Office of the Revisor of Statutes
Minnesota Session Laws - 1997, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 233-S.F.No. 637
An act relating to retirement; increasing pension
benefit accrual rates; adjusting financing for pension
plans; adding supplemental financial conditions
information for pension funds; reducing
appropriations; modifying or establishing various
pension aids; appropriating money; amending Minnesota
Statutes 1996, sections 3.85, subdivisions 11 and 12;
3A.02, subdivisions 1 and 4; 3A.07; 11A.18,
subdivision 9; 69.011, subdivisions 1, 2, and by
adding a subdivision; 69.021, subdivisions 5, 7a, 10,
and 11; 69.031, subdivision 5; 352.01, subdivision 25;
352.04, subdivisions 2 and 3; 352.115, subdivision 3;
352.72, subdivision 2; 352.92, subdivisions 1 and 2;
352.93, subdivisions 2, 3, and by adding a
subdivision; 352.95, subdivisions 1 and 5; 352B.02,
subdivisions 1a and 1c; 352B.08, subdivisions 2 and
2a; 352B.10, subdivision 1; 352B.30, by adding a
subdivision; 352C.031, subdivision 4; 352C.033;
352D.02, subdivisions 1 and 2; 352D.04, subdivisions 1
and 2; 353.01, subdivision 37; 353.27, subdivisions 2
and 3a; 353.29, subdivision 3; 353.651, subdivision 3;
353.656, subdivision 1; 353.71, subdivision 2;
353A.08, subdivisions 1 and 2; 353A.083, by adding a
subdivision; 354.05, subdivision 38; 354.42,
subdivisions 2, 3, and 5; 354.44, subdivision 6, and
by adding a subdivision; 354.53, subdivision 1;
354.55, subdivision 11; 354A.011, subdivision 15a;
354A.12, subdivisions 1, 2a, 3a, 3b, and 3c; 354A.31,
subdivisions 4 and 4a; 356.20, subdivision 2; 356.215,
subdivisions 2, 4d, and 4g; 356.217; 356.30,
subdivisions 1 and 3; 356.32, subdivision 2; 422A.06,
subdivision 8; 422A.151; 423B.01, subdivision 9, and
by adding a subdivision; 423B.06, by adding a
subdivision; 423B.07; 423B.09, subdivision 1, and by
adding a subdivision; 423B.10, subdivision 1; 423B.15,
subdivisions 2, 3, 6, and by adding a subdivision; and
490.124, subdivisions 1 and 5; Laws 1965, chapter 519,
section 1, as amended; Laws 1979, chapter 109, section
1, as amended; Laws 1989, chapter 319, article 19,
section 7, subdivisions 1, as amended, 3, 4, as
amended, and 7; Laws 1993, chapter 125, article 1,
section 1; and Laws 1996, chapter 448, article 1,
section 3; proposing coding for new law in Minnesota
Statutes, chapters 124; 273; 352; 352C; 354A; 355; and
356; repealing Minnesota Statutes 1996, sections
124.195, subdivision 12; 124.2139; 353C.01; 353C.02;
353C.03; 353C.04; 353C.05; 353C.06; 353C.07; 353C.08;
353C.09; 353C.10; 354A.12, subdivision 2b; 356.70; and
356.88, subdivision 2; Laws 1985, chapter 259, section
3; and Laws 1993, chapter 336, article 3, section 1.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
PENSION UNIFORMITY PROVISIONS
Section 1. Minnesota Statutes 1996, section 3.85,
subdivision 11, is amended to read:
Subd. 11. [VALUATIONS AND REPORTS TO LEGISLATURE.] (a) The
commission shall contract with an established actuarial
consulting firm to conduct annual actuarial valuations for the
retirement plans named in paragraph (b). The contract must
include provisions for performing cost analyses of proposals for
changes in benefit and funding policies.
(b) The contract for actuarial valuation must include the
following retirement plans:
(1) the teachers retirement plan, teachers retirement
association;
(2) the general state employees retirement plan, Minnesota
state retirement system;
(3) the correctional employees retirement plan, Minnesota
state retirement system;
(4) the state patrol retirement plan, Minnesota state
retirement system;
(5) the judges retirement plan, Minnesota state retirement
system;
(6) the Minneapolis employees retirement plan, Minneapolis
employees retirement fund;
(7) the public employees retirement plan, public employees
retirement association;
(8) the public employees police and fire plan, public
employees retirement association;
(9) the Duluth teachers retirement plan, Duluth teachers
retirement fund association;
(10) the Minneapolis teachers retirement plan, Minneapolis
teachers retirement fund association;
(11) the St. Paul teachers retirement plan, St. Paul
teachers retirement fund association;
(12) the legislators retirement plan, Minnesota state
retirement system; and
(13) the elective state officers retirement plan, Minnesota
state retirement system; and
(14) the public employees local government correctional
service retirement plan, public employees retirement
association, if there are any participants in that plan.
(c) The contract must specify completion of annual
actuarial valuation calculations on a fiscal year basis with
their contents as specified in section 356.215, and the
standards for actuarial work adopted by the commission.
The contract must specify completion of annual experience
data collection and processing and a quadrennial published
experience study for the plans listed in paragraph (b), clauses
(1), (2), and (7), as provided for in the standards for
actuarial work adopted by the commission. The experience data
collection, processing, and analysis must evaluate the following:
(1) individual salary progression;
(2) rate of return on investments based on current asset
value;
(3) payroll growth;
(4) mortality;
(5) retirement age;
(6) withdrawal; and
(7) disablement.
(d) The actuary retained by the commission shall annually
prepare a report to the legislature, including the commentary on
the actuarial valuation calculations for the plans named in
paragraph (b) and summarizing the results of the actuarial
valuation calculations. The commission-retained actuary shall
include with the report the actuary's recommendations concerning
the appropriateness of the support rates to achieve proper
funding of the retirement funds by the required funding dates.
The commission-retained actuary shall, as part of the
quadrennial published experience study, include recommendations
to the legislature on the appropriateness of the actuarial
valuation assumptions required for evaluation in the study.
(e) If the actuarial gain and loss analysis in the
actuarial valuation calculations indicates a persistent pattern
of sizable gains or losses, as directed by the commission, the
actuary retained by the commission shall prepare a special
experience study for a plan listed in paragraph (b), clause (3),
(4), (5), (6), (8), (9), (10), (11), (12), or (13), or (14), in
the manner provided for in the standards for actuarial work
adopted by the commission.
(f) The term of the contract between the commission and the
actuary retained by the commission is two years, plus not to
exceed two one-year extensions before competitive bidding. The
contract is subject to competitive bidding procedures as
specified by the commission.
Sec. 2. Minnesota Statutes 1996, section 3.85, subdivision
12, is amended to read:
Subd. 12. [ALLOCATION OF ACTUARIAL COST.] (a) The
commission shall assess each retirement plan specified in
subdivision 11, paragraph (b), the compensation paid to the
actuary retained by the commission for the actuarial valuation
calculations, quadrennial projection valuations, and quadrennial
experience studies. The assessment is 100 percent of the amount
of contract compensation for the actuarial consulting firm
retained by the commission for actuarial valuation calculations,
including the public employees police and fire plan
consolidation accounts of the public employees retirement
association, annual experience data collection and processing,
and quadrennial experience studies.
The portion of the total assessment payable by each
retirement system or pension plan must be determined as follows:
(1) Each pension plan specified in subdivision 11,
paragraph (b), clauses (1) to (14) (13), must pay the following
indexed amount based on its total active, deferred, inactive,
and benefit recipient membership:
up to 2,000 members, inclusive $2.55 per member
2,001 through 10,000 members $1.13 per member
over 10,000 members $0.11 per member
The amount specified is applicable for the assessment of
the July 1, 1991, to June 30, 1992, fiscal year actuarial
compensation amounts. For the July 1, 1992, to June 30, 1993,
fiscal year and subsequent fiscal year actuarial compensation
amounts, the amount specified must be increased at the same
percentage increase rate as the implicit price deflator for
state and local government purchases of goods and services for
the 12-month period ending with the first quarter of the
calendar year following the completion date for the actuarial
valuation calculations, as published by the federal Department
of Commerce, and rounded upward to the nearest full cent.
(2) The total per-member portion of the allocation must be
determined, and that total per-member amount must be subtracted
from the total amount for allocation. Of the remainder dollar
amount, the following per-retirement system and per-pension plan
charges must be determined and the charges must be paid by the
system or plan:
(i) 37.87 percent is the total additional per-retirement
system charge, of which one-seventh must be paid by each
retirement system specified in subdivision 11, paragraph (b),
clauses (1), (2), (6), (7), (9), (10), and (11).
(ii) 62.13 percent is the total additional per-pension plan
charge, of which one-thirteenth must be paid by each pension
plan specified in subdivision 11, paragraph (b), clauses (1) to
(13), if there are not any participants in the plan specified in
subdivision 11, paragraph (b), clause (14), or of which
one-fourteenth must be paid by each pension plan specified in
subdivision 11, paragraph (b), clauses (1) to (14), if there are
participants in the plan specified in subdivision 11, paragraph
(b), clause (14).
(b) The assessment must be made following the completion of
the actuarial valuation calculations and the experience
analysis. The amount of the assessment is appropriated from the
retirement fund applicable to the retirement plan. Receipts
from assessments must be deposited in the state treasury and
credited to the general fund.
Sec. 3. Minnesota Statutes 1996, section 3A.02,
subdivision 1, is amended to read:
Subdivision 1. [QUALIFICATIONS.] (a) A former legislator
is entitled, upon written application to the director, to
receive a retirement allowance monthly, if the person:
(1) has served at least six full years, without regard to
the application of section 3A.10, subdivision 2, or has served
during all or part of four regular sessions as a member of the
legislature, which service need not be continuous;
(2) has attained the normal retirement age;
(3) has retired as a member of the legislature; and
(4) has made all contributions provided for in section
3A.03, has made payments for past service under subdivision 2,
or has made payments in lieu of contributions under Minnesota
Statutes 1992, section 3A.031, prior to July 1, 1994.
(b) This paragraph applies to members of the legislature
who terminate service as a legislator before July 1, 1997. For
service rendered before the beginning of the 1979 legislative
session, but not to exceed eight years of service, the
retirement allowance is an amount equal to five percent per year
of service of that member's average monthly salary. For service
in excess of eight years rendered before the beginning of the
1979 legislative session, and for service rendered after the
beginning of the 1979 legislative session, the retirement
allowance is an amount equal to 2-1/2 percent per year of
service of that member's average monthly salary.
(c) This paragraph applies to members of the legislature
who terminate service as a legislator after June 30, 1997. The
retirement allowance is an amount equal to the applicable rate
or rates under paragraph (b) per year of service of the member's
average monthly salary adjusted for that person on an actuarial
equivalent basis to reflect the change in the postretirement
interest rate actuarial assumption under section 356.215,
subdivision 4d, from five percent to six percent. The
adjustment must be calculated by or, alternatively, the
adjustment procedure must be specified by, the actuary retained
by the legislative commission on pensions and retirement. The
purpose of this adjustment is to ensure that the total amount of
benefits that the actuary predicts an individual member will
receive over the member's lifetime under this paragraph will be
the same as the total amount of benefits the actuary predicts
the individual member would receive over the member's lifetime
under the law in effect before enactment of this paragraph.
(d) The retirement allowance accrues beginning with the
first day of the month of receipt of the application, but not
before age 60, and for the remainder of the former legislator's
life, if the former legislator is not serving as a member of the
legislature or as a constitutional officer or commissioner as
defined in section 352C.021, subdivisions 2 and 3. The annuity
shall does not begin to accrue prior to retirement as a
legislator. No annuity payment shall may be made retroactive
for more than 180 days before the date the annuity application
is filed with the director.
(d) (e) Any member who has served during all or part of
four regular sessions is considered to have served eight years
as a member of the legislature.
(e) (f) The retirement allowance ceases with the last
payment that accrued to the retired legislator during the
retired legislator's lifetime, except that the surviving spouse,
if any, is entitled to the retirement allowance for the calendar
month in which the retired legislator died.
Sec. 4. Minnesota Statutes 1996, section 3A.02,
subdivision 4, is amended to read:
Subd. 4. [DEFERRED ANNUITIES AUGMENTATION.] (a) The
deferred annuity of any former legislator shall must be
augmented as provided herein. The required reserves applicable
to the deferred annuity, determined as of the date the benefit
begins to accrue using an appropriate mortality table and an
interest assumption of five six percent, shall must be augmented
from the first of the month following termination of service, or
July 1, 1973, whichever is later, to the first day of the month
in which the annuity begins to accrue, at the rate of five
percent per annum compounded annually until January 1, 1981, and
thereafter at the rate of three percent per annum compounded
annually until January 1 of the year in which the former
legislator attains age 55. From that date to the effective date
of retirement, the rate is five percent compounded annually.
(b) The retirement allowance of, or the survivor benefit
payable on behalf of, a former member of the legislature who
terminated service before July 1, 1997, which is not first
payable until after June 30, 1997, must be increased on an
actuarial equivalent basis to reflect the change in the
postretirement interest rate actuarial assumption under section
356.215, subdivision 4d, from five percent to six percent under
a calculation procedure and tables adopted by the board of
directors of the Minnesota state retirement system and approved
by the actuary retained by the legislative commission on
pensions and retirement.
Sec. 5. Minnesota Statutes 1996, section 11A.18,
subdivision 9, is amended to read:
Subd. 9. [CALCULATION OF POSTRETIREMENT ADJUSTMENT.] (a)
Annually, following June 30, the state board shall use the
procedures in paragraphs (b), (c), and (d) to determine whether
a postretirement adjustment is payable and to determine the
amount of any postretirement adjustment.
(b) If the Consumer Price Index for urban wage earners and
clerical workers all items index published by the Bureau of
Labor Statistics of the United States Department of Labor
increases from June 30 of the preceding year to June 30 of the
current year, the state board shall certify the percentage
increase. The amount certified may must not exceed the lesser
of the difference between the preretirement interest assumption
and postretirement interest assumption in section 356.215,
subdivision 4d, paragraph (a), or 3.5 2.5 percent. For the
Minneapolis employees retirement fund, the amount certified must
not exceed 3.5 percent.
(c) In addition to any percentage increase certified under
paragraph (b), the board shall use the following procedures to
determine if a postretirement adjustment is payable under this
paragraph:
(1) The state board shall determine the market value of the
fund on June 30 of that year;
(2) The amount of reserves required for the annuity or
benefit payable to an annuitant and benefit recipient of the
participating public pension plans or funds shall must be
determined by the commission-retained actuary as of the current
June 30. An annuitant or benefit recipient who has been
receiving an annuity or benefit for at least 12 full months as
of the current June 30 is eligible to receive a full
postretirement adjustment. An annuitant or benefit recipient
who has been receiving an annuity or benefit for at least one
full month, but less than 12 full months as of the current June
30, is eligible to receive a partial postretirement adjustment.
Each fund shall report separately the amount of the reserves for
those annuitants and benefit recipients who are eligible to
receive a full postretirement benefit adjustment. This amount
is known as "eligible reserves." Each fund shall also report
separately the amount of the reserves for those annuitants and
benefit recipients who are not eligible to receive a
postretirement adjustment. This amount is known as "noneligible
reserves." For an annuitant or benefit recipient who is
eligible to receive a partial postretirement adjustment, each
fund shall report separately as additional "eligible reserves"
an amount that bears the same ratio to the total reserves
required for the annuitant or benefit recipient as the number of
full months of annuity or benefit receipt as of the current June
30 bears to 12 full months. The remainder of the annuitant's or
benefit recipient's reserves shall must be separately reported
as additional "noneligible reserves." The amount of "eligible"
and "noneligible" required reserves shall must be certified to
the board by the commission-retained actuary as soon as is
practical following the current June 30;
(3) The state board shall determine the percentage increase
certified under paragraph (b) multiplied by the eligible
required reserves, as adjusted for mortality gains and losses
under subdivision 11, determined under clause (2);
(4) The state board shall add the amount of reserves
required for the annuities or benefits payable to annuitants and
benefit recipients of the participating public pension plans or
funds as of the current June 30 to the amount determined under
clause (3);
(5) The state board shall subtract the amount determined
under clause (4) from the market value of the fund determined
under clause (1);
(6) The state board shall adjust the amount determined
under clause (5) by the cumulative current balance determined
pursuant to clause (8) and any negative balance carried forward
under clause (9);
(7) A positive amount resulting from the calculations in
clauses (1) to (6) is the excess market value. A negative
amount is the negative balance;
(8) The state board shall allocate one-fifth of the excess
market value or one-fifth of the negative balance to each of
five consecutive years, beginning with the fiscal year ending
the current June 30; and
(9) To calculate the postretirement adjustment under this
paragraph based on investment performance for a fiscal year, the
state board shall add together all excess market value allocated
to that year and subtract from the sum all negative balances
allocated to that year. If this calculation results in a
negative number, the entire negative balance must be carried
forward and allocated to the next year. If the resulting amount
is positive, a postretirement adjustment is payable under this
paragraph. The board shall express a positive amount as a
percentage of the total eligible required reserves certified to
the board under clause (2).
(d) The state board shall determine the amount of any
postretirement adjustment which is payable using the following
procedure:
(1) The total "eligible" required reserves as of the first
of January next following the end of the fiscal year for the
annuitants and benefit recipients eligible to receive a full or
partial postretirement adjustment as determined by clause (2)
shall must be certified to the state board by the
commission-retained actuary. The total "eligible" required
reserves shall must be determined by the commission-retained
actuary on the assumption that all annuitants and benefit
recipients eligible to receive a full or partial postretirement
adjustment will be alive on the January 1 in question; and
(2) The state board shall add the percentage certified
under paragraph (b) to any positive percentage calculated under
paragraph (c). The board shall not subtract from the percentage
certified under paragraph (b) any negative amount calculated
under paragraph (c). The sum of these percentages shall must be
carried to five decimal places and shall must be certified to
each participating public pension fund or plan as the full
postretirement adjustment percentage.
(e) A retirement annuity payable in the event of retirement
before becoming eligible for social security benefits as
provided in section 352.116, subdivision 3; 353.29, subdivision
6; or 354.35 must be treated as the sum of a period certain
retirement annuity and a life retirement annuity for the
purposes of any postretirement adjustment. The period certain
retirement annuity plus the life retirement annuity shall must
be the annuity amount payable until age 62 or 65, whichever
applies. A postretirement adjustment granted on the period
certain retirement annuity must terminate when the period
certain retirement annuity terminates.
Sec. 6. Minnesota Statutes 1996, section 69.011,
subdivision 1, is amended to read:
Subdivision 1. [DEFINITIONS.] Unless the language or
context clearly indicates that a different meaning is intended,
the following words and terms shall for the purposes of this
chapter and chapters 423, 423A, 424 and 424A have the meanings
ascribed to them:
(a) "Commissioner" means the commissioner of revenue.
(b) "Municipality" means any home rule charter or statutory
city, organized town or park district subject to chapter 398,
the University of Minnesota, and, for purposes of the fire state
aid program only, an American Indian tribal government entity
located within a federally recognized American Indian
reservation, and, for purposes of the police state aid program
only, the metropolitan airports commission, with respect to
employees peace officers covered under chapter 422A, or the
department of natural resources and the department of public
safety with respect to peace officers covered under chapter 352B.
(c) "Minnesota Firetown Premium Report" means a form
prescribed by the commissioner containing space for reporting by
insurers of fire, lightning, sprinkler leakage and extended
coverage premiums received upon risks located or to be performed
in this state less return premiums and dividends.
(d) "Firetown" means the area serviced by any municipality
having a qualified fire department or a qualified incorporated
fire department having a subsidiary volunteer firefighters'
relief association.
(e) "Market value" means latest available market value of
all property in a taxing jurisdiction, whether the property is
subject to taxation, or exempt from ad valorem taxation obtained
from information which appears on abstracts filed with the
commissioner of revenue or equalized by the state board of
equalization.
(f) "Minnesota Aid to Police Premium Report" means a form
prescribed by the commissioner for reporting by each fire and
casualty insurer of all premiums received upon direct business
received by it in this state, or by its agents for it, in cash
or otherwise, during the preceding calendar year, with reference
to insurance written for insuring against the perils contained
in auto insurance coverages as reported in the Minnesota
business schedule of the annual financial statement which each
insurer is required to file with the commissioner in accordance
with the governing laws or rules less return premiums and
dividends.
(g) "Peace officer" means any person:
(1) whose primary source of income derived from wages is
from direct employment by a municipality or county as a law
enforcement officer on a full-time basis of not less than 30
hours per week;
(2) who has been employed for a minimum of six months prior
to December 31 preceding the date of the current year's
certification under subdivision 2, clause (b);
(3) who is sworn to enforce the general criminal laws of
the state and local ordinances;
(4) who is licensed by the peace officers standards and
training board and is authorized to arrest with a warrant; and
(5) who is a member of a local police relief association to
which section 69.77 applies, the state patrol retirement plan,
the public employees police and fire fund, or the Minneapolis
employees retirement fund.
(h) "Full-time equivalent number of peace officers
providing contract service" means the integral or fractional
number of peace officers which would be necessary to provide the
contract service if all peace officers providing service were
employed on a full-time basis as defined by the employing unit
and the municipality receiving the contract service.
(i) "Retirement benefits other than a service pension"
means any disbursement authorized under section 424A.05,
subdivision 3, clauses (2), (3) and (4).
(j) "Municipal clerk, municipal clerk-treasurer or county
auditor" means the person who was elected or appointed to the
specified position or, in the absence of the person, another
person who is designated by the applicable governing body. In a
park district the clerk is the secretary of the board of park
district commissioners. In the case of the University of
Minnesota, the clerk is that official designated by the board of
regents. For the metropolitan airports commission, the clerk is
the person designated by the commission. For the department of
natural resources or the department of public safety, the clerk
is the respective commissioner.
Sec. 7. Minnesota Statutes 1996, section 69.011,
subdivision 2, is amended to read:
Subd. 2. [QUALIFICATION FOR FIRE OR POLICE STATE AID.] (a)
In order to qualify to receive fire state aid, on or before
March 15 annually, in conjunction with the financial report
required pursuant to section 69.051, the clerk of each
municipality having a duly organized fire department as provided
in subdivision 4, or the secretary of each independent nonprofit
firefighting corporation having a subsidiary incorporated
firefighters' relief association whichever is applicable, and
the fire chief, shall jointly certify the existence of the
municipal fire department or of the independent nonprofit
firefighting corporation, whichever is applicable, which meets
the minimum qualification requirements set forth in this
subdivision, and the fire personnel and equipment of the
municipal fire department or the independent nonprofit
firefighting corporation as of the preceding December 31.
Certification shall be made to the commissioner on a form
prescribed by the commissioner and shall include any other facts
the commissioner may require. The certification shall be made
to the commissioner in duplicate. Each copy of the certificate
shall be duly executed and deemed an original. The commissioner
shall forward one copy to the auditor of the county wherein the
fire department is located and retain one copy.
(b) On or before March 15 annually the clerk of each
municipality having a duly organized police department and
having a duly incorporated relief association shall certify that
fact to the county auditor of the county where the police
department is located and to the commissioner on a form
prescribed by the commissioner together with the other facts the
commissioner or auditor may require.
Except as provided in subdivision 2b, on or before March 15
annually, the clerk of each municipality and the auditor of each
county employing one or more peace officers as defined in
subdivision 1, clause (h) (g), shall certify the number of such
peace officers to the commissioner on forms prescribed by the
commissioner. Credit for officers employed less than a full
year shall be apportioned. Each full month of employment of a
qualifying officer during the calendar year shall entitle the
employing municipality or county to credit for 1/12 of the
payment for employment of a peace officer for the entire year.
For purposes of sections 69.011 to 69.051, employment of a peace
officer shall commence when the peace officer is entered on the
payroll of the respective municipal police department or county
sheriff's department. No peace officer shall be included in the
certification of the number of peace officers by more than one
municipality or county for the same month.
Sec. 8. Minnesota Statutes 1996, section 69.011, is
amended by adding a subdivision to read:
Subd. 2b. [DEPARTMENTS OF NATURAL RESOURCES AND PUBLIC
SAFETY.] (a) On or before July 1, 1997, the commissioner of
natural resources shall certify one-half of the number of peace
officers as defined in subdivision 1, clause (g), employed by
the enforcement division during calendar year 1996 and the
commissioner of public safety shall certify one-half of the
number of peace officers as defined in subdivision 1, clause
(g), employed by the bureau of criminal apprehension, the
gambling enforcement division, and the state patrol division
during calendar year 1996.
(b) On or before March 15, 1998, the commissioner of
natural resources shall certify seven-tenths of the number of
peace officers as defined in subdivision 1, clause (g), employed
by the enforcement division and the commissioner of public
safety shall certify seven-tenths of the number of peace
officers as defined in subdivision 1, clause (g), employed by
the bureau of criminal apprehension, the gambling enforcement
division, and the state patrol division.
(c) On or before March 15, 1999, and annually on or before
March 15, thereafter, the commissioner of natural resources
shall certify the number of peace officers as defined in
subdivision 1, clause (g), employed by the enforcement division
and the commissioner of public safety shall certify the number
of peace officers as defined in subdivision 1, clause (g),
employed by the bureau of criminal apprehension, the gambling
enforcement division, and the state patrol division.
(d) The certification must be on a form prescribed by the
commissioner. Peace officers certified under this paragraph
must be included in the total certifications under subdivision 2.
Sec. 9. Minnesota Statutes 1996, section 69.021,
subdivision 5, is amended to read:
Subd. 5. [CALCULATION OF STATE AID.] (a) The amount of
fire state aid available for apportionment shall be equal to 107
percent of the amount of premium taxes paid to the state upon
the fire, lightning, sprinkler leakage, and extended coverage
premiums reported to the commissioner by insurers on the
Minnesota Firetown Premium Report. This amount shall be reduced
by the amount required to pay the state auditor's costs and
expenses of the audits or exams of the firefighters relief
associations.
(b) The total amount for apportionment in respect to peace
officer state aid is equal to 104 percent of the amount of
premium taxes paid to the state upon the premiums reported to
the commissioner by insurers on the Minnesota Aid to Police
Premium Report, plus the payment amounts received under section
60A.152 since the last aid apportionment, and reduced by the
amount required to pay the state auditor's costs and expenses of
the audits or exams of the police relief associations. The
total amount for apportionment in respect to firefighters state
aid shall not be less than two percent of the premiums reported
to the commissioner by insurers on the Minnesota Firetown
Premium Report after subtracting (1) the amount required to pay
the state auditor's costs and expenses of the audits or exams of
the firefighters relief associations, and (2) one percent of the
premiums reported by town and farmers' mutual insurance
companies and mutual property and casualty companies with total
assets of $5,000,000 or less. The total amount for
apportionment in respect to the police state aid program shall
not be less than two percent of the amount of premiums reported
to the commissioner by insurers on the Minnesota Aid to Police
Premium Report after subtracting the amount required to pay the
state auditor's cost and expenses of the audits or exams of the
police relief associations. The commissioner shall calculate
the percentage of increase or decrease reflected in the
apportionment over or under the previous year's available state
aid using the same premiums as a basis for comparison.
(c) The amount for apportionment in respect to peace
officer state aid under paragraph (b) must be further reduced by
$1,779,000 in fiscal year 1999, $2,077,000 in fiscal year 2000,
and $2,404,000 in fiscal year 2001. These reductions in this
paragraph cancel to the general fund.
Sec. 10. Minnesota Statutes 1996, section 69.021,
subdivision 7a, is amended to read:
Subd. 7a. [APPORTIONMENT OF POLICE STATE AID.] (a) The
commissioner shall apportion the state peace officer aid to each
municipality and to the county in the following manner:
(1) for all municipalities maintaining police departments
and the county, counties, the department of natural resources,
and the department of public safety, the police state aid must
be distributed in proportion to the total number of peace
officers, as determined under section 69.011, subdivision 1,
clause (g), and subdivision 2, clause (b), employed by
each municipality and by the county employing unit for 12
calendar months and the proportional or fractional number who
were employed less than 12 months;
(2) for each municipality which contracts with the county
for police service, a proportionate amount of the state aid
distributed to the county based on the full-time equivalent
number of peace officers providing contract service must be
credited against the municipality's contract obligation; and
(3) for each municipality which contracts with another
municipality for police service, a proportionate amount of the
state aid distributed to the municipality providing contract
service based on the full-time equivalent number of peace
officers providing contract service on a full-time equivalent
basis must be credited against the contract obligation of the
municipality receiving contract service.
(b) No municipality entitled to receive state peace officer
aid may be apportioned less state peace officer aid for any year
under Laws 1976, chapter 315, than the amount which was
apportioned to it for calendar year 1975 based on premiums
reported to the commissioner for calendar year 1974; provided,
the amount of state peace officer aid to other municipalities
within the county and to the county must be adjusted in
proportion to the total number of peace officers in the
municipalities and the county, so that the amount of state peace
officer aid apportioned does not exceed the amount of state
peace officer aid available for apportionment.
Sec. 11. Minnesota Statutes 1996, section 69.021,
subdivision 10, is amended to read:
Subd. 10. [REDUCTION IN POLICE STATE AID
APPORTIONMENT.] (a) The commissioner of revenue shall reduce the
apportionment of police state aid under subdivisions 5,
paragraph (b), 6, and 7 7a, for eligible employer units by
any excess police state aid.
(b) "Excess police state aid" is:
(1) for counties and for municipalities in which police
retirement coverage is provided wholly by the public employees
police and fire fund and all police officers are members of the
plan governed by sections 353.63 to 353.657, the amount in
excess of the employer's total prior calendar year obligation
under section 353.65, as defined in paragraph (c), as certified
by the executive director of the public employees retirement
association.;
(2) for municipalities in which police retirement coverage
is provided in part by the public employees police and fire fund
governed by sections 353.63 to 353.657 and in part by a local
police consolidation account governed by chapter 353A, the
amount in excess of the employer's total prior calendar year
obligation as defined in paragraph (c), as certified by the
executive director of the public employees retirement
association;
(3) for municipalities in which police retirement coverage
is provided in part by the public employees police and fire fund
governed by sections 353.63 to 353.657 and in part by a local
police relief association governed by sections 69.77 and
423A.01, the amount in excess of the employer's total prior
calendar year obligation as defined in paragraph (c), as
certified by the executive director of the public employees
retirement association, plus the amount of the financial
requirements of the relief association certified to the
applicable municipality during the prior calendar year under
section 69.77, subdivisions 2b and 2c, reduced by the amount of
member contributions deducted from the covered salary of the
relief association during the prior calendar year under section
69.77, subdivision 2a, as certified by the chief administrative
officer of the applicable municipality;
(4) for the metropolitan airports commission, if there are
police officers hired before July 1, 1978, with retirement
coverage by the Minneapolis employees retirement fund remaining,
the amount in excess of the commission's total prior calendar
year obligation as defined in paragraph (c), as certified by the
executive director of the public employees retirement
association, plus the amount determined by expressing the
commission's total prior calendar year contribution to the
Minneapolis employees retirement fund under section 422A.101,
subdivisions 2 and 2a, as a percentage of the commission's total
prior calendar year covered payroll for commission employees
covered by the Minneapolis employees retirement fund and
applying that percentage to the commission's total prior
calendar year covered payroll for commission police officers
covered by the Minneapolis employees retirement fund, as
certified by the chief administrative officer of the
metropolitan airports commission; and
(5) for the department of natural resources and for the
department of public safety, the amount in excess of the
employer's total prior calendar year obligation under section
352B.02, subdivision 1c, for plan members who are peace officers
under section 69.011, subdivision 1, clause (g), as certified by
the executive director of the Minnesota state retirement system.
(c) The employer's total prior calendar year obligation
with respect to the public employees police and fire plan is the
total prior calendar year obligation under section 353.65,
subdivision 3, for police officers as defined in section 353.64,
subdivision 2, and the actual total prior calendar year
obligation under section 353.65, subdivision 3, for
firefighters, as defined in section 353.64, subdivision 3, but
not to exceed for those firefighters the applicable following
amount:
municipality maximum amount
Albert Lea $54,157.01
Anoka 10,399.31
Apple Valley 5,442.44
Austin 49,864.73
Bemidji 27,671.38
Brooklyn Center 6,605.92
Brooklyn Park 24,002.26
Burnsville 15,956.00
Cloquet 4,260.49
Coon Rapids 39,920.00
Cottage Grove 8,588.48
Crystal 5,855.00
East Grand Forks 51,009.88
Edina 32,251.00
Elk River 5,216.55
Ely 13,584.16
Eveleth 16,288.27
Fergus Falls 6,742.00
Fridley 33,420.64
Golden Valley 11,744.61
Hastings 16,561.00
Hopkins 4,324.23
International Falls 14,400.69
Lakeville 782.35
Lino Lakes 5,324.00
Little Falls 7,889.41
Maple Grove 6,707.54
Maplewood 8,476.69
Minnetonka 10,403.00
Montevideo 1,307.66
Moorhead 68,069.26
New Hope 6,739.72
North St. Paul 4,241.14
Northfield 770.63
Owatonna 37,292.67
Plymouth 6,754.71
Red Wing 3,504.01
Richfield 53,757.96
Rosemount 1,712.55
Roseville 9,854.51
St. Anthony 33,055.00
St. Louis Park 53,643.11
Thief River Falls 28,365.04
Virginia 31,164.46
Waseca 11,135.17
West St. Paul 15,707.20
White Bear Lake 6,521.04
Woodbury 3,613.00
any other municipality 0.00
(d) The total shall amount of excess police state aid must
be deposited in a separate the excess police state-aid account
in the general fund, administered and distributed as provided in
subdivision 11.
Sec. 12. Minnesota Statutes 1996, section 69.021,
subdivision 11, is amended to read:
Subd. 11. [EXCESS POLICE STATE-AID HOLDING ACCOUNT.] (a)
An excess police state-aid holding account is established in the
general fund.
(b) Excess police state aid determined according to section
69.021, subdivision 10, must be deposited in the excess police
state-aid holding account.
(c) From the balance in the excess police state-aid holding
account, $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.
(d) If a police officer stress reduction program is created
by law and money is appropriated for that program, an amount
equal to that appropriation must be transferred from the balance
in the excess police state-aid holding account.
(e) On October 1, 1997, and annually on each October 1, on
October 1, 2001, and annually on October 1 thereafter, one-half
of the balance of the excess police state-aid holding account
remaining after deductions under paragraphs (c) and (d) is
appropriated for additional amortization aid under section
423A.02, subdivision 1b.
(f) On October 1, 1998, and annually each October 1 in 1999
and 2000, the entire balance of the excess police state-aid
holding account remaining after transfers under paragraphs (c)
and (d) is appropriated for additional amortization aid under
section 423A.02, subdivision 1b.
(g) The remaining balance in the excess police state-aid
holding account, after the deductions under paragraphs (c), (d),
and (e), cancels to the general fund.
Sec. 13. Minnesota Statutes 1996, section 69.031,
subdivision 5, is amended to read:
Subd. 5. [DEPOSIT OF STATE AID.] (1) (a) The municipal
treasurer, on receiving the fire state aid, shall within 30 days
after receipt transmit it to the treasurer of the duly
incorporated firefighters' relief association if there is one
organized and the association has filed a financial report with
the municipality; but if there is no relief association
organized, or if any association dissolve, be removed, or has
heretofore dissolved, or has been removed as trustees of state
aid, then the treasurer of the municipality shall keep the money
in the municipal treasury as provided for in section 424A.08 and
shall be disbursed only for the purposes and in the manner set
forth in that section.
(2) (b) The municipal treasurer, upon receipt of the police
state aid, shall disburse the police state aid in the following
manner:
(a) (1) For a municipality in which a local police relief
association exists and all peace officers are members of the
association, the total state aid shall be transmitted to the
treasurer of the relief association within 30 days of the date
of receipt, and the treasurer of the relief association shall
immediately deposit the total state aid in the special fund of
the relief association;
(b) (2) For a municipality in which police retirement
coverage is provided by the public employees police and fire
fund and all peace officers are members of the fund, the total
state aid shall be applied toward the municipality's employer
contribution to the public employees police and fire fund
pursuant to section 353.65, subdivision 3; or
(c) (3) For a municipality other than a city of the first
class with a population of more than 300,000 in which both a
police relief association exists and police retirement coverage
is provided in part by the public employees police and fire
fund, the municipality may elect at its option to transmit the
total state aid to the treasurer of the relief association as
provided in clause (a), to use the total state aid to apply
toward the municipality's employer contribution to the public
employees police and fire fund subject to all the provisions set
forth in clause (b), or to allot the total state aid
proportionately to be transmitted to the police relief
association as provided in this subdivision and to apply toward
the municipality's employer contribution to the public employees
police and fire fund subject to the provisions of clause (b) on
the basis of the respective number of active full-time peace
officers, as defined in section 69.011, subdivision 1, clause
(g).
For a city of the first class with a population of more
than 300,000, in addition, the city may elect to allot the
appropriate portion of the total police state aid to apply
toward the employer contribution of the city to the public
employees police and fire fund based on the covered salary of
police officers covered by the fund each payroll period and to
transmit the balance to the police relief association.
(3) (c) The county treasurer, upon receipt of the police
state aid for the county, shall apply the total state aid toward
the county's employer contribution to the public employees
police and fire fund pursuant to section 353.65, subdivision 3.
(4) (d) The designated metropolitan airports commission
official, upon receipt of the police state aid for the
metropolitan airports commission, shall apply the total police
state aid toward the commission's employer contribution to the
Minneapolis employees retirement fund under section 422A.101,
subdivision 2a.
(e) The police state aid apportioned to the departments of
public safety and natural resources under section 69.021,
subdivision 7a, is appropriated to the commissioner of finance
for transfer to the funds and accounts from which the salaries
of peace officers certified under section 69.011, subdivision
2a, are paid. The commissioner of revenue shall certify to the
commissioners of public safety, natural resources, and finance
the amounts to be transferred from the appropriation for police
state aid. The commissioners of public safety and natural
resources shall certify to the commissioner of finance the
amounts to be credited to each of the funds and accounts from
which the peace officers employed by their respective
departments are paid. Each commissioner must allocate the
police state aid first for employer contributions for employees
funded from the general fund and then for employer contributions
for employees funded from other funds. For peace officers whose
salaries are paid from the general fund, the amounts transferred
from the appropriation for police state aid must be canceled to
the general fund.
Sec. 14. [124.2141] [AID ADJUSTMENTS DUE TO CHANGES IN
EMPLOYER RETIREMENT CONTRIBUTION RATES.]
Subdivision 1. [AID ADJUSTMENT.] Beginning in fiscal year
1998 and each year thereafter, the commissioner of children,
families, and learning shall adjust state aid payments to school
operating funds for independent school district No. 625,
independent school district No. 709 and special school district
No. 1, by the net amount of clauses (1) and (2) and for all
other districts, including charter schools, but excluding any
education organizations that are prohibited from receiving
direct state aids under section 124.193 or 124.32, subdivision
12, by the net amount of clauses (1), (2) and (3):
(1) a decrease equal to each district's share of the fiscal
year 1997 adjustment effected under Minnesota Statutes 1996,
section 124.2139;
(2) an increase equal to one percent of the salaries paid
to members of the general plan of the public employees
retirement association in fiscal year 1997, multiplied by 0.35
for fiscal year 1998 and 0.70 each year thereafter;
(3) a decrease equal to 2.34 percent of the salaries paid
to members of the teachers retirement association in fiscal year
1997.
Subd. 2. [APPROPRIATION AND ESTIMATED NET SAVINGS.] The
amounts necessary to pay any positive net adjustments under this
section to any school district are appropriated annually from
the general fund to the commissioner of children, families, and
learning. The estimated net general fund savings under this
section is $29,819,000 in fiscal year 1998, and $26,997,000 in
each fiscal year thereafter.
Subd. 3. [LIMITS ON ADJUSTMENTS AND POTENTIAL REDUCTIONS.]
Increases to any school districts under subdivision 1, clause
(2), and decreases under subdivision 1, clauses (1) and (3), are
limited to the fiscal year 1999 amounts. The commissioner of
children, families, and learning may permanently reduce the
adjustments to school districts under subdivision 1, clauses (1)
and (2), in the same manner as prescribed for nonschool
jurisdictions under section 273.13985, subdivision 2. The
commissioner may, from time to time, require that the most
recent fiscal year payroll information be certified by the
executive director of the teachers retirement association. For
any school district where the newly certified teachers
retirement association payroll is significantly lower than the
fiscal 1997 amount as determined by the commissioner, the
commissioner shall recalculate the lower reduction under
subdivision 1, clause (3), and shall permanently reduce the
adjustment amount in subsequent years.
Subd. 4. [EFFECT OF REORGANIZATIONS.] The commissioner of
children, families, and learning shall reapportion the aid
adjustments to school districts under this section to account
for significant changes in boundaries or consolidations, as
determined by the commissioner. If a school district is
dissolved, or a school district function thereof is assumed by
either the state or a nonpublic organization, adjustments for
all or the appropriate fraction of the total payroll under this
section must terminate.
Subd. 5. [ADJUSTMENT TERMINATION.] All adjustments under
this section terminate on June 30, 2020.
Sec. 15. [273.1385] [AID FOR PUBLIC EMPLOYEES RETIREMENT
ASSOCIATION EMPLOYER CONTRIBUTION RATE INCREASE.]
Subdivision 1. [AID TO OFFSET RATE INCREASE.] Beginning
with the December 26, 1997, payment, and according to the
schedule for payment of local aid under section 477A.015
thereafter, the commissioner of revenue shall pay to each city,
county, town, and other nonschool jurisdiction an amount equal
to 0.35 percent of the fiscal year 1997 payroll for employees
who were members of the general plan of the public employees
retirement association. Except for the December 1997
distribution under this section, the amount of aid must be
certified before September 1 of the year preceding the
distribution year to the affected local government. The
executive director of the public employees retirement
association shall certify the general plan fiscal year covered
payroll and other information requested by the commissioner of
revenue, on or before August 1, 1997, and in subsequent years
where necessary, in order to facilitate administration of this
section. The amount necessary to make these aid payments is
appropriated annually from the general fund to the commissioner
of revenue. Expenditures under this section are estimated to be
$7,942,500 in fiscal year 1998, and $15,885,000 in each
subsequent fiscal year, less any future reductions under
subdivision 2.
Subd. 2. [LIMIT ON AID AND POTENTIAL FUTURE PERMANENT AID
REDUCTIONS.] The aid amount received by any jurisdiction in
fiscal year 2000 or any year thereafter may not exceed the
amount it received in fiscal year 1999. The commissioner may,
from time to time, request the most recent fiscal year payroll
information by jurisdiction to be certified by the executive
director of the public employees retirement association. For
any jurisdiction where newly certified public employees
retirement association general plan payroll is significantly
lower than the fiscal 1997 amount, as determined by the
commissioner, the commissioner shall recalculate the aid amount
based on the most recent fiscal year payroll information,
certify the recalculated aid amount for the next distribution
year, and permanently reduce the aid amount to that jurisdiction.
Subd. 3. [EFFECT OF REORGANIZATIONS.] The commissioner of
revenue may adjust the aid amounts for separate jurisdictions to
account for significant changes in boundaries or in the form of
government, as determined by the commissioner. If a local
government function and the associated public employees
retirement association general plan payroll is assumed by either
the state, or a nonpublic organization, the aid amounts
attributable to the function under this section must terminate.
Subd. 4. [AID TERMINATION.] The aid provided under this
section terminates on June 30, 2020.
Sec. 16. Minnesota Statutes 1996, section 352.01,
subdivision 25, is amended to read:
Subd. 25. [NORMAL RETIREMENT AGE.] "Normal retirement age"
means age 65 for a person who first became a covered employee or
a member of a pension fund listed in section 356.30, subdivision
3, before July 1, 1989. For a person who first becomes a
covered employee after June 30, 1989, normal retirement age
means the higher of age 65 or "retirement age," as defined in
United States Code, title 42, section 416(l), as amended, but
not to exceed age 66.
Sec. 17. Minnesota Statutes 1996, section 352.04,
subdivision 2, is amended to read:
Subd. 2. [EMPLOYEE CONTRIBUTIONS.] The employee
contribution to the fund must be equal to 4.07 4.0 percent of
salary. These contributions must be made by deduction from
salary as provided in subdivision 4.
Sec. 18. Minnesota Statutes 1996, section 352.04,
subdivision 3, is amended to read:
Subd. 3. [EMPLOYER CONTRIBUTIONS.] (a) The employer
contribution to the fund must be equal to 4.2 4.0 percent of
salary.
(b) By January 1 of each year, the board of directors shall
report to the legislative commission on pensions and retirement,
the chair of the committee on appropriations of the house of
representatives, and the chair of the committee on finance of
the senate on the amount raised by the employer and employee
contribution rates in effect and whether the total amount is
less than, the same as, or more than the actuarial requirement
determined under section 356.215.
(c) If the legislative commission on pensions and
retirement, based on the most recent valuation performed by its
actuary, determines that the total amount raised by the employer
and employee contributions under subdivision 2 and paragraph (b)
is less than the actuarial requirements determined under section
356.215, the employer and employee rates must be increased by
equal amounts as necessary to meet the actuarial requirements.
The employee rate may not exceed 4.15 percent of salary and the
employer rate may not exceed 4.29 percent of salary. The
increases are effective on the next January 1 following the
determination by the commission. The executive director of the
Minnesota state retirement system shall notify employing units
of any increases under this paragraph.
Sec. 19. Minnesota Statutes 1996, section 352.115,
subdivision 3, is amended to read:
Subd. 3. [RETIREMENT ANNUITY FORMULA.] (a) This paragraph,
in conjunction with section 352.116, subdivision 1, applies to a
person who became a covered employee or a member of a pension
fund listed in section 356.30, subdivision 3, before July 1,
1989, unless paragraph (b), in conjunction with section 352.116,
subdivision 1a, produces a higher annuity amount, in which case
paragraph (b) will apply. The employee's average salary, as
defined in subdivision 2, multiplied by one the percent
specified in section 356.19, subdivision 1, per year of
allowable service for the first ten years and 1.5 the percent
specified in section 356.19, subdivision 2, for each later year
of allowable service and pro rata for completed months less than
a full year shall determine the amount of the retirement annuity
to which the employee is entitled.
(b) This paragraph applies to a person who has become at
least 55 years old and first became a covered employee after
June 30, 1989, and to any other covered employee who has become
at least 55 years old and whose annuity amount, when calculated
under this paragraph and in conjunction with section 352.116,
subdivision 1a, is higher than it is when calculated under
paragraph (a), in conjunction with section 352.116, subdivision
1. The employee's average salary, as defined in subdivision 2,
multiplied by 1.5 the percent specified in section 356.19,
subdivision 2, for each year of allowable service and pro rata
for months less than a full year shall determine the amount of
the retirement annuity to which the employee is entitled.
Sec. 20. Minnesota Statutes 1996, section 352.72,
subdivision 2, is amended to read:
Subd. 2. [COMPUTATION OF DEFERRED ANNUITY.] (a) The
deferred annuity, if any, accruing under subdivision 1, or
section 352.22, subdivision 3, must be computed as provided in
section 352.22, subdivision 3, on the basis of allowable service
before termination of state service and augmented as provided
herein. The required reserves applicable to a deferred annuity
or to an annuity for which a former employee was eligible but
had not applied or to any deferred segment of an annuity must be
determined as of the date the benefit begins to accrue and
augmented by interest compounded annually from the first day of
the month following the month in which the employee ceased to be
a state employee, or July 1, 1971, whichever is later, to the
first day of the month in which the annuity begins to accrue.
The rates of interest used for this purpose must be five percent
compounded annually until January 1, 1981, and three percent
compounded annually thereafter until January 1 of the year
following the year in which the former employee attains age 55.
From that date to the effective date of retirement, the rate is
five percent compounded annually. If a person has more than one
period of uninterrupted service, the required reserves related
to each period must be augmented by interest under this
subdivision. The sum of the augmented required reserves so
determined is the present value of the annuity. "Uninterrupted
service" for the purpose of this subdivision means periods of
covered employment during which the employee has not been
separated from state service for more than two years. If a
person repays a refund, the service restored by the repayment
must be considered continuous with the next period of service
for which the employee has credit with this system. The formula
percentages used for each period of uninterrupted service must
be those applicable to a new employee. The mortality table and
interest assumption used to compute the annuity must be those in
effect when the employee files application for annuity. This
section shall does not reduce the annuity otherwise payable
under this chapter.
(b) The retirement annuity or disability benefit of, or the
survivor benefit payable on behalf of, a former state employee
who terminated service before July 1, 1997, which is not first
payable until after June 30, 1997, must be increased on an
actuarial equivalent basis to reflect the change in the
postretirement interest rate actuarial assumption under section
356.215, subdivision 4d, from five percent to six percent under
a calculation procedure and the tables adopted by the board and
approved by the actuary retained by the legislative commission
on pensions and retirement.
Sec. 21. Minnesota Statutes 1996, section 352.92,
subdivision 1, is amended to read:
Subdivision 1. [EMPLOYEE CONTRIBUTIONS.] Beginning with
the first full pay period after July 1, 1984, in lieu of
employee contributions payable under section 352.04, subdivision
2, Employee contributions by of covered correctional employees
must be in an amount equal to 4.90 5.50 percent of salary.
Sec. 22. Minnesota Statutes 1996, section 352.92,
subdivision 2, is amended to read:
Subd. 2. [EMPLOYER CONTRIBUTIONS.] In lieu of employer
contributions payable under section 352.04, subdivision 3, The
employer shall contribute for covered correctional employees an
amount equal to 6.75 7.70 percent of salary.
Sec. 23. Minnesota Statutes 1996, section 352.93,
subdivision 2, is amended to read:
Subd. 2. [CALCULATING MONTHLY ANNUITY.] The monthly
annuity under this section must be determined by multiplying the
average monthly salary by the number of years, or completed
months, of covered correctional service by 2.5 the percent
specified in section 356.19, subdivision 5. However, the
monthly annuity must not exceed 75 percent of the average
monthly salary.
Sec. 24. Minnesota Statutes 1996, section 352.93,
subdivision 3, is amended to read:
Subd. 3. [PAYMENTS; DURATION AND AMOUNT ANNUITY ACCRUAL.]
The annuity under this section shall must begin to accrue as
provided in section 352.115, subdivision 8., and must be paid
for an additional 84 full calendar months or to the first of the
month following the month in which the employee attains normal
retirement age, whichever occurs first, except that payment must
not cease before the first of the month following the month in
which the employee becomes 62. It must then be reduced to the
amount as calculated at normal retirement age under section
352.115, except that if this amount, when added to that portion
of the social security benefit based on state service the
employee would be eligible to receive at the time, is less than
the benefit payable under subdivision 2, the retired employee
shall receive an amount that when added to the social security
benefit will equal the amount payable under subdivision 2. If
the employee retired prior to age 55, the reduced benefit as
calculated under section 352.115 must be actuarially reduced as
provided in subdivision 2a.
When an annuity is reduced under this subdivision, the
percentage adjustments, if any, that have been applied to the
original annuity under section 11A.18, before the reduction,
must be compounded and applied to the reduced annuity. A former
correctional employee employed by the state in a position
covered by the regular plan or the unclassified employees
retirement program between the age of 58 and normal retirement
age shall receive a partial return of correctional contributions
at retirement with six percent interest based on the following
formula:
Employee contributions Years and complete
contributed as a months of regular
correctional employee service between
in excess of the age 58 and the
contributions the normal retirement age
employee would have X .....................
contributed as a number of years between
regular employee age 58 and normal
retirement age
Sec. 25. Minnesota Statutes 1996, section 352.93, is
amended by adding a subdivision to read:
Subd. 3a. [OPTIONAL ANNUITIES.] The board may establish
optional annuity forms to pay a higher amount from the date of
retirement until an employee is first eligible to draw social
security benefits or up to the age the employee is eligible to
receive unreduced social security benefits, at which time the
monthly benefits must be reduced. The optional annuity forms
must be actuarially equivalent to the normal single life annuity
form provided in subdivision 2. The optional annuity forms must
be approved by the actuary retained by the legislative
commission on pensions and retirement.
Sec. 26. [352.931] [SURVIVOR BENEFITS.]
Subdivision 1. [SURVIVING SPOUSE BENEFIT.] (a) If the
correctional employee was at least age 50, has credit for at
least three years allowable service, and dies before an annuity
or disability benefit has become payable, notwithstanding any
designation of beneficiary to the contrary, the surviving spouse
of the employee may elect to receive, in lieu of the refund
under section 352.12, subdivision 1, an annuity for life equal
to the joint and 100 percent survivor annuity which the employee
could have qualified for had the employee terminated service on
the date of death. The election may be made at any time after
the date of death of the employee. The surviving spouse benefit
begins to accrue as of the first of the month next following the
date on which the application for the benefit was filed.
(b) If the employee was under age 50, dies, and had credit
for at least three years of allowable service credit on the date
of death but did not yet qualify for retirement, the surviving
spouse may elect to receive a 100 percent joint and survivor
annuity based on the age of the employee and surviving spouse at
the time of death. The annuity is payable using the early
retirement reduction under section 352.93, subdivision 2a, to
age 50, and one-half of the early retirement reduction from age
50 to the age payment begins. The surviving spouse eligible for
surviving spouse benefits under this paragraph may apply for the
annuity at any time after the employee's death. Sections
352.22, subdivision 3, and 352.72, subdivision 2, apply to a
deferred annuity or surviving spouse benefit payable under this
subdivision.
(c) The annuity must cease with the last payment received
by the surviving spouse in the lifetime of the surviving
spouse. Any employee may request in writing that this
subdivision not apply and that payment be made only to a
designated beneficiary as otherwise provided by this chapter.
Subd. 2. [SURVIVING SPOUSE COVERAGE; TERM CERTAIN.] In
lieu of the 100 percent optional annuity under subdivision 1,
the surviving spouse of a deceased employee may elect to receive
survivor coverage in a term certain of ten, 15, or 20 years.
The monthly term certain annuity must be actuarially equivalent
to the 100 percent optional annuity under subdivision 1 and must
be approved by the actuary retained by the legislative
commission on pensions and retirement. The optional annuity
ceases upon the expiration of the term certain period. If a
survivor elects a term certain annuity and dies before the
expiration of the specified term certain period, the commuted
value of the remaining annuity payments must be paid in a lump
sum to the survivor's estate.
Subd. 3. [DEPENDENT CHILD SURVIVOR COVERAGE.] If there is
no surviving spouse eligible for benefits under subdivision 1, a
dependent child as defined in section 352.01, subdivision 26, is
eligible for a dependent child survivor benefit. Benefits to a
dependent child must be paid from the date of the employee's
death to the date the dependent child attains age 20 if the
child is under age 15 on the date of death. If the child is 15
years or older on the date of death, the benefit is payable for
five years. The payment to a dependent child is an amount
actuarially equivalent to the value of a 100 percent joint and
survivor optional annuity using the age of the employee and age
of the dependent child at the date of death in lieu of the age
of the surviving spouse. If there is more than one dependent
child, each dependent child shall receive a proportionate share
of the actuarial value of the employee's account, with the
amount of the benefit payable to each child to be determined
based on the portion of the total eligibility period that each
child is eligible. The process for calculating the dependent
child survivor benefit must be approved by the actuary retained
by the legislative commission on pensions and retirement.
Subd. 4. [DEATH REFUND.] An amount equal to the excess, if
any, of the accumulated contributions credited to the account of
the deceased employee in excess of the total of the benefits
paid to the surviving spouse and surviving child or children
must be paid to the deceased employee's last designated
beneficiary or, if none, as specified under section 352.12,
subdivision 1.
Subd. 5. [APPLICATION.] The benefit elections under this
section must be made on an application form prescribed by the
executive director and must be filed with the executive director.
Sec. 27. Minnesota Statutes 1996, section 352.95,
subdivision 1, is amended to read:
Subdivision 1. [JOB-RELATED DISABILITY.] A covered
correctional employee who becomes disabled and physically unfit
to perform the duties of the position as a direct result of an
injury, sickness, or other disability incurred in or arising out
of any act of duty that makes the employee physically or
mentally unable to perform the duties, is entitled to a
disability benefit based on covered correctional service only.
The benefit amount must equal 50 percent of the average salary
defined in section 352.93, plus an additional 2-1/2 percent
equal to that specified in section 356.19, subdivision 5, for
each year of covered correctional service in excess of 20 years,
ten months, prorated for completed months.
Sec. 28. Minnesota Statutes 1996, section 352.95,
subdivision 5, is amended to read:
Subd. 5. [RETIREMENT STATUS AT NORMAL RETIREMENT AGE.] The
disability benefit paid to a disabled correctional employee
under this section shall terminate at the end of the month in
which the employee reaches age 62. If the disabled correctional
employee is still disabled when the employee reaches age 62, the
employee shall be deemed to be a retired employee. If the
employee had elected an optional annuity under subdivision 1a,
the employee shall receive an annuity in accordance with the
terms of the optional annuity previously elected. If the
employee had not elected an optional annuity under subdivision
1a, the employee may within 90 days of attaining age 65 or
reaching the five-year anniversary of the effective date of the
disability benefit, whichever is later, either elect to receive
a normal retirement annuity computed in the manner provided in
section 352.115 352.93 or elect to receive an optional annuity
as provided in section 352.116, subdivision 3, based on the same
length of service as used in the calculation of the disability
benefit. Election of an optional annuity must be made within 90
days before attaining age 65 or reaching the five-year
anniversary of the effective date of the disability benefit,
whichever is later. The reduction for retirement before normal
retirement age as provided in section 352.116, subdivision 1 or
1a, does not apply. The savings clause provision of section
352.93, subdivision 3, applies. If an optional annuity is
elected, the optional annuity shall begin to accrue on the first
of the month following the month in which the employee reaches
age 65 or the five-year anniversary of the effective date of the
disability benefit, whichever is later.
Sec. 29. Minnesota Statutes 1996, section 352B.02,
subdivision 1a, is amended to read:
Subd. 1a. [MEMBER CONTRIBUTIONS.] Each member shall pay a
sum equal to 8.92 8.40 percent of the member's salary, which
shall constitute the member contribution to the fund.
Sec. 30. Minnesota Statutes 1996, section 352B.02,
subdivision 1c, is amended to read:
Subd. 1c. [EMPLOYER CONTRIBUTIONS.] (a) In addition to
member contributions, department heads shall pay a sum equal to
14.88 12.60 percent of the salary upon which deductions were
made, which shall constitute the employer contribution to the
fund. Department contributions must be paid out of money
appropriated to departments for this purpose.
(b) By January 1 of each year, the board of directors shall
report to the legislative commission on pensions and retirement,
the chair of the committee on appropriations of the house of
representatives, and the chair of the committee on finance of
the senate on the amount raised by the employer and employee
contribution rates in effect and whether the total amount is
less than, the same as, or more than the actuarial requirement
determined under section 356.215.
Sec. 31. Minnesota Statutes 1996, 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 2.65 the percent specified in section 356.19,
subdivision 6, for each year and pro rata for completed months
of service.
Sec. 32. Minnesota Statutes 1996, section 352B.08,
subdivision 2a, is amended to read:
Subd. 2a. [EARLY RETIREMENT.] Any member who has become at
least 50 years old, or former member if service ended after June
30, 1989, and who has at least three years of allowable service
is entitled upon application to a reduced retirement annuity
equal to the annuity calculated under subdivision 2, reduced so
that the reduced annuity is the actuarial equivalent of the
annuity that would be payable if the member deferred receipt of
the annuity from the day the annuity begins to accrue to age
55 by two-tenths of one percent for each month that the member
is under age 55 at the time of retirement.
Sec. 33. Minnesota Statutes 1996, 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 53 60 percent, plus an additional
2.65 percent equal to that specified in section 356.19,
subdivision 6, for each year and pro rata for completed months
of service in excess of 20 years, if any.
Sec. 34. Minnesota Statutes 1996, section 352B.30, is
amended by adding a subdivision to read:
Subd. 4. [1997 POSTRETIREMENT FUND INTEREST CHANGES.] The
retirement annuity or disability benefit of, or the survivor
benefit payable on behalf of, a former member who terminated
service before July 1, 1997, which is not first payable until
after June 30, 1997, must be increased on an actuarial
equivalent basis to reflect the change in the postretirement
interest rate actuarial assumption under section 356.215,
subdivision 4d, from five percent to six percent under a
calculation procedure and tables adopted by the board and
approved by the actuary retained by the legislative commission
on pensions and retirement.
Sec. 35. Minnesota Statutes 1996, section 352C.031,
subdivision 4, is amended to read:
Subd. 4. [RETIREMENT ALLOWANCE FORMULA.] (a) This
paragraph applies to constitutional officers who terminate that
service before July 1, 1997. The average salary multiplied by
2-1/2 percent for each year of allowable service and pro rata
for completed months less than a full year shall determine the
amount of the normal retirement allowance.
(b) This paragraph applies to constitutional officers who
terminate that service after June 30, 1997. The retirement
allowance is an amount equal to the rate under paragraph (a) per
year of service of the constitutional officer's average monthly
salary adjusted for that person on an actuarial equivalent basis
to reflect the change in the postretirement interest rate
actuarial assumption under section 356.215, subdivision 4d, from
five percent to six percent. The adjustment must be calculated
by or, alternatively, the adjustment procedure must be specified
by the actuary retained by the legislative commission on
pensions and retirement.
Sec. 36. Minnesota Statutes 1996, section 352C.033, is
amended to read:
352C.033 [DEFERRED ANNUITIES AUGMENTATION.]
(a) The deferred retirement allowance for any former
constitutional officer shall must be augmented as provided in
this section. The required reserves applicable to the deferred
retirement allowance, determined as of the date the retirement
allowance begins to accrue using the appropriate mortality table
and an interest assumption of five six percent, shall be
augmented from the first of the month following termination of
service as a constitutional officer, or January 1, 1979,
whichever is later, to the first day of the month in which the
annuity begins to accrue, at the rate of five percent per annum
compounded annually until January 1, 1981, and thereafter at the
rate of three percent per annum compounded annually until
January 1 of the year in which the former constitutional officer
attains age 55. From that date to the effective date of
retirement, the rate is five percent compounded annually.
(b) The retirement allowance of, or the survivor benefit
payable on behalf of, a former constitutional officer who
terminated service before July 1, 1997, which is not first
payable until after June 30, 1997, must be increased on an
actuarial equivalent basis to reflect the change in the
postretirement interest rate actuarial assumption under section
356.215, subdivision 4d, from five percent to six percent under
a calculation procedure and tables adopted by the board as
recommended by an approved actuary and approved by the actuary
retained by the legislative commission on pensions and
retirement.
Sec. 37. Minnesota Statutes 1996, section 353.01,
subdivision 37, is amended to read:
Subd. 37. [NORMAL RETIREMENT AGE.] "Normal retirement age"
means age 65 for a person who first became a public employee or
a member of a pension fund listed in section 356.30, subdivision
3, before July 1, 1989. For a person who first becomes a public
employee after June 30, 1989, "normal retirement age" means the
higher of age 65 or "retirement age," as defined in United
States Code, title 42, section 416(l), as amended, but not to
exceed age 66.
Sec. 38. Minnesota Statutes 1996, section 353.27,
subdivision 2, is amended to read:
Subd. 2. [EMPLOYEE CONTRIBUTION.] The employee
contribution shall be an amount (a) for a "basic member" equal
to 8.23 8.75 percent of total salary; and (b) for a "coordinated
member" equal to 4.23 4.75 percent of total salary. These
contributions shall must be made by deduction from salary in the
manner provided in subdivision 4. Where any portion of a
member's salary is paid from other than public funds, such
member's employee contribution shall must be based on the total
salary received from all sources.
Sec. 39. Minnesota Statutes 1996, section 353.27,
subdivision 3a, is amended to read:
Subd. 3a. [ADDITIONAL EMPLOYER CONTRIBUTION.] (a) An
additional employer contribution shall must be made equal to (a)
2-1/2 2.68 percent of the total salary of each "basic member";
and (b) one-quarter of one .43 percent of the total salary of
each "coordinated member." These contributions shall must be
made from funds available to the employing subdivision by the
means and in the manner provided in section 353.28.
(b) This subdivision is repealed once the actuarial value
of the assets of the plan equal or exceed the actuarial accrued
liability of the plan as determined by the actuary retained by
the legislative commission on pensions and retirement under
section 356.215. The repeal is effective on the first day of
the first full pay period occurring after March 31 of the
calendar year following the issuance of the actuarial valuation
upon which the repeal is based.
Sec. 40. Minnesota Statutes 1996, section 353.29,
subdivision 3, is amended to read:
Subd. 3. [RETIREMENT ANNUITY FORMULA.] (a) This paragraph,
in conjunction with section 353.30, subdivisions 1, 1a, 1b, and
1c, applies to any member who first became a public employee or
a member of a pension fund listed in section 356.30, subdivision
3, before July 1, 1989, unless paragraph (b), in conjunction
with section 353.30, subdivision 5, produces a higher annuity
amount, in which case paragraph (b) will apply. The average
salary as defined in subdivision 2, multiplied by two the
percent specified in section 356.19, subdivision 3, for each
year of allowable service for the first ten years and thereafter
by 2.5 the percent specified in section 356.19, subdivision 4,
per year of allowable service and completed months less than a
full year for the "basic member," and one the percent specified
in section 356.19, subdivision 1, for each year of allowable
service for the first ten years and thereafter by 1.5 the
percent specified in section 356.19, subdivision 2, per year of
allowable service and completed months less than a full year for
the "coordinated member," shall determine the amount of the
"normal" retirement annuity.
(b) This paragraph applies to a member who has become at
least 55 years old and first became a public employee after June
30, 1989, and to any other member whose annuity amount, when
calculated under this paragraph and in conjunction with section
353.30, subdivision 5, is higher than it is when calculated
under paragraph (a), in conjunction with section 353.30,
subdivisions 1, 1a, 1b, and 1c. The average salary, as defined
in subdivision 2, multiplied by 2.5 the percent specified in
section 356.19, subdivision 4, for each year of allowable
service and completed months less than a full year for a basic
member and 1.5 the percent specified in section 356.19,
subdivision 2, per year of allowable service and completed
months less than a full year for a coordinated member, shall
determine the amount of the normal retirement annuity.
Sec. 41. Minnesota Statutes 1996, section 353.651,
subdivision 3, is amended to read:
Subd. 3. [RETIREMENT ANNUITY FORMULA.] The average salary
as defined in subdivision 2, multiplied by 2.65 the percent
specified in section 356.19, subdivision 6, per year of
allowable service determines the amount of the normal retirement
annuity. If the member has earned allowable service for
performing services other than those of a police officer or
firefighter, the annuity representing such service is computed
under sections 353.29 and 353.30.
Sec. 42. Minnesota Statutes 1996, section 353.656,
subdivision 1, is amended to read:
Subdivision 1. [IN LINE OF DUTY; COMPUTATION OF BENEFITS.]
A member of the police and fire fund who becomes disabled and
physically unfit to perform duties as a police officer or
firefighter subsequent to June 30, 1973, as a direct result of
an injury, sickness, or other disability incurred in or arising
out of any act of duty, which has or is expected to render the
member physically or mentally unable to perform duties as a
police officer or firefighter for a period of at least one year,
shall receive disability benefits during the period of such
disability. The benefits must be in an amount equal to 53 60
percent of the "average salary" under subdivision 3, plus an
additional 2.65 percent specified in section 356.19, subdivision
6, of said average salary for each year of service in excess of
20 years. Should disability under this subdivision occur before
the member has at least five years of allowable service credit
in the police and fire fund, the disability benefit must be
computed on the "average salary" from which deductions were made
for contribution to the police and fire fund.
Sec. 43. Minnesota Statutes 1996, section 353.71,
subdivision 2, is amended to read:
Subd. 2. [DEFERRED ANNUITY COMPUTATION; AUGMENTATION.] (a)
The deferred annuity, if any, accruing under subdivision 1, or
sections 353.34, subdivision 3, and 353.68, subdivision 4, shall
must be computed in the manner provided in said sections, on the
basis of allowable service prior to termination of public
service and augmented as provided herein. The required reserves
applicable to a deferred annuity, or to an annuity for which a
former member was eligible but had not applied, or to any
deferred segment of an annuity shall be determined as of the
date the annuity begins to accrue and shall be augmented from
the first day of the month following the month in which the
former member ceased to be a public employee, or July 1, 1971,
whichever is later, to the first day of the month in which the
annuity begins to accrue, at the rate of five percent per annum
compounded annually until January 1, 1981, and at the rate of
three percent thereafter until January 1 of the year following
the year in which the former member attains age 55. From that
date to the effective date of retirement, the rate is five
percent per annum compounded annually. If a person has more
than one period of uninterrupted service, the required reserves
related to each period shall be augmented by interest pursuant
to this subdivision. The sum of the augmented required reserves
so determined shall be the present value of the annuity.
Uninterrupted service for the purpose of this subdivision shall
mean periods of covered employment during which the employee has
not been separated from public service for more than two years.
If a person repays a refund, the service restored thereby shall
be considered as continuous with the next period of service for
which the employee has credit with this association. The formula
percentages used for each period of uninterrupted service shall
be those as would be applicable to a new employee. This section
shall not reduce the annuity otherwise payable under this
chapter. This subdivision shall apply to deferred annuitants of
record on July 1, 1971, and to employees who thereafter become
deferred annuitants; it shall also apply from July 1, 1971, to
former members who make application for an annuity after July 1,
1973.
(b) The retirement annuity or disability benefit of, or the
survivor benefit payable on behalf of, a former member who
terminated service before July 1, 1997, which is not first
payable until after June 30, 1997, must be increased on an
actuarial equivalent basis to reflect the change in the
postretirement interest rate actuarial assumption under section
356.215, subdivision 4d, from five percent to six percent under
a calculation procedure and tables adopted by the board and
approved by the actuary retained by the legislative commission
on pensions and retirement.
Sec. 44. Minnesota Statutes 1996, section 353A.08,
subdivision 1, is amended to read:
Subdivision 1. [ELECTION OF COVERAGE BY CURRENT RETIREES.]
A person who is receiving a service pension, disability benefit,
or survivorship survivor benefit is eligible to elect benefit
coverage provided under the relevant provisions of the public
employees police and fire fund benefit plan or to retain benefit
coverage provided under the relief association benefit plan in
effect on the effective date of the consolidation. The relevant
provisions of the public employees police and fire fund benefit
plan for the person electing that benefit coverage are limited
to participation in the Minnesota postretirement investment fund
for any future postretirement adjustments based on the amount of
the benefit or pension payable on December 31, if December 31 is
the effective date of consolidation, or on the December 1
following the effective date of the consolidation, if other than
December 31. The survivorship survivor benefit payable on
behalf of any service pension or disability benefit recipient
who elects benefit coverage under the public employees police
and fire fund benefit plan must be calculated under the relief
association benefit plan and is subject to participation in the
Minnesota postretirement investment fund for any future
postretirement adjustments based on the amount of the
survivorship survivor benefit payable.
A survivor benefit calculated under the relief association
benefit plan which is first payable after June 30, 1997, to the
surviving spouse of a retired member of a consolidation account
who, before July 1, 1997, chose to participate in the Minnesota
postretirement investment fund as provided under this
subdivision must be increased on the effective date of the
survivor benefit on an actuarial equivalent basis to reflect the
change in the postretirement interest rate actuarial assumption
under section 356.215, subdivision 4d, from five percent to six
percent under a calculation procedure and tables adopted by the
board and approved by the actuary retained by the legislative
commission on pensions and retirement.
By electing the public employees police and fire fund
benefit plan, a current service pension or disability benefit
recipient who, as of the first January 1 occurring after the
effective date of consolidation, has been receiving the pension
or benefit for at least seven months, or any survivor benefit
recipient who, as of the first January 1 occurring after the
effective date of consolidation, has been receiving the benefit
on the person's own behalf or in combination with a prior
applicable service pension or disability benefit for at least
seven months is eligible to receive a partial adjustment payable
from the Minnesota postretirement investment fund under section
11A.18, subdivision 9.
The election by any pension or benefit recipient must be
made on or before the deadline established by the board of the
public employees retirement association in a manner that
recognizes the number of persons eligible to make the election
and the anticipated time required to conduct any required
benefit counseling.
Sec. 45. Minnesota Statutes 1996, section 353A.08,
subdivision 2, is amended to read:
Subd. 2. [ELECTION OF COVERAGE BY CURRENT DEFERRED
RETIREES.] (a) Any person who has terminated active employment
as a police officer or firefighter, whichever applies, with the
municipality, has sufficient credit for service to entitle the
person to an eventual service pension and has not taken a refund
of accumulated member contributions, if applicable, shall have
the option to elect to have benefit coverage provided under the
relevant provisions of the public employees police and fire fund
benefit plan or to retain benefit coverage provided by the
relief association benefit plan in effect on the effective date
of consolidation. The relevant provisions of the public
employees police and fire fund benefit plan for the person
electing that benefit coverage shall be the provisions specified
in subdivision 1.
The election shall be made when the person files an
application for receipt of the deferred service pension and
shall accompany that application.
(b) The retirement annuity for a deferred member of a
consolidated local relief association which consolidated before
July 1, 1997, who elected the relevant provisions of the public
employees police and fire fund benefit plan under subdivision 1
must be increased on an actuarial equivalent basis to reflect
the change in the postretirement interest rate actuarial
assumption under section 356.215, subdivision 4d, from five
percent to six percent under a calculation procedure and tables
adopted by the board of trustees of the public employees
retirement association and approved by the actuary retained by
the legislative commission on pensions and retirement.
Sec. 46. Minnesota Statutes 1996, section 353A.083, is
amended by adding a subdivision to read:
Subd. 3. [PRE-1997 CONSOLIDATION.] (a) For any
consolidation plan account in effect on July 1, 1997, the
applicable benefit plan coverage defined in paragraph (b) or (c)
applies unless the consolidation account's city approves the
extension of the post-June 30, 1997, public employees police and
fire fund benefit plan to the consolidation account members.
(b) If the applicable municipality has approved the July 1,
1993, public employees police and fire fund benefit provisions,
but has not approved the extension of the post-June 30, 1997,
public employees police and fire fund benefit provisions:
(1) the benefit accrual rate for calculating retirement
annuities that apply to consolidation account members who have
elected or elect coverage under the provisions of the public
employees police and fire fund benefit plan is 2.9 percent of
average salary under section 353.651, subdivision 2, per year of
allowable service;
(2) the optional survivor annuities payable to the
survivors of these consolidated members who elected coverage
under the provisions of the public employees police and fire
fund benefit plan must be determined using a benefit accrual
rate of 2.9 percent of average salary under section 353.651,
subdivision 2, per year of the member's allowable service;
(3) the disability benefit payable for these consolidated
members who elected or elect coverage under the provisions of
the public employees police and fire fund benefit plan and:
(i) who become disabled in the line of duty, as defined
under section 353.656, subdivision 1, is an amount equal to 58
percent of average salary under section 353.651, subdivision 2,
plus an additional 2.9 percent of that average salary for each
year of service in excess of 20 years; or
(ii) who become disabled because of sickness or injury
occurring while not on duty, as defined under section 353.656,
subdivision 3, is an amount equal to 43.50 percent of average
salary under section 353.651, subdivision 2, plus an additional
2.9 percent of that average salary for each year of service in
excess of 15 years.
(c) If the applicable municipality has not approved the
July 1, 1993, public employees police and fire fund benefit
provisions, and has not approved the extension of the post-June
30, 1997, public employees police and fire fund benefit
provisions:
(1) the benefit accrual rate for calculating retirement
annuities that apply to consolidation account members who have
elected or elect coverage under the provisions of the public
employees police and fire fund benefit plan is 2.74 percent of
average salary under section 353.651, subdivision 2, per year of
allowable service;
(2) the optional survivor annuities payable to the
survivors of these consolidated members who elected coverage
under the provisions of the public employees police and fire
fund benefit plan must be determined using a benefit accrual
rate of 2.74 percent of average salary under section 353.651,
subdivision 2, per year of the member's allowable service;
(3) the disability benefit payable for consolidated members
who elected or elect the coverage under the provisions of the
public employees police and fire fund benefit plan and:
(i) who become disabled in the line of duty, as defined
under section 353.656, subdivision 1, is an amount equal to
54.80 percent of the average salary under section 353.651,
subdivision 2, plus an additional 2.74 percent of that average
salary for each year of service in excess of 20 years; or
(ii) who become disabled because of sickness or injury
occurring while not on duty, as defined under section 353.656,
subdivision 3, is an amount equal to 41.10 percent of the
average salary under section 353.651, subdivision 2, plus an
additional 2.74 percent of that average salary for each year of
service in excess of 15 years.
Sec. 47. Minnesota Statutes 1996, section 354.05,
subdivision 38, is amended to read:
Subd. 38. [NORMAL RETIREMENT AGE.] "Normal retirement age"
means age 65 for a person who first became a member of the
association or a member of a pension fund listed in section
356.30, subdivision 3, before July 1, 1989. For a person who
first becomes a member of the association after June 30, 1989,
normal retirement age means the higher of age 65 or "retirement
age," as defined in United States Code, title 42, section
416(l), as amended, but not to exceed age 66.
Sec. 48. Minnesota Statutes 1996, section 354.42,
subdivision 2, is amended to read:
Subd. 2. [EMPLOYEE.] The employee contribution to the fund
shall be is an amount equal to 6.5 5.0 percent of the salary of
every coordinated member and 10.5 9.0 percent of the salary of
every basic member. This contribution shall must be made by
deduction from salary. Where any portion of a member's salary
is paid from other than public funds, such the member's employee
contribution shall must be based on the entire salary received.
Sec. 49. Minnesota Statutes 1996, section 354.42,
subdivision 3, is amended to read:
Subd. 3. [EMPLOYER.] The employer contribution to the fund
shall be is an amount equal to 4-1/2 5.0 percent of the salary
of each coordinated member and 8-1/2 9.0 percent of the salary
of each basic member.
Sec. 50. Minnesota Statutes 1996, section 354.42,
subdivision 5, is amended to read:
Subd. 5. [ADDITIONAL EMPLOYER CONTRIBUTION.] (a) To
amortize the unfunded actuarial accrued liability computed under
the entry age actuarial cost method and disclosed under the
annual actuarial valuations prepared by the commission-retained
actuary under section 356.215, an additional employer
contribution shall must be made in the amount of 3.64 1.64
percent of the salary of each member.
(b) This contribution must be made in the manner provided
in section 354.52, subdivision 4.
(c) This subdivision is repealed once the actuarial value
of the assets of the plan equal or exceed the actuarial accrued
liability of the plan as determined by the actuary retained by
the legislative commission on pensions and retirement under
section 356.215. The repeal is effective on the first day of
the first full pay period occurring after March 31 of the
calendar year following the issuance of the actuarial valuation
upon which the repeal is based.
By January 1 of each year, the board of directors shall
report to the legislative commission on pensions and retirement,
the chair of the committee on appropriations of the house of
representatives, and the chair of the committee on finance of
the senate on the amount raised by the additional employer
contribution rate in effect and whether that amount is less
than, the same as, or more than the required amortization
contribution determined under section 356.215.
Sec. 51. Minnesota Statutes 1996, section 354.44,
subdivision 6, is amended to read:
Subd. 6. [COMPUTATION OF FORMULA PROGRAM RETIREMENT
ANNUITY.] (1) The formula retirement annuity hereunder shall
must be computed in accordance with the applicable provisions of
the formulas stated in clause (2) or (4) on the basis of each
member's average salary for the period of the member's formula
service credit.
For all years of formula service credit, "average salary,"
for the purpose of determining the member's retirement annuity,
means the average salary upon which contributions were made and
upon which payments were made to increase the salary limitation
provided in Minnesota Statutes 1971, section 354.511, for the
highest five successive years of formula service credit
provided, however, that such "average salary" shall not include
any more than the equivalent of 60 monthly salary payments.
Average salary must be based upon all years of formula service
credit if this service credit is less than five years.
(2) This clause, in conjunction with clause (3), applies to
a person who first became a member of the association or a
member of a pension fund listed in section 356.30, subdivision
3, before July 1, 1989, unless clause (4), in conjunction with
clause (5), produces a higher annuity amount, in which case
clause (4) applies. The average salary as defined in clause
(1), multiplied by the following percentages per year of formula
service credit shall determine the amount of the annuity to
which the member qualifying therefor is entitled:
Coordinated Member Basic Member
Each year of service 1.13 the 2.13 the
during first ten percent percent
specified in specified in
section 356.19, section 356.19,
subdivision 1, subdivision 3,
per year per year
Each year of service 1.63 the 2.63 the
thereafter percent percent
specified in specified in
section 356.19, section 356.19,
subdivision 2, subdivision 4,
per year per year
(3)(i) This clause applies only to a person who first
became a member of the association or a member of a pension fund
listed in section 356.30, subdivision 3, before July 1, 1989,
and whose annuity is higher when calculated under clause (2), in
conjunction with this clause than when calculated under clause
(4), in conjunction with clause (5).
(ii) Where any member retires prior to normal retirement
age under a formula annuity, the member shall be paid a
retirement annuity in an amount equal to the normal annuity
provided in clause (2) reduced by one-quarter of one percent for
each month that the member is under normal retirement age at the
time of retirement except that for any member who has 30 or more
years of allowable service credit, the reduction shall be
applied only for each month that the member is under age 62.
(iii) Any member whose attained age plus credited allowable
service totals 90 years is entitled, upon application, to a
retirement annuity in an amount equal to the normal annuity
provided in clause (2), without any reduction by reason of early
retirement.
(4) This clause applies to a member who has become at least
55 years old and first became a member of the association 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
clause and in conjunction with clause (5), is higher than it is
when calculated under clause (2), in conjunction with clause (3).
The average salary, as defined in clause (1) multiplied by 2.63
the percent specified by section 356.19, subdivision 4, for each
year of service for a basic member and by 1.63 the
percent specified in section 356.19, subdivision 2, for each
year of service for a coordinated member shall determine the
amount of the retirement annuity to which the member is entitled.
(5) This clause applies to a person who has become at least
55 years old and first becomes a member of the association after
June 30, 1989, and to any other member who has become at least
55 years old and whose annuity is higher when calculated under
clause (4) in conjunction with this clause than when calculated
under clause (2), in conjunction with clause (3). An employee
who retires under the formula annuity before the normal
retirement age shall be paid the normal annuity provided in
clause (4) reduced so that the reduced annuity is the actuarial
equivalent of the annuity that would be payable to the employee
if the employee deferred receipt of the annuity and the annuity
amount were augmented at an annual rate of three percent
compounded annually from the day the annuity begins to accrue
until the normal retirement age.
Sec. 52. Minnesota Statutes 1996, section 354.44, is
amended by adding a subdivision to read:
Subd. 6a. [EXTENSION OF 1997 PERMANENT INCREASE.] (a) A
percentage of the permanent increase for benefit recipients
effective July 1, 1997, under section 71, as specified in
paragraph (b), is payable to:
(1) a member who terminates service after June 30, 1997,
and whose benefit begins to accrue during the period of July 2,
1997, to July 1, 2002, based on the member's age at retirement.
(2) a member who is determined to be totally and
permanently disabled under section 354.05, subdivision 14, after
June 30, 1997, and whose benefit begins to accrue during the
period of July 2, 1997, to July 1, 2002, based on the member's
age at disability.
(3) the survivor of a member who terminates service and
dies after June 30, 1997, and whose benefit begins to accrue
during the period of July 2, 1997, to July 1, 2002.
(b) The percentage of the permanent increase is the amount
designated for the applicable beginning benefit accrual date, as
follows:
Beginning Benefit Percentage of
Accrual Date Permanent Increase
July 2, 1997 to July 1, 1998 50 percent
July 2, 1998 to July 1, 1999 40 percent
July 2, 1999 to July 1, 2000 30 percent
July 2, 2000 to July 1, 2001 20 percent
July 2, 2001 to July 1, 2002 10 percent
Sec. 53. Minnesota Statutes 1996, section 354.53,
subdivision 1, is amended to read:
Subdivision 1. [EMPLOYEE AND EMPLOYER CONTRIBUTIONS.] Any
employee given a leave of absence to enter military service and
who returns to teaching service upon discharge from military
service as provided in section 192.262, shall may obtain credit
for the period of military service but shall not receive credit
for any voluntary extension of military service at the instance
of the member beyond the initial period of enlistment, induction
or call to active duty. The member shall obtain credit by
paying into the fund an employee contribution based upon
the salary of the member at the date of return from military
service. The amount of this contribution shall be as follows:
Period Basic Member Coordinated Member
July 1, 1973 8 percent 4 percent
thru
June 30, 1979
July 1, 1979
and 8.5 percent 4.5 percent
thereafter
The contributions specified in this subdivision shall be
contribution rates in effect at the time that the military
service was performed multiplied by the annual salary rate of
the member for the year beginning with the date of return from
military service and the number of years of military service
together with interest thereon at an annual rate of 8.5 percent
compounded annually from the time the military service was
rendered to the first date of payment. The employer
contribution and additional contribution provided in section
354.42 shall must be paid by the employing unit at the rates in
effect at the time that the military service was performed,
applied to the annual salary rate of the member for the year
beginning with the date of return from military service, in the
manner provided in section 354.52, subdivision 4.
Sec. 54. Minnesota Statutes 1996, section 354.55,
subdivision 11, is amended to read:
Subd. 11. [DEFERRED ANNUITY; AUGMENTATION.] (a) Any person
covered under section 354.44, subdivision 6, who ceases to
render teaching service, may leave the person's accumulated
deductions in the fund for the purpose of receiving a deferred
annuity at retirement. Eligibility for an annuity under this
subdivision shall be is governed pursuant to section 354.44,
subdivision 1, or 354.60.
(b) The amount of the deferred retirement annuity shall be
is determined by section 354.44, subdivision 6, and augmented as
provided in this subdivision. The required reserves related to
that portion of the annuity which had accrued when the member
ceased to render teaching service shall must be augmented by
interest compounded annually from the first day of the month
following the month during which the member ceased to render
teaching service to the effective date of retirement. There
shall be no augmentation if this period is less than three
months or if this period commences prior to July 1, 1971. The
rates of interest used for this purpose shall must be five
percent compounded annually commencing July 1, 1971, until
January 1, 1981, and three percent compounded annually
thereafter until January 1 of the year following the year in
which the former member attains age 55. From that date to the
effective date of retirement, the rate is five percent
compounded annually. If a person has more than one period of
uninterrupted service, a separate average salary determined
under section 354.44, subdivision 6, must be used for each
period and the required reserves related to each period shall
must be augmented by interest pursuant to this subdivision. The
sum of the augmented required reserves so determined shall be
the basis for purchasing the deferred annuity. If a person
repays a refund, the service restored by the repayment must be
considered as continuous with the next period of service for
which the person has credit with this fund. If a person does
not render teaching service in any one fiscal year or more
consecutive fiscal years and then resumes teaching service, the
formula percentages used from the date of the resumption of
teaching service shall must be those applicable to new members.
The mortality table and interest assumption used to compute the
annuity shall must be the applicable mortality table established
by the board under section 354.07, subdivision 1, and the
interest rate assumption under section 356.215 in effect when
the member retires. A period of uninterrupted service for the
purposes of this subdivision means a period of covered teaching
service during which the member has not been separated from
active service for more than one fiscal year.
(c) In no case shall the annuity payable under this
subdivision be less than the amount of annuity payable pursuant
to section 354.44, subdivision 6.
(d) The requirements and provisions for retirement before
normal retirement age contained in section 354.44, subdivision
6, clause (3) or (5), shall also apply to an employee fulfilling
the requirements with a combination of service as provided in
section 354.60.
(e) The augmentation provided by this subdivision applies
to the benefit provided in section 354.46, subdivision 2.
(f) The augmentation provided by this subdivision shall not
apply to any period in which a person is on an approved leave of
absence from an employer unit covered by the provisions of this
chapter.
(g) The retirement annuity or disability benefit of, or the
survivor benefit payable on behalf of, a former teacher who
terminated service before July 1, 1997, which is not first
payable until after June 30, 1997, must be increased on an
actuarial equivalent basis to reflect the change in the
postretirement interest rate actuarial assumption under section
356.215, subdivision 4d, from five percent to six percent under
a calculation procedure and tables adopted by the board as
recommended by an approved actuary and approved by the actuary
retained by the legislative commission on pensions and
retirement.
Sec. 55. [356.19] [RETIREMENT BENEFIT FORMULA
PERCENTAGES.]
Subdivision 1. [COORDINATED PLAN MEMBERS.] The applicable
benefit accrual rate is 1.2 percent.
Subd. 2. [COORDINATED PLAN MEMBERS.] The applicable
benefit accrual rate is 1.7 percent.
Subd. 3. [BASIC PLAN MEMBERS.] The applicable benefit
accrual rate is 2.2 percent.
Subd. 4. [BASIC PLAN MEMBERS.] The applicable benefit
accrual rate is 2.7 percent.
Subd. 5. [CORRECTIONAL PLAN MEMBERS.] The applicable
benefit accrual rate is 2.4 percent.
Subd. 6. [STATE TROOPERS PLAN AND POLICE/FIRE PLAN
MEMBERS.] The applicable benefit accrual rate is 3.0 percent.
Subd. 7. [JUDGES PLAN.] The applicable benefit accrual
rate is 2.7 percent.
Subd. 8. [JUDGES PLAN.] The applicable benefit accrual
rate is 3.2 percent.
Subd. 9. [FUTURE BENEFIT ACCRUAL RATE INCREASES.] After
January 2, 1998, benefit accrual rate increases under this
section must apply only to allowable service or formula service
rendered after the effective date of the benefit accrual rate
increase.
Sec. 56. Minnesota Statutes 1996, section 356.20,
subdivision 2, is amended to read:
Subd. 2. [COVERED PUBLIC PENSION FUNDS.] This section
applies to the following public pension plans:
(1) State employees retirement fund.
(2) Public employees retirement fund.
(3) Teachers retirement association.
(4) State patrol retirement fund.
(5) Minneapolis teachers retirement fund association.
(6) St. Paul teachers retirement fund association.
(7) Duluth teachers retirement fund association.
(8) Minneapolis employees retirement fund.
(9) University of Minnesota faculty retirement plan.
(10) University of Minnesota faculty supplemental
retirement plan.
(11) Judges retirement fund.
(12) Any police or firefighter's relief association
enumerated in section 69.77, subdivision 1a or 69.771,
subdivision 1.
(13) Public employees police and fire fund.
(14) Minnesota state retirement system correctional
officers retirement fund.
(15) Public employees local government correctional service
retirement plan.
Sec. 57. Minnesota Statutes 1996, section 356.215,
subdivision 2, is amended to read:
Subd. 2. [REQUIREMENTS.] (a) It is the policy of the
legislature that it is necessary and appropriate to determine
annually the financial status of tax supported retirement and
pension plans for public employees. To achieve this goal, the
legislative commission on pensions and retirement shall have
prepared by the actuary retained by the commission annual
actuarial valuations of the retirement plans enumerated in
section 3.85, subdivision 11, paragraph (b), and quadrennial
experience studies of the retirement plans enumerated in section
3.85, subdivision 11, paragraph (b), clauses (1), (2), and (7),
and, two years after each set of quadrennial experience studies,
quadrennial projection valuations of the retirement plans
enumerated in section 3.85, subdivision 11, paragraph (b),
clauses (1), (2), and (7), and of any other retirement plan
enumerated in section 3.85, subdivision 11, paragraph (b), for
which it determines that the analysis is beneficial. The
governing or managing board or administrative officials of each
public pension and retirement fund or plan enumerated in section
356.20, subdivision 2, clauses (9), (10), and (12), shall have
prepared by an approved actuary annual actuarial valuations of
their respective funds as provided in this section. This
requirement also applies to any fund that is the successor to
any organization enumerated in section 356.20, subdivision 2, or
to the governing or managing board or administrative officials
of any newly formed retirement fund or association operating
under the control or supervision of any public employee group,
governmental unit, or institution receiving a portion of its
support through legislative appropriations, and any local police
or fire fund coming within the provisions of section 356.216.
(b) The quadrennial projection valuations required under
paragraph (a) are intended to serve as an additional analytical
tool with which policy makers may assess the future funding
status of public plans through forecasting and testing various
potential outcomes over time if certain plan assumptions or
valuation methods were to be modified. In consultation with the
executive director of the legislative commission on pensions and
retirement, the retirement fund directors, the state economist,
the state demographer, the commissioner of finance, and the
commissioner of employee relations, the actuary retained by the
legislative commission on pensions and retirement shall perform
the quadrennial projection valuations, testing future
implications for plan funding by modifying assumptions and
methods currently in place. The commission-retained actuary
shall provide advice to the commission as to the periods over
which such projections should be made, the nature and scope of
the scenarios to be analyzed, the measures of funding status to
be employed, and shall report the results of these analyses in
the same manner as for quadrennial experience studies.
Sec. 58. Minnesota Statutes 1996, section 356.215,
subdivision 4d, is amended to read:
Subd. 4d. [INTEREST AND SALARY ASSUMPTIONS.] (a) For funds
governed by chapters chapter 352B, 353C, and by sections 352.90
through 352.951 and 353.63 through 353.68, the actuarial
valuation must use a preretirement interest assumption of 8.5
percent, a postretirement interest assumption of five six
percent, and a future salary increase assumption of 6.5 percent.
(b) For funds governed by chapter 354A, the actuarial
valuation must use preretirement and postretirement assumptions
of 8.5 percent and a future salary increase assumption of 6.5
percent, but the actuarial valuation must reflect the payment of
postretirement adjustments to retirees, based on the methods
specified in the bylaws of the fund as approved by the
legislature. For a fund governed by chapter 422A, the actuarial
valuation shall use a preretirement interest assumption of six
percent, a postretirement interest assumption of five percent,
and an assumption that in each future year the salary on which a
retirement or other benefit is based is 1.04 multiplied by the
salary for the preceding year.
(c) For all other funds not specified in paragraph (a),
(b), (d), or (e), the actuarial valuation must use a
preretirement interest assumption of five percent, a
postretirement interest assumption of five percent, and a future
salary increase assumption of 3.5 percent.
(d) For funds governed by chapters 3A, 352C, and 490, the
actuarial valuation must use a preretirement interest assumption
of 8.5 percent, a postretirement interest assumption of five six
percent, and a future salary increase assumption of 6.5 percent
in each future year in which the salary amount payable is not
determinable from section 3.099, 15A.081, subdivision 6, or
15A.083, subdivision 1, whichever applies, or from applicable
compensation council recommendations under section 15A.082.
(e) For funds governed by sections 352.01 through 352.86,
353.01 through 353.46, and chapter 354, the actuarial valuation
must use a preretirement interest assumption of 8.5, a
postretirement interest assumption of five six percent, and a
graded rate future salary increase assumption as follows:
General state General public
employees employees Teachers
retirement retirement retirement
Age plan plan plan
16 7.2500% 8.71% 7.25%
17 7.2500 8.71 7.25
18 7.2500 8.70 7.25
19 7.2500 8.70 7.25
20 7.2500 7.70 7.25
21 7.1454 7.70 7.25
22 7.1094 7.70 7.25
23 7.0725 7.70 7.20
24 7.0363 7.70 7.15
25 7.0000 7.60 7.10
26 7.0000 7.51 7.05
27 7.0000 7.39 7.00
28 7.0000 7.30 7.00
29 7.0000 7.20 7.00
30 7.0000 7.20 7.00
31 7.0000 7.10 7.00
32 7.0000 7.10 7.00
33 7.0000 7.00 7.00
34 7.0000 7.00 7.00
35 7.0000 6.90 7.00
36 6.9019 6.80 7.00
37 6.8074 6.70 7.00
38 6.7125 6.60 6.90
39 6.6054 6.50 6.80
40 6.5000 6.40 6.70
41 6.3540 6.30 6.60
42 6.2087 6.30 6.50
43 6.0622 6.30 6.35
44 5.9048 6.20 6.20
45 5.7500 6.20 6.05
46 5.6940 6.09 5.90
47 5.6375 6.00 5.75
48 5.5822 5.90 5.70
49 5.5405 5.80 5.65
50 5.5000 5.70 5.60
51 5.4384 5.70 5.55
52 5.3776 5.70 5.50
53 5.3167 5.70 5.45
54 5.2826 5.70 5.40
55 5.2500 5.70 5.35
56 5.2500 5.70 5.30
57 5.2500 5.70 5.25
58 5.2500 5.70 5.25
59 5.2500 5.70 5.25
60 5.2500 5.00 5.25
61 5.2500 5.00 5.25
62 5.2500 5.00 5.25
63 5.2500 5.00 5.25
64 5.2500 5.00 5.25
65 5.2500 5.00 5.25
66 5.2500 5.00 5.25
67 5.2500 5.00 5.25
68 5.2500 5.00 5.25
69 5.2500 5.00 5.25
70 5.2500 5.00 5.25
Sec. 59. Minnesota Statutes 1996, section 356.215,
subdivision 4g, is amended to read:
Subd. 4g. [AMORTIZATION CONTRIBUTIONS.] (a) In addition to
the exhibit indicating the level normal cost, the actuarial
valuation must contain an exhibit indicating the additional
annual contribution sufficient to amortize the unfunded
actuarial accrued liability. For funds governed by chapters 3A,
352, 352B, 352C, 353, 353C, 354, 354A, and 490, the additional
contribution must be calculated on a level percentage of covered
payroll basis by the established date for full funding in effect
when the valuation is prepared. For funds governed by chapter
3A, sections 352.90 through 352.951, chapters 352B, 352C,
sections 353.63 through 353.68, and chapters 353C, 354A, and
490, the level percent additional contribution must be
calculated assuming annual payroll growth of 6.5 percent. For
funds governed by sections 352.01 through 352.86 and chapter
354, the level percent additional contribution must be
calculated assuming an annual payroll growth of five percent.
For the fund governed by sections 353.01 through 353.46, the
level percent additional contribution must be calculated
assuming an annual payroll growth of six percent. For all other
funds, the additional annual contribution must be calculated on
a level annual dollar amount basis.
(b) For any fund other than the Minneapolis employees
retirement fund, after the first actuarial valuation date
occurring after June 1, 1989, if there has not been a change in
the actuarial assumptions used for calculating the actuarial
accrued liability of the fund, a change in the benefit plan
governing annuities and benefits payable from the fund, a change
in the actuarial cost method used in calculating the actuarial
accrued liability of all or a portion of the fund, or a
combination of the three, which change or changes by themselves
without inclusion of any other items of increase or decrease
produce a net increase in the unfunded actuarial accrued
liability of the fund, the established date for full funding for
the first actuarial valuation made after June 1, 1989, and each
successive actuarial valuation is the first actuarial valuation
date occurring after June 1, 2020.
(c) For any fund or plan other than the Minneapolis
employees retirement fund, after the first actuarial valuation
date occurring after June 1, 1989, if there has been a change in
any or all of the actuarial assumptions used for calculating the
actuarial accrued liability of the fund, a change in the benefit
plan governing annuities and benefits payable from the fund, a
change in the actuarial cost method used in calculating the
actuarial accrued liability of all or a portion of the fund, or
a combination of the three, and the change or changes, by
themselves and without inclusion of any other items of increase
or decrease, produce a net increase in the unfunded actuarial
accrued liability in the fund, the established date for full
funding must be determined using the following procedure:
(i) the unfunded actuarial accrued liability of the fund
must be determined in accordance with the plan provisions
governing annuities and retirement benefits and the actuarial
assumptions in effect before an applicable change;
(ii) the level annual dollar contribution or level
percentage, whichever is applicable, needed to amortize the
unfunded actuarial accrued liability amount determined under
item (i) by the established date for full funding in effect
before the change must be calculated using the interest
assumption specified in subdivision 4d in effect before the
change;
(iii) the unfunded actuarial accrued liability of the fund
must be determined in accordance with any new plan provisions
governing annuities and benefits payable from the fund and any
new actuarial assumptions and the remaining plan provisions
governing annuities and benefits payable from the fund and
actuarial assumptions in effect before the change;
(iv) the level annual dollar contribution or level
percentage, whichever is applicable, needed to amortize the
difference between the unfunded actuarial accrued liability
amount calculated under item (i) and the unfunded actuarial
accrued liability amount calculated under item (iii) over a
period of 30 years from the end of the plan year in which the
applicable change is effective must be calculated using the
applicable interest assumption specified in subdivision 4d in
effect after any applicable change;
(v) the level annual dollar or level percentage
amortization contribution under item (iv) must be added to the
level annual dollar amortization contribution or level
percentage calculated under item (ii);
(vi) the period in which the unfunded actuarial accrued
liability amount determined in item (iii) is amortized by the
total level annual dollar or level percentage amortization
contribution computed under item (v) must be calculated using
the interest assumption specified in subdivision 4d in effect
after any applicable change, rounded to the nearest integral
number of years, but not to exceed 30 years from the end of the
plan year in which the determination of the established date for
full funding using the procedure set forth in this clause is
made and not to be less than the period of years beginning in
the plan year in which the determination of the established date
for full funding using the procedure set forth in this clause is
made and ending by the date for full funding in effect before
the change; and
(vii) the period determined under item (vi) must be added
to the date as of which the actuarial valuation was prepared and
the date obtained is the new established date for full funding.
(d) For the Minneapolis employees retirement fund, the
established date for full funding is June 30, 2020.
(e) For the public employees retirement association police
and fire fund plan, the correctional employees retirement plan
of the Minnesota state retirement system, and the state patrol
retirement plan, an excess of valuation assets over actuarial
accrued liability will must be amortized in the same manner over
the same period as an unfunded actuarial accrued liability
but will must serve to reduce the required contribution instead
of increasing it.
Sec. 60. Minnesota Statutes 1996, section 356.217, is
amended to read:
356.217 [MODIFICATIONS IN ACTUARIAL SERVICES.]
(a) The actuary retained by the legislative commission on
pensions and retirement is not required to prepare actuarial
valuations of the public employees local government correctional
employees retirement plan unless the plan is implemented by a
county under section 353C.04.
(b) The cost of any requested benefit projections by the
commission-retained actuary relating to the Minnesota
postretirement investment fund for the state board of investment
is payable by the state board of investment.
(c) (b) Actuarial valuations under section 356.215, for
July 1, 1991, and thereafter, are not required to have an
individual commentary section. The commentary section, if
omitted from the individual plan actuarial valuation, must be
included in an appropriate generalized format as part of the
report to the legislature under section 3.85, subdivision 11.
(d) (c) Actuarial valuations under section 356.215, for
July 1, 1991, and thereafter, are not required to contain
separate actuarial valuation results for basic and coordinated
programs unless each program has a membership of at least ten
percent of the total membership of the fund. Actuarial
valuations under section 356.215, for July 1, 1991, and
thereafter, are not required to contain cash flow forecasts.
(e) (d) Actuarial valuations of the public employees police
and fire fund local consolidation accounts for July 1, 1991, and
thereafter, are not required to contain separate tabulations or
summaries of active member, service retirement, disability
retirement, and survivor data for each local consolidation
account.
(f) (e) The commission-retained actuary is:
(1) required to publish experience findings for plans for
which experience findings are required only on a quadrennial
basis for the four-year period ending June 30, 1992, and every
four years thereafter;
(2) not required to prepare a separate experience analysis
or publish separate experience findings for basic and
coordinated programs if separate actuarial valuation results for
the programs are not required; and
(3) not required to calculate investment rate of return
experience results on any basis other than current asset value
as defined in section 356.215, subdivision 1, clause (6).
Sec. 61. Minnesota Statutes 1996, 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, and the state patrol
retirement fund, must not exceed 2-1/2 the percent specified in
section 356.19, subdivision 4, 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 the percent specified in
section 356.19, subdivision 6, 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. The formula percentage used by the
legislators retirement plan and the elective state officers
retirement must not exceed 2.5 percent, but this limit does not
apply to the adjustment provided under section 3A.02,
subdivision 1, paragraph (c), or 352C.031, paragraph (b).
(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. 62. Minnesota Statutes 1996, section 356.30,
subdivision 3, is amended to read:
Subd. 3. [COVERED FUNDS.] This section applies to the
following retirement funds:
(1) state employees retirement fund, established pursuant
to chapter 352;
(2) correctional employees retirement program, established
pursuant to chapter 352;
(3) unclassified employees retirement plan, established
pursuant to chapter 352D;
(4) state patrol retirement fund, established pursuant to
chapter 352B;
(5) legislators' retirement plan, established pursuant to
chapter 3A;
(6) elective state officers' retirement plan, established
pursuant to chapter 352C;
(7) public employees retirement association, established
pursuant to chapter 353;
(8) public employees police and fire fund, established
pursuant to chapter 353;
(9) teachers retirement association, established pursuant
to chapter 354;
(10) Minneapolis employees retirement fund, established
pursuant to chapter 422A;
(11) Minneapolis teachers retirement fund association,
established pursuant to chapter 354A;
(12) St. Paul teachers retirement fund association,
established pursuant to chapter 354A;
(13) Duluth teachers retirement fund association,
established pursuant to chapter 354A;
(14) public employees local government correctional service
retirement plan established by sections 353C.01 to 353C.10; and
(15) (14) judges' retirement fund, established by sections
490.121 to 490.132.
Sec. 63. Minnesota Statutes 1996, section 356.32,
subdivision 2, is amended to read:
Subd. 2. [COVERED FUNDS.] The provisions of this section
shall apply to the following retirement funds:
(1) state employees retirement fund, established pursuant
to chapter 352;
(2) correctional employees retirement program, established
pursuant to chapter 352;
(3) state patrol retirement fund, established pursuant to
chapter 352B;
(4) public employees retirement fund, established pursuant
to chapter 353;
(5) public employees police and fire fund, established
pursuant to chapter 353;
(6) teachers retirement association, established pursuant
to chapter 354;
(7) Minneapolis employees retirement fund, established
pursuant to chapter 422A;
(8) Duluth teachers retirement fund association,
established pursuant to chapter 354A;
(9) Minneapolis teachers retirement fund association,
established pursuant to chapter 354A; and
(10) St. Paul teachers retirement fund association,
established pursuant to chapter 354A;
(11) public employees local government correctional service
retirement plan established by sections 353B.01 to 353B.10.
Sec. 64. Minnesota Statutes 1996, section 422A.06,
subdivision 8, is amended to read:
Subd. 8. [RETIREMENT BENEFIT FUND.] (a) The retirement
benefit fund shall consist of amounts held for payment of
retirement allowances for members retired pursuant to this
chapter.
(b) Assets equal to the required reserves for retirement
allowances pursuant to this chapter determined in accordance
with the appropriate mortality table adopted by the board of
trustees based on the experience of the fund as recommended by
the commission-retained actuary shall be transferred from the
deposit accumulation fund to the retirement benefit fund as of
the last business day of the month in which the retirement
allowance begins. The income from investments of these assets
shall be allocated to this fund. There shall be paid from this
fund the retirement annuities authorized by law. A required
reserve calculation for the retirement benefit fund must be made
by the actuary retained by the legislative commission on
pensions and retirement and must be certified to the retirement
board by the commission-retained actuary.
(c) The retirement benefit fund shall be governed by the
applicable laws governing the accounting and audit procedures,
investment, actuarial requirements, calculation and payment of
postretirement benefit adjustments, discharge of any deficiency
in the assets of the fund when compared to the actuarially
determined required reserves, and other applicable operations
and procedures regarding the Minnesota postretirement investment
fund in effect on June 30, 1997, established pursuant to under
Minnesota Statutes 1996, section 11A.18, and any legal or
administrative interpretations of those laws of the state board
of investment, the legal advisor to the board of investment and
the executive director of the state board of investment in
effect on June 30, 1997. If a deferred yield adjustment account
is established for the Minnesota postretirement investment
fund before June 30, 1997, under Minnesota Statutes 1996,
section 11A.18, subdivision 5, the retirement board shall also
establish and maintain a deferred yield adjustment account
within this fund.
(d) Annually, following the calculation of any
postretirement adjustment payable from the retirement benefit
fund, the board of trustees shall submit a report to the
executive director of the legislative commission on pensions and
retirement and to the commissioner of finance indicating the
amount of any postretirement adjustment and the underlying
calculations on which that postretirement adjustment amount is
based, including the amount of dividends, the amount of
interest, and the amount of net realized capital gains or losses
utilized in the calculations.
(e) With respect to a former contributing member who began
receiving a retirement annuity or disability benefit under
section 422A.151, paragraph (a), clause (2), after June 30,
1997, or with respect to a survivor of a former contributing
member who began receiving a survivor benefit under section
422A.151, paragraph (a), clause (2), after June 30, 1997, the
reserves attributable to the one percent lower amount of the
cost-of-living adjustment payable to those annuity or benefit
recipients annually must be transferred back to the deposit
accumulation fund to the credit of the metropolitan airports
commission. The calculation of this annual reduced
cost-of-living adjustment reserve transfer must be reviewed by
the actuary retained by the legislative commission on pensions
and retirement.
Sec. 65. Minnesota Statutes 1996, section 422A.151, is
amended to read:
422A.151 [ALTERNATIVE CALCULATION OF ANNUITY.]
(a) In the case of a contributing member of the Minneapolis
employees retirement fund who is employed as a licensed peace
officer or firefighter with the metropolitan airports commission
and who retires, becomes disabled within the meaning of section
422A.18, or dies, the retirement, disability, or survivor
allowance is equal to the higher of the following:
(1) the retirement, disability, or survivor allowance
calculated for the person under the applicable provisions of the
Minneapolis employees retirement fund; or
(2) the retirement, disability, or survivor benefit that
the person would be entitled to upon meeting the applicable age
and allowable service requirements of section 353.651, 353.656,
or 353.657 if all employment as a licensed peace officer or
firefighter with the metropolitan airports commission had been
allowable service under the public employees retirement
association police and fire fund, instead of being covered by
the Minneapolis employees retirement fund. In computing the
alternative benefit under section 353.651, 353.656, or 353.657,
the applicable definitions and related provisions of chapter 353
must be used.
A firefighter or licensed peace officer terminating
employment by the metropolitan airports commission after June
30, 1997, or the survivor of a deceased firefighter or licensed
peace officer terminating employment by the metropolitan
airports commission after June 30, 1997, under section 353.651,
353.656, or 353.657, shall receive a one percent lower
cost-of-living adjustment than otherwise payable under section
422A.06, subdivision 5. If the cost-of-living adjustment
payable under section 422A.06, subdivision 5, is less than one
percent, the firefighter or licensed peace officer who retired
after June 30, 1997, must not have a reduction in the previously
received annuity or benefit amount, but future cost-of-living
adjustments must be modified equal to the percentage the benefit
would have been reduced below the person's current annuity or
benefit amount to reflect the one percent lower cost-of-living
adjustment under section 422A.06, subdivision 5.
(b) If a contributing member under paragraph (a) has
periods of coverage by the Minneapolis employees retirement fund
that include service other than employment as a licensed peace
officer or firefighter as well as employment as a licensed peace
officer or firefighter, the calculation of the benefit under
paragraph (a), clause (2), may only utilize service as a
licensed peace officer or firefighter employed by the
metropolitan airports commission.
Sec. 66. Minnesota Statutes 1996, section 490.124,
subdivision 1, is amended to read:
Subdivision 1. [BASIC RETIREMENT ANNUITY.] Except as
qualified hereinafter from and after mandatory retirement date,
normal retirement date, early retirement date, or one year from
the disability retirement date, as the case may be, a retirement
annuity shall be payable to a retiring judge from the judges'
retirement fund in an amount equal to: (1) 2-1/2 the percent of
specified in section 356.19, subdivision 7, multiplied by the
judge's final average compensation multiplied by the number of
years and fractions of years of allowable service rendered prior
to July 1, 1980; plus (2) three the percent of specified in
section 356.19, subdivision 8, multiplied by the judge's final
average compensation multiplied by the number of years and
fractions of years of allowable service rendered after June 30,
1980; provided that the annuity shall must not exceed 65 70
percent of the judge's annual salary for the 12 months
immediately preceding retirement.
Sec. 67. Minnesota Statutes 1996, section 490.124,
subdivision 5, is amended to read:
Subd. 5. [DEFERRED BENEFITS.] (a) Any benefit to which a
judge is entitled under this section may be deferred until early
or normal retirement date, notwithstanding termination of such
judge's service prior thereto.
(b) The retirement annuity of, or the survivor benefit
payable on behalf of, a former judge, who terminated service
before July 1, 1997, which is not first payable until after June
30, 1997, must be increased on an actuarial equivalent basis to
reflect the change in the postretirement interest rate actuarial
assumption under section 356.215, subdivision 4d, from five
percent to six percent under a calculation procedure and tables
adopted by the board of directors of the Minnesota state
retirement system and approved by the actuary retained by the
legislative commission on pensions and retirement.
Sec. 68. Laws 1996, chapter 448, article 1, section 3, is
amended to read:
Sec. 3. [EFFECTIVE DATE.]
(a) Sections 1 and 2 are effective on the day following
approval by the Itasca county board and compliance with
Minnesota Statutes, section 645.021.
(b) Notwithstanding Minnesota Statutes, section 645.021,
the approval and compliance required by paragraph (a) is
effective if accomplished before January 1, 1999.
Sec. 69. [APPROPRIATIONS; DEPARTMENT OF CORRECTIONS AND
LEGISLATIVE COMMISSION ON PENSIONS AND RETIREMENT.]
(a) $900,000 in fiscal year 1998 and $900,000 in fiscal
year 1999 is appropriated from the general fund to the
commissioner of corrections. The commissioner of finance shall
include this amount in the base budget for the agency when
developing the governor's budget recommendations for the
biennium ending June 30, 2001.
(b) For fiscal year 1999, $50,000 is appropriated to the
legislative coordinating commission for allocation to the
legislative commission on pensions and retirement.
Sec. 70. [APPROPRIATION REDUCTION.]
Subdivision 1. [REDUCTIONS BY RETIREMENT PLAN AND
EMPLOYER.] In fiscal years 1998 and 1999, the commissioner of
finance shall reduce allotments and cancel to the general fund
the amounts determined by multiplying the general fund supported
salaries of employees who are members of the teachers retirement
association according to clauses (1) and (2), and for employees
who are members of the general state employees retirement plan
of the Minnesota state retirement system according to clauses
(3), (4), and (5):
(1) 0.90 percent for the Minnesota state colleges and
universities;
(2) 1.50 percent for all agencies other than the Minnesota
state colleges and universities
(3) 0.20 percent for all agencies other than the Minnesota
state colleges and universities and the university of Minnesota;
(4) 0.12 percent for the Minnesota state colleges and
universities;
(5) 0.0728 percent for the university of Minnesota.
Subd. 2. [APPROPRIATION REDUCTIONS APPLIED TO BASE
BUDGETS.] The commissioner of finance shall include the
reductions under subdivision 1 when developing the base budgets
for all affected organizations as submitted with the governor's
recommended budget for the biennium ending June 30, 2001.
Subd. 3. [PROJECTED SAVINGS.] For the biennium ending June
30, 1999, the projected general fund savings attributable to the
reductions under subdivision 1 are as follows:
fiscal year
1998 1999
subdivision 1, clauses (1) and (2) $1,937,000 $2,053,000
subdivision 1, clauses (3) $1,162,000 $1,233,000
subdivision 1, clauses (4) and (5) $ 480,000 $ 509,000
Sec. 71. [APPROPRIATION]
For the fiscal years ending June 30, 1998, and June 30,
1999, the amounts transferred under section 13 to funds and
accounts from which the salaries of peace officers employed by
the department of natural resources are paid are appropriated
from those funds and accounts to the commissioner of natural
resources to assist in making the employer contributions to the
state patrol retirement plan under Minnesota Statutes, section
352B.02, subdivision 1c. Notwithstanding section 13, for fiscal
years 1998 and 1999, amounts transferred to the general fund for
peace officers employed by the department of natural resources
do not cancel but are appropriated to the commissioner of
natural resources to assist in making employer contributions to
the state patrol retirement plan. The amounts appropriated in
this section must be included in the department's budgetary base
for the next biennium.
Sec. 72. [PERMANENT INCREASE FOR BENEFIT RECIPIENTS.]
A monthly survivor, disability, or retirement benefit paid
under Minnesota Statutes, chapters 3A, 352, 352B, 352C, 352D,
353, 353A, 354, and 490 on June 30, 1997, is permanently
increased effective July 1, 1997, to reflect the change in the
postretirement fund interest assumption from five percent to six
percent. The benefit payable under the six percent
postretirement interest assumption must be actuarially
equivalent to the benefit payable under the five percent
interest assumption and must be based on tables adopted by the
applicable board and approved by the actuary retained by the
legislative commission on pensions and retirement.
Sec. 73. [ALTERNATIVE BENEFIT ADJUSTMENTS.]
If the permanent increase under section 71, along with the
annual cost-of-living adjustments paid during the ten years
after the effective date of this section averages less than
inflation as measured by the Consumer Price Index or 3.5
percent, whichever is lower, the executive directors of the
teachers retirement association, public employees retirement
association, and the Minnesota state retirement system shall
suggest alternative benefit adjustments for retirees receiving
benefits on June 30, 1997, who exceed their life expectancy by
three or more years.
Sec. 74. [MANDATED PENSION COMMISSION STUDY; DISPOSITION
OF PERA-P&F CONSOLIDATION ACCOUNTS.]
(a) The legislative commission on pensions and retirement,
in consultation with the affected constituencies, shall study
the advantages and disadvantages of the blending of some or all
local police and salaried firefighter consolidation accounts
into the public employees police and fire retirement plan
established under Minnesota Statutes, sections 353.63 to 353.68.
(b) The report must be transmitted on or before January 31,
1998, to the chair of the committee on governmental operations
and veterans of the senate, the chair of the governmental
operations budget division of the senate, the chair of the
committee on governmental operations of the house of
representatives, and the chair of the state government finance
division of the house of representatives.
Sec. 75. [MANDATED PENSION COMMISSION STUDY; FIRST CLASS
CITY TEACHER RETIREMENT FUND CONSOLIDATION OPTIONS.]
(a) The legislative commission on pensions and retirement,
in consultation with the affected constituencies, shall study
the advantages and disadvantages of the restructuring or the
consolidation of the first class city teacher retirement fund
associations and the statewide teachers retirement association.
In its deliberations, the commission shall review the future
state funding needs of the Minneapolis employees retirement fund
and other applicable state pension funding resources.
(b) The report must be transmitted on or before January 31,
1998, to the chair of the committee on governmental operations
and veterans of the senate, the chair of the governmental
operations budget division of the senate, the chair of the
committee on governmental operations of the house of
representatives, and the chair of the state governmental finance
division of the house of representatives.
Sec. 76. [TERMINATION DATE; CERTAIN TEACHERS.]
Notwithstanding Minnesota Statutes, section 354.44,
subdivision 4, for purposes of eligibility for retirement
benefits from the teachers retirement association, the
termination date of a teacher terminating active teaching
service at the end of the school year in a school where the
school year was disrupted or extended by flooding during the
first half of calendar year 1997 or by fire damage or fire loss
to school buildings or facilities during the 1996-1997 school
year must be determined by the closing date of the school
calendar in effect immediately before the flooding or in effect
immediately before the fire.
Sec. 77. [POLICE STATE AID ADJUSTMENT.]
The legislature determines that the total employer
contributions paid to the public employees police and fire fund
for calendar year 1995, as certified to the commissioner of
revenue by the public employees retirement association in August
1996 for determining the amount of police state aid to be
distributed in September 1996, were overstated for some of the
counties and cities and understated for other counties and
cities. The executive director of the public employees
retirement association shall certify to the commissioner of
revenue the amount of the overstated or understated 1995
calendar year employer contributions paid to the public
employees police and fire fund by each county and city; and the
commissioner of revenue shall adjust the October 1997 police
state aid distributions by the applicable amount of overpaid or
underpaid police state aid distributed in September 1996.
The estimated net adjustment for police state aid in the
fiscal year ending June 30, 1998, is $1,835,000. The expected
net reduction to future police state aid expenditures resulting
from this adjustment is 6.5 percent less each year.
Sec. 78. [REPEALER.]
(a) Minnesota Statutes 1996, sections 124.195, subdivision
12; 124.2139; 356.70; and 356.88, subdivision 2, are repealed.
(b) Minnesota Statutes 1996, sections 353C.01; 353C.02;
353C.03; 353C.04; 353C.05; 353C.06; 353C.07; 353C.08; 353C.09;
and 353C.10, are repealed.
Sec. 79. [EFFECTIVE DATES.]
Sections 38 and 39 are effective the first full pay period
after December 31, 1997. Sections 17, 18, 21, 22, 29, and 30
are effective the first full pay period after June 30, 1997.
Sections 48, 49, and 50 are effective for all salary paid July
1, 1997, or later. Sections 1 to 16, 19, 20, 23 to 28, 31 to
36, 37, 40 to 47, 51 to 67, 69 to 75, 77, and 78 are effective
July 1, 1997. Sections 68 and 76 are effective the day
following final enactment.
ARTICLE 2
LEGISLATORS AND CONSTITUTIONAL OFFICERS
Section 1. Minnesota Statutes 1996, section 3A.07, is
amended to read:
3A.07 [APPLICATION.]
(a) Except as provided in paragraph (b), this chapter
applies to members of the legislature in service upon after July
1, 1965, or thereafter, who otherwise meet the requirements of
this chapter.
(b) Members of the legislature who were elected for the
first time after June 30, 1997, or members of the legislature
who were elected before July 1, 1997, and who, after July 1,
1998, elect not to be members of the plan established by this
chapter are covered by the unclassified employees retirement
program governed by chapter 352D.
(c) The post-July 1, 1998, coverage election under
paragraph (b) is irrevocable and must be made on a form
prescribed by the director.
Sec. 2. [352C.011] [APPLICABILITY.]
(a) Except as provided in paragraph (b), this chapter
applies only to constitutional officers first elected before
July 1, 1997, to a constitutional office.
(b) Constitutional officers elected for the first time to a
constitutional office after June 30, 1997, or constitutional
officers who were elected before July 1, 1997, and who, after
July 1, 1998, elect not to be members of the plan established by
this chapter are covered by the unclassified employees
retirement program governed by chapter 352D.
(c) The post-July 1, 1998, coverage election under
paragraph (b) is irrevocable and must be made on a form
prescribed by the executive director of the Minnesota state
retirement system.
Sec. 3. Minnesota Statutes 1996, section 352D.02,
subdivision 1, is amended to read:
Subdivision 1. [COVERAGE.] (a) Employees enumerated in
paragraph (b) (c), clauses 2, 3, 4, and 6 to 15, if they are in
the unclassified service of the state or metropolitan council
and are eligible for coverage under the general state employees
retirement plan under chapter 352, are participants in the
unclassified program under this chapter unless the employee
gives notice to the executive director of the Minnesota state
retirement system within one year following the commencement of
employment in the unclassified service that the employee desires
coverage under the general state employees retirement plan. For
the purposes of this chapter, an employee who does not file
notice with the executive director is deemed to have exercised
the option to participate in the unclassified plan.
(b) Persons referenced in paragraph (c), clauses (1) and
(5), are participants in the unclassified program under this
chapter unless the person is eligible to elect different
coverage under section 3A.07 or 352C.011 and, after July 1,
1998, elects retirement coverage by the applicable alternative
retirement plan.
(c) Enumerated employees and referenced persons are:
(1) the governor, the lieutenant governor, the secretary of
state, the state auditor, the state treasurer, and the attorney
general;
(2) an employee in the office of the governor, lieutenant
governor, secretary of state, state auditor, state treasurer,
attorney general, or;
(3) an employee of the state board of investment;
(2) (4) the head of a department, division, or agency
created by statute in the unclassified service, an acting
department head subsequently appointed to the position, or an
employee enumerated in section 15A.081, subdivision 1 or
15A.083, subdivision 4;
(3) (5) a member of the legislature;
(6) a permanent, full-time unclassified employee of the
legislature or a commission or agency of the legislature or a
temporary legislative employee having shares in the supplemental
retirement fund as a result of former employment covered by this
chapter, whether or not eligible for coverage under the
Minnesota state retirement system;
(4) (7) a person who is employed in a position established
under section 43A.08, subdivision 1, clause (3), or in a
position authorized under a statute creating or establishing a
department or agency of the state, which is at the deputy or
assistant head of department or agency or director level;
(5) (8) the regional administrator, or executive director
of the metropolitan council, general counsel, division
directors, operations managers, and other positions as
designated by the council, all of which may not exceed 27
positions at the council and the chair, provided that upon
initial designation of all positions provided for in this
clause, no further designations or redesignations may be made
without approval of the board of directors of the Minnesota
state retirement system;
(6) (9) the executive director, associate executive
director, and not to exceed nine positions of the higher
education services office in the unclassified service, as
designated by the higher education services office before
January 1, 1992, or subsequently redesignated with the approval
of the board of directors of the Minnesota state retirement
system, unless the person has elected coverage by the individual
retirement account plan under chapter 354B;
(7) (10) the clerk of the appellate courts appointed under
article VI, section 2, of the Constitution of the state of
Minnesota;
(8) (11) the chief executive officers of correctional
facilities operated by the department of corrections and of
hospitals and nursing homes operated by the department of human
services;
(9) (12) an employee whose principal employment is at the
state ceremonial house;
(10) (13) an employee of the Minnesota educational
computing corporation;
(11) (14) an employee of the world trade center board; and
(12) (15) an employee of the state lottery board who is
covered by the managerial plan established under section 43A.18,
subdivision 3.
Sec. 4. Minnesota Statutes 1996, section 352D.02,
subdivision 2, is amended to read:
Subd. 2. [COVERAGE UPON EMPLOYMENT CHANGE.] A person
becoming a participant in the unclassified program by virtue of
employment in a position specified in subdivision 1,
clause (2) (4) and remaining in the unclassified service shall
remain a participant in the program even though the position the
person occupies is deleted from any of the sections referenced
in subdivision 1, clause (2) (4) by subsequent amendment, except
that a person shall not be eligible to elect the unclassified
program after separation from unclassified service if on the
return of the person to service, that position is not specified
in subdivision 1, clause (2) (4). Any person employed in a
position specified in subdivision 1 shall cease to participate
in the unclassified program in the event the position is placed
in the classified service.
Sec. 5. Minnesota Statutes 1996, section 352D.04,
subdivision 1, is amended to read:
Subdivision 1. [INVESTMENT OPTIONS.] (a) An employee A
person exercising an option to participate in the retirement
program provided by this chapter may elect to purchase shares in
one or a combination of the income share account, the growth
share account, the international share account, the money market
account, the bond market account, the fixed interest account, or
the common stock index account established in section 11A.17.
The employee person may elect to participate in one or more of
the investment accounts in the fund by specifying, on a form
provided by the executive director, the percentage of
the employee's person's contributions provided in subdivision 2
to be used to purchase shares in each of the accounts.
(b) A participant may indicate in writing on forms provided
by the Minnesota state retirement system a choice of options for
subsequent purchases of shares. Until a different written
indication is made by the participant, the executive director
shall purchase shares in the supplemental fund as selected by
the participant. If no initial option is chosen, 100 percent
income shares must be purchased for a participant. A change in
choice of investment option is effective no later than the first
pay date first occurring after 30 days following the receipt of
the request for a change.
(c) Shares in the fixed interest account attributable to
any guaranteed investment contract as of July 1, 1994, may not
be withdrawn from the fund or transferred to another account
until the guaranteed investment contract has expired, unless the
participant qualifies for withdrawal under section 352D.05 or
for benefit payments under sections 352D.06 to 352D.075.
(d) A participant or former participant may also change the
investment options selected for all or a portion of the
participant's shares previously purchased in accounts, subject
to the provisions of paragraph (c) concerning the fixed interest
account. Changes in investment options for the participant's
shares must be effected as soon as cash flow to an account
practically permits, but not later than six months after the
requested change.
Sec. 6. Minnesota Statutes 1996, section 352D.04,
subdivision 2, is amended to read:
Subd. 2. [CONTRIBUTION RATES.] (a) The moneys money used
to purchase shares under this section shall be is the employee
and employer contributions provided in this subdivision.
(a) (b) The employee contribution shall be is an amount
equal to the employee contribution specified in section 352.04,
subdivision 2.
(b) (c) The employer contribution shall be is an amount
equal to six percent of salary.
(d) These contributions shall must be made by deduction
from salary in the manner provided in section 352.04,
subdivisions 4, 5, and 6.
(e) For members of the legislature, the contributions under
this subdivision also must be made on per diem payments received
during a regular or special legislative session, but may not be
made on per diem payments received outside of a regular or
special legislative session, on the additional compensation
attributable to a leadership position under section 3.099,
subdivision 3, living expense payments under section 3.101, or
special session living expense payments under section 3.103.
Sec. 7. [355.621] [LEGISLATORS AND CONSTITUTIONAL
OFFICERS; SOCIAL SECURITY COVERAGE REFERENDUM.]
Subdivision 1. [DEFINITIONS GENERALLY.] For the purposes
of sections 7 to 14, each of the terms defined in this section
has the indicated meaning.
Subd. 2. [ENABLING ACT.] "Enabling act" means sections
355.01 to 355.07.
Subd. 3. [LEGISLATOR.] "Legislator" means a member of the
legislature duly elected and sworn into office.
Subd. 4. [CONSTITUTIONAL OFFICER.] "Constitutional officer"
means the governor, the lieutenant governor, the attorney
general, the secretary of state, the state auditor, and the
state treasurer duly elected and sworn into office.
Subd. 5. [ADDITIONAL TERMS.] The terms "social security
act," "state agency," "employment," "wages," "contribution
fund," "federal insurance contributions act," and "political
subdivision" each have the meaning ascribed in the enabling act.
Sec. 8. [355.622] [REFERENDUM.]
Under the enabling act, the governor shall designate an
agency or individual to supervise a referendum to be held after
July 1, 1998, in accordance with provisions of section
218(d)(6)(c) of the Social Security Act, for legislators and for
constitutional officers.
Sec. 9. [355.623] [NOTICE OF REFERENDUM.]
The notice of referendum required by section 218(d) of the
Social Security Act that is to be provided to legislators and to
constitutional officers must contain a statement of the rights
which accrue under the Social Security Act. The statement must
be in the form that the agency or individual designated to
supervise the referendum deems necessary and sufficient to
inform legislators and constitutional officers of their Social
Security Act rights. The statement must also inform the
legislators and constitutional officers of the effect that
social security coverage will have on their future public
retirement coverage.
Sec. 10. [355.624] [DIVISION OF THE LEGISLATORS RETIREMENT
PLAN AND THE ELECTIVE STATE OFFICERS RETIREMENT PLAN.]
(a) In accord with section 218(d)(6)(c) of the Social
Security Act, the state agency shall divide the legislators
retirement plan into two parts or divisions and shall divide the
elective state officers retirement plan into two parts or
divisions.
(b) One division or part of the legislators retirement plan
must be composed of legislators who desire coverage under an
agreement under section 218(d) of the Social Security Act, and
those legislators must have their future public pension plan
coverage under chapter 352D. Also included in this division or
part are legislators who are elected after July 1, 1997. The
other division or part of the legislators retirement plan must
be composed of legislators who do not desire coverage under an
agreement under section 218(d) of the Social Security Act, and
those legislators must have their future public pension plan
coverage under chapter 3A.
(c) One division or part of the elective state officers
retirement plan must be composed of constitutional officers who
desire coverage under an agreement under section 218(d) of the
Social Security Act, and those constitutional officers must have
their future public pension plan coverage under chapter 352D.
Also included in this division or part are constitutional
officers who are elected after July 1, 1997. The other division
or part of the elective state officers retirement plan must be
composed of constitutional officers who do not desire coverage
under an agreement under section 218(d) of the Social Security
Act, and those constitutional officers must have their future
public pension plan coverage under chapter 352C.
Sec. 11. [355.625] [TRANSFER OF MEMBERS.]
In accord with section 218(d)(6)(f) of the Social Security
Act and when the legislators retirement plan or the elective
state officers retirement plan, whichever applies, is divided
into two parts or divisions, a legislator or constitutional
officer who does not desire coverage under an agreement under
section 218(d) of the Social Security Act may be transferred to
the other part or division if the agreement with the federal
Department of Health and Human Services so provides and if the
legislator or constitutional officer files with the state agency
a written request for the transfer.
Sec. 12. [355.626] [CERTIFICATION BY GOVERNOR.]
If the governor receives satisfactory evidence that the
conditions specified in section 218(d)(7) of the Social Security
Act have been met with respect to the legislators retirement
plan or the elective state officers retirement plan, whichever
applies, the governor shall so certify to the secretary of the
federal Department of Health and Human Services.
Sec. 13. [355.627] [AGREEMENTS WITH FEDERAL AGENCY.]
Upon the governor's certification under section 12, the
state agency, with the approval of the governor, is authorized
after June 30, 1998, to enter into or modify an agreement with
the secretary of the federal Department of Health and Human
Services with respect to legislators or constitutional officers,
whichever applies.
Sec. 14. [355.628] [SOCIAL SECURITY CONTRIBUTIONS.]
Subdivision 1. [EMPLOYER CONTRIBUTIONS.] Employer
contributions required under the agreement or modification under
section 13 and payments required by section 355.49 must be paid
by the senate, the house of representatives, or the relevant
constitutional office, whichever applies.
Subd. 2. [EMPLOYEE CONTRIBUTIONS; DEDUCTION FROM
WAGES.] (a) After the date on which the agreement or
modification under section 13 is executed, there must be paid as
a deduction from wages an employee contribution by legislators
or constitutional officers in an amount equal to the tax that
would be imposed by the Federal Insurance Contribution Act if
the service constituted employment within the meaning of the act.
(b) Contributions made under this subdivision must be paid
into the contribution fund in partial discharge of the employer
liability for social security coverage.
(c) A failure to deduct employee contributions does not
relieve the legislator or constitutional officer or the senate,
the house of representatives, or the relevant constitutional
office of the liability to make the contribution.
Sec. 15. [COVERAGE ELECTION.]
(a) Members of the legislature who were members of the
legislators retirement plan on the effective date of this
section and constitutional officers who were members of the
elective state officers retirement plan on the effective date of
this section may elect coverage by the unclassified employees
retirement program governed by Minnesota Statutes, chapter 352D,
instead of the prior retirement coverage, as part of the social
security referendum under section 10.
(b) The election of a retirement coverage change applies
only to prospective service as a member of the legislature or a
constitutional officer. The election must be made in
conjunction with the referendum selection under section 10. A
member of the legislature or a constitutional officer who elects
a retirement coverage change under this section is entitled to
an augmented deferred retirement annuity under Minnesota
Statutes, section 3A.02, subdivisions 1 and 4, or Minnesota
Statutes, sections 352C.031 and 352C.033, whichever applies,
notwithstanding any provision of law to the contrary.
(c) A member of the legislature or a constitutional officer
who elects a retirement coverage change under this section is
not entitled to a refund under Minnesota Statutes, section
3A.03, subdivision 2, or 352C.09, subdivision 2, whichever
applies, until the person terminates service as a member of the
legislature or a constitutional officer.
Sec. 16. [STUDY OF LEGISLATORS AND CONSTITUTIONAL OFFICER
PENSION COVERAGE.]
Subdivision 1. [STUDY MANDATE.] The legislative commission
on pensions and retirement shall study the issue of the
appropriate pension coverage for legislators and for
constitutional officers during the 1997-1998 interim.
Subd. 2. [STUDY CONTENTS.] At a minimum, the commission
must study the following:
(1) the appropriate member contribution rates to the
legislators retirement plan and the elective state officers
retirement plan and their adequacy in funding the normal cost
and administrative expenses of the applicable plan in comparison
to other public pension plans;
(2) the appropriateness of including new legislators and
constitutional officers and of including current legislators and
constitutional officers in coverage by the social security
program and the necessary adaptations to the defined
contribution plan coverage established in section 3 and the
legislators retirement plan established in Minnesota Statutes,
chapter 3A, or the elective state officers retirement plan
established in Minnesota Statutes, chapter 352C, to supplement
that coverage; and
(3) the appropriateness of permitting current legislators
and current constitutional officers to elect the defined
contribution plan coverage established in section 3 for future
service and the impact of the election on past service credit
under Minnesota Statutes, chapter 3A, or Minnesota Statutes,
chapter 352C.
Subd. 3. [STUDY PRINCIPLES.] The study must reflect the
following principles:
(1) to the extent practicable, the public pension plan
coverage to be provided to legislators and constitutional
officers should match or parallel the pension coverage provided
to legislative employees and agency heads;
(2) the public pension plan coverage to be provided to
legislators and constitutional officers may appropriately
reflect the part-time nature of legislative service for many
legislators and the unique character of elected public service
for other legislators and for constitutional officers; and
(3) the public pension coverage ultimately provided to
legislators and constitutional officers should conform with the
applicable provisions of the principles of pension policy of the
commission.
Subd. 4. [STUDY RESULTS.] The results of the study should
include any applicable proposed legislation, including, but not
limited to, amending or repealing, in whole or in part, sections
1 to 15.
Subd. 5. [REPORT.] The study and any recommended proposed
legislation must be reported to the 1998 legislative session.
Sec. 17. [EFFECTIVE DATE.]
Sections 1 to 6 and 16 are effective July 1, 1997.
Sections 7 to 15 are effective July 1, 1998.
ARTICLE 3
FIRST CLASS CITY TEACHER RETIREMENT FUNDS
Section 1. Minnesota Statutes 1996, section 354A.011,
subdivision 15a, is amended to read:
Subd. 15a. [NORMAL RETIREMENT AGE.] "Normal retirement
age" means age 65 for a person who first became a member of the
coordinated program of the Minneapolis or St. Paul teachers
retirement fund association or the new law coordinated program
of the Duluth teachers retirement fund association or a member
of a pension fund listed in section 356.30, subdivision 3,
before July 1, 1989. For a person who first became a member of
the coordinated program of the Minneapolis or St. Paul teachers
retirement fund association or the new law coordinated program
of the Duluth teachers retirement fund association after June
30, 1989, normal retirement age means the higher of age 65 or
retirement age, as defined in United States Code, title 42,
section 416(l), as amended, but not to exceed age 66. For a
person who is a member of the basic program of the Minneapolis
or St. Paul teachers retirement fund association or the old law
coordinated program of the Duluth teachers retirement fund
association, normal retirement age means the age at which a
teacher becomes eligible for a normal retirement annuity
computed upon meeting the age and service requirements specified
in the applicable provisions of the articles of incorporation or
bylaws of the respective teachers retirement fund association.
Sec. 2. Minnesota Statutes 1996, 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 5.5 percent
Minneapolis teachers retirement
association
basic program 8.5 percent
coordinated program 4.5 5.5 percent
St. Paul teachers retirement
association
basic program 8 percent
coordinated program 4.5 5.5 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 1996, section 354A.12,
subdivision 2a, is amended to read:
Subd. 2a. [EMPLOYER REGULAR AND ADDITIONAL CONTRIBUTION
RATES.] (a) The employing units shall make the following
employer contributions to teachers retirement fund associations:
(1) for any coordinated member of a teachers retirement
fund association in a city of the first class, the employing
unit shall pay the employer social security taxes in accordance
with section 355.46, subdivision 3, clause (b);
(2) for any coordinated member of one of the following
teachers retirement fund associations in a city of the first
class, the employing unit shall make a regular employer
contribution to the respective retirement fund association in an
amount equal to the designated percentage of the salary of the
coordinated member as provided below:
Duluth teachers retirement
fund association 4.50 percent
Minneapolis teachers retirement
fund association 4.50 percent
St. Paul teachers retirement
fund association 4.50 percent;
(3) for any basic member of one of the following teachers
retirement fund associations in a city of the first class, the
employing unit shall make a regular employer contribution to the
respective retirement fund in an amount equal to the designated
percentage of the salary of the basic member as provided below:
Minneapolis teachers retirement
fund association 8.50 percent
St. Paul teachers retirement
fund association 8.00 percent
(4) for a basic member of a teachers retirement fund
association in a city of the first class, the employing unit
shall make an additional employer contribution to the respective
fund in an amount equal to the designated percentage of the
salary of the basic member, as provided below:
Minneapolis teachers retirement
fund association
July 1, 1993 - June 30, 1994 4.85 percent
July 1, 1994, and thereafter 3.64 percent
St. Paul teachers retirement
fund association
July 1, 1993 - June 30, 1995 4.63 percent
July 1, 1995, and thereafter 3.64 percent
(5) for a coordinated member of a teachers retirement fund
association in a city of the first class, the employing unit
shall make an additional employer contribution to the respective
fund in an amount equal to the applicable percentage of the
coordinated member's salary, as provided below:
Duluth teachers retirement
fund association 1.29 percent
Minneapolis teachers retirement
fund association
July 1, 1993 - June 30, 1994 0.50 percent
July 1, 1994, and thereafter 3.64 percent
St. Paul teachers retirement
fund association
July 1, 1993 - June 30, 1994 0.50 percent
July 1, 1994 - June 30, 1995 1.50 percent
July 1, 1995 1997, and thereafter 3.64
3.84 percent
(b) The regular and additional employer contributions must
be remitted directly to the respective teachers retirement fund
association at least once each month. Delinquent amounts are
payable with interest under the procedure in subdivision 1a.
(c) Payments of regular and additional employer
contributions for school district or technical college employees
who are paid from normal operating funds must be made from the
appropriate fund of the district or technical college.
Sec. 4. Minnesota Statutes 1996, section 354A.12,
subdivision 3a, is amended to read:
Subd. 3a. [SPECIAL DIRECT STATE AID TO ST. PAUL FIRST
CLASS CITY TEACHERS RETIREMENT FUND ASSOCIATION ASSOCIATIONS.]
(a) In fiscal year 1998, the state shall pay $4,827,000 to the
St. Paul teachers retirement fund association $500,000 in fiscal
year 1994, $17,954,000 to the Minneapolis teachers retirement
fund association, and $486,000 to the Duluth teachers retirement
fund association. In each subsequent fiscal year, the payment
these payments to the St. Paul first class city teachers
retirement fund association associations must be increased at
the same rate as the increase in the general education revenue
formula allowance under section 124A.22, subdivision 2, in
subsequent fiscal years $2,827,000 for St. Paul, $12,954,000 for
Minneapolis, and $486,000 for Duluth.
(b) The direct state aid is aids under this subdivision are
payable October 1 annually. The commissioner of finance shall
pay the direct state aid. The amount required under this
subdivision is appropriated annually from the general fund to
the commissioner of finance.
Sec. 5. Minnesota Statutes 1996, section 354A.12,
subdivision 3b, is amended to read:
Subd. 3b. [SPECIAL DIRECT STATE MATCHING AID TO THE
MINNEAPOLIS TEACHERS RETIREMENT FUND ASSOCIATION.] (a) Special
school district No. 1 may make an additional employer
contribution to the Minneapolis teachers retirement fund
association. The city of Minneapolis may make a contribution to
the Minneapolis teachers retirement fund association. This
contribution may be made by a levy of the board of estimate and
taxation of the city of Minneapolis, and the levy, if made, is
classified as that of a special taxing district for purposes of
sections 275.065 and 276.04, and for all other property tax
purposes.
(b) For every $1,000 contributed in equal proportion by
special school district No. 1 and by the city of Minneapolis to
the Minneapolis teachers retirement fund association under
paragraph (a), the state shall pay to the Minneapolis teachers
retirement fund association $1,000, but not to exceed $2,500,000
in total in fiscal year 1994. The total amount available for
each subsequent fiscal year must be increased at the same rate
as the increase in the general education revenue formula
allowance under section 124A.22, subdivision 2, in subsequent
fiscal years. The superintendent of special school district No.
1, the mayor of the city of Minneapolis, and the executive
director of the Minneapolis teachers retirement fund association
shall jointly certify to the commissioner of finance the total
amount that has been contributed by special school district No.
1 and by the city of Minneapolis to the Minneapolis teachers
retirement fund association. Any certification to the
commissioner of children, families, and learning must be made
quarterly. If the total certifications for a fiscal year exceed
the maximum annual direct state matching aid amount in any
quarter, the amount of direct state matching aid payable to the
Minneapolis teachers retirement fund association must be limited
to the balance of the maximum annual direct state matching aid
amount available. The amount required under this paragraph,
subject to the maximum direct state matching aid amount, is
appropriated annually to the commissioner of finance.
(c) The commissioner of finance may prescribe the form of
the certifications required under paragraph (b).
Sec. 6. Minnesota Statutes 1996, section 354A.12,
subdivision 3c, is amended to read:
Subd. 3c. [TERMINATION OF SUPPLEMENTAL CONTRIBUTIONS AND
DIRECT MATCHING AND STATE AID.] (a) The supplemental
contributions payable to the Minneapolis teachers retirement
fund association by special school district No. 1 and the city
of Minneapolis under section 423A.02, subdivision 3, or to the
St. Paul teachers retirement fund association by independent
school district No. 625 under section 423A.02, subdivision 3, or
the direct state aid aids under subdivision 3a to the St. Paul
first class city teachers retirement association associations,
and the direct matching and state aid under subdivision 3b to
the Minneapolis teachers retirement fund association terminates
terminate for the respective fund at the end of the fiscal year
in which the accrued liability funding ratio for that fund, as
determined in the most recent actuarial report for that fund by
the actuary retained by the legislative commission on pensions
and retirement, equals or exceeds the accrued liability funding
ratio for the teachers retirement association, as determined in
the most recent actuarial report for the teachers retirement
association by the actuary retained by the legislative
commission on pensions and retirement.
(b) If the state direct matching, state supplemental, or
state aid is terminated for the St. Paul a first class city
teachers retirement fund association or the Minneapolis teachers
retirement fund association under paragraph (a), it may not
again be received by that fund.
(c) If either the Minneapolis teachers retirement fund
association, or the St. Paul teachers retirement fund
association, or the Duluth teachers retirement fund association
remain funded at less than the funding ratio applicable to the
teachers retirement association when the provisions of paragraph
(b) become effective, then any state aid not distributed to that
association must be immediately transferred to the other
association associations in proportion to the relative sizes of
their unfunded actuarial accrued liabilities.
Sec. 7. [354A.29] [ST. PAUL TEACHERS RETIREMENT FUND
ASSOCIATION POSTRETIREMENT ADJUSTMENT.]
Subdivision 1. [ARTICLES OF INCORPORATION AND
BYLAWS.] Permission is granted for the St. Paul teachers
retirement fund association under Minnesota Statutes, section
354A.12, subdivision 4, to amend its articles of incorporation
and bylaws to provide postretirement adjustments under this
section.
Subd. 2. [ELIMINATION OF PRIOR LUMP SUM POSTRETIREMENT
ADJUSTMENT MECHANISM.] As a condition precedent to the
implementation of subdivisions 3 through 6, the lump sum
postretirement adjustment mechanism in effect on the date of
enactment of this section must be eliminated and the articles of
incorporation and bylaws of the association must be amended
accordingly.
Subd. 3. [POSTRETIREMENT ADJUSTMENT.] (a) The
postretirement adjustment described in the articles and bylaws
of the St. Paul teachers retirement fund association must be
determined by the board annually after June 30 using the
procedures under this section.
(b) Each eligible person who has been receiving an annuity
or benefit under the articles of incorporation, the bylaws, or
this chapter for at least 12 months as of the end of the fiscal
year is eligible to receive a postretirement adjustment of 2.0
percent that is payable each January 1.
Subd. 4. [ADDITIONAL INVESTMENT PERCENTAGE
ADJUSTMENT.] (a) An excess investment earnings percentage
adjustment must be computed and paid under this subdivision to
those annuitants and eligible benefit recipients who have been
receiving an annuity or benefit for at least 12 months as
determined each June 30 by the board of trustees.
(b) The board shall also determine the five-year annualized
rate of return attributable to the assets of the St. Paul
teachers retirement fund association under the formula specified
in section 11A.04, clause (11), and the amount of the excess
five-year annualized rate of return over the preretirement
interest assumption specified in Minnesota Statutes, section
356.215.
(c) The excess investment percentage adjustment 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 under section 356.215, by
the rate of return excess as determined in paragraph (b).
(d) The excess investment percentage adjustment is payable
to all annuitants and benefit recipients on the following
January 1.
Subd. 5. [EFFECT ON ANNUITY.] The adjustments calculated
under subdivisions 3 and 4 must be included in all annuities or
benefits paid to the recipient after the adjustments take effect.
Subd. 6. [LUMP SUM POSTRETIREMENT ADJUSTMENT
TRANSITION.] This subdivision applies to all annuitants and
beneficiaries of the association who received a lump sum
postretirement adjustment before the calculation of the first
postretirement adjustment under subdivisions 3 and 4. Before
the calculation of the first postretirement adjustment under
subdivisions 3 and 4, the annual retirement annuity must be
increased by the amount of the lump sum postretirement
adjustment described in the association bylaws and paid to the
annuitant or beneficiary in 1997 before the effective date of
this section or if the annuitant or beneficiary was not eligible
for a lump sum postretirement adjustment, then the annual
benefit paid to that annuitant or benefit recipient must be
increased by the cumulative percentage increase in the Consumer
Price Index for urban wage earners and clerical workers All
Items Index published by the United States Department of Labor,
Bureau of Labor Statistics, from the date of the initial receipt
of a retirement annuity or benefit of the person whose service
is the basis of the benefit to June 30, 1997.
Sec. 8. Minnesota Statutes 1996, 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.
(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) will apply. The retirement annuity formula
percentage for purposes of this paragraph is one the percent
specified in section 356.19, subdivision 1, per year for each
year of coordinated service for the first ten years and 1.5 the
percent specified in section 356.19, subdivision 2, for each
year of coordinated service thereafter.
(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 (c), in conjunction with
the provisions of subdivision 6. The retirement annuity formula
percentage for purposes of this paragraph is 1.5 the percent
specified in section 356.19, subdivision 2, for each year of
coordinated service.
Sec. 9. Minnesota Statutes 1996, section 354A.31,
subdivision 4a, is amended 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 the percent
specified in section 356.19, subdivision 1, per year for each
year of coordinated service for the first ten years and 1.63 the
percent specified in section 356.19, subdivision 2, 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 the percent specified in section 356.19,
subdivision 2, for each year of coordinated service.
Sec. 10. Laws 1979, chapter 109, section 1, as amended by
Laws 1981, chapter 157, section 1, is amended to read:
Section 1. Authorization is hereby granted in accordance
with Minnesota Statutes, Section 354A.12, for the St. Paul
teachers retirement fund association to amend its bylaws as
follows:
(1) Paragraph 9 of Section 3 of Article IV of the bylaws
may be amended to provide a lump sum payment to annuitants and
survivor benefit recipients who have been receiving annuities or
benefits for at least three years, payable three months
following the end of a fiscal year. The payments shall only be
made if the investment income of the fund during the preceding
fiscal year was in excess of 5-1/2 percent of the asset value of
the fund at the end of that fiscal year. The amount that each
eligible annuitant or benefit recipient shall be entitled to
receive shall be determined as follows:
(a) The years of service of each annuitant as credited by
the fund and the years of service of each person on behalf of
whom a survivor benefit is paid as credited by the fund shall be
totaled;
(b) The dollar amount equal to one-half of one percent of
the asset value of the fund at the end of the previous fiscal
year shall be determined;
(c) The dollar amount determined pursuant to clause (b)
shall be divided by the aggregate years of credited service
totaled pursuant to clause (a), the result to be considered the
bonus figure per year of service credit;
(d) For each eligible annuitant and benefit recipient, the
payment shall be equal to the bonus figure per year of service
credit determined pursuant to clause (c) multiplied by each year
of service credited for that person by the fund.
(2) A new paragraph may be added to Section 2 of Article IV
of the bylaws to provide that any active member of the fund with
service credit prior to July 1, 1978 who elects in the social
security referendum to become a coordinated member shall be
entitled to a retirement annuity when otherwise qualified, the
calculation of which shall utilize the formula specified in Laws
1977, Chapter 429, Section 61 for that portion of credited
service which was served prior to July 1, 1978 and the new
coordinated formula specified in the bylaws for the remainder of
credited service, both applied to the average salary as
specified in Paragraph 2 of Section 1 of Article IX. The
formula percentages to be used in calculating the coordinated
portion of a retirement annuity on coordinated service shall
recognize the coordinated service as a continuation of any
service prior to July 1, 1978.
(3) (2) Paragraph 5 of Section 3 of Article IV of the
bylaws in effect on June 1, 1978 may be amended to provide that
the recomputation of a disability benefit in an amount equal to
a service pension shall occur when the member attains the age of
60 years and shall be recomputed without any reduction for early
retirement, and that if the disability terminates prior to age
60 the member shall be eligible for benefits as provided in
Paragraph 1 of Section 3 of Article IV and the years of service
and final average salary accrued to disability termination date
would be used as provided in Paragraph 5 of Section 3 of Article
IV of the bylaws in effect June 1, 1978 and that Paragraph 3 of
Section 4 of Article IV be amended to conform to this provision.
(4) (3) Article VIII of the bylaws in effect July 1, 1978
may be amended by adding a new section 5 providing augmentation
of benefits in the same manner as Minnesota Statutes 1978,
Section 354.55, Subdivision 11.
Sec. 11. [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
1.45 percent for each year of credited service.
Sec. 12. [REPEALER.]
(a) Minnesota Statutes 1996, section 354A.12, subdivision
2b, is repealed.
(b) Laws 1985, chapter 259, section 3; and Laws 1993,
chapter 336, article 3, section 1, are repealed.
Sec. 13. [EFFECTIVE DATES.]
Sections 2 and 3 are effective for all salary paid on or
after July 1, 1997. Sections 1 and 4 to 12 are effective July
1, 1997.
ARTICLE 4
MINNEAPOLIS POLICE AND FIREFIGHTERS
Section 1. Minnesota Statutes 1996, section 423B.01,
subdivision 9, is amended to read:
Subd. 9. [EXCESS INVESTMENT INCOME.] "Excess investment
income" means the amount, if any, by which the average time
weighted total rate of return earned by the fund in the most
recent prior five fiscal years has exceeded the actual average
percentage increase in the current monthly salary of a first
grade patrol officer in the most recent prior five fiscal years
plus two percent, and must be expressed as a dollar amount and.
The amount may not exceed one percent of the total assets of the
fund, except when the actuarial value of assets of the fund
according to the most recent annual actuarial valuation prepared
in accordance with sections 356.215 and 356.216 is greater than
102 percent of its actuarial accrued liabilities, in which case
the amount must not exceed 1-1/2 percent of the total assets of
the fund, and does not exist unless the yearly average
percentage increase of the time weighted total rate of return of
the fund for the previous five years exceeds by two percent the
yearly average percentage increase in monthly salary of a first
grade patrol officer during the previous five calendar years.
Sec. 2. Minnesota Statutes 1996, section 423B.01 is
amended by adding a new subdivision to read:
Subd. 15. [ACTUARIAL EQUIVALENT.] "Actuarial equivalent"
or "actuarially equivalent" means the condition of one annuity
or benefit having an equal actuarial present value as another
annuity or benefit, determined as of a given date at a specified
age with each actuarial present value based on the appropriate
mortality table adopted by the board of directors based on the
experience of the fund and approved by the actuary retained by
the legislative commission on pensions and retirement and using
the applicable preretirement or postretirement interest rate
assumptions specified in section 356.216.
Sec. 3. Minnesota Statutes 1996, section 423B.06, is
amended by adding a subdivision to read:
Subd. 5. [TAX LEVY.] Notwithstanding any provision of
section 69.77 to the contrary, if in any year after the
actuarial value of assets of the fund according to the most
recent annual actuarial valuation prepared in accordance with
sections 356.215 and 356.216 is greater than 102 percent of the
actuarial accrued liabilities of the fund and subsequently the
actuarial value of assets are less than 100 percent of the
actuarial accrued liabilities, the city of Minneapolis is not
required to levy a property tax to amortize any unfunded
actuarial accrued liability unless the fund experiences two
successive years when the actuarial value of assets are less
than 100 percent of the actuarial accrued liabilities according
to the most recent annual actuarial valuation prepared in
accordance with sections 356.215 and 356.216.
Sec. 4. Minnesota Statutes 1996, section 423B.07, is
amended to read:
423B.07 [AUTHORIZED FUND DISBURSEMENTS.]
The police pension fund may be used only for the payment of:
(1) service, disability, or dependency pensions;
(2) notwithstanding a contrary provision of section 69.80,
the salary of the secretary of the association in an amount not
to exceed 30 percent of the base salary of a first grade patrol
officer, the salary of the president of the association in an
amount not to exceed ten percent of the base salary of a first
grade patrol officer, and the salaries of the other elected
members of the board of trustees in an amount not to exceed
three units;
(3) expenses of officers and employees of the association
in connection with the protection of the fund;
(4) expenses of operating and maintaining the association,
including the administrative expenses related to the
administration of the insurance plan authorized in section
423B.08;
(5) support for hospital and medical insurance for
pensioners who have completed 20 years or more of service or
permanent disabilitants and surviving spouses of deceased active
members, disabilitants, or service pensioners who have completed
20 years or more of service in an amount equal to one unit per
month, to be added to the pension otherwise provided;
(6) health and welfare benefits of one unit per month in
addition to other benefits for members who retired after July 1,
1980, and have completed 20 years or more of service or for
members who are permanent disabilitants; and
(7) (5) other expenses authorized by section 69.80, or
other applicable law.
Sec. 5. Minnesota Statutes 1996, section 423B.09,
subdivision 1, is amended to read:
Subdivision 1. [MINNEAPOLIS POLICE; PERSONS ENTITLED TO
RECEIVE PENSIONS.] The association shall grant pensions payable
from the police pension fund in monthly installments to persons
entitled to pensions in the manner and for the following
purposes.
(a) When the actuarial value of assets of the fund
according to the most recent annual actuarial valuation
performed in accordance with sections 356.215 and 356.216 is
less than 90 percent of the actuarial accrued liabilities, an
active member or a deferred pensioner who has performed duty as
a member of the police department of the city for five years or
more, upon written application after retiring from duty and
reaching at least age 50, is entitled to be paid monthly for
life a service pension equal to eight units. For full years of
service beyond five years, the service pension increases by 1.6
units for each full year, to a maximum of 40 units. When the
actuarial value of assets of the fund according to the most
recent annual actuarial valuation prepared in accordance with
sections 356.215 and 356.216 is greater than 90 percent of
actuarial accrued liabilities, active members, deferred members,
and service pensioners are entitled to a service pension
according to the following schedule:
5 years 8.0 units
6 years 9.6 units
7 years 11.2 units
8 years 12.8 units
9 years 14.4 units
10 years 16.0 units
11 years 17.6 units
12 years 19.2 units
13 years 20.8 units
14 years 22.4 units
15 years 24.0 units
16 years 25.6 units
17 years 27.2 units
18 years 28.8 units
19 years 30.4 units
20 years 34.0 units
21 years 35.6 units
22 years 37.2 units
23 years 38.8 units
24 years 40.4 units
25 years 42.0 units
Fractional years of service may not be used in computing
pensions.
(b) An active member who after five years' service but less
than 20 years' service with the police department of the city,
becomes superannuated so as to be permanently unable to perform
the person's assigned duties, is entitled to be paid monthly for
life a superannuation pension equal to two four units for five
years of service and an additional two units for each full year
of service over five years and less than 20 years.
(c) An active member who is not eligible for a service
pension and who, while a member of the police department of the
city, becomes diseased or sustains an injury while in the
service that permanently unfits the member for the performance
of police duties is entitled to be paid monthly for life a
pension equal to 32 34 units while so disabled.
Sec. 6. Minnesota Statutes 1996, section 423B.09, is
amended by adding a subdivision to read:
Subd. 6. [OPTIONAL ANNUITIES.] A member who is retired or
disabled on the effective date of this subdivision may elect an
optional retirement annuity within 60 days of the effective date
instead of the normal retirement annuity. A member who retires
or becomes disabled after the effective date of this subdivision
may elect an optional retirement annuity prior to the receipt of
any benefits. The optional retirement annuity may be a 50
percent, a 75 percent, or a 100 percent joint and survivor
annuity without reinstatement in the event of the designated
beneficiary predeceasing the member or a 50 percent, a 75
percent, or a 100 percent joint and survivor annuity with
reinstatement in the event of the designated beneficiary
predeceasing the member. Optional retirement annuity forms must
be actuarially equivalent to the service pension and automatic
survivor coverage otherwise payable to the retiring member and
the member's beneficiaries. Once selected, the optional annuity
is irrevocable.
Sec. 7. Minnesota Statutes 1996, section 423B.10,
subdivision 1, is amended to read:
Subdivision 1. [ENTITLEMENT; BENEFIT AMOUNT.] (a) The
surviving spouse of a deceased service pensioner, disability
pensioner, deferred pensioner, superannuation pensioner, or
active member, who was the legally married spouse of the
decedent, residing with the decedent, and who was married while
or before the time the decedent was on the payroll of the police
department, and who, if the deceased member was a service or
deferred pensioner, was legally married to the member for a
period of at least one year before retirement from the police
department, is entitled to a surviving spouse benefit. The
surviving spouse benefit is equal to 21 22 units per month if
the person is the surviving spouse of a deceased active member
or disabilitant. The surviving spouse benefit is equal to six
units per month, plus an additional one unit for each year of
service to the credit of the decedent in excess of five years,
to a maximum of 21 22 units per month, if the person is the
surviving spouse of a deceased service pensioner, deferred
pensioner, or superannuation pensioner. The surviving spouse
benefit is payable for the life of the surviving spouse.
(b) A surviving child of a deceased service pensioner,
disability pensioner, deferred pensioner, superannuation
pensioner, or active member, who was living while the decedent
was an active member of the police department or was born within
nine months after the decedent terminated active service in the
police department, is entitled to a surviving child benefit.
The surviving child benefit is equal to eight units per month if
the person is the surviving child of a deceased active member or
disabilitant. The surviving child benefit is equal to two units
per month, plus an additional four-tenths of one unit per month
for each year of service to the credit of the decedent in excess
of five years, to a maximum of eight units, if the person is the
surviving child of a deceased service pensioner, deferred
pensioner, or superannuation pensioner. The surviving child
benefit is payable until the person attains age 18, or, if in
full-time attendance during the normal school year, in a school
approved by the board of directors, until the person receives a
bachelor's degree or attains the age of 22 years, whichever
occurs first. In the event of the death of both parents leaving
a surviving child or children entitled to a surviving child
benefit as determined in this paragraph, the surviving child is,
or the surviving children are, entitled to a surviving child
benefit in such sums as determined by the board of directors to
be necessary for the care and education of such surviving child
or children, but not to exceed the family maximum benefit per
month, to the children of any one family.
(c) The surviving spouse and surviving child benefits are
subject to a family maximum benefit. The family maximum benefit
is 40 41 units per month.
(d) A surviving spouse who is otherwise not qualified may
receive a benefit if the surviving spouse was married to the
decedent for a period of five years and was residing with the
decedent at the time of death. The surviving spouse benefit is
the same as that provided in paragraph (a), except that if the
surviving spouse is younger than the decedent, the surviving
spouse benefit must be actuarially equivalent to a surviving
spouse benefit that would have been paid to the member's spouse
had the member been married to a person of the same age or a
greater age than the member's age before retirement.
Sec. 8. Minnesota Statutes 1996, section 423B.15,
subdivision 2, is amended to read:
Subd. 2. [DETERMINATION OF EXCESS INVESTMENT INCOME.] The
board of trustees of the relief association shall determine by
May 1 of each year whether or not the fund has excess investment
income. The amount of excess investment income, if any, must be
stated as a dollar amount and reported by the chief
administrative officer of the relief association to the mayor
and governing body of the city, the state auditor, the
commissioner of finance, and the executive director of the
legislative commission on pensions and retirement. The dollar
amount of excess investment income up to one percent of the
assets of the fund, except when the actuarial value of assets of
the fund according to the most recent annual actuarial valuation
prepared in accordance with sections 356.215 and 356.216 is
greater than 102 percent of its actuarial accrued liabilities in
which case the amount may not exceed 1-1/2 percent of the assets
of the fund, must be applied for the purpose specified in
subdivision 3. Excess investment income must not be considered
as income to or assets of the fund for actuarial valuations of
the fund for that year under sections 69.77, 356.215, and
356.216 and the provisions of this section except to offset the
annual postretirement payment. Additional investment income is
any realized or unrealized investment income other than the
excess investment income and must be included in the actuarial
valuations performed under sections 69.77, 356.215, and 356.216
and the provisions of this section.
Sec. 9. Minnesota Statutes 1996, section 423B.15,
subdivision 3, is amended to read:
Subd. 3. [AMOUNT OF ANNUAL POSTRETIREMENT PAYMENT.] The
amount determined under subdivision 2 must be applied in
accordance with this subdivision. When the actuarial value of
assets of the fund according to the most recent annual actuarial
valuation prepared in accordance with sections 356.215 and
356.216 is less than 102 percent of its total actuarial
liabilities, the relief association shall apply the first
one-half of excess investment income to the payment of an annual
postretirement payment as specified in this subdivision. and the
second one-half of excess investment income up to one-half of
one percent of the assets of the fund must be applied to reduce
the state amortization state aid or supplementary amortization
state aid payments otherwise due to the relief association under
section 423A.02 for the current calendar year. When the
actuarial value of assets of the fund according to the most
recent annual actuarial valuation prepared in accordance with
sections 356.215 and 356.216 is less than 102 percent funded and
other conditions are met, the relief association shall pay an
annual postretirement payment to all eligible members in an
amount not to exceed one-half of one percent of the assets of
the fund. When the actuarial value of assets of the fund
according to the most recent annual actuarial valuation prepared
in accordance with sections 356.215 and 356.216 is greater than
102 percent of its actuarial accrued liabilities, the relief
association shall pay an annual postretirement payment to all
eligible members in an amount not to exceed 1-1/2 percent of the
assets of the fund. Payment of the annual postretirement
payment must be in a lump sum amount on June 1 following the
determination date in any year. Payment of the annual
postretirement payment may be made only if the average time
weighted total rate of return for the most recent prior five
years exceeds by two percent the actual average percentage
increase in the current monthly salary of a top grade patrol
officer in the most recent prior five fiscal years. The total
amount of all payments to members may not exceed the amount
determined under this subdivision. Payment to each eligible
member must be calculated by dividing the total number of
pension units to which eligible members are entitled into the
excess investment income available for distribution to members,
and then multiplying that result by the number of units to which
each eligible member is entitled to determine each eligible
member's annual postretirement payment. When the actuarial
value of assets of the fund according to the most recent annual
actuarial valuation prepared in accordance with sections 356.215
and 356.216 is less than 102 percent of its actuarial accrued
liabilities, payment to each eligible member may not exceed an
amount equal to the total monthly benefit that the eligible
member was entitled to in the prior year under the terms of the
benefit plan of the relief association or each eligible member's
proportionate share of the excess investment income, whichever
is less. When the actuarial value of assets of the fund
according to the most recent annual actuarial valuation prepared
in accordance with sections 356.215 and 356.216 is greater than
102 percent of its actuarial accrued liabilities, payment to
each eligible member must not exceed the member's proportionate
share of 1-1/2 percent of the assets of the fund.
A person who received a pension or benefit for the entire
12 months before the determination date is eligible for a full
annual postretirement payment. A person who received a pension
or benefit for less than 12 months before the determination date
is eligible for a prorated annual postretirement payment.
Sec. 10. Minnesota Statutes 1996, section 423B.15,
subdivision 6, is amended to read:
Subd. 6. [NO GUARANTEE OF ANNUAL POSTRETIREMENT PAYMENT.]
No provision of or payment made under this section may be
interpreted or relied upon by any member of the relief
association to guarantee or entitle a member to annual
postretirement payments for a period when no excess investment
income is earned by the fund. If the actuarial value of assets
of the fund according to the most recent annual actuarial
valuation prepared in accordance with sections 356.215 and
356.216 is less than 102 percent of its actuarial accrued
liabilities, the distribution of assets under this section must
not exceed one-half of one percent.
Sec. 11. Minnesota Statutes 1996, section 423B.15, is
amended by adding a subdivision to read:
Subd. 7. [ANNUAL ACTUARIAL VALUATION DATE.]
Notwithstanding any provision of section 69.77, subdivision 2h,
356.215 or 356.216 to the contrary, the annual actuarial
valuation of the fund must be completed by May 1 of each year.
Sec. 12. Laws 1965, chapter 519, section 1, as amended by
Laws 1967, chapter 819, section 1; Laws 1969, chapter 123,
section 1; Laws 1975, chapter 57, section 1; Laws 1977, chapter
164, section 2; Laws 1990, chapter 589, article 1, section 5;
Laws 1992, chapter 454, section 2; and Laws 1994, chapter 591,
article 1, section 1, is amended to read:
Section 1. [MINNEAPOLIS, CITY OF; FIREFIGHTER'S RELIEF
ASSOCIATION; SURVIVING SPOUSE'S ENTITLEMENT.] Notwithstanding
the provisions of Minnesota Statutes 1965, Section 69.48, to the
contrary, when a service pensioner, disability pensioner, or
deferred pensioner, or an active member of a relief association
dies, leaving:
(1) A surviving spouse who was a legally married spouse,
residing with the decedent, and who was married while or prior
to the time the decedent was on the payroll of the fire
department in the case of a deceased active member; and who, in
case the deceased member was a service or deferred pensioner was
legally married to the member at least five years before death;
or
(2) A child or children who were living while the deceased
was on the payroll of the fire department, or born within nine
months after the decedent was withdrawn from the payroll of the
fire department, the surviving spouse and the child or children
shall be entitled to a pension or pensions, as follows:
(a) To the surviving spouse, a pension of not less than 17
units, and not to exceed the total of 22 units per month, as the
bylaws of the association provide, for life; provided, that if
the spouse shall remarry then the pension shall cease and
terminate as of the date of remarriage; provided, further, if
the remarriage terminates for any reason, the surviving spouse
shall again be entitled to a pension as the bylaws of the
association provide;
(b) To the child or children, if their other parent is
living, a pension of not to exceed eight units per month for
each child up to the time each child reaches the age of not less
than 16 years and not to exceed an age of 18 years; provided,
however, upon approval by the board of trustees, such a child
who is a full-time student, upon proof of compliance with the
provisions of this act, may be entitled to such pension so long
as the child is a full-time student and has not reached 22 years
of age, all in conformity with the bylaws of the association;
provided, further, the total pensions hereunder for the
surviving spouse and children of the deceased member shall not
exceed the sum of 41 units per month;
(c) A child or children of a deceased member after the
death of their other parent, or in the event their other parent
predeceases the member, be entitled to receive a pension or
pensions in such amount as the board of trustees of the
association shall deem necessary to properly support the child
or children until they reach the age of not less than 16 and not
more than 18 years; provided, however, upon approval by the
board of trustees, such a child who is a full-time student, upon
proof of compliance with the provisions of this act, may be
entitled to such pension so long as the child is a full-time
student and has not reached 22 years of age, as the bylaws of
the association may provide; but the total amount of the pension
or pensions hereunder for any child or children shall not exceed
the sum of 41 units per month;
(d) For the purposes of this act, a full-time student is
defined as an individual who is in full-time attendance as a
student at an educational institution. Whether or not the
student was in full-time attendance would be determined by the
board of trustees of the association in the light of the
standards and practices of the school involved. Specifically
excluded is a person who is paid by the person's employer while
attending school at the request of the person's employer.
Benefits may continue during any period of four calendar months
or less in any 12 month period in which a person does not attend
school if the person shows to the satisfaction of the board of
trustees that the person intends to continue in full-time school
attendance immediately after the end of the period. An
educational institution is defined so as to permit the payment
of benefits to students taking vocational or academic courses in
all approved, accredited or licensed schools, colleges, and
universities. The board of trustees shall make the final
determination of eligibility for benefits if any question arises
concerning the approved status of the educational institution
which the student attends or proposes to attend;
(e) In the event that a child who is receiving a pension as
provided above shall marry before the age of 22 years, the
pension shall cease as of the date of the marriage.; and
(f) A surviving spouse of a deceased service pensioner,
disability pensioner, deferred pensioner, or service pensioner
who is otherwise not qualified may receive a benefit if the
surviving spouse was legally married to the decedent for a
period of five years and was residing with the decedent at the
time of death. The surviving spouse benefit is the same as that
provided under paragraph (a), except that if the surviving
spouse is younger than the decedent, the surviving spouse
benefit must be actuarially equivalent to a surviving spouse
benefit that would have been paid to the member's spouse had the
member been married to a person of the same age or a greater age
than the member's age prior to retirement. A benefit paid under
this paragraph may be less than 17 units, notwithstanding the 17
unit minimum established under paragraph (a).
Sec. 13. Laws 1989, chapter 319, article 19, section 7,
subdivision 1, as amended by Laws 1992, chapter 471, article 2,
section 5, and Laws 1996, chapter 438, article 4, section 12, is
amended to read:
Subdivision 1. [MINNEAPOLIS FIRE DEPARTMENT RELIEF
ASSOCIATION; DEFINITIONS.] For the purposes of this section,
each of the terms in this subdivision have the meanings given
them in paragraphs (a) to (h).
(a) "Annual postretirement payment" means the payment of a
lump sum postretirement benefit to an eligible member on June 1
following the determination date in any year.
(b) "City" means the city of Minneapolis.
(c) "Determination date" means December 31 of each year.
(d) "Eligible member" means a person, including a service
pensioner, a disability pensioner, a survivor, or dependent of a
deceased active member, service pensioner, or disability
pensioner, who received a pension or benefit from the relief
association during the 12 months before the determination date.
A person who received a pension or benefit for the entire 12
months before the determination date is eligible for a full
annual postretirement payment. A person who received a pension
or benefit for less than 12 months before the determination date
is eligible for a prorated annual postretirement payment.
(e) "Excess investment income" means the amount by which
the average time weighted total rate of return earned by the
fund in the most recent prior five fiscal years has exceeded the
actual average percentage increase in the current monthly salary
of a top grade firefighter in the most recent prior five fiscal
years plus two percent. The excess investment income must be
expressed as a dollar amount and may not exceed one percent of
the total assets of the fund, except when the actuarial value of
assets of the fund according to the most recent annual actuarial
valuation prepared in accordance with Minnesota Statutes,
sections 356.215 and 356.216 is greater than 102 percent of its
actuarial accrued liabilities in which case the amount must not
exceed 1-1/2 percent of the assets of the funds.
(f) "Fund" means the Minneapolis fire department relief
association.
(g) "Relief association" means the Minneapolis fire
department relief association.
(h) "Time weighted total rate of return" means the
percentage amount determined by using the formula or formulas
established by the state board of investment under Minnesota
Statutes, section 11A.04, clause (11), and in effect on January
1, 1987.
Sec. 14. Laws 1989, chapter 319, article 19, section 7,
subdivision 3, is amended to read:
Subd. 3. [DETERMINATION OF EXCESS INVESTMENT INCOME.] The
board of trustees of the relief association shall determine by
May 1 of each year whether or not the relief association has
excess investment income. The amount of excess investment
income, if any, must be stated as a dollar amount and reported
by the chief administrative officer of the relief association to
the mayor and governing body of the city, the state auditor, the
commissioner of finance, and the executive director of the
legislative commission on pensions and retirement. The dollar
amount of excess investment income up to one percent of the
assets of the fund, except if the actuarial value of assets of
the fund according to the most recent annual actuarial valuation
prepared in accordance with Minnesota Statutes, sections 356.215
and 356.216 is greater than 102 percent of its actuarial accrued
liabilities, must be applied for the purpose specified in
subdivision 4. Excess investment income must not be considered
as income to or assets of the fund for actuarial valuations of
the fund for that year under sections 69.77, 356.215, and
356.216 and the provisions of this section except to offset the
annual postretirement payment. Additional investment income is
any realized or unrealized investment income other than the
excess investment income and must be included in the actuarial
valuations performed under sections 69.77, 356.215, and 356.216
and the provisions of this section.
Sec. 15. Laws 1989, chapter 319, article 19, section 7,
subdivision 4, as amended by Laws 1990, chapter 570, article 12,
section 63, Laws 1992, chapter 471, article 2, section 6, and
Laws 1996, chapter 438, article 4, section 13, is amended to
read:
Subd. 4. [AMOUNT OF ANNUAL POSTRETIREMENT PAYMENT.] The
amount determined under subdivision 3 must be applied in
accordance with this subdivision. When the actuarial value of
assets of the fund according to the most recent annual actuarial
valuation prepared in accordance with Minnesota Statutes,
sections 356.215 and 356.216 is less than 102 percent of its
actuarial accrued liabilities, the relief association shall
apply the first one-half of one percent of assets which
constitute excess investment income to the payment of an annual
postretirement payment as specified in this subdivision. and the
second one-half of one percent of assets which constitute excess
investment income shall be applied to reduce the state
amortization state aid or supplementary amortization state aid
payments otherwise due to the relief association under section
423A.02 for the current calendar year. When the actuarial value
of assets of the fund according to the most recent annual
actuarial valuation prepared in accordance with Minnesota
Statutes, sections 356.215 and 356.216 is less than 102 percent
of its actuarial accrued liabilities, the relief association
shall pay an annual postretirement payment to all eligible
members in an amount not to exceed one-half of one percent of
the assets of the fund. Payment of the annual postretirement
payment must be in a lump sum amount on June 1 following the
determination date in any year. When the actuarial value of
assets of the fund according to the most recent annual actuarial
valuation prepared in accordance with Minnesota Statutes,
sections 356.215 and 356.216 is greater than 102 percent of its
actuarial accrued liabilities, the relief association shall pay
an annual postretirement payment to all eligible members in an
amount not to exceed 1-1/2 percent of the assets of the fund.
Payment of the annual postretirement payment may be made only if
the average time weighted total rate of return in the most
recent prior five fiscal years exceeds by two percent the actual
average percentage increase in the current monthly salary of a
top grade firefighter in the most recent prior five fiscal
years. The total amount of all payments to members may not
exceed the amount determined under subdivision 3. Payment to
each eligible member must be calculated by dividing the total
number of pension units to which eligible members are entitled
into the excess investment income available for distribution to
members, and then multiplying that result by the number of units
to which each eligible member is entitled to determine each
eligible member's annual postretirement payment. When the fund
actuarial value of assets according to the most recent annual
actuarial valuation prepared in accordance with Minnesota
Statutes, sections 356.215 and 356.216 is less than 102 percent
of its actuarial accrued liabilities, payment to each eligible
member may not exceed an amount equal to the total monthly
benefit that the eligible member was entitled to in the prior
year under the terms of the benefit plan of the relief
association or each eligible member's proportionate share of the
excess investment income, whichever is less. When the actuarial
value of assets of the fund according to the most recent annual
actuarial valuation prepared in accordance with Minnesota
Statutes, sections 356.215 and 356.216 is greater than 102
percent of its actuarial accrued liabilities, payment to each
eligible member may not exceed the member's proportionate share
of 1-1/2 percent of assets of the fund.
Sec. 16. Laws 1989, chapter 319, article 19, section 7,
subdivision 7, is amended to read:
Subd. 7. [NO GUARANTEE OF ANNUAL POSTRETIREMENT PAYMENT.]
No provision of or payment made under this section may be
interpreted or relied upon by any member of the relief
association to guarantee or entitle a member to annual
postretirement payments for a period when no excess investment
income is earned by the fund. If the actuarial value of assets
of the fund according to the most recent annual actuarial
valuation prepared in accordance with Minnesota Statutes,
sections 356.215 and 356.216 is less than 102 percent of its
actuarial accrued liabilities, a distribution of the fund assets
must not exceed one-half of one percent.
Sec. 17. Laws 1993, chapter 125, article 1, section 1, is
amended to read:
Section 1. [MINNEAPOLIS, CITY OF; SERVICE PENSION RATES.]
Notwithstanding the provisions of Minnesota Statutes,
section 69.45, Laws 1971, chapter 542, section 1, and Laws 1980,
chapter 607, article XV, section 9, to the contrary, when the
actuarial value of assets of the fund according to the most
recent annual actuarial valuation prepared in accordance with
Minnesota Statutes, sections 356.215 and 356.216 is less than 90
percent of its actuarial accrued liabilities, the service
pensions payable by the Minneapolis fire department relief
association for members terminating active service as a
Minneapolis firefighter after June 1, 1993, must be computed as
follows:
length of service
credited service pension payable
10 years 16.0 units
11 years 17.6 units
12 years 19.2 units
13 years 20.8 units
14 years 22.4 units
15 years 24.0 units
16 years 25.6 units
17 years 27.2 units
18 years 28.8 units
19 years 30.4 units
20 years 33.0 units
21 years 34.6 units
22 years 36.2 units
23 years 37.8 units
24 years 39.4 units
25 years 41.0 units
When the actuarial value of assets of the fund according to
the most recent annual actuarial valuation prepared in
accordance with Minnesota Statutes, sections 356.215 and 356.216
is of greater than 90 percent of actuarial accrued liabilities,
the following schedule applies to all active members and retired
service pensioners who otherwise met the then existing
requirements to receive a benefit:
length of service
credited service pension payable
5 years 8.0 units
6 years 9.6 units
7 years 11.2 units
8 years 12.8 units
9 years 14.4 units
10 years 16.0 units
11 years 17.6 units
12 years 19.2 units
13 years 20.8 units
14 years 22.4 units
15 years 24.0 units
16 years 25.6 units
17 years 27.2 units
18 years 28.8 units
19 years 30.4 units
20 years 33.0 33.5 units
21 years 34.6 35.1 units
22 years 36.2 37.7 units
23 years 37.8 38.3 units
24 years 39.4 39.9 units
25 years 41.0 41.5 units
When the actuarial value of assets of the fund according to
the most recent annual actuarial valuation prepared in
accordance with Minnesota Statutes, sections 356.215 and 356.216
is of greater than 92.5 percent of actuarial accrued
liabilities, the following schedule applies to all active
members and retired service pensioners who otherwise met the
then existing requirements to receive a benefit:
length of service
credited service pension payable
5 years 8.0 units
6 years 9.6 units
7 years 11.2 units
8 years 12.8 units
9 years 14.4 units
10 years 16.0 units
11 years 17.6 units
12 years 19.2 units
13 years 20.8 units
14 years 22.4 units
15 years 24.0 units
16 years 25.6 units
17 years 27.2 units
18 years 28.8 units
19 years 30.4 units
20 years 34.0 units
21 years 35.6 units
22 years 37.2 units
23 years 38.8 units
24 years 40.4 units
25 years 42.0 units
Sec. 18. [MINNEAPOLIS FIRE DEPARTMENT RELIEF ASSOCIATION;
OPTIONAL ANNUITIES.]
A member of the Minneapolis fire department relief
association who is retired or disabled on the effective date of
this section may elect an optional retirement annuity within 60
days of the effective date instead of the normal retirement
pension. A member who retires or becomes disabled after the
effective date of this section may elect an optional retirement
annuity prior to the receipt of any benefits. The optional
retirement annuity may be a 50 percent, a 75 percent, or a 100
percent joint and survivor annuity without reinstatement in the
event of the designated beneficiary predeceasing the member or a
joint and survivor annuity with reinstatement in the event of
the designated beneficiary predeceasing the member. An optional
retirement annuity must be actuarially equivalent to the service
pension and automatic survivor coverage otherwise payable to the
retiring member and the member's beneficiaries. Once selected,
the optional annuity is irrevocable.
Sec. 19. [MINNEAPOLIS FIRE DEPARTMENT RELIEF ASSOCIATION
TAX LEVY.]
If in any year after the Minneapolis fire department relief
actuarial value of assets of the association according to the
most recent annual actuarial valuation prepared in accordance
with Minnesota Statutes, sections 356.215 and 356.216 is greater
than 102 percent of the actuarial accrued liabilities of the
fund and subsequently the actuarial value of assets are less
than 100 percent of the actuarial accrued liabilities according
to the most recent annual actuarial valuation prepared in
accordance with Minnesota Statutes, sections 356.215 and
356.216, the city of Minneapolis is not required to levy a
property tax to fund any deficit unless the fund has two
successive years when the actuarial value of assets are less
than 100 percent of the actuarial accrued liabilities according
to the most recent annual actuarial valuation prepared in
accordance with Minnesota Statutes, sections 356.215 and 356.216.
Sec. 20. [ACTUARIAL VALUATION DATE.]
Notwithstanding Minnesota Statutes, section 69.77,
subdivision 2h, 356.215 or 356.216, the annual actuarial
valuation of the Minneapolis fire department relief association
must be completed by May 1 of each year.
Sec. 21. [ACTUARIAL EQUIVALENT.]
For the purposes of the Minneapolis fire department relief
association, "actuarial equivalent" or "actuarially equivalent"
means the condition of one annuity or benefit having an equal
actuarial present value as another annuity or benefit,
determined as of a given date at a specified age with each
actuarial present value based on the appropriate mortality table
adopted by the board of directors based on the experience of the
fund and approved by the actuary retained by the legislative
commission on pensions and retirement and using the applicable
preretirement or postretirement interest rate assumptions
specified in Minnesota Statutes, section 356.216.
Sec. 22. [BENEFIT EXCHANGE.]
The one unit health and welfare benefit granted to members
of the Minneapolis fire department relief association in Laws
1980, chapter 667, article XV, section 9, who retired after July
1, 1980, must be reduced by one-half unit upon the
implementation of the benefit improvement in section 17 when the
actuarial value of assets of the fund according to the most
recent annual actuarial valuation report under Minnesota
Statutes, sections 356.215 and 356.216 exceeds 90 percent of its
actuarial accrued liabilities and the benefit must be eliminated
when the actuarial value of assets of the fund exceeds 92.5
percent of its actuarial accrued liabilities and the benefit in
section 15 is fully implemented.
Sec. 23. [EFFECTIVE DATE.]
The sections of this article are effective on the day after
compliance by the governing body of the city of Minneapolis with
Minnesota Statutes, section 645.021, subdivision 2. Section 4
is effective when the provisions of section 5 take effect. The
disability pension and superannuation pension unit amount change
in section 5 is effective only when section 4 takes effect.
Sections 7 and 12 are effective retroactive to July 1, 1996 and
apply to all current spouses of members, except that the unit
increases for surviving spouses in section 7 shall not otherwise
increase the surviving spouse benefit beyond 22 units.
Presented to the governor May 29, 1997
Signed by the governor June 2, 1997, 2:00 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes