Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Session Laws - 2005, 1st Special Session
Key: (1) language to be deleted (2) new language
CHAPTER 8-H.F.No. 44
An act relating to retirement; various public pension
plans; clarifying and revising various plan
provisions; eliminating obsolete provisions; defining
average salary; modifying the definition of allowable
service to include time on strike; defining covered
salary to include certain employer contributions to
supplemental retirement plans; specifying itemized
detail of plan administrative expenses in annual
financial reporting; excluding police officers of the
University of Minnesota from the public employees
police and fire fund; clarifying collection procedures
relating to charter schools; adding a uniform
nonassignment and legal process exemption provision;
providing for various member and employer contribution
rate increases; adding employees of Bridges Medical
Services, Hutchinson Area Health Care, and Northfield
Hospital to privatization coverage; extending date for
filing special law approval with the secretary of
state for the RenVilla Nursing Home; requiring the
privatization periodic filing of updated copies of
articles of incorporation and bylaws; modifying a
higher education individual retirement account plan
investment option provision; implementing the
recommendations of the Volunteer Firefighter Relief
Association working group of the state auditor;
modifying the trigger date for filing financial
reports; revising the per firefighter financing
requirements for monthly benefit service pensions;
modifying the options for crediting interest on
deferred service pensions; clarifying the deferred
service pension options available to defined
contribution plans; providing for the crediting of
service during military service leaves; requiring the
amortization of experience losses; clarifying the
compliance requirements for the qualification for fire
state aid; modifying a limit on mutual fund
investments; clarifying corporate stock and exchange
traded funds investment authority; modifying the
municipal representation requirements on relief
association governing boards; clarifying exemptions
from process and taxation; providing that certain laws
do not apply to the consolidation of specified
volunteer firefighter relief associations; providing
an ad hoc postretirement adjustment to Eveleth police
and fire trust fund benefit recipients; authorizing
the Maplewood Firefighters Relief Association to
transfer assets to the Oakdale Firefighters Relief
Association to cover service credits earned by certain
individuals; appropriating money; amending Minnesota
Statutes 2004, sections 3A.13; 69.011, subdivision 2b,
by adding a subdivision; 69.021, subdivisions 5, 11;
69.051, subdivisions 1, 1a; 69.33; 69.77, subdivision
4; 69.771; 69.772, subdivisions 3, 4; 69.773,
subdivisions 4, 5; 69.775; 352.01, subdivisions 2a, 4,
5, 12, 13, 21, 23, by adding a subdivision; 352.021,
subdivisions 1, 2, 3, 4; 352.04, subdivisions 1, 12;
352.041, subdivisions 1, 2, 3, 5; 352.115,
subdivisions 2, 3; 352.15, subdivisions 1, 3, 4;
352.22, subdivision 10; 352.87, subdivision 3; 352.91,
by adding a subdivision; 352.93, subdivision 1;
352B.01, subdivisions 1, 2, 3, 11; 352B.02,
subdivision 1e; 352B.071; 352C.021, by adding a
subdivision; 352D.01; 352D.015, subdivisions 3, 4;
352D.03; 352D.05, subdivision 4; 352D.085, subdivision
1; 352D.09, subdivision 5; 352D.12; 353.01,
subdivisions 6, 10, 14, 32, 33, by adding a
subdivision; 353.025; 353.026; 353.027; 353.028;
353.14; 353.15, subdivisions 1, 3; 353.27,
subdivisions 2, 3, 3a, 11, by adding a subdivision;
353.271; 353.28, subdivisions 5, 6; 353.29,
subdivision 3; 353.31, subdivision 1c; 353.32,
subdivision 9; 353.33, subdivisions 3, 12; 353.64, by
adding a subdivision; 353.65, subdivisions 2, 3;
353.651, subdivision 3; 353.656, subdivision 1;
353B.02, subdivision 10; 353F.02, subdivision 4;
354.05, subdivisions 7, 35, by adding a subdivision;
354.091; 354.094, subdivision 1; 354.10, subdivisions
1, 3, 4; 354.33, subdivision 5; 354.39; 354.41,
subdivision 2; 354.42, by adding a subdivision;
354.44, subdivisions 2, 6; 354A.011, subdivisions 3a,
24, by adding a subdivision; 354A.021, subdivision 5,
by adding a subdivision; 354A.097, subdivision 1;
354A.31, subdivisions 4, 4a, 5; 354B.21, subdivisions
2, 3; 354B.25, subdivision 2; 356.20, subdivision 4;
356.215, subdivision 8; 356.216; 356.47, subdivision
3; 356.551; 356.611, subdivision 1; 356A.06,
subdivision 7; 383B.46, subdivision 2; 383B.47;
383B.48; 383B.49; 422A.01, subdivisions 6, 11, by
adding subdivisions; 422A.06, subdivision 7; 422A.10,
subdivisions 1, 2; 422A.15, subdivision 1; 422A.16,
subdivision 9; 422A.22, subdivisions 1, 3, 4, 6;
422A.231; 422A.24; 423B.01, by adding a subdivision;
423B.05, subdivision 3; 423B.09, subdivision 1, by
adding a subdivision; 423B.10, subdivision 1; 423B.17;
423C.01, by adding a subdivision; 423C.05, subdivision
2; 423C.09; 424A.02, subdivisions 3, 4, 7; 424A.04,
subdivision 1; 424B.10, subdivision 1; 471A.10;
490.121, subdivisions 4, 20, 21, by adding a
subdivision; 490.126, subdivision 5; Laws 1999,
chapter 222, article 16, section 16, as amended; Laws
2000, chapter 461, article 4, section 4, as amended;
Laws 2004, chapter 267, article 12, section 4;
proposing coding for new law in Minnesota Statutes,
chapters 356; 383B; 423C; 424A; repealing Minnesota
Statutes 2004, sections 352.119, subdivision 1;
352.15, subdivision 1a; 352C.031, subdivision 3;
353.15, subdivision 2; 353.29, subdivision 2; 353.34,
subdivision 3b; 353.36, subdivisions 2, 2a, 2b, 2c;
353.46, subdivision 4; 353.651, subdivision 2;
353.663; 353.74; 353.75; 354.10, subdivision 2;
354.59; 422A.22, subdivisions 2, 5; 422A.221.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
2005 OMNIBUS RETIREMENT BILL
ARTICLE 1
COVERED SALARY; AVERAGE SALARY
Section 1. Minnesota Statutes 2004, section 352.01,
subdivision 13, is amended to read:
Subd. 13. [SALARY.] (a) Subject to the limitations of
section 356.611, "salary" means wages, or other periodic
compensation, paid to an employee before deductions for deferred
compensation, supplemental retirement plans, or other voluntary
salary reduction programs.
(b) "Salary" does not include:
(1) lump sum sick leave payments;
(2) severance payments;
(3) lump sum annual leave payments and overtime payments
made at the time of separation from state service;
(4) payments in lieu of any employer-paid group insurance
coverage, including the difference between single and family
rates that may be paid to an employee with single coverage;
(5) payments made as an employer-paid fringe benefit;
(6) workers' compensation payments;
(7) employer contributions to a deferred compensation or
tax sheltered annuity program; and
(8) amounts contributed under a benevolent vacation and
sick leave donation program.
(c) Amounts provided to an employee by the employer through
a grievance proceeding or a legal settlement are salary only if
the settlement is reviewed by the executive director and the
amounts are determined by the executive director to be
consistent with paragraph (a) and prior determinations.
Sec. 2. Minnesota Statutes 2004, section 352.01, is
amended by adding a subdivision to read:
Subd. 14a. [AVERAGE SALARY.] (a) "Average salary" means
the average of the highest five successive years of salary upon
which the employee has made contributions to the retirement fund
by payroll deductions. Average salary must be based upon all
allowable service if this service is less than five years.
(b) "Average salary" does not include the payment of
accrued unused annual leave or overtime paid at time of final
separation from state service if paid in a lump sum nor does it
include the reduced salary, if any, paid during the period the
employee is entitled to workers' compensation benefit payments
for temporary disability.
(c) For an employee covered by the correctional state
employees retirement plan, "average salary" means the average of
the monthly salary during the employee's highest five successive
years of salary as an employee covered by the general state
employees retirement plan, or the correctional state employees
retirement plan, or by a combination of the two. If the total
of the covered service is less than five years, the
determination of average salary must be based on all allowable
service.
Sec. 3. Minnesota Statutes 2004, section 352.115,
subdivision 2, is amended to read:
Subd. 2. [AVERAGE SALARY NORMAL RETIREMENT ANNUITY.] The
retirement annuity hereunder payable at normal retirement age or
thereafter must be computed in accordance with the applicable
provisions of the formula stated in subdivision 3, on the basis
of the employee's average salary for the period of allowable
service. This retirement annuity is known as the "normal"
retirement annuity.
For each year of allowable service, "average salary" of an
employee in determining a retirement annuity means the average
of the highest five successive years of salary upon which the
employee has made contributions to the retirement fund by
payroll deductions. Average salary must be based upon all
allowable service if this service is less than five years.
"Average salary" does not include the payment of accrued
unused annual leave or overtime paid at time of final separation
from state service if paid in a lump sum nor does it include the
reduced salary, if any, paid during the period the employee is
entitled to workers' compensation benefit payments for temporary
disability.
Sec. 4. Minnesota Statutes 2004, 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 section 352.01, subdivision 2 14a, multiplied by the
percent specified in section 356.315, subdivision 1, per year of
allowable service for the first ten years and the percent
specified in section 356.315, 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 section 352.01,
subdivision 2 14a, multiplied by the percent specified in
section 356.315, 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. 5. Minnesota Statutes 2004, section 352.87,
subdivision 3, is amended to read:
Subd. 3. [RETIREMENT ANNUITY FORMULA.] A person specified
in subdivision 1 will have is entitled to receive a retirement
annuity applicable for allowable service credit under this
section calculated by multiplying the employee's average salary,
as defined in section 352.115 352.01, subdivision 2 14a, by the
percent specified in section 356.315, subdivision 2a, for each
year or portions of a year of allowable service credit. No
reduction for retirement prior to before the normal retirement
age, as specified in section 352.01, subdivision 25, applies to
service to which this section applies.
Sec. 6. Minnesota Statutes 2004, section 352.93,
subdivision 1, is amended to read:
Subdivision 1. [BASIS OF ANNUITY; WHEN TO APPLY.] After
separation from state service, an employee covered under section
352.91 who has reached age 55 years and has credit for at least
three years of covered correctional service or a combination of
covered correctional service and regular Minnesota general
employees state retirement System plan service is entitled upon
application to a retirement annuity under this section, based
only on covered correctional employees' service. Application
may be made no earlier than 60 days before the date the employee
is eligible to retire by reason of both age and service
requirements.
In this section, "average salary" means the average of the
monthly salary during the employee's highest five successive
years of salary as an employee covered by the Minnesota State
Retirement System. Average salary must be based upon all
allowable service if this service is less than five years.
Sec. 7. Minnesota Statutes 2004, section 352B.01,
subdivision 11, is amended to read:
Subd. 11. [AVERAGE MONTHLY SALARY.] (a) Subject to the
limitations of section 356.611, "average monthly salary" means
the average of the highest monthly salaries for five years of
service as a member upon which contributions were deducted from
pay under section 352B.02, or upon which appropriate
contributions or payments were made to the fund to receive
allowable service and salary credit as specified under the
applicable law. Average monthly salary must be based upon all
allowable service if this service is less than five years.
(b) "Average monthly salary" means the salary of the member
as defined in section 352.01, subdivision 13. "Average monthly
salary" does not include any lump-sum annual leave payments and
overtime payments made at the time of separation from state
service, any amounts of severance pay, or any reduced salary
paid during the period the person is entitled to workers'
compensation benefit payments for temporary disability.
(c) A member on leave of absence receiving temporary
workers' compensation payments and a reduced salary or no salary
from the employer who is entitled to allowable service credit
for the period of absence may make payment to the fund for the
difference between salary received, if any, and the salary the
member would normally receive if not on leave of absence during
the period. The member shall pay an amount equal to the member
and employer contribution rate under section 352B.02,
subdivisions 1b and 1c, on the differential salary amount for
the period of the leave of absence. The employing department,
at its option, may pay the employer amount on behalf of the
member. Payment made under this subdivision must include
interest at the rate of 8.5 percent per year, and must be
completed within one year of the return from the leave of
absence.
Sec. 8. Minnesota Statutes 2004, section 352C.021, is
amended by adding a subdivision to read:
Subd. 1a. [AVERAGE SALARY.] "Average salary," for purposes
of calculating the normal retirement annuity under section
352C.031, subdivision 4, means the average of the highest five
successive years of salary upon which contributions have been
made under section 352C.09.
Sec. 9. Minnesota Statutes 2004, section 353.01,
subdivision 10, is amended to read:
Subd. 10. [SALARY.] (a) Subject to the limitations of
section 356.611, "salary" means:
(1) the periodic compensation of a public employee, before
deductions for deferred compensation, supplemental retirement
plans, or other voluntary salary reduction programs, and also
means "wages" and includes net income from fees;
(2) for a public employee who is covered by a supplemental
retirement plan under section 356.24, subdivision 1, clause (8),
(9), or (10), which require all plan contributions be made by
the employer, the contribution to the applicable supplemental
retirement plan when the contribution is from mandatory
withholdings from employees' wages; and
(2) (3) for a public employee who has prior service covered
by a local police or firefighters relief association that has
consolidated with the Public Employees Retirement Association or
to which section 353.665 applies and who has elected coverage
either under the public employees police and fire fund benefit
plan under section 353A.08 following the consolidation or under
section 353.665, subdivision 4, the rate of salary upon which
member contributions to the special fund of the relief
association were made prior to the effective date of the
consolidation as specified by law and by bylaw provisions
governing the relief association on the date of the initiation
of the consolidation procedure and the actual periodic
compensation of the public employee after the effective date of
consolidation.
(b) Salary does not mean:
(1) the fees paid to district court reporters, unused
annual vacation or sick leave payments, in lump-sum or periodic
payments, severance payments, reimbursement of expenses,
lump-sum settlements not attached to a specific earnings period,
or workers' compensation payments;
(2) employer-paid amounts used by an employee toward the
cost of insurance coverage, employer-paid fringe benefits,
flexible spending accounts, cafeteria plans, health care expense
accounts, day care expenses, or any payments in lieu of any
employer-paid group insurance coverage, including the difference
between single and family rates that may be paid to a member
with single coverage and certain amounts determined by the
executive director to be ineligible;
(3) the amount equal to that which the employing
governmental subdivision would otherwise pay toward single or
family insurance coverage for a covered employee when, through a
contract or agreement with some but not all employees, the
employer:
(i) discontinues, or for new hires does not provide,
payment toward the cost of the employee's selected insurance
coverages under a group plan offered by the employer;
(ii) makes the employee solely responsible for all
contributions toward the cost of the employee's selected
insurance coverages under a group plan offered by the employer,
including any amount the employer makes toward other employees'
selected insurance coverages under a group plan offered by the
employer; and
(iii) provides increased salary rates for employees who do
not have any employer-paid group insurance coverages;
(4) except as provided in section 353.86 or 353.87,
compensation of any kind paid to volunteer ambulance service
personnel or volunteer firefighters, as defined in subdivision
35 or 36; and
(5) the amount of compensation that exceeds the limitation
provided in section 356.611.
(c) Amounts provided to an employee by the employer through
a grievance proceeding or a legal settlement are salary only if
the settlement is reviewed by the executive director and the
amounts are determined by the executive director to be
consistent with paragraph (a) and prior determinations.
Sec. 10. Minnesota Statutes 2004, section 353.01, is
amended by adding a subdivision to read:
Subd. 17a. [AVERAGE SALARY.] (a) "Average salary," for
purposes of calculating a retirement annuity under section
353.29, subdivision 3, means an amount equivalent to the average
of the highest salary of the member, police officer, or
firefighter, whichever applies, upon which employee
contributions were paid for any five successive years of
allowable service, based on dates of salary periods as listed on
salary deduction reports. Average salary must be based upon all
allowable service if this service is less than five years.
(b) "Average salary" may not include any reduced salary
paid during a period in which the employee is entitled to
benefit payments from workers' compensation for temporary
disability, unless the average salary is higher, including this
period.
Sec. 11. Minnesota Statutes 2004, 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 section 353.01, subdivision 2 17a,
multiplied by the percent specified in section 356.315,
subdivision 3, for each year of allowable service for the first
ten years and thereafter by the percent specified in section
356.315, subdivision 4, per year of allowable service and
completed months less than a full year for the "basic member,"
and the percent specified in section 356.315, subdivision 1, for
each year of allowable service for the first ten years and
thereafter by the percent specified in section 356.315,
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 section 353.01, subdivision 2 17a, multiplied by the percent
specified in section 356.315, subdivision 4, for each year of
allowable service and completed months less than a full year for
a basic member and the percent specified in section 356.315,
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. 12. Minnesota Statutes 2004, section 353.33,
subdivision 3, is amended to read:
Subd. 3. [COMPUTATION OF BENEFITS.] This disability
benefit is an amount equal to the normal annuity payable to a
member who has reached normal retirement age with the same
number of years of allowable service and the same average
salary, as provided in section 353.01, subdivision 17a, and
section 353.29, subdivisions 2 and subdivision 3.
A basic member shall receive a supplementary monthly
benefit of $25 to age 65 or the five-year anniversary of the
effective date of the disability benefit, whichever is later.
If the disability benefits under this subdivision exceed
the average salary as defined in section 353.29 353.01,
subdivision 2 17a, the disability benefits must be reduced to an
amount equal to said the average salary.
Sec. 13. Minnesota Statutes 2004, section 353.651,
subdivision 3, is amended to read:
Subd. 3. [RETIREMENT ANNUITY FORMULA.] The average salary
as defined in section 353.01, subdivision 2 17a, multiplied by
the percent specified in section 356.315, 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 that service is must
be computed under sections 353.29 and 353.30.
Sec. 14. Minnesota Statutes 2004, 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 plan who becomes disabled and
physically unfit to perform duties as a police officer,
firefighter, or paramedic as defined under section 353.64,
subdivision 10, 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 the duties as a police officer,
firefighter, or paramedic as defined under section 353.64,
subdivision 10, 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 60 percent of the
"average salary" as defined in section 353.651 353.01,
subdivision 2 17a, plus an additional percent specified in
section 356.315, subdivision 6, of that average salary for each
year of service in excess of 20 years. If the disability under
this subdivision occurs before the member has at least five
years of allowable service credit in the police and fire plan,
the disability benefit must be computed on the "average salary"
from which deductions were made for contribution to the police
and fire fund.
Sec. 15. Minnesota Statutes 2004, section 353B.02,
subdivision 10, is amended to read:
Subd. 10. [SALARY.] (a) "Salary" under this chapter is
subject to the limitations of section 356.611.
(b) "Salary" for benefit computation and contribution
purposes means the salary of a first class or first grade
firefighter or patrol officer, whichever applies, for the former
members of the following consolidating relief associations:
(1) Anoka Police Relief Association;
(2) Austin Firefighters Relief Association;
(3) Austin Police Relief Association;
(4) Columbia Heights Fire Department Relief Association,
Paid Division;
(5) Fairmont Police Benefit Association;
(6) Faribault Fire Department Relief Association;
(7) Mankato Fire Department Relief Association;
(8) Minneapolis Fire Department Relief Association;
(9) Minneapolis Police Relief Association;
(10) Richfield Fire Department Relief Association;
(11) Rochester Fire Department Relief Association;
(12) Rochester Police Relief Association;
(13) St. Cloud Fire Department Relief Association;
(14) St. Cloud Police Relief Association;
(15) St. Paul Fire Department Relief Association;
(16) South St. Paul Firefighters Relief Association;
(17) West St. Paul Firefighters Relief Association;
(18) West St. Paul Police Relief Association; and
(19) Winona Fire Department Relief Association.
(b) (c) "Salary" for benefit computation purposes means the
salary of a first grade patrol officer for the second month of
the previous fiscal year and for contribution purposes means the
current salary of a first grade patrol officer, for the former
members of the following consolidating relief associations:
(1) Bloomington Police Relief Association;
(2) Crystal Police Relief Association;
(3) Fridley Police Pension Association;
(4) Richfield Police Relief Association;
(5) St. Louis Park Police Relief Association; and
(6) Winona Police Relief Association.
(c) (d) "Salary" for benefit computation purposes means the
final salary and for contribution purposes means the current
salary for the former members of the following consolidating
relief associations:
(1) Albert Lea Firefighters Relief Association;
(2) Albert Lea Police Relief Association;
(3) Buhl Police Relief Association;
(4) Chisholm Firefighters Relief Association;
(5) Crookston Fire Department Relief Association;
(6) Crookston Police Relief Association;
(7) Faribault Police Benefit Association;
(8) Red Wing Police Relief Association; and
(9) Virginia Fire Department Relief Association.
(d) (e) "Salary" for benefit computation purposes means the
average earnings or salary for the final six months of
employment before retirement and for contribution purposes means
the current salary for the former members of the following
consolidating relief associations:
(1) Chisholm Police Relief Association;
(2) Hibbing Firefighters Relief Association; and
(3) Hibbing Police Relief Association.
(e) (f) "Salary" for benefit computation purposes means the
greater of the final salary at retirement or the highest salary
of a patrol officer and for contribution purposes means the
greater of the current salary or the current highest salary of a
patrol officer for the former members of the following
consolidating relief associations:
(1) Brainerd Police Benefit Association; and
(2) New Ulm Police Relief Association.
(f) (g) "Salary" for benefit computation and contribution
purposes means the following for the former members of the
consolidating relief associations as indicated:
(1) salary of a top grade patrol officer, including
longevity pay and education incentive pay in an amount not to
exceed $235 per month, Columbia Heights Police Relief
Association;
(2) maximum pay of a firefighter, including overtime
payments for a regular workweek of a firefighter mandated by the
federal Fair Labor Standards Act of 1938, as amended, Duluth
Firefighters Relief Association;
(3) salary of a first class patrol officer with 16 years of
service, Duluth Police Pension Association;
(4) base salary for the rank currently held, plus longevity
pay, pay for eligibility for next higher rank and pay for first
aid care, Mankato Police Benefit Association;
(5) average annual salary for highest three paid years for
benefit computation purposes and current salary for contribution
purposes, Red Wing Fire Department Relief Association;
(6) pay of the highest grade full-time firefighter, St.
Louis Park Fire Department Relief Association;
(7) maximum monthly pay of a patrol officer, St. Paul
Police Relief Association;
(8) prevailing base pay of rank held at retirement for
benefit computation purposes and current salary for contribution
purposes, South St. Paul Police Relief Association; and
(9) prevailing pay for rank held for at least six months
before retirement for benefit computation purposes and current
salary for contribution purposes, Virginia Police Relief
Association.
Sec. 16. Minnesota Statutes 2004, section 354.05, is
amended by adding a subdivision to read:
Subd. 13a. [AVERAGE SALARY.] (a) "Average salary," for the
purpose of determining the member's retirement annuity, means
the average salary upon which contributions were made for the
highest five successive years of formula service credit.
(b) "Average salary" may not include any more than the
equivalent of 60 monthly salary payments.
(c) "Average salary" must be based upon all years of
formula service credit if this service credit is less than five
years.
Sec. 17. Minnesota Statutes 2004, section 354.05,
subdivision 35, is amended to read:
Subd. 35. [SALARY.] (a) Subject to the limitations of
section 356.611, "salary" means the periodic compensation, upon
which member contributions are required before deductions for
deferred compensation, supplemental retirement plans, or other
voluntary salary reduction programs.
(b) "Salary" does not mean:
(1) lump sum annual leave payments;
(2) lump sum wellness and sick leave payments;
(3) employer-paid amounts used by an employee toward the
cost of insurance coverage, employer-paid fringe benefits,
flexible spending accounts, cafeteria plans, health care expense
accounts, day care expenses, or any payments in lieu of any
employer-paid group insurance coverage, including the difference
between single and family rates that may be paid to a member
with single coverage and certain amounts determined by the
executive director to be ineligible;
(4) any form of payment made in lieu of any other
employer-paid fringe benefit or expense;
(5) any form of severance payments;
(6) workers' compensation payments;
(7) disability insurance payments, including self-insured
disability payments;
(8) payments to school principals and all other
administrators for services that are in addition to the normal
work year contract if these additional services are performed on
an extended duty day, Saturday, Sunday, holiday, annual leave
day, sick leave day, or any other nonduty day;
(9) payments under section 356.24, subdivision 1, clause
(4); and
(10) payments made under section 122A.40, subdivision 12,
except for payments for sick leave that are accumulated under
the provisions of a uniform school district policy that applies
equally to all similarly situated persons in the district.
(c) Amounts provided to an employee by the employer through
a grievance proceeding or a legal settlement are salary only if
the settlement is reviewed by the executive director and the
amounts are determined by the executive director to be
consistent with paragraph (a) and prior determinations.
Sec. 18. Minnesota Statutes 2004, section 354.44,
subdivision 6, is amended to read:
Subd. 6. [COMPUTATION OF FORMULA PROGRAM RETIREMENT
ANNUITY.] (a) The formula retirement annuity must be computed in
accordance with the applicable provisions of the formulas stated
in paragraph (b) or (d) on the basis of each member's average
salary under section 354.05, subdivision 13a, 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.
(b) This paragraph, in conjunction with paragraph (c),
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 paragraph (d), in
conjunction with paragraph (e), produces a higher annuity
amount, in which case paragraph (d) applies. The average salary
as defined in paragraph (a) section 354.05, subdivision 13a,
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 the percent the percent
during first ten specified in specified in
section 356.315, section 356.315,
subdivision 1, subdivision 3,
per year per year
Each year of service the percent the percent
thereafter specified in specified in
section 356.315, section 356.315,
subdivision 2, subdivision 4,
per year per year
(c)(i) This paragraph 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 paragraph (b),
in conjunction with this paragraph than when calculated under
paragraph (d), in conjunction with paragraph (e).
(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 paragraph (b) 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 paragraph (b), without any reduction by reason of
early retirement.
(d) This paragraph 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 paragraph and in conjunction with paragraph (e), is
higher than it is when calculated under paragraph (b), in
conjunction with paragraph (c). The average salary, as defined
in paragraph (a) section 354.05, subdivision 13a, multiplied by
the percent specified by section 356.315, subdivision 4, for
each year of service for a basic member and by the percent
specified in section 356.315, 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.
(e) This paragraph 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 paragraph (d) in conjunction with this paragraph than when
calculated under paragraph (b), in conjunction with paragraph
(c). An employee who retires under the formula annuity before
the normal retirement age shall be paid the normal annuity
provided in paragraph (d) 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.
(f) No retirement annuity is payable to a former employee
with a salary that exceeds 95 percent of the governor's salary
unless and until the salary figures used in computing the
highest five successive years average salary under paragraph (a)
have been audited by the Teachers Retirement Association and
determined by the executive director to comply with the
requirements and limitations of section 354.05, subdivisions 35
and 35a.
Sec. 19. Minnesota Statutes 2004, section 354A.011, is
amended by adding a subdivision to read:
Subd. 7a. [AVERAGE SALARY.] "Average salary," for purposes
of computing a normal coordinated program retirement annuity
under section 354A.31, subdivision 4 or 4a, 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.
Sec. 20. Minnesota Statutes 2004, section 354A.011,
subdivision 24, is amended to read:
Subd. 24. [SALARY; COVERED SALARY.] (a) Subject to the
limitations of section 356.611, "salary" or "covered salary"
means the entire compensation, upon which member contributions
are required and made, that is paid to a teacher before
deductions for deferred compensation, supplemental retirement
plans, or other voluntary salary reduction programs.
(b) "Salary" does not mean:
(1) lump sum annual leave payments;
(2) lump sum wellness and sick leave payments;
(3) employer-paid amounts used by an employee toward the
cost of insurance coverage, employer-paid fringe benefits,
flexible spending accounts, cafeteria plans, health care expense
accounts, day care expenses, or any payments in lieu of any
employer-paid group insurance coverage, including the difference
between single and family rates that may be paid to a member
with single coverage, and certain amounts determined by the
executive secretary or director to be ineligible;
(4) any form of payment that is made in lieu of any other
employer-paid fringe benefit or expense;
(5) any form of severance payments;
(6) workers' compensation payments;
(7) disability insurance payments, including self-insured
disability payments;
(8) payments to school principals and all other
administrators for services that are in addition to the normal
work year contract if these additional services are performed on
an extended duty day, Saturday, Sunday, holiday, annual leave
day, sick leave day, or any other nonduty day;
(9) payments under section 356.24, subdivision 1, clause
(4)(ii); and
(10) payments made under section 122A.40, subdivision 12,
except for payments for sick leave that are accumulated under
the provisions of a uniform school district policy that applies
equally to all similarly situated persons in the district.
(c) Amounts provided to an employee by the employer through
a grievance proceeding or a legal settlement are salary only if
the settlement is reviewed by the executive director and the
amounts are determined by the executive director to be
consistent with paragraph (a) and prior determinations.
Sec. 21. Minnesota Statutes 2004, 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 is
an amount equal to a retiring coordinated member's average
salary under section 354A.011, subdivision 7a, 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 the percent
specified in section 356.315, subdivision 1, per year for each
year of coordinated service for the first ten years and the
percent specified in section 356.315, 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 the percent
specified in section 356.315, subdivision 2, for each year of
coordinated service.
Sec. 22. Minnesota Statutes 2004, 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 under
section 354A.011, subdivision 7a, 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 the percent
specified in section 356.315, subdivision 1, per year for each
year of coordinated service for the first ten years and the
percent specified in section 356.315, 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 the percent specified in section 356.315,
subdivision 2, for each year of coordinated service.
Sec. 23. Minnesota Statutes 2004, section 356.611,
subdivision 1, is amended to read:
Subdivision 1. [STATE SALARY LIMITATIONS.] (a)
Notwithstanding any provision of law, bylaws, articles of
incorporation, retirement and disability allowance plan
agreements, or retirement plan contracts to the contrary, the
covered salary for pension purposes for a plan participant of a
covered retirement fund enumerated in section 356.30,
subdivision 3, may not exceed 95 110 percent of the salary
established for the governor under section 15A.082 at the time
the person received the salary.
(b) This section does not apply to a salary paid:
(1) to the governor or to a judge;
(2) to an employee or an elected official who is not
subject to the limit as specified under section 43A.17,
subdivision 9;
(3) to an employee of a political subdivision in a position
that is excluded from the limit as specified under section
43A.17, subdivision 9;
(3) (4) to a state employee as defined under section
43A.02, subdivision 21;
(4) (5) to an employee of Gillette Hospital who is covered
by the general state employees retirement plan of the Minnesota
State Retirement System;
(5) (6) to an employee of the Minnesota Crop Improvement
Council; or
(6) (7) to an employee of the Minnesota Historical Society;
(8) to an employee of the Southern Minnesota Municipal
Power Association; or
(9) to the director of the Duluth Port Authority.
(c) The limited covered salary determined under this
section must be used in determining employee and employer
contributions and in determining retirement annuities and other
benefits under the respective covered retirement fund and under
this chapter.
Sec. 24. Minnesota Statutes 2004, section 422A.01, is
amended by adding a subdivision to read:
Subd. 4a. [AVERAGE SALARY.] (a) "Average salary" means the
arithmetic average annual salary, wages, or compensation of the
member from the city for any five calendar years out of the last
ten calendar years of service, except as provided for in section
422A.16, which may include the year in which the employee
retires, as selected by the employee.
(b) A member with more than five calendar years of service,
but less than ten calendar years, may select any five calendar
years of service to determine the average salary. A member with
less than five years of service with the city shall use all
earnings to determine the average salary.
Sec. 25. Minnesota Statutes 2004, section 422A.01, is
amended by adding a subdivision to read:
Subd. 13a. [COVERED SALARY.] "Salary" is subject to the
limitations of section 356.611.
Sec. 26. Minnesota Statutes 2004, section 422A.15,
subdivision 1, is amended to read:
Subdivision 1. [FORMULA PENSION AND ANNUITY.] Except as
otherwise provided in subdivision 3, each contributing member
who, at the time of retirement, fulfills the conditions
necessary to enable the member to retire, shall is entitled to
receive what shall be known as a "formula pension and annuity"
equal to two percent for each year of allowable service for the
first ten years and thereafter 2.5 percent per year of allowable
service of the arithmetic average annual salary, wages or
compensation of the member from the city for any five calendar
years out of the last ten calendar years of service except as
provided for in section 422A.16, which may include the year in
which the employee retires, as selected by the employee,
multiplied by the years of service credited by the retirement
fund. The formula pension and annuity shall must be computed on
the single life plan but subject to the option selections
provided for in section 422A.17.
In order to be entitled to the formula pension and annuity
herein provided for, the retiring employee at the time of
cessation of employment and of actual retirement shall must have
attained the age of 60 years or have been employed by the city
not less than 30 years, or meet the qualifications provided for
in section 422A.16, and in addition thereto have contributed to
the retirement fund at the percentage rate prescribed by the
retirement law applicable when the salary, wages or compensation
was paid on all salaries, wages, or compensation received from
the city or from an applicable employing unit. The years of
service to be applied in the formula pension and annuity shall
must be found and determined by the retirement board, except
that no credit shall may be allowed for any year in which a back
charge is owing at time of retirement and the earnings from any
year in which a back charge is owing shall may not be used in
determining the average annual salary.
Sec. 27. Minnesota Statutes 2004, section 422A.16,
subdivision 9, is amended to read:
Subd. 9. [INCOMPETENCY OR DEATH OF MEMBER.] Any member of
the contributing class who becomes permanently separated from
the service of the city under subdivision 8, may, by an
instrument in writing, filed with the municipal employees
retirement board within 30 days after such the separation
becomes permanent, elect to allow the member contributions
to such the fund to the date of separation to remain on deposit
in such the fund, and in such the event the member shall be
is entitled to receive a retirement allowance at age 65,
provided the member, or someone acting in the member's behalf if
the member be incompetent, shall must make a written application
for such the retirement allowance in the same manner provided
for in section 422A.17 and in accordance with the provisions of
section 422A.15, subdivision 1, except for determining
average annual salary. A member with more than five calendar
years of service but less than ten calendar years may select any
five calendar years of service to determine the average annual
salary. A member with less than five years of service with the
city shall use all earnings to determine the average annual
salary.
If the contributing member dies before reaching the age of
65 years, or having attained the age of 65 years without having
made the election provided for herein, the net accumulated
amount of deductions from the member's salary, pay or
compensation, plus interest, to the member's credit on date of
death shall be paid is payable to such the person or persons as
have been nominated by written designation filed with the
retirement board, in such the form as that the retirement board
shall require requires.
If the employee fails to make a designation, or if the
person or persons designated by such the employee predeceases
such the employee, the net accumulated credit to such the
employee's account on date of death shall be paid is payable to
such the employee's estate.
The provisions of subdivisions 4, 5, and 6 shall also apply
to any member qualifying for benefits under this subdivision,
except for purposes of this subdivision the age referred to in
subdivision 4 shall be is 65 years.
Sec. 28. Minnesota Statutes 2004, section 423B.01, is
amended by adding a subdivision to read:
Subd. 22. [COVERED SALARY.] "Salary" is subject to the
limitations of section 356.611.
Sec. 29. Minnesota Statutes 2004, section 423C.01, is
amended by adding a subdivision to read:
Subd. 29. [COVERED SALARY.] "Salary" is subject to the
limitations of section 356.611.
Sec. 30. Minnesota Statutes 2004, section 490.121,
subdivision 21, is amended to read:
Subd. 21. [FINAL AVERAGE COMPENSATION.] "Final average
compensation" means the total amount of salary payable to a
judge in the highest five years out of the last ten years prior
to before the event of maturity of benefits termination of
judicial service, divided by five; provided, however, that if
the number of years of service by the judge equals or exceeds
ten. If the number of years of service by the judge is less
than ten, but more than five, the highest five shall years of
salary must be counted, and. If the number of years of service
by the judge is less than five, the aggregate salary in such for
the period shall of service must be divided by the number of
months in such the period and multiplied by 12.
Sec. 31. Minnesota Statutes 2004, section 490.121, is
amended by adding a subdivision to read:
Subd. 21a. [COVERED SALARY LIMITATION.] "Final average
compensation" is subject to the limitations of section 356.611.
Sec. 32. [REPEALER.]
Minnesota Statutes 2004, sections 352C.031, subdivision 3;
353.29, subdivision 2; and 353.651, subdivision 2, are repealed.
Sec. 33. [EFFECTIVE DATE.]
This article is effective on the day following final
enactment except that section 23 applies retroactively from
April 28, 1994.
ARTICLE 2
ALLOWABLE SERVICE CREDIT
Section 1. [356.195] [SERVICE CREDIT PURCHASE PROCEDURES
FOR STRIKE PERIODS.]
Subdivision 1. [COVERED PLANS.] This section applies to
all defined benefit plans specified in section 356.30,
subdivision 3.
Subd. 2. [PURCHASE PROCEDURE FOR STRIKE PERIODS.] (a) An
employee covered by a plan specified in subdivision 1 may
purchase allowable service credit in the applicable plan for any
period of time during which the employee was on a public
employee strike without pay, not to exceed a period of one year,
if the employee makes a payment in lieu of salary deductions as
specified in paragraph (b) or (c), whichever applies. The
employing unit, at its option, may pay the employer portion of
the amount specified in paragraph (b) on behalf of its employees.
(b) If payment is received by the applicable pension plan
executive director within one year from the end of the strike,
the payment amount is equal to the applicable employee and
employer contribution rates specified in law for the applicable
plan during the strike period, applied to the employee's rate of
salary in effect at the conclusion of the strike for the period
of the strike without pay, plus compound interest at a monthly
rate of 0.71 percent from the last day of the strike period
until the date payment is received.
(c) If payment is received by the applicable pension fund
director after one year and before five years from the end of
the strike, the payment amount is the amount determined under
section 356.551.
(d) Payments may not be made more than five years after the
end of the strike.
Sec. 2. Minnesota Statutes 2004, section 490.121,
subdivision 4, is amended to read:
Subd. 4. [ALLOWABLE SERVICE.] (a) "Allowable service"
means any calendar month, subject to the service credit limit in
subdivision 22, served as a judge at any time, or served as a
referee in probate for all referees in probate who were in
office prior to January 1, 1974.
(b) "Allowable service" also means a period of authorized
leave of absence for which the judge has made a payment in lieu
of contributions, not in an amount in excess of the service
credit limit under subdivision 22. To obtain the service
credit, the judge shall pay an amount equal to the normal cost
of the judges retirement plan on the date of return from the
leave of absence, as determined in the most recent actuarial
report for the plan filed with the Legislative Commission on
Pensions and Retirement, multiplied by the judge's average
monthly salary rate during the authorized leave of absence and
multiplied by the number of months of the authorized leave of
absence, plus annual compound interest at the rate of 8.5
percent from the date of the termination of the leave to the
date on which payment is made. The payment must be made within
one year of the date on which the authorized leave of absence
terminated. Service credit for an authorized leave of absence
is in addition to a uniformed service leave under section
490.1211.
Sec. 3. Laws 1999, chapter 222, article 16, section 16, as
amended by Laws 2002, chapter 392, article 7, section 1, and
Laws 2003, First Special Session chapter 12, article 6, section
2, and Laws 2004, chapter 267, article 17, section 6, is amended
to read:
Sec. 16. [REPEALER.]
(a) Sections 2 to 6 and 8 to 13 are repealed on May 16,
2004.
(b) Sections 1 and 7 are repealed on May 16, 2006 2007.
Sec. 4. Laws 2000, chapter 461, article 4, section 4, as
amended by Laws 2003, First Special Session chapter 12, article
6, section 3, and Laws 2004, chapter 267, article 17, section 7,
is amended to read:
Sec. 4. [EFFECTIVE DATE; SUNSET REPEALER.]
(a) Sections 1, 2, and 3 are effective on the day following
final enactment.
(b) Sections 1, 2, and 3, are repealed on May 16, 2006 2007.
Sec. 5. [METRO TRANSIT STRIKE PROVISION.]
Notwithstanding the payment deadline specified in Minnesota
Statutes, section 356.195, subdivision 2, paragraph (b), a Metro
Transit employee covered by the general state employees
retirement plan of the Minnesota State Retirement System who was
on strike on or after January 1, 2004, and before the effective
date of this section, is authorized to make a payment under that
paragraph on or before one year after the effective date of this
section.
Sec. 6. [CROSBY-IRONTON PUBLIC SCHOOL STRIKE PROVISION.]
Notwithstanding the payment deadline specified in Minnesota
Statutes, section 356.195, subdivision 2, paragraph (b), a
Crosby-Ironton public school teacher covered by the Teachers
Retirement Association who was on strike during a period that
included April 1, 2005, and before the effective date of this
section, is authorized to make a payment under that paragraph on
or before one year after the effective date of this section.
Sec. 7. [UNIVERSITY OF MINNESOTA STRIKE PROVISION.]
Notwithstanding the payment deadline specified in Minnesota
Statutes, section 356.195, subdivision 2, paragraph (b), a
University of Minnesota employee covered by the Minnesota State
Retirement System who was on strike on or after October 21,
2003, and before the effective date of this section, is
authorized to make a payment under that paragraph on or before
one year after the effective date of this section.
Sec. 8. [EFFECTIVE DATE.]
(a) Sections 1 and 3 to 7 are effective the day following
final enactment.
(b) Section 2 is effective retroactively from January 1,
2005, and applies to any person who was in active service as a
judge on or after that date and applies to an authorized leave
of absence that occurred before or after that date. For a
person for whom section 2 is retroactive, the equivalent
contribution payment must be made on or before July 1, 2006.
ARTICLE 3
ACTUARIAL FINANCIAL REPORTING AND OTHER
GENERALLY APPLICABLE ADMINISTRATIVE CHANGES
Section 1. Minnesota Statutes 2004, section 352.01,
subdivision 12, is amended to read:
Subd. 12. [ACTUARIAL EQUIVALENT.] "Actuarial 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 as recommended by the actuary retained by the Legislative
Commission on Pensions and Retirement under section 356.214, and
approved under section 356.215, subdivision 18, and using the
applicable preretirement or postretirement interest rate
assumption specified in section 356.215, subdivision 8.
Sec. 2. Minnesota Statutes 2004, section 353.01,
subdivision 14, is amended to read:
Subd. 14. [ACTUARIAL EQUIVALENT.] "Actuarial 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 with each actuarial present value
based on the appropriate mortality table adopted by the board of
trustees based on the experience of the fund as recommended by
the actuary retained by the Legislative Commission on Pensions
and Retirement under section 356.214, and approved under section
356.215, subdivision 18, and using the applicable preretirement
or postretirement interest rate assumption specified in section
356.215, subdivision 8.
Sec. 3. Minnesota Statutes 2004, section 354.05,
subdivision 7, is amended to read:
Subd. 7. [ACTUARIAL EQUIVALENT.] "Actuarial 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 with each actuarial present value
based on the appropriate mortality table adopted by the board of
trustees based on the experience of the association as
recommended by the actuary retained by the Legislative
Commission on Pensions and Retirement under section 356.214, and
approved under section 356.215, subdivision 18, and using the
applicable preretirement or postretirement interest rate
assumption specified in section 356.215, subdivision 8.
Sec. 4. Minnesota Statutes 2004, section 354.094,
subdivision 1, is amended to read:
Subdivision 1. [SERVICE CREDIT CONTRIBUTIONS.] (a) Upon
granting any extended leave of absence under section 122A.46 or
136F.43, the employing unit granting the leave must certify the
leave to the association on a form specified by the executive
director. A member granted an extended leave of absence under
section 122A.46 or 136F.43 may pay employee contributions and
receive allowable service credit toward annuities and other
benefits under this chapter, for each year of the leave,
provided that the member and the employing board make the
required employer contribution in any proportion they may agree
upon, during the period of the leave. The employer may enter
into an agreement with the exclusive bargaining representative
of the teachers in the district under which, for an individual
teacher, all or a portion of the employee's contribution is paid
by the employer. Any such agreement must include a sunset of
eligibility to qualify for the payment and must not be a part of
the collective bargaining agreement. The leave period must not
exceed five years. A member may not receive more than five
years of allowable service credit under this section. The
employee and employer contributions must be based upon the rates
of contribution prescribed by section 354.42 for the salary
received during the year immediately preceding the extended
leave.
(b) Employee contribution payments for the years for which
a member is receiving service credit while on extended leave
must be made on or before the later of June 30 of each fiscal
year for which service credit is to be received or within 30
days after first notification of the amount due, if requested by
the member, is given by the association. If payment is to be
made by a transfer of pretax assets authorized under section
356.441, payment is authorized after June 30 of the fiscal year
providing that authorization for the asset transfer has been
received by the applicable third party administrator by June 30,
and the payment must include interest at a rate of .708 percent
per month from June 30 through the end of the month in which
payment is received. No payment is permitted after the
following September 30. Payments received after June 30 must
include interest at an annual rate of 8.5 percent from June 30
through the end of the month in which payment is received.
(c) Notwithstanding the provisions of any agreements to the
contrary, employee and employer contributions may not be made to
receive allowable service credit if the member does not have
full reinstatement rights as provided in section 122A.46 or
136F.43, both during and at the end of the extended leave.
(d) Any school district paying the employee's retirement
contributions under this section shall forward to the applicable
retirement association or retirement fund a copy of the
agreement executed by the school district and the employee.
Sec. 5. Minnesota Statutes 2004, section 354A.011,
subdivision 3a, is amended to read:
Subd. 3a. [ACTUARIAL EQUIVALENT.] "Actuarial 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 with each actuarial present value
based on the appropriate mortality table adopted by the
appropriate board of trustees based on the experience of that
retirement fund association as recommended by the actuary
retained by the Legislative Commission on Pensions and
Retirement under section 356.214, and approved under section
356.215, subdivision 18, and using the applicable preretirement
or postretirement interest rate assumption specified in section
356.215, subdivision 8.
Sec. 6. Minnesota Statutes 2004, section 356.20,
subdivision 4, is amended to read:
Subd. 4. [CONTENTS OF FINANCIAL REPORT.] (a) The financial
report required by this section must contain financial
statements and disclosures that indicate the financial
operations and position of the retirement plan and fund. The
report must conform with generally accepted governmental
accounting principles, applied on a consistent basis. The
report must be audited. The report must include, as part of its
exhibits or its footnotes, an actuarial disclosure item based on
the actuarial valuation calculations prepared by the
commission-retained actuary retained under section 356.214 or by
the actuary retained by the retirement fund or plan, if
applicable whichever applies, according to applicable actuarial
requirements enumerated in section 356.215, and specified in the
most recent standards for actuarial work adopted by the
Legislative Commission on Pensions and Retirement. The accrued
assets, the accrued liabilities, including accrued reserves, and
the unfunded actuarial accrued liability of the fund or plan
must be disclosed. The disclosure item must contain a
declaration by the actuary retained by the Legislative
Commission on Pensions and Retirement under section 356.214 or
the actuary retained by the fund or plan, whichever applies,
specifying that the required reserves for any retirement,
disability, or survivor benefits provided under a benefit
formula are computed in accordance with the entry age actuarial
cost method and in accordance with the most recent applicable
standards for actuarial work adopted by the Legislative
Commission on Pensions and Retirement.
(b) Assets of the fund or plan contained in the disclosure
item must include the following statement of the actuarial value
of current assets as defined in section 356.215, subdivision 1:
Value Value
at cost at market
Cash, cash equivalents, and
short-term securities ......... .........
Accounts receivable ......... .........
Accrued investment income ......... .........
Fixed income investments ......... .........
Equity investments other
than real estate ......... .........
Real estate investments ......... .........
Equipment ......... .........
Equity Participation in the Minnesota
postretirement investment
fund or the retirement
benefit fund ......... .........
Other ......... .........
Total assets
Value at cost .........
Value at market .........
Actuarial value of current assets .........
(c) The unfunded actuarial accrued liability of the fund or
plan contained in the disclosure item must include the following
measures of unfunded actuarial accrued liability, using
the actuarial value of current assets:
(1) the unfunded actuarial accrued liability, determined by
subtracting the current assets and the present value of future
normal costs from the total current and expected future benefit
obligations; and
(2) the unfunded pension benefit obligation, determined by
subtracting the current assets from the actuarial present value
of credited projected benefits.
If the current assets of the fund or plan exceed the
actuarial accrued liabilities, the excess must be disclosed and
indicated as a surplus.
(d) The pension benefit obligations schedule included in
the disclosure must contain the following information on the
benefit obligations:
(1) the pension benefit obligation, determined as the
actuarial present value of credited projected benefits on
account of service rendered to date, separately identified as
follows:
(i) for annuitants;
retirement annuities;
disability benefits;
surviving spouse and child benefits;
(ii) for former members without vested rights;
(iii) for deferred annuitants' benefits, including
any augmentation;
(iv) for active employees;
accumulated employee contributions,
including allocated investment income;
employer-financed benefits vested;
employer-financed benefits nonvested;
total pension benefit obligation; and
(2) if there are additional benefits not appropriately
covered by the foregoing items of benefit obligations, a
separate identification of the obligation.
(e) The report must contain an itemized exhibit describing
the administrative expenses of the plan, including, but not
limited to, the following items, classified on a consistent
basis from year to year, and with any further meaningful detail:
(1) personnel expenses;
(2) communication-related expenses;
(3) office building and maintenance expenses;
(4) professional services fees; and
(5) other expenses.
(f) The report must contain an itemized exhibit describing
the investment expenses of the plan, including, but not limited
to, the following items, classified on a consistent basis from
year to year, and with any further meaningful detail:
(1) internal investment-related expenses; and
(2) external investment-related expenses.
(g) Any additional statements or exhibits or more detailed
or subdivided itemization of a disclosure item that will enable
the management of the fund to portray a true interpretation of
the fund's financial condition must be included in the
additional statements or exhibits.
Sec. 7. Minnesota Statutes 2004, section 356.47,
subdivision 3, is amended to read:
Subd. 3. [PAYMENT.] (a) Upon the retired member attaining
the age of 65 years or upon the first day of the month next
following the month occurring one year after the termination of
the reemployment that gave rise to the limitation, whichever is
later, and the filing of a written application, the retired
member is entitled to the payment, in a lump sum, of the value
of the person's amount under subdivision 2, plus interest at the
compound annual rate of six percent from the date that the
amount was deducted from the retirement annuity to the date of
payment.
(b) The written application must be on a form prescribed by
the chief administrative officer of the applicable retirement
plan.
(c) If the retired member dies before the payment provided
for in paragraph (a) is made, the amount is payable, upon
written application, to the deceased person's surviving spouse,
or if none, to the deceased person's designated beneficiary, or
if none, to the deceased person's estate.
(d) In lieu of the direct payment of the person's amount
under subdivision 2, on or after the payment date under
paragraph (a), if the federal Internal Revenue Code so permits,
the retired member may elect to have all or any portion of the
payment amount under this section paid in the form of a direct
rollover to an eligible retirement plan as defined in section
402(c) of the federal Internal Revenue Code that is specified by
the retired member. If the retired member dies with a balance
remaining payable under this section, the surviving spouse of
the retired member, or if none, the deceased person's designated
beneficiary, or if none, the administrator of the deceased
person's estate may elect a direct rollover under this paragraph.
Sec. 8. Minnesota Statutes 2004, section 422A.01,
subdivision 6, is amended to read:
Subd. 6. [PRESENT WORTH OR PRESENT VALUE.] "Present worth"
or "present value" means that the present amount of money if
increased at the applicable postretirement or preretirement
interest rate assumption specified in section 356.215,
subdivision 8, and based on the mortality table adopted by the
board of trustees based on the experience of the fund as
recommended by the actuary retained by the Legislative
Commission on Pensions and Retirement under section 356.214, and
approved under section 356.215, subdivision 18, will at
retirement equal the actuarial accrued liability of the annuity
already earned.
Sec. 9. Minnesota Statutes 2004, section 490.121,
subdivision 20, is amended to read:
Subd. 20. [ACTUARIAL EQUIVALENT.] "Actuarial 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 with each actuarial present value
based on the appropriate mortality table adopted by the board of
trustees directors of the Minnesota State Retirement System
based on the experience of the fund as recommended by
the commission-retained actuary retained under section 356.214,
and approved under section 356.215, subdivision 18, and using
the applicable preretirement or postretirement interest rate
assumption specified in section 356.215, subdivision 8.
Sec. 10. [EFFECTIVE DATE.]
(a) Sections 1 to 5, 8, and 9 are effective July 1, 2005.
(b) Section 6 is effective the day following final
enactment and applies to annual financial reporting occurring on
or after June 30, 2005.
(c) Section 4 is effective the day following final
enactment.
(d) Section 7 is effective July 1, 2005, and applies to
retired members with an amount in a reemployed annuitant's
account on or after that date.
ARTICLE 4
MEMBERSHIP INCLUSIONS
AND EXCLUSIONS
Section 1. Minnesota Statutes 2004, section 69.011, is
amended by adding a subdivision to read:
Subd. 2c. [INELIGIBILITY OF CERTAIN POLICE OFFICERS.] A
police officer employed by the University of Minnesota who is
required by the Board of Regents to be a member of the
University of Minnesota faculty retirement plan is not eligible
to be included in any police state-aid certification under this
section.
Sec. 2. Minnesota Statutes 2004, section 352.01,
subdivision 2a, is amended to read:
Subd. 2a. [INCLUDED EMPLOYEES.] (a) "State employee"
includes:
(1) employees of the Minnesota Historical Society;
(2) employees of the State Horticultural Society;
(3) employees of the Disabled American Veterans, Department
of Minnesota, Veterans of Foreign Wars, Department of Minnesota,
if employed before July 1, 1963;
(4) employees of the Minnesota Crop Improvement
Association;
(5) employees of the adjutant general who are paid from
federal funds and who are not covered by any federal civilian
employees retirement system;
(6) employees of the Minnesota State Colleges and
Universities employed under the university or college activities
program;
(7) currently contributing employees covered by the system
who are temporarily employed by the legislature during a
legislative session or any currently contributing employee
employed for any special service as defined in subdivision 2b,
clause (8);
(8) employees of the Armory Building Commission;
(9) employees of the legislature appointed without a limit
on the duration of their employment and persons employed or
designated by the legislature or by a legislative committee or
commission or other competent authority to conduct a special
inquiry, investigation, examination, or installation;
(10) trainees who are employed on a full-time established
training program performing the duties of the classified
position for which they will be eligible to receive immediate
appointment at the completion of the training period;
(11) employees of the Minnesota Safety Council;
(12) any employees on authorized leave of absence from the
Transit Operating Division of the former Metropolitan Transit
Commission who are employed by the labor organization which is
the exclusive bargaining agent representing employees of the
Transit Operating Division;
(13) employees of the Metropolitan Council, Metropolitan
Parks and Open Space Commission, Metropolitan Sports Facilities
Commission, Metropolitan Mosquito Control Commission, or
Metropolitan Radio Board unless excluded or covered by another
public pension fund or plan under section 473.415, subdivision
3;
(14) judges of the Tax Court;
(15) personnel employed on June 30, 1992, by the University
of Minnesota in the management, operation, or maintenance of its
heating plant facilities, whose employment transfers to an
employer assuming operation of the heating plant facilities, so
long as the person is employed at the University of Minnesota
heating plant by that employer or by its successor organization;
and
(16) seasonal help in the classified service employed by
the Department of Revenue; and
(17) persons employed by the Department of Commerce as a
peace officer in the Insurance Fraud Prevention Division under
section 45.0135 who have attained the mandatory retirement age
specified in section 43A.34, subdivision 4.
(b) Employees specified in paragraph (a), clause (15), are
included employees under paragraph (a) if employer and employee
contributions are made in a timely manner in the amounts
required by section 352.04. Employee contributions must be
deducted from salary. Employer contributions are the sole
obligation of the employer assuming operation of the University
of Minnesota heating plant facilities or any successor
organizations to that employer.
Sec. 3. Minnesota Statutes 2004, section 352.91, is
amended by adding a subdivision to read:
Subd. 4a. [PROCESS FOR EVALUATING AND RECOMMENDING
POTENTIAL EMPLOYMENT POSITIONS FOR MEMBERSHIP INCLUSION.] (a)
The Department of Corrections and the Department of Human
Services must establish a procedure for evaluating periodic
requests by department employees for qualification for
recommendation by the commissioner for inclusion of the
employment position in the correctional facility or human
services facility in the correctional retirement plan and for
periodically determining employment positions that no longer
qualify for continued correctional retirement plan coverage.
(b) The procedure must provide for an evaluation of the
extent of the employee's working time spent in direct contact
with patients or inmates, the extent of the physical hazard that
the employee is routinely subjected to in the course of
employment, and the extent of intervention routinely expected of
the employee in the event of a facility incident. The
percentage of routine direct contact with inmates or patients
may not be less than 75 percent.
(c) The applicable commissioner shall notify the employee
of the determination of the appropriateness of recommending the
employment position for inclusion in the correctional retirement
plan, if the evaluation procedure results in a finding that the
employee:
(1) routinely spends 75 percent of the employee's time in
direct contact with inmates or patients; and
(2) is regularly engaged in the rehabilitation, treatment,
custody, or supervision of inmates or patients.
(d) After providing the affected employee an opportunity to
dispute or clarify any evaluation determinations, if the
commissioner determines that the employment position is
appropriate for inclusion in the correctional retirement plan,
the commissioner shall forward that recommendation and
supporting documentation to the chair of the Legislative
Commission on Pensions and Retirement, the chair of the State
and Local Governmental Operations Committee of the senate, the
chair of the Governmental Operations and Veterans Affairs Policy
Committee of the house of representatives, and the executive
director of the Legislative Commission on Pensions and
Retirement in the form of the appropriate proposed legislation.
The recommendation must be forwarded to the legislature before
January 15 for the recommendation to be considered in that
year's legislative session.
Sec. 4. Minnesota Statutes 2004, section 352B.01,
subdivision 2, is amended to read:
Subd. 2. [MEMBER.] "Member" means:
(1) a State Patrol member currently employed after June 30,
1943, under section 299D.03 by the state, who is a peace officer
under section 626.84, and whose salary or compensation is paid
out of state funds;
(2) a conservation officer employed under section 97A.201,
currently employed by the state, whose salary or compensation is
paid out of state funds;
(3) a crime bureau officer who was employed by the crime
bureau and was a member of the Highway Patrolmen's retirement
fund on July 1, 1978, whether or not that person has the power
of arrest by warrant after that date, or who is employed as
police personnel, with powers of arrest by warrant under section
299C.04, and who is currently employed by the state, and whose
salary or compensation is paid out of state funds;
(4) a person who is employed by the state in the Department
of Public Safety in a data processing management position with
salary or compensation paid from state funds, who was a crime
bureau officer covered by the State Patrol retirement plan on
August 15, 1987, and who was initially hired in the data
processing management position within the department during
September 1987, or January 1988, with membership continuing for
the duration of the person's employment in that position,
whether or not the person has the power of arrest by warrant
after August 15, 1987;
(5) a public safety employee defined as a peace officer in
section 626.84, subdivision 1, paragraph (c), and employed with
the Division of Alcohol and Gambling Enforcement under section
299L.01; and
(6) a Fugitive Apprehension Unit officer after October 31,
2000, employed by the Office of Special Investigations of the
Department of Corrections who is a peace officer under section
626.84; and
(7) an employee of the Department of Commerce defined as a
peace officer in section 626.84, subdivision 1, paragraph (c),
who is employed by the Division of Insurance Fraud Prevention
under section 45.0135 after January 1, 2005, and who has not
attained the mandatory retirement age specified in section
43A.34, subdivision 4.
Sec. 5. Minnesota Statutes 2004, section 353.01,
subdivision 6, is amended to read:
Subd. 6. [GOVERNMENTAL SUBDIVISION.] (a) "Governmental
subdivision" means a county, city, town, school district within
this state, or a department or unit of state government, or any
public body whose revenues are derived from taxation, fees,
assessments or from other sources.
(b) Governmental subdivision also means the Public
Employees Retirement Association, the League of Minnesota
Cities, the Association of Metropolitan Municipalities, public
hospitals owned or operated by, or an integral part of, a
governmental subdivision or governmental subdivisions, the
Association of Minnesota Counties, the Metropolitan Intercounty
Association, the Minnesota Municipal Utilities Association, the
Metropolitan Airports Commission, the University of Minnesota
with respect to police officers covered by the public employees
police and fire retirement plan, the Minneapolis Employees
Retirement Fund for employment initially commenced after June
30, 1979, the Range Association of Municipalities and Schools,
soil and water conservation districts, economic development
authorities created or operating under sections 469.090 to
469.108, the Port Authority of the city of St. Paul, the Spring
Lake Park Fire Department, incorporated, the Lake Johanna
Volunteer Fire Department, incorporated, the Red Wing
Environmental Learning Center, and the Dakota County
Agricultural Society.
(c) Governmental subdivision does not mean any municipal
housing and redevelopment authority organized under the
provisions of sections 469.001 to 469.047; or any port authority
organized under sections 469.048 to 469.089 other than the Port
Authority of the city of St. Paul; or any hospital district
organized or reorganized prior to July 1, 1975, under sections
447.31 to 447.37 or the successor of the district, nor the
Minneapolis Community Development Agency.
Sec. 6. Minnesota Statutes 2004, section 353.64, is
amended by adding a subdivision to read:
Subd. 6a. [UNIVERSITY OF MINNESOTA POLICE OFFICERS;
INCLUSIONS AND EXCLUSIONS.] (a) Unless paragraph (b) applies, a
person who is employed as a peace officer by the University of
Minnesota at any campus or facility of the university, who is
required by the university to be and is licensed as a peace
officer by the Minnesota Peace Officer Standards and Training
Board under sections 626.84 to 626.863, and who has the full
power of arrest is a member of the public employees police and
fire retirement plan.
(b) A police officer employed by the University of
Minnesota who is required by the Board of Regents to contribute
to the University of Minnesota faculty retirement plan is not
eligible to be a member of the public employees police and fire
retirement plan.
Sec. 7. Minnesota Statutes 2004, section 354B.21,
subdivision 2, is amended to read:
Subd. 2. [COVERAGE; ELECTION.] (a) An eligible person is
entitled to elect coverage by the plan. If the eligible person
does not make a timely election of coverage by the plan, the
person has the coverage specified in subdivision 3.
(b) For eligible persons who were employed by the former
state university system or the former community college system
before May 1, 1995, the person has the retirement coverage that
the person had for employment immediately before May 1, 1995.
(c) (b) For all other eligible persons, the election of
coverage must be made within 90 days of May 10, 1995, or 90 days
of receiving notice from the employer of the options available
under this section, whichever occurs later unless otherwise
specified in this section, the eligible person is authorized to
elect prospective Teachers Retirement Association plan coverage
rather than coverage by the plan established by this chapter.
The election of prospective Teachers Retirement Association plan
coverage shall be made within one year of commencing eligible
Minnesota State Colleges and Universities system employment. If
an election is not made within the specified election period due
to a termination of Minnesota State Colleges and Universities
system employment, an election may be made within 90 days of
returning to eligible Minnesota State Colleges and Universities
system employment. All elections are irrevocable. Prior to
making an election the eligible person shall be covered by the
plan indicated as default coverage under subdivision 3.
(c) A purchase of service credit in the Teachers Retirement
Association plan for any period or periods of Minnesota State
Colleges and Universities system employment occurring prior to
the election under paragraph (b) is prohibited.
Sec. 8. Minnesota Statutes 2004, section 354B.21,
subdivision 3, is amended to read:
Subd. 3. [DEFAULT COVERAGE.] (a) Prior to making an
election under subdivision 2, or if an eligible person fails to
elect coverage by the plan under subdivision 2 or if the person
fails to make a timely election, the following retirement
coverage applies:
(1) for employees of the board who are employed in faculty
positions in the technical colleges, in the state universities
or in the community colleges, the retirement coverage is by the
plan established by this chapter;
(2) for employees of the board who are employed in faculty
positions in the technical colleges, the retirement coverage is
by the plan established by this chapter unless on June 30, 1997,
the employee was a member of the Teachers Retirement Association
established under chapter 354 and then the retirement coverage
is by the Teachers Retirement Association, or, unless the
employee was a member of a first class city teacher retirement
fund established under chapter 354A on June 30, 1995, and then
the retirement coverage is by the Duluth Teachers Retirement
Fund Association if the person was a member of that plan on June
30, 1995, or the Minneapolis Teachers Retirement Fund
Association if the person was a member of that plan on June 30,
1995, or the St. Paul Teachers Retirement Fund Association if
the person was a member of that plan on June 30, 1995; and
(3) for employees of the board who are employed in eligible
unclassified administrative positions, the retirement coverage
is by the plan established by this chapter.
(b) If an employee fails to correctly certify prior
membership in the Teachers Retirement Association to the
Minnesota State colleges and Universities system, the system
shall not pay interest on employee contributions, employer
contributions, and additional employer contributions to the
Teachers Retirement Association under section 354.52,
subdivision 4.
Sec. 9. [EFFECTIVE DATE.]
(a) Sections 1, 3, 5, and 6 are effective July 1, 2005.
(b) Sections 2 and 4 are effective retroactively from
January 1, 2005.
(c) Sections 7 and 8 are effective the day following final
enactment.
ARTICLE 5
RETIREMENT CONTRIBUTIONS
Section 1. Minnesota Statutes 2004, section 353.27,
subdivision 2, is amended to read:
Subd. 2. [EMPLOYEE CONTRIBUTION.] (a) The employee
contribution is the following applicable percentage of the total
salary amount for a "basic member" and for a "coordinated
member":
Basic Coordinated
Program Program
Before January 1, 2002 8.75 4.75
Effective January 1, 2002
Effective before January 1, 2006 9.10 5.10
Effective January 1, 2006 9.10 5.50
Effective January 1, 2007 9.10 5.75
Effective January 1, 2008 9.10 6.00 plus any
contribution
rate adjustment
under
subdivision 3b
(b) These contributions must be made by deduction from
salary as defined in section 353.01, subdivision 10, in the
manner provided in subdivision 4. Where If any portion of a
member's salary is paid from other than public funds, such the
member's employee contribution must be based on the total salary
received by the member from all sources.
Sec. 2. Minnesota Statutes 2004, section 353.27,
subdivision 3, is amended to read:
Subd. 3. [EMPLOYER CONTRIBUTION.] (a) The employer
contribution is the following applicable percentage of the total
salary amount for "basic members" and for "coordinated members":
Basic Coordinated
Program Program
Before January 1, 2002 8.75 4.75
Effective January 1, 2002
Effective before January 1, 2006 9.10 5.10
Effective January 1, 2006 9.10 5.50
Effective January 1, 2007 9.10 5.75
Effective January 1, 2008 9.10 6.00 plus any
contribution
rate adjustment
under
subdivision 3b
(b) This contribution must be made from funds available to
the employing subdivision by the means and in the manner
provided in section 353.28.
Sec. 3. Minnesota Statutes 2004, section 353.27,
subdivision 3a, is amended to read:
Subd. 3a. [ADDITIONAL EMPLOYER CONTRIBUTION.] (a) An
additional employer contribution must be made equal to (1) 2.68
percent of the following applicable percentage of the total
salary of each amount for "basic member members"; and (2)
.43 percent of the total salary of each for "coordinated member.
members":
Basic Coordinated
Program Program
Effective before January 1, 2006 2.68 .43
Effective January 1, 2006 2.68 .50
Effective January 1, 2009 2.68 .75
Effective January 1, 2010 2.68 1.00
These contributions must be made from funds available to
the employing subdivision by the means and in the manner
provided in section 353.28.
(b) The coordinated program contribution rates set forth in
paragraph (a) effective for January 1, 2009, or January 1, 2010,
must not be implemented if, following receipt of the July 1,
2008, or July 1, 2009, annual actuarial valuation reports under
section 356.215, respectively, the actuarially required
contributions are equal to or less than the total rates under
this section in effect as of January 1, 2008.
(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.
Sec. 4. Minnesota Statutes 2004, section 353.27, is
amended by adding a subdivision to read:
Subd. 3b. [CHANGE IN EMPLOYEE AND EMPLOYER CONTRIBUTIONS
IN CERTAIN INSTANCES.] (a) For purposes of this section, a
contribution sufficiency exists if the total of the employee
contribution under subdivision 2, the employer contribution
under subdivision 3, the additional employer contribution under
subdivision 3a, and any additional contribution previously
imposed under this subdivision exceeds the total of the normal
cost, the administrative expenses, and the amortization
contribution of the retirement plan as reported in the most
recent actuarial valuation of the retirement plan prepared by
the actuary retained under section 356.214 and prepared under
section 356.215 and the standards for actuarial work of the
Legislative Commission on Pensions and Retirement. For purposes
of this section, a contribution deficiency exists if the total
of the employee contributions under subdivision 2, the employer
contributions under subdivision 3, the additional employer
contribution under subdivision 3a, and any additional
contribution previously imposed under this subdivision is less
than the total of the normal cost, the administrative expenses,
and the amortization contribution of the retirement plan as
reported in the most recent actuarial valuation of the
retirement plan prepared by the actuary retained under section
356.214 and prepared under section 356.215 and the standards for
actuarial work of the Legislative Commission on Pensions and
Retirement.
(b) Employee and employer contributions under subdivisions
2 and 3 must be adjusted:
(1) if, after July 1, 2010, the regular actuarial
valuations of the general employees retirement plan of the
Public Employees Retirement Association under section 356.215
indicate that there is a contribution sufficiency under
paragraph (a) equal to or greater than 0.5 percent of covered
payroll for two consecutive years, the coordinated program
employee and employer contribution rates must be decreased as
determined under paragraph (c) to a level such that the
sufficiency equals no more than 0.25 percent of covered payroll
based on the most recent actuarial valuation; or
(2) if, after July 1, 2010, the regular actuarial
valuations of the general employees retirement plan of the
Public Employees Retirement Association under section 356.215
indicate that there is a deficiency equal to or greater than 0.5
percent of covered payroll for two consecutive years, the
coordinated program employee and employer contribution rates
must be increased as determined under paragraph (c) to a level
such that no deficiency exists based on the most recent
actuarial valuation.
(c) The contribution rate increase or decrease must be
determined by the executive director of the Public Employees
Retirement Association, must be reported to the chair and the
executive director of the Legislative Commission on Pensions and
Retirement on or before the next February 1, and, if the
Legislative Commission on Pensions and Retirement does not
recommend against the rate change or does not recommend a
modification in the rate change, is effective on the next July 1
following the determination by the executive director that a
contribution deficiency or sufficiency has existed for two
consecutive fiscal years based on the most recent actuarial
valuations under section 356.215. If the actuarially required
contribution exceeds or is less than the total support provided
by the combined employee and employer contribution rates by more
than 0.5 percent of covered payroll, the coordinated program
employee and employer contribution rates must be adjusted
incrementally over one or more years to a level such that there
remains a contribution sufficiency of no more than 0.25 percent
of covered payroll.
(d) No incremental adjustment may exceed 0.25 percent for
either the coordinated program employee and employer
contribution rates per year in which any adjustment is
implemented. A contribution rate adjustment under this
subdivision must not be made until at least two years have
passed since fully implementing a previous adjustment under this
subdivision.
Sec. 5. Minnesota Statutes 2004, section 353.28,
subdivision 5, is amended to read:
Subd. 5. [INTEREST CHARGES CHARGEABLE ON AMOUNTS DUE.] Any
amount due under this section or section 353.27, subdivision 4,
is payable with interest at an annual compound rate of 8.5
percent compounded annually from the date due until the date
payment is received by the association, with a minimum interest
charge of $10. Interest for past due payments of excess police
state aid under section 69.031, subdivision 5, must be charged
at an annual rate of 8.5 percent compounded annually.
Sec. 6. Minnesota Statutes 2004, section 353.28,
subdivision 6, is amended to read:
Subd. 6. [FAILURE TO PAY COLLECTION OF UNPAID AMOUNTS.] (a)
If the a governmental subdivision which receives the direct
proceeds of property taxation fails to pay amounts an amount due
under chapters chapter 353, 353A, 353B, 353C, and or 353D or
fails to make payments of excess police state aid to the public
employees police and fire fund under section 69.031, subdivision
5, the executive director shall certify those amounts the amount
to the governmental subdivision for payment. If the
governmental subdivision fails to remit the sum so due in a
timely fashion, the executive director shall certify amounts the
amount to the applicable county auditor for collection. The
county auditor shall collect such amounts the amount out of the
revenue of the governmental subdivision, or shall add them the
amount to the levy of the governmental subdivision and make
payment directly to the association. This tax shall must be
levied, collected, and apportioned in the manner that other
taxes are levied, collected, and apportioned.
(b) If a governmental subdivision which is not funded
directly from the proceeds of property taxation fails to pay an
amount due under this chapter, the executive director shall
certify the amount to the governmental subdivision for payment.
If the governmental subdivision fails to pay the amount for a
period of 60 days after certification, the executive director
shall certify the amount to the commissioner of finance, who
shall deduct the amount from any subsequent state-aid payment or
state appropriation amount applicable to the governmental
subdivision.
Sec. 7. Minnesota Statutes 2004, section 353.65,
subdivision 2, is amended to read:
Subd. 2. [EMPLOYEE CONTRIBUTION RATE.] (a) The employee
contribution is an amount equal to 6.2 the percent of the total
salary of the member specified in paragraph (b). This
contribution 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, the member's
employee contribution is based on the total salary received from
all sources.
(b) For calendar year 2006, the employee contribution rate
is 7.0 percent. For calendar year 2007, the employee
contribution rate is 7.8 percent. For calendar year 2008, the
employee contribution rate is 8.6 percent. For calendar year
2009 and thereafter, the employee contribution rate is 9.4
percent.
Sec. 8. Minnesota Statutes 2004, section 353.65,
subdivision 3, is amended to read:
Subd. 3. [EMPLOYER CONTRIBUTION RATE.] (a) The employer
contribution shall be an amount equal to 9.3 the percent of the
total salary of every member as specified in paragraph (b).
This contribution shall be made from funds available to the
employing subdivision by the means and in the manner provided in
section 353.28.
(b) For calendar year 2006, the employer contribution rate
is 10.5 percent. For calendar year 2007, the employer
contribution rate is 11.7 percent. For calendar year 2008, the
employer contribution rate is 12.9 percent. For calendar year
2009 and thereafter, the employer contribution rate is 14.1
percent.
Sec. 9. [PUBLIC EMPLOYEES RETIREMENT ASSOCIATION; INTEREST
ON SERVICE CREDIT PURCHASE PAYMENT RETURN.]
If a former employee of the Minneapolis Community
Development Agency made a prior service credit purchase payment
under Minnesota Statutes 2002, section 356.55, in an amount that
is greater than the actually required payment amount because of
the use of an inaccurate salary figure or other similar
reporting or clerical error, the general employees retirement
plan of the Public Employees Retirement Association may pay
interest on the overage amount at an annual compound rate of six
percent per year.
Sec. 10. [RETURN OF PRIOR SERVICE CREDIT PURCHASE PAYMENT
FOR CERTAIN MINNEAPOLIS CITY EMPLOYEES.]
(a) An eligible person, upon written application, may
receive a return of a prior service credit purchase payment
under Minnesota Statutes 2002, section 356.55, plus interest on
the amount at an annual compound rate of six percent per year.
The return amount and interest must be made in an
institution-to-institution transfer to a federal tax qualified
retirement plan or account and may not be paid directly to an
individual.
(b) An eligible person is a person who was an employee of
the Minneapolis Community Development Agency and made a payment
for the purchase of prior service credit under Laws 2003,
chapter 127, article 12, section 31, subdivision 4, and
Minnesota Statutes 2002, section 356.55, in an erroneous amount
because of an inaccurate salary figure supplied by the employing
agency.
Sec. 11. [EFFECTIVE DATE.]
(a) Sections 5 and 6 are effective retroactive to July 1,
2005.
(b) Sections 9 and 10 are effective the day following final
enactment.
(c) Section 10 expires June 30, 2005.
ARTICLE 6
PENSION BENEFITS UPON PRIVATIZATION
Section 1. Minnesota Statutes 2004, section 353F.02,
subdivision 4, is amended to read:
Subd. 4. [MEDICAL FACILITY.] "Medical facility" means:
(1) Bridges Medical Services;
(2) the Fair Oaks Lodge, Wadena;
(2) (3) the Glencoe Area Health Center;
(3) (4) the Hutchinson Area Health Care;
(5) the Kanabec Hospital;
(4) (6) the Luverne Public Hospital;
(7) the Northfield Hospital;
(5) (8) the RenVilla Nursing Home;
(6) (9) the Renville County Hospital in Olivia;
(7) (10) the St. Peter Community Healthcare Center; and
(8) (11) the Waconia-Ridgeview Medical Center.
Sec. 2. Minnesota Statutes 2004, section 471A.10, is
amended to read:
471A.10 [PUBLIC EMPLOYEE LAWS; SALE OR LEASE OF EXISTING
FACILITY.]
(a) Unless expressly provided therein, and except as
provided in this section, no state law, charter provision, or
ordinance of a municipality relating to public employees shall
apply to a person solely by reason of that person's employment
by a private vendor in connection with services rendered under a
service contract.
(b) A private vendor purchasing or leasing existing related
facilities from a municipality or operating or maintaining the
facility shall recognize all exclusive bargaining
representatives and existing labor agreements and those
agreements shall remain in force until they expire by their
terms. Persons who are not who were employed by a municipality
in a related facility at the time of and who were members of the
Public Employees Retirement Association general plan due to that
employment are not permitted to remain as active members of the
plan following a lease or purchase of the facility by the a
private vendor are not "public employees" within the meaning of
the Public Employees Retirement Act, chapter 353. Persons
employed by a municipality in a related facility at the time of
a lease or purchase of the facility by a private vendor shall
continue to be considered to be "public employees" within the
meaning of the Public Employees Retirement Act, chapter 353, but
may elect to terminate their participation in the Public
Employees Retirement Association as provided in this section.
Each such employee may exercise the election annually on the
anniversary of the person's initial employment by the
municipality. An employee electing to terminate participation
in the association is entitled to benefits that the employee
would be entitled to if terminating public employment and may
participate in a retirement program established by the private
vendor.
Sec. 3. Laws 2004, chapter 267, article 12, section 4, is
amended to read:
Sec. 4. [EFFECTIVE DATE.]
(a) Section 1, relating to the Fair Oaks Lodge, Wadena, is
effective upon the latter of:
(1) the day after the governing body of Todd County and its
chief clerical officer timely complete their compliance with
Minnesota Statutes, section 645.021, subdivisions 2 and 3; and
(2) the day after the governing body of Wadena County and
its chief clerical officer timely complete their compliance with
Minnesota Statutes, section 645.021, subdivisions 2 and 3.
(b) Section 1, relating to the RenVilla Nursing Home, is
effective upon the latter of:
(1) the day after the governing body of the city of
Renville and its chief clerical officer timely complete their
compliance with Minnesota Statutes, section 645.021,
subdivisions 2 and 3, except that the certificate of approval
must be filed before January 1, 2006; and
(2) the first day of the month next following certification
to the governing body of the city of Renville by the executive
director of the Public Employees Retirement Association that the
actuarial accrued liability of the special benefit coverage
proposed for extension to the privatized RenVilla Nursing Home
employees under section 1 does not exceed the actuarial gain
otherwise to be accrued by the Public Employees Retirement
Association, as calculated by the consulting actuary retained by
the Legislative Commission on Pensions and Retirement, or the
actuary retained under Minnesota Statutes, section 356.214,
whichever is applicable.
(c) The cost of the actuarial calculations must be borne by
the city of Renville or the purchaser of the RenVilla Nursing
Home.
(d) Section 1, relating to the St. Peter Community
Healthcare Center, is effective upon the latter of:
(1) the day after the governing body of the city of St.
Peter and its chief clerical officer timely complete their
compliance with Minnesota Statutes, section 645.021,
subdivisions 2 and 3; and
(2) the first day of the month next following certification
to the governing body of the city of St. Peter by the executive
director of the Public Employees Retirement Association that the
actuarial accrued liability of the special benefit coverage
proposed for extension to the privatized St. Peter Community
Healthcare Center employees under section 1 does not exceed the
actuarial gain otherwise to be accrued by the Public Employees
Retirement Association, as calculated by the consulting actuary
retained by the Legislative Commission on Pensions and
Retirement, or the actuary retained under Minnesota Statutes,
section 356.214, whichever is applicable.
(e) The cost of the actuarial calculations must be borne by
the city of St. Peter or the purchaser of the St. Peter
Community Healthcare Center.
(f) If the required actions under paragraphs (b) and (c)
occur, section 1 applies retroactively to the RenVilla Nursing
Home as of the date of privatization.
(g) If the required actions under paragraph (a) occur,
section 1 applies retroactively to Fair Oaks Lodge, Wadena, as
of January 1, 2004.
(h) Sections 2 and 3 are effective on the day following
final enactment.
Sec. 4. [EFFECTIVE DATE.]
(a) Section 1, relating to Bridges Medical Services, is
effective upon the later of:
(1) the day after the governing body of the city of Ada and
its chief clerical officer timely complete their compliance with
Minnesota Statutes, section 645.021, subdivisions 2 and 3; and
(2) the first day of the month next following certification
to the governing body of the city of Ada by the executive
director of the Public Employees Retirement Association that the
actuarial accrued liability of the special benefit coverage
proposed for extension to the privatized Bridges Medical
Services employees under section 1 does not exceed the actuarial
gain otherwise to be accrued by the Public Employees Retirement
Association, as calculated by the consulting actuary retained
under Minnesota Statutes, section 356.214.
(b) Section 1, relating to the Hutchinson Area Health Care,
is effective upon the later of:
(1) the day after the governing body of the city of
Hutchinson and its chief clerical officer timely complete their
compliance with Minnesota Statutes, section 645.021,
subdivisions 2 and 3; and
(2) the first day of the month next following certification
to the governing body of the city of Hutchinson by the executive
director of the Public Employees Retirement Association that the
actuarial accrued liability of the special benefit coverage
proposed for extension to the privatized Hutchinson Area Health
Care employees under section 1 does not exceed the actuarial
gain otherwise to be accrued by the Public Employees Retirement
Association, as calculated by the consulting actuary retained by
the Legislative Commission on Pensions and Retirement.
(c) Section 1, relating to the Northfield Hospital, is
effective upon the later of:
(1) the day after the governing body of the city of
Northfield and its chief clerical officer timely complete their
compliance with Minnesota Statutes, section 645.021,
subdivisions 2 and 3; and
(2) the first day of the month next following certification
to the governing body of the city of Northfield by the executive
director of the Public Employees Retirement Association that the
actuarial accrued liability of the special benefit coverage
proposed for extension to the privatized Northfield Hospital
employees under section 1 does not exceed the actuarial gain
otherwise to be accrued by the Public Employees Retirement
Association, as calculated by the consulting actuary retained by
the Legislative Commission on Pensions and Retirement.
(d) The cost of the actuarial calculations must be borne by
the facility, the city in which the facility is located, or the
purchaser of the facility.
(e) If the required actions in paragraphs (a), (b), or (c)
and (d) occur, section 1 applies retroactively to the date of
privatization.
(f) Section 3 is effective the day following final
enactment.
(g) Section 2 is effective the day following final
enactment and applies to privatizations occurring on or after
the effective date.
ARTICLE 7
FIRST CLASS CITY TEACHER
RETIREMENT FUND ASSOCIATIONS
Section 1. Minnesota Statutes 2004, section 354A.021, is
amended by adding a subdivision to read:
Subd. 9. [UPDATED ARTICLES OF INCORPORATION AND BYLAWS;
FILING.] (a) On or before July 1, 2006, and within six months of
the date of the approval of any amendment to the articles of
incorporation or bylaws, the chief administrative officer of
each first class city teacher retirement fund association shall
prepare and publish an updated compilation of the articles of
incorporation and the bylaws of the association.
(b) The chief administrative officer of the first class
city teacher retirement fund association must certify the
accuracy and the completeness of the compilation.
(c) The compilation of the articles of incorporation and
bylaws of a first class city teacher retirement fund association
must contain an index.
(d) The compilation must be made available to association
members and other interested parties. The association may
charge a fee for a copy that reflects the price of printing or
otherwise producing the copy. Two copies of the compilation
must be filed, without charge, by each retirement fund
association with the Legislation Commission on Pensions and
Retirement, the Legislative Reference Library, the state
auditor, the commissioner of education, the chancellor of the
Minnesota State Colleges and Universities system, and the
superintendent of the applicable school district.
(e) A first class city teacher retirement fund association
may contract with the revisor of statutes for the preparation of
the compilation.
(f) If a first class city teacher retirement fund
association makes an updated copy of its articles of
incorporation and bylaws available on its Web site, the
retirement fund association is not obligated to file a hard copy
of the documents under paragraph (d) for the applicable filing
period.
Sec. 2. [EFFECTIVE DATE.]
Section 1 is effective July 1, 2005.
ARTICLE 8
MINNESOTA STATE COLLEGES AND UNIVERSITIES
INDIVIDUAL RETIREMENT ACCOUNT PLAN CHANGES
Section 1. Minnesota Statutes 2004, section 354B.25,
subdivision 2, is amended to read:
Subd. 2. [INVESTMENT OPTIONS.] (a) The plan administrator
shall arrange for the purchase of investment products.
(b) The investment products must be purchased with
contributions under section 354B.23 or with money or assets
otherwise provided by law by authority of the board.
(c) Various investment accounts offered through the
Minnesota supplemental investment fund established under section
11A.17 and administered by the State Board of Investment is one
of the may be included as investment products for the individual
retirement account plan. Direct access must also be provided to
lower expense and no-load mutual funds, as those terms are
defined by the federal Securities and Exchange Commission,
including stock funds, bond funds, and balanced funds. Other
investment products or combination of investment products which
may be included are:
(1) savings accounts at federally insured financial
institutions;
(2) life insurance contracts, fixed and variable annuity
contracts from companies that are subject to regulation by the
commerce commissioner;
(3) investment options from open-ended investment companies
registered under the federal Investment Company Act of 1940,
United States Code, title 15, sections 80a-1 to 80a-64;
(4) investment options from a firm that is a registered
investment advisor under the federal Investment Advisers Act of
1940, United States Code, title 15, sections 80b-1 to 80b-21;
and
(5) investment options of a bank as defined in United
States Code, title 15, section 80b-2, subsection (a), paragraph
2, or a bank holding company as defined in the Bank Holding
Company Act of 1956, United States Code, title 12, section 1841,
subsection (a), paragraph (1).
Sec. 2. [EFFECTIVE DATE.]
Section 1 is effective the day following final enactment.
ARTICLE 9
VOLUNTEER FIREFIGHTER RELIEF
ASSOCIATION CHANGES
Section 1. Minnesota Statutes 2004, section 69.051,
subdivision 1, is amended to read:
Subdivision 1. [FINANCIAL REPORT AND AUDIT.] The board of
each salaried firefighters relief association, police relief
association, and volunteer firefighters relief association as
defined in section 424A.001, subdivision 4, with assets of at
least $200,000 or liabilities of at least $200,000 in the prior
year or in any previous year, according to the most recent
applicable actuarial valuation or financial report if no
valuation is required, shall:
(1) prepare a financial report covering the special and
general funds of the relief association for the preceding fiscal
year on a form prescribed by the state auditor. The financial
report shall must contain financial statements and disclosures
which present the true financial condition of the relief
association and the results of relief association operations in
conformity with generally accepted accounting principles and in
compliance with the regulatory, financing and funding provisions
of this chapter and any other applicable laws. The financial
report shall must be countersigned by the municipal clerk or
clerk-treasurer of the municipality in which the relief
association is located if the relief association is a
firefighters relief association which is directly associated
with a municipal fire department or is a police relief
association, or countersigned by the secretary of the
independent nonprofit firefighting corporation and by the
municipal clerk or clerk-treasurer of the largest municipality
in population which contracts with the independent nonprofit
firefighting corporation if the volunteer firefighter relief
association is a subsidiary of an independent nonprofit
firefighting corporation;
(2) file the financial report in its office for public
inspection and present it to the city council after the close of
the fiscal year. One copy of the financial report shall must be
furnished to the state auditor after the close of the fiscal
year; and
(3) submit to the state auditor audited financial
statements which have been attested to by a certified public
accountant, public accountant, or the state auditor within 180
days after the close of the fiscal year. The state auditor may
accept this report in lieu of the report required in clause (2).
Sec. 2. Minnesota Statutes 2004, section 69.051,
subdivision 1a, is amended to read:
Subd. 1a. [FINANCIAL STATEMENT.] (a) The board of each
volunteer firefighters relief association, as defined in section
424A.001, subdivision 4, with assets of less than $200,000 and
liabilities less than $200,000, according to the most recent
financial report, shall that is not required to file a financial
report and audit under subdivision 1 must prepare a detailed
statement of the financial affairs for the preceding fiscal year
of the relief association's special and general funds in the
style and form prescribed by the state auditor. The detailed
statement must show the sources and amounts of all money
received; all disbursements, accounts payable and accounts
receivable; the amount of money remaining in the treasury; total
assets including a listing of all investments; the accrued
liabilities; and all items necessary to show accurately the
revenues and expenditures and financial position of the relief
association.
(b) The detailed financial statement required under
paragraph (a) must be certified by an independent public
accountant or auditor or by the auditor or accountant who
regularly examines or audits the financial transactions of the
municipality. In addition to certifying the financial condition
of the special and general funds of the relief association, the
accountant or auditor conducting the examination shall give an
opinion as to the condition of the special and general funds of
the relief association, and shall comment upon any exceptions to
the report. The independent accountant or auditor shall must
have at least five years of public accounting, auditing, or
similar experience, and shall must not be an active, inactive,
or retired member of the relief association or the fire or
police department.
(c) The detailed statement required under paragraph (a)
must be countersigned by the municipal clerk or clerk-treasurer
of the municipality, or, where applicable, by the secretary of
the independent nonprofit firefighting corporation and by the
municipal clerk or clerk-treasurer of the largest municipality
in population which contracts with the independent nonprofit
firefighting corporation if the relief association is a
subsidiary of an independent nonprofit firefighting corporation.
(d) The volunteer firefighters' relief association board
must file the detailed statement required under paragraph (a) in
the relief association office for public inspection and present
it to the city council within 45 days after the close of the
fiscal year, and must submit a copy of the detailed statement to
the state auditor within 90 days of the close of the fiscal year.
Sec. 3. Minnesota Statutes 2004, section 69.771, is
amended to read:
69.771 [VOLUNTEER FIREFIGHTERS' RELIEF ASSOCIATION
FINANCING GUIDELINES ACT; APPLICATION.]
Subdivision 1. [COVERED RELIEF ASSOCIATIONS.] The
applicable provisions of sections 69.771 to 69.776 shall apply
to any firefighters' relief association other than a relief
association enumerated in section 69.77, subdivision 1a, which
is organized under any laws of this state, which is composed of
volunteer firefighters or is composed partially of volunteer
firefighters and partially of salaried firefighters with
retirement coverage provided by the public employees police and
fire fund and which, in either case, operates subject to the
service pension minimum requirements for entitlement and
maximums contained in section 424A.02, or subject to a special
law modifying those requirements or maximums.
Subd. 2. [AUTHORIZED EMPLOYER SUPPORT FOR A RELIEF
ASSOCIATION.] Notwithstanding any law to the contrary, a
municipality may lawfully contribute public funds, including the
transfer of any applicable fire state aid, or may levy property
taxes for the support of a firefighters' relief association
specified in subdivision 1, however organized, which provides
retirement coverage or pays a service pension to retired
firefighter or a retirement benefit to a disabled firefighter or
a surviving dependent of either an active or retired firefighter
for the operation and maintenance of the relief association only
if the municipality and the relief association both comply with
the applicable provisions of sections 69.771 to 69.776.
Subd. 3. [REMEDY FOR NONCOMPLIANCE; DETERMINATION.]
Any (a) A municipality in which there exists a firefighters'
relief association as specified in subdivision 1 which does not
comply with the applicable provisions of sections 69.771 to
69.776 or the provisions of any applicable special law relating
to the funding or financing of the association shall does not
qualify initially to receive, or be and is not entitled
subsequently to retain, fire state aid pursuant to under
sections 69.011 to 69.051 until the reason for the
disqualification specified by the state auditor is remedied,
whereupon the municipality or relief association, if otherwise
qualified, shall be is entitled to again receive fire state aid
for the year occurring immediately subsequent to the year in
which the disqualification is remedied.
(b) The state auditor shall determine if a municipality to
which a firefighters' relief association is directly associated
or a firefighters' relief association fails to comply with the
provisions of sections 69.771 to 69.776 or the funding or
financing provisions of any applicable special law based upon
the information contained in the annual financial report of the
firefighters' relief association required pursuant to under
section 69.051., the actuarial valuation of the relief
association, if applicable, the relief association officers'
financial requirements of the relief association and minimum
municipal obligation determination documentation under section
69.772, subdivisions 3 and 4; 69.773, subdivisions 4 and 5; or
69.774, subdivision 2, if requested to be filed by the state
auditor, the applicable municipal or nonprofit firefighting
corporation budget, if requested to be filed by the state
auditor, and any other relevant documents or reports obtained by
the state auditor.
(c) The municipality or nonprofit firefighting corporation
and the associated relief association are not eligible to
receive or to retain fire state aid if:
(1) the relief association fails to prepare or to file the
financial report or financial statement under section 69.051;
(2) the relief association treasurer is not bonded in the
manner and in the amount required by section 69.051, subdivision
2;
(3) the relief association officers fail to determine or
improperly determine the accrued liability and the annual
accruing liability of the relief association under section
69.772, subdivisions 2, 2a, and 3, paragraph (c), clause (2), if
applicable;
(4) if applicable, the relief association officers fail to
obtain and file a required actuarial valuation or the officers
file an actuarial valuation that does not contain the special
fund actuarial liability calculated under the entry age normal
actuarial cost method, the special fund current assets, the
special fund unfunded actuarial accrued liability, the special
fund normal cost under the entry age normal actuarial cost
method, the amortization requirement for the special fund
unfunded actuarial accrued liability by the applicable target
date, a summary of the applicable benefit plan, a summary of the
membership of the relief association, a summary of the actuarial
assumptions used in preparing the valuation, and a signed
statement by the actuary attesting to its results and certifying
to the qualifications of the actuary as an approved actuary
under section 356.215, subdivision 1, paragraph (c);
(5) the municipality failed to provide a municipal
contribution, or the nonprofit firefighting corporation failed
to provide a corporate contribution, in the amount equal to the
minimum municipal obligation if the relief association is
governed under section 69.772, or the amount necessary, when
added to the fire state aid actually received in the plan year
in question, to at least equal in total the calculated annual
financial requirements of the special fund of the relief
association if the relief association is governed under section
69.773, and, if the municipal or corporate contribution is
deficient, the municipality failed to include the minimum
municipal obligation certified under section 69.772, subdivision
3, or 69.773, subdivision 5, in its budget and tax levy or the
nonprofit firefighting corporation failed to include the minimum
corporate obligation certified under section 69.774, subdivision
2, in the corporate budget;
(6) the relief association did not receive municipal
ratification for the most recent plan amendment when municipal
ratification was required under section 69.772, subdivision 6;
69.773, subdivision 6; or 424A.02, subdivision 10;
(7) the relief association invested special fund assets in
an investment security that is not authorized under section
69.775;
(8) the relief association had an administrative expense
that is not authorized under section 69.80 or 424A.05,
subdivision 3, or the municipality had an expenditure that is
not authorized under section 424A.08;
(9) the relief association officers fail to provide a
complete and accurate public pension plan investment portfolio
and performance disclosure under section 356.219;
(10) the relief association fails to obtain the
acknowledgment from a broker of the statement of investment
restrictions under section 356A.06, subdivision 8b;
(11) the relief association officers permitted to occur a
prohibited transaction under section 356A.06, subdivision 9, or
424A.001, subdivision 7, or failed to undertake correction of a
prohibited transaction that did occur; or
(12) the relief association pays a defined benefit service
pension in an amount that is in excess of the applicable service
pension maximum under section 424A.02, subdivision 3.
Sec. 4. Minnesota Statutes 2004, section 69.772,
subdivision 3, is amended to read:
Subd. 3. [FINANCIAL REQUIREMENTS OF RELIEF ASSOCIATION;
MINIMUM OBLIGATION OF MUNICIPALITY.] (a) During the month of
July, the officers of the relief association shall determine the
overall funding balance of the special fund for the current
calendar year, the financial requirements of the special fund
for the following calendar year and the minimum obligation of
the municipality with respect to the special fund for the
following calendar year in accordance with the requirements of
this subdivision.
(1) (b) The overall funding balance of the special fund for
the current calendar year shall must be determined in the
following manner:
(a) (1) The total accrued liability of the special fund for
all active and deferred members of the relief association as of
December 31 of the current year shall must be calculated
pursuant to under subdivisions 2 and 2a, if applicable.
(b) (2) The total present assets of the special fund
projected to December 31 of the current year, including receipts
by and disbursements from the special fund anticipated to occur
on or before December 31 shall, must be calculated. To the
extent possible, for those assets for which a market value is
readily ascertainable, the current market value as of the date
of the calculation for those assets shall must be utilized in
making this calculation. For any asset for which no market
value is readily ascertainable, the cost value or the book
value, whichever is applicable, shall must be utilized in making
this calculation.
(c) (3) The amount of the total present assets of the
special fund calculated pursuant to under clause (b) shall (2)
must be subtracted from the amount of the total accrued
liability of the special fund calculated pursuant to under
clause (a) (1). If the amount of total present assets exceeds
the amount of the total accrued liability, then the special fund
shall be is considered to have a surplus over full funding. If
the amount of the total present assets is less than the amount
of the total accrued liability, then the special fund shall be
is considered to have a deficit from full funding. If the
amount of total present assets is equal to the amount of the
total accrued liability, then the special fund shall be is
considered to be fully funded.
(2) (c) The financial requirements of the special fund for
the following calendar year shall must be determined in the
following manner:
(a) (1) The total accrued liability of the special fund for
all active and deferred members of the relief association as of
December 31 of the calendar year next following the current
calendar year shall must be calculated pursuant to under
subdivisions 2 and 2a, if applicable.
(b) (2) The increase in the total accrued liability of the
special fund for the following calendar year over the total
accrued liability of the special fund for the current year shall
must be calculated.
(c) (3) The amount of anticipated future administrative
expenses of the special fund shall must be calculated by
multiplying the dollar amount of the administrative expenses of
the special fund for the most recent prior calendar year by the
factor of 1.035.
(d) (4) If the special fund is fully funded, the financial
requirement requirements of the special fund for the following
calendar year shall be are the figure which represents the
increase in the total accrued liability of the special fund as
amounts calculated pursuant to subclause (b) under clauses (2)
and (3).
(e) (5) If the special fund has a deficit from full
funding, the financial requirements of the special fund for the
following calendar year shall be are the financial requirements
of the special fund calculated as though the special fund were
fully funded pursuant to subclause (d) under clause (4) plus an
amount equal to one-tenth of the original amount of the deficit
from full funding of the special fund as determined pursuant to
this section for the calendar year 1971 until that deficit from
full funding is fully retired, and plus an amount equal to
one-tenth of the increase in the deficit from full funding of
the special fund under clause (2) resulting either from an
increase in the amount of the service pension accruing after
December 31, 1971 occurring in the last ten years or from a net
annual investment loss occurring during the last ten years until
each increase in the deficit from full funding is fully
retired. The annual amortization contribution under this clause
may not exceed the amount of the deficit from full funding.
(f) (6) If the special fund has a surplus over full
funding, the financial requirements of the special fund for the
following calendar year shall be are the financial requirements
of the special fund calculated as though the special fund were
fully funded pursuant to subclause (d) under clause (4) reduced
by an amount equal to one-tenth of the amount of the surplus
over full funding of the special fund.
(3) (d) The minimum obligation of the municipality with
respect to the special fund shall be is the financial
requirements of the special fund reduced by the amount of any
fire state aid payable pursuant to under sections 69.011 to
69.051 reasonably anticipated to be received by the municipality
for transmittal to the special fund during the following
calendar year, an amount of interest on the assets of the
special fund projected to the beginning of the following
calendar year calculated at the rate of five percent per annum,
and the amount of any anticipated contributions to the special
fund required by the relief association bylaws from the active
members of the relief association reasonably anticipated to be
received during the following calendar year. A reasonable
amount of anticipated fire state aid is an amount that does not
exceed the fire state aid actually received in the prior year
multiplied by the factor 1.035.
Sec. 5. Minnesota Statutes 2004, section 69.772,
subdivision 4, is amended to read:
Subd. 4. [CERTIFICATION OF FINANCIAL REQUIREMENTS AND
MINIMUM MUNICIPAL OBLIGATION; LEVY.] (a) The officers of the
relief association shall certify the financial requirements of
the special fund of the relief association and the minimum
obligation of the municipality with respect to the special fund
of the relief association as determined pursuant to under
subdivision 3 to the governing body of the municipality on or
before August 1 of each year. The financial requirements of the
relief association and the minimum municipal obligation must be
included in the financial report or financial statement under
section 69.051.
(b) The municipality shall provide for at least the minimum
obligation of the municipality with respect to the special fund
of the relief association by tax levy or from any other source
of public revenue.
(c) The municipality may levy taxes for the payment of the
minimum municipal obligation without any limitation as to rate
or amount and irrespective of any limitations imposed by other
provisions of law upon the rate or amount of taxation until the
balance of the special fund or any fund of the relief
association has attained a specified level. In addition, any
taxes levied pursuant to under this section shall must not cause
the amount or rate of any other taxes levied in that year or to
be levied in a subsequent year by the municipality which are
subject to a limitation as to rate or amount to be reduced.
(d) If the municipality does not include the full amount of
the minimum municipal obligations in its levy for any year, the
officers of the relief association shall certify that amount to
the county auditor, who shall spread a levy in the amount of the
certified minimum municipal obligation on the taxable property
of the municipality.
(e) If the state auditor determines that a municipal
contribution actually made in a plan year was insufficient under
section 69.771, subdivision 3, paragraph (c), clause (5), the
state auditor may request a copy of the certifications under
this subdivision from the relief association or from the city.
The relief association or the city, whichever applies, must
provide the certifications within 14 days of the date of the
request from the state auditor.
Sec. 6. Minnesota Statutes 2004, section 69.773,
subdivision 4, is amended to read:
Subd. 4. [FINANCIAL REQUIREMENTS OF SPECIAL FUND.] Prior
to (a) On or before August 1 of each year, the officers of the
relief association shall determine the financial requirements of
the special fund of the relief association in accordance with
the requirements of this subdivision.
(b) The financial requirements of the relief
association shall must be based on the most recent actuarial
valuation of the special fund prepared in accordance with
subdivision 2. If the relief association has an unfunded
actuarial accrued liability as reported in the most recent
actuarial valuation, the financial requirements shall must be
determined by adding the figures calculated pursuant to under
paragraph (d), clauses (a) (1), (b) (2), and (c) (3). If
the relief association does not have an unfunded actuarial
accrued liability as reported in the most recent actuarial
valuation, the financial requirements shall must be an amount
equal to the figure calculated pursuant to under paragraph (d),
clauses (a) (1) and (b) (2), reduced by an amount equal to
one-tenth of the amount of any assets in excess of the actuarial
accrued liability of the relief association.
(c) The determination of whether or not the relief
association has an unfunded actuarial accrued liability
shall must be based on the current market value of assets for
which a market value is readily ascertainable and the cost or
book value, whichever is applicable, for assets for which no
market value is readily ascertainable.
(a) (d) The components of the financial requirements of the
relief association are the following:
(1) The normal level cost requirement for the following
year, expressed as a dollar amount, shall be is the figure for
the normal level cost of the relief association as reported in
the actuarial valuation.
(b) (2) The amount of anticipated future administrative
expenses of the special fund shall must be calculated by
multiplying the dollar amount of the administrative expenses of
the special fund for the most recent prior calendar year by the
factor of 1.035.
(c) (3) The amortization contribution requirement to retire
the current unfunded actuarial accrued liability by the
established date for full funding shall be is the figure for the
amortization contribution as reported in the actuarial
valuation. If there has not been a change in the actuarial
assumptions used for calculating the actuarial accrued liability
of the special fund, a change in the bylaws of the relief
association governing the service pensions, retirement benefits,
or both, payable from the special fund, or a change in the
actuarial cost method used to value all or a portion of the
special fund which change or changes, which by themselves,
without inclusion of any other items of increase or decrease,
produce a net increase in the unfunded actuarial accrued
liability of the special fund since December 31, 1970, the
established date for full funding shall be is the December 31,
1990 occurring ten years later. If there has been a change in
the actuarial assumptions used for calculating the actuarial
accrued liability of the special fund, a change in the bylaws of
the relief association governing the service pensions,
retirement benefits, or both payable from the special fund or a
change in the actuarial cost method used to value all or a
portion of the special fund 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 of the special fund since December 31, 1970,
but prior to January 1, 1979 within the past 20 years, the
established date for full funding shall be December 31, 1998,
and if there has been a change since December 31, 1978, the
established date for full funding shall must be determined using
the following procedure:
(i) the unfunded actuarial accrued liability of the special
fund attributable to experience losses that have occurred since
the most recent prior actuarial valuation must be determined and
the level annual dollar contribution needed to amortize the
experience loss over a period of ten years ending on the
December 31 occurring ten years later must be calculated;
(ii) the unfunded actuarial accrued liability of the
special fund shall must be determined in accordance with the
provisions governing service pensions, retirement benefits, and
actuarial assumptions in effect before an applicable change;
(ii) (iii) the level annual dollar contribution needed to
amortize this unfunded actuarial accrued liability amount by the
date for full funding in effect prior to before the change shall
must be calculated using the interest assumption specified in
section 356.215, subdivision 8, in effect before any applicable
change;
(iii) (iv) the unfunded actuarial accrued liability of the
special fund shall must be determined in accordance with any new
provisions governing service pensions, retirement benefits, and
actuarial assumptions and the remaining provisions governing
service pensions, retirement benefits, and actuarial assumptions
in effect before an applicable change;
(iv) (v) the level annual dollar contribution needed to
amortize the difference between the unfunded actuarial accrued
liability amount calculated pursuant to subclause (i) under item
(ii) and the unfunded actuarial accrued liability amount
calculated pursuant to subclause (iii) under item (iv) over a
period of 20 years starting December 31 of the year in which the
change is effective shall must be calculated using the interest
assumption specified in section 356.215, subdivision 8, in
effect after any applicable change;
(v) (vi) the annual amortization contribution calculated
pursuant to subclause (iv) shall under item (v) must be added to
the annual amortization contribution calculated pursuant to
subclause (ii) under items (i) and (iii);
(vi) (vii) the period in which the unfunded actuarial
accrued liability amount determined in subclause (iii) item (iv)
will be amortized by the total annual amortization contribution
computed pursuant to subclause (v) shall under item (vi) must be
calculated using the interest assumption specified in section
356.215, subdivision 8, in effect after any applicable change,
rounded to the nearest integral number of years, but which shall
must not exceed a period of 20 years from the end of the year in
which the determination of the date for full funding using this
procedure is made and which shall must not be less than the
period of years beginning in the year in which the determination
of the date for full funding using this procedure is made and
ending by the date for full funding in effect before the change;
(vii) (viii) the period determined pursuant to subclause
(vi) shall under item (vii) must be added to the date as of
which the actuarial valuation was prepared and the resulting
date shall be is the new date for full funding.
Sec. 7. Minnesota Statutes 2004, section 69.773,
subdivision 5, is amended to read:
Subd. 5. [MINIMUM MUNICIPAL OBLIGATION.] (a) The officers
of the relief association shall determine the minimum obligation
of the municipality with respect to the special fund of the
relief association for the following calendar year prior to on
or before August 1 of each year in accordance with the
requirements of this subdivision.
(b) The minimum obligation of the municipality with respect
to the special fund shall be is an amount equal to the financial
requirements of the special fund of the relief association
determined pursuant to under subdivision 4, reduced by the
estimated amount of any fire state aid payable pursuant to under
sections 69.011 to 69.051 reasonably anticipated to be received
by the municipality for transmittal to the special fund of the
relief association during the following year and the amount of
any anticipated contributions to the special fund required by
the relief association bylaws from the active members of the
relief association reasonably anticipated to be received during
the following calendar year. A reasonable amount of anticipated
fire state aid is an amount that does not exceed the fire state
aid actually received in the prior year multiplied by the factor
1.035.
(c) The officers of the relief association shall certify
the financial requirements of the special fund of the relief
association and the minimum obligation of the municipality with
respect to the special fund of the relief association as
determined pursuant to under subdivision 4 and this subdivision
to the governing body of the municipality by August 1 of each
year. The financial requirements of the relief association and
the minimum municipal obligation must be included in the
financial report or financial statement under section 69.051.
(d) The municipality shall provide for at least the minimum
obligation of the municipality with respect to the special fund
of the relief association by tax levy or from any other source
of public revenue. The municipality may levy taxes for the
payment of the minimum municipal obligation without any
limitation as to rate or amount and irrespective of any
limitations imposed by other provisions of law or charter upon
the rate or amount of taxation until the balance of the special
fund or any fund of the relief association has attained a
specified level. In addition, any taxes levied pursuant to
under this section shall must not cause the amount or rate of
any other taxes levied in that year or to be levied in a
subsequent year by the municipality which are subject to a
limitation as to rate or amount to be reduced.
(e) If the municipality does not include the full amount of
the minimum municipal obligation in its levy for any year, the
officers of the relief association shall certify that amount to
the county auditor, who shall spread a levy in the amount of the
minimum municipal obligation on the taxable property of the
municipality.
(f) If the state auditor determines that a municipal
contribution actually made in a plan year was insufficient under
section 69.771, subdivision 3, paragraph (c), clause (5), the
state auditor may request from the relief association or from
the city a copy of the certifications under this subdivision.
The relief association or the city, whichever applies, must
provide the certifications within 14 days of the date of the
request from the state auditor.
Sec. 8. Minnesota Statutes 2004, section 69.775, is
amended to read:
69.775 [INVESTMENTS.]
(a) The special fund assets of the a relief associations
association governed by sections 69.771 to 69.776 must be
invested in securities that are authorized investments under
section 356A.06, subdivision 6 or 7.
(b) Notwithstanding the foregoing, up to 75 percent of the
market value of the assets of the special fund, not including
any money market mutual funds, may be invested in open-end
investment companies registered under the federal Investment
Company Act of 1940, if the portfolio investments of the
investment companies comply with the type of securities
authorized for investment under section 356A.06, subdivision 7.
(c) Securities held by the associations before June 2,
1989, that do not meet the requirements of this section may be
retained after that date if they were proper investments for the
association on that date.
(d) The governing board of the association may select and
appoint investment agencies to act for and in its behalf or may
certify special fund assets for investment by the State Board of
Investment under section 11A.17.
(e) The governing board of the association may certify
general fund assets of the relief association for investment by
the State Board of Investment in fixed income pools or in a
separately managed account at the discretion of the State Board
of Investment as provided in section 11A.14.
(f) The governing board of the association may select and
appoint a qualified private firm to measure management
performance and return on investment, and the firm shall use the
formula or formulas developed by the state board under section
11A.04, clause (11).
Sec. 9. Minnesota Statutes 2004, section 356A.06,
subdivision 7, is amended to read:
Subd. 7. [EXPANDED LIST OF AUTHORIZED INVESTMENT
SECURITIES.] (a) [AUTHORITY.] Except to the extent otherwise
authorized by law or bylaws, a covered pension plan not
described by subdivision 6, paragraph (a), may invest its assets
only in accordance with this subdivision.
(b) [SECURITIES GENERALLY.] The covered pension plan has
the authority to purchase, sell, lend, or exchange the
securities specified in paragraphs (c) to (g) (h), including
puts and call options and future contracts traded on a contract
market regulated by a governmental agency or by a financial
institution regulated by a governmental agency. These
securities may be owned as units in commingled trusts that own
the securities described in paragraphs (c) to (g) (h).
(c) [GOVERNMENT OBLIGATIONS.] The covered pension plan may
invest funds in governmental bonds, notes, bills, mortgages, and
other evidences of indebtedness provided the issue is backed by
the full faith and credit of the issuer or the issue is rated
among the top four quality rating categories by a nationally
recognized rating agency. The obligations in which funds may be
invested under this paragraph include guaranteed or insured
issues of (1) the United States, its agencies, its
instrumentalities, or organizations created and regulated by an
act of Congress; (2) Canada and its provinces, provided the
principal and interest is payable in United States dollars; (3)
the states and their municipalities, political subdivisions,
agencies, or instrumentalities; (4) the International Bank for
Reconstruction and Development, the Inter-American Development
Bank, the Asian Development Bank, the African Development Bank,
or any other United States government sponsored organization of
which the United States is a member, provided the principal and
interest is payable in United States dollars.
(d) [CORPORATE OBLIGATIONS.] The covered pension plan may
invest funds in bonds, notes, debentures, transportation
equipment obligations, or any other longer term evidences of
indebtedness issued or guaranteed by a corporation organized
under the laws of the United States or any state thereof, or the
Dominion of Canada or any province thereof if they conform to
the following provisions:
(1) the principal and interest of obligations of
corporations incorporated or organized under the laws of the
Dominion of Canada or any province thereof must be payable in
United States dollars; and
(2) obligations must be rated among the top four quality
categories by a nationally recognized rating agency.
(e) [OTHER OBLIGATIONS.] (1) The covered pension plan may
invest funds in bankers acceptances, certificates of deposit,
deposit notes, commercial paper, mortgage participation
certificates and pools, asset backed securities, repurchase
agreements and reverse repurchase agreements, guaranteed
investment contracts, savings accounts, and guaranty fund
certificates, surplus notes, or debentures of domestic mutual
insurance companies if they conform to the following provisions:
(i) bankers acceptances and deposit notes of United States
banks are limited to those issued by banks rated in the highest
four quality categories by a nationally recognized rating
agency;
(ii) certificates of deposit are limited to those issued by
(A) United States banks and savings institutions that are rated
in the highest four quality categories by a nationally
recognized rating agency or whose certificates of deposit are
fully insured by federal agencies; or (B) credit unions in
amounts up to the limit of insurance coverage provided by the
National Credit Union Administration;
(iii) commercial paper is limited to those issued by United
States corporations or their Canadian subsidiaries and rated in
the highest two quality categories by a nationally recognized
rating agency;
(iv) mortgage participation or pass through certificates
evidencing interests in pools of first mortgages or trust deeds
on improved real estate located in the United States where the
loan to value ratio for each loan as calculated in accordance
with section 61A.28, subdivision 3, does not exceed 80 percent
for fully amortizable residential properties and in all other
respects meets the requirements of section 61A.28, subdivision
3;
(v) collateral for repurchase agreements and reverse
repurchase agreements is limited to letters of credit and
securities authorized in this section;
(vi) guaranteed investment contracts are limited to those
issued by insurance companies or banks rated in the top four
quality categories by a nationally recognized rating agency or
to alternative guaranteed investment contracts where the
underlying assets comply with the requirements of this
subdivision;
(vii) savings accounts are limited to those fully insured
by federal agencies; and
(viii) asset backed securities must be rated in the top
four quality categories by a nationally recognized rating agency.
(2) Sections 16A.58, 16C.03, subdivision 4, and 16C.05 do
not apply to certificates of deposit and collateralization
agreements executed by the covered pension plan under clause
(1), item (ii).
(3) In addition to investments authorized by clause (1),
item (iv), the covered pension plan may purchase from the
Minnesota Housing Finance Agency all or any part of a pool of
residential mortgages, not in default, that has previously been
financed by the issuance of bonds or notes of the agency. The
covered pension plan may also enter into a commitment with the
agency, at the time of any issue of bonds or notes, to purchase
at a specified future date, not exceeding 12 years from the date
of the issue, the amount of mortgage loans then outstanding and
not in default that have been made or purchased from the
proceeds of the bonds or notes. The covered pension plan may
charge reasonable fees for any such commitment and may agree to
purchase the mortgage loans at a price sufficient to produce a
yield to the covered pension plan comparable, in its judgment,
to the yield available on similar mortgage loans at the date of
the bonds or notes. The covered pension plan may also enter
into agreements with the agency for the investment of any
portion of the funds of the agency. The agreement must cover
the period of the investment, withdrawal privileges, and any
guaranteed rate of return.
(f) [CORPORATE STOCKS.] The covered pension plan may
invest funds in stocks or convertible issues of any corporation
organized under the laws of the United States or the states
thereof, any corporation organized under the laws of the
Dominion of Canada or its provinces, or any corporation listed
on the New York Stock Exchange or the American Stock Exchange an
exchange regulated by an agency of the United States or of the
Canadian national government, if they conform to the following
provisions:
(1) the aggregate value of corporate stock investments, as
adjusted for realized profits and losses, must not exceed 85
percent of the market or book value, whichever is less, of a
fund, less the aggregate value of investments according to
subdivision 6 paragraph (h);
(2) investments must not exceed five percent of the total
outstanding shares of any one corporation.
(g) [EXCHANGE TRADED FUNDS.] The covered pension plan may
invest funds in exchange traded funds, subject to the maximums,
the requirements, and the limitations set forth in paragraph
(d), (e), (f), or (h), whichever applies.
(h) [OTHER INVESTMENTS.] (1) In addition to the
investments authorized in paragraphs (b) to (f) (g), and subject
to the provisions in clause (2), the covered pension plan may
invest funds in:
(i) venture capital investment businesses through
participation in limited partnerships and corporations;
(ii) real estate ownership interests or loans secured by
mortgages or deeds of trust through investment in limited
partnerships, bank sponsored collective funds, trusts, and
insurance company commingled accounts, including separate
accounts;
(iii) regional and mutual funds through bank sponsored
collective funds and open-end investment companies registered
under the Federal Investment Company Act of 1940;
(iv) resource investments through limited partnerships,
private placements, and corporations; and
(v) international securities.
(2) The investments authorized in clause (1) must conform
to the following provisions:
(i) the aggregate value of all investments made according
to clause (1) may not exceed 35 percent of the market value of
the fund for which the covered pension plan is investing;
(ii) there must be at least four unrelated owners of the
investment other than the state board covered pension plan for
investments made under clause (1), item (i), (ii), (iii), or
(iv);
(iii) covered pension plan participation in an investment
vehicle is limited to 20 percent thereof for investments made
under clause (1), item (i), (ii), (iii), or (iv); and
(iv) covered pension plan participation in a limited
partnership does not include a general partnership interest or
other interest involving general liability. The covered pension
plan may not engage in any activity as a limited partner which
creates general liability.
Sec. 10. Minnesota Statutes 2004, section 424A.02,
subdivision 3, is amended to read:
Subd. 3. [FLEXIBLE SERVICE PENSION MAXIMUMS.] (a) Annually
on or before August 1 as part of the certification of the
financial requirements and minimum municipal obligation
determined under section 69.772, subdivision 4, or 69.773,
subdivision 5, as applicable, the secretary or some other
official of the relief association designated in the bylaws of
each relief association shall calculate and certify to the
governing body of the applicable qualified municipality the
average amount of available financing per active covered
firefighter for the most recent three-year period. The amount
of available financing shall include any amounts of fire state
aid received or receivable by the relief association, any
amounts of municipal contributions to the relief association
raised from levies on real estate or from other available
revenue sources exclusive of fire state aid, and one-tenth of
the amount of assets in excess of the accrued liabilities of the
relief association calculated under section 69.772, subdivision
2; 69.773, subdivisions 2 and 4; or 69.774, subdivision 2, if
any.
(b) The maximum service pension which the relief
association has authority to provide for in its bylaws for
payment to a member retiring after the calculation date when the
minimum age and service requirements specified in subdivision 1
are met must be determined using the table in paragraph (c) or
(d), whichever applies.
(c) For a relief association where the governing bylaws
provide for a monthly service pension to a retiring member, the
maximum monthly service pension amount per month for each year
of service credited that may be provided for in the bylaws is
the greater of the service pension amount provided for in the
bylaws on the date of the calculation of the average amount of
the available financing per active covered firefighter or the
maximum service pension figure corresponding to the average
amount of available financing per active covered firefighter:
Minimum Average Amount of Maximum Service Pension
Available Financing per Amount Payable per Month
Firefighter for Each Year of Service
$... $ .25
42 41 .50
84 81 1.00
126 122 1.50
168 162 2.00
209 203 2.50
252 243 3.00
294 284 3.50
335 324 4.00
378 365 4.50
420 405 5.00
503 486 6.00
587 567 7.00
672 648 8.00
755 729 9.00
839 810 10.00
923 891 11.00
1007 972 12.00
1090 1053 13.00
1175 1134 14.00
1259 1215 15.00
1342 1296 16.00
1427 1377 17.00
1510 1458 18.00
1594 1539 19.00
1677 1620 20.00
1762 1701 21.00
1845 1782 22.00
1888 1823 22.50
1929 1863 23.00
2014 1944 24.00
2098 2025 25.00
2183 2106 26.00
2267 2187 27.00
2351 2268 28.00
2436 2349 29.00
2520 2430 30.00
2604 2511 31.00
2689 2592 32.00
2773 2673 33.00
2857 2754 34.00
2942 2834 35.00
3026 2916 36.00
3110 2997 37.00
3194 3078 38.00
3278 3159 39.00
3362 3240 40.00
3446 3321 41.00
3530 3402 42.00
3614 3483 43.00
3698 3564 44.00
3782 3645 45.00
3866 3726 46.00
3950 3807 47.00
4034 3888 48.00
4118 3969 49.00
4202 4050 50.00
4286 4131 51.00
4370 4212 52.00
Effective beginning December 31, 2003:
4454 4293 53.00
4538 4374 54.00
4622 4455 55.00
4706 4536 56.00
(d) For a relief association in which the governing bylaws
provide for a lump sum service pension to a retiring member, the
maximum lump sum service pension amount for each year of service
credited that may be provided for in the bylaws is the greater
of the service pension amount provided for in the bylaws on the
date of the calculation of the average amount of the available
financing per active covered firefighter or the maximum service
pension figure corresponding to the average amount of available
financing per active covered firefighter for the applicable
specified period:
Minimum Average Amount Maximum Lump Sum Service
of Available Financing Pension Amount Payable
per Firefighter for Each Year of Service
$.. $10
11 20
16 30
23 40
27 50
32 60
43 80
54 100
65 120
77 140
86 160
97 180
108 200
131 240
151 280
173 320
194 360
216 400
239 440
259 480
281 520
302 560
324 600
347 640
367 680
389 720
410 760
432 800
486 900
540 1000
594 1100
648 1200
702 1300
756 1400
810 1500
864 1600
918 1700
972 1800
1026 1900
1080 2000
1134 2100
1188 2200
1242 2300
1296 2400
1350 2500
1404 2600
1458 2700
1512 2800
1566 2900
1620 3000
1672 3100
1726 3200
1753 3250
1780 3300
1820 3375
1834 3400
1888 3500
1942 3600
1996 3700
2023 3750
2050 3800
2104 3900
2158 4000
2212 4100
2265 4200
2319 4300
2373 4400
2427 4500
2481 4600
2535 4700
2589 4800
2643 4900
2697 5000
2751 5100
2805 5200
2859 5300
2913 5400
2967 5500
3021 5600
3075 5700
3129 5800
3183 5900
3237 6000
3291 6100
3345 6200
3399 6300
3453 6400
3507 6500
3561 6600
3615 6700
3669 6800
3723 6900
3777 7000
Effective beginning December 31, 2003:
3831 7100
3885 7200
3939 7300
3993 7400
4047 7500
(e) For a relief association in which the governing bylaws
provide for a monthly benefit service pension as an alternative
form of service pension payment to a lump sum service pension,
the maximum service pension amount for each pension payment type
must be determined using the applicable table contained in this
subdivision.
(f) If a relief association establishes a service pension
in compliance with the applicable maximum contained in paragraph
(c) or (d) and the minimum average amount of available financing
per active covered firefighter is subsequently reduced because
of a reduction in fire state aid or because of an increase in
the number of active firefighters, the relief association may
continue to provide the prior service pension amount specified
in its bylaws, but may not increase the service pension amount
until the minimum average amount of available financing per
firefighter under the table in paragraph (c) or (d), whichever
applies, permits.
(g) No relief association is authorized to provide a
service pension in an amount greater than the largest applicable
flexible service pension maximum amount even if the amount of
available financing per firefighter is greater than the
financing amount associated with the largest applicable flexible
service pension maximum.
Sec. 11. Minnesota Statutes 2004, section 424A.02,
subdivision 4, is amended to read:
Subd. 4. [DEFINED CONTRIBUTION LUMP SUM SERVICE
PENSIONS.] (a) If the bylaws governing the relief association so
provide exclusively, the relief association may pay a defined
contribution lump sum service pension in lieu of any defined
benefit service pension governed by subdivision 2.
(b) An individual account for each firefighter who is a
member of the relief association shall must be established. To
each individual active member account shall must be credited a
right to an equal share of: (a) (1) any amounts of fire state
aid received by the relief association; (b) (2) any amounts of
municipal contributions to the relief association raised from
levies on real estate or from other available revenue sources
exclusive of fire state aid; and (c) (3) any amounts equal to
the share of the assets of the special fund to the credit
of: (1) (i) any former member who terminated active service
with the fire department to which the relief association is
associated prior to before meeting the minimum service
requirement provided for in subdivision 1 and has not returned
to active service with the fire department for a period no
shorter than five years; or (2) (ii) any retired member who
retired prior to before obtaining a full nonforfeitable interest
in the amounts credited to the individual member
account pursuant to under subdivision 2 and any applicable
provision of the bylaws of the relief association. In addition,
any interest or investment income earned return on the assets of
the special fund shall must be credited in proportion to the
share of the assets of the special fund to the credit of each
individual active member account through the date on which the
investment return is recognized by and credited to the special
fund.
(c) At the time of retirement pursuant to under subdivision
1 and any applicable provision of the bylaws of the relief
association, a retiring member shall be is entitled to that
portion of the assets of the special fund to the credit of the
member in the individual member account which is
nonforfeitable pursuant to under subdivision 2 and any
applicable provision of the bylaws of the relief association
based on the number of years of service to the credit of the
retiring member.
Sec. 12. Minnesota Statutes 2004, section 424A.02,
subdivision 7, is amended to read:
Subd. 7. [DEFERRED SERVICE PENSIONS.] (a) A member of a
relief association to which this section applies is entitled to
a deferred service pension if the member:
(1) has completed the lesser of the minimum period of
active service with the fire department specified in the bylaws
or 20 years of active service with the fire department;
(2) has completed at least five years of active membership
in the relief association; and
(3) separates from active service and membership before
reaching age 50 or the minimum age for retirement and
commencement of a service pension specified in the bylaws
governing the relief association if that age is greater than age
50.
(b) The deferred service pension starts is payable when the
former member reaches age 50, or the minimum age specified in
the bylaws governing the relief association if that age is
greater than age 50, and when the former member makes a valid
written application.
(c) A relief association that provides a lump sum service
pension governed by subdivision 3 may, when its governing bylaws
so provide, pay interest on the deferred lump sum service
pension during the period of deferral. If provided for in the
bylaws, interest must be paid in one of the following manners:
(1) at the investment performance rate actually earned on
that portion of the assets if the deferred benefit amount is
invested by the relief association in a separate account
established and maintained by the relief association or if the
deferred benefit amount is invested in a separate investment
vehicle held by the relief association;
(2) at the an interest rate of up to five percent,
compounded annually, as set by the board of directors and
approved as provided in subdivision 10; or
(3) at a rate equal to the actual time weighted total rate
of return investment performance of the special fund as reported
by the Office of the State Auditor under section 356.219, up to
five percent, compounded annually, and applied consistently for
all deferred service pensioners.
(d) A relief association may not use the method provided
for in paragraph (c), clause (3), until it has modified its
bylaws to be consistent with that clause.
(d) Interest under paragraph (c), clause (2) or (3), is
payable from the first day of the month next following the date
on which the municipality has approved the deferred service
pension interest rate established by the board of trustees or
from the first day of the month next following the date on which
the member separated from active fire department service and
relief association membership, whichever is later, to the last
day of the month immediately before the month in which the
deferred member becomes eligible to begin receipt of the service
pension and applies for the deferred service pension.
(e) A relief association that provides a defined
contribution service pension may, if its governing bylaws so
provide, credit interest or additional investment performance on
the deferred lump sum service pension during the period of
deferral. If provided for in the bylaws, the interest must be
paid in one of the manners specified in paragraph (c) or
alternatively the relief association may credit any investment
return on the assets of the special fund of the defined
contribution volunteer firefighter relief association in
proportion to the share of the assets of the special fund to the
credit of each individual deferred member account through the
date on which the investment return is recognized by and
credited to the special fund.
(f) For a deferred service pension that is transferred to a
separate account established and maintained by the relief
association or separate investment vehicle held by the relief
association, the deferred member bears the full investment risk
subsequent to transfer and in calculating the accrued liability
of the volunteer firefighters relief association that pays a
lump sum service pension, the accrued liability for deferred
service pensions is equal to the separate relief association
account balance or the fair market value of the separate
investment vehicle held by the relief association.
(f) (g) The deferred service pension is governed by and
must be calculated under the general statute, special law,
relief association articles of incorporation, and relief
association bylaw provisions applicable on the date on which the
member separated from active service with the fire department
and active membership in the relief association.
Sec. 13. [424A.021] [CREDIT FOR BREAK IN SERVICE TO
PROVIDE UNIFORMED SERVICE.]
Subdivision 1. [AUTHORIZATION.] Subject to restrictions
stated in this section, a volunteer firefighter who is absent
from firefighting service due to service in the uniformed
services, as defined in United States Code, title 38, section
4303(13), may obtain service credit if the relief association is
a defined benefit plan or an allocation of any fire state aid,
any municipal contributions, and any investment return received
by the relief association if the relief association is a defined
contribution plan for the period of the uniformed service, not
to exceed five years, unless a longer period is required under
United States Code, title 38, section 4312.
Subd. 2. [LIMITATIONS.] (a) To be eligible for service
credit or an investment return allocation under this section,
the volunteer firefighter must return to firefighting service
with coverage by the same relief association or by the successor
to that relief association upon discharge from service in the
uniformed service within the time frame required in United
States Code, title 38, section 4312(e).
(b) Service credit or an investment return allocation is
not authorized if the firefighter separates from uniformed
service with a dishonorable or bad conduct discharge or under
other than honorable conditions.
(c) Service credit or an investment return allocation is
not authorized if the firefighter fails to provide notice to the
fire department that the individual is leaving to provide
service in the uniformed service, unless it is not feasible to
provide that notice due to the emergency nature of the situation.
Sec. 14. Minnesota Statutes 2004, section 424A.04,
subdivision 1, is amended to read:
Subdivision 1. [MEMBERSHIP.] (a) Every A relief
association that is directly associated with a municipal fire
department shall must be managed by a board of trustees
consisting of nine members. Six trustees shall must be elected
from the membership of the relief association and three trustees
shall must be drawn from the officials of the municipalities
served by the fire department to which the relief association is
directly associated. The bylaws of a relief association which
provides a monthly benefit service pension may provide that one
of the six trustees elected from the relief
association membership may be a retired member receiving a
monthly pension who is elected by the membership of the relief
association. The three ex officio municipal trustees shall be
the mayor, the clerk, clerk-treasurer or finance director, must
be one elected municipal official and one elected or appointed
municipal official who are designated as municipal
representatives by the municipal governing board annually and
the chief of the municipal fire department.
(b) Every A relief association that is a subsidiary of an
independent nonprofit firefighting corporation shall must be
managed by a board of trustees consisting of ten nine members.
Six trustees shall must be elected from the membership of the
relief association, three two trustees shall must be drawn from
the officials of the municipalities served by the fire
department to which the relief association is directly
associated, and one trustee shall be the fire chief serving with
the independent nonprofit firefighting corporation. The bylaws
of a relief association may provide that one of the six trustees
elected from the relief association membership may be a retired
member receiving a monthly pension who is elected by the
membership of the relief association. The three ex officio two
municipal trustees who are the elected officials shall must
be elected or appointed municipal officials, selected as follows:
(1) if only one municipality contracts with the independent
nonprofit firefighting corporation, the ex officio municipal
trustees shall must be three elected two officials of the
contracting municipality who are designated annually by the
governing body of the municipality;
(2) if two municipalities contract with the independent
nonprofit firefighting corporation, the ex officio trustees
shall be two elected officials of the largest municipality in
population and one elected official of the next largest
municipality in population who are designated by the governing
bodies of the applicable municipalities; or
(3) (2) if three two or more municipalities contract with
the independent nonprofit corporation, the ex officio municipal
trustees shall must be one elected official of from each of
the three two largest municipalities in population who are
designated annually by the governing bodies of the applicable
municipalities.
(c) The municipal trustees for a relief association that is
directly associated with a fire department operated as or by a
joint powers entity must be designated annually by the joint
powers board. The municipal trustees for a relief association
that is directly associated with a fire department service area
township must be designated by the township board.
(d) If a relief association lacks the ex officio municipal
board members provided for in paragraph (a), (b), or (b) (c)
because the fire department is not located in or associated with
an organized municipality, joint powers entity, or township, the
ex officio municipal board members must be appointed from the
fire department service area by the board of commissioners of
the applicable county.
(e) The term of these appointed ex officio municipal board
members is three years one year or until the person's successor
is qualified, whichever is later.
(d) An ex officio (f) A municipal trustee under paragraph
(a), (b), or (c) shall have, or (d) has all the rights and
duties accorded to any other trustee, except the right to be an
officer of the relief association board of trustees.
(e) (g) A board shall must have at least three officers,
which shall be who are a president, a secretary and a treasurer.
These officers shall must be elected from among the elected
trustees by either the full board of trustees or by the
membership, as specified in the bylaws, and. In no event shall
may any trustee hold more than one officer position at any one
time. The terms of the elected trustees and of the officers of
the board shall must be specified in the bylaws of the relief
association, but shall may not exceed three years. If the term
of the elected trustees exceeds one year, the election of the
various trustees elected from the membership shall initially and
shall thereafter continue to must be staggered on as equal a
basis as is practicable.
Sec. 15. Minnesota Statutes 2004, section 424B.10,
subdivision 1, is amended to read:
Subdivision 1. [BENEFITS.] (a) Notwithstanding any
provision of section 424A.02, subdivision 3, to the contrary,
the service pension of the subsequent relief association as of
the effective date of consolidation is either the service
pension amount specified in clause (1) or the service pension
amounts specified in clause (2), as provided for in the
consolidated relief association's articles of incorporation or
bylaws:
(1) the highest dollar amount service pension amount of any
prior volunteer firefighters relief association in effect
immediately before the consolidation initiation if the pension
amount was implemented consistent with section 424A.02; or
(2) for service rendered by each individual volunteer
firefighter before consolidation, the service pension amount
under the consolidating volunteer firefighters relief
association that the firefighter belonged to immediately before
the consolidation if the pension amount was implemented
consistent with section 424A.02 and for service rendered after
the effective date of the consolidation, the highest dollar
amount service pension of any of the consolidating volunteer
firefighters relief associations in effect immediately before
the consolidation if the pension amount was implemented
consistent with section 424A.02.
(b) Any increase in the service pension amount beyond the
amount implemented under paragraph (a) must conform with the
requirements and limitations of sections 69.771 to 69.775 and
424A.02.
Sec. 16. [EFFECTIVE DATE.]
(a) Sections 1 to 12, 14, and 15 are effective July 1, 2005.
(b) Section 13 is effective July 1, 2005, and applies to
breaks in service that end on or after that date.
ARTICLE 10
VARIOUS CORRECTIONS
AND CLARIFICATIONS
Section 1. Minnesota Statutes 2004, section 3A.13, is
amended to read:
3A.13 [EXEMPTION FROM PROCESS AND TAXATION; HEALTH PREMIUM
DEDUCTION.]
(a) The provisions of section 352.15 shall 356.401 apply to
the legislators retirement plan, chapter 3A.
(b) The executive director of the Minnesota State
Retirement System must, at the request of a retired legislator
who is enrolled in a health insurance plan covering state
employees, deduct the person's health insurance premiums from
the person's annuity and transfer the amount of the premium to a
health insurance carrier covering state employees.
Sec. 2. Minnesota Statutes 2004, section 69.011,
subdivision 2b, is amended 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
each 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) (b) 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. 3. Minnesota Statutes 2004, 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, before the addition
of the minimum fire state aid allocation amount under
subdivision 7, is 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 must 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.
The total amount for apportionment in respect to fire state
aid must not be less than two percent of the premiums reported
to the commissioner by insurers on the Minnesota Firetown
Premium Report after subtracting the following amounts:
(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.
(b) The total amount for apportionment as police state aid
is equal to 104 percent of the amount of premium taxes paid to
the state on the premiums reported to the commissioner by
insurers on the Minnesota Aid to Police Premium Report, reduced
by the amount required to pay the costs and expenses of the
state auditor for audits or exams of police relief
associations. The total amount for apportionment in respect to
the police state aid program must 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.
(c) 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.
(d) 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.
(e) In addition to the amount for apportionment of police
state aid under paragraph (b), each year $100,000 shall must be
apportioned for police state aid. An amount sufficient to pay
this increase is annually appropriated from the general fund.
Sec. 4. Minnesota Statutes 2004, section 69.021,
subdivision 11, is amended to read:
Subd. 11. [EXCESS POLICE STATE-AID HOLDING ACCOUNT.] (a)
The excess police state-aid holding account is established in
the general fund. The excess police state-aid holding account
must be administered by the commissioner.
(b) Excess police state aid determined according to
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, $900,000 is appropriated to and must be transferred
annually to the ambulance service personnel longevity award and
incentive suspense account established by section 144E.42,
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 to the
administrator of that program from the balance in the excess
police state-aid holding account.
(e) On October 1, 1997, and annually on each subsequent
October 1 of each year, one-half of the balance of the excess
police state-aid holding account remaining after the deductions
under paragraphs (c) and (d) is appropriated for additional
amortization aid under section 423A.02, subdivision 1b.
(f) Annually, 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. 5. Minnesota Statutes 2004, section 69.33, is amended
to read:
69.33 [NAMES OF ASSOCIATIONS REPORTED TO INSURANCE
COMPANIES.]
The commissioner shall enclose in the annual statement
blank that is sent to all fire insurance companies doing
business in this state a blank form containing the names of all
firefighters' relief associations in all cities of the first
class and the names of the cities and require these companies,
at the time of making their annual statements to the
commissioner, to state on these blanks the amount of premiums
received by them upon properties insured within the corporate
limits of the cities named thereon during the year ending
December 31st last past. Thereafter, before July first each
year, the commissioner shall certify to the commissioner of
finance the information thus obtained, together with the amount
of the tax for the benefit of the relief association pension
plans covering firefighters in cities of the first class paid in
such year by these companies upon these insurance premiums.
Sec. 6. Minnesota Statutes 2004, section 69.773,
subdivision 4, is amended to read:
Subd. 4. [FINANCIAL REQUIREMENTS OF SPECIAL FUND.] Prior
to Before August 1 of each year, the officers of the relief
association shall determine the financial requirements of the
special fund of the relief association in accordance with the
requirements of this subdivision. The financial requirements of
the relief association shall must be based on the most recent
actuarial valuation of the special fund prepared in accordance
with subdivision 2. If the relief association has an unfunded
actuarial accrued liability as reported in the most recent
actuarial valuation, the financial requirements shall must be
determined by adding the figures calculated pursuant to under
clauses (a), (b), and (c). If the relief association does not
have an unfunded actuarial accrued liability as reported in the
most recent actuarial valuation, the financial requirements
shall must be an amount equal to the figure calculated pursuant
to under clauses (a) and (b), reduced by an amount equal to
one-tenth of the amount of any assets in excess of the actuarial
accrued liability of the relief association. The determination
of whether or not the relief association has an unfunded
actuarial accrued liability shall must be based on the current
market value of assets for which a market value is readily
ascertainable and the cost or book value, whichever is
applicable, for assets for which no market value is readily
ascertainable.
(a) The normal level cost requirement for the following
year, expressed as a dollar amount, shall be is the figure for
the normal level cost of the relief association as reported in
the actuarial valuation.
(b) The amount of anticipated future administrative
expenses of the special fund shall must be calculated by
multiplying the dollar amount of the administrative expenses of
the special fund for the most recent year by the factor of 1.035.
(c) The amortization contribution requirement to retire the
current unfunded actuarial accrued liability by the established
date for full funding shall be is the figure for the
amortization contribution as reported in the actuarial
valuation. If there has not been a change in the actuarial
assumptions used for calculating the actuarial accrued liability
of the special fund, a change in the bylaws of the relief
association governing the service pensions, retirement benefits,
or both payable from the special fund or a change in the
actuarial cost method used to value all or a portion of the
special fund which change or changes, which by themselves
without inclusion of any other items of increase or decrease,
produce a net increase in the unfunded actuarial accrued
liability of the special fund since December 31, 1970, the
established date for full funding shall be December 31, 1990.
If there has been a change in the actuarial assumptions used for
calculating the actuarial accrued liability of the special fund,
a change in the bylaws of the relief association governing the
service pensions, retirement benefits, or both payable from the
special fund or a change in the actuarial cost method used to
value all or a portion of the special fund 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 of the special fund since December
31, 1970, but prior to January 1, 1979, the established date for
full funding shall be December 31, 1998, and if there has been a
change since December 31, 1978, the established date for full
funding shall must be determined using the following procedure:
(i) the unfunded actuarial accrued liability of the special
fund shall must be determined in accordance with the provisions
governing service pensions, retirement benefits, and actuarial
assumptions in effect before an applicable change;
(ii) the level annual dollar contribution needed to
amortize this unfunded actuarial accrued liability amount by the
date for full funding in effect prior to before the change shall
must be calculated using the interest assumption specified in
section 356.215, subdivision 8, in effect before any applicable
change;
(iii) the unfunded actuarial accrued liability of the
special fund shall must be determined in accordance with any new
provisions governing service pensions, retirement benefits, and
actuarial assumptions and the remaining provisions governing
service pensions, retirement benefits, and actuarial assumptions
in effect before an applicable change;
(iv) the level annual dollar contribution needed to
amortize the difference between the unfunded actuarial accrued
liability amount calculated pursuant to under subclause (i) and
the unfunded actuarial accrued liability amount
calculated pursuant to under subclause (iii) over a period of 20
years starting December 31 of the year in which the change is
effective shall must be calculated using the interest assumption
specified in section 356.215, subdivision 8, in effect after any
applicable change;
(v) the annual amortization contribution calculated
pursuant to under subclause (iv) shall must be added to the
annual amortization contribution calculated pursuant to under
subclause (ii);
(vi) the period in which the unfunded actuarial accrued
liability amount determined in subclause (iii) will be amortized
by the total annual amortization contribution computed pursuant
to under subclause (v) shall must be calculated using the
interest assumption specified in section 356.215, subdivision 8,
in effect after any applicable change, rounded to the nearest
integral number of years, but which shall does not exceed a
period of 20 years from the end of the year in which the
determination of the date for full funding using this procedure
is made and which shall is not be less than the period of years
beginning in the year in which the determination of the date for
full funding using this procedure is made and ending by the date
for full funding in effect before the change;
(vii) the period determined pursuant to under subclause (vi)
shall must be added to the date as of which the actuarial
valuation was prepared and the resulting date shall be is the
new date for full funding.
Sec. 7. Minnesota Statutes 2004, section 352.01,
subdivision 4, is amended to read:
Subd. 4. [ACCUMULATED CONTRIBUTIONS.] "Accumulated
contributions" means the total, exclusive of interest, of (1)
the sums deducted from the salary of an employee, (2) the amount
of payments, including assessments, paid by the employee in lieu
of salary deductions and all other payments made under Laws
1929, chapter 191, as amended, this chapter and credited to the
employee's individual account in the retirement fund.
Sec. 8. Minnesota Statutes 2004, section 352.01,
subdivision 5, is amended to read:
Subd. 5. [RETIREMENT FUND.] (a) "Retirement fund" means
the general state employees retirement fund created by section
352.04, subdivision 1, with respect to the general state
employees retirement plan or the correctional state employees
retirement fund created by section 352.911, subdivision 1, with
respect to the correctional state employees retirement plan.
(b) "The retirement fund" includes the aggregate of
accumulated contributions of employees covered by the applicable
plan, and all other funds paid into the state treasury or
received by the director under Laws 1929, chapter 191, as
amended this chapter, together with all income and profits from
the money and interest on it, including contributions on the
part of the federal government, the state, and state departments.
Sec. 9. Minnesota Statutes 2004, section 352.01,
subdivision 21, is amended to read:
Subd. 21. [ACCRUED ANNUITIES.] (a) In this chapter and
chapters 3A, 352B, 352C, and 490, "accrued annuity" means an
annuity that had become payable to a retired employee in the
lifetime of the employee.
(b) An annuity or benefit authorized as provided in this
chapter and chapters 3A, 352B, 352C, and 490 becomes payable on
the first day of each calendar month for that calendar month and
is to must be paid on the first day of each calendar month
beginning with benefits payable on and after December 1, 1977.
(c) Notwithstanding any provision to the contrary in this
chapter and chapters 3A, 352B, 352C, and 490, benefit payment
authorized as "payable for life" is payable for the entire month
in which death occurs, and the benefit payment for the month of
death is payable to the surviving spouse or other beneficiary
only if the annuitant dies before negotiating the benefit check.
Sec. 10. Minnesota Statutes 2004, section 352.01,
subdivision 23, is amended to read:
Subd. 23. [COVERAGE OR COVERED BY THE SYSTEM.] "Coverage"
or "covered by the system" means that a state employees employee
who serve serves the state of Minnesota and make makes the
required employee contributions to the retirement fund will is,
by reason of these contributions become, entitled to either (1)
a retirement annuity, or (2) a disability benefit, or (3) a
refund of accumulated contributions, as provided in this chapter.
Sec. 11. Minnesota Statutes 2004, section 352.021,
subdivision 1, is amended to read:
Subdivision 1. [ESTABLISHMENT.] (a) There is established
the general state employees retirement plan of the Minnesota
State Retirement System for state employees.
(b) The system general state employees retirement plan is a
continuation of the State Employees Retirement Association.
(c) Any person who was a member of the State Employees
Retirement Association on June 30, 1967, is covered by
the system general state employees retirement plan and is
entitled to all benefits provided by the system plan upon
fulfilling the age, service, contribution, and other
requirements of this chapter.
Sec. 12. Minnesota Statutes 2004, section 352.021,
subdivision 2, is amended to read:
Subd. 2. [STATE EMPLOYEES COVERED.] Every person who is a
state employee, as defined in section 352.01, on July 1, 1967,
or becomes a state employee after that date as defined in
section 352.01 is covered by the system general state employees
retirement plan. Acceptance of state employment or continuance
in state service is deemed to be consent to have deductions made
from salary for deposit to the credit of the account of the
state employee in the retirement fund.
Sec. 13. Minnesota Statutes 2004, section 352.021,
subdivision 3, is amended to read:
Subd. 3. [OPTIONAL EXEMPTIONS.] Any person who is
appointed by the governor or lieutenant governor may request
exemption from coverage by the general state employees
retirement plan under this chapter if the appointee is not so
covered at by the plan on the date of appointment. To qualify
for this exemption, a written request must be made within 90
days from the date of entering upon the duties of the position
to which the person is appointed. After making the request, a
person requesting the exemption is not entitled to coverage by
the general state employees retirement plan while employed in
the position that entitled that person to an exemption from
coverage.
Sec. 14. Minnesota Statutes 2004, section 352.021,
subdivision 4, is amended to read:
Subd. 4. [REENTERING SERVICE AFTER REFUND.] When a former
employee who has withdrawn accumulated contributions reenters
employment in a position entitled to coverage under the
system general state employees retirement plan, the employee
shall must be covered by the system plan on the same basis as a
new employee and is not entitled to credit for any former
service. The annuity rights forfeited when taking a refund can
only be restored as provided in this chapter.
Sec. 15. Minnesota Statutes 2004, section 352.04,
subdivision 1, is amended to read:
Subdivision 1. [FUND CREATED.] (a) There is created a
special fund to be known as the general state employees
retirement fund. In that fund there shall be deposited
employees, employee contributions, employers employer
contributions, and other amounts authorized by law must be
deposited.
(b) Effective July 1, 1969, The general state employees
retirement plan of the Minnesota State Retirement System shall
must participate in the Minnesota postretirement investment fund.
In that fund there shall be deposited The amounts provided in
section 352.119 must be deposited in the Minnesota
postretirement investment fund.
Sec. 16. Minnesota Statutes 2004, section 352.04,
subdivision 12, is amended to read:
Subd. 12. [FUND DISBURSEMENT RESTRICTED.] The general
state employees retirement fund and the participation in the
Minnesota postretirement investment fund must be disbursed only
for the purposes provided by law. The expenses of the system
and any benefits provided by law, other than benefits payable
from the Minnesota postretirement investment fund, must be paid
from the general state employees retirement fund. The
retirement allowances, retirement annuities, and disability
benefits, as well as refunds of any sum remaining to the credit
of a deceased retired employee or a disabled employee must be
paid only from the general state employees retirement fund after
the needs have been certified and the amounts withdrawn from the
participation in the Minnesota postretirement investment fund
under section 11A.18. The amounts necessary to make the
payments from the general state employees retirement fund and
the participation in the Minnesota postretirement investment
fund are annually appropriated from these funds for those
purposes.
Sec. 17. Minnesota Statutes 2004, section 352.041,
subdivision 1, is amended to read:
Subdivision 1. [ALLOWABLE SERVICE CREDIT.] Any (a) An
employee covered by the system general state employees
retirement plan who is given a leave of absence for employment
by a political subdivision of the state shall remains a member
of the plan and must continue to pay member contributions into
the general state employees retirement fund for the period of
leave.
(b) Upon payment of member contributions, the employee must
be given allowable service credit as a state employee on the
records of the system retirement plan as though the employee had
received salary from the state during the leave. Payments into
the retirement fund shall must be at the rate required in
section 352.04, subdivision 2, and must be based upon the salary
received from the political subdivision subject to the maximum
amount, if any.
Sec. 18. Minnesota Statutes 2004, section 352.041,
subdivision 2, is amended to read:
Subd. 2. [EMPLOYEE CONTRIBUTIONS, PROCEDURE.] The officer
or employee who is authorized by law to pay salaries to
employees of the political subdivision which is employing a
state employee shall have must deduct employee contributions
deducted for the general state employees retirement plan under
section 352.04, subdivision 2, from the salary of each employee
who is on leave of absence from state service on each payroll
abstract and shall must pay the sum to the director following
the conclusion of each pay period.
Sec. 19. Minnesota Statutes 2004, section 352.041,
subdivision 3, is amended to read:
Subd. 3. [EMPLOYER CONTRIBUTIONS, PROCEDURE.] The officer
or employee who is authorized by law to pay salaries to
employees of the political subdivision which is employing a
state employee covered by the system shall general state
employees retirement plan also must have employer contributions
made to the general state employees retirement fund on following
the conclusion of each payroll abstract in the amount required
by section 352.04, subdivision 3. These contributions are to
must be charged to the political subdivision as an
administrative cost.
Sec. 20. Minnesota Statutes 2004, section 352.041,
subdivision 5, is amended to read:
Subd. 5. [EMPLOYER CONTRIBUTIONS, LEAVES OF ABSENCE; TAX
LEVIES.] (a) Every political subdivision which is employing a
state employee covered by the system on leave of absence from
state service for employment by a political subdivision of the
state shall must pay into the general state employees retirement
fund the amount of the employer contribution required by law for
state employees covered by the system under section 352.04,
subdivision 3.
(b) Employing political subdivisions, except other than
school districts, may levy taxes necessary for the payment of
employer contributions without limitation as to rate or amount.
The levy of the taxes does not reduce the amount of other
taxes to that may be levied by political subdivisions,
except other than school districts, which are subject to any
limitation.
Sec. 21. Minnesota Statutes 2004, section 352.15,
subdivision 1, is amended to read:
Subdivision 1. [EXEMPTION; EXCEPTIONS.] None of the money,
annuities, or other benefits mentioned in this chapter is
assignable either in law or in equity or subject to execution,
levy, attachment, garnishment, or other legal process, except as
provided in subdivision 1a or section 518.58, 518.581, or
518.6111. The provisions of section 356.401 apply to the general
state employees retirement plan and to the correctional state
employees retirement plan.
Sec. 22. Minnesota Statutes 2004, section 352.15,
subdivision 3, is amended to read:
Subd. 3. [DEDUCTING HEALTH OR DENTAL INSURANCE PREMIUMS.]
The board may direct authorize, at its discretion, the deduction
of a retiree's health or dental insurance premiums and transfer
of the amounts to a health or dental insurance carrier covering
state employees. The insurance carrier must certify that the
retired employee has signed an authorization for the deduction
and provide a computer readable roster of covered retirees and
amounts. The health or dental insurance carrier must refund
deductions withheld from a retiree's check in error directly to
the retiree. The board shall require that the insurance carrier
to reimburse the fund for the administrative expense of
withholding the premium amounts. The insurance carrier shall
assume liability for any failure of the system to properly
withhold the premium amounts.
Sec. 23. Minnesota Statutes 2004, section 352.15,
subdivision 4, is amended to read:
Subd. 4. [DIRECT TRANSFER OF REFUNDS.] A direct transfer
of account refunds under this chapter may be made to an
individual retirement savings accounts account or a qualified
retirement plans plan of the person upon the receipt of an
application for transfer by a former employee, on forms
acceptable to the executive director.
Sec. 24. Minnesota Statutes 2004, section 352.22,
subdivision 10, is amended to read:
Subd. 10. [OTHER REFUNDS.] Former employees covered by the
system are entitled to apply for refunds if they are or become
members of the State Patrol retirement fund, the state Teachers
Retirement Association, or employees of the University of
Minnesota excluded from coverage under the system by action of
the Board of Regents; or labor service employees, excluded from
coverage under section 352.01, subdivision 2b, clause (25); or
employees of the adjutant general who under federal law
effectually elect membership in a federal retirement system; or
officers or employees of the senate or house of representatives,
excluded from coverage under section 352.01, subdivision 2b,
clause (8) (7). The refunds must include accumulated
contributions plus interest as provided in subdivision 2. These
employees may apply for a refund once 30 days or more have
elapsed after their coverage ceases, even if they continue in
state service but in positions not covered by this chapter.
Sec. 25. Minnesota Statutes 2004, section 352B.01,
subdivision 1, is amended to read:
Subdivision 1. [SCOPE.] In this chapter, each of the terms
defined in this section have has the meanings meaning given
them to it.
Sec. 26. Minnesota Statutes 2004, section 352B.01,
subdivision 2, is amended to read:
Subd. 2. [MEMBER.] "Member" means:
(1) a State Patrol member currently employed after June 30,
1943, under section 299D.03 by the state, who is a peace officer
under section 626.84, and whose salary or compensation is paid
out of state funds;
(2) a conservation officer employed under section 97A.201,
currently employed by the state, whose salary or compensation is
paid out of state funds;
(3) a crime bureau officer who was employed by the crime
bureau and was a member of the Highway Patrolmen's retirement
fund on July 1, 1978, whether or not that person has the power
of arrest by warrant after that date, or who is employed as
police personnel, with powers of arrest by warrant under section
299C.04, and who is currently employed by the state, and whose
salary or compensation is paid out of state funds;
(4) a person who is employed by the state in the Department
of Public Safety in a data processing management position with
salary or compensation paid from state funds, who was a crime
bureau officer covered by the State Patrol retirement plan on
August 15, 1987, and who was initially hired in the data
processing management position within the department during
September 1987, or January 1988, with membership continuing for
the duration of the person's employment in that position,
whether or not the person has the power of arrest by warrant
after August 15, 1987;
(5) a public safety employee defined as who is a peace
officer in under section 626.84, subdivision 1, paragraph (c),
and who is employed with by the Division of Alcohol and Gambling
Enforcement under section 299L.01; and
(6) a Fugitive Apprehension Unit officer after October 31,
2000, who is employed by the Office of Special Investigations of
the Department of Corrections and who is a peace officer under
section 626.84.
Sec. 27. Minnesota Statutes 2004, section 352B.01,
subdivision 3, is amended to read:
Subd. 3. [ALLOWABLE SERVICE.] (a) "Allowable service"
means:
(1) for members defined in subdivision 2, clause (a) (1),
monthly service is granted for in any month for which payments
have been made to the State Patrol retirement fund, and
(2) for members defined in subdivision 2, clauses (b) (2)
and (c) (3), service for which payments have been made to the
State Patrol retirement fund, service for which payments were
made to the State Police officers retirement fund after June 30,
1961, and all prior service which was credited to a member for
service on or before June 30, 1961.
(b) Allowable service also includes any period of absence
from duty by a member who, by reason of injury incurred in the
performance of duty, is temporarily disabled and for which
disability the state is liable under the workers' compensation
law, until the date authorized by the executive director for
commencement of payment of a disability benefit or return to
employment.
(c) MS 2002 (Expired)
(d) Allowable service means service in a month during which
a member is paid a salary from which a member contribution is
deducted, deposited, and credited in the State Patrol retirement
plan.
Sec. 28. Minnesota Statutes 2004, section 352B.02,
subdivision 1e, is amended to read:
Subd. 1e. [AUDIT; ACTUARIAL VALUATION.] The legislative
auditor shall audit the fund. Any actuarial valuation of the
fund required under section 356.215 must be prepared by the
actuary retained under section 356.214. Any approved actuary
retained by the executive director under section 352.03,
subdivision 6, may perform actuarial valuations and experience
studies to supplement those performed by the commission-retained
actuary retained under section 356.214. Any supplemental
actuarial valuation or experience studies shall must be filed
with the executive director of the Legislative Commission on
Pensions and Retirement.
Sec. 29. Minnesota Statutes 2004, section 352B.071, is
amended to read:
352B.071 [EXEMPTION FROM PROCESS.]
None of the money, annuities, or other benefits provided
for in this chapter is assignable either in law or in equity or
be subject to execution, levy, attachment, garnishment, or other
legal process, except as provided in section 518.58, 518.581, or
518.6111. The provisions of section 356.401 apply to the State
Patrol retirement plan.
Sec. 30. Minnesota Statutes 2004, section 352D.01, is
amended to read:
352D.01 [ESTABLISHMENT.]
There is hereby established within the Minnesota State
Retirement System a retirement program for certain public
employees to be known as the Minnesota unclassified employees
retirement program, which shall be. The program must be
administered by the Minnesota State Retirement System.
Sec. 31. Minnesota Statutes 2004, section 352D.015,
subdivision 3, is amended to read:
Subd. 3. [SUPPLEMENTAL INVESTMENT FUND.] "Supplemental
investment fund" means the fund established and governed by
section 11A.17.
Sec. 32. Minnesota Statutes 2004, section 352D.015,
subdivision 4, is amended to read:
Subd. 4. [GENERAL FUND.] "General fund" means the general
state employees retirement fund except the moneys for the
unclassified program.
Sec. 33. Minnesota Statutes 2004, section 352D.03, is
amended to read:
352D.03 [TRANSFER OF ASSETS.]
Unless an eligible employee enumerated in section 352D.02,
subdivision 1 or 1a, has elected coverage under the individual
retirement account plan under chapter 354B, a sum of money
representing the assets credited to each employee exercising the
option contained in section 352D.02, plus an equal employer
contribution together with interest for the employment period at
the actuarially assumed rates applicable preretirement interest
actuarial assumption rate during this period, compounded
annually, shall must be used for the purchase of shares on
behalf of each employee in the accounts of the supplemental
retirement fund established by section 11A.17. Any employer's
contribution to amortize the deficit in the state employee's
retirement fund shall not, however, be used for the purchase of
shares.
Sec. 34. Minnesota Statutes 2004, section 352D.05,
subdivision 4, is amended to read:
Subd. 4. [REPAYMENT OF REFUND.] (a) A participant in the
unclassified program may repay regular refunds taken pursuant to
under section 352.22, as provided in section 352.23.
(b) A participant in the unclassified program or an
employee covered by the general plan who has withdrawn the value
of the total shares may repay the refund taken and thereupon
restore the service credit, rights and benefits forfeited by
paying into the fund the amount refunded plus interest at an
annual rate of 8.5 percent compounded annually from the date
that the refund was taken until the date that the refund is
repaid. If the participant had withdrawn only the employee
shares as permitted under prior laws, repayment shall must be
pro rata. Payment shall
(c) Except as provided in section 356.441, the repayment of
a refund under this section must be made in a lump sum.
Sec. 35. Minnesota Statutes 2004, section 352D.085,
subdivision 1, is amended to read:
Subdivision 1. [COMBINED SERVICE.] Except as provided in
section 356.30, 356.302, or 356.303, service under the
unclassified program for which the employee has been credited
with employee shares may be used for the limited purpose of
qualifying for benefits under sections 352.115, 352.72,
subdivision 1, 352.113, 354.44, 354.45, 354.48, and 354.60;
provided such. The service also may not be used to qualify for
a disability benefit under section 352.113 or 354.48 if a
participant was under the unclassified program at the time of
the disability, and provided further that. Also, the years of
service and salary paid while the participant was in the
unclassified program shall may not be used in determining the
amount of benefits.
Sec. 36. Minnesota Statutes 2004, section 352D.09,
subdivision 5, is amended to read:
Subd. 5. [UNCLAIMED BENEFITS.] If the beneficiary,
surviving spouse or estate has not made application for benefits
within ten years after the date of the death of a participant,
the value of the shares shall be is appropriated to the regular
general state employees retirement fund and the provisions of
section 352.12, subdivision 12 shall, govern. If a former
participant fails to make a claim for benefits within five years
after the termination of covered service or by age 70, whichever
is later, the value of the shares shall be is appropriated to
the general state employees retirement fund and the provisions
of section 352.22, subdivision 8, shall apply.
Sec. 37. Minnesota Statutes 2004, section 352D.12, is
amended to read:
352D.12 [TRANSFER OF PRIOR SERVICE CONTRIBUTIONS.]
(a) An employee who is a participant in the unclassified
program and who has prior service credit in a covered plan under
chapters 3A, chapter 352, 352C, 353, 354, 354A, and or 422A
may, within the time limits specified in this section, elect to
transfer to the unclassified program prior service contributions
to one or more of those plans. Participants with six or more
years of prior service credit in a plan governed by chapter 3A
or 352C on July 1, 1998, may not transfer prior service
contributions. Participants with less than six years of prior
service credit in a plan governed by chapter 3A or 352C on July
1, 1998, must be contributing to the unclassified plan on or
after January 5, 1999, in order to transfer prior contributions.
(b) For participants with prior service credit in a plan
governed by chapter 352, 353, 354, 354A, or 422A, "prior service
contributions" means the accumulated employee and equal employer
contributions with interest at an annual rate of 8.5 percent
compounded annually, based on fiscal year balances. For
participants with less than six years of service credit as of
July 1, 1998, and with prior service credit in a plan governed
by chapter 3A or 352C, "prior service contributions" means an
amount equal to twice the amount of the accumulated member
contributions plus annual compound interest at the rate of 8.5
percent, computed on fiscal year balances.
(c) If a participant has taken a refund from a retirement
plan listed in this section, the participant may repay the
refund to that plan, notwithstanding any restrictions on
repayment to that plan, plus 8.5 percent interest compounded
annually and have the accumulated employee and equal employer
contributions transferred to the unclassified program with
interest at an annual rate of 8.5 percent compounded annually
based on fiscal year balances. If a person repays a refund and
subsequently elects to have the money transferred to the
unclassified program, the repayment amount, including interest,
is added to the fiscal year balance in the year which the
repayment was made.
(d) A participant electing to transfer prior service
contributions credited to a retirement plan governed by chapter
352, 353, 354, 354A, or 422A as provided under this section must
complete the a written application for the transfer and repay
any refund within one year of the commencement of the employee's
participation in the unclassified program. A participant
electing to transfer prior service contributions credited to a
retirement plan governed by chapter 3A or 352C as provided under
this section must complete the application for the transfer and
repay any refund between January 5, 1999, and June 1, 1999, if
the employee commenced participation in the unclassified program
before January 5, 1999, or within one year of the commencement
of the employee's participation in the unclassified program if
the employee commenced participation in the unclassified program
after January 4, 1999.
Sec. 38. Minnesota Statutes 2004, section 353.01,
subdivision 32, is amended to read:
Subd. 32. [COORDINATED MEMBER.] "Coordinated member" means
any a public employee, including any a public hospital employee,
who is covered by any an agreement or modification made between
the state and the Secretary of Health, Education and Welfare
Human Services, making the provisions of the federal Old Age,
Survivors and Disability Insurance Act applicable to the member
if the membership eligibility criteria are met under this
chapter. A coordinated member also is a former basic member who
has a complete and continuous separation for at least 30 days
from employment as a public employee meeting the requirements
specified in subdivision 28, paragraphs (a) and (b), and who
reenters public service as a public employee and meets the
membership eligibility criteria under this chapter.
Sec. 39. Minnesota Statutes 2004, section 353.01,
subdivision 33, is amended to read:
Subd. 33. [BASIC MEMBER.] "Basic member" means any a
public employee, including any a public hospital employee, who
is not covered by any agreement or modification made between the
state and the Secretary of Health, Education and Welfare Human
Services.
Sec. 40. Minnesota Statutes 2004, section 353.025, is
amended to read:
353.025 [RANGE ASSOCIATION OF MUNICIPALITIES AND SCHOOLS.]
From and after January 1, 1982, Employees of the Range
Association of Municipalities and Schools hereinafter referred
to as the association, shall become are coordinated members of
the general employees retirement plan of the Public Employees
Retirement Association unless specifically exempt under section
353.01, subdivision 2b, and. The Range Association shall be
deemed to be of Municipalities and Schools is a governmental
subdivision for the purposes of this chapter.
Sec. 41. Minnesota Statutes 2004, section 353.026, is
amended to read:
353.026 [COVERAGE FOR CERTAIN MUNICIPAL AND SCHOOL DISTRICT
EMPLOYEES.]
Any person who was employed by the city of Minneapolis,
Special School District No. 1, or public corporation as defined
in section 422A.01, subdivision 9, on or after July 1, 1978, and
prior to before July 1, 1979, and who was excluded from
retirement coverage by the coordinated program of the
Minneapolis municipal employees retirement fund pursuant to
under section 422A.09, subdivision 3, shall be is entitled to
retirement coverage by the general employees retirement plan of
the Public Employees Retirement Association unless specifically
excluded pursuant to under section 353.01, subdivision 2b, from
and after May 19, 1981.
Sec. 42. Minnesota Statutes 2004, section 353.027, is
amended to read:
353.027 [RETENTION OF COVERAGE FOR CERTAIN MUNICIPAL COURT
EMPLOYEES.]
Any person employed on January 1, 1975, by a municipal
court established pursuant to under Minnesota Statutes 1957,
section 488.03, and located in the cities of New Brighton,
Roseville, Maplewood, North Saint Paul, White Bear Lake, or St.
Paul shall be is eligible for membership in the general
employees retirement plan of the Public Employees Retirement
Association and shall retain retains any rights or benefits the
person had attained as a member of the general employees
retirement plan of the association on January 1, 1975, so long
as the person remains an employee of the municipal court of
Ramsey County.
Sec. 43. Minnesota Statutes 2004, section 353.028, is
amended to read:
353.028 [CITY MANAGERS; ELECTION; DEFERRED COMPENSATION.]
Subdivision 1. [DEFINITIONS.] (a) For purposes of this
section, each of the terms in this subdivision has the meaning
indicated.
(b) "City manager" means (1) a person who is duly appointed
to and is holding the position of city manager in a Plan B
statutory city or in a home rule city operating under the
"council-manager" form of government, or (2) a person who is
appointed to and is holding the position of chief administrative
officer of a home rule charter city or a statutory city pursuant
to under a charter provision, ordinance, or resolution
establishing such a position and prescribing its duties and
responsibilities.
(c) "Governing body" means the city council of the city
employing the city manager.
(d) "Election" means the election described in subdivision
2.
Subd. 2. [ELECTION.] (a) A city manager may elect to be
excluded from membership in the general employees retirement
plan of the Public Employees Retirement Association. The
election of exclusion must be made within six months following
the commencement of employment, must be made in writing on a
form prescribed by the executive director, and must be approved
by a resolution of adopted by the governing body of the city.
The election of exclusion is not effective until it is filed
with the executive director. Membership of a city manager in
the association general employees retirement plan ceases on the
date the written election is received by the executive director
or upon a later date specified. Employee and employer
contributions made on behalf of a person exercising the option
to be excluded from membership under this section must be
refunded in accordance with section 353.27, subdivision 7.
(b) A city manager who has elected exclusion under this
subdivision may elect to revoke that action by filing a written
notice with the executive director. The notice must be on a
form prescribed by the executive director and must be approved
by a resolution of the governing body of the city. Membership
of the city manager in the association resumes prospectively
from the date of the first day of the pay period for which
contributions were deducted or, if pay period coverage dates are
not provided, the date on which the notice of revocation or
contributions are received in the office of the association,
provided that the notice of revocation is received by the
association within 60 days of the receipt of contributions.
(c) An election under paragraph (b) is irrevocable. Any
election under paragraph (a) or (b) must include a statement
that the individual will not seek authorization to purchase
service credit for any period of excluded service.
Subd. 3. [DEFERRED COMPENSATION; CITY CONTRIBUTION.] If an
election of exclusion is made, and if the city manager and the
governing body of the city additionally agree in writing that
the additional compensation is to be deferred and shall is to be
contributed on behalf of the city manager to a deferred
compensation program which meets the requirements of section 457
of the Internal Revenue Code of 1954 1986, as amended through
December 31, 1980, the governing body may compensate the city
manager, in addition to the salary allowed under any limitation
imposed on salaries by law or charter, in an amount equal to the
employer contribution which would be required by section 353.27,
subdivision 3, if the city manager were a member of the
association general employees retirement plan.
Subd. 4. [REFUNDS; DEFERRED ANNUITY.] A city manager who
makes an election to be excluded from membership is entitled to
a refund of accumulated deductions or, if otherwise qualified, a
deferred annuity in the manner provided by under section 353.34,
at the option of the manager.
Subd. 5. [ELECTION; OTHER EMPLOYMENT.] If a city manager
who has made an election to be excluded subsequently accepts
employment in another governmental subdivision or subsequently
accepts employment other than as a city manager in the same
city, the election shall be deemed to have been is rescinded on
the effective date of employment.
Sec. 44. Minnesota Statutes 2004, section 353.14, is
amended to read:
353.14 [BENEFITS FROM OTHER FUNDS.]
No annuity or benefit provided by this chapter shall may be
affected, diminished, or impaired by any pension, benefit, or
annuity which any member or survivor is entitled to receive from
a tax supported public retirement plan or system authorized by
any other law, for based on service that is different service
than the service for which the member or survivor is entitled to
receive benefit or annuity from a retirement plan administered
by the Public Employees Retirement Association.
Sec. 45. Minnesota Statutes 2004, section 353.15,
subdivision 1, is amended to read:
Subdivision 1. [EXEMPTION; EXCEPTIONS.] No money, annuity,
or benefit provided for in this chapter is assignable or subject
to execution, levy, attachment, garnishment, or legal process,
except as provided in subdivision 2 or section 518.58, 518.581,
or 518.6111. The provisions of section 356.401 apply to the
general employees retirement plan, to the public employees
police and fire retirement plan, and to the local government
correctional service retirement plan.
Sec. 46. Minnesota Statutes 2004, section 353.15,
subdivision 3, is amended to read:
Subd. 3. [PAYMENT TO PUBLIC BODIES.] If, in the judgment
of the executive director, conditions so warrant, payment of an
annuity, a retirement benefit, or a refund may be made to a
public body in behalf of an annuitant, disabilitant, or survivor
upon such terms as the executive director may prescribe.
Sec. 47. Minnesota Statutes 2004, section 353.27,
subdivision 11, is amended to read:
Subd. 11. [EMPLOYERS; REQUIRED TO FURNISH REQUESTED
INFORMATION.] (a) All governmental subdivisions shall furnish
promptly such other information relative to the employment
status of all employees or former employees, including, but not
limited to, payroll abstracts pertaining to all past and present
employees, as may be requested by the association or its
executive director, including schedules of salaries applicable
to various categories of employment.
(b) In the event payroll abstract records have been lost or
destroyed, for whatever reason or in whatever manner, so that
such schedules of salaries cannot be furnished therefrom, the
employing governmental subdivision, in lieu thereof, shall
furnish to the association an estimate of the earnings of any
employee or former employee for any period as may be requested
by the association or its executive director. Should If the
association receive such schedules is provided a schedule of
estimated earnings, the executive director is hereby authorized
to use the same as a basis for making whatever computations
might be necessary for determining obligations of the employee
and employer to the retirement fund. If estimates are not
furnished by the employer pursuant to at the request of the
association or its executive director, the association executive
director may estimate the obligations of the employee and
employer to the retirement fund based upon such those records as
that are in its possession. Where payroll abstracts have been
lost or destroyed, the governmental agency need not furnish any
information pertaining to employment prior to July 1, 1963. The
association shall make no estimate of any obligation of any
employee, former employee, or employer covering employment prior
to July 1, 1963.
Sec. 48. Minnesota Statutes 2004, section 353.271, is
amended to read:
353.271 [PARTICIPATION IN MINNESOTA POSTRETIREMENT
INVESTMENT FUND.]
Subdivision 1. [AUTHORIZATION.] The general employees
retirement plan of the Public Employees Retirement Association,
including the public employees police and fire fund but
excluding the various local relief association consolidation
accounts, is retirement plan, and the local government
correctional service retirement plan are authorized to
participate in the Minnesota postretirement investment fund.
There shall be is one general participation in the Minnesota
postretirement investment fund for all purposes by each plan of
the Public Employees Retirement fund and one general
participation in the Minnesota postretirement investment fund
for all purposes by the public employees police and fire
fund Association.
Subd. 2. [VALUATION OF ASSETS; ADJUSTMENT OF BENEFITS.]
(1) (a) The required reserves for retirement annuities payable
as provided in this chapter other than those payable from the
various local relief association consolidation accounts, as
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 actuary retained by the Legislative
Commission on Pensions and Retirement under section 356.214, and
approved under section 356.215, subdivision 18, and using the
postretirement interest assumption specified in section 356.215,
subdivision 8, shall must be transferred to the Minnesota
postretirement investment fund as of the last business day of
the month in which the retirement annuity begins.
(2) (b) Annuity payments other than those payable from the
various local relief association consolidation accounts
shall must be adjusted in accordance with the provisions of
section 11A.18.
(3) (c) Increases in payments pursuant to under this
section or from the various local relief association
consolidation accounts, if applicable, will must be made
automatically unless the intended recipient files written notice
with the executive director of the Public Employees Retirement
Association requesting that the increase shall not be made.
Sec. 49. Minnesota Statutes 2004, section 353.31,
subdivision 1c, is amended to read:
Subd. 1c. [COORDINATED MEMBERS.] Except for benefits
provided under section 353.32, subdivisions 1 and 1a, no
survivor benefits are payable to the surviving spouse or
dependent children of a deceased coordinated member.
Sec. 50. Minnesota Statutes 2004, section 353.32,
subdivision 9, is amended to read:
Subd. 9. [PAYMENT TO A MINOR.] If a member or former
member dies having named as beneficiary a person who is a minor
at the time of the application for refund, the board may make
the payment (a) (1) directly to the minor, (b) (2) to any
a person who has legally qualified and is acting as guardian of
the minor's person or property in any jurisdiction, or (c) (3)
to either parent of the minor or to any an adult person with
whom the minor may at the time be living, provided only that.
The parent or other person to whom any amount is to be
paid shall have advised must advise the board in writing that
the amount will be held or used in trust for the benefit of such
minor. Any annuity or disability benefit payable at the time of
death of an annuitant or recipient of a disability benefit,
which is payable to a beneficiary who is a minor, may be paid in
the same manner. Such The payment shall be is a bar to recovery
by any other person or persons.
Sec. 51. Minnesota Statutes 2004, section 353.33,
subdivision 12, is amended to read:
Subd. 12. [BASIC DISABILITY SURVIVOR BENEFITS.] If a basic
member who is receiving a disability benefit under subdivision 3:
(a) (1) dies before attaining age 65 or within five years
of the effective date of the disability, whichever is later, the
surviving spouse shall is entitled to receive a survivor benefit
under section 353.31, unless the surviving spouse elected to
receive a refund under section 353.32, subdivision 1.;
(b) (2) is living at age 65 or five years after the
effective date of the disability, whichever is later, the basic
member may continue to receive a normal disability benefit, or
elect a joint and survivor optional annuity under section
353.31, subdivision 1b. The election of the joint and survivor
optional annuity must occur within 90 days of attaining age 65
or of reaching the five-year anniversary of the effective date
of the disability benefit, whichever is later. The optional
annuity takes effect on the first day of the month following the
month in which the person attains age 65 or reaches the
five-year anniversary of the effective date of the disability
benefit, whichever is later.; or
(c) (3) if there is a dependent child or children under
paragraph (a) or (b) clause (1) or (2), the association shall
grant dependent child is entitled to a dependent child benefit
under section 353.31, subdivision 1b, paragraph (b).
Sec. 52. Minnesota Statutes 2004, section 354.091, is
amended to read:
354.091 [SERVICE CREDIT.]
(a) In computing service credit, no teacher shall may
receive credit for more than one year of teaching service for
any fiscal year. Commencing July 1, 1961 Additionally, in
crediting allowable service:
(1) if a teacher teaches less than five hours in a day,
service credit must be given for the fractional part of the day
as the term of service performed bears to five hours;
(2) if a teacher teaches five or more hours in a day,
service credit must be given for only one day;
(3) if a teacher teaches at least 170 full days in any
fiscal year, service credit must be given for a full year of
teaching service; and
(4) if a teacher teaches for only a fractional part of the
year, service credit must be given for such fractional part of
the year in the same relationship as the period of service
performed bears to 170 days.
(b) A teacher shall must receive a full year of service
credit based on the number of days in the employer's full school
year if it that school year is less than 170 days. Teaching
service performed before July 1, 1961, must be computed under
the law in effect at the time it was performed.
(c) A teacher must not lose or gain retirement service
credit as a result of the employer converting to a flexible or
alternate work schedule. If the employer converts to a flexible
or alternate work schedule, the forms for reporting teaching
service and the procedures for determining service credit must
be determined by the executive director with the approval of the
board of trustees.
(d) For all services rendered on or after July 1, 2003,
service credit for all members employed by the Minnesota State
Colleges and Universities system must be determined:
(1) for full-time employees, by the definition of full-time
employment contained in the collective bargaining agreement for
those units listed in section 179A.10, subdivision 2, or
contained in the applicable personnel or salary plan for those
positions designated in section 179A.10, subdivision 1;
(2) for part-time employees, by the appropriate proration
of full-time equivalency based on the provisions contained in
the collective bargaining agreement for those units listed in
section 179A.10, subdivision 2, or contained in the applicable
personnel or salary plan for those positions designated in
section 179A.10, subdivision 1, and the applicable procedures of
the Minnesota State Colleges and Universities system; and
(3) in no case may a member receive more than one year of
service credit for any fiscal year.
Sec. 53. Minnesota Statutes 2004, section 354.10,
subdivision 1, is amended to read:
Subdivision 1. [EXEMPTION; EXCEPTIONS.] (a) The provisions
of section 356.401 apply to the teachers retirement plan.
(b) The right of a teacher to take advantage of the
benefits provided by this chapter, is a personal right only and
is not assignable. All money to the credit of a teacher's
account in the fund or any money payable to the teacher from the
fund belongs to the state of Minnesota until actually paid to
the teacher or a beneficiary under this chapter.
(c) The association may acknowledge a properly completed
power of attorney form. An assignment or attempted assignment
of a teacher's interest in the fund, or of the beneficiary's
interest in the fund, by a teacher or a beneficiary is void and
exempt from garnishment or levy under attachment or execution,
except as provided in subdivision 2 or 3, or section 518.58,
518.581, or 518.6111.
Sec. 54. Minnesota Statutes 2004, section 354.10,
subdivision 3, is amended to read:
Subd. 3. [PAYMENT TO PUBLIC BODIES.] If, in the judgment
of the executive director, conditions so warrant, payment of an
annuity, a retirement benefit, or a refund may be made to a
public body in behalf of an annuitant, disabilitant, or survivor
upon such terms as the executive director may prescribe.
Sec. 55. Minnesota Statutes 2004, section 354.10,
subdivision 4, is amended to read:
Subd. 4. [CHANGES IN DESIGNATED BENEFICIARIES.] Any (a) A
beneficiary designated by a retiree or member under section
354.05, subdivision 22, may be changed or revoked by the retiree
or member on a form provided by the executive director.
(b) A change or revocation made under this subdivision is
valid only if the properly completed form is received by the
association on or before the date of death of the retiree or the
member.
(c) If a designated beneficiary dies before the retiree or
member designating the beneficiary, and a new beneficiary is not
designated, the retiree's or member's estate is the beneficiary.
Sec. 56. Minnesota Statutes 2004, section 354.33,
subdivision 5, is amended to read:
Subd. 5. [RETIREES NOT ELIGIBLE FOR FEDERAL BENEFITS.]
Notwithstanding the provisions of section 354.55, subdivision 3,
when any person retires after July 1, 1973, who (a) (1) has ten
or more years of allowable service, and (b) (2) does not have
any retroactive Social Security coverage by reason of the
person's position in the retirement system, and (c) (3) does not
qualify for federal old age and survivor primary benefits at the
time of retirement, the annuity shall must be computed under
section 354.44, subdivision 2, of the law in effect on June 30,
1969, except that accumulations after June 30, 1957, shall must
be calculated using the same mortality table and interest
assumption as are used to transfer the required reserves to the
Minnesota postretirement investment fund.
Sec. 57. Minnesota Statutes 2004, section 354.39, is
amended to read:
354.39 [EFFECTIVE DATE; APPLICATION.]
After July 1, 1971, any A member of the Teachers Retirement
Association who is employed in a new state university and or any
other new institutions institution of higher learning not
included in any agreement or modification made between the state
and the federal Secretary of Health, Education and Welfare Human
Services, making the provisions of the federal Old Age and,
Survivors and Disability Insurance Act applicable to such
members, shall must be covered under the provisions of this
chapter applicable to coordinated members.
Sec. 58. Minnesota Statutes 2004, section 354.41,
subdivision 2, is amended to read:
Subd. 2. [TEACHERS.] Every teacher after June 30, 1957, in
the service or entering the service of the state or one of its
governmental subdivision subdivisions as a teacher, except
persons specially specifically excluded, shall must become a
member of the association by the acceptance of such employment.
Sec. 59. Minnesota Statutes 2004, section 354.42, is
amended by adding a subdivision to read:
Subd. 1a. [TEACHERS RETIREMENT FUND.] (a) Within the
Teachers Retirement Association and the state treasury is
created a special retirement fund, which must include all the
assets of the Teachers Retirement Association and all revenue of
the association. The fund is the continuation of the fund
established under Laws 1931, chapter 406, section 2,
notwithstanding the repeal of Minnesota Statutes 1973, section
354.42, subdivision 1, by Laws 1974, chapter 289, section 59.
(b) The teachers retirement fund must be credited with all
employee and employer contributions, all investment revenue and
gains, and all other income authorized by law.
(c) From the teachers retirement fund is appropriated the
payments of annuities and benefits authorized by this chapter,
the transfers to the Minnesota postretirement investment fund,
and the reasonable and necessary expenses of administering the
fund and the association.
Sec. 60. Minnesota Statutes 2004, section 354.44,
subdivision 2, is amended to read:
Subd. 2. [COMPUTATION OF MONEY PURCHASE ANNUITY.] (a) The
amount of retirement annuity is an amount equal to double the
annuity which could be purchased by the member's accumulated
deductions plus interest thereon. The annuity shall must be
determined by the member's age, sex, double the amount of
accumulated deductions, double the amount of interest earned on
the accumulated deductions, and the appropriate mortality tables
and interest rates. To determine the amount of the annuity for
a basic member, the accumulated deductions prior to before July
1, 1957, and the accumulated deductions subsequent to after July
1, 1957, shall must be considered separately.
(1) (b) For service rendered prior to before July 1, 1957,
the accumulated deductions for any a member shall must be
carried forward at a fixed amount which is shown credited to the
member's account as of that date. That fixed amount shall must
also include any payments in lieu of salary deductions which are
to be made in the future and are were actually so made pursuant
to under an agreement executed between the member and the board
as authorized by section 354.50 or any other authorized payments
made by the member to the fund. The annuity granted with
respect to the period shall must be determined as follows:
(a) (1) the fixed amount of the accumulated deductions for
the period including the interest credited on the amount as
earned up to July 1, 1957.; and
(b) (2) annuity purchase rates based on the applicable
mortality table established by the board and the interest rate
assumption in effect prior to before July 1, 1957, in the case
of basic members and an annuity purchase rate based on an
appropriate annuity table of mortality established by the board
as provided in section 354.07, subdivision 1, and using the
applicable postretirement interest rate assumption specified in
section 356.215, subdivision 8, in the case of coordinated
members.
(2) (c) For service rendered subsequent to after July 1,
1957, the accumulated deductions for any a member shall must
consist of the amounts actually credited to the member's account
by reason of salary deductions. The annuity granted with
respect to the period shall must be determined by the following:
(a) (1) accumulated deductions for the period;
(b) (2) interest credited on these accumulated deductions
from July 1, 1957, to the date of retirement;
(c) (3) interest credited on accumulated deductions
including prior credited interest provided in paragraph (1) (b)
from July 1, 1957, to the date of retirement;
(d) (4) after the amount available for an annuity granted
with respect to the person is determined in accordance with the
provisions of this subdivision, an additional amount equal to 20
percent of the sum of clause (2)(a) (1) plus interest credited
to members a member's account from July 1, 1957, to date of
retirement is to be added. This added amount is not to be
doubled as provided for other amounts determined in this
subdivision; and
(e) (5) the annuity purchase rate based on an appropriate
annuity table of mortality established by the board as provided
in section 354.07, subdivision 1, and using the applicable
postretirement interest rate assumption specified in section
356.215, subdivision 8.
Sec. 61. Minnesota Statutes 2004, section 354A.021,
subdivision 5, is amended to read:
Subd. 5. [TAX SHELTERED ANNUITY PROGRAM AND FUND.] Any A
teachers retirement fund association may establish a tax
sheltered annuity program and fund meeting the requirements of
section 403(b) of the Internal Revenue Code of 1986, as amended
through December 31, 1992, which shall must include all assets
which were acquired for the specific purpose of being credited
to the program and fund and to which shall must be credited all
employee contributions, and employer contributions, if
negotiated under a collective bargaining agreement, designated
for this purpose and all interest income attributable to the
assets of the program and fund.
Sec. 62. Minnesota Statutes 2004, section 354A.097,
subdivision 1, is amended to read:
Subdivision 1. [SERVICE CREDIT PURCHASE AUTHORIZED.] A
teacher who has at least three years of allowable service credit
with the teachers retirement fund association and who performed
service in the United States armed forces before becoming a
teacher as defined in section 354A.011, subdivision 27, or who
failed to obtain service credit for a military leave of absence
period under section 354A.093, is entitled to purchase allowable
service credit for the initial period of enlistment, induction,
or call to active duty without any voluntary extension by making
payment under section 356.55 provided 356.551 if the teacher has
not purchased service credit from another Minnesota defined
benefit public employee pension plan for the same period of
service.
Sec. 63. Minnesota Statutes 2004, section 354A.31,
subdivision 5, is amended to read:
Subd. 5. [UNREDUCED NORMAL RETIREMENT ANNUITY.] Upon
retirement at normal retirement age with at least three years of
service credit, a coordinated member shall be is entitled to a
normal retirement annuity calculated pursuant to under
subdivision 4 or 4a, whichever applies.
Sec. 64. [356.401] [EXEMPTION FROM PROCESS.]
Subdivision 1. [EXEMPTION; EXCEPTIONS.] None of the money,
annuities, or other benefits provided for in the governing law
of a covered retirement plan is assignable either in law or in
equity or subject to state estate tax, or to execution, levy,
attachment, garnishment, or other legal process, except as
provided in subdivision 2 or section 518.58, 518.581, or
518.6111.
Subd. 2. [AUTOMATIC DEPOSITS.] (a) The chief
administrative officer of a covered retirement plan may remit,
through an automatic deposit system, annuity, benefit, or refund
payments only to a financial institution associated with the
National Automated Clearinghouse Association or a comparable
successor organization that is trustee for a person who is
eligible to receive the annuity, benefit, or refund.
(b) Upon the request of a retiree, disabilitant, survivor,
or former member, the chief administrative officer of a covered
retirement plan may remit the annuity, benefit, or refund check
to the applicable financial institution for deposit in the
person's individual account or the person's joint account. An
overpayment to a joint account after the death of the annuitant
or benefit recipient must be repaid to the fund of the
applicable covered retirement plan by the joint tenant if the
overpayment is not repaid to that fund by the financial
institution associated with the National Automated Clearinghouse
Association or its successor. The governing board of the
covered retirement plan may prescribe the conditions under which
these payments may be made.
Subd. 3. [COVERED RETIREMENT PLANS.] The provisions of
this section apply to the following retirement plans:
(1) the legislators retirement plan, established by chapter
3A;
(2) the general state employees retirement plan of the
Minnesota State Retirement System, established by chapter 352;
(3) the correctional state employees retirement plan of the
Minnesota State Retirement System, established by chapter 352;
(4) the State Patrol retirement plan, established by
chapter 352B;
(5) the elective state officers retirement plan,
established by chapter 352C;
(6) the unclassified state employees retirement program,
established by chapter 352D;
(7) the general employees retirement plan of the Public
Employees Retirement Association, established by chapter 353;
(8) the public employees police and fire plan of the Public
Employees Retirement Association, established by chapter 353;
(9) the public employees defined contribution plan,
established by chapter 353D;
(10) the local government correctional service retirement
plan of the Public Employees Retirement Association, established
by chapter 353E;
(11) the Teachers Retirement Association, established by
chapter 354;
(12) the Duluth Teachers Retirement Fund Association,
established by chapter 354A;
(13) the Minneapolis Teachers Retirement Fund Association,
established by chapter 354A;
(14) the St. Paul Teachers Retirement Fund Association,
established by chapter 354A;
(15) the individual retirement account plan, established by
chapter 354B;
(16) the higher education supplemental retirement plan,
established by chapter 354C;
(17) the Minneapolis employees retirement fund, established
by chapter 422A;
(18) the Minneapolis Police Relief Association, established
by chapter 423B;
(19) the Minneapolis Firefighters Relief Association,
established by chapter 423C; and
(20) the judges retirement fund, established by sections
490.121 to 490.132.
Sec. 65. Minnesota Statutes 2004, section 356.551, is
amended to read:
356.551 [POST JULY 1, 2003 2004, PRIOR SERVICE CREDIT
PURCHASE PAYMENT AMOUNT DETERMINATION PROCEDURE.]
Subdivision 1. [APPLICATION.] (a) Unless the prior service
credit purchase authorization special law or general statute
provision explicitly specifies a different purchase payment
amount determination procedure, and if section 356.55 has
expired, this section governs the determination of the prior
service credit purchase payment amount of any prior service
credit purchase.
(b) The purchase payment amount determination procedure
must recognize any service credit accrued to the purchaser in a
pension plan enumerated in section 356.30, subdivision 3.
(c) Any service credit in a Minnesota defined benefit
public employee pension plan available to be reinstated by the
purchaser through the repayment of a refund of member or
employee contributions previously received must be repaid in
full before any purchase of prior service credit payment is made
under this section.
Subd. 2. [DETERMINATION.] (a) Unless the minimum purchase
amount set forth in paragraph (c) applies, the prior service
credit purchase amount is an amount equal to the actuarial
present value, on the date of payment, as calculated by the
chief administrative officer of the pension plan and reviewed by
the actuary retained by the Legislative Commission on Pensions
and Retirement under section 356.214, of the amount of the
additional retirement annuity obtained by the acquisition of the
additional service credit in this section.
(b) Calculation of this amount must be made using the
preretirement interest rate applicable to the public pension
plan specified in section 356.215, subdivision 4d 8, and the
mortality table adopted for the public pension plan. The
calculation must assume continuous future service in the public
pension plan until, and retirement at, the age at which the
minimum requirements of the fund for normal retirement or
retirement with an annuity unreduced for retirement at an early
age, including section 356.30, are met with the additional
service credit purchased. The calculation must also assume a
full-time equivalent salary, or actual salary, whichever is
greater, and a future salary history that includes annual salary
increases at the applicable salary increase rate for the plan
specified in section 356.215, subdivision 4d.
(c) The prior service credit purchase amount may not be
less than the amount determined by applying the current employee
or member contribution rate, the employer contribution rate, and
the additional employer contribution rate, if any, to the
person's current annual salary and multiplying that result by
the number of whole and fraction years of service to be
purchased.
(d) Payment must be made in one lump sum within one year of
the prior service credit authorization. Payment of the amount
calculated under this section must be made by the applicable
eligible person.
(e) However, the current employer or the prior employer
may, at its discretion, pay all or any portion of the payment
amount that exceeds an amount equal to the employee contribution
rates in effect during the period or periods of prior service
applied to the actual salary rates in effect during the period
or periods of prior service, plus interest at the rate of 8.5
percent a year compounded annually from the date on which the
contributions would otherwise have been made to the date on
which the payment is made. If the employer agrees to payments
under this subdivision, the purchaser must make the employee
payments required under this subdivision within 290 90 days of
the prior service credit authorization. If that employee
payment is made, the employer payment under this subdivision
must be remitted to the chief administrative officer of the
public pension plan within 60 days of receipt by the chief
administrative officer of the employee payments specified under
this subdivision.
Subd. 3. [DOCUMENTATION.] The prospective prior service
credit purchaser must provide any relevant documentation
required by the chief administrative officer of the applicable
public pension plan to determine eligibility for the prior
service credit under this section.
Subd. 4. [PAYMENT PRECONDITION FOR CREDIT GRANT.] Service
credit for the purchase period must be granted by the public
pension plan to the purchaser upon receipt of the full purchase
payment amount specified in subdivision 2.
Sec. 66. Minnesota Statutes 2004, section 356A.06,
subdivision 7, is amended to read:
Subd. 7. [EXPANDED LIST OF AUTHORIZED INVESTMENT
SECURITIES.] (a) [AUTHORITY.] Except to the extent otherwise
authorized by law or bylaws, a covered pension plan not
described by subdivision 6, paragraph (a), may invest its assets
only in accordance with this subdivision.
(b) [SECURITIES GENERALLY.] The covered pension plan has
the authority to purchase, sell, lend, or exchange the
securities specified in paragraphs (c) to (g), including puts
and call options and future contracts traded on a contract
market regulated by a governmental agency or by a financial
institution regulated by a governmental agency. These
securities may be owned as units in commingled trusts that own
the securities described in paragraphs (c) to (g).
(c) [GOVERNMENT OBLIGATIONS.] The covered pension plan may
invest funds in governmental bonds, notes, bills, mortgages, and
other evidences of indebtedness provided the issue is backed by
the full faith and credit of the issuer or the issue is rated
among the top four quality rating categories by a nationally
recognized rating agency. The obligations in which funds may be
invested under this paragraph include guaranteed or insured
issues of (1) the United States, its agencies, its
instrumentalities, or organizations created and regulated by an
act of Congress; (2) Canada and its provinces, provided the
principal and interest is payable in United States dollars; (3)
the states and their municipalities, political subdivisions,
agencies, or instrumentalities; (4) the International Bank for
Reconstruction and Development, the Inter-American Development
Bank, the Asian Development Bank, the African Development Bank,
or any other United States government sponsored organization of
which the United States is a member, provided the principal and
interest is payable in United States dollars.
(d) [CORPORATE OBLIGATIONS.] The covered pension plan may
invest funds in bonds, notes, debentures, transportation
equipment obligations, or any other longer term evidences of
indebtedness issued or guaranteed by a corporation organized
under the laws of the United States or any state thereof, or the
Dominion of Canada or any province thereof if they conform to
the following provisions:
(1) the principal and interest of obligations of
corporations incorporated or organized under the laws of the
Dominion of Canada or any province thereof must be payable in
United States dollars; and
(2) obligations must be rated among the top four quality
categories by a nationally recognized rating agency.
(e) [OTHER OBLIGATIONS.] (1) The covered pension plan may
invest funds in bankers acceptances, certificates of deposit,
deposit notes, commercial paper, mortgage participation
certificates and pools, asset backed securities, repurchase
agreements and reverse repurchase agreements, guaranteed
investment contracts, savings accounts, and guaranty fund
certificates, surplus notes, or debentures of domestic mutual
insurance companies if they conform to the following provisions:
(i) bankers acceptances and deposit notes of United States
banks are limited to those issued by banks rated in the highest
four quality categories by a nationally recognized rating
agency;
(ii) certificates of deposit are limited to those issued by
(A) United States banks and savings institutions that are rated
in the highest four quality categories by a nationally
recognized rating agency or whose certificates of deposit are
fully insured by federal agencies; or (B) credit unions in
amounts up to the limit of insurance coverage provided by the
National Credit Union Administration;
(iii) commercial paper is limited to those issued by United
States corporations or their Canadian subsidiaries and rated in
the highest two quality categories by a nationally recognized
rating agency;
(iv) mortgage participation or pass through certificates
evidencing interests in pools of first mortgages or trust deeds
on improved real estate located in the United States where the
loan to value ratio for each loan as calculated in accordance
with section 61A.28, subdivision 3, does not exceed 80 percent
for fully amortizable residential properties and in all other
respects meets the requirements of section 61A.28, subdivision
3;
(v) collateral for repurchase agreements and reverse
repurchase agreements is limited to letters of credit and
securities authorized in this section;
(vi) guaranteed investment contracts are limited to those
issued by insurance companies or banks rated in the top four
quality categories by a nationally recognized rating agency or
to alternative guaranteed investment contracts where the
underlying assets comply with the requirements of this
subdivision;
(vii) savings accounts are limited to those fully insured
by federal agencies; and
(viii) asset backed securities must be rated in the top
four quality categories by a nationally recognized rating agency.
(2) Sections 16A.58, 16C.03, subdivision 4, and 16C.05 do
not apply to certificates of deposit and collateralization
agreements executed by the covered pension plan under clause
(1), item (ii).
(3) In addition to investments authorized by clause (1),
item (iv), the covered pension plan may purchase from the
Minnesota Housing Finance Agency all or any part of a pool of
residential mortgages, not in default, that has previously been
financed by the issuance of bonds or notes of the agency. The
covered pension plan may also enter into a commitment with the
agency, at the time of any issue of bonds or notes, to purchase
at a specified future date, not exceeding 12 years from the date
of the issue, the amount of mortgage loans then outstanding and
not in default that have been made or purchased from the
proceeds of the bonds or notes. The covered pension plan may
charge reasonable fees for any such commitment and may agree to
purchase the mortgage loans at a price sufficient to produce a
yield to the covered pension plan comparable, in its judgment,
to the yield available on similar mortgage loans at the date of
the bonds or notes. The covered pension plan may also enter
into agreements with the agency for the investment of any
portion of the funds of the agency. The agreement must cover
the period of the investment, withdrawal privileges, and any
guaranteed rate of return.
(f) [CORPORATE STOCKS.] The covered pension plan may
invest funds in stocks or convertible issues of any corporation
organized under the laws of the United States or the states
thereof, the Dominion of Canada or its provinces, or any
corporation listed on the New York Stock Exchange or the
American Stock Exchange, if they conform to the following
provisions:
(1) the aggregate value of corporate stock investments, as
adjusted for realized profits and losses, must not exceed 85
percent of the market or book value, whichever is less, of a
fund, less the aggregate value of investments according to
subdivision 6 paragraph (g);
(2) investments must not exceed five percent of the total
outstanding shares of any one corporation.
(g) [OTHER INVESTMENTS.] (1) In addition to the
investments authorized in paragraphs (b) to (f), and subject to
the provisions in clause (2), the covered pension plan may
invest funds in:
(i) venture capital investment businesses through
participation in limited partnerships and corporations;
(ii) real estate ownership interests or loans secured by
mortgages or deeds of trust through investment in limited
partnerships, bank sponsored collective funds, trusts, and
insurance company commingled accounts, including separate
accounts;
(iii) regional and mutual funds through bank sponsored
collective funds and open-end investment companies registered
under the Federal Investment Company Act of 1940;
(iv) resource investments through limited partnerships,
private placements, and corporations; and
(v) international securities.
(2) The investments authorized in clause (1) must conform
to the following provisions:
(i) the aggregate value of all investments made according
to clause (1) may not exceed 35 percent of the market value of
the fund for which the covered pension plan is investing;
(ii) there must be at least four unrelated owners of the
investment other than the state board covered pension plan for
investments made under clause (1), item (i), (ii), (iii), or
(iv);
(iii) covered pension plan participation in an investment
vehicle is limited to 20 percent thereof for investments made
under clause (1), item (i), (ii), (iii), or (iv); and
(iv) covered pension plan participation in a limited
partnership does not include a general partnership interest or
other interest involving general liability. The covered pension
plan may not engage in any activity as a limited partner which
creates general liability.
Sec. 67. Minnesota Statutes 2004, section 422A.01,
subdivision 11, is amended to read:
Subd. 11. [EMPLOYEE.] "Employee" means any a person who is
not exempted from the contributing class pursuant to under
section 422A.09, subdivision 3, who is was employed before July
1, 1979, by and paid, in whole or in part, by the city or any of
its boards, departments, or commissions, operated as a
department of city government or independently if financed in
whole or in part by city funds, including any a person who was
employed by a public corporation as herein defined, and
including any a person who was employed before July 1, 1979, by
Special School District No. 1, and who is not a member of any
other retirement system, and also including any a person who is
was employed before July 1, 1973, by the county of Hennepin, who
was entitled by law to elect and has elected to retain
membership in the municipal Minneapolis Employees Retirement
Fund and who makes any required member contributions to the fund
and who remains so employed.
Sec. 68. Minnesota Statutes 2004, section 422A.06,
subdivision 7, is amended to read:
Subd. 7. [DISABILITY BENEFIT FUND.] (a) The required
reserves for disability allowances which become effective after
December 31, 1973, shall be transferred from the deposit
accumulation fund to the A disability benefit fund is
established, containing the required reserves for disability
allowances under this chapter. A proportionate share of income
from investments shall must be allocated to this fund.
There shall must be paid from this fund the disability
allowances which become effective after December 31, 1973
payable under this chapter.
(b) In the event of the termination of any disability
allowance for any reason other than the death of the recipient,
the balance of the required reserves for the disability
allowance as of the date of the termination shall must be
transferred from the disability benefit fund to the deposit
accumulation fund.
(c) At the end of each fiscal year, as part of the annual
actuarial valuation, a determination shall must be made of the
required reserves for all disability allowances being paid from
the disability benefit fund. Any excess of assets over
actuarial required reserves in the disability benefit fund shall
must be transferred to the deposit accumulation fund. Any
excess of actuarial reserves over assets in the disability
benefit fund shall must be funded by a transfer of the
appropriate amount of assets from the deposit accumulation fund.
Sec. 69. Minnesota Statutes 2004, section 422A.10,
subdivision 1, is amended to read:
Subdivision 1. [MEMBER CONTRIBUTION RATE; DEDUCTIONS.] (a)
There shall must be deducted and withheld from the basic salary,
pay or compensation of each employee in the contributing class,
prior to January 1, 1980 an amount equal to 7-1/4 percent, after
December 31, 1979 but prior to January 1, 1981 an amount equal
to 8-1/4 percent and after December 31, 1980 an amount equal to
9-1/4 percent of such salary, pay or compensation, except as
hereinafter provided.
(b) The retirement board may increase the percentage rate
of contribution to the retirement fund of any employee or
employees for the purpose of establishing and maintaining on an
actuarial basis a plan of insurance, survivors' benefits, or
other type of benefit or benefits, the cost of which shall must
be paid out of such extra percentage so authorized and deducted
from the employee's compensation, except as hereinafter
provided. Any plan or plans so established and placed in
operation may be amended from time to time, or may be abandoned,
but if abandoned, any surplus remaining from the operation of a
plan shall must be the property of the fund, and shall must be
credited to the reserve for loss in investment account.
Sec. 70. Minnesota Statutes 2004, section 422A.10,
subdivision 2, is amended to read:
Subd. 2. [CONSENT TO DEDUCTIONS MANDATORY MEMBER
CONTRIBUTIONS.] Every employee to whom sections 422A.01 to
422A.25 this chapter applies who shall continue in the service
after the passage of Laws 1919, chapter 522, as well as every
person to whom sections 422A.01 to 422A.25 applies who may
hereafter be appointed to a position or place, shall be is
deemed to consent and agree to the deductions made and provided
for herein, and payment with such reductions, for service, shall
be are a full and complete discharge and acquittance of all
claims and demands for all services rendered by such person
during the period covered by such payment; except the person's
claim to the benefits to which the person may be entitled under
the provisions of sections 422A.01 to 422A.25 this chapter.
Sec. 71. Minnesota Statutes 2004, section 422A.22,
subdivision 1, is amended to read:
Subdivision 1. [RETENTION; TRANSFER.] (a) If an employee
to whom sections 422A.01 to 422A.25 this chapter applies becomes
absolutely separated from the active service prior to before
attaining the minimum retirement age established in section
422A.13, the employee is entitled to a refund of the net
accumulated amount of deduction from salary, pay, or
compensation, made for the purpose of accumulating a fund from
which to pay retirement allowances, shall be returned to such
employee, with interest at the annual compound rate of six
percent.
(b) Any contributing employee who separates from a
department, board or commission of the city whose employees are
covered by a fund organized under sections 422A.01 to 422A.25
this chapter, and becomes an employee of a department or board
of the same city, whose employees are covered by a retirement
fund or relief association by whatever name known, organized
under any other law and supported in whole or in part by taxes
on the same city, shall have has the option of:
(1) retaining their membership in the fund organized under
sections 422A.01 to 422A.25 this chapter, regardless of the
provisions of any law, rule, bylaw or other action requiring
membership in any other retirement fund or relief association
however organized.; or
(2) transferring to the fund or association covering the
employees of the department or board to which they are
transferring, providing they are eligible for membership therein.
(c) Any contributing employee who elects to transfer to
another fund or association as herein provided in paragraph (b),
clause (2), shall must make such election within one year from
the date of separation from the city service covered by this
fund. If the contributing employee elects to transfer to
another fund as herein provided, the employee is entitled to a
refund of the net accumulated contributions made by such
employee to the fund organized under sections 422A.01 to
422A.25, shall be returned to the employee this chapter with
interest at the annual compound rate of six percent.
Sec. 72. Minnesota Statutes 2004, section 422A.22,
subdivision 3, is amended to read:
Subd. 3. [LIMITATION ON ELIGIBILITY.] No employee of the
city shall be is eligible to be a member of, or receive benefits
from, more than one retirement plan or fund of the city for the
same period of service.
Sec. 73. Minnesota Statutes 2004, section 422A.22,
subdivision 4, is amended to read:
Subd. 4. [DEATH-WHILE-ACTIVE REFUND.] (a) Upon the death
of an active member prior to before the employee's termination
of active service, there shall be paid to the beneficiary or
beneficiaries designated by the member on a form specified by
the executive director and filed with the retirement board, are
entitled to receive the net accumulated employee deductions from
salary, pay, or compensation, including interest under
subdivision 1, paragraph (a), compounded annually to the date of
the member's death. The amount must not include any
contributions made by the employee or on the employee's behalf,
or any interest or investment earnings on those contributions,
which were allocated to the survivor benefit fund under section
422A.06, subdivision 6.
(b) If the employee fails to make a designation, or if the
beneficiary or beneficiaries designated by the employee
predeceases the employee, the benefit specified in paragraph (a)
must be paid to the deceased employee's estate is entitled to
the benefit specified in paragraph (a).
(c) A benefit payable under this subdivision is in addition
to any applicable survivor benefit under section 422A.23.
Sec. 74. Minnesota Statutes 2004, section 422A.22,
subdivision 6, is amended to read:
Subd. 6. [REFUND; MUNICIPAL EMPLOYEES RETIREMENT FUND.]
Any A person who has received a refund from the municipal
Minneapolis Employees Retirement Fund, and who is a member of a
public retirement system included in section 422A.16,
subdivision 8, may repay such refund with interest at a compound
annual rate of 8.5 percent to the municipal Minneapolis
Employees Retirement Fund. If a refund is repaid to the fund
and if more than one refund has been received from the fund, all
refunds must be repaid. Repayment shall must be made as
provided in sections 422A.01 to 422A.25 this chapter.
Sec. 75. Minnesota Statutes 2004, section 422A.231, is
amended to read:
422A.231 [COST ALLOCATION.]
(a) Notwithstanding any law to the contrary, all current
and future contribution requirements due to this article are
payable by the participating contributing employing units other
than the state of Minnesota.
(b) In each actuarial valuation of the retirement fund, the
actuary retained by the Legislative Commission on Pensions and
Retirement under section 356.214 shall include an exhibit on the
impact of the benefit increases contained in this article on the
survivor benefit fund. The actuary shall calculate the expected
change in the present value of the future benefits payable from
the survivor benefit fund attributable to this article, using
the actuarial method and assumptions applicable to the
Minneapolis Employees Retirement Fund, from the prior actuarial
valuation and shall compare that result with the actual change
in the present value of future benefits payable from the
survivor benefit fund attributable to this article from the
prior actuarial valuation.
(c) The executive director shall assess each participating
employer, other than the state of Minnesota, its proportional
share of the net increase amount calculated under paragraph
(b). The assessment must be made on the first business day of
the following February, plus compound interest at an annual rate
of six percent on the amount from the actuarial valuation date
to the date of payment.
Sec. 76. Minnesota Statutes 2004, section 422A.24, is
amended to read:
422A.24 [ALLOWANCES NOT ASSIGNABLE OR SUBJECT TO PROCESS.]
No money payable pursuant to this chapter shall be
assignable either in law or equity or be subject to execution,
levy, attachment, garnishment, or other legal process, except as
provided in section 518.58, 518.581, or 518.6111, nor shall any
of the proceeds of payments due pursuant to this chapter be
subject to the inheritance tax provisions of this state upon
transfer to a surviving spouse or minor or dependent child of
the decedent or a trust for their benefit. The provisions of
section 356.401 apply to the Minneapolis employees retirement
plan.
Sec. 77. Minnesota Statutes 2004, section 423B.17, is
amended to read:
423B.17 [PAYMENTS EXEMPT FROM PROCESS.]
A payment made by the association under a provision of
sections 423B.01 to 423B.18, as amended, is exempt from legal
process except as provided in section 518.58, 518.581, or
518.6111. No person entitled to a payment may assign the same.
The association may not recognize an assignment or pay a sum on
account of an assignment. The provisions of section 356.401
apply to the Minneapolis Police Relief Association.
Sec. 78. Minnesota Statutes 2004, section 423C.09, is
amended to read:
423C.09 [PAYMENTS EXEMPT FROM PROCESS.]
All payments made, or to be made, by the association under
this chapter shall be totally exempt from garnishment,
execution, or other legal process, except as provided in section
518.58, 518.581, or 518.6111. No person entitled to a payment
shall have the right to assign the name, nor shall the
association have authority to recognize any assignment or to pay
any sum on account thereof. Any attempt to transfer any right
or claim, or any part thereof, shall be void. The provisions of
section 356.401 apply to the Minneapolis Firefighters Relief
Association.
Sec. 79. Minnesota Statutes 2004, section 490.126,
subdivision 5, is amended to read:
Subd. 5. [EXEMPTION FROM PROCESS; NO ASSIGNMENT.] None of
the money, annuities, or other benefits provided in this chapter
is assignable either in law or equity or is subject to
execution, levy, attachment, garnishment, or other legal
process, except as provided in section 518.58, 518.581, or
518.6111. The provisions of section 356.401 apply to the judges
retirement plan.
Sec. 80. [REVISOR'S INSTRUCTION.]
In the next edition and subsequent editions of Minnesota
Statutes, the revisor of statutes shall replace the reference to
"sections 422A.01 to 422A.25" with the reference to "this
chapter" wherever the reference appears in Minnesota Statutes,
chapter 422A.
Sec. 81. [REPEALER.]
(a) Minnesota Statutes 2004, section 352.119, subdivision
1, is repealed.
(b) Minnesota Statutes 2004, sections 353.34, subdivision
3b; 353.36, subdivisions 2, 2a, 2b, and 2c; 353.46, subdivision
4; 353.663; 353.74; and 353.75, are repealed.
(c) Minnesota Statutes 2004, section 354.59, is repealed.
(d) Minnesota Statutes 2004, sections 422A.22, subdivisions
2 and 5; and 422A.221, are repealed.
(e) Minnesota Statutes 2004, sections 352.15, subdivision
1a; 353.15, subdivision 2; and 354.10, subdivision 2, are
repealed.
Sec. 82. [EFFECTIVE DATE.]
(a) Sections 1 to 73 and 75 to 81 are effective July 1,
2005.
(b) Section 74 is effective January 1, 2006.
(c) Sections 1, 21, 22, 23, 29, 45, 46, 53, 64, 76, 77, 78,
79, and 81, paragraph (e), do not apply to any cause of action
that is proceeding on the date of enactment or to any cause of
action for which the applicable statute of limitations has not
expired as of the date of enactment.
ARTICLE 11
LOCAL RETIREMENT PLANS
Section 1. Minnesota Statutes 2004, section 69.77,
subdivision 4, is amended to read:
Subd. 4. [RELIEF ASSOCIATION FINANCIAL REQUIREMENTS;
MINIMUM MUNICIPAL OBLIGATION.] (a) The officers of the relief
association shall determine the financial requirements of the
relief association and minimum obligation of the municipality
for the following calendar year in accordance with the
requirements of this subdivision. The financial requirements of
the relief association and the minimum obligation of the
municipality must be determined on or before the submission date
established by the municipality under subdivision 5.
(b) The financial requirements of the relief association
for the following calendar year must be based on the most recent
actuarial valuation or survey of the special fund of the
association if more than one fund is maintained by the
association, or of the association, if only one fund is
maintained, prepared in accordance with sections 356.215,
subdivisions 4 to 15, and 356.216, as required under subdivision
10. If an actuarial estimate is prepared by the actuary of the
relief association as part of obtaining a modification of the
benefit plan of the relief association and the modification is
implemented, the actuarial estimate must be used in calculating
the subsequent financial requirements of the relief association.
(c) If the relief association has an unfunded actuarial
accrued liability as reported in the most recent actuarial
valuation or survey, the total of the amounts calculated under
clauses (1), (2), and (3), constitute the financial requirements
of the relief association for the following year. If the relief
association does not have an unfunded actuarial accrued
liability as reported in the most recent actuarial valuation or
survey, the amount calculated under clauses (1) and (2)
constitute the financial requirements of the relief association
for the following year. The financial requirement elements are:
(1) the normal level cost requirement for the following
year, expressed as a dollar amount, which must be determined by
applying the normal level cost of the relief association as
reported in the actuarial valuation or survey and expressed as a
percentage of covered payroll to the estimated covered payroll
of the active membership of the relief association, including
any projected change in the active membership, for the following
year;
(2) for the Bloomington Fire Department Relief Association,
the Fairmont Police Relief Association, and the Virginia Fire
Department Relief Association, to the dollar amount of normal
cost determined under clause (1) must be added an amount equal
to the dollar amount of the administrative expenses of the
special fund of the association if more than one fund is
maintained by the association, or of the association if only one
fund is maintained, for the most recent year, multiplied by the
factor of 1.035. The administrative expenses are those
authorized under section 69.80. No amount of administrative
expenses under this clause are to be included in the financial
requirements of the Minneapolis Firefighters Relief Association
or the Minneapolis Police Relief Association; and
(3) to the dollar amount of normal cost and expenses
determined under clauses (1) and (2) must be added an amount
equal to the level annual dollar amount which is sufficient to
amortize the unfunded actuarial accrued liability by December
31, 2010, the Fairmont Police Relief Association, the
Minneapolis Firefighters Relief Association, and the Virginia
Fire Department Relief Association, by the date determined under
section 356.216, paragraph (a), clause (2), for the Bloomington
Fire Department Relief Association, and by December 31, 2020,
for the Minneapolis Police Relief Association, as determined
from the actuarial valuation or survey of the fund, using an
interest assumption set at the applicable rate specified in
section 356.215, subdivision 8. The amortization date specified
in this clause applies to all local police or salaried
firefighters' relief associations and that date supersedes any
amortization date specified in any applicable special law.
(d) The minimum obligation of the municipality is an amount
equal to the financial requirements of the relief association
reduced by the estimated amount of member contributions from
covered salary anticipated for the following calendar year and
the estimated amounts anticipated for the following calendar
year from the applicable state aid program established under
sections 69.011 to 69.051 receivable by the relief association
after any allocation made under section 69.031, subdivision 5,
paragraph (b), clause (2), or 423A.01, subdivision 2, clause
(6), from the local police and salaried firefighters' relief
association amortization aid program established under section
423A.02, subdivision 1, from the supplementary amortization
state-aid program established under section 423A.02, subdivision
1a, and from the additional amortization state aid under section
423A.02, subdivision 1b.
Sec. 2. Minnesota Statutes 2004, section 356.215,
subdivision 8, is amended to read:
Subd. 8. [INTEREST AND SALARY ASSUMPTIONS.] (a) The
actuarial valuation must use the applicable following
preretirement interest assumption and the applicable following
postretirement interest assumption:
preretirement postretirement
interest rate interest rate
plan assumption assumption
general state employees
retirement plan 8.5% 6.0%
correctional state employees
retirement plan 8.5 6.0
State Patrol retirement plan 8.5 6.0
legislators retirement plan 8.5 6.0
elective state officers
retirement plan 8.5 6.0
judges retirement plan 8.5 6.0
general public employees
retirement plan 8.5 6.0
public employees police and fire
retirement plan 8.5 6.0
local government correctional
service retirement plan 8.5 6.0
teachers retirement plan 8.5 6.0
Minneapolis employees
retirement plan 6.0 5.0
Duluth teachers retirement plan 8.5 8.5
Minneapolis teachers retirement
plan 8.5 8.5
St. Paul teachers retirement
plan 8.5 8.5
Minneapolis Police Relief
Association 6.0 6.0
Fairmont Police Relief
Association 5.0 5.0
Minneapolis Fire Department
Relief Association 6.0 6.0
Virginia Fire Department
Relief Association 5.0 5.0
Bloomington Fire Department
Relief Association 6.0 6.0
local monthly benefit volunteer
firefighters relief associations 5.0 5.0
(b) The actuarial valuation must use the applicable
following single rate future salary increase assumption, the
applicable following modified single rate future salary increase
assumption, or the applicable following graded rate future
salary increase assumption:
(1) single rate future salary increase assumption
future salary
plan increase assumption
legislators retirement plan 5.0%
elective state officers retirement
plan 5.0
judges retirement plan 5.0
Minneapolis Police Relief Association 4.0
Fairmont Police Relief
Association 3.5
Minneapolis Fire Department Relief
Association 4.0
Virginia Fire Department
Relief Association 3.5
Bloomington Fire Department Relief
Association 4.0
(2) modified single rate future salary increase assumption
future salary
plan increase assumption
Minneapolis employees the prior calendar year
retirement plan amount increased first by
1.0198 percent to prior
fiscal year date and
then increased by 4.0
percent annually for
each future year
(3) select and ultimate future salary increase assumption
or graded rate future salary increase assumption
future salary
plan increase assumption
general state employees select calculation and
retirement plan assumption A
correctional state employees
retirement plan assumption H
State Patrol retirement plan assumption H
general public employees select calculation and
retirement plan assumption B
public employees police and fire
fund retirement plan assumption C
local government correctional service
retirement plan assumption H
teachers retirement plan assumption D
Duluth teachers retirement plan assumption E
Minneapolis teachers retirement plan assumption F
St. Paul teachers retirement plan assumption G
The select calculation is:
during the ten-year select period, a designated percent
is multiplied by the result of ten minus T, where T is
the number of completed years of service, and is added
to the applicable future salary increase assumption. The
designated percent is 0.2 percent for the correctional state
employees retirement plan, the State Patrol retirement
plan, the public employees police and fire plan, and the
local government correctional service plan; 0.3 percent
for the general state employees retirement plan, the
general public employees retirement plan, the teachers
retirement plan, the Duluth Teachers Retirement Fund
Association, and the St. Paul Teachers Retirement Fund
Association; and 0.4 percent for the Minneapolis Teachers
Retirement Fund Association.
The ultimate future salary increase assumption is:
age A B C D E F G H
16 6.95% 6.95% 11.50% 8.20% 8.00% 6.50% 6.90% 7.7500
17 6.90 6.90 11.50 8.15 8.00 6.50 6.90 7.7500
18 6.85 6.85 11.50 8.10 8.00 6.50 6.90 7.7500
19 6.80 6.80 11.50 8.05 8.00 6.50 6.90 7.7500
20 6.75 6.40 11.50 6.00 6.90 6.50 6.90 7.7500
21 6.75 6.40 11.50 6.00 6.90 6.50 6.90 7.1454
22 6.75 6.40 11.00 6.00 6.90 6.50 6.90 7.0725
23 6.75 6.40 10.50 6.00 6.85 6.50 6.85 7.0544
24 6.75 6.40 10.00 6.00 6.80 6.50 6.80 7.0363
25 6.75 6.40 9.50 6.00 6.75 6.50 6.75 7.0000
26 6.75 6.36 9.20 6.00 6.70 6.50 6.70 7.0000
27 6.75 6.32 8.90 6.00 6.65 6.50 6.65 7.0000
28 6.75 6.28 8.60 6.00 6.60 6.50 6.60 7.0000
29 6.75 6.24 8.30 6.00 6.55 6.50 6.55 7.0000
30 6.75 6.20 8.00 6.00 6.50 6.50 6.50 7.0000
31 6.75 6.16 7.80 6.00 6.45 6.50 6.45 7.0000
32 6.75 6.12 7.60 6.00 6.40 6.50 6.40 7.0000
33 6.75 6.08 7.40 6.00 6.35 6.50 6.35 7.0000
34 6.75 6.04 7.20 6.00 6.30 6.50 6.30 7.0000
35 6.75 6.00 7.00 6.00 6.25 6.50 6.25 7.0000
36 6.75 5.96 6.80 6.00 6.20 6.50 6.20 6.9019
37 6.75 5.92 6.60 6.00 6.15 6.50 6.15 6.8074
38 6.75 5.88 6.40 5.90 6.10 6.50 6.10 6.7125
39 6.75 5.84 6.20 5.80 6.05 6.50 6.05 6.6054
40 6.75 5.80 6.00 5.70 6.00 6.50 6.00 6.5000
41 6.75 5.76 5.90 5.60 5.90 6.50 5.95 6.3540
42 6.75 5.72 5.80 5.50 5.80 6.50 5.90 6.2087
43 6.65 5.68 5.70 5.40 5.70 6.50 5.85 6.0622
44 6.55 5.64 5.60 5.30 5.60 6.50 5.80 5.9048
45 6.45 5.60 5.50 5.20 5.50 6.50 5.75 5.7500
46 6.35 5.56 5.45 5.10 5.40 6.40 5.70 5.6940
47 6.25 5.52 5.40 5.00 5.30 6.30 5.65 5.6375
48 6.15 5.48 5.35 5.00 5.20 6.20 5.60 5.5822
49 6.05 5.44 5.30 5.00 5.10 6.10 5.55 5.5404
50 5.95 5.40 5.25 5.00 5.00 6.00 5.50 5.5000
51 5.85 5.36 5.25 5.00 5.00 5.90 5.45 5.4384
52 5.75 5.32 5.25 5.00 5.00 5.80 5.40 5.3776
53 5.65 5.28 5.25 5.00 5.00 5.70 5.35 5.3167
54 5.55 5.24 5.25 5.00 5.00 5.60 5.30 5.2826
55 5.45 5.20 5.25 5.00 5.00 5.50 5.25 5.2500
56 5.35 5.16 5.25 5.00 5.00 5.40 5.20 5.2500
57 5.25 5.12 5.25 5.00 5.00 5.30 5.15 5.2500
58 5.25 5.08 5.25 5.10 5.00 5.20 5.10 5.2500
59 5.25 5.04 5.25 5.20 5.00 5.10 5.05 5.2500
60 5.25 5.00 5.25 5.30 5.00 5.00 5.00 5.2500
61 5.25 5.00 5.25 5.40 5.00 5.00 5.00 5.2500
62 5.25 5.00 5.25 5.50 5.00 5.00 5.00 5.2500
63 5.25 5.00 5.25 5.60 5.00 5.00 5.00 5.2500
64 5.25 5.00 5.25 5.70 5.00 5.00 5.00 5.2500
65 5.25 5.00 5.25 5.70 5.00 5.00 5.00 5.2500
66 5.25 5.00 5.25 5.70 5.00 5.00 5.00 5.2500
67 5.25 5.00 5.25 5.70 5.00 5.00 5.00 5.2500
68 5.25 5.00 5.25 5.70 5.00 5.00 5.00 5.2500
69 5.25 5.00 5.25 5.70 5.00 5.00 5.00 5.2500
70 5.25 5.00 5.25 5.70 5.00 5.00 5.00 5.2500
71 5.25 5.00 5.70
(c) The actuarial valuation must use the applicable
following payroll growth assumption for calculating the
amortization requirement for the unfunded actuarial accrued
liability where the amortization retirement is calculated as a
level percentage of an increasing payroll:
payroll growth
plan assumption
general state employees retirement plan 5.00%
correctional state employees retirement plan 5.00
State Patrol retirement plan 5.00
legislators retirement plan 5.00
elective state officers retirement plan 5.00
judges retirement plan 5.00
general public employees retirement plan 6.00
public employees police and fire
retirement plan 6.00
local government correctional service
retirement plan 6.00
teachers retirement plan 5.00
Duluth teachers retirement plan 5.00
Minneapolis teachers retirement plan 5.00
St. Paul teachers retirement plan 5.00
Sec. 3. Minnesota Statutes 2004, section 356.216, is
amended to read:
356.216 [CONTENTS OF ACTUARIAL VALUATIONS FOR LOCAL POLICE
AND FIRE FUNDS.]
(a) The provisions of section 356.215 that govern the
contents of actuarial valuations must apply to any local police
or fire pension fund or relief association required to make an
actuarial report under this section, except as follows:
(1) in calculating normal cost and other requirements, if
required to be expressed as a level percentage of covered
payroll, the salaries used in computing covered payroll must be
the maximum rate of salary on which retirement and survivorship
credits and amounts of benefits are determined and from which
any member contributions are calculated and deducted;
(2) in lieu of the amortization date specified in section
356.215, subdivision 11, the appropriate amortization target
date specified in section 69.77, subdivision 4, or 69.773,
subdivision 4, clause (c), must be used in calculating any
required amortization contribution, except that if the actuarial
report for the Bloomington Fire Department Relief Association
indicates an unfunded actuarial accrued liability, the unfunded
obligation is to be amortized on a level dollar basis by
December 31 of the year occurring 20 years later, and if
subsequent actuarial valuations for the Bloomington Fire
Department Relief Association determine a net actuarial
experience loss incurred during the year which ended as of the
day before the most recent actuarial valuation date, any
unfunded liability due to that loss is to be amortized on a
level dollar basis by December 31 of the year occurring 20 years
later and except that the amortization date for the Minneapolis
Police Relief Association is December 31, 2020;
(3) in addition to the tabulation of active members and
annuitants provided for in section 356.215, subdivision 13, the
member contributions for active members for the calendar year
and the prospective annual retirement annuities under the
benefit plan for active members must be reported;
(4) actuarial valuations required under section 69.773,
subdivision 2, must be made at least every four years and
actuarial valuations required under section 69.77 shall be made
annually;
(5) the actuarial balance sheet showing accrued assets
valued at market value if the actuarial valuation is required to
be prepared at least every four years or valued as current
assets under section 356.215, subdivision 1, clause (6), or
paragraph (b), whichever applies, if the actuarial valuation is
required to be prepared annually, actuarial accrued liabilities,
and the unfunded actuarial accrued liability must include the
following required reserves:
(i) For active members
1. Retirement benefits
2. Disability benefits
3. Refund liability due to death or withdrawal
4. Survivors' benefits
(ii) For deferred annuitants' benefits
(iii) For former members without vested rights
(iv) For annuitants
1. Retirement annuities
2. Disability annuities
3. Surviving spouses' annuities
4. Surviving children's annuities
In addition to those required reserves, separate items must
be shown for additional benefits, if any, which may not be
appropriately included in the reserves listed above; and
(6) actuarial valuations are due by the first day of the
seventh month after the end of the fiscal year which the
actuarial valuation covers.
(b) For the Minneapolis Firefighters Relief Association or
the Minneapolis Police Relief Association, the following
provisions additionally apply:
(1) in calculating the actuarial balance sheet, unfunded
actuarial accrued liability, and amortization contribution of
the relief association, "current assets" means the value of all
assets at cost, including realized capital gains and losses,
plus or minus, whichever applies, the average value of total
unrealized capital gains or losses for the most recent
three-year period ending with the end of the plan year
immediately preceding the actuarial valuation report
transmission date; and
(2) in calculating the applicable portions of the actuarial
valuation, an annual preretirement interest assumption of six
percent, an annual postretirement interest assumption of six
percent, and an annual salary increase assumption of four
percent must be used.
Sec. 4. Minnesota Statutes 2004, section 383B.46,
subdivision 2, is amended to read:
Subd. 2. [ESTABLISHMENT OF ACCOUNT; CONTRIBUTIONS.] The
county of Hennepin shall deduct from the salary of every person
who is eligible for coverage and who elected to retain or obtain
coverage by the Hennepin County supplemental retirement program
a sum equal to one percent of the total salary of the person.
Any classified or unclassified employee who is employed in
subsidized on-the-job training, work experience or public
service employment as an enrollee under the federal
Comprehensive Employment and Training Act shall not be included
in the supplemental retirement account from and after March 30,
1978 unless the employee has as of the later of March 30, 1978
or the date of employment sufficient service credit in the
public employees retirement fund or the Minneapolis municipal
employees retirement fund, whichever is applicable, to meet the
minimum vesting requirements for a deferred retirement annuity,
or the county agrees in writing to make the required employer
contributions on account of the individual from revenue sources
other than funds provided under the federal Comprehensive
Employment and Training Act, or the employee agrees in writing
to make the required employer contribution in addition to the
employee contribution. The deduction shall be made in the same
manner as other retirement deductions are made from the salary
of the person. An amount equal to the amounts deducted during
each payroll period shall be contributed by the county of
Hennepin. The total amount deducted and contributed shall be
deposited to the credit of the supplemental retirement account
in the treasury of the county of Hennepin a separate account
administered by the Minnesota State Retirement System on behalf
of Hennepin County. The Hennepin County supplemental retirement
account is hereby established as an account separate and
distinct from other funds, accounts, or assets of the county of
Hennepin.
Sec. 5. Minnesota Statutes 2004, section 383B.47, is
amended to read:
383B.47 [PARTICIPATION IN MINNESOTA SUPPLEMENTAL INVESTMENT
FUND.]
With the moneys deposited to the credit of the supplemental
retirement account in the treasury of the county of Hennepin,
the county of Hennepin, the Minnesota State Retirement System
shall purchase shares on behalf of Hennepin County in the
accounts of the Minnesota supplemental investment fund as
provided in section 383B.48.
Sec. 6. Minnesota Statutes 2004, section 383B.48, is
amended to read:
383B.48 [BUYING STATE SUPPLEMENTAL INVESTMENT FUND SHARES.]
At the time a person becomes eligible for coverage and
elects to obtain coverage by the Hennepin County supplemental
retirement program and before November 1 of each subsequent
year, A participant in the Hennepin County supplemental
retirement program shall indicate in writing on a form provided
by the county of Hennepin the account of the Minnesota
supplemental investment fund in which the participant wishes
salary deductions and county matching contributions attributable
to salary deductions to be invested for the subsequent 12-month
period such time as allowed by the Minnesota State Retirement
System. For that 12-month period, The county of Hennepin
Minnesota State Retirement System shall purchase with the salary
deductions and county matching funds attributable to the salary
deductions shares in the appropriate account of the Minnesota
supplemental investment fund in accordance with the indicated
preferences of the participant. However, the county of Hennepin
has the authority to determine which accounts of the Minnesota
supplemental investment fund will be available for participant
investment. The shares purchased must stand in the name of the
county of Hennepin. A record must be kept by the county of
Hennepin Minnesota State Retirement System indicating the number
of shares in each account of the Minnesota supplemental
investment fund purchased with the salary deductions and county
matching funds attributable to the salary deductions of each
participant. The record must be known as the "participant's
share account record." The participant's share account record
must show, in addition to the number of shares in the account,
any cash balance of salary deductions or county matching funds
attributable to those deductions which stand uninvested in
shares. At the option of the county of Hennepin, and subject to
any terms and conditions established and communicated in writing
by the county to a participant, the participant may designate no
more often than once each calendar quarter month that prior
salary deductions and county matching contributions attributable
to the salary deductions, together with any interest earned, be
reinvested in another account of the Minnesota supplemental
investment fund made available by the county of Hennepin.
Sec. 7. Minnesota Statutes 2004, section 383B.49, is
amended to read:
383B.49 [SUPPLEMENTAL RETIREMENT BENEFITS; REDEMPTION OF
SHARES.]
When requested to do so, in writing, on forms provided by
the county Minnesota State Retirement System, by a participant,
surviving spouse, a guardian of a surviving child or a personal
representative, whichever is applicable, the county of Hennepin
Minnesota State Retirement System shall on behalf of Hennepin
County redeem shares in the accounts of the Minnesota
supplemental investment fund standing in a participant's share
account record under the following circumstances and in
accordance with the laws and regulations governing the Minnesota
supplemental investment fund:
(1) A participant who is no longer employed by the county
of Hennepin is entitled to receive the cash realized on the
redemption of the shares to the credit of the participant's
share account record of the person. The participant may request
the redemption of all or a portion of the shares in the
participant's share account record of the person, but may not
request more than one redemption in any one calendar year. If
only a portion of the shares in the participant's share account
record is requested to be redeemed the person may request to
redeem not less than 20 percent of the shares in any one
calendar year and the redemption must be completed in no more
than five years. The person may select annual redemption in a
single lump sum or in monthly payments. An election is
irrevocable except that a participant may request an amendment
of the election to redeem all of the person's remaining shares.
All requests under this paragraph are subject to application to
and approval of the Hennepin County administrator, in the sole
discretion of the administrator Minnesota State Retirement
System upon verification by Hennepin County through the county
administrator of the recipient's eligibility to redeem funds.
(2) In the event of the death of a participant leaving a
surviving spouse, the surviving spouse is entitled to receive
the cash realized on the redemption of all or a portion of the
shares in the participant's share account record of the deceased
spouse, but in no event may the spouse request more than one
redemption in each calendar year. If only a portion of the
shares in the participant's share account record is requested to
be redeemed, the surviving spouse may request the redemption of
not less than 20 percent of the shares in any one calendar year.
The surviving spouse may elect annual redemption in a single
lump sum payment or in monthly payments. Redemption must be
completed in no more than five years. An election is
irrevocable except that the surviving spouse may request an
amendment of the election to redeem all of the participant's
remaining shares. All requests under this paragraph are subject
to application to and approval of the Hennepin County
administrator, in the sole discretion of the
administrator Minnesota State Retirement System upon
verification by Hennepin County through the county administrator
of the recipient's eligibility to redeem funds. Upon the death
of the surviving spouse, any shares remaining in the
participant's share account record must be redeemed on behalf of
Hennepin County by the county of Hennepin Minnesota State
Retirement System and the cash realized from the redemption
distributed to the estate of the surviving spouse.
(3) In the event of the death of a participant leaving no
surviving spouse, but leaving a minor surviving child or minor
surviving children, the guardianship estate of the minor child
is, or the guardianship estates of the minor children are,
entitled to receive the cash realized on the redemption of all
shares to the credit of the participant's share account record
of the deceased participant. In the event of minor surviving
children, the cash realized must be paid in equal shares to the
guardianship estates of the minor surviving children.
(4) In the event of the death of a participant leaving no
surviving spouse and no minor surviving children, the estate of
the deceased participant is entitled to receive the cash
realized on the redemption of all shares to the credit of the
participant's share account record of the deceased participant.
Sec. 8. [383B.491] [MINNESOTA STATE RETIREMENT SYSTEM
BILLING AUTHORITY.]
The Minnesota State Retirement System executive director is
authorized to enter into an interagency agreement with Hennepin
County under which the Minnesota State Retirement System would
directly bill the county for the cost of the Minnesota State
Retirement System's administration of the Hennepin County
Supplemental Retirement Plan.
Sec. 9. Minnesota Statutes 2004, section 423B.05,
subdivision 3, is amended to read:
Subd. 3. [CONTINUATION OF BOARD.] Notwithstanding the
provisions of section 423A.01, subdivision 2, or any other law,
the board of trustees and its successors established under
subdivision 1 shall continue to govern the association until
there are no more than 100 225 members of the police pension
fund. The fund thereafter must become a trust fund in
accordance with section 423A.01, subdivision 2.
Sec. 10. Minnesota Statutes 2004, 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
A B
20 years 34.0 34.5 units 35.0 units
21 years 35.6 36.1 units 36.6 units
22 years 37.2 37.7 units 38.2 units
23 years 38.8 39.3 units 39.8 units
24 years 40.4 40.9 units 41.4 units
25 years 42.0 42.5 units 43.0 units
Column A is applicable until December 31, 2005, and applies
retroactively to January 1, 2005, for a service pensioner who
retired before January 1, 2005. Column B applies on and after
January 1, 2006.
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 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 34 units while so disabled.
Sec. 11. Minnesota Statutes 2004, section 423B.09, is
amended by adding a subdivision to read:
Subd. 7. [ADDITIONAL UNIT.] The additional half units
provided to members by subdivision 1 must also be provided under
the same terms and at the same time as applicable under
subdivision 1 to members who selected a joint annuity option
under subdivision 6 and must be in an amount that is actuarially
equivalent to the service pension and the automatic survivor
coverage for that additional unit.
Sec. 12. Minnesota Statutes 2004, 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 22 22.5 units per month
until December 31, 2005, and 23 units per month beginning on
January 1, 2006, 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 22 22.5 units per month
until December 31, 2005, and 23 units per month beginning on
January 1, 2006, 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 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.
(e) For any surviving spouse who began receiving survivor
benefits before January 1, 2005, the half-unit increase under
paragraph (a) is effective retroactive to January 1, 2005.
Sec. 13. Minnesota Statutes 2004, section 423C.05,
subdivision 2, is amended to read:
Subd. 2. [SERVICE PENSION.] (a) An active A member who has
performed duty for the fire department 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 under paragraph (b).
(b) Based on the percentage that the actuarial value of
assets of the special fund equal to the actuarial accrued
liabilities of the special fund according to the most recent
annual actuarial valuation of the relief association prepared in
accordance with sections 356.215 and 356.216, The amount of the
service pension is as follows:
Length of Service Service Service
allowable pension pension pension
service payable if payable payable if
credit under 90 if greater greater
percent than 89.99 than 92.49
percent and percent
less than Number of
92.5 percent units
5 years - 8.0 units 8.0 units
6 years - 9.6 units 9.6 units
7 years - 11.2 units 11.2 units
8 years - 12.8 units 12.8 units
9 years - 14.4 units 14.4 units
10 years 16.0 units 16.0 units 16.0 units
11 years 17.6 units 17.6 units 17.6 units
12 years 19.2 units 19.2 units 19.2 units
13 years 20.8 units 20.8 units 20.8 units
14 years 22.4 units 22.4 units 22.4 units
15 years 24.0 units 24.0 units 24.0 units
16 years 25.6 units 25.6 units 25.6 units
17 years 27.2 units 27.2 units 27.2 units
18 years 28.8 units 28.8 units 28.8 units
19 years 30.4 units 30.4 units 30.4 units
20 years 33.0 units 33.5 units 34.0 units
21 years 34.6 units 35.1 units 35.6 units
22 years 36.2 units 37.7 units 37.2 units
23 years 37.8 units 38.3 units 38.8 units
24 years 39.4 units 39.9 units 40.4 units
25 years
or more 41.0 units 41.5 units 42.0 units
(c) A member entitled to a benefit under this subdivision
may elect to have it paid as an optional retirement annuity
pursuant to the conditions set forth in subdivision 8. A member
receiving a benefit pursuant to subdivision 5 or 6 shall not
simultaneously be entitled to a benefit under this subdivision.
Sec. 14. [423C.16] [RECOMPUTATION OF DISABLED BENEFIT
PROHIBITED.]
Notwithstanding section 423A.11, the Board of Trustees of
the Minneapolis Firefighters Relief Association shall not
recompute the disability benefit of a member who became
permanently disabled as the result of a service-related disease
or injury. Any prior recomputation of a disabled member's
service-related disability pension shall be revoked upon the
member's request and upon the member's signed and sworn
agreement to waive any right to a recomputation of the benefit
in the future. Non-service-related disability pension benefits
that were recomputed at full 25-year service pensions shall
remain in effect.
Sec. 15. [NO REDUCTION OF BENEFITS.]
When a pension benefit is properly paid in accordance with
the laws governing the Minneapolis Police Relief Association or
the Minneapolis Firefighters Relief Association, whichever
apply, to any member, the dollar amount of the pension a member
received may not be reduced if the city of Minneapolis and the
collective bargaining agent representing active police officers
or firefighters enter into or are required to abide by an
agreement that would otherwise require the association to reduce
the dollar amount of a pension that had properly been paid to
any member.
Sec. 16. [AURORA, BIWABIK CITY, HOYT LAKES, AND PALO
VOLUNTEER FIREFIGHTER RELIEF ASSOCIATIONS; CONSOLIDATION.]
(a) This section applies to consolidation of any
combination of two or more of the following volunteer
firefighter relief associations: Aurora, Biwabik City, Hoyt
Lakes, and Palo.
(b) Notwithstanding Minnesota Statutes, section 424B.10,
subdivision 1, paragraph (a), the service pension to be paid by
the relief association existing after the consolidation is as
follows:
(1) for the service rendered by each individual volunteer
firefighter before the effective date of the consolidation, the
service pension amount is the amount payable to that volunteer
firefighter under the articles of incorporation or bylaws of the
consolidating volunteer firefighters relief association that the
firefighter was a member of immediately before the
consolidation;
(2) for the service rendered after the effective date of
the consolidation, the service pension amount is the highest
dollar amount service pension of any of the consolidating
volunteer firefighters relief associations under the articles of
incorporation or bylaws in effect immediately before the
consolidation; and
(3) after consolidation, increases in the amounts
established in clauses (1) and (2) may be implemented if
consistent with applicable requirements of Minnesota Statutes,
chapters 69 and 424A.
Sec. 17. [EVELETH RETIRED POLICE AND FIRE TRUST FUND; AD
HOC POSTRETIREMENT ADJUSTMENT.]
(a) In addition to the current pensions and other
retirement benefits payable, the pensions and retirement
benefits payable to retired police officers and firefighters and
their surviving spouses by the Eveleth police and fire trust
fund are increased by $100 per month. Increases are retroactive
from January 1, 2005.
(b) Following the January 1, 2005, effective date of the
benefit increase provided under paragraph (a), every two years
thereafter, to be effective no earlier than the applicable
January 1, the city council of the city of Eveleth is authorized
to provide permanent, uniform benefit increases, not less than
$10 per month nor to exceed $100 per month, to any remaining
retirees and survivors receiving benefits from the Eveleth
police and fire trust fund. Any given benefit improvement under
this paragraph is not effective unless the city council passes a
resolution approving the increase.
(c) Within 30 days following the approval of a resolution
under paragraph (b), the chief administrative officer of the
city of Eveleth shall file a copy of the resolution with the
executive director of the Legislative Commission on Pensions and
Retirement, with the chair of the house Governmental Operations
and Veterans Affairs Committee, and with the chair of the senate
State and Local Government Operations Committee. Along with a
copy of the resolution, the city's chief administrative officer
must send a statement indicating the age of each benefit
recipient and the retirement benefit or survivor benefit being
received before and after the benefit increase.
Sec. 18. [MAPLEWOOD AND OAKDALE VOLUNTEER FIREFIGHTER
RELIEF ASSOCIATIONS; TRANSFER OF ASSETS.]
Notwithstanding any limitations in Minnesota Statutes,
section 424A.02, subdivision 13, or any other provision of law
to the contrary, if an agreement between the affected relief
associations and cities is reached as provided in this section,
the Maplewood Firefighters Relief Association may transfer
assets from its special fund to the Oakdale Fire Department
Relief Association representing the value of the accumulated
service credit for the current members of the Oakdale Fire
Department Relief Association who are currently eligible to
receive a combined service pension for firefighter service in
both associations. The transfer of the assets from the
Maplewood Firefighters Relief Association to the Oakdale Fire
Department Relief Association must be in an amount representing
the cumulative value of the service credit earned by the members
of the Oakdale Fire Department Relief Association who are
currently eligible to receive a combined service pension for
firefighting service in both associations for the service credit
that they accrued while working for the Maplewood Fire
Department. The amount of the assets, liabilities, and service
credit to be transferred must be specified in a joint agreement
negotiated by the secretaries of the two relief associations and
ratified by the boards of trustees of both relief associations
and of the cities of Maplewood and Oakdale. The agreement must
specify by name or other appropriate means the firefighters
affected by the liability, asset, and service credit transfer.
The ratification must be expressed in the form of resolutions
adopted by each entity. The agreements must specify the amount
of assets to be transferred, the amount of liabilities to be
transferred, and the amount of service credit each of the
applicable individuals will receive in the Oakdale Fire
Department Relief Association. Upon the ratification of the
agreement by both relief associations and both cities, the
assets, liabilities, and service credit of the applicable
individuals must be transferred to the Oakdale Fire Department
Relief Association, and the Maplewood Firefighters Relief
Association is relieved of any obligation to the individuals. A
certified copy of the ratified agreement must be filed with the
state auditor and with the secretary of state.
Sec. 19. [EFFECTIVE DATE; LOCAL APPROVAL.]
(a) Sections 2 and 3 with respect to the Bloomington Fire
Department Relief Association are effective the day after the
date on which the city council of the city of Bloomington and
its chief clerical officer timely complete their compliance with
Minnesota Statutes, section 645.021, subdivisions 2 and 4.
(b) Sections 1, 3, with respect to the Minneapolis Police
Relief Association, 9, 10, 11, 12, 13, and 15 are not severable
and are effective the day after the date of the approval by the
city council of the city of Minneapolis and the timely
completion by the chief clerical officer of the city of
Minneapolis of compliance with Minnesota Statutes, section
645.021, subdivisions 2 and 3.
(c) Sections 4, 5, 6, 7, and 8 are effective the day after
the board of Hennepin County and its chief clerical officer
complete in a timely manner their compliance with Minnesota
Statutes, section 645.021, subdivisions 2 and 3.
(d) Sections 14 and 15 are effective the day after the
governing body of the city of Minneapolis and its chief clerical
officer timely complete their compliance with Minnesota
Statutes, section 645.021, subdivisions 2 and 3.
(e) Section 17 is effective the day after the date on which
the city council of the city of Eveleth and its chief clerical
officer timely complete their compliance with Minnesota
Statutes, section 645.021, subdivisions 2 and 3.
(f) Section 16 is effective with respect to a volunteer
firefighters relief association listed in column A the day after
the governing body of the municipality listed in column B and
its chief clerical officer timely complete compliance with
Minnesota Statutes, section 645.021, subdivisions 2 and 3.
A B
Aurora city of Aurora
Biwabik city of Biwabik
Hoyt Lakes city of Hoyt Lakes
Palo town of White
(g) Section 18 is effective the day after the governing
body of the city of Maplewood, the governing body of the city of
Oakdale, the Maplewood chief clerical officer, and the Oakdale
chief clerical officer complete their compliance with Minnesota
Statutes, section 645.021, subdivisions 2 and 3.
ARTICLE 12
ONE PERSON AND SMALL GROUP
RETIREMENT CHANGES
Section 1. [PURCHASE OF PRIOR SERVICE CREDIT.]
(a) An eligible person described in paragraph (b) is
entitled to purchase up to one year of allowable service credit
from the Teachers Retirement Association for the 2003-2004
school year. The service credit purchase under this section
must be made in accordance with Minnesota Statutes, section
356.551, except as otherwise stated in this section.
(b) An eligible person is a person who:
(1) is currently a member of the Teachers Retirement
Association;
(2) was born on April 2, 1949;
(3) has been employed by Independent School District No.
11, Anoka-Hennepin, since the 1971-1972 school year;
(4) applied for and was granted an extended leave of
absence from Independent School District No. 11, Anoka-Hennepin,
for the 2002-2003, 2003-2004, and 2004-2005 school years under
Minnesota Statutes, section 122A.46;
(5) was unable to make timely payment for the 2003-2004
school year under Minnesota Statutes, section 354.094, because
of a problem in transferring funds from the individual's
tax-sheltered annuity account; and
(6) was not permitted by the Teachers Retirement
Association to make payment after June 30, 2004, with interest.
(c) Notwithstanding Minnesota Statutes, section 356.551,
payment must be made by September 1, 2005, or prior to
termination of service, whichever is earlier, and the employee
payment amount is an amount equal to the employee contribution
rate in effect during the 2003-2004 school year applied to the
eligible individual's salary in the year prior to the leave,
plus .708 percent monthly interest from June 30, 2004, until the
end of the month in which payment is made. If the full payment
required under this paragraph is made, then notwithstanding
Minnesota Statutes, section 354.094, the individual is
authorized under Minnesota Statutes, section 354.094, to make
the required contribution for the 2004-2005 school year, and any
subsequent years of the leave. Notwithstanding payment
deadlines in Minnesota Statutes, section 354.094, the employee
contribution for the 2004-2005 school year must be made on or
before September 30, 2005, with .708 percent monthly interest
from June 30, 2005, until paid.
(d) If payment is received under paragraph (c), the
executive director of the Teachers Retirement Association shall
bill Independent School District No. 11, Anoka-Hennepin, for the
employer contribution that would have been made on behalf of the
eligible person for the 2003-2004 fiscal year under Minnesota
Statutes, section 354.094. The remainder of the full actuarial
value payment under Minnesota Statutes, section 356.551, is
waived. If the school district fails to make payment under this
paragraph within 30 days of notification of the amount due, the
executive director shall notify the commissioner of the
Department of Finance of that fact and the employer payment
amount shall be deducted from any subsequent state aid to the
school district.
Sec. 2. [EFFECTIVE DATE.]
Section 1 is effective the day following final enactment.
Presented to the governor July 15, 2005
Signed by the governor July 25, 2005, 2:05 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes