Minnesota Session Laws - 2025, Regular Session

CHAPTER 37--S.F.No. 2884

An act

relating to retirement; Minnesota State Retirement System, making administrative changes, increasing the formula multiplier and the postretirement adjustment for the general state employees retirement plan, and increasing the postretirement adjustment for the legislators and unclassified retirement plans; Public Employees Retirement Association, making administrative and conforming changes, increasing the cap on the postretirement adjustment for the general employees retirement plan, expanding the privatization requirements and revising the method for calculating withdrawal liability; implementing the recommendations of the MSRS correctional plan eligibility work group, the amortization work group, and the State Auditor's fire relief association working group; increasing the employer contribution maximum for the higher education supplemental retirement plan; increasing the maximum lump-sum benefit level for defined benefit firefighter relief associations; Minnesota Secure Choice Retirement Program, making administrative and policy changes, authorizing the commissioner of employment and economic development to disclose information to the executive director, and adding penalties for noncompliance; modifying the pension fund executive directors' authority to correct errors and modifying the annual reporting requirement; repealing the investment business recipient disclosure reporting requirement for firefighter relief associations; establishing a work group on pension plans for probation officers and 911 telecommunicators; modifying circumstances for terminating state and supplemental employer contributions; modifying certain public safety benefits; providing certain teacher retirement association benefit increases; modifying duty disability and health insurance continuation for peace officers and firefighters; making technical changes, clarifications, and corrections to the statutes governing the Legislative Commission on Pensions and Retirement, the statewide volunteer firefighter plan, IRAP to TRA transfers, fire state aid and police and firefighter retirement supplemental state aid, and the public employees defined contribution plan; modifying practices for reporting and repealing certain reporting requirements for the State Board of Investment; eliminating obsolete provisions; appropriating money;

amending Minnesota Statutes 2024, sections 3.85, subdivisions 2, 3, 10; 11A.07, subdivisions 4, 4b; 124E.12, subdivisions 4, 6; 126C.10, subdivision 37; 181.101; 187.03, subdivisions 5, 7, 7a, by adding a subdivision; 187.05, subdivisions 4, 6, by adding a subdivision; 187.07, subdivisions 1, 2, 3, 6; 187.08, subdivisions 3, 7; 187.11; 268.19, subdivision 1; 299A.465, subdivision 1; 352.01, by adding a subdivision; 352.029, subdivision 3; 352.03, subdivision 5; 352.115, subdivision 3; 352.22, subdivisions 2b, 3; 352.90; 352.92, subdivision 2a; 352.93, subdivision 1; 352.955, subdivision 1; 352B.02, subdivision 1c; 353.01, subdivisions 2a, 2b, 2d; 353.028, subdivisions 2, 3; 353.032, subdivisions 3, 4, 5, 6, 7, 9, 10; 353.27, subdivision 3a; 353.34, subdivision 5; 353.65, subdivision 3b; 353D.01, subdivision 2; 353D.02, subdivisions 1, 2, 3, 4, 5, 6, 7; 353E.06, subdivision 1; 353F.01; 353F.02, subdivisions 3, 4b, 5a, 6, by adding subdivisions; 353F.025; 353F.03; 353F.04; 353F.05; 353F.051, subdivisions 1, 2; 353F.052; 353F.057; 353F.06; 353F.07; 353F.08; 353F.09; 353G.08, subdivision 1a; 353G.11, subdivisions 2, 2a, by adding a subdivision; 353G.17, subdivisions 4, 5; 353G.19, subdivisions 1, 2, 3, 4, 5; 354.42, subdivision 3; 354.44, subdivision 6; 354B.215, subdivisions 3, 4; 356.215, subdivisions 1, 4, 8, 11, 17; 356.24, subdivision 1; 356.415, subdivisions 1, 1b, 1c, 1d, 1e; 356.633, subdivisions 1, 2, by adding a subdivision; 356.636, subdivisions 2, 3; 423A.022, subdivisions 2, 3, 5; 424A.014, subdivisions 2, 5; 424A.015, subdivision 4; 424A.016, subdivisions 2, 6; 424A.02, subdivision 3; 424A.05, subdivision 3; 424A.06, subdivision 2; 424A.08; 424A.092, subdivisions 2, 3, 4; 424A.093, subdivision 5; 424B.22, subdivisions 1, 2, 3, by adding a subdivision; 477B.02, subdivisions 3, 8; 477B.03, subdivisions 5, 7; 477B.04, subdivisions 3, 4; 490.123, subdivision 5; proposing coding for new law in Minnesota Statutes, chapters 187; 352; 352B; 356; repealing Minnesota Statutes 2024, sections 11A.27; 352.91, subdivisions 1, 2, 2a, 3c, 3d, 3e, 3f, 3g, 3h, 3i, 3j, 4a, 4b, 4c, 6; 353F.02, subdivision 4a; 356.635, subdivision 9; 356A.06, subdivision 5; 424A.015, subdivision 5.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

ARTICLE 1

MINNESOTA STATE RETIREMENT SYSTEM

Section 1.

Minnesota Statutes 2024, 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) applies.

new text begin (1) If the employee does not have allowable service after June 30, 2025, new text end the employee's new text begin retirement annuity is equal to the employee's new text end average salary deleted text begin , as defined in section 352.01, subdivision 14a, deleted text end multiplied by 1.2 percent per year of allowable service for the first ten years and 1.7 percent for each later year of allowable service and pro rata for completed months less than a full year deleted text begin determines the amount of the retirement annuity to which the employee is entitled deleted text end .

new text begin (2) If the employee has allowable service after June 30, 2025, the employee's retirement annuity is equal to the employee's average salary multiplied by 1.2 percent per year of allowable service for the first ten years and 1.7 percent for each later year of allowable service through June 30, 2025, and 1.9 percent for each year of allowable service after June 30, 2025, and pro rata for completed months less than a full year. new text end

(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.

new text begin (1) If the employee does not have allowable service after June 30, 2025, new text end the employee's new text begin retirement annuity is equal to the employee's new text end average salary deleted text begin , as defined in section 352.01, subdivision 14a, deleted text end multiplied by 1.7 percent for each year of allowable service and pro rata for new text begin completed new text end months less than a full year deleted text begin determines the amount of the retirement annuity to which the employee is entitled deleted text end .

new text begin (2) If the employee has allowable service after June 30, 2025, the employee's retirement annuity is equal to the employee's average salary multiplied by 1.7 percent for each year of allowable service through June 30, 2025, and 1.9 percent for each year of allowable service after June 30, 2025, and pro rata for completed months less than a full year. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2025. new text end

Sec. 2.

Minnesota Statutes 2024, section 352.22, subdivision 2b, is amended to read:

Subd. 2b.

Refund repayment.

Any person who has received a refund from the state employees retirement plan deleted text begin , deleted text end new text begin or the correctional state employees retirement plan new text end and who is a member of any of the retirement plans specified in section 356.311, paragraph (b), may repay the refund with interest to the deleted text begin state employees retirement deleted text end plan new text begin from which the refund was paid new text end . If a refund is repaid to the plan and more than one refund has been received from the plan, all refunds must be repaid. Repayment must be made as provided in section 352.23, and under terms and conditions consistent with that section as agreed upon with the director.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 3.

Minnesota Statutes 2024, section 352.22, subdivision 3, is amended to read:

Subd. 3.

Deferred annuity.

(a) new text begin After separation from state service, new text end an employee deleted text begin who has at least three years of allowable service if employed before July 1, 2010, or who has at least five years of allowable service if employed after June 30, 2010, when termination occurs deleted text end may elect to leave the new text begin employee's new text end accumulated contributions in the new text begin retirement new text end fund and thereby be entitled to a deferred retirement annuity deleted text begin . deleted text end new text begin if the employee: new text end

new text begin (1) is a member of the state employees retirement plan and satisfies the allowable service requirement under section 352.115, subdivision 1, applicable to the employee; or new text end

new text begin (2) is a member of the correctional state employees retirement plan and satisfies the allowable service requirement under section 352.925 applicable to the employee. new text end

new text begin (b) new text end The annuity must be computed under the law in effect when new text begin the employee separates from new text end state service deleted text begin terminated deleted text end , on the basis of the allowable service credited to the person before the deleted text begin termination of deleted text end new text begin separation from state new text end service.

deleted text begin (b) deleted text end new text begin (c) new text end An employee on layoff or on leave of absence without pay, except a leave of absence for health reasons, and who does not return to state service must have an annuity, deferred annuity, or other benefit to which the employee may become entitled computed under the law in effect on the employee's last working day.

deleted text begin (c) deleted text end new text begin (d) new text end No application for a deferred annuity may be made more than 60 days before the time the former employee reaches the required age for entitlement to the payment of the annuity. The deferred annuity begins to accrue no earlier than 60 days before the date the application is filed in the office of the system, but not (1) before the date on which the employee reaches the required age for entitlement to the annuity nor (2) before the day following the termination of state service in a position which is not covered by the retirement system.

deleted text begin (d) deleted text end new text begin (e) new text end Application for the accumulated contributions left on deposit with the fund may be made at any time following the date of the termination of service.

deleted text begin (e) deleted text end new text begin (f) new text end Deferred annuities must be augmented as provided in subdivision 3a.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from July 1, 2023. new text end

Sec. 4.

Minnesota Statutes 2024, section 356.415, subdivision 1, is amended to read:

Subdivision 1.

Annual postretirement adjustments; Minnesota State Retirement System general state employees retirement plan, legislators retirement plan, and unclassified state employees retirement program.

(a) Recipients of a retirement annuity, disability benefit, or survivor benefit from the general state employees retirement plan, the legislators retirement plan, or the unclassified state employees retirement program are entitled to an annual postretirement adjustment, effective as of each January 1, as follows:

deleted text begin (1) effective January 1, 2019, through December 31, 2023, a postretirement increase of one percent must be applied each year to the amount of the monthly annuity or benefit of each annuitant or benefit recipient who has been receiving an annuity or a benefit for at least 12 full months as of the June 30 of the calendar year immediately before the adjustment; deleted text end

deleted text begin (2) effective January 1, 2019, through December 31, 2023, for each annuitant or benefit recipient who has been receiving an annuity or a benefit for at least one full month, but less than 12 full months as of the June 30 of the calendar year immediately before the adjustment, a postretirement increase of 1/12 of one percent for each month that the person has been receiving an annuity or benefit must be applied to the amount of the monthly annuity or benefit of the annuitant or benefit recipient; deleted text end

deleted text begin (3) deleted text end new text begin (1) new text end effective January 1, deleted text begin 2024 deleted text end new text begin 2026 new text end , and thereafter, a postretirement increase of deleted text begin 1.5 deleted text end new text begin 1.75 new text end percent must be applied each year to the amount of the monthly annuity or benefit of each annuitant or benefit recipient who has been receiving an annuity or a benefit for at least 12 full months as of the June 30 of the calendar year immediately before the adjustment; and

deleted text begin (4) deleted text end new text begin (2) new text end effective January 1, deleted text begin 2024 deleted text end new text begin 2026 new text end , and thereafter, for each annuitant or benefit recipient who has been receiving an annuity or a benefit for at least one full month, but less than 12 full months as of the June 30 of the calendar year immediately before the adjustment, an annual postretirement increase of 1/12 of deleted text begin 1.5 deleted text end new text begin 1.75 new text end percent for each month that the person has been receiving an annuity or benefit must be applied to the amount of the monthly annuity or benefit of the annuitant or benefit recipient.

(b) An increase in annuity or benefit payments under this subdivision must be made automatically unless written notice is filed by the annuitant or benefit recipient with the executive director of the deleted text begin covered deleted text end new text begin Minnesota State new text end Retirement deleted text begin plan deleted text end new text begin System new text end requesting that the increase not be made.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for postretirement adjustments beginning on or after January 1, 2026. new text end

ARTICLE 2

PUBLIC EMPLOYEES RETIREMENT ASSOCIATION

Section 1.

Minnesota Statutes 2024, section 353.01, subdivision 2a, is amended to read:

Subd. 2a.

Included employees; mandatory membership.

(a) new text begin Any new text end public deleted text begin employees deleted text end new text begin employee new text end whose salary from one governmental subdivision deleted text begin exceeds deleted text end new text begin is expected to exceed new text end $425 in any month and who deleted text begin are deleted text end new text begin is new text end not specifically excluded under subdivision 2b or deleted text begin have deleted text end new text begin has new text end not been provided an option to participate under subdivision 2d, whether individually or by action of the governmental subdivision, must participate new text begin beginning on the employee's first day of employment new text end as deleted text begin members deleted text end new text begin a member new text end of the association with retirement coverage by the general employees retirement plan under this chapter, the public employees police and fire plan under this chapter, or the local government correctional employees retirement plan under chapter 353E, whichever applies. new text begin For any employee whose salary is not expected to exceed $425 in any month, new text end membership commences deleted text begin as a condition of employment on the first day of employment or deleted text end on the first day that the new text begin employee's salary exceeds $425 and the other new text end eligibility criteria are met deleted text begin , whichever is later deleted text end . Public employees include but are not limited to:

(1) persons whose salary meets the threshold in this paragraph from employment in one or more positions within one governmental subdivision;

(2) elected county sheriffs;

(3) persons who are appointed, employed, or contracted to perform governmental functions that by law or local ordinance are required of a public officer, including, but not limited to:

(i) town and city clerk or treasurer;

(ii) county auditor, treasurer, or recorder;

(iii) city manager as defined in section 353.028 who does not exercise the option provided under subdivision 2d; or

(iv) emergency management director, as provided under section 12.25;

(4) physicians under section 353D.01, subdivision 2, who do not elect public employees defined contribution plan coverage under section 353D.02, subdivision 2;

(5) full-time employees of the Dakota County Agricultural Society;

(6) employees of the Red Wing Port Authority who were first employed by the Red Wing Port Authority before May 1, 2011, and who are not excluded employees under subdivision 2b;

(7) employees of the Seaway Port Authority of Duluth who are not excluded employees under subdivision 2b;

(8) employees of the Stevens County Housing and Redevelopment Authority who were first employed by the Stevens County Housing and Redevelopment Authority before May 1, 2014, and who are not excluded employees under subdivision 2b;

(9) employees of the Minnesota River Area Agency on Aging who were first employed by a Regional Development Commission before January 1, 2016, and who are not excluded employees under subdivision 2b; and

(10) employees of the Public Employees Retirement Association.

(b) A public employee or elected official who was a member of the association on June 30, 2002, based on employment that qualified for membership coverage by the public employees retirement plan or the public employees police and fire plan under this chapter, or the local government correctional employees retirement plan under chapter 353E as of June 30, 2002, retains that membership for the duration of the person's employment in that position or incumbency in elected office. Except as provided in subdivision 28, the person shall participate as a member until the employee or elected official terminates public employment under subdivision 11a or terminates membership under subdivision 11b.

(c) If the salary of an included public employee is less than $425 in any subsequent month, the member retains membership eligibility.

(d) For the purpose of participation in the general employees retirement plan, public employees include employees who were members of the former Minneapolis Employees Retirement Fund on June 29, 2010.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2025. new text end

Sec. 2.

Minnesota Statutes 2024, section 353.01, subdivision 2b, is amended to read:

Subd. 2b.

Excluded employees.

(a) The following public employees are not eligible to participate as members of the association with retirement coverage by the general employees retirement plan, the local government correctional employees retirement plan under chapter 353E, or the public employees police and fire plan:

(1) persons whose salary from one governmental subdivision never exceeds new text begin or is never expected to exceed new text end $425 in a month;

(2) public officers who are elected to a governing body, city mayors, or persons who are appointed to fill a vacancy in an elected office of a governing body, whose term of office commences on or after July 1, 2002, for the service to be rendered in that elected position;

(3) election judges and persons employed solely to administer elections;

(4) patient and inmate personnel who perform services for a governmental subdivision;

(5) except as otherwise specified in subdivision 12a, employees who are employed solely in a temporary position as defined under subdivision 12a, and employees who resign from a nontemporary position and accept a temporary position within 30 days of that resignation in the same governmental subdivision;

(6) employees who are employed by reason of work emergency caused by fire, flood, storm, or similar disaster, but if the person becomes a probationary or provisional employee within the same pay period, other than on a temporary basis, the person is a "public employee" retroactively to the beginning of the pay period;

(7) employees who by virtue of their employment in one governmental subdivision are required by law to be a member of and to contribute to any of the plans or funds administered by the Minnesota State Retirement System, the Teachers Retirement Association, or the St. Paul Teachers Retirement Fund Association, but this exclusion must not be construed to prevent a person from being a member of and contributing to the Public Employees Retirement Association and also belonging to and contributing to another public pension plan or fund for other service occurring during the same period of time, and a person who meets the definition of "public employee" in subdivision 2 by virtue of other service occurring during the same period of time becomes a member of the association unless contributions are made to another public retirement plan on the salary based on the other service or to the Teachers Retirement Association by a teacher as defined in section 354.05, subdivision 2;

(8) persons who are members of a religious order and are excluded from coverage under the federal Old Age, Survivors, Disability, and Health Insurance Program for the performance of service as specified in United States Code, title 42, section 410(a)(8)(A), as amended, if no irrevocable election of coverage has been made under section 3121(r) of the Internal Revenue Code of 1954, as amended;

(9) persons who are:

(i) employed by a governmental subdivision who have not reached the age of 23 and who are enrolled on a full-time basis to attend or are attending classes on a full-time basis at an accredited school, college, or university in an undergraduate, graduate, or professional-technical program, or at a public or charter high school;

(ii) employed as resident physicians, medical interns, pharmacist residents, or pharmacist interns and are serving in a degree or residency program in a public hospital or in a public clinic; or

(iii) students who are serving for a period not to exceed five years in an internship or a residency program that is sponsored by a governmental subdivision, including an accredited educational institution;

(10) persons who hold a part-time adult supplementary technical college license who render part-time teaching service in a technical college;

(11) for the first three years of employment, foreign citizens who are employed by a governmental subdivision, except that the following foreign citizens must be considered included employees under subdivision 2a:

(i) H-1B, H-1B1, and E-3 status holders;

(ii) employees of Hennepin County or Hennepin Healthcare System, Inc.;

(iii) employees legally authorized to work in the United States for three years or more; and

(iv) employees otherwise required to participate under federal law;

(12) public hospital employees who elected not to participate as members of the association before 1972 and who did not elect to participate from July 1, 1988, to October 1, 1988;

(13) deleted text begin except as provided in section 353.86, deleted text end volunteer ambulance service personnel, as defined in subdivision 35, but persons who serve as volunteer ambulance service personnel may still qualify as public employees under subdivision 2 and may be members of the Public Employees Retirement Association and participants in the general employees retirement plan or the public employees police and fire plan, whichever applies, on the basis of compensation received from public employment service other than service as volunteer ambulance service personnel;

(14) except as provided in section 353.87, volunteer firefighters, as defined in subdivision 36, engaging in activities undertaken as part of volunteer firefighter duties, but a person who is a volunteer firefighter may still qualify as a public employee under subdivision 2 and may be a member of the Public Employees Retirement Association and a participant in the general employees retirement plan or the public employees police and fire plan, whichever applies, on the basis of compensation received from public employment activities other than those as a volunteer firefighter;

(15) employees in the building and construction trades, as follows:

(i) pipefitters and associated trades personnel employed by Independent School District No. 625, St. Paul, with coverage under a collective bargaining agreement by the pipefitters local 455 pension plan who were either first employed after May 1, 1997, or, if first employed before May 2, 1997, elected to be excluded under Laws 1997, chapter 241, article 2, section 12;

(ii) electrical workers, plumbers, carpenters, and associated trades personnel employed by Independent School District No. 625, St. Paul, or the city of St. Paul, with coverage under a collective bargaining agreement by the electrical workers local 110 pension plan, the plumbers local 34 pension plan, or the carpenters local 322 pension plan who were either first employed after May 1, 2000, or, if first employed before May 2, 2000, elected to be excluded under Laws 2000, chapter 461, article 7, section 5;

(iii) bricklayers, allied craftworkers, cement masons, glaziers, glassworkers, painters, allied tradesworkers, and plasterers employed by the city of St. Paul or Independent School District No. 625, St. Paul, with coverage under a collective bargaining agreement by the bricklayers and allied craftworkers local 1 pension plan, the cement masons local 633 pension plan, the glaziers and glassworkers local 1324 pension plan, the painters and allied trades local 61 pension plan, or the plasterers local 265 pension plan who were either first employed after May 1, 2001, or if first employed before May 2, 2001, elected to be excluded under Laws 2001, First Special Session chapter 10, article 10, section 6;

(iv) plumbers employed by the Metropolitan Airports Commission, with coverage under a collective bargaining agreement by the plumbers local 34 pension plan, who were either first employed after May 1, 2001, or if first employed before May 2, 2001, elected to be excluded under Laws 2001, First Special Session chapter 10, article 10, section 6;

(v) electrical workers or pipefitters employed by the Minneapolis Park and Recreation Board, with coverage under a collective bargaining agreement by the electrical workers local 292 pension plan or the pipefitters local 539 pension plan, who were first employed before May 2, 2015, and elected to be excluded under Laws 2015, chapter 68, article 11, section 5;

(vi) laborers and associated trades personnel employed by the city of St. Paul or Independent School District No. 625, St. Paul, who are designated as temporary employees with coverage under a collective bargaining agreement by a multiemployer plan as defined in section 356.27, subdivision 1, who were either first employed on or after June 1, 2018, or if first employed before June 1, 2018, elected to be excluded under Laws 2018, chapter 211, article 16, section 13; and

(vii) employees who are trades employees as defined in section 356.27, subdivision 1, first hired on or after July 1, 2020, by the city of St. Paul or Independent School District No. 625, St. Paul, except for any trades employee for whom contributions are made under section 356.24, subdivision 1, clause (8), (9), or (10), by either employer to a multiemployer plan as defined in section 356.27, subdivision 1;

(16) employees who are hired after June 30, 2002, solely to fill seasonal positions under subdivision 12b which are limited in duration by the employer to a period of six months or less in each year of employment with the governmental subdivision;

(17) persons who are provided supported employment or work-study positions by a governmental subdivision and who participate in an employment or industries program maintained for the benefit of these persons where the governmental subdivision limits the position's duration to up to five years, including persons participating in a federal or state subsidized on-the-job training, work experience, senior citizen, youth, or unemployment relief program where the training or work experience is not provided as a part of, or for, future permanent public employment;

(18) independent contractors and the employees of independent contractors;

(19) reemployed annuitants of the association during the course of that reemployment;

(20) persons appointed to serve on a board or commission of a governmental subdivision or an instrumentality thereof;

(21) persons employed as full-time fixed-route bus drivers by the St. Cloud Metropolitan Transit Commission who are members of the International Brotherhood of Teamsters Local 638 and who are, by virtue of that employment, members of the International Brotherhood of Teamsters Central States pension plan; and

(22) persons employed by the Duluth Transit Authority or any subdivision thereof who are members of the Teamsters General Local Union 346 and who are, by virtue of that employment, members of the Central States Southeast and Southwest Areas Pension Fund.

(b) Any person performing the duties of a public officer in a position defined in subdivision 2a, paragraph (a), clause (3), is not an independent contractor and is not an employee of an independent contractor.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2025. new text end

Sec. 3.

Minnesota Statutes 2024, section 353.01, subdivision 2d, is amended to read:

Subd. 2d.

Optional membership.

(a) Membership in the association is optional by action of the individual employee for the following public employees who meet the conditions set forth in subdivision 2a:

(1) members of the coordinated plan who are also employees of labor organizations as defined in section 353.017, subdivision 1, for their employment by the labor organization only, if they elect to have membership under section 353.017, subdivision 2;

(2) persons who are elected or deleted text begin persons who are deleted text end appointed to elected positions new text begin , new text end other than local governing body elected positions new text begin , and new text end who elect to participate new text begin within 30 days of taking office new text end by deleted text begin filing deleted text end new text begin completing and signing new text end a deleted text begin written election for deleted text end membership new text begin election on a form prescribed by the executive director of the association and filing the membership election with the association within 60 days of taking office new text end ;

(3) members of the association who are appointed by the governor to be a state department head and who elect not to be covered by the general state employees retirement plan of the Minnesota State Retirement System under section 352.021;

(4) city managers as defined in section 353.028, subdivision 1, who do not elect to be excluded from membership in the association under section 353.028, subdivision 2; and

(5) employees of the Port Authority of the city of St. Paul on January 1, 2003, who were at least age 45 on that date, and who elected to participate by deleted text begin filing a written deleted text end new text begin completing and signing a membership new text end election deleted text begin for membership deleted text end .

(b) Membership in the association is optional by action of the governmental subdivision for the employees of the following governmental subdivisions under the conditions specified:

(1) the Minnesota Association of Townships if the board of that association, at its option, certifies to the executive director that its employees who meet the conditions set forth in subdivision 2a are to be included for purposes of retirement coverage, in which case the status of the association as a participating employer is permanent;

(2) a county historical society if the county in which the historical society is located, at its option, certifies to the executive director that the employees of the historical society who meet the conditions set forth in subdivision 2a are to be considered county employees for purposes of retirement coverage under this chapter. The status as a county employee must be accorded to all similarly situated county historical society employees and, once established, must continue as long as a person is an employee of the county historical society; and

(3) Hennepin Healthcare System, Inc., a public corporation, with respect to employees other than paramedics, emergency medical technicians, and protection officers, if the corporate board establishes alternative retirement plans for certain classes of employees of the corporation and certifies to the association the applicable employees to be excluded from future retirement coverage.

(c) For employees who are covered by paragraph (a), clause (1), (2), or (3), or covered by paragraph (b), clause (1) or (2), if the necessary membership election is not made, the employee is excluded from retirement coverage under this chapter. For employees who are covered by paragraph (a), clause (4), if the necessary election new text begin of exclusion new text end is not made, the employee must become a member and have retirement coverage under the applicable provisions of this chapter. For employees specified in paragraph (b), clause (3), membership continues until the exclusion option is exercised for the designated class of employee.

(d) The option to become a member, once exercised under this subdivision, may not be withdrawn until the termination of public service as defined under subdivision 11a.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2025. new text end

Sec. 4.

Minnesota Statutes 2024, section 353.028, subdivision 2, is amended to read:

Subd. 2.

Election.

(a) A city manager first employed by a city may make a onetime, irrevocable election to be excluded from membership in the general employees retirement plan of the association. The election of exclusion must be made within 30 days following the commencement of employment, must be made in writing on a form prescribed by the executive director, deleted text begin and deleted text end must be approved by a resolution adopted by the governing body of the city new text begin , and must be filed with the association within 60 days of commencing employment new text end . The election of exclusion is not effective until it is filed with the executive director. Membership of a city manager in the general employees retirement plan ceases on the date the written election new text begin of exclusion new text end is received by the executive director. Employee and employer contributions made during the first deleted text begin 30 deleted text end new text begin 60 new text end days of employment on behalf of a person exercising the option to be excluded from membership under this paragraph must be refunded or credited in accordance with section 353.27, subdivision 7.

(b) A city manager who has previously been an employee in any position covered by any retirement plan administered by the association to which the city contributed or by any supplemental pension or deferred compensation plan under section 356.24 sponsored by the city is not eligible to make the election under paragraph (a).

(c) Any election under paragraph (a) must include a statement that the individual will not seek authorization to purchase service credit for any period of excluded service.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2025. new text end

Sec. 5.

Minnesota Statutes 2024, section 353.028, subdivision 3, is amended to read:

Subd. 3.

Deferred compensation; city contribution.

(a) If an election of exclusion under subdivision 2 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 is to be contributed on behalf of the city manager to a deferred compensation program that meets the requirements of section 457 of the Internal Revenue Code of 1986, as amended, and section 356.24, 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 that would be required by section 353.27, subdivision 3, if the city manager were a member of the general employees retirement plan.

(b) Alternatively, if an election of exclusion under subdivision 2 is made, the city manager and the governing body of the city may agree in writing that the equivalent employer contribution to the contribution under section 353.27, subdivision 3, be contributed by the city to the defined contribution plan of the Public Employees Retirement Association under chapter 353D. deleted text begin Any deleted text end new text begin An election and new text end agreement under this paragraph must be entered into within 30 days following the commencement of employment.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2025. new text end

Sec. 6.

Minnesota Statutes 2024, section 353.27, subdivision 3a, is amended to read:

Subd. 3a.

Additional employer contribution.

(a) An additional employer contribution to the general employees retirement fund of the Public Employees Retirement Association must be made equal to the following applicable percentage of the total salary amount for "basic members" and for "coordinated members":

		Basic Program		Coordinated Program
Effective before January 1, 2006		2.68		.43
Effective January 1, 2006		2.68		.5
Effective January 1, 2009		2.68		.75
Effective January 1, 2010		2.68		1

These contributions must be made from funds available to the employing subdivision by the means and in the manner provided in section 353.28.

deleted text begin (b) The coordinated program contribution rates set forth in paragraph (a) effective for January 1, 2010, must not be implemented if, following receipt of the July 1, 2009, annual actuarial valuation report 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. deleted text end

deleted text begin (c) deleted text end new text begin (b) new text end This subdivision is repealed once the actuarial value of the assets of the general employees retirement plan of the Public Employees Retirement Association equal or exceed new text begin 98 percent of new text end the actuarial accrued liability of the plan as determined by the actuary retained under sections 356.214 and 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.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 7.

Minnesota Statutes 2024, section 353.34, subdivision 5, is amended to read:

Subd. 5.

Right to a refund generally unlimited.

The right to a refund provided in this chapter deleted text begin , and laws amendatory thereof, deleted text end is not restricted as to time deleted text begin unless specifically provided and the statute of limitation does not apply thereto deleted text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 8.

Minnesota Statutes 2024, section 353E.06, subdivision 1, is amended to read:

Subdivision 1.

Duty disability qualification requirements.

A member who is determined to qualify for a duty disability as defined in section 353E.001, subdivision 1, is entitled to a disability benefit. The disability benefit must be based on covered service under this chapter only and is an amount equal to 47.5 percent of the average salary defined in section 353E.04, subdivision 2, plus deleted text begin an additional 1.9 percent deleted text end new text begin , new text end for each year of covered service under this chapter in excess of 25 years deleted text begin . deleted text end new text begin : new text end

new text begin (1) 1.9 percent for each year of allowable service beginning before July 1, 2025; and new text end

new text begin (2) 2.2 percent for each year of allowable service beginning after June 30, 2025. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 9.

Minnesota Statutes 2024, section 356.415, subdivision 1b, is amended to read:

Subd. 1b.

Annual postretirement adjustments; deleted text begin PERA deleted text end new text begin Public Employees Retirement Association new text end ; general employees retirement plan.

(a) Annuities, disability benefits, and survivor benefits being paid from the general employees retirement plan of the Public Employees Retirement Association shall be increased effective each January 1 by the percentage of increase determined under this subdivision. The increase to the annuity or benefit shall be determined by multiplying the monthly amount of the annuity or benefit by the percentage of increase specified in paragraph (b), after taking into account any reduction to the percentage of increase required under paragraph deleted text begin (c) deleted text end new text begin (d) new text end .

(b) The percentage of increase shall be one percent unless the federal Social Security Administration has announced a cost-of-living adjustment pursuant to United States Code, title 42, section 415(i), in the last quarter of the preceding calendar year that is greater than deleted text begin two deleted text end new text begin one new text end percent. If the cost-of-living adjustment announced by the federal Social Security Administration is greater than deleted text begin two deleted text end new text begin one new text end percent, the percentage of increase deleted text begin shall be 50 percent of deleted text end new text begin must be the same as new text end the cost-of-living adjustment announced by the federal Social Security Administration, but in no event may the percentage of increase exceed deleted text begin 1.5 percent deleted text end new text begin the applicable maximum percentage in effect on January 1 under paragraph (c) new text end .

new text begin (c) The applicable maximum percentage in effect on January 1 is 1.75 percent, unless either of the following is true, in which case the applicable maximum percentage is 1.5 percent: new text end

new text begin (1) the market value of assets equals or is less than 85 percent of the actuarial accrued liabilities as reported by the plan's actuary in the most recent two consecutive annual actuarial valuations; or new text end

new text begin (2) the market value of assets equals or is less than 80 percent of the actuarial accrued liabilities as reported by the plan's actuary in the most recent annual actuarial valuation. new text end

deleted text begin (c) deleted text end new text begin (d) new text end (1) If the recipient of an annuity, disability benefit, or survivor's benefit has been receiving the annuity or benefit for at least 12 full months as of the June 30 of the calendar year immediately before the effective date of the increase, there is no reduction in the percentage of increase.

(2) If the recipient of an annuity, disability benefit, or survivor's benefit has been receiving the annuity or benefit for at least one month, but less than 12 full months, as of the June 30 of the calendar year immediately preceding the effective date of the increase, the percentage of increase is multiplied by a fraction, the numerator of which is the number of months the annuity or benefit was received as of June 30 of the preceding calendar year and the denominator of which is 12.

deleted text begin (d) deleted text end new text begin (e) new text end An increase in annuity or benefit payments under this deleted text begin section deleted text end new text begin subdivision new text end must be made automatically unless written notice is filed by the recipient with the executive director of the Public Employees Retirement Association requesting that the increase not be made.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for postretirement adjustments beginning on or after January 1, 2026. new text end

ARTICLE 3

PUBLIC EMPLOYEES DEFINED CONTRIBUTION PLAN

Section 1.

Minnesota Statutes 2024, section 353D.01, subdivision 2, is amended to read:

Subd. 2.

Eligibility.

(a) Eligibility to participate in the plan is available to:

(1) any elected or appointed local government official of a governmental subdivision who elects to participate in the plan under section 353D.02, subdivision 1, and who, for the service rendered to a governmental subdivision, is not a member of the association within the meaning of section 353.01, subdivision 7;

(2) physicians who, if they did not elect to participate in the plan under section 353D.02, subdivision 2, would meet the definition of member under section 353.01, subdivision 7;

(3) basic and advanced life-support emergency medical service personnel who are employed by any public ambulance service that elects to participate under section 353D.02, subdivision 3;

(4) members of a municipal rescue squad associated with the city of Litchfield in Meeker County, or of a county rescue squad associated with Kandiyohi County, if an independent nonprofit rescue squad corporation, incorporated under chapter 317A, performing emergency management services, and if not affiliated with a fire department or ambulance service and if its members are not eligible for membership in that fire department's or ambulance service's relief association or comparable pension plan;

new text begin (5) members of the municipal rescue squad associated with the city of Eden Valley in Stearns and Meeker Counties who are not eligible for membership in the police and fire retirement plan or a firefighter relief association affiliated with the city and who elect to participate in the plan under section 353D.02, subdivision 4, paragraph (b); new text end

deleted text begin (5) deleted text end new text begin (6) new text end employees of the Port Authority of the city of St. Paul who elect to participate in the plan under section 353D.02, subdivision 5, and who are not members of the association under section 353.01, subdivision 7;

deleted text begin (6) deleted text end new text begin (7) new text end city managers who elected to be excluded from the general employees retirement plan of the association under section 353.028 and who elected to participate in the public employees defined contribution plan under section 353.028, subdivision 3, paragraph (b);

deleted text begin (7) deleted text end new text begin (8) new text end volunteer or emergency on-call firefighters serving in a municipal fire department or an independent nonprofit firefighting corporation who are not covered by the police and fire retirement plan and who are not covered by a firefighters relief association and who elect to participate in the public employees defined contribution plan;

deleted text begin (8) deleted text end new text begin (9) new text end any elected county sheriff who is a former member of the police and fire plan, is receiving a retirement annuity as provided under section 353.651, deleted text begin who deleted text end new text begin and new text end does not have previous employment with the county for which the sheriff was elected; and

deleted text begin (9) deleted text end new text begin (10) new text end persons appointed to serve on a board or commission of a governmental subdivision or an instrumentality thereof.

(b) Individuals otherwise eligible to participate in the plan under this subdivision who are currently covered by a public or private pension plan because of their employment or provision of services are not eligible to participate in the deleted text begin public employees defined contribution deleted text end plan.

(c) A former participant is a person who has terminated eligible employment or service and has not withdrawn the value of the person's individual account.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 2.

Minnesota Statutes 2024, section 353D.02, subdivision 1, is amended to read:

Subdivision 1.

Local government officials.

Eligible elected or appointed local government officials may elect to participate in the defined contribution plan within the first 30 days of deleted text begin being elected or appointed to deleted text end new text begin taking new text end public office by deleted text begin filing deleted text end new text begin completing and signing new text end a membership deleted text begin application deleted text end new text begin election new text end on a form prescribed by the executive director of the association authorizing contributions to be deducted from the official's salary. Participation begins on the first day of the pay period for which the contributions were deducted or, if pay period coverage dates are not provided, the date on which the membership deleted text begin application deleted text end new text begin election new text end or contributions are received in the office of the association, whichever is received first, provided further that the membership deleted text begin application deleted text end new text begin election new text end is received by the association within 60 days of deleted text begin the receipt of the contributions deleted text end new text begin taking office new text end . An election to participate in the plan is irrevocable.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2025. new text end

Sec. 3.

Minnesota Statutes 2024, section 353D.02, subdivision 2, is amended to read:

Subd. 2.

Eligible physicians.

Eligible physicians may elect to participate in the defined contribution plan within the first 30 days of commencing employment with a government subdivision under section 353.01, subdivision 6, by deleted text begin filing deleted text end new text begin completing and signing new text end a membership deleted text begin application deleted text end new text begin election new text end on a form prescribed by the executive director of the association authorizing contributions to be deducted from the physician's salary new text begin and filing the membership election with the association within 60 days of commencing employment new text end . Participation begins on the first day of the pay period for which the contributions were deducted. An election to participate in the defined contribution plan is irrevocable.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2025. new text end

Sec. 4.

Minnesota Statutes 2024, section 353D.02, subdivision 3, is amended to read:

Subd. 3.

Eligible ambulance service personnel.

Each public ambulance service with eligible personnel may elect to participate in the plan. If a service elects to participate, its eligible personnel may elect to participate or decline to participate. An individual's new text begin membership new text end election must be made within 30 days of the service's election to participate or within 30 days of the date on which the individual began employment with the service or began to provide service for it, whichever date is later. new text begin The membership election must be received by the association within 60 days of the service's election to participate or within 60 days of the date on which the individual first began employment, whichever is later. new text end An election by a service or an individual is irrevocable.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2025. new text end

Sec. 5.

Minnesota Statutes 2024, section 353D.02, subdivision 4, is amended to read:

Subd. 4.

Eligible rescue squad deleted text begin personnel deleted text end new text begin members new text end .

new text begin (a) new text end The municipality or county, as applicable, associated with a rescue squad under section 353D.01, subdivision 2, paragraph (a), clause (4), may elect to participate in the plan. If the municipality or county, as applicable, elects to participate, the eligible personnel may elect to participate or decline to participate. An eligible individual's new text begin membership new text end election must be made within 30 days of the deleted text begin service's deleted text end new text begin municipality's or county's new text end election to participate or within 30 days of the date on which the individual first began employment with the rescue squad, whichever is later. deleted text begin Elections under this subdivision by a government unit or individual are irrevocable. deleted text end new text begin The membership election must be received by the association within 60 days of the municipality's or county's election to participate or within 60 days of the date on which the individual first began employment, whichever is later. new text end The municipality or county, as applicable, must specify by resolution eligibility requirements for rescue squad personnel which must be satisfied if the individual is to be authorized to make the new text begin membership new text end election under this subdivision.

new text begin (b) An eligible member under section 353D.01, subdivision 2, paragraph (a), clause (5), may elect to participate or decline to participate in the plan within 30 days of the date on which the member first begins service with the rescue squad. new text end

new text begin (c) Elections under this subdivision by a government unit or individual are irrevocable. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 6.

Minnesota Statutes 2024, section 353D.02, subdivision 5, is amended to read:

Subd. 5.

St. Paul Port Authority personnel.

Employees of the Port Authority of the city of St. Paul who do not elect to participate in the general employees retirement plan may elect within the first 30 days of commencing employment to participate in the plan by deleted text begin filing deleted text end new text begin completing and signing new text end a membership deleted text begin application deleted text end new text begin election new text end on a form prescribed by the executive director of the association authorizing contributions to be deducted from the employee's salary. Participation begins on the first day of the pay period for which the contributions were deducted or, if pay period coverage dates are not provided, the date on which the membership deleted text begin application deleted text end new text begin election new text end or the contributions are received in the office of the association, whichever is received first, deleted text begin if deleted text end new text begin provided new text end the membership deleted text begin application deleted text end new text begin election new text end is received by the association within 60 days of deleted text begin the receipt of the contributions deleted text end new text begin commencing employment new text end . An election to participate in the plan is irrevocable.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2025. new text end

Sec. 7.

Minnesota Statutes 2024, section 353D.02, subdivision 6, is amended to read:

Subd. 6.

City managers.

new text begin Any new text end city deleted text begin managers deleted text end new text begin manager new text end who elected to be excluded new text begin within 30 days of commencing employment new text end from the general employees retirement plan of the Public Employees Retirement Association under section 353.028, new text begin subdivision 2, new text end and who deleted text begin elected to participate in the plan deleted text end new text begin entered into an agreement new text end under section 353.028, subdivision 3, paragraph (b), new text begin with the governing body of the city that employs the city manager to have the city make contributions to the defined contribution plan under chapter 353D, new text end must file deleted text begin that deleted text end new text begin an new text end election with the deleted text begin executive director deleted text end new text begin association new text end within the first deleted text begin 30 deleted text end new text begin 60 new text end days of commencing employment new text begin to participate in the defined contribution plan. The city manager must complete and sign a membership election on a form prescribed by the executive director of the association new text end . Participation begins on the first day of the pay period next following the date of the coverage election. An election to participate by a city manager is irrevocable.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2025. new text end

Sec. 8.

Minnesota Statutes 2024, section 353D.02, subdivision 7, is amended to read:

Subd. 7.

Certain volunteer firefighters.

Volunteer or on-call firefighters who are serving as members of a municipal fire department or an independent nonprofit firefighting corporation and who are not covered for that firefighting service by the public employees police and fire retirement plan under sections 353.63 to 353.68, by a firefighters relief association under chapter 424A, or by the statewide volunteer firefighter retirement plan under chapter 353G may elect to participate in the plan within the first 30 days of commencing service new text begin by completing and signing a membership election on a form prescribed by the executive director of the association. The membership election must be filed with the association within 60 days of commencing service new text end . An eligible firefighter's election is irrevocable. No employer contribution is payable by the fire department or the firefighting corporation unless the municipal governing body or the firefighting corporation governing body, whichever applies, ratifies the new text begin membership new text end election.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2025. new text end

ARTICLE 4

PERA PRIVATIZATION

Section 1.

Minnesota Statutes 2024, section 353F.01, is amended to read:

353F.01 PURPOSE AND INTENT.

The purpose of this chapter is to ensure, to the extent possible, that persons employed deleted text begin at public medical facilities who deleted text end new text begin by governmental subdivisions that new text end are privatized and consequently are excluded from retirement coverage by the Public Employees Retirement Association will be entitled to receive future retirement benefits under the general employees retirement plan of the Public Employees Retirement Association commensurate with the prior contributions made by them or made on their behalf upon the privatization of the deleted text begin medical facility deleted text end new text begin governmental subdivision new text end .

Sec. 2.

Minnesota Statutes 2024, section 353F.02, is amended by adding a subdivision to read:

new text begin Subd. 2a. new text end

new text begin Association. new text end

new text begin "Association" means the Public Employees Retirement Association established under chapter 353. new text end

Sec. 3.

Minnesota Statutes 2024, section 353F.02, subdivision 3, is amended to read:

Subd. 3.

Effective date of privatization.

"Effective date of privatization" means the date that deleted text begin the operation of a medical facility is assumed by another deleted text end new text begin a governmental subdivision becomes a privatized new text end employer or the date that a deleted text begin medical facility deleted text end new text begin governmental subdivision new text end is purchased deleted text begin by another employer deleted text end new text begin in a privatization new text end and active membership in the deleted text begin Public Employees Retirement deleted text end association consequently terminates.

Sec. 4.

Minnesota Statutes 2024, section 353F.02, is amended by adding a subdivision to read:

new text begin Subd. 3b. new text end

new text begin Funding ratio. new text end

new text begin "Funding ratio" means the actuarial value of assets of the general employees retirement fund, divided by the present value of accrued benefits for the fund, expressed as a percentage. new text end

Sec. 5.

Minnesota Statutes 2024, section 353F.02, is amended by adding a subdivision to read:

new text begin Subd. 3c. new text end

new text begin General employees retirement fund. new text end

new text begin "General employees retirement fund" means the general employees retirement fund as defined under section 353.27, subdivision 1. new text end

Sec. 6.

Minnesota Statutes 2024, section 353F.02, is amended by adding a subdivision to read:

new text begin Subd. 3d. new text end

new text begin General employees retirement plan. new text end

new text begin "General employees retirement plan" or "general plan" means the general employees retirement plan of the association established under chapter 353. new text end

Sec. 7.

Minnesota Statutes 2024, section 353F.02, is amended by adding a subdivision to read:

new text begin Subd. 3e. new text end

new text begin Governmental subdivision. new text end

new text begin "Governmental subdivision" has the meaning given in section 353.01, subdivision 6. new text end

Sec. 8.

Minnesota Statutes 2024, section 353F.02, subdivision 4b, is amended to read:

Subd. 4b.

Privatization.

"Privatization" means deleted text begin a medical facility that privatizes when the facility deleted text end new text begin the process of privatizing, through which a governmental subdivision new text end ceases to be a governmental subdivision for any reason other than that the deleted text begin medical facility deleted text end new text begin governmental subdivision new text end closes or permanently ceases to operate.

Sec. 9.

Minnesota Statutes 2024, section 353F.02, is amended by adding a subdivision to read:

new text begin Subd. 4c. new text end

new text begin Privatize or privatizing. new text end

new text begin "Privatize" or "privatizing" means to engage in a transaction, including a sale to, acquisition by, or merger with an entity or a sale to or acquisition by one or more individuals, or a series of such transactions that result in a governmental subdivision ceasing to be a governmental subdivision on or after the effective date of privatization. Privatize or privatizing does not mean ceasing to be a governmental subdivision because the subdivision closed or permanently ceased to operate. new text end

Sec. 10.

Minnesota Statutes 2024, section 353F.02, subdivision 5a, is amended to read:

Subd. 5a.

Privatized deleted text begin former public deleted text end employer.

"Privatized deleted text begin former public deleted text end employer" means deleted text begin a medical facility that was included in the definition of deleted text end new text begin an entity that was a new text end governmental subdivision deleted text begin under section 353.01, subdivision 6, deleted text end on the day before the effective date of privatization deleted text begin that is privatized deleted text end and whose employees are deleted text begin certified for participation under this chapter deleted text end new text begin privatized employees new text end .

Sec. 11.

Minnesota Statutes 2024, section 353F.02, subdivision 6, is amended to read:

Subd. 6.

Privatized deleted text begin former public deleted text end employee.

(a) "Privatized deleted text begin former public deleted text end employee" means a person who new text begin , before the effective date of the privatization of a governmental subdivision new text end :

(1) was employed by the deleted text begin privatized former public employer on the day before the effective date of privatization; or deleted text end new text begin governmental subdivision; and new text end

deleted text begin (2) terminated employment with the privatized former public employer on the day before the effective date; and deleted text end

deleted text begin (3) deleted text end new text begin (2) new text end was a deleted text begin participant in deleted text end new text begin member of new text end the general employees retirement plan deleted text begin of the Public Employees Retirement Association at the time of termination of employment with the privatized former public employer deleted text end new text begin for the period of employment with the governmental subdivision new text end .

(b) Privatized deleted text begin former public deleted text end employee does not mean a person who, on the day before the effective date of privatization, was simultaneously employed with the privatized deleted text begin former public deleted text end employer and by a governmental subdivision deleted text begin under section 353.01, subdivision 6, deleted text end and who, after the effective date of privatization, continues to accrue service credit under section 353.01, subdivision 16, through simultaneous employment with a governmental subdivision.

Sec. 12.

Minnesota Statutes 2024, section 353F.02, is amended by adding a subdivision to read:

new text begin Subd. 6a. new text end

new text begin Privatizing active employee. new text end

new text begin "Privatizing active employee" means a privatized employee who was employed by the privatizing governmental subdivision on the day before the effective date of the privatization. new text end

Sec. 13.

Minnesota Statutes 2024, section 353F.025, is amended to read:

353F.025 deleted text begin CERTIFICATION AND DECERTIFICATION OF MEDICAL FACILITIES AND OTHER PUBLIC EMPLOYING UNITS deleted text end new text begin WITHDRAWAL LIABILITY new text end .

Subdivision 1.

Eligibility determination new text begin and calculation of withdrawal liability new text end .

(a) deleted text begin The chief clerical deleted text end new text begin This section applies to any governmental subdivision that privatizes. new text end

new text begin (b) Before the effective date of privatization, an new text end officer of deleted text begin a deleted text end new text begin the new text end governmental subdivision deleted text begin may deleted text end new text begin that is privatizing or that has control or ownership of an entity that is privatizing must new text end submit new text begin to the executive director new text end a resolution from the governing body deleted text begin to the executive director of the Public Employees Retirement Association which supports providing coverage under this chapter for employees of that governmental subdivision who are privatized, and which states that the governing body will pay for actuarial calculations, as further specified in paragraph (c). deleted text end new text begin of the governmental subdivision stating the following: new text end

new text begin (1) that it is the intention of the governmental subdivision to privatize or to engage in a privatization that will result in the controlled or owned entity becoming privatized; and new text end

new text begin (2) that the governmental subdivision will reimburse the association for the cost to calculate withdrawal liability under paragraph (d). new text end

deleted text begin (b) deleted text end new text begin (c) new text end The governing body must also provide new text begin to the executive director new text end a copy of deleted text begin any applicable deleted text end new text begin the new text end purchase deleted text begin or deleted text end new text begin , new text end lease new text begin , or other transaction new text end agreement and any other information requested by the executive director to allow the executive director to deleted text begin verify that under the proposed employer change, deleted text end new text begin determine whether new text end the deleted text begin new deleted text end employer deleted text begin does not qualify as deleted text end new text begin , after the privatization, will be new text end a governmental subdivision deleted text begin under section 353.01, subdivision 6 deleted text end new text begin or a privatized employer new text end , making the employees ineligible for continued coverage as active members of the general employees retirement plan deleted text begin of the Public Employees Retirement Association deleted text end .

deleted text begin (c) Following deleted text end new text begin (d) If, within 30 days after new text end receipt of deleted text begin a deleted text end new text begin the new text end resolution and deleted text begin a determination by deleted text end new text begin information under paragraph (b), new text end the executive director new text begin determines new text end that the deleted text begin new deleted text end employer deleted text begin is deleted text end new text begin after the privatization will new text end not new text begin be new text end a governmental subdivision, the executive director deleted text begin shall deleted text end new text begin must new text end direct the consulting actuary retained new text begin by the association new text end under section 356.214 to deleted text begin determine whether the general employees retirement plan of the Public Employees Retirement Association, if coverage under this chapter is provided, is expected to receive a net gain or a net loss if privatization occurs. A net gain is expected if the actuarial liability of the special benefit coverage provided under this chapter, if extended to the applicable employees under the privatization, is less than the actuarial gain otherwise to accrue to the plan. A net loss is expected if the actuarial accrued liability of the special benefit coverage provided under this chapter, if extended to the applicable employees under the privatization, is more than the actuarial gain otherwise to accrue to the plan. The date of the actuarial calculations used to make this determination must be within one year of the effective date of privatization deleted text end new text begin calculate the withdrawal liability to be incurred by the privatized employer on the effective date of the privatization. Withdrawal liability and present value must be calculated as provided in paragraphs (e) and (f), respectively new text end .

new text begin (e) Withdrawal liability is equal to the present value of accrued benefits attributable to the privatizing active employees minus the product of: new text end

new text begin (1) the present value of accrued benefits attributable to the privatizing active employees; and new text end

new text begin (2) the general plan's funding ratio. new text end

new text begin If the withdrawal liability is a negative number, the withdrawal liability is zero. Withdrawal liability must be calculated using the most recently completed actuarial valuation before the effective date of privatization. new text end

new text begin (f) Present value of accrued benefits is determined using the actuarial assumptions under section 356.215, subdivision 8, for the general plan. The present value of accrued benefits does not include projected compensation or projected service. new text end

new text begin (g) The governmental subdivision must reimburse the association for the cost of calculating the withdrawal liability. new text end

new text begin Subd. 1a. new text end

new text begin Payment of withdrawal liability. new text end

new text begin No later than six months after the effective date of privatization, the privatized employer must pay the withdrawal liability calculated under subdivision 1 to the general employees retirement fund, unless the privatized employer elects a payment plan. In lieu of a single withdrawal liability payment, the privatized employer may elect to pay the withdrawal liability with interest compounded annually at the applicable rate or rates specified in section 356.59, subdivision 3, in equal annual payments for a term of no longer than ten years. The obligation to pay under this subdivision is binding upon the privatized employer and its successors and assignees. new text end

Subd. 2.

Reporting privatizations.

(a) deleted text begin If the actuarial calculations under subdivision 1, paragraph (c), indicate privatization can be approved because a net gain to the general employees retirement plan of the Public Employees Retirement association is expected, or if paragraph (b) applies, the executive director shall, following acceptance of the actuarial calculations by deleted text end new text begin The association must maintain a record of the consulting actuary's calculation of withdrawal liability under subdivision 1 and any associated report. The calculation and any associated report must be made publicly available and provided to: new text end

new text begin (1) new text end the board of trustees deleted text begin , forward notice and supporting documentation, including a copy of the actuary's report and findings, to deleted text end new text begin ; new text end

new text begin (2) new text end the chair and the executive director of the Legislative Commission on Pensions and Retirement new text begin ; new text end and

new text begin (3) new text end the chairs and the ranking minority members of the new text begin legislative new text end committees with jurisdiction over governmental operations deleted text begin in the house of representatives and senate deleted text end .

deleted text begin (b) If the calculations under subdivision 1, paragraph (c), indicate a net loss, the executive director shall recommend to the board of trustees that the privatization be approved if the chief clerical officer of the applicable governmental subdivision submits a resolution from the governing body specifying that a lump sum payment will be made to the Public Employees Retirement Association equal to the net loss, plus interest. The interest must be computed using the applicable ultimate investment return assumption under section 356.215, subdivision 8, expressed as a monthly rate, from the date of the actuarial valuation from which the actuarial accrued liability data was used to determine the net loss in the actuarial study under subdivision 1, to the date of payment, with annual compounding. Payment must be made on or after the effective date of privatization. deleted text end

deleted text begin (c) deleted text end new text begin (b) new text end The deleted text begin Public Employees Retirement deleted text end association must maintain a list that includes the names of all privatized deleted text begin former public deleted text end employers in the association's new text begin annual new text end comprehensive deleted text begin annual deleted text end financial report and on the association's website. new text begin Beginning July 1, 2027, the association must also include in the list the amount of the withdrawal liability determined as of the effective date of privatization and the remaining amount, if any, of withdrawal liability due to be paid for each privatized employer. new text end

Sec. 14.

Minnesota Statutes 2024, section 353F.03, is amended to read:

353F.03 VESTING RULE FOR CERTAIN EMPLOYEES.

Notwithstanding any provision of chapter 353 to the contrary, a privatized deleted text begin former public deleted text end employee is eligible to receive a retirement annuity under section 353.29 of the edition of Minnesota Statutes published in the year before the year in which the privatization occurred, without regard to the requirement specified in section 353.01, subdivision 47.

Sec. 15.

Minnesota Statutes 2024, section 353F.04, is amended to read:

353F.04 AUGMENTATION INTEREST RATES FOR PRIVATIZED deleted text begin FORMER PUBLIC deleted text end EMPLOYEES.

Subdivision 1.

Enhanced augmentation rates.

(a) The deferred annuity of a privatized deleted text begin former public deleted text end employee is subject to augmentation under section 353.34, subdivision 3, except that the rate of augmentation is as specified in this section.

(b) This paragraph applies if the effective date of privatization was on or before January 1, 2007, and also applies to Hutchinson Area Health Care with a privatization effective date of January 1, 2008. For a privatized deleted text begin former public deleted text end employee, the augmentation rate is 5.5 percent compounded annually until January 1 following the year in which the deleted text begin person deleted text end new text begin privatized employee new text end attains age 55. After that date, the augmentation rate is 7.5 percent compounded annually.

(c) If paragraph (b) is not applicable, and if the effective date of the privatization is after January 1, 2007, and before January 1, 2011, then the augmentation rate is four percent compounded annually until January 1, following the year in which the deleted text begin person deleted text end new text begin privatized employee new text end attains age 55. After that date, the augmentation rate is six percent compounded annually.

(d) If the effective date of the privatization is after December 31, 2010, the augmentation rate depends on the result of computations specified in section 353F.025, subdivision 1. If those computations indicate no loss or a net gain to the deleted text begin fund of the deleted text end general employees retirement deleted text begin plan of the Public Employees Retirement Association deleted text end new text begin fund new text end , the augmentation rate is two percent compounded annually. If the computations under that subdivision indicate a net loss to the fund if a two percent augmentation rate is used, but a net gain or no loss if a one percent rate is used, then the augmentation rate is one percent compounded annually.

(e) Notwithstanding paragraphs (b) to (d), after June 30, 2020, and before January 1, 2024, the augmentation rate for all privatized deleted text begin former public deleted text end employees under paragraphs (b) to (d) is two percent compounded annually. After December 31, 2023, no additional augmentation is applied to the new text begin deferred annuities of new text end privatized deleted text begin former public employee's deferred annuity deleted text end new text begin employees new text end .

Subd. 2.

Exceptions.

The augmentation rates specified in subdivision 1 do not apply to a privatized deleted text begin former public deleted text end employee:

(1) beginning the first of the month in which the privatized deleted text begin former public deleted text end employee becomes covered again by a retirement plan enumerated in section 356.30, subdivision 3, if the employee accrues at least six months of credited service in any single plan enumerated in section 356.30, subdivision 3, except clause (6);

(2) beginning the first of the month in which the privatized deleted text begin former public deleted text end employee becomes covered again by the general employees retirement plan deleted text begin of the Public Employees Retirement Association deleted text end ;

(3) beginning the first of the month after a privatized deleted text begin former public deleted text end employee terminates service with the privatized deleted text begin former public deleted text end employer;

(4) if the privatized deleted text begin former public deleted text end employee begins receipt of a retirement annuity while employed by the privatized deleted text begin former public deleted text end employer; or

(5) if the effective date of privatization occurs after June 30, 2020.

Sec. 16.

Minnesota Statutes 2024, section 353F.05, is amended to read:

353F.05 AUTHORIZATION FOR ADDITIONAL ALLOWABLE SERVICE FOR EARLY RETIREMENT PURPOSES.

(a) For the purpose of determining eligibility for early retirement benefits provided under section 353.30, subdivision 1a, of the edition of Minnesota Statutes published in the year before the year in which the privatization occurred, and notwithstanding any provision of chapter 353 deleted text begin , deleted text end to the contrary, the years of allowable service for a privatized deleted text begin former public deleted text end employee who transfers employment on the effective date of privatization and does not apply for a refund of contributions under section 353.34, subdivision 1, of the edition of Minnesota Statutes published in the year before the year in which the privatization occurred, or any similar provision, includes service with the privatized deleted text begin former public deleted text end employer following the effective date. The privatized deleted text begin former public deleted text end employer shall provide any reports that the executive director deleted text begin of the Public Employees Retirement Association deleted text end may reasonably request to permit calculation of benefits.

(b) To be eligible for early retirement benefits under this section, the deleted text begin individual deleted text end new text begin privatized employee new text end must separate from service with the privatized deleted text begin former public deleted text end employer. The privatized deleted text begin former public deleted text end employee, or an individual authorized to act on behalf of that employee, may apply for an annuity following application procedures under section 353.29, subdivision 4.

Sec. 17.

Minnesota Statutes 2024, section 353F.051, subdivision 1, is amended to read:

Subdivision 1.

Eligibility.

A privatized deleted text begin former public deleted text end employee who is totally and permanently disabled under section 353.01, subdivision 19, and who had a medically documented preexisting condition of the disability before the termination of coverage, may apply for a disability benefit.

Sec. 18.

Minnesota Statutes 2024, section 353F.051, subdivision 2, is amended to read:

Subd. 2.

Calculation of benefits.

A person qualifying under subdivision 1 is entitled to receive a disability benefit calculated under section 353.33, subdivision 3. deleted text begin The disability benefit must be augmented under section 353.71, subdivision 2, from the date of termination to the date the disability benefit begins to accrue. deleted text end

Sec. 19.

Minnesota Statutes 2024, section 353F.052, is amended to read:

353F.052 APPLICATION OF SURVIVING SPOUSE, DEPENDENT CHILD PROVISION.

Notwithstanding any provisions of law to the contrary, subdivisions within section 353.32 of the edition of Minnesota Statutes published in the year before the year in which a privatization occurred, applicable to the surviving spouse or dependent children of a former member as defined in section 353.01, subdivision 7a, apply to the survivors of a privatized deleted text begin former public deleted text end employee.

Sec. 20.

Minnesota Statutes 2024, section 353F.057, is amended to read:

353F.057 TERMINATION FROM SERVICE REQUIREMENT.

Upon termination of service from the privatized deleted text begin former public deleted text end employer after the effective date of privatization, a privatized deleted text begin former public deleted text end employee must separate from any employment relationship with the privatized deleted text begin former public deleted text end employer for at least 30 days to qualify to receive a retirement annuity under this chapter.

Sec. 21.

Minnesota Statutes 2024, section 353F.06, is amended to read:

353F.06 APPLICATION OF REEMPLOYED ANNUITANT EARNINGS LIMITATIONS.

If a privatized deleted text begin former public deleted text end employee satisfies the separation from service requirement in section 353F.057 and thereafter resumes employment with the privatized deleted text begin former public deleted text end employer or a governmental subdivision under section 353.01, subdivision 6, the reemployed annuitant earnings limitations of section 353.37 apply.

Sec. 22.

Minnesota Statutes 2024, section 353F.07, is amended to read:

353F.07 EFFECT ON REFUND.

Notwithstanding any provision of chapter 353 to the contrary, privatized deleted text begin former public deleted text end employees may receive a refund of employee accumulated contributions plus interest as provided in section 353.34, subdivision 2, at any time after the transfer of employment to the privatized deleted text begin former public deleted text end employer. If a privatized deleted text begin former public deleted text end employee has received a refund from a pension plan listed in section 356.30, subdivision 3, the deleted text begin person deleted text end new text begin privatized employee new text end may not repay that refund unless the deleted text begin person deleted text end new text begin privatized employee new text end again becomes a member of one of those listed plans and complies with section 356.30, subdivision 2.

Sec. 23.

Minnesota Statutes 2024, section 353F.08, is amended to read:

353F.08 COUNSELING SERVICES.

The privatized deleted text begin former public deleted text end employer and the executive director deleted text begin of the Public Employees Retirement Association deleted text end shall provide privatized deleted text begin former public deleted text end employees with counseling on their benefits available under the general employees retirement plan deleted text begin of the Public Employees Retirement Association deleted text end during a new text begin mutually agreed-upon new text end period deleted text begin mutually agreed upon deleted text end before or after the effective date of privatization.

Sec. 24.

Minnesota Statutes 2024, section 353F.09, is amended to read:

353F.09 APPLICATION TO SALES OF PRIVATIZED deleted text begin FORMER PUBLIC deleted text end EMPLOYERS.

A deleted text begin medical facility or other employing unit deleted text end new text begin privatized employer new text end shall cease to be a privatized deleted text begin former public deleted text end employer and its employees shall cease to be considered privatized deleted text begin former public deleted text end employees under this chapter upon the sale of the operations of the deleted text begin medical facility or deleted text end employing unit to another employer or the sale of the deleted text begin medical facility or deleted text end employing unit to another employer. The privatized deleted text begin former public deleted text end employees deleted text begin shall be deleted text end new text begin are new text end entitled to benefits accrued under this chapter to the date of the sale, but deleted text begin shall deleted text end new text begin must new text end not accrue additional benefits after the date of the sale.

Sec. 25.

new text begin REPEALER. new text end

new text begin Minnesota Statutes 2024, section 353F.02, subdivision 4a, new text end new text begin is repealed. new text end

Sec. 26.

new text begin EFFECTIVE DATE. new text end

new text begin Sections 1 to 25 are effective July 1, 2027. new text end

ARTICLE 5

MSRS CORRECTIONAL PLAN ELIGIBILITY WORK GROUP

Section 1.

Minnesota Statutes 2024, section 352.01, is amended by adding a subdivision to read:

new text begin Subd. 28. new text end

new text begin Executive director. new text end

new text begin "Executive director" or "director" means the executive director of the system appointed under section 352.03, subdivision 5. new text end

Sec. 2.

Minnesota Statutes 2024, section 352.029, subdivision 3, is amended to read:

Subd. 3.

Contributions.

The employee and employer contributions required by section 352.04, or by section 352.92 for employees covered by section deleted text begin 352.91 deleted text end new text begin 352.905 new text end , are the obligation of the employee who is a member under section 352.01, subdivision 2a, paragraph (a), or who chooses coverage under this section. However, the employing labor organization may pay the employer contributions. Contributions made by the employee must be made by salary deduction. The employing labor organization shall pay all contributions to the system as required by section 352.04, or by section 352.92 for employees covered by section deleted text begin 352.91 deleted text end new text begin 352.905 new text end .

Sec. 3.

Minnesota Statutes 2024, section 352.03, subdivision 5, is amended to read:

Subd. 5.

Executive director, deputy director, and assistant director.

(a) The board shall appoint an executive director deleted text begin , in this chapter called the director, deleted text end on the basis of education, experience in the retirement field, ability to manage and lead system staff, and ability to assist the board in setting a vision for the system. The new text begin executive new text end director must have had at least five years' experience in either an executive level management position or in a position with responsibility for the governance, management, or administration of a retirement plan.

(b) The executive director, deputy director, and assistant director must be in the unclassified service but appointees may be selected from civil service lists if desired. Notwithstanding any law to the contrary, the board must set the salary of the executive director. The board must review the performance of the executive director on an annual basis and may grant salary adjustments as a result of the review. The salary of the deputy director and assistant director must be set in accordance with section 43A.18, subdivision 3.

Sec. 4.

Minnesota Statutes 2024, section 352.90, is amended to read:

352.90 POLICY.

It is the policy of the legislature to provide special retirement benefits for and special contributions by certain correctional employees who may deleted text begin be required deleted text end new text begin need new text end to retire at an early age because they lose the mental or physical capacity required to maintain the safety, security, discipline, and custody of deleted text begin inmates deleted text end new text begin incarcerated persons new text end at state correctional facilities deleted text begin ; of deleted text end new text begin or new text end patients new text begin and clients new text end in the deleted text begin state-operated deleted text end forensic services program deleted text begin , which is comprised of the Minnesota Security Hospital, the forensic nursing home, the forensic transition service, and the competency restoration program; of patients in deleted text end new text begin or new text end the Minnesota Sex Offender Program deleted text begin ; or of patients in the Minnesota Specialty Health System-Cambridge deleted text end .

Sec. 5.

new text begin [352.901] DEFINITIONS APPLICABLE TO THE CORRECTIONAL PLAN. new text end

new text begin Subdivision 1. new text end

new text begin Terms. new text end

new text begin Unless the language or context clearly indicates a different meaning is intended, the terms defined in this section have the meanings given. The definitions in this section apply only to the correctional employees retirement plan and supplement the definitions in section 352.01. new text end

new text begin Subd. 2. new text end

new text begin Chief executive officer. new text end

new text begin "Chief executive officer" means the Direct Care and Treatment chief executive officer appointed under section 246C.08 or a person the chief executive officer has delegated responsibilities to under sections 352.90 to 352.955, including the duty to certify direct contact under section 352.905, subdivision 2. new text end

new text begin Subd. 3. new text end

new text begin Commissioner. new text end

new text begin "Commissioner" means the commissioner of corrections appointed under section 241.01, subdivision 1, or a person the commissioner has delegated responsibilities to under sections 352.90 to 352.955, including the duty to certify direct contact under section 352.905, subdivision 2. new text end

new text begin Subd. 4. new text end

new text begin Custody. new text end

new text begin "Custody" means an employee's exercise of legal and physical control over an incarcerated person, patient, or client who is detained, confined, or otherwise restricted from freedom of movement. new text end

new text begin Subd. 5. new text end

new text begin Direct Care and Treatment. new text end

new text begin "Direct Care and Treatment" means the agency established under section 246C.02. new text end

new text begin Subd. 6. new text end

new text begin Direct contact. new text end

new text begin "Direct contact" means interactions between an employee and one or more patients, clients, or incarcerated persons where the employee is physically present and engaged with patients, clients, or incarcerated persons as part of the employee's normal duties, as defined in section 352.01, subdivision 17d, which must include regular involvement in rehabilitation, treatment, custody, or supervision of patients, clients, or incarcerated persons, while maintaining safety, security, and order. new text end

new text begin Subd. 7. new text end

new text begin Direct contact requirement. new text end

new text begin "Direct contact requirement" means the requirement that the employee spend at least 75 percent of the employee's working time in direct contact. new text end

new text begin Subd. 8. new text end

new text begin Eligible facility. new text end

new text begin "Eligible facility" means: new text end

new text begin (1) Minnesota Correctional Facility-Faribault; new text end

new text begin (2) Minnesota Correctional Facility-Lino Lakes; new text end

new text begin (3) Minnesota Correctional Facility-Moose Lake; new text end

new text begin (4) Minnesota Correctional Facility-Oak Park Heights; new text end

new text begin (5) Minnesota Correctional Facility-Red Wing; new text end

new text begin (6) Minnesota Correctional Facility-Rush City; new text end

new text begin (7) Minnesota Correctional Facility-Shakopee; new text end

new text begin (8) Minnesota Correctional Facility-St. Cloud; new text end

new text begin (9) Minnesota Correctional Facility-Stillwater; new text end

new text begin (10) Minnesota Correctional Facility-Togo; or new text end

new text begin (11) Minnesota Correctional Facility-Willow River. new text end

new text begin Subd. 9. new text end

new text begin Eligible program. new text end

new text begin "Eligible program" means: new text end

new text begin (1) the forensic services program; or new text end

new text begin (2) the Minnesota Sex Offender Program. new text end

new text begin Subd. 10. new text end

new text begin Employee organization. new text end

new text begin "Employee organization" has the meaning given in section 179A.03, subdivision 6. new text end

new text begin Subd. 11. new text end

new text begin Rehabilitation. new text end

new text begin "Rehabilitation" means the process of providing treatment, education, or other interventions designed to improve the mental, physical, or behavioral condition of a patient, client, or incarcerated person with the goal of facilitating the reintegration into society or improving the quality of life of the patient, client, or incarcerated person. new text end

new text begin Subd. 12. new text end

new text begin Supervision. new text end

new text begin "Supervision" means the oversight and management of patients, clients, or incarcerated persons by an employee at an eligible facility or eligible program to ensure compliance with rules, regulations, and treatment plans; monitor behavior; enforce discipline; and provide guidance or direction. new text end

new text begin Subd. 13. new text end

new text begin Treatment. new text end

new text begin "Treatment" means the broad range of services, including medical, psychological, or therapeutic interventions, aimed at addressing the health, mental health, or behavioral needs and overall condition of patients, clients, or incarcerated persons by or under the supervision of employees at an eligible facility or eligible program. new text end

new text begin Subd. 14. new text end

new text begin Working time. new text end

new text begin "Working time" means time spent performing the normal duties of an employee's employment position, not including time spent in training or on a leave of absence for vacation, illness, or other reasons as authorized in the human resources policies applicable to the employee. new text end

Sec. 6.

new text begin [352.905] COVERED CORRECTIONAL SERVICE. new text end

new text begin Subdivision 1. new text end

new text begin Direct contact not required. new text end

new text begin (a) For all periods of service that an employee is performing covered correctional service as defined in this subdivision, the employee is a member of the correctional employees retirement plan, whether or not the employee has any direct contact. new text end

new text begin (b) "Covered correctional service" under this subdivision means service performed by a state employee employed at an eligible facility or in an eligible program in one of the following employment positions: new text end

new text begin (1) corrections officer 1; new text end

new text begin (2) corrections officer 2; new text end

new text begin (3) corrections officer 3; new text end

new text begin (4) corrections lieutenant; new text end

new text begin (5) corrections captain; new text end

new text begin (6) security counselor; new text end

new text begin (7) security counselor lead; or new text end

new text begin (8) corrections canine officer. new text end

new text begin Subd. 2. new text end

new text begin Direct contact required. new text end

new text begin (a) For all periods of service that an employee is performing covered correctional service as defined in this subdivision, the employee is a member of the correctional employees retirement plan, but only if the employee satisfies the direct contact requirement and the employee's employer has certified to the executive director, in the manner prescribed by the executive director, that the employee satisfies the direct contact requirement. new text end

new text begin (b) "Covered correctional service" under this subdivision means service performed by a state employee employed at an eligible facility or in an eligible program in one of the employment positions specified in subdivisions 3 to 6. new text end

new text begin Subd. 3. new text end

new text begin Employment positions A to C. new text end

new text begin Employment positions with a title that begins with the letters "A" to "C": new text end

new text begin (1) automotive mechanic; new text end

new text begin (2) baker; new text end

new text begin (3) behavior analyst 1; new text end

new text begin (4) behavior analyst 2; new text end

new text begin (5) behavior analyst 3; new text end

new text begin (6) building maintenance coordinator; new text end

new text begin (7) building maintenance lead worker; new text end

new text begin (8) building maintenance supervisor 2; new text end

new text begin (9) building utilities mechanic; new text end

new text begin (10) carpenter; new text end

new text begin (11) carpenter lead; new text end

new text begin (12) central services administrative specialist intermediate; new text end

new text begin (13) central services administrative specialist principal; new text end

new text begin (14) central services administrative specialist senior; new text end

new text begin (15) certified occupational therapy assistant 1; new text end

new text begin (16) certified occupational therapy assistant 2; new text end

new text begin (17) chaplain; new text end

new text begin (18) client advocate; new text end

new text begin (19) clinical program therapist 1; new text end

new text begin (20) clinical program therapist 2; new text end

new text begin (21) clinical program therapist 3; new text end

new text begin (22) clinical program therapist 4; new text end

new text begin (23) cook; new text end

new text begin (24) cook coordinator; new text end

new text begin (25) corrections chief cook; new text end

new text begin (26) corrections discipline unit supervisor; new text end

new text begin (27) corrections food services supervisor; new text end

new text begin (28) corrections industries production supervisor; new text end

new text begin (29) corrections inmate program coordinator; new text end

new text begin (30) corrections manufacturing specialist-tool and die; new text end

new text begin (31) corrections manufacturing specialist-engraving and drafting; new text end

new text begin (32) corrections manufacturing specialist-graphics; new text end

new text begin (33) corrections manufacturing specialist-light assembly; new text end

new text begin (34) corrections manufacturing specialist-light manufacturing; new text end

new text begin (35) corrections manufacturing specialist-mechanical; new text end

new text begin (36) corrections manufacturing specialist-sales and service; new text end

new text begin (37) corrections manufacturing specialist-transportation and warehouse; new text end

new text begin (38) corrections manufacturing specialist-wood; new text end

new text begin (39) corrections security caseworker; new text end

new text begin (40) corrections security caseworker career; new text end

new text begin (41) corrections teaching assistant; new text end

new text begin (42) corrections transitions program coordinator; new text end

new text begin (43) culinary supervisor; and new text end

new text begin (44) customer services specialist principal. new text end

new text begin Subd. 4. new text end

new text begin Employment positions D to M. new text end

new text begin Employment positions with a title that begins with the letters "D" to "M": new text end

new text begin (1) delivery van driver; new text end

new text begin (2) dental assistant; new text end

new text begin (3) dental hygienist; new text end

new text begin (4) dentist; new text end

new text begin (5) electrical/electronics specialist; new text end

new text begin (6) electrician; new text end

new text begin (7) electrician lead; new text end

new text begin (8) electrician master of record; new text end

new text begin (9) electrician supervisor; new text end

new text begin (10) food service supervisor; new text end

new text begin (11) food service worker; new text end

new text begin (12) general maintenance worker; new text end

new text begin (13) general maintenance worker lead; new text end

new text begin (14) general repair worker; new text end

new text begin (15) groundskeeper senior; new text end

new text begin (16) group supervisor; new text end

new text begin (17) group supervisor assistant; new text end

new text begin (18) human services support specialist; new text end

new text begin (19) institution maintenance lead worker; new text end

new text begin (20) laborer trades and equipment; new text end

new text begin (21) library technician; new text end

new text begin (22) library/information resource services specialist; new text end

new text begin (23) library/information resource services specialist supervisor; new text end

new text begin (24) licensed alcohol/drug counselor; new text end

new text begin (25) licensed practical nurse; new text end

new text begin (26) machinery repair worker; new text end

new text begin (27) maintenance machinist; new text end

new text begin (28) management analyst 3; new text end

new text begin (29) mason; new text end

new text begin (30) medical assistant, certified; and new text end

new text begin (31) music therapist. new text end

new text begin Subd. 5. new text end

new text begin Employment positions O to R. new text end

new text begin Employment positions with a title that begins with the letters "O" to "R": new text end

new text begin (1) occupational therapist; new text end

new text begin (2) occupational therapist senior; new text end

new text begin (3) painter; new text end

new text begin (4) painter lead; new text end

new text begin (5) physical therapist; new text end

new text begin (6) plant maintenance engineer; new text end

new text begin (7) plant maintenance engineer lead; new text end

new text begin (8) plumber; new text end

new text begin (9) plumber chief; new text end

new text begin (10) plumber master in charge; new text end

new text begin (11) plumber supervisor; new text end

new text begin (12) psychiatric advanced practice registered nurse; new text end

new text begin (13) psychologist 1; new text end

new text begin (14) psychologist 2; new text end

new text begin (15) psychologist 3; new text end

new text begin (16) recreation program assistant; new text end

new text begin (17) recreation therapist; new text end

new text begin (18) recreation therapist coordinator; new text end

new text begin (19) recreation therapist senior; new text end

new text begin (20) refrigeration mechanic; new text end

new text begin (21) registered nurse; new text end

new text begin (22) registered nurse advanced practice; new text end

new text begin (23) registered nurse principal; new text end

new text begin (24) registered nurse senior; new text end

new text begin (25) rehabilitation counselor senior; and new text end

new text begin (26) residential program lead. new text end

new text begin Subd. 6. new text end

new text begin Employment positions S to W. new text end

new text begin Employment positions with a title that begins with the letters "S" to "W": new text end

new text begin (1) security supervisor; new text end

new text begin (2) sentencing to service crew leader, institution community work crews; new text end

new text begin (3) skills development specialist; new text end

new text begin (4) social work specialist; new text end

new text begin (5) social work specialist senior-human services; new text end

new text begin (6) social worker senior; new text end

new text begin (7) special education program assistant; new text end

new text begin (8) special teacher: doctoral; new text end

new text begin (9) special teacher: master of arts/master of science/five-year+teachers license; new text end

new text begin (10) special teacher: five-year career technical credential; new text end

new text begin (11) special teacher: five-year career technical credential+10 credits; new text end

new text begin (12) special teacher: five-year career technical credential+20 credits; new text end

new text begin (13) special teacher: five-year career technical credential+30 credits; new text end

new text begin (14) special teacher: five-year career technical credential+40 credits; new text end

new text begin (15) special teacher: five-year career technical credential+50 credits; new text end

new text begin (16) special teacher: bachelor of arts/bachelor of science+teachers license; new text end

new text begin (17) special teacher: bachelor of arts/bachelor of science+teachers license+10 credits; new text end

new text begin (18) special teacher: bachelor of arts/bachelor of science+teachers license+20 credits; new text end

new text begin (19) special teacher: bachelor of arts/bachelor of science+teachers license+30 credits; new text end

new text begin (20) special teacher: bachelor of arts/bachelor of science+teachers license+40 credits; new text end

new text begin (21) special teacher: career technical credential; new text end

new text begin (22) special teacher: master of arts/master of science+teachers license+10 graduate credits; new text end

new text begin (23) special teacher: master of arts/master of science+teachers license+20 graduate credits; new text end

new text begin (24) special teacher: master of arts/master of science+teachers license+30 graduate credits; new text end

new text begin (25) special teacher: no degree/teachers license; new text end

new text begin (26) speech pathology clinician; new text end

new text begin (27) sports medicine specialist; new text end

new text begin (28) work therapy assistant; new text end

new text begin (29) work therapy program coordinator; and new text end

new text begin (30) work therapy technician. new text end

new text begin Subd. 7. new text end

new text begin Former employees of Minnesota Specialty Health System-Cambridge. new text end

new text begin A Department of Human Services or Direct Care and Treatment employee who was employed at the Minnesota Specialty Health System-Cambridge immediately preceding the 2014 conversion to community-based homes and was in covered correctional service at the time of the transition will continue to be covered by the correctional employees retirement plan while employed in the direct care and treatment of patients by and without a break in service with the Department of Human Services or Direct Care and Treatment. new text end

Sec. 7.

new text begin [352.907] PLAN COVERAGE CHANGES. new text end

new text begin Subdivision 1. new text end

new text begin Correctional plan membership committee. new text end

new text begin (a) A correctional plan membership committee is established to make determinations regarding changes to employment positions and to coverage of employees. new text end

new text begin (b) The members of the correctional plan membership committee are: new text end

new text begin (1) the commissioner or the commissioner's designee; new text end

new text begin (2) the chief executive officer or the chief executive officer's designee; new text end

new text begin (3) the executive director or the executive director's designee; new text end

new text begin (4) the commissioner of management and budget or the commissioner's designee; new text end

new text begin (5) one representative from each employee organization that represents one or more employees of the Department of Corrections or Direct Care and Treatment and who are covered by the correctional employees retirement plan; new text end

new text begin (6) the human resources director or the director's designee from the Department of Corrections; and new text end

new text begin (7) the human resources director or the director's designee from Direct Care and Treatment. new text end

new text begin (c) A member of the correctional plan membership committee under paragraph (b), clause (5), need not attend a meeting of the committee if none of the employees represented by the employee organization will be impacted by any action to be taken by the committee at the meeting. new text end

new text begin (d) If the executive director has received one or more requests for changes to the title of an employment position, the addition or removal of an employment position from the lists in section 352.905, or the commencement or cessation of coverage of an employee by the correctional employees retirement plan, the executive director must convene the correctional plan membership committee at least as frequently as once every calendar quarter. If the executive director has not received any requests during a calendar quarter, the executive director is not required to convene a meeting. new text end

new text begin (e) The human resources directors of the Department of Corrections and Direct Care and Treatment must retain each request to the correctional plan membership committee and the related documentation and final determination for an employee or employment position in their respective department or agency. new text end

new text begin Subd. 2. new text end

new text begin Change in the title of an employment position. new text end

new text begin (a) No later than 60 days before the effective date of a change in the title of an employment position listed in section 352.905, the Department of Corrections or Direct Care and Treatment, as applicable, must submit a request to the commissioner of management and budget to review the title change and determine whether the responsibilities of the employment position have changed. The commissioner of management and budget must provide a response to the Department of Corrections or Direct Care and Treatment, as applicable, by the effective date of the change. new text end

new text begin (b) If the commissioner of management and budget determines that the responsibilities of the employment position have not changed or the responsibilities of the employment position have changed but the changes do not affect the eligibility of the employment position for coverage by the correctional employees retirement plan, the department or agency, as applicable, must: new text end

new text begin (1) submit the title change to the executive director of the Legislative Commission on Pensions and Retirement before the start of the next legislative session and request legislation to replace the title in section 352.905 with the new title; and new text end

new text begin (2) notify each employee in the employment position no later than 30 days after the effective date of the title change that the title change will not affect the continued coverage of the employee by the correctional employees retirement plan and that the department or agency, as applicable, has submitted a request to the legislature to change the title in section 352.905. new text end

new text begin (c) If the commissioner of management and budget determines that the responsibilities of the employment position have changed and the changes result in the employment position no longer being qualified for coverage by the correctional employees retirement plan, the employer must: new text end

new text begin (1) submit a request to the correctional plan membership committee for confirmation that the employment position must be removed from the lists of employment positions in section 352.905; and new text end

new text begin (2) notify each employee in the employment position no later than 30 days after the effective date of the title change that a determination was made by the commissioner of management and budget that, because the responsibilities of the employment position have changed, the employment position and all employees in the employment position are no longer eligible for coverage by the correctional employees retirement plan subject to confirmation by the correctional plan membership committee. new text end

new text begin Subd. 3. new text end

new text begin Transfers to new eligible facility or eligible program. new text end

new text begin (a) If the Department of Corrections or Direct Care and Treatment adds a facility to the list of eligible facilities under section 352.901, subdivision 8, or a program to the list of eligible programs under section 352.901, subdivision 9, and the department or agency, as applicable, responsible for the new facility or program transfers a state employee who was rendering covered correctional service under section 352.905 to the new facility or program, the state employee must continue to be covered by the correctional employees retirement plan if the employee is employed in the same employment position at the new facility or in the new program. new text end

new text begin (b) The employee continues to be covered by the correctional employees retirement plan unless the department or agency, as applicable, completes the process under subdivision 5 and the correctional plan membership committee has determined that the employee no longer qualifies for coverage. new text end

new text begin Subd. 4. new text end

new text begin Procedures for making employment position changes. new text end

new text begin (a) The correctional plan membership committee must consider requests to add or remove an employment position listed in section 352.905, subdivisions 3 to 6, or to confirm a determination under subdivision 2 by the commissioner of management and budget that, because the responsibilities of the employment position have changed, the employment position and all employees in the employment position are no longer eligible for coverage by the correctional employees retirement plan. new text end

new text begin (b) An employee, employee organization, or employer may submit a request to the correctional plan membership committee to add an employment position to section 352.905, subdivisions 3 to 6. The correctional plan membership committee may determine that an employment position must be added if the committee determines that at least one employee in the employment position satisfies the direct contact requirement. new text end

new text begin (c) The correctional plan membership committee may, at the request of an employer, determine under this subdivision or confirm a determination under subdivision 2, clause (2), that an employment position must be removed from the lists in section 352.905, subdivisions 3 to 6, if the committee determines that no employee in the employment classification satisfies the direct contact requirement. new text end

new text begin (d) The correctional plan membership committee must include an effective date in any determination to add or remove an employment position from the lists in section 352.905, subdivisions 3 to 6. The effective date may be retroactive for a determination to add an employment position. new text end

new text begin (e) If the correctional plan membership committee determines that an employment position must be added to or removed from the lists of employment positions in section 352.905, subdivisions 3 to 6, the department or agency affected by the determination must submit the employment position change to the executive director of the Legislative Commission on Pensions and Retirement before the start of the next legislative session and request legislation to make the change. new text end

new text begin (f) After making a determination that an employment position must be added to or removed from the lists of employment positions in section 352.905, subdivisions 3 to 6, the correctional plan membership committee must designate a member of the committee to communicate the committee's determination to all affected employees no later than ten days after the date of the meeting at which the determination was made and inform the employees of the right to appeal the determination under subdivision 6. new text end

new text begin Subd. 5. new text end

new text begin Procedures for adding or ceasing coverage for employees. new text end

new text begin (a) The correctional plan membership committee must consider requests to provide coverage by the correctional employees retirement plan to an employee in an employment position listed in section 352.905, subdivisions 3 to 6, or to cease coverage of an employee. new text end

new text begin (b) An employee, an employee's employee organization, or an employee's manager may submit a request to the correctional plan membership committee to provide coverage to an employee in an employment position listed in section 352.905, subdivisions 3 to 6. The request may include a description of the extent of the physical hazard that the employee is routinely subjected to in the course of employment, the extent of intervention routinely expected of the employee in the event of a facility incident, and the extent the employee is routinely involved in the rehabilitation, treatment, custody, or supervision of patients, clients, or incarcerated persons. The request must include: new text end

new text begin (1) a signed and dated position description for the employee's position; and new text end

new text begin (2) a statement signed by the employer's human resources director or the director's designee and the commissioner or the chief executive officer, as applicable, that the employee satisfies the direct contact requirement. new text end

new text begin (c) An employer may submit a request to the correctional plan membership committee to cease coverage of an employee. The request must include: new text end

new text begin (1) a signed and dated position description for the employee's position; and new text end

new text begin (2) a statement signed by the employee's employer that the employee no longer satisfies the direct contact requirement. new text end

new text begin (d) The correctional plan membership committee must include an effective date in any determination that an employee must begin to receive coverage by the correctional employees retirement plan or that coverage must cease. The effective date may be retroactive to the date as of which the coverage requirements were first satisfied or were no longer met. new text end

new text begin (e) After making a determination of coverage or no coverage for an employee, the correctional plan membership committee must designate a member of the committee to communicate the committee's determination to the affected employee no later than ten days after the date of the meeting at which the determination was made and inform the employee of the right to appeal the determination under subdivision 6. new text end

new text begin Subd. 6. new text end

new text begin Right to appeal. new text end

new text begin (a) No later than 30 days after receiving a determination under subdivision 4 or 5, the affected employee may appeal a determination of the correctional plan membership committee by filing an appeal with the human resources manager of the department or agency, as applicable, in which the employee is employed. The appeal must include: new text end

new text begin (1) the reasons for the appeal and rationale for a determination that the employee be covered by the correctional employees retirement plan; and new text end

new text begin (2) new or additional information, if any, not previously submitted or considered by the correctional plan membership committee, including a new or revised position description and samples of work product. new text end

new text begin (b) The appeal must be decided by the commissioner of corrections if the employee is an employee of the Department of Corrections or by the chief executive officer of Direct Care and Treatment if the employee is an employee of Direct Care and Treatment. The decision of the commissioner or chief executive officer, as applicable, is final. new text end

new text begin (c) A determination not timely appealed under paragraph (a) is not entitled to further administrative or judicial review. A determination under subdivision 4 or 5 or an appeal decided under paragraph (b) may not be appealed under section 356.96. new text end

Sec. 8.

new text begin [352.908] CORRECTION OF PLAN COVERAGE ERRORS. new text end

new text begin Section 356.637 applies if an employee is erroneously covered by: new text end

new text begin (1) the correctional employees retirement plan when the employee should have been covered by one of the other plans specified in section 356.637; or new text end

new text begin (2) a plan specified in section 356.637, other than the correctional employees retirement plan, when the employee should have been covered by the correctional employees retirement plan. new text end

Sec. 9.

Minnesota Statutes 2024, 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 deleted text begin 352.91 deleted text end new text begin 352.905 new text end who has reached age 55 years and is vested under section 352.925, 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.

Sec. 10.

Minnesota Statutes 2024, section 352.955, subdivision 1, is amended to read:

Subdivision 1.

Election to transfer prior MSRS-general service credit.

(a) An eligible employee described in paragraph (b) may elect to transfer service credit in the general state employees retirement plan of the Minnesota State Retirement System to the correctional state employees retirement plan for eligible prior correctional employment.

(b) An eligible employee is a person who deleted text begin is covered by legislation implementing the recommendations under section 352.91, subdivision 4a deleted text end new text begin the correctional plan membership committee determines is entitled to coverage by the correctional employees retirement plan under section 352.907 new text end .

(c) Eligible prior correctional employment is employment covered by the general state employees retirement plan of the Minnesota State Retirement System, is continuous service, and is certified by the commissioner of corrections and the Direct Care and Treatment executive board, whichever applies, and by the commissioner of management and budget to the executive director of the Minnesota State Retirement System as service that would qualify for correctional state employees retirement plan coverage under section deleted text begin 352.91 deleted text end new text begin 352.905 new text end , if the service had been rendered after the date of coverage transfer.

(d) The election to transfer past service credit under this section must be made in writing by the applicable person on a form prescribed by the executive director of the Minnesota State Retirement System and must be filed with the executive director of the Minnesota State Retirement System on or before the one year anniversary of the coverage transfer or the date of the eligible employee's termination of state employment, whichever is earlier.

Sec. 11.

new text begin REPEALER. new text end

new text begin Minnesota Statutes 2024, section 352.91, subdivisions 1, 2, 2a, 3c, 3d, 3e, 3f, 3g, 3h, 3i, 3j, 4a, 4b, 4c, and 6, new text end new text begin are repealed. new text end

Sec. 12.

new text begin EFFECTIVE DATE. new text end

new text begin Sections 1 to 11 are effective January 1, 2026. new text end

ARTICLE 6

HIGHER EDUCATION SUPPLEMENTAL RETIREMENT PLAN

Section 1.

Minnesota Statutes 2024, section 356.24, subdivision 1, is amended to read:

Subdivision 1.

Restriction; exceptions.

It is unlawful for a school district or other governmental subdivision or state agency to levy taxes for or to contribute public funds to a supplemental pension or deferred compensation plan that is established, maintained, and operated in addition to a primary pension program for the benefit of the governmental subdivision employees other than:

(1) to a supplemental pension plan that was established, maintained, and operated before May 6, 1971;

(2) to a plan that provides solely for group health, hospital, disability, or death benefits;

(3) to the individual retirement account plan established by chapter 354B;

(4) to a plan that provides solely for severance pay under section 465.72 to a retiring or terminating employee;

(5) to a deferred compensation plan defined in subdivision 3;

(6) for personnel employed by the Board of Trustees of the Minnesota State Colleges and Universities and not covered by clause (5), to the supplemental retirement plan under chapter 354C, if the supplemental plan coverage is provided for in a personnel policy or in the collective bargaining agreement of the public employer with the exclusive representative of the covered employees in an appropriate unit, in an amount matching employee contributions on a dollar for dollar basis, but not to exceed an employer contribution of deleted text begin $2,700 deleted text end new text begin $4,300 new text end a year for each employee;

(7) to a supplemental plan or to a governmental trust to save for postretirement health care expenses qualified for tax-preferred treatment under the Internal Revenue Code, if the supplemental plan coverage is provided for in a personnel policy or in the collective bargaining agreement of a public employer with the exclusive representative of the covered employees in an appropriate unit;

(8) to the laborers national industrial pension fund or to a laborers local pension fund for the employees of a governmental subdivision who are covered by a collective bargaining agreement that provides for coverage by that fund and that sets forth a fund contribution rate, but not to exceed an employer contribution of $10,000 per year per employee;

(9) to the plumbers and pipefitters national pension fund or to a plumbers and pipefitters local pension fund for the employees of a governmental subdivision who are covered by a collective bargaining agreement that provides for coverage by that fund and that sets forth a fund contribution rate, but not to exceed an employer contribution of $5,000 per year per employee;

(10) to the international union of operating engineers pension fund for the employees of a governmental subdivision who are covered by a collective bargaining agreement that provides for coverage by that fund and that sets forth a fund contribution rate, but not to exceed an employer contribution of $10,000 per year per employee;

(11) to the International Association of Machinists national pension fund for the employees of a governmental subdivision who are covered by a collective bargaining agreement that provides for coverage by that fund and that sets forth a fund contribution rate, but not to exceed an employer contribution of $5,000 per year per employee;

(12) for employees of United Hospital District, Blue Earth, to the state of Minnesota deferred compensation program, if the employee makes a contribution, in an amount that does not exceed the total percentage of covered salary under section 353.27, subdivisions 3 and 3a;

(13) to the alternative retirement plans established by the Hennepin County Medical Center under section 383B.914, subdivision 5;

(14) to the International Brotherhood of Teamsters Central States pension plan for fixed-route bus drivers employed by the St. Cloud Metropolitan Transit Commission who are members of the International Brotherhood of Teamsters Local 638 by virtue of that employment; or

(15) to a supplemental plan organized and operated under the Internal Revenue Code, as amended, that is wholly and solely funded by the employee's accumulated sick leave, accumulated vacation leave, and accumulated severance pay.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

ARTICLE 7

STATE AUDITOR'S FIRE RELIEF ASSOCIATION WORKING GROUP

Section 1.

Minnesota Statutes 2024, section 424A.014, subdivision 2, is amended to read:

Subd. 2.

Financial statement.

(a) The board of trustees of each firefighters relief association that is not required to and does not choose 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:

(1) the sources and amounts of all money received;

(2) all disbursements, accounts payable, and accounts receivable;

(3) the amount of money remaining in the treasury;

(4) total assets, including a listing of all investments;

(5) the accrued liabilities; and

(6) all other items necessary to show accurately the revenues and expenditures and financial position of the relief association.

(b) The detailed financial statement of the special and general funds required under paragraph (a) must be certified by a certified public accountant or by the state auditor in accordance with agreed-upon procedures and forms prescribed by the state auditor. The accountant must have at least five years of public accounting, auditing, or similar experience and must not be an active, inactive, or retired member of the relief association or the fire department.

(c) The detailed financial statement required under paragraph (a) must be countersigned by:

(1) the municipal clerk or clerk-treasurer of the municipality;

(2) where applicable, the municipal clerk or clerk-treasurer of the largest municipality in population that contracts with the independent nonprofit firefighting corporation if the relief association is a subsidiary of an independent nonprofit firefighting corporation, and by the secretary of the independent nonprofit firefighting corporation; or

(3) the chief financial official of the county in which the firefighters relief association is located or primarily located if the relief association is associated with a fire department that is not located in or associated with an organized municipality.

(d) The firefighters relief association board must submit a copy of the detailed financial statement required under paragraph (a) that has been certified by the governing body of the municipality to the state auditor on or before deleted text begin March 31 deleted text end new text begin June 30 new text end after the close of the fiscal year.

(e) A certified public accountant or auditor who performs the agreed-upon procedures under paragraph (b) is subject to the reporting requirement of section 6.67.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2026. new text end

Sec. 2.

Minnesota Statutes 2024, section 424A.015, subdivision 4, is amended to read:

Subd. 4.

deleted text begin Transfer to individual retirement account deleted text end new text begin Right to elect a direct rollover new text end .

deleted text begin A relief association that is a qualified pension plan under section 401(a) of the Internal Revenue Code, as amended, and that provides a single payment service pension, at the written request of the applicable retiring member or, following the death of the active member, at the written request of the deceased member's surviving spouse, may directly transfer on an institution-to-institution basis the eligible member's lump-sum pension or the survivor benefit attributable to the member, whichever applies, to the requesting person's individual retirement account under section 408(a) of the Internal Revenue Code, as amended. deleted text end new text begin A relief association must permit a member, a surviving spouse, or another distributee as defined in section 356.633, subdivision 1, paragraph (b), to elect a direct rollover of any distribution that is an eligible rollover distribution as defined in section 356.633, subdivision 1, paragraph (d), subject to the terms and conditions of section 356.633. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 3.

Minnesota Statutes 2024, section 424A.016, subdivision 2, is amended to read:

Subd. 2.

Defined contribution service pension eligibility.

(a) A relief association, when its articles of incorporation or bylaws so provide, may pay new text begin as soon as practicable new text end out of the assets of its special fund a defined contribution service pension to each of its members who:

(1) separates from active service with the fire department;

(2) deleted text begin reaches age 50 deleted text end new text begin submits a valid written application for the distribution new text end ;

(3) completes at least five years of active service as an active member of the fire department to which the relief association is associated;

(4) completes at least five years of active membership with the relief association before separation from active service; and

(5) complies with any additional conditions as to age, service, and membership that are prescribed by the bylaws of the relief association.

(b) In the case of a member who has completed at least five years of active service as an active member of the fire department to which the relief association is associated on the date that the relief association is established and incorporated, the requirement that the member complete at least five years of active membership with the relief association before separation from active service may be waived by the board of trustees of the relief association if the member completes at least five years of inactive membership with the relief association before the date of the payment of the service pension. During the period of inactive membership, the member is not entitled to receive any disability benefit coverage, is not entitled to receive additional individual account allocation of fire state aid or municipal contribution toward a service pension, and is considered to have the status of a person entitled to a deferred service pension.

(c) The service pension earned by a firefighter under this chapter and the articles of incorporation and bylaws of the relief association may be paid whether or not the municipality or independent nonprofit firefighting corporation to which the relief association is associated qualifies for the receipt of fire state aid under chapter 477B.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2026. new text end

Sec. 4.

Minnesota Statutes 2024, section 424A.016, subdivision 6, is amended to read:

Subd. 6.

Deferred service pensions.

(a) A "deferred member" means a member of a relief association who has separated from active service and membership and has completed the minimum service and membership requirements in subdivision 2. The requirement that a member separate from active service and membership is waived for deleted text begin persons deleted text end new text begin any person new text end who deleted text begin have deleted text end new text begin has new text end discontinued deleted text begin their deleted text end volunteer firefighter and paid on-call firefighter duties and deleted text begin who are deleted text end new text begin is new text end employed on a part-time or full-time basis under section 424A.015, subdivision 1.

(b) A deferred member is entitled to receive a deferred service pension deleted text begin when deleted text end new text begin as soon as practicable after new text end the member deleted text begin reaches at least age 50, or at least the minimum age specified in the bylaws governing the relief association if that age is greater than age 50, and makes deleted text end new text begin submits new text end a valid written application new text begin for the distribution and complies with any conditions as to age prescribed by the relief association's bylaws new text end .

(c) A defined contribution relief association must credit interest or additional investment performance on the deferred lump-sum service pension during the period of deferral for all deferred members on or after January 1, 2021. A defined contribution relief association may specify in its bylaws the method by which it will credit interest or additional investment performance to the accounts of deferred members. Such method shall be limited to one of the three methods provided in this paragraph. In the event the bylaws do not specify a method, the interest or additional investment performance must be credited using the method defined in clause (3). The permissible methods are:

(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;

(2) at the investment performance rate actually earned on that portion of the assets if the deferred benefit amount is invested in a separate investment vehicle held by the relief association; or

(3) at the investment return on the assets of the special fund of the defined contribution relief association in proportion to the share of the assets of the special fund to the credit of each individual deferred member account.

(d) Notwithstanding the requirements of section 424A.015, subdivision 6, bylaw amendments made in accordance with paragraph (c) on or before January 1, 2022, shall apply to members already in deferred status as of January 1, 2021.

(e) Unless the bylaws provide differently, interest or additional investment performance must be allocated to each deferred member account beginning on the date that the member separates from active service and membership and ending on the last date that the deferred member account is valued before the final distribution of the deferred service pension.

new text begin (f) Notwithstanding the requirements of section 424A.015, subdivision 6, a relief association that amends its bylaws to lower the required minimum retirement age may specify in the bylaws amendment that the lower minimum retirement age applies to members who separated from active service and membership prior to the effective date of the bylaws amendment. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2026. new text end

Sec. 5.

Minnesota Statutes 2024, section 424A.05, subdivision 3, is amended to read:

Subd. 3.

Authorized disbursements from special fund.

(a) Disbursements from the special fund may not be made for any purpose other than one of the following:

(1) for the payment new text begin or direct rollover under section 356.633 new text end of service pensions to deleted text begin retired deleted text end members of the relief association if authorized and paid under law and the bylaws governing the relief association;

(2) for the purchase of an annuity for the applicable person under section 424A.015, subdivision 3 deleted text begin , for the transfer of service pension or benefit amounts to the applicable person's individual retirement account under section 424A.015, subdivision 4, or to the applicable person's account in the Minnesota deferred compensation plan under section 424A.015, subdivision 5 deleted text end ;

(3) for the payment new text begin or direct rollover under section 356.633 new text end of temporary or permanent disability benefits to disabled members of the relief association if authorized and paid under law and specified in amount in the bylaws governing the relief association;

(4) for the payment new text begin or direct rollover under section 356.633 new text end of survivor benefits or for the payment of a death benefit to the estate of the deceased active or deferred firefighter, if authorized and paid under law and specified in amount in the bylaws governing the relief association;

(5) for the payment of the fees, dues and assessments to the Minnesota State Fire Department Association and to the Minnesota State Fire Chiefs Association in order to entitle relief association members to membership in and the benefits of these associations or organizations;

(6) for the payment of insurance premiums to the state Volunteer Firefighters Benefit Association, or an insurance company licensed by the state of Minnesota offering casualty insurance, in order to entitle relief association members to membership in and the benefits of the association or organization;

(7) for the payment of administrative expenses of the relief association as authorized under subdivision 3b; and

(8) for the payment new text begin or direct rollover under section 356.633 new text end of a service pension to the former spouse of a member or former member of a relief association, if the former spouse is an alternate payee designated in a qualified domestic relations order under subdivision 5.

(b) Checks or authorizations for electronic fund transfers for disbursements authorized by this section must be signed by the relief association treasurer and at least one other elected trustee who has been designated by the board of trustees to sign the checks or authorizations. A relief association may make disbursements authorized by this subdivision by electronic fund transfers only if the specific method of payment and internal control policies and procedures regarding the method are approved by the board of trustees.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 6.

Minnesota Statutes 2024, section 424A.06, subdivision 2, is amended to read:

Subd. 2.

General fund assets and revenues.

(a) The general fund, if established, must be credited with the following:

(1) all money received from dues deleted text begin other than dues payable as contributions under the bylaws of the relief association to the special fund deleted text end ;

(2) all money received from fines;

(3) all money received from initiation fees;

(4) all money received as entertainment revenues; and

(5) any money or property donated, given, granted or devised by any person, either for the support of the general fund of the relief association or for unspecified purposes.

(b) The treasurer of the relief association is the custodian of the assets of the general fund and must be the recipient on behalf of the general fund of all revenues payable to the general fund. The treasurer shall maintain adequate records documenting any transaction involving the assets or the revenues of the general fund. These records must be open for inspection by any member of the relief association at reasonable times and places.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2026. new text end

Sec. 7.

Minnesota Statutes 2024, section 424A.092, subdivision 2, is amended to read:

Subd. 2.

Determination of accrued liability.

(a) deleted text begin Beginning with the calculation performed in 2021 for the 2022 calendar year, deleted text end Each firefighters relief association which pays a lump-sum service pension shall determine the accrued liability of the special fund of the firefighters relief association relative to each active member of the relief association, calculated using the applicable appendix to the standards for actuarial work established by the Legislative Commission on Pensions and Retirement under section 3.85, subdivision 10.

deleted text begin (b) For calendar years before 2022, each firefighters relief association shall determine the accrued liability of the special fund of the firefighters relief association relative to each active member of the relief association, calculated individually using the following table: deleted text end

deleted text begin Cumulative Year deleted text end	deleted text begin Accrued Liability deleted text end
deleted text begin ............ deleted text end	deleted text begin ............ deleted text end
deleted text begin 1 deleted text end	deleted text begin $ deleted text end	deleted text begin 60 deleted text end
deleted text begin 2 deleted text end		deleted text begin 124 deleted text end
deleted text begin 3 deleted text end		deleted text begin 190 deleted text end
deleted text begin 4 deleted text end		deleted text begin 260 deleted text end
deleted text begin 5 deleted text end		deleted text begin 334 deleted text end
deleted text begin 6 deleted text end		deleted text begin 410 deleted text end
deleted text begin 7 deleted text end		deleted text begin 492 deleted text end
deleted text begin 8 deleted text end		deleted text begin 576 deleted text end
deleted text begin 9 deleted text end		deleted text begin 666 deleted text end
deleted text begin 10 deleted text end		deleted text begin 760 deleted text end
deleted text begin 11 deleted text end		deleted text begin 858 deleted text end
deleted text begin 12 deleted text end		deleted text begin 962 deleted text end
deleted text begin 13 deleted text end		deleted text begin 1070 deleted text end
deleted text begin 14 deleted text end		deleted text begin 1184 deleted text end
deleted text begin 15 deleted text end		deleted text begin 1304 deleted text end
deleted text begin 16 deleted text end		deleted text begin 1428 deleted text end
deleted text begin 17 deleted text end		deleted text begin 1560 deleted text end
deleted text begin 18 deleted text end		deleted text begin 1698 deleted text end
deleted text begin 19 deleted text end		deleted text begin 1844 deleted text end
deleted text begin 20 deleted text end		deleted text begin 2000 deleted text end
deleted text begin 21 deleted text end	deleted text begin and thereafter deleted text end	deleted text begin 100 deleted text end	deleted text begin additional per year deleted text end

deleted text begin As set forth in the table the accrued liability for each member of the relief association corresponds to the cumulative years of active service to the credit of the member. The accrued liability of the special fund for each active member is determined by multiplying the accrued liability from the chart by the ratio of the lump-sum service pension amount currently provided for in the bylaws of the relief association to a service pension of $100 per year of service. deleted text end

deleted text begin (c) deleted text end new text begin (b) new text end If a member has fractional service as of December 31, the figure for service credit to be used for the determination of accrued liability pursuant to this section shall be rounded to the nearest full year of service credit. The total accrued liability of the special fund as of December 31 shall be the sum of the accrued liability attributable to each active member of the relief association.

deleted text begin (d) deleted text end new text begin (c) new text end To the extent that the state auditor considers it to be necessary or practical, the state auditor may specify and issue procedures, forms, or mathematical tables for use in performing the calculations of the accrued liability for deferred members pursuant to this subdivision.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 8.

Minnesota Statutes 2024, section 424A.092, 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.

(b) The overall funding balance of the special fund for the current calendar year must be determined in the following manner:

(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 must be calculated under subdivisions 2 and 2a, if applicable.

(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, 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 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, must be utilized in making this calculation.

(3) The amount of the total present assets of the special fund calculated under clause (2) must be subtracted from the amount of the total accrued liability of the special fund calculated under clause (1). If the amount of total present assets exceeds the amount of the total accrued liability, then the special fund 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 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 is considered to be fully funded.

(c) The financial requirements of the special fund for the following calendar year must be determined in the following manner:

(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 must be calculated under subdivisions 2 and 2a, if applicable.

(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 must be calculated.

(3) The amount of anticipated future administrative expenses of the special fund 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.

(4) If the special fund is fully funded, the financial requirements of the special fund for the following calendar year are the total of the amounts calculated under clauses (2) and (3).

(5) If the special fund has a deficit from full funding, the financial requirements of the special fund for the following calendar year are the financial requirements of the special fund calculated as though the special fund were fully funded 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 under clause (2) resulting either from an increase in the amount of the service pension 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.

(6) If the special fund has a surplus over full funding, the financial requirements of the special fund for the following calendar year are the financial requirements of the special fund calculated as though the special fund were fully funded under clause (4) reduced by an amount equal to one-tenth of the amount of the surplus over full funding of the special fund.

(d) The minimum obligation of the municipality with respect to the special fund is the financial requirements of the special fund reduced by the amount of any fire state aid and police and firefighter retirement supplemental state aid payable under chapter 477B and section 423A.022 reasonably anticipated to be received by the municipality for transmittal to the special fund during the following calendar year, new text begin and new text end 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 deleted text begin , and the amount of any 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 deleted text end . 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.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2026. new text end

Sec. 9.

Minnesota Statutes 2024, section 424A.092, 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 under subdivision 3 on or before August 1 of each year. The certification must be made to the entity that is responsible for satisfying the minimum obligation with respect to the special fund of the relief association. If the responsible entity is a joint powers entity, the certification must be made in the manner specified in the joint powers agreement, or if the joint powers agreement is silent on this point, the certification must be made to the chair of the joint powers board.

(b) The financial requirements of the relief association and the minimum municipal obligation must be included in the financial report or financial statement under section 424A.014. The schedule forms related to the determination of the financial requirements must be filed new text begin annually new text end with the state auditor by deleted text begin March 31, annually, if the relief association is required to file a financial statement under section 424A.014, subdivision 2, or by deleted text end June 30 deleted text begin , annually, if the relief association is required to file a financial report and audit under section 424A.014, subdivision 1 deleted text end .

(c) 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.

(d) 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 under this section 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 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.

(f) If the state auditor determines that a municipal contribution actually made in a plan year was insufficient under section 424A.091, 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.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2026. new text end

Sec. 10.

Minnesota Statutes 2024, section 424A.093, 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 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 is an amount equal to the financial requirements of the special fund of the relief association determined under subdivision 4, reduced by the estimated amount of any fire state aid and police and firefighter retirement supplemental state aid payable under chapter 477B and section 423A.022 reasonably anticipated to be received by the municipality for transmittal to the special fund of the relief association during the following year deleted text begin 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 deleted text end . 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 under subdivision 4 and this subdivision by August 1 of each year. The certification must be made to the entity that is responsible for satisfying the minimum obligation with respect to the special fund of the relief association. If the responsible entity is a joint powers entity, the certification must be made in the manner specified in the joint powers agreement, or if the joint powers agreement is silent on this point, the certification must be made to the chair of the joint powers board.

(d) The financial requirements of the relief association and the minimum municipal obligation must be included in the financial report or financial statement under section 424A.014.

(e) 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 under this section 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.

(f) 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.

(g) If the state auditor determines that a municipal contribution actually made in a plan year was insufficient under section 424A.091, 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.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2026. new text end

Sec. 11.

new text begin REPEALER. new text end

new text begin Minnesota Statutes 2024, section 424A.015, subdivision 5, new text end new text begin is repealed. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

ARTICLE 8

FIREFIGHTERS RELIEF ASSOCIATIONS

Section 1.

Minnesota Statutes 2024, section 424A.02, subdivision 3, is amended to read:

Subd. 3.

Determining maximum pension benefit.

(a) Except as provided in paragraph (b) and section 424B.22, subdivision 4, a defined benefit relief association may not set in its bylaws a service pension amount above the following maximum amounts:

(1) for a defined benefit relief association in which the governing bylaws provide for a monthly service pension, the maximum monthly service pension amount per month for each year of service credited is the lesser of $100 or the maximum monthly service pension amount that could be adopted by the relief association as a bylaws amendment that satisfies section 424A.093, subdivision 6, paragraph (d); and

(2) for a defined benefit relief association in which the governing bylaws provide for a lump-sum service pension, the maximum lump-sum service pension amount for each year of service credited is the lesser of deleted text begin $15,000 deleted text end new text begin $20,000 new text end or the maximum lump-sum service pension amount that could be adopted by the relief association as a bylaws amendment that satisfies section 424A.092, subdivision 6, paragraph (e).

(b) A defined benefit relief association may set in its bylaws a service pension amount that is not greater than the maximum amounts in clause (1) or (2), as applicable, but only if the service pension amount has been ratified by the municipality.

(1) For a defined benefit relief association that pays a monthly service pension, the maximum monthly service pension amount per month for each year of service credited is $100.

(2) For a defined benefit relief association that pays a lump-sum service pension, the maximum lump-sum service pension amount for each year of service credited is deleted text begin $15,000 deleted text end new text begin $20,000 new text end .

(c) The method of calculating service pensions must be applied uniformly for all years of active service. Credit must be given for all years of active service, unless the bylaws of the relief association provide that service credit is not given for:

(1) years of active service in excess of caps on service credit; or

(2) years of active service earned by a former member who:

(i) has ceased duties as a volunteer firefighter and paid on-call firefighter with the fire department before becoming vested under subdivision 2; and

(ii) has not resumed active service with the fire department and active membership in the relief association for a period as defined in the relief association's bylaws, of not less than five years.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 2.

new text begin REPEALER. new text end

new text begin Minnesota Statutes 2024, section 356A.06, subdivision 5, new text end new text begin is repealed. new text end

ARTICLE 9

MINNESOTA SECURE CHOICE RETIREMENT PROGRAM

Section 1.

Minnesota Statutes 2024, section 187.03, subdivision 5, is amended to read:

Subd. 5.

Covered employee.

(a) "Covered employee" means a person who is employed by a covered employer and who satisfies any other criteria established by the board.

(b) Covered employee does not include:

(1) a person who, on December 31 of the preceding calendar year, was younger than 18 years of age;

(2) a person covered under the federal Railway Labor Act, as amended, United States Code, title 45, sections 151 et seq.;

(3) a person on whose behalf an employer makes contributions to a Taft-Hartley multiemployer pension trust fund; deleted text begin or deleted text end

(4) a person employed by the government of the United States, another country, the state of Minnesota, another state, or any subdivision thereof deleted text begin . deleted text end new text begin ; or new text end

new text begin (5) a person employed on a temporary or seasonal basis for a limited duration, which the employer determines at the time the person is hired will not extend beyond 180 days. new text end

new text begin (c) A person described in paragraph (b), clause (5), may elect to have contributions deducted from the person's paycheck for remittance to the program, but only if the employer would otherwise be considered a covered employer. new text end

Sec. 2.

Minnesota Statutes 2024, section 187.03, is amended by adding a subdivision to read:

new text begin Subd. 6a. new text end

new text begin Enrollment window. new text end

new text begin "Enrollment window" means the period established by the board, according to a phase-in schedule approved under Laws 2023, chapter 46, section 10, subdivision 1, paragraph (b), that is applicable to each covered employer and during which the covered employer is first required to provide information to covered employees and enroll covered employees who do not elect to opt out of the program. new text end

Sec. 3.

Minnesota Statutes 2024, section 187.03, subdivision 7, is amended to read:

Subd. 7.

Executive director.

"Executive director" means the chief executive and administrative head of the program new text begin or, if an executive director has not been appointed, executive director means the interim executive director, if one has been appointed new text end .

Sec. 4.

Minnesota Statutes 2024, section 187.03, subdivision 7a, is amended to read:

Subd. 7a.

Home and community-based services employee.

"Home and community-based services employee" means an individual deleted text begin employed by the individual's child or spouse deleted text end new text begin who is not an employee of a provider agency and who is selected by and working under the direction of a participant in a covered program new text end to provide new text begin to the participant new text end :

(1) consumer-directed community supports services under sections 256B.092 and 256B.49 and chapter 256S or under the alternative care program authorized under section 256B.0913; or

(2) services under the community first services and supports program authorized under section 256B.85 and Minnesota's federally approved waiver programs.

This definition applies only to this chapter and does not create any other legal rights or obligations under state or federal law.

Sec. 5.

Minnesota Statutes 2024, section 187.05, is amended by adding a subdivision to read:

new text begin Subd. 1a. new text end

new text begin Certification by employers that are not covered employers. new text end

new text begin (a) Any entity or person may file a certification with the executive director on a form prescribed by the executive director and provide documentation in support of the certification, as requested by the executive director, stating that the entity or person is not a covered employer. The certification must state that the entity or person is not a covered employer for one or more of the following reasons: new text end

new text begin (1) the entity or person has not been engaged for at least 12 months in a business, industry, profession, trade, or other enterprise in Minnesota, whether for profit or not for profit; new text end

new text begin (2) the entity or person does not employ five or more employees; new text end

new text begin (3) the entity or person sponsors or contributes to or, in the immediately preceding 12 months, sponsored or contributed to a retirement savings plan for its employees; or new text end

new text begin (4) the entity is a political subdivision of the state or federal government. new text end

new text begin (b) Within 30 days of receiving the certification, the executive director must accept the certification or issue a determination that the entity or person is a covered employer and subject to the requirements of section 187.07. new text end

new text begin (c) The entity or person may appeal the executive director's determination by filing an appeal with the board of directors no later than 30 days after receipt of the determination. new text end

Sec. 6.

Minnesota Statutes 2024, section 187.05, subdivision 4, is amended to read:

Subd. 4.

Contribution rate.

(a) The board deleted text begin must establish default, minimum, and maximum deleted text end new text begin may change the required new text end employee contribution rates and deleted text begin an deleted text end new text begin the new text end escalation schedule deleted text begin to automatically increase each covered employee's contribution rate annually until the contribution rate is equal to the maximum contribution rate deleted text end new text begin under section 187.07, subdivision 1. The board must provide all covered employers with notice of a change in employee contribution rates or the escalation schedule at least six months in advance of the effective date of the change new text end .

(b) A covered employee must have the right, annually or more frequently as determined by the board, to change the contribution rate, opt out or elect not to contribute, or cease contributions.

Sec. 7.

Minnesota Statutes 2024, section 187.05, subdivision 6, is amended to read:

Subd. 6.

Withdrawals and distributions.

The board must establish alternatives permitting covered employees to take a withdrawal of all or a portion of the covered employee's account while employed and one or more distributions following termination of employment. new text begin By July 1, 2028, the board must include lifetime income options as new text end distribution alternatives deleted text begin must include lifetime income options deleted text end .

Sec. 8.

Minnesota Statutes 2024, section 187.07, subdivision 1, is amended to read:

Subdivision 1.

Requirement to enroll employees.

new text begin (a) new text end Each covered employer must enroll its covered employees in the program and withhold payroll deduction contributions from each covered employee's paycheck new text begin no later than 30 days after the covered employee's first day of employment new text end , unless the covered employee has elected not to contribute.

new text begin (b) Unless the board has approved a different rate or rates under section 187.05, subdivision 4, or a covered employee has elected a different contribution rate or not to contribute, the employee contribution rates and escalation schedule are: new text end

new text begin (1) five percent of pay for the covered employee's first year of participation; new text end

new text begin (2) six percent of pay for the covered employee's second year of participation; new text end

new text begin (3) seven percent of pay for the covered employee's third year of participation; and new text end

new text begin (4) eight percent of pay for the covered employee's fourth year of participation and each year thereafter. new text end

new text begin (c) Paragraph (a) does not apply to a covered employer until the covered employer's enrollment window has opened. No later than 30 days after the end of the enrollment window, the covered employer must have enrolled all covered employees, except for any covered employee who has elected not to contribute. new text end

new text begin (d) The executive director must communicate annually by email or otherwise in writing to each covered employee: new text end

new text begin (1) the annual limit on employee contributions to a traditional IRA and a Roth IRA in effect under section 408 and 408A, respectively, of the Internal Revenue Code; and new text end

new text begin (2) notice that it is the responsibility of the covered employee to reduce the covered employee's contribution rate from the rate under paragraph (b) as necessary to stay within the limit under section 408 or section 408A of the Internal Revenue Code that is applicable to the covered employee and the type of IRA to which the contributions are being credited. new text end

Sec. 9.

Minnesota Statutes 2024, section 187.07, subdivision 2, is amended to read:

Subd. 2.

Remitting contributions.

new text begin Notwithstanding section 181.06, new text end a covered employer must deleted text begin timely deleted text end remit new text begin payroll deduction new text end contributions deleted text begin as required by the board deleted text end new text begin withheld from the paycheck of each covered employee to the program as soon as practicable after the deduction is taken and no later than 30 days after the date of each paycheck new text end .

Sec. 10.

Minnesota Statutes 2024, section 187.07, subdivision 3, is amended to read:

Subd. 3.

Distribution of information.

new text begin (a) new text end Covered employers must provide information prepared by the board to all covered employees regarding the program. The information must be provided to each covered employee deleted text begin at least 30 deleted text end new text begin no later than 14 new text end days deleted text begin prior to the date of the first paycheck from which employee contributions could be deducted for transmittal to the program, if the covered employee does not elect to opt out of the program deleted text end new text begin after the covered employee's first day of employment new text end .

new text begin (b) Paragraph (a) does not apply to a covered employer until the covered employer's enrollment window has opened. No later than 14 days before the date of the first paycheck from which employee contributions could be deducted for transmittal to the program, the covered employer must provide the information prepared by the board regarding the program to all covered employees of the covered employer. new text end

Sec. 11.

Minnesota Statutes 2024, section 187.07, subdivision 6, is amended to read:

Subd. 6.

Enforcement.

(a) new text begin As described under section 187.12, new text end the board may impose new text begin : new text end

new text begin (1) new text end statutory civil penalties against any covered employer that fails to comply with deleted text begin subdivisions deleted text end new text begin subdivision new text end 1 deleted text begin , 2, and deleted text end new text begin or new text end 3 new text begin ; and new text end

new text begin (2) statutory civil or criminal penalties against any covered employer that fails to comply with subdivision 2 new text end .

(b) At the request of the board, the attorney general shall enforce the penalties imposed by the board against a covered employer. Proceeds of such penalties, after deducting enforcement expenses, must be deposited in the Secure Choice administrative fund and are appropriated to the program.

(c) The board must provide deleted text begin covered employers with deleted text end written warnings new text begin to any covered employer that fails to comply with subdivision 1 or 3 or both subdivisions 1 and 3 new text end for the first deleted text begin year deleted text end new text begin two years new text end of noncompliance deleted text begin before assessing deleted text end new text begin . If the covered employer has not complied with subdivision 1 or 3 during the two-year period after the date on which the covered employer was first required to comply with subdivision 1 or 3, as applicable, the board must assess new text end penalties.

Sec. 12.

Minnesota Statutes 2024, section 187.08, subdivision 3, is amended to read:

Subd. 3.

Membership terms.

(a) Board members serve for two-year terms, except deleted text begin for deleted text end new text begin : new text end

new text begin (1) new text end the executive directors of the Minnesota State Retirement System and the State Board of Investment deleted text begin , who deleted text end serve indefinitely new text begin ; and new text end

new text begin (2) the initial term of the member who is an executive or other professional with substantial experience in retirement plan investments under subdivision 1, clause (3), item (iii), and the member who is a human resources executive under subdivision 1, clause (4), is three years new text end .

(b) Board members' terms may be renewed, but no member may serve more than two consecutive terms.

Sec. 13.

Minnesota Statutes 2024, section 187.08, subdivision 7, is amended to read:

Subd. 7.

Executive director; staff.

(a) The board must appoint an executive director, determine the duties of the executive director, and set the compensation of the executive director. The board may appoint an interim executive director to serve as executive director during any period that the executive director position is vacant.

new text begin (b) The executive director may participate in deliberations but must not vote on any matter before the board. The executive director must not participate in deliberations on any matter before the board that results or is likely to result in direct measurable economic gain to the executive director or the executive director's family. new text end

new text begin (c) The executive director must file with the Campaign Finance and Public Disclosure Board an economic interest statement in a manner prescribed by section 10A.09, subdivisions 5 and 6. new text end

deleted text begin (b) deleted text end new text begin (d) new text end The board may hire staff as necessary to support the board and the executive director deleted text begin or interim executive director deleted text end in performing their duties or the board may authorize the executive director deleted text begin or interim executive director deleted text end to hire staff.

Sec. 14.

Minnesota Statutes 2024, section 187.11, is amended to read:

187.11 OTHER STATE AGENCIES TO PROVIDE ASSISTANCE.

(a) The board may enter into intergovernmental agreements with the commissioner of revenue, the commissioner of labor and industry, new text begin the commissioner of employment and economic development, new text end and any other state agency that the board deems necessary or appropriate to provide outreach, technical assistance, or compliance services. An agency that enters into an intergovernmental agreement with the board pursuant to this section must collaborate and cooperate with the board to provide the outreach, technical assistance, or compliance services under any such agreement. new text begin The board, executive director, and program staff must maintain the privacy of data obtained under any intergovernmental agreement if required under chapter 13. new text end

new text begin (b) For purposes of section 268.19, subdivision 1, paragraph (a), clause (20), "assisting with communication with employers and to verify employer compliance with chapter 187" means providing the executive director with at least the following information for employers, to the extent available to the commissioner of employment and economic development: new text end

new text begin (1) federal employer identification number; new text end

new text begin (2) business name, address, mailing address, email address, and phone number; new text end

new text begin (3) number of employees; and new text end

new text begin (4) employer industry code. new text end

deleted text begin (b) deleted text end new text begin (c) new text end The commissioner of administration must provide office space in the Capitol complex for the executive director and staff of the program.

Sec. 15.

new text begin [187.12] PENALTIES FOR NONCOMPLIANCE. new text end

new text begin Subdivision 1. new text end

new text begin Failure to enroll covered employees or distribute information. new text end

new text begin (a) The board may assess penalties against a covered employer that fails to comply with section 187.07, subdivision 1 or 3 or both subdivisions 1 and 3, beginning with the second anniversary of the date on which the covered employer was first required to comply with section 187.07, subdivision 1 or 3, as applicable. new text end

new text begin (b) The board may assess the following penalties for a covered employer's failure to comply with section 187.07, subdivision 1 or 3: new text end

new text begin (1) on the second anniversary, a penalty of $100 per covered employee, not to exceed $4,000; new text end

new text begin (2) on the third anniversary, a penalty of $200 per covered employee, not to exceed $6,000; new text end

new text begin (3) on the fourth anniversary, a penalty of $300 per covered employee; and new text end

new text begin (4) on each anniversary after the fourth anniversary, a penalty of $500 per covered employee. new text end

new text begin (c) If the covered employer fails to comply with section 187.07, subdivisions 1 and 3, the board must assess two times the penalties in paragraph (b). new text end

new text begin (d) The date on which a covered employer is first required to comply with section 187.07, subdivision 1, is the following: new text end

new text begin (1) for paragraph (a), on or before the 30th day after the first day of employment of a covered employee hired by the covered employer; and new text end

new text begin (2) for paragraph (b), on or before the 30th day after the end of the enrollment window applicable to the covered employer. new text end

new text begin (e) The date on which a covered employer is first required to comply with section 187.07, subdivision 3, is the following: new text end

new text begin (1) for paragraph (a), for a newly hired covered employee, no later than 14 days after the covered employee's first day of employment; and new text end

new text begin (2) for paragraph (b), no later than the 14th day prior to the date of the first paycheck from which employee contributions could be deducted for transmittal to the program. new text end

new text begin Subd. 2. new text end

new text begin Notice and waiver. new text end

new text begin Before assessing a penalty under subdivision 1, the board must provide the covered employer with a written notice informing the covered employer of the amount of the penalty and that the penalty will not be assessed if: new text end

new text begin (1) the covered employer cures the violation no later than 30 days after the date of the notice; or new text end

new text begin (2) the board waives the penalty at the request of the covered employer due to extenuating circumstances. new text end

new text begin Subd. 3. new text end

new text begin Failure to remit contributions. new text end

new text begin (a) If the executive director has reason to believe, based on communication from a covered employee or another source, that a covered employer has failed to comply with section 187.07, subdivision 2, by not remitting payroll deduction contributions withheld from the paycheck of one or more covered employees within 30 days after the deduction is withheld, the executive director must make a written demand to the covered employer requiring the covered employer to immediately remit to the program the withheld contributions plus interest at the annual rate specified in section 356.59, subdivision 2, for the period beginning with the tenth day after the contribution was deducted from the covered employee's paycheck to the date the contribution is remitted to the program. new text end

new text begin (b) Any covered employer that willfully and intentionally fails to remit a payroll deduction contribution within ten days after demand from the executive director is guilty of a misdemeanor. new text end

new text begin (c) If the executive director issues a written demand to a covered employer under paragraph (a) for a second time, the executive director must assess a penalty of $250 for each employee contribution withheld but not transmitted to the program. new text end

new text begin Subd. 4. new text end

new text begin Action; damages. new text end

new text begin (a) A covered employee or the attorney general, upon referral from the board, may bring a civil action against a covered employer for a failure to enroll covered employees, distribute information, or remit contributions under section 187.07, subdivisions 1 to 3. A covered employer who is found to have violated section 187.07, subdivisions 1 to 3, is liable to the program for the civil penalties provided for in this section. A covered employer who is found to have violated section 187.07, subdivisions 1 to 3, is liable for compensatory damages and other appropriate relief including but not limited to injunctive relief. new text end

new text begin (b) The attorney general, upon referral from the board, may bring a criminal action against a covered employer for the willful and intentional failure to remit contributions under section 187.07, subdivision 2. new text end

new text begin (c) An action brought under paragraph (a) or (b) may be filed in the district court of the county in which a violation is alleged to have been committed, where the covered employer resides or has a principal place of business, or any other court of competent jurisdiction. new text end

new text begin (d) In an action brought under paragraph (a) or (b), the court must order a covered employer who is found to have committed a violation to pay to the program or covered employee, as appropriate, reasonable costs, disbursements, witness fees, and attorney fees. new text end

Sec. 16.

Minnesota Statutes 2024, section 268.19, subdivision 1, is amended to read:

Subdivision 1.

Use of data.

(a) Except as provided by this section, data gathered from any person under the administration of the Minnesota Unemployment Insurance Law are private data on individuals or nonpublic data not on individuals as defined in section 13.02, subdivisions 9 and 12, and may not be disclosed except according to a district court order or section 13.05. A subpoena is not considered a district court order. These data may be disseminated to and used by the following agencies without the consent of the subject of the data:

(1) state and federal agencies specifically authorized access to the data by state or federal law;

(2) any agency of any other state or any federal agency charged with the administration of an unemployment insurance program;

(3) any agency responsible for the maintenance of a system of public employment offices for the purpose of assisting individuals in obtaining employment;

(4) the public authority responsible for child support in Minnesota or any other state in accordance with section 518A.83;

(5) human rights agencies within Minnesota that have enforcement powers;

(6) the Department of Revenue to the extent necessary for its duties under Minnesota laws;

(7) public and private agencies responsible for administering publicly financed assistance programs for the purpose of monitoring the eligibility of the program's recipients;

(8) the Department of Labor and Industry and the Commerce Fraud Bureau in the Department of Commerce for uses consistent with the administration of their duties under Minnesota law;

(9) the Department of Human Services and the Office of Inspector General and its agents within the Department of Human Services, including county fraud investigators, for investigations related to recipient or provider fraud and employees of providers when the provider is suspected of committing public assistance fraud;

(10) the Department of Human Services for the purpose of evaluating medical assistance services and supporting program improvement;

(11) local and state welfare agencies for monitoring the eligibility of the data subject for assistance programs, or for any employment or training program administered by those agencies, whether alone, in combination with another welfare agency, or in conjunction with the department or to monitor and evaluate the statewide Minnesota family investment program and other cash assistance programs, the Supplemental Nutrition Assistance Program, and the Supplemental Nutrition Assistance Program Employment and Training program by providing data on recipients and former recipients of Supplemental Nutrition Assistance Program (SNAP) benefits, cash assistance under chapter 256, 256D, 256J, or 256K, child care assistance under chapter 142E, or medical programs under chapter 256B or 256L or formerly codified under chapter 256D;

(12) local and state welfare agencies for the purpose of identifying employment, wages, and other information to assist in the collection of an overpayment debt in an assistance program;

(13) local, state, and federal law enforcement agencies for the purpose of ascertaining the last known address and employment location of an individual who is the subject of a criminal investigation;

(14) the United States Immigration and Customs Enforcement has access to data on specific individuals and specific employers provided the specific individual or specific employer is the subject of an investigation by that agency;

(15) the Department of Health for the purposes of epidemiologic investigations;

(16) the Department of Corrections for the purposes of case planning and internal research for preprobation, probation, and postprobation employment tracking of offenders sentenced to probation and preconfinement and postconfinement employment tracking of committed offenders;

(17) the state auditor to the extent necessary to conduct audits of job opportunity building zones as required under section 469.3201;

(18) the Office of Higher Education for purposes of supporting program improvement, system evaluation, and research initiatives including the Statewide Longitudinal Education Data System; deleted text begin and deleted text end

(19) the Family and Medical Benefits Division of the Department of Employment and Economic Development to be used as necessary to administer chapter 268B new text begin ; and new text end

new text begin (20) the executive director or interim executive director of the Minnesota Secure Choice Retirement Program established under chapter 187 for the purposes of assisting with communication with employers and to verify employer compliance with chapter 187 new text end .

(b) Data on individuals and employers that are collected, maintained, or used by the department in an investigation under section 268.182 are confidential as to data on individuals and protected nonpublic data not on individuals as defined in section 13.02, subdivisions 3 and 13, and must not be disclosed except under statute or district court order or to a party named in a criminal proceeding, administrative or judicial, for preparation of a defense.

(c) Data gathered by the department in the administration of the Minnesota unemployment insurance program must not be made the subject or the basis for any suit in any civil proceedings, administrative or judicial, unless the action is initiated by the department.

Sec. 17.

new text begin EFFECTIVE DATE. new text end

new text begin Sections 1 to 16 are effective the day following final enactment. new text end

ARTICLE 10

PUBLIC PENSION PLANS: AMORTIZATION OF LIABILITIES; CORRECTION OF ERRORS

Section 1.

Minnesota Statutes 2024, section 353G.08, subdivision 1a, is amended to read:

Subd. 1a.

Annual funding requirements; monthly division.

(a) Annually, the executive director shall determine the funding requirements of each deleted text begin monthly benefit deleted text end new text begin fire department new text end account in the deleted text begin statewide volunteer firefighter deleted text end new text begin monthly division of the defined benefit new text end plan on or before August 1.

(b) The executive director must determine the funding requirements of a deleted text begin monthly benefit deleted text end new text begin fire department new text end account under this subdivision from:

(1) the most recent actuarial valuation normal cost, administrative expense, including the cost of a regular actuarial valuation, and amortization results for the account determined by the approved actuary retained by the retirement association under sections 356.215 and 356.216; and

(2) the standards for actuarial work, utilizing a six percent investment return actuarial assumption deleted text begin and deleted text end new text begin , new text end other actuarial assumptions approved under section 356.215, subdivision 18 deleted text begin : deleted text end new text begin , and the amortization periods specified in section 356.215, subdivision 11. new text end

deleted text begin (i) with that portion of any unfunded actuarial accrued liability attributable to a benefit deleted text end deleted text begin increase to be amortized over a period of 20 years from the date of the benefit change; deleted text end

deleted text begin (ii) with that portion of any unfunded actuarial accrued liability attributable to an deleted text end deleted text begin assumption change or an actuarial method change to be amortized over a period of 20 years deleted text end deleted text begin from the date of the assumption or method change; deleted text end

deleted text begin (iii) with that portion of any unfunded actuarial accrued liability attributable to an deleted text end deleted text begin investment loss to be amortized over a period of ten years from the date of investment loss; deleted text end deleted text begin and deleted text end

deleted text begin (iv) with the balance of any net unfunded actuarial accrued liability to be amortized over deleted text end deleted text begin a period of five years from the date of the actuarial valuation. deleted text end

(c) The required contributions of the entity or entities associated with the fire department whose active firefighters are covered by the monthly division are the annual financial requirements of the deleted text begin monthly benefit deleted text end new text begin fire department new text end account deleted text begin of the plan deleted text end under paragraph (b) reduced by the amount of any fire state aid payable under chapter 477B, or any police and firefighter retirement supplemental state aid payable under section 423A.022, that is reasonably anticipated to be received by the plan attributable to the entity or entities during the following calendar year. The required contribution must be allocated between the entities if more than one entity is involved. 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.

(d) The required contribution calculated in paragraph (c) must be paid to the plan on or before December 31 of the year for which it was calculated. If the contribution is not received by the plan by December 31, it is payable with interest at an annual compound rate of six percent from the date due until the date payment is received by the plan. If the entity does not pay the full amount of the required contribution, the executive director shall collect the unpaid amount under section 353.28, subdivision 6.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment, except the amendment to paragraph (b), clause (2), is effective beginning with actuarial valuations on or after July 1, 2025. new text end

Sec. 2.

Minnesota Statutes 2024, section 356.215, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

(a) For the purposes of sections 3.85 and 356.20 to 356.23, each of the terms in the following paragraphs has the meaning given.

(b) "Actuarial valuation" means a set of calculations prepared by an actuary retained under section 356.214 if so required under section 3.85, or otherwise, by an approved actuary, to determine the normal cost and the accrued actuarial liabilities of a benefit plan, according to the entry age actuarial cost method and based upon stated assumptions including, but not limited to rates of interest, mortality, salary increase, disability, withdrawal, and retirement and to determine the payment necessary to amortize over a stated period any unfunded accrued actuarial liability disclosed as a result of the actuarial valuation of the benefit plan.

(c) "Approved actuary" means:

(1) a person who is regularly engaged in the business of providing actuarial services and who is a fellow in the Society of Actuaries; or

(2) a firm that retains a person described in clause (1) on its staff.

(d) "Entry age actuarial cost method" means an actuarial cost method under which the actuarial present value of the projected benefits of each individual currently covered by the benefit plan and included in the actuarial valuation is allocated on a level basis over the service of the individual, if the benefit plan is governed by section 424A.093, or over the earnings of the individual, if the benefit plan is governed by any other law, between the entry age and the assumed exit age, with the portion of the actuarial present value which is allocated to the valuation year to be the normal cost and the portion of the actuarial present value not provided for at the valuation date by the actuarial present value of future normal costs to be the actuarial accrued liability, with aggregation in the calculation process to be the sum of the calculated result for each covered individual and with recognition given to any different benefit formulas which may apply to various periods of service.

(e) "Experience study" means a report providing experience data and an actuarial analysis of the adequacy of the actuarial assumptions on which actuarial valuations are based.

(f) "Actuarial value of assets" means the market value of all assets as of the preceding June 30, reduced by:

(1) 20 percent of the difference between the actual net change in the market value of total assets between the June 30 that occurred three years earlier and the June 30 that occurred four years earlier and the computed increase in the market value of total assets over that fiscal year period if the assets had earned a rate of return on assets equal to the annual percentage investment return assumption used in the actuarial valuation for the July 1 that occurred four years earlier;

(2) 40 percent of the difference between the actual net change in the market value of total assets between the June 30 that occurred two years earlier and the June 30 that occurred three years earlier and the computed increase in the market value of total assets over that fiscal year period if the assets had earned a rate of return on assets equal to the annual percentage investment return assumption used in the actuarial valuation for the July 1 that occurred three years earlier;

(3) 60 percent of the difference between the actual net change in the market value of total assets between the June 30 that occurred one year earlier and the June 30 that occurred two years earlier and the computed increase in the market value of total assets over that fiscal year period if the assets had earned a rate of return on assets equal to the annual percentage investment return assumption used in the actuarial valuation for the July 1 that occurred two years earlier; and

(4) 80 percent of the difference between the actual net change in the market value of total assets between the most recent June 30 and the June 30 that occurred one year earlier and the computed increase in the market value of total assets over that fiscal year period if the assets had earned a rate of return on assets equal to the annual percentage investment return assumption used in the actuarial valuation for the July 1 that occurred one year earlier.

(g) "Unfunded actuarial accrued liability" means the total current and expected future benefit obligations, reduced by the sum of the actuarial value of assets and the present value of future normal costs.

deleted text begin (h) "Pension benefit obligation" means the actuarial present value of credited projected benefits, determined as the actuarial present value of benefits estimated to be payable in the future as a result of employee service attributing an equal benefit amount, including the effect of projected salary increases and any step rate benefit accrual rate differences, to each year of credited and expected future employee service. deleted text end

new text begin (h) "Standards for actuarial work" means the document required under section 3.85, subdivision 10, to be adopted by the Legislative Commission on Pensions and Retirement as so adopted and amended from time to time. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 3.

Minnesota Statutes 2024, section 356.215, subdivision 4, is amended to read:

Subd. 4.

Actuarial valuation; contents.

(a) The actuarial valuation must be made in conformity with the requirements of the definition contained in subdivision 1 and the deleted text begin most recent deleted text end standards for actuarial work deleted text begin adopted by the Legislative Commission on Pensions and Retirement deleted text end .

(b) The actuarial valuation must measure all aspects of the benefit plan of the fund in accordance with changes in benefit plans, if any, and salaries reasonably anticipated to be in force during the ensuing fiscal year. The actuarial valuation must be prepared in accordance with the entry age actuarial cost method. The actuarial valuation required under this section must include the information required in subdivisions 5 to 15.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 4.

Minnesota Statutes 2024, section 356.215, subdivision 8, is amended to read:

Subd. 8.

Actuarial assumptions.

(a) The actuarial valuation must use the applicable following investment return assumption:

plan	investment return assumption
general state employees retirement plan	7%
correctional state employees retirement plan	7
State Patrol retirement plan	7
legislators retirement plan, and for the constitutional officers calculation of total plan liabilities	0
judges retirement plan	7
general public employees retirement plan	7
public employees police and fire retirement plan	7
local government correctional service retirement plan	7
teachers retirement plan	7
St. Paul teachers retirement plan	7
Bloomington Fire Department Relief Association	6
local monthly benefit volunteer firefighter relief associations	5
monthly benefit retirement plans in the statewide volunteer firefighter retirement plan	6

(b) The actuarial valuation for each of the covered retirement plans listed in section 356.415, subdivision 2, and the St. Paul Teachers Retirement Fund Association must take into account the postretirement adjustment rate or rates applicable to the plan as specified in section 354A.29, subdivision 7, or 356.415, whichever applies.

(c) The actuarial valuation must use the applicable salary increase and payroll growth assumptions found in the appendix to the standards for actuarial work deleted text begin adopted by the Legislative Commission on Pensions and Retirement pursuant to section 3.85, subdivision 10 deleted text end . The appendix must be updated whenever new assumptions have been approved or deemed approved under subdivision 18.

(d) The assumptions set forth in the appendix to the standards for actuarial work continue to apply, unless a different salary assumption or a different payroll increase assumption:

(1) has been proposed by the governing board of the applicable retirement plan;

(2) is accompanied by the concurring recommendation of the actuary retained under section 356.214, subdivision 1, if applicable, or by the approved actuary preparing the most recent actuarial valuation report if section 356.214 does not apply; and

(3) has been approved or deemed approved under subdivision 18.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 5.

Minnesota Statutes 2024, section 356.215, subdivision 11, is amended to read:

Subd. 11.

Amortization contributions.

(a) deleted text begin In addition to the exhibit indicating the level normal cost, deleted text end The actuarial valuation of deleted text begin the retirement deleted text end new text begin each pension new text end plan new text begin listed in subdivision 8, paragraph (a), other than the legislators retirement plan, the Bloomington Fire Department Relief Association, and the local monthly benefit volunteer firefighter relief associations, new text end must contain an exhibit deleted text begin for financial reporting purposes deleted text end indicating the additional annual contribution sufficient to amortize new text begin on a level percent of payroll basis new text end the unfunded actuarial accrued liability deleted text begin and must contain an exhibit indicating the additional contribution sufficient to amortize the unfunded actuarial accrued liability. For the retirement plans listed in subdivision 8, paragraph (a), but excluding the legislators retirement plan, the Bloomington Fire Department Relief Association, and the local monthly benefit volunteer firefighter relief associations, the additional contribution must be calculated on a level percentage of covered payroll basis by the established date for full funding in effect when the valuation is prepared, assuming annual payroll growth at the applicable percentage rate set forth in the appendix described in subdivision 8, paragraph (c). For the legislators retirement plan, the additional annual contribution must be calculated on a level annual dollar amount basis. deleted text end new text begin resulting from any of the following changes, over the period specified for that change, except that the pension plan's unfunded actuarial accrued liability as of July 1, 2024, must be amortized over a period that ends June 30, 2048: new text end

new text begin (1) experience gain or loss: 15 years; new text end

new text begin (2) assumption or method change: 20 years; new text end

new text begin (3) benefit change for active members: 15 years; new text end

new text begin (4) long-term benefit change for inactive members: 15 years; new text end

new text begin (5) short-term benefit change for inactive members: the number of years during which the benefit change will be in effect; and new text end

new text begin (6) an annual contribution that is more or less than the actuarially determined contribution: 15 years. new text end

new text begin (b) The amortization periods specified in paragraph (a) apply: new text end

new text begin (1) unless the standards for actuarial work state otherwise; new text end

new text begin (2) except that, for the legislators retirement plan, the additional annual contribution sufficient to amortize the unfunded actuarial accrued liability must be calculated on a level dollar basis with an amortization period of one year; and new text end

new text begin (3) except that, for the State Patrol retirement plan, the public employees police and fire retirement plan, and the Teachers Retirement Association, the unfunded actuarial accrued liability resulting from benefit increases enacted in 2025 must be amortized over a period that ends June 30, 2048. new text end

deleted text begin (b) This paragraph applies only if the calculation under this paragraph for a retirement plan results in an established date for full funding that is earlier than the established date for full funding applicable to the retirement plan under paragraph (c). For any retirement plan, if there has been a change in any or all of the actuarial assumptions used for calculating the actuarial accrued liability of the fund, a change in the benefit plan governing annuities and benefits payable from the fund, a change in the actuarial cost method used in calculating the actuarial accrued liability of all or a portion of the fund, or a combination of the three, and the change or changes, by itself or by themselves and without inclusion of any other items of increase or decrease, produce a net increase in the unfunded actuarial accrued liability in the fund, the established date for full funding must be determined using the following procedure: deleted text end

deleted text begin (i) the unfunded actuarial accrued liability of the fund must be determined in accordance with the plan provisions governing annuities and retirement benefits and the actuarial assumptions in effect before an applicable change; deleted text end

deleted text begin (ii) the level annual dollar contribution or level percentage, whichever is applicable, needed to amortize the unfunded actuarial accrued liability amount determined under item (i) by the established date for full funding in effect before the change must be calculated using the investment return assumption specified in subdivision 8 in effect before the change; deleted text end

deleted text begin (iii) the unfunded actuarial accrued liability of the fund must be determined in accordance with any new plan provisions governing annuities and benefits payable from the fund and any new actuarial assumptions and the remaining plan provisions governing annuities and benefits payable from the fund and actuarial assumptions in effect before the change; deleted text end

deleted text begin (iv) the level annual dollar contribution or level percentage, whichever is applicable, needed to amortize the difference between the unfunded actuarial accrued liability amount calculated under item (i) and the unfunded actuarial accrued liability amount calculated under item (iii) over a period of 30 years from the end of the plan year in which the applicable change is effective must be calculated using the applicable investment return assumption specified in subdivision 8 in effect after any applicable change; deleted text end

deleted text begin (v) the level annual dollar or level percentage amortization contribution under item (iv) must be added to the level annual dollar amortization contribution or level percentage calculated under item (ii); deleted text end

deleted text begin (vi) the period in which the unfunded actuarial accrued liability amount determined in item (iii) is amortized by the total level annual dollar or level percentage amortization contribution computed under item (v) must be calculated using the investment return assumption specified in subdivision 8 in effect after any applicable change, rounded to the nearest integral number of years, but not to exceed 30 years from the end of the plan year in which the determination of the established date for full funding using the procedure set forth in this clause is made and not to be less than the period of years beginning in the plan year in which the determination of the established date for full funding using the procedure set forth in this clause is made and ending by the date for full funding in effect before the change; and deleted text end

deleted text begin (vii) the period determined under item (vi) must be added to the date as of which the actuarial valuation was prepared and the date obtained is the new established date for full funding. deleted text end

deleted text begin (c) The established date for full funding is the date provided for each of the following plans: deleted text end

deleted text begin (i) for the general employees retirement plan of the Public Employees Retirement Association, the established date for full funding is June 30, 2048; deleted text end

deleted text begin (ii) for the Teachers Retirement Association, the established date for full funding is June 30, 2048; deleted text end

deleted text begin (iii) for the correctional state employees retirement plan and the State Patrol retirement plan of the Minnesota State Retirement System, the established date for full funding is June 30, 2048; deleted text end

deleted text begin (iv) for the judges retirement plan, the established date for full funding is June 30, 2048; deleted text end

deleted text begin (v) for the local government correctional service retirement plan and the public employees police and fire retirement plan, the established date for full funding is June 30, 2048; deleted text end

deleted text begin (vi) for the St. Paul Teachers Retirement Fund Association, the established date for full funding is June 30, 2048; and deleted text end

deleted text begin (vii) for the general state employees retirement plan of the Minnesota State Retirement System, the established date for full funding is June 30, 2048. deleted text end

deleted text begin (d) For the retirement plans for which the annual actuarial valuation indicates an excess of valuation assets over the actuarial accrued liability, the valuation assets in excess of the actuarial accrued liability must be recognized as a reduction in the current contribution requirements by an amount equal to the amortization of the excess expressed as a level percentage of pay over a 30-year period beginning anew with each annual actuarial valuation of the plan. deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with the July 1, 2025, actuarial valuations. new text end

Sec. 6.

Minnesota Statutes 2024, section 356.215, subdivision 17, is amended to read:

Subd. 17.

Actuarial services by approved actuaries.

(a) The actuarial valuation or quadrennial experience study must be made and any actuarial consulting services for a retirement fund or plan must be provided by an approved actuary. The actuarial valuation or quadrennial experience study must include a signed written declaration that it has been prepared according to sections 356.20 to 356.23 and according to the deleted text begin most recent deleted text end standards for actuarial work deleted text begin adopted by the Legislative Commission on Pensions and Retirement deleted text end .

(b) Actuarial valuations or experience studies prepared by an approved actuary retained by a retirement fund or plan must be submitted to the Legislative Commission on Pensions and Retirement within ten days of the submission of the document to the retirement fund or plan.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 7.

Minnesota Statutes 2024, section 356.636, subdivision 2, is amended to read:

Subd. 2.

Correction of errors.

(a) The executive director of a pension fund may correct an deleted text begin operational, demographic, or employer or employee eligibility deleted text end error deleted text begin , deleted text end new text begin made by a pension fund new text end or an error in a plan document that is not a statute if the executive director determines that correction is necessary or appropriate to preserve and protect the tax qualification of any pension or retirement plan listed in section 356.611, subdivision 6, that is deleted text begin part of deleted text end new text begin administered by new text end the pension fund. The method of correction must comply with the Internal Revenue Service Employee Plans Compliance Resolution System (EPCRS) or any successor thereto, if the EPCRS addresses the error and correction.

(b) To the extent deemed necessary by the executive director to implement correction, the executive director may:

(1) make distributions;

(2) transfer assets;

(3) recover an overpayment by reducing future benefit payments or designating appropriate revenue or source of funding that will restore to the plan the amount of the overpayment; or

(4) take any other action that will restore the plan and any affected member or participant to the position the plan, member, or participant would have been in had the error not occurred.

(c) An executive director may correct an error under paragraph (a) or (b) without regard to any statute that imposes a time limitation on making such correction.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 8.

Minnesota Statutes 2024, section 356.636, subdivision 3, is amended to read:

Subd. 3.

Annual report.

new text begin (a) new text end The executive director of each pension fund must new text begin submit a new text end report annually deleted text begin , no later than each February 1, deleted text end to the chair and executive director of the Legislative Commission on Pensions and Retirement deleted text begin on whether the executive director of the pension fund corrected any operational, demographic, employer or employee eligibility, deleted text end new text begin no later than each February 1. The report must describe each error new text end or plan document error new text begin corrected under subdivision 2 new text end during the preceding calendar year deleted text begin . deleted text end new text begin , other than: new text end

new text begin (1) an error corrected in the ordinary course of business; and new text end

new text begin (2) correction authorized by current law, including but not limited to correction authorized under sections 352.04, 353.27, 354.42, 356.401, and 356.637. new text end

new text begin (b) new text end The report must describe the error, the pension or retirement plan affected by the error, the method of correction, and the cost, if any, to the pension or retirement plan, employee, or employer of the error and correction.

new text begin (c) An error is corrected in the ordinary course of business if it is a correction or cancellation of an overpayment or an adjustment of an ongoing annuity amount. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

ARTICLE 11

PUBLIC SAFETY BENEFIT INCREASES

Section 1.

Minnesota Statutes 2024, section 356.415, subdivision 1c, is amended to read:

Subd. 1c.

Annual postretirement adjustments; deleted text begin PERA-police deleted text end new text begin public employees police new text end and fire new text begin retirement plan new text end .

(a) Retirement annuity, disability benefit, or survivor benefit recipients of the public employees police and fire retirement plan are entitled to an annual postretirement adjustment, effective as of each January 1, as follows:

(1) for each annuitant or benefit recipient who will have been receiving an annuity or benefit for at least deleted text begin 36 deleted text end new text begin 24 new text end full months as of the immediate preceding June 30, a postretirement increase of one percent must be applied each year to the amount of the monthly annuity or benefit of the annuitant or benefit recipient; or

(2) for each annuitant or benefit recipient who has been receiving the annuity or benefit for at least deleted text begin 25 deleted text end new text begin 13 new text end full months, but less than deleted text begin 36 deleted text end new text begin 24 new text end months as of the immediate preceding June 30, a postretirement increase of 1/12 of one percent for each full month that the person has been receiving an annuity or benefit during the fiscal year in which the annuity or benefit was effective must be applied each year to the amount of the monthly annuity or benefit of the annuitant or benefit recipient.

(b) An increase in annuity or benefit payments under this section must be made automatically unless written notice is filed by the annuitant or benefit recipient with the executive director of the Public Employees Retirement Association requesting that the increase not be made.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for postretirement adjustments beginning on or after January 1, 2026. new text end

Sec. 2.

Minnesota Statutes 2024, section 356.415, subdivision 1e, is amended to read:

Subd. 1e.

Annual postretirement adjustments; State Patrol retirement plan.

(a) Retirement annuity, disability benefit, or survivor benefit recipients of the State Patrol retirement plan are entitled to an annual postretirement adjustment, effective as of each January 1, as follows:

(1) a postretirement increase of deleted text begin one deleted text end new text begin 1.25 new text end percent must be applied each year to the monthly annuity or benefit of each annuitant or benefit recipient who has been receiving an annuity or a benefit for at least 12 full months as of the June 30 of the calendar year immediately before the adjustment; and

(2) for each annuitant or benefit recipient who has been receiving an annuity or a benefit for at least one full month, but less than 12 full months as of the June 30 of the calendar year immediately before the adjustment, an annual postretirement increase of 1/12 of deleted text begin one deleted text end new text begin 1.25 new text end percent for each month that the person has been receiving an annuity or benefit must be applied to the amount of the monthly annuity or benefit of each annuitant or benefit recipient.

(b) An increase in annuity or benefit payments under this subdivision must be made automatically unless written notice is filed by the annuitant or benefit recipient with the executive director of the deleted text begin applicable covered deleted text end new text begin Minnesota State new text end Retirement deleted text begin plan deleted text end new text begin System new text end requesting that the increase not be made.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for postretirement adjustments beginning on or after January 1, 2026. new text end

Sec. 3.

new text begin POSTRETIREMENT ADJUSTMENT FOR CALENDAR YEAR 2026. new text end

new text begin (a) Notwithstanding Minnesota Statutes, section 356.415, subdivision 1c, the postretirement adjustment for the year beginning January 1, 2026, and ending December 31, 2026, is three percent for eligible recipients of a retirement annuity, disability benefit, or survivor benefit from the public employees police and fire retirement plan. new text end

new text begin (b) A recipient is an eligible recipient if: new text end

new text begin (1) the recipient's annuity or benefit is attributable to service as a member of the public employees police and fire plan; and new text end

new text begin (2) the recipient has received monthly benefits for at least 12 full months as of December 31, 2025. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for the postretirement adjustment on January 1, 2026. new text end

ARTICLE 12

DIRECT STATE AID FOR PUBLIC SAFETY PLANS

Section 1.

new text begin [352B.251] DIRECT STATE AID. new text end

new text begin Subdivision 1. new text end

new text begin Aid. new text end

new text begin The commissioner of management and budget must transfer $2,300,000 annually from the general fund to the State Patrol retirement fund on or before October 1, 2025, and October 1 of each year thereafter. new text end

new text begin Subd. 2. new text end

new text begin Aid expiration. new text end

new text begin The aid under subdivision 1 expires July 1, 2048. new text end

Sec. 2.

Minnesota Statutes 2024, section 353.65, subdivision 3b, is amended to read:

Subd. 3b.

Direct state aid.

(a) The state must pay $4,500,000 on October 1, 2018, and October 1, 2019, to the public employees police and fire retirement plan. By October 1 of each year after 2019, the state must pay $9,000,000 to the public employees police and fire retirement plan.

new text begin (b) By October 1 of each year after 2024, the state must pay $17,700,000 to the public employees police and fire retirement plan. new text end

new text begin (c) new text end The commissioner of management and budget must pay the aid specified in this subdivision. The amount required is annually appropriated from the general fund to the commissioner of management and budget.

deleted text begin (b) deleted text end new text begin (d) new text end The aid under paragraph (a) continues until the earlier of:

(1) the first day of the fiscal year following three consecutive fiscal years in which, for each fiscal year, the actuarial value of assets of the fund equals or exceeds 100 percent of the actuarial accrued liabilities as reported by the actuary retained under section 356.214 in the annual actuarial valuation prepared under section 356.215; or

(2) July 1, 2048.

new text begin (e) The aid under paragraph (b) expires July 1, 2048. new text end

Sec. 3.

new text begin EFFECTIVE DATE. new text end

new text begin Sections 1 and 2 are effective the day following final enactment. new text end

ARTICLE 13

TEACHER RETIREMENT ASSOCIATION BENEFIT INCREASES

Section 1.

Minnesota Statutes 2024, section 126C.10, subdivision 37, is amended to read:

Subd. 37.

Pension adjustment revenue.

(a) A school district's pension adjustment revenue equals the sum of:

(1) the greater of zero or the product of:

(i) the difference between the district's adjustment under Minnesota Statutes 2012, section 127A.50, subdivision 1, for fiscal year 2014 per adjusted pupil unit and the state average adjustment under Minnesota Statutes 2012, section 127A.50, subdivision 1, for fiscal year 2014 per adjusted pupil unit; and

(ii) the district's adjusted pupil units for the fiscal year; and

(2) the product of the salaries paid to district employees who were members of the Teachers Retirement Association and the St. Paul Teachers' Retirement Fund Association for the prior fiscal year and the district's pension adjustment rate for the fiscal year. The pension adjustment rate for Independent School District No. 625, St. Paul, equals 2.3 percent for fiscal year 2023, 2.5 percent for fiscal year 2024 and fiscal year 2025, and 3.25 percent for fiscal year 2026 and later. The pension adjustment rate for all other districts equals deleted text begin 1.05 percent for fiscal year 2023, deleted text end 1.25 percent for deleted text begin fiscal year 2024 and deleted text end fiscal year 2025 deleted text begin , deleted text end and deleted text begin 2.0 deleted text end new text begin 2.31 new text end percent for fiscal year 2026 and later.

(b) For fiscal year 2025, the state total pension adjustment revenue under paragraph (a), clause (2), must not exceed the amount calculated under paragraph (a), clause (2), for fiscal year 2024. The commissioner must prorate the pension adjustment revenue under paragraph (a), clause (2), so as not to exceed the maximum.

(c) For fiscal year 2026 and fiscal year 2027, the state total pension adjustment revenue under paragraph (a), clause (2), must not be prorated.

(d) For fiscal year 2028 and later, the state total pension adjustment revenue under paragraph (a), clause (2), must not exceed the amount calculated under paragraph (a), clause (2), for fiscal year 2027. The commissioner must prorate the pension adjustment revenue under paragraph (a), clause (2), so as not to exceed the maximum.

(e) Notwithstanding section 123A.26, subdivision 1, a cooperative unit, as defined in section 123A.24, subdivision 2, qualifies for pension adjustment revenue under paragraph (a), clause (2), as if it was a district, and the aid generated by the cooperative unit shall be paid to the cooperative unit.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue in fiscal years 2026 and later. new text end

Sec. 2.

Minnesota Statutes 2024, section 354.42, subdivision 3, is amended to read:

Subd. 3.

Employer.

(a) The regular employer contribution to the fund by Special School District No. 1, Minneapolis, is an amount equal to the applicable following percentage of salary of each coordinated member and the applicable percentage of salary of each basic member specified in paragraph (c).

The additional employer contribution to the fund by Special School District No. 1, Minneapolis, is an amount equal to 3.64 percent of the salary of each teacher who is a coordinated member or who is a basic member.

(b) The regular employer contribution to the fund by Independent School District No. 709, Duluth, is an amount equal to the applicable percentage of salary of each old law or new law coordinated member specified for the coordinated program in paragraph (c).

(c) The employer contribution to the fund for every other employer is an amount equal to deleted text begin the applicable following percentage deleted text end new text begin 9.81 percent new text end of the salary of each coordinated member and deleted text begin the applicable following percentage deleted text end new text begin 13.81 percent new text end of the salary of each basic member:

	deleted text begin Period deleted text end	deleted text begin Coordinated Member deleted text end			deleted text begin Basic Member deleted text end
	deleted text begin from July 1, 2022, through June 30, 2023 deleted text end		deleted text begin 8.55 percent deleted text end		deleted text begin 12.55 percent deleted text end
	deleted text begin from July 1, 2023, through June 30, 2025 deleted text end		deleted text begin 8.75 percent deleted text end		deleted text begin 12.75 percent deleted text end
	deleted text begin after June 30, 2025 deleted text end		deleted text begin 9.5 percent deleted text end		deleted text begin 13.5 percent deleted text end

(d) When an employer contribution rate changes for a fiscal year, the new contribution rate is effective for the entire salary paid for each employer unit with the first payroll cycle reported.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective June 30, 2025. new text end

Sec. 3.

Minnesota Statutes 2024, 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.

(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 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 for service rendered before July 1, 2006:

	Period		Coordinated Member		Basic Member
	Each year of service during first ten		1.2 percent per year		2.2 percent per year
	Each year of service thereafter		1.7 percent per year		2.7 percent per year

For service rendered on or after July 1, 2006, by a member other than a member who was a member of the former Duluth Teachers Retirement Fund Association between January 1, 2006, and June 30, 2015, and for service rendered on or after July 1, 2013, by a member who was a member of the former Duluth Teachers Retirement Fund Association between January 1, 2013, and June 30, 2015, the average salary as defined in section 354.05, subdivision 13a, multiplied by the following percentages per year of service credit, determines the amount the annuity to which the member qualifying therefor is entitled:

	Period		Coordinated Member		Basic Member
	Each year of service during first ten		1.4 percent per year		2.2 percent per year
	Each year of service after ten years of service		1.9 percent per year		2.7 percent per year

(c)(1) 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).

(2) 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.

(3) 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).

(1) For a basic member, the average salary, as defined in section 354.05, subdivision 13a, multiplied by 2.7 percent for each year of service for a basic member determines the amount of the retirement annuity to which the basic member is entitled. The annuity of a basic member who was a member of the former Minneapolis Teachers Retirement Fund Association as of June 30, 2006, must be determined according to the annuity formula under the articles of incorporation of the former Minneapolis Teachers Retirement Fund Association in effect as of that date.

(2) For a coordinated member, the average salary, as defined in section 354.05, subdivision 13a, multiplied by 1.7 percent for each year of service rendered before July 1, 2006, and by 1.9 percent for each year of service rendered on or after July 1, 2006, for a member other than a member who was a member of the former Duluth Teachers Retirement Fund Association between January 1, 2006, and June 30, 2015, and by 1.9 percent for each year of service rendered on or after July 1, 2013, for a member of the former Duluth Teachers Retirement Fund Association between January 1, 2013, and June 30, 2015, determines the amount of the retirement annuity to which the coordinated 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 is entitled to receive deleted text begin the normal deleted text end new text begin an new text end annuity deleted text begin provided in paragraph (d), reduced as described in deleted text end new text begin under new text end clause (1) or (2), as applicable.

(1) For a member who is at least age deleted text begin 62 deleted text end new text begin 60 new text end and has at least 30 years of service, the annuity deleted text begin shall be deleted text end new text begin is the normal annuity provided in paragraph (d) new text end reduced by an early reduction factor of deleted text begin six deleted text end new text begin five new text end percent for each year that the member's age of retirement precedes the normal retirement age. The resulting reduced annuity shall be further adjusted to take into account the increase in the monthly amount that would have occurred had the member retired early and deferred receipt of the annuity until normal retirement age and the annuity was augmented during the deferral period at 2.5 percent, if the member commenced employment after June 30, 2006, or at three percent, if the member commenced employment before July 1, 2006, compounded annually.

(2) For a member who has not attained age deleted text begin 62 deleted text end new text begin 60 new text end or has fewer than 30 years of service, the annuity deleted text begin shall be deleted text end new text begin is the normal annuity provided in paragraph (d) new text end reduced for each year that the member's age of retirement precedes normal retirement age by the following early reduction factors:

(i) for the period during which the member is age 55 through age 58, the factor is four percent; and

(ii) for the period during which the member is at least age 59 but not yet normal retirement age, the factor is seven percent.

The resulting annuity shall be further adjusted to take into account the increase in the monthly amount that would have occurred had the member retired early and deferred receipt of the annuity until normal retirement age and the annuity was augmented during the deferral period at the applicable annual rate, compounded annually. The applicable annual rate is the rate in effect for the month that includes the member's effective date of retirement and deleted text begin shall deleted text end new text begin must new text end be considered as fixed for the member for the period until the member reaches normal retirement age. The applicable annual rate for June 2019 is 2.5 percent, if the member commenced employment after June 30, 2006, or three percent, if the member commenced employment before July 1, 2006, compounded annually, and decreases each month beginning July 2019 in equal monthly increments over the five-year period that begins July 1, 2019, and ends June 30, 2024, to zero percent effective for July 2024 and thereafter.

After June 30, 2024, the reduced annuity commencing before normal retirement age under this clause shall not take into account any augmentation.

(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.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective June 30, 2025. new text end

Sec. 4.

Minnesota Statutes 2024, section 356.415, subdivision 1d, is amended to read:

Subd. 1d.

new text begin Annual postretirement adjustments; new text end Teachers Retirement Association deleted text begin annual postretirement adjustments deleted text end .

(a) Except as set forth in paragraph (d), recipients of a retirement annuity, disability benefit, or survivor benefit from the Teachers Retirement Association are entitled to an annual postretirement adjustment, effective as of each January 1, as follows:

deleted text begin (1) effective January 1, 2019, through December 31, 2023, a postretirement increase of one percent must be applied each year to the amount of the monthly annuity or benefit of each annuitant or benefit recipient who has been receiving an annuity or a benefit for at least 12 full months as of the June 30 of the calendar year immediately before the adjustment; deleted text end

deleted text begin (2) effective January 1, 2019, through December 31, 2023, for each annuitant or benefit recipient who has been receiving an annuity or a benefit for at least one full month, but less than 12 full months as of the June 30 of the calendar year immediately before the adjustment, a postretirement increase of 1/12 of one percent for each month the person has been receiving an annuity or benefit must be applied to the amount of the monthly annuity or benefit of the annuitant or benefit recipient; deleted text end

deleted text begin (3) effective January 1, 2024, and thereafter, deleted text end new text begin (1) new text end a postretirement increase must be applied each year to the amount of the monthly annuity or benefit of each annuitant or benefit recipient who has been receiving an annuity or a benefit for at least 12 full months as of the June 30 of the calendar year immediately before the adjustment, at the following rates:

	from January 1, 2024, through December 31, 2024	1.1 percent
	from January 1, 2025, through December 31, 2025	1.2 percent
	from January 1, 2026, through December 31, 2026	1.3 percent
	from January 1, 2027, through December 31, 2027	1.4 percent
	from January 1, 2028, and thereafter	1.5 percent

deleted text begin (4) effective January 1, 2024, and thereafter, deleted text end new text begin (2) new text end for each annuitant or benefit recipient who has been receiving an annuity or a benefit for at least one full month, but less than 12 full months, as of the June 30 of the calendar year immediately before the adjustment, an annual postretirement increase of 1/12 of the applicable percentage for each month that the person has been receiving an annuity or benefit must be applied to the amount of the monthly annuity or benefit of the annuitant or benefit recipient. The applicable percentages are the following:

	from January 1, 2024, through December 31, 2024	1.1 percent
	from January 1, 2025, through December 31, 2025	1.2 percent
	from January 1, 2026, through December 31, 2026	1.3 percent
	from January 1, 2027, through December 31, 2027	1.4 percent
	from January 1, 2028, and thereafter	1.5 percent

(b) An increase in annuity or benefit payments under this section must be made automatically unless written notice is filed by the annuitant or benefit recipient with the executive director of the Teachers Retirement Association requesting that the increase not be made.

(c) The retirement annuity payable to a person who retires before becoming eligible for Social Security benefits and who has elected the optional payment as provided in section 354.35 must be treated as the sum of a period-certain retirement annuity and a life retirement annuity for the purposes of any postretirement adjustment. The period-certain retirement annuity plus the life retirement annuity must be the annuity amount payable until age 62, 65, or normal retirement age, as selected by the member at retirement, for an annuity amount payable under section 354.35. A postretirement adjustment granted on the period-certain retirement annuity must terminate when the period-certain retirement annuity terminates.

(d) Members who retire on or after July 1, 2024, are entitled to an annual postretirement adjustment of the member's retirement annuity, effective as of each January 1, beginning with the year following the year in which the member attains normal retirement age, as follows:

(1) if a member has been receiving an annuity for at least 12 full months as of the June 30 of the calendar year immediately before the date of the adjustment, a postretirement increase equal to the percentage specified in paragraph (a), clause deleted text begin (3) deleted text end new text begin (1) new text end , must be applied, effective on January 1, to the amount of the member's monthly annuity;

(2) if a member has been receiving an annuity for at least one full month, but less than 12 full months as of the June 30 of the calendar year immediately before the date of adjustment, a postretirement increase of 1/12 of the applicable percentage specified in paragraph (a), clause deleted text begin (4) deleted text end new text begin (2) new text end , for each month that the member has been receiving an annuity must be applied, effective on January 1, to the amount of the member's monthly annuity; or

(3) if a member has been receiving an annuity for fewer than seven months as of the January 1 of the year following the year in which the member attains normal retirement age, a postretirement adjustment shall be applied effective as of the next January 1. The amount of the adjustment shall be determined under clause (2).

deleted text begin (e) Paragraph (d) does not apply to members who retire under section 354.44, subdivision 6, paragraph (c), clause (3), or who retire when the member is at least age 62 and has at least 30 years of service under section 354.44, subdivision 6, paragraph (c), (d), (e), or (f), as applicable. deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective June 30, 2025. new text end

ARTICLE 14

APPROPRIATIONS FOR TEACHERS RETIREMENT ASSOCIATION

Section 1.

new text begin APPROPRIATIONS; TEACHERS RETIREMENT ASSOCIATION. new text end

new text begin (a) $4,000 in fiscal year 2026 and $4,000 in fiscal year 2027 are appropriated from the general fund to the Department of Education for increased employer pension contributions to the Teachers Retirement Association. new text end

new text begin (b) $17,000 in fiscal year 2026 and $17,000 in fiscal year 2027 are appropriated from the general fund to the Minnesota State Academies for increased employer pension contributions to the Teachers Retirement Association. new text end

new text begin (c) $5,000 in fiscal year 2026 and $5,000 in fiscal year 2027 are appropriated from the general fund to the Perpich Center for the Arts for increased employer pension contributions to the Teachers Retirement Association. new text end

new text begin (d) $543,000 in fiscal year 2026 and $543,000 in fiscal year 2027 are appropriated from the general fund to the Board of Trustees of the Minnesota State Colleges and Universities for increased employer pension contributions to the Teachers Retirement Association. new text end

Sec. 2.

new text begin EDUCATION APPROPRIATIONS. new text end

new text begin Subdivision 1. new text end

new text begin Department of Education. new text end

new text begin The sums indicated are appropriated from the general fund to the Department of Education for the fiscal years designated. These sums are in addition to appropriations made for the same purpose in any other law. new text end

new text begin Subd. 2. new text end

new text begin General education aid. new text end

new text begin For general education aid under Minnesota Statutes, section 126C.13, subdivision 4: new text end

	new text begin $ new text end	new text begin 17,098,000 new text end	new text begin ..... new text end	new text begin 2026 new text end
	new text begin $ new text end	new text begin 19,711,000 new text end	new text begin ..... new text end	new text begin 2027 new text end

new text begin The 2026 appropriation includes $0 for 2025 and $17,098,000 for 2026. new text end

new text begin The 2027 appropriation includes $1,899,000 for 2026 and $17,812,000 for 2027. new text end

ARTICLE 15

DUTY DISABILITY BENEFITS AND CONTINUATION OF HEALTH COVERAGE FOR PEACE OFFICERS AND FIREFIGHTERS

Section 1.

Minnesota Statutes 2024, section 299A.465, subdivision 1, is amended to read:

Subdivision 1.

Officer or firefighter disabled in line of duty.

(a) This subdivision applies to any peace officer or firefighter:

(1) who the Public Employees Retirement Association or the Minnesota State Retirement System determines is eligible to receive a duty disability benefit pursuant to section 353.656 or 352B.10, subdivision 1, respectively; or

(2) who deleted text begin (i) does not qualify to receive disability benefits by operation of the eligibility requirements set forth in section 353.656, subdivision 1, paragraph (b), (ii) retires pursuant to section 353.651, subdivision 4, or (iii) deleted text end is a member of a local police or salaried firefighters relief association and qualifies for a duty disability benefit under the terms of plans of the relief associations, and the peace officer or firefighter deleted text begin described in item (i), (ii), or (iii) deleted text end has discontinued public service as a peace officer or firefighter as a result of a disabling injury and has been determined, by the Public Employees Retirement Association, to have otherwise met the duty disability criteria set forth in section 353.01, subdivision 41.

(b) deleted text begin A determination made on behalf of a peace officer or firefighter described in paragraph (a), clause (2), must be at the request of the peace officer or firefighter made for the purposes of this section. deleted text end Determinations made in accordance with paragraph (a) are binding on the peace officer or firefighter, employer, and state. The determination must be made by the executive director of the Public Employees Retirement Association or by the executive director of the Minnesota State Retirement System, whichever applies, and is not subject to section 356.96, subdivision 2. Upon making a determination, the executive director deleted text begin shall deleted text end new text begin must new text end provide written notice to the peace officer or firefighter and the employer. deleted text begin This deleted text end new text begin The new text end notice must include deleted text begin : deleted text end

deleted text begin (1) deleted text end a written statement of the reasons for the determination deleted text begin ; deleted text end

deleted text begin (2) deleted text end new text begin . If the notice is from the executive director of the Minnesota State Retirement System, the notice must also include: new text end

new text begin (1) new text end a notice that the person may petition for a review of the determination by requesting that a contested case be initiated before the Office of Administrative Hearings, the cost of which must be borne by the peace officer or firefighter and the employer; and

deleted text begin (3) deleted text end new text begin (2) new text end a statement that any person who does not petition for a review within 60 days is precluded from contesting issues determined by the executive director in any other administrative review or court procedure.

If, prior to the contested case hearing, additional information is provided to support the claim for duty disability as defined in section 352B.011, subdivision 7, deleted text begin or 353.01, subdivision 41, whichever applies, deleted text end the executive director may reverse the determination without the requested hearing. If a hearing is held before the Office of Administrative Hearings, the determination rendered by the judge conducting the fact-finding hearing is a final decision and order under section 14.62, subdivision 2a, and is binding on the applicable executive director, the peace officer or firefighter, employer, and state. Review of a final determination made by the Office of Administrative Hearings under this section may only be obtained by writ of certiorari to the Minnesota Court of Appeals under sections 14.63 to 14.68. Only the peace officer or firefighter, employer, and state have standing to participate in a judicial review of the decision of the Office of Administrative Hearings.

(c) The officer's or firefighter's employer deleted text begin shall deleted text end new text begin must new text end continue to provide health coverage new text begin and pay for the coverage as required by paragraphs (d) to (g) new text end for:

(1) the officer or firefighter; and

(2) the officer's or firefighter's dependents if the officer or firefighter was receiving dependent coverage at the time of the injury under the employer's group health plan.

new text begin (d) For an officer or firefighter who has applied for or been approved to receive benefits under section 353.656 prior to the date of enactment or an officer or firefighter who applies for and is approved for total and permanent duty disability benefits under section 353.656, subdivision 1a, the employer is responsible for the continued payment of the employer's contribution for health coverage of the officer or firefighter and, if applicable, the officer's or firefighter's dependents. Coverage must continue for the officer or firefighter and, if applicable, the officer's or firefighter's dependents until the officer or firefighter reaches age 65 or, if deceased, would have reached age 65. new text end

new text begin (e) For an officer or firefighter approved to receive benefits under section 353.656 on or after the date of enactment and who is not approved for total and permanent duty disability benefits under section 353.656, subdivision 1a, the employer is responsible for the continued payment of the employer's contribution for health coverage of the officer or firefighter and, if applicable, the officer's or firefighter's dependents. Coverage must continue: new text end

new text begin (1) for the officer or firefighter for a period of 60 months or, if earlier, until the officer or firefighter reaches age 65; and new text end

new text begin (2) for the officer's or firefighter's dependents for a period of 60 months. new text end

new text begin (f) For an officer or firefighter who has applied for or been approved to receive benefits under section 352B.10, subdivision 1, the employer is responsible for the continued payment of the employer's contribution for health coverage of the officer or firefighter and, if applicable, the officer's or firefighter's dependents. Coverage must continue for the officer or firefighter and, if applicable, the officer's or firefighter's dependents until the officer or firefighter reaches age 65 or, if deceased, would have reached age 65. new text end

deleted text begin (d) The employer is responsible for the continued payment of the employer's contribution for coverage of the officer or firefighter and, if applicable, the officer's or firefighter's dependents. Coverage must continue for the officer or firefighter and, if applicable, the officer's or firefighter's dependents until the officer or firefighter reaches or, if deceased, would have reached the age of 65. However, deleted text end new text begin (g) The employer is not required to continue health new text end coverage for dependents deleted text begin does not have to be continued deleted text end after the person is no longer a dependent.

new text begin (h) An officer or firefighter who has applied for or been approved to receive benefits under section 353.656 may affirmatively waive health coverage under this section but must not receive any payment or other consideration from the employer in exchange for waiver of the coverage. Any agreement entered into between an officer or firefighter who has applied for or been approved to receive benefits under section 353.656 and the officer's or firefighter's employer or the employer's agent providing for compensation for a waiver of coverage under this section is void. Nothing in this subdivision shall be construed to render void any agreement entered into prior to the date of enactment. new text end

new text begin (i) Once a duty disability determination is made pursuant to section 353.656, the employer has no right to challenge and is prohibited from challenging the continuation and payment of health coverage under this section. new text end

Sec. 2.

Minnesota Statutes 2024, section 353.032, subdivision 3, is amended to read:

Subd. 3.

Approval.

(a) An employee who applies for treatment of a psychological condition that was a result of the performance of duties related to the occupation new text begin and cannot perform the normal duties of the position held by the employee on the date of injury, event, or onset of mental illness new text end must receive approval new text begin from the executive director new text end for psychological treatment as provided under this subdivision.

deleted text begin (b) deleted text end The executive director shall grant approval to an employee who submits, in the form and manner specified by the executive director new text begin , an application that includes new text end :

(1) a report by a mental health professional diagnosing the employee with a mental illness and finding that the employee is currently unable to perform the normal duties of the position held by the employee on the date of the injury, event, or onset of the mental illness on a full- or part-time basis; and

(2) deleted text begin documentation from the employer certifying the dates the employee was on duty in a position covered under the police and fire plan deleted text end new text begin proof that a first report of injury was filed by the employee with the employer new text end .

new text begin (b) An employee is eligible for treatment of a psychological condition under subdivision 4, paragraph (a), while maintaining full-time or part-time work for the employer when the mental injury was a result of the performance of the employee's occupational duties. The executive director shall grant approval to the employee who submits, in the form and manner specified by the executive director, an application that includes: new text end

new text begin (1) a report by a mental health professional diagnosing the employee with a mental illness that was a result of the performance of the employee's occupational duties and determining that the employee is medically able to continuing working full-time or part-time in the position held by the employee at the time of the injury, event, or onset of the mental illness; and new text end

new text begin (2) proof that a first report of injury was filed by the employee with the employer. new text end

(c) An employee who receives approval under this subdivision is not considered disabled for the purposes of a duty disability under section 353.656, subdivision 1, unless the employee completes the additional requirements under this section, receives final confirmation under subdivision 6, and applies for disability benefits under section 353.031 before receiving duty disability benefits or related benefits.

(d) The executive director must notify an employing entity electronically and by mail that an application for psychological condition treatment has been submitted by an employee and request deleted text begin the certification required under paragraph (b), clause (2), from the employing entity deleted text end new text begin documentation from the employer certifying the dates the employee was on duty in a position covered under the police and fire plan new text end within six business days after the application has been received by the executive director.

(e) An employer shall submit the certification required under paragraph deleted text begin (b), clause (2), deleted text end new text begin (d) new text end within five business days of receiving notice from the executive director, and the employee shall receive approval no later than 14 business days after the employee's application is received by the executive director, whether or not the employer's certification has been submitted. Nothing in this paragraph shall delay the treatment of the psychological condition of the employee.

Sec. 3.

Minnesota Statutes 2024, section 353.032, subdivision 4, is amended to read:

Subd. 4.

Treatment required.

(a) Except as provided in paragraph (f), new text begin beginning when the application is received by the executive director, new text end an employee who receives approval under subdivision 3 shall complete up to 24 consecutive weeks of active treatment modalities for the employee's diagnosed mental illness, as provided under this subdivision, before a final confirmation can be made under subdivision 6. Treatment shall be at the direction of a mental health professional using treatment modalities indicated for the treatment of the diagnosed mental illness. An employee shall not be penalized for an interruption in active, consecutive treatment that is not initiated by or resulting from an intentional action of the employee. Subject to the limit under subdivision 9, the employer shall pay for the treatment costs to the extent not paid for by the employee's health insurance and may seek reimbursement.

(b) The employee's mental health professional must assess the employee's progress in treatment monthly and at the end of the 24 weeks or earlier, including any change to the employee's ability to return to the position held by the employee on the date of the injury, event, or onset of the mental illness, or to another position with the employer which provides salary and employer-provided benefits, including pension benefits, that are equal to or greater than those for the position held by the employee on the date of the injury, event, or onset of the mental illness. A final confirmation under subdivision 6 must be supported by a report from the employee's mental health professional containing an opinion about the employee's prognosis, the duration of the disability, and the expectations for improvement following the treatment. A report that does not contain and support a finding that the employee's disability as a result of a psychological condition will last for at least 12 months must not be relied upon to support approval of duty disability benefits.

(c) The employee may deleted text begin return to deleted text end new text begin work new text end full- new text begin time new text end or part-time deleted text begin work deleted text end prior to the completion of the 24 weeks of treatment if the employee's mental health professional determines that they are medically able to do so.

(d) The employee may return to light duty assignments, subject to availability of a position, prior to the completion of the 24 weeks of treatment, if deemed medically appropriate by the employee's mental health professional and with the employer's approval.

(e) A fitness for duty presumption shall apply to an employee who is cleared to return to work or light duty under paragraph (c) or (d), except as provided under subdivision 10.

(f) No employee shall be required to complete treatment under this subdivision more than three times in ten years.

Sec. 4.

Minnesota Statutes 2024, section 353.032, subdivision 5, is amended to read:

Subd. 5.

Continuation of salary and benefits.

(a) Subject to subdivision 9, for the period that an employee is seeking psychological condition treatment approval under subdivision 3 or 6 new text begin , beginning when the application is received by the executive director new text end , appealing a determination thereof, or receiving treatment under subdivision 4 or 7, the employer shall continue:

(1) to pay, for a current employee only, the employee's full salary and employer-provided benefits, including any employer contribution to health care and retirement benefits. new text begin The employer must not require the employee to use accrued vacation, sick, holiday, personal time off or any leave benefits while the employee is receiving treatment under subdivision 4. new text end The employer must proportionally reduce the salary paid to an employee who is otherwise receiving benefits for the disability that provide compensation for all or a portion of the employee's salary for the same time period. Nothing in this paragraph requires an employer to pay more than 100 percent of the employee's salary;

(2) to provide health insurance benefits to the employee and to the employee's dependents, if the employee was receiving dependent coverage at the time of the injury, event, or onset of the mental illness under the employer's group health plan; and

(3) to provide any other employment benefits provided to the employee under the employee's currently applicable collective bargaining agreement.

(b) An employee shall obtain service credit for the treatment period required under subdivision 4 or 7.

(c) Nothing prevents an employer from providing benefits in addition to those required by this section or otherwise affects an employee's rights with respect to any other employment benefit.

(d) If an employee is unable to receive treatment through the prescribed treatment program due to circumstances beyond the employee's control, which includes but is not limited to a lack of availability of a mental health facility or a mental health professional, the employee shall continue to receive their regular compensation, benefits, and retirement service credits, until such mental health facility or mental health professional becomes available to the employee for their treatment program. new text begin The employer must not require the employee to use sick or vacation leave during this period. new text end The continuation of salary and benefits allowed under this paragraph must not exceed 30 days beyond the day treatment is prescribed, except that continuation of benefits and salary may be extended beyond 30 days if written documentation from the mental health facility or mental health professional providing the treatment start date is submitted by the employee to the executive director and the employer.

Sec. 5.

Minnesota Statutes 2024, section 353.032, subdivision 6, is amended to read:

Subd. 6.

Termination or continuation of psychological condition treatment.

(a) Following completion of treatment under subdivision 4, the association shall confirm the treatment requirements are satisfied deleted text begin , deleted text end and make one of the following determinations new text begin based on the report of the employee's mental health professional new text end :

(1) continue the approval for an additional eight weeks for the employee to complete additional treatment, as provided under subdivision 7;

(2) terminate the psychological condition treatment because the employee is:

(i) able to return to new text begin or continue new text end full-time new text begin or part-time new text end work in the position held by the employee on the date of the injury, event, or onset of the mental illness; or

(ii) able to return to another vacant full-time position with the employer which provides salary and employer-provided benefits, including pension benefits, that are equal to or greater than those for the position held by the employee on the date of the injury, event, or onset of the mental illness, as certified by the employer in the form and manner specified by the executive director; or

(3) confirm the employee has met the requirements under section 353.032, after which the employee may apply for a duty disability benefit based on a psychological condition under section 353.031.

new text begin (b) The association must notify the employee and the employer electronically and by mail of its determination under paragraph (a). new text end

deleted text begin (b) deleted text end new text begin (c) new text end After confirmation and application under paragraph (a), clause (3), the association must approve the employee's application for disability benefits if the employee is eligible under section 353.031, at which time the employee is entitled to receive disability benefits as provided under this section and any related benefits. The disability benefit begins to accrue the day following the day on which the employer ceases to continue salary and benefits under subdivision 5 and section 353.656, subdivision 4, paragraph (a).

deleted text begin (c) deleted text end new text begin (d) new text end Following completion of the additional treatment requirements under subdivision 7, if applicable, the association shall confirm the additional treatment requirements are satisfied, after which, the employee may apply for disability benefits because the employee is eligible under section 353.031, at which time the employee is entitled to receive disability benefits as provided under this section and any related benefits. The disability benefit begins to accrue the day following the day on which the employer ceases to continue salary and benefits under subdivision 5 and section 353.656, subdivision 4, paragraph (a).

new text begin (e) Treatment requirements that remain incomplete 60 days past the 24 weeks of treatment under subdivision 4 or the additional eight weeks of treatment under subdivision 7 terminate. new text end

deleted text begin (d) deleted text end new text begin (f) new text end A fitness for duty presumption shall apply to an employee who is determined able to return to work as provided under paragraph (a), clause (2), except as provided under subdivision 10.

Sec. 6.

Minnesota Statutes 2024, section 353.032, subdivision 7, is amended to read:

Subd. 7.

Additional treatment.

(a) Except as provided in paragraph (g), if, after completing the treatment required under subdivision 4, the new text begin employee's new text end mental health professional's report determines that the employee is making progress in treatment, and the employee's prognosis is expected to further improve with additional treatment, the association shall continue the employee's initial approval under subdivision 6, paragraph (a), clause (1), and the employee shall complete up to an additional eight consecutive weeks of active treatment modalities as provided under this subdivision. new text begin The association must notify the employer electronically and by mail that the initial approval has been continued within six business days after the executive director receives the mental health professional's report. new text end

(b) Treatment shall be at the direction of a mental health professional using treatment modalities indicated for the treatment of the employee's diagnosed mental illness. An employee shall not be penalized for an interruption in active, consecutive treatment that is not initiated by or resulting from an intentional action of the employee. Subject to subdivision 9, the employer shall pay for the treatment costs to the extent not paid for by the employee's health insurance and may seek reimbursement.

(c) The employee's mental health professional must assess the employee's progress in treatment at the end of eight weeks, including any change to the employee's ability to return to the position held by the employee on the date of the injury, event, or onset of the mental illness, or to another position with the employer which provides salary and employer-provided benefits, including pension benefits, that are equal to or greater than those for the position held by the employee on the date of the injury, event, or onset of the mental illness. A final confirmation under subdivision 6, paragraph deleted text begin (b) deleted text end new text begin (c) new text end , must be supported by an updated report from the employee's mental health professional containing an opinion about the employee's prognosis, the duration of the disability, and the expectations for improvement following the additional treatment. An updated report that does not contain and support a finding that the employee's disability as a result of a psychological condition will last for at least 12 months must not be relied upon to support approval of duty disability benefits.

(d) The employee may return to full- new text begin time new text end or part-time work deleted text begin prior to the completion of deleted text end new text begin for the employer or continue to work full-time or part-time for the employer during new text end the eight weeks of treatment if the employee's mental health professional determines that they are medically able to do so new text begin and with the employer's approval new text end .

(e) The employee may return to light duty assignments, subject to availability of a position, prior to the completion of the eight weeks of treatment, if deemed medically appropriate by the employee's mental health professional and with the employer's approval.

(f) A fitness for duty presumption shall apply to an employee who is cleared to return to work or light duty under paragraph (d) or (e), except as provided under subdivision 10.

(g) No employee shall be required to complete treatment under this subdivision more than three times in ten years.

Sec. 7.

Minnesota Statutes 2024, section 353.032, subdivision 9, is amended to read:

Subd. 9.

Employer reimbursement; limit.

(a) Except as provided in paragraph (c), an employer subject to this section may annually apply by August 1 for the preceding fiscal year to the commissioner of public safety for reimbursement of:

(1) the treatment costs incurred by the employer under subdivision 4 or 7; and

(2) the costs incurred to continue salary and benefits as required under subdivision 5.

(b) An employer must apply for the reimbursement in the form and manner specified by the commissioner of public safety.

(c) No employer shall be required to pay for the salary, benefits, and treatment costs required under subdivisions 4, 5, and 7 for a single employee more than three times in ten years.

new text begin (d) An officer or firefighter receiving treatment under this section must provide to the employer, on a monthly basis, billing statements or invoices for treatment costs incurred as outlined in subdivisions 4 and 7. new text end

Sec. 8.

Minnesota Statutes 2024, section 353.032, subdivision 10, is amended to read:

Subd. 10.

Fitness for duty presumption.

(a) An employee who is cleared or determined able to new text begin work full-time or part-time while receiving treatment under subdivision 3, paragraph (c); or new text end return to work or light duty under subdivision 4, paragraph (e); 6, paragraph deleted text begin (c) deleted text end new text begin (f) new text end ; or 7, paragraph (f), is presumed fit for duty, except as follows:

(1) an employer may request a fitness for duty exam by an independent medical provider if the exam is completed within six weeks of the employer receiving the determination from the treating mental health professional, and the independent medical provider's report is completed no more than six weeks later;

(2) an employee found unfit for duty by an independent medical provider under clause (1):

(i) is presumed eligible for a duty disability, as provided under subdivision 6, paragraph (a), clause (3), if the employee otherwise meets the eligibility requirements under section 353.031; or

(ii) may appeal the independent medical provider's determination by requesting an examination under paragraph (c); and

(3) the fitness-for-duty timeline under this paragraph may be modified by mutual agreement of the employer and employee.

(b) Nothing in this section shall be deemed to affect the Americans with Disabilities Act, United States Code, title 42, chapter 126; the Family Medical Leave Act, United States Code, title 29, chapter 28; or the Minnesota Human Rights Act, chapter 363A.

(c) An employee who wishes to appeal the independent medical provider's determination under paragraph (a), clause (2), item (ii), may request an examination by a qualified professional selected by the employee from a panel established by mutual agreement among the League of Minnesota Cities, the Association of Minnesota Counties, the Minnesota Peace and Police Officers Association, the Minnesota Professional Fire Fighters Association, the Minnesota Chiefs of Police Association, and the Minnesota Law Enforcement Association. The panel shall consist of five licensed psychiatrists or psychologists who have expertise regarding psychological or emotional disorders and who are qualified to opine as to the employee's fitness to engage in police or firefighting duties. The agreed upon panel of qualified professionals must be submitted to the executive director and made available for use in the appeal process. If the employee fails to select a qualified professional from the panel within ten days of any notice of appeal, the employing entity may select the qualified professional from the panel. A determination made by a qualified professional under this item is binding and not subject to appeal. This panel may be the same panel as the panel established under section 352B.102, subdivision 10.

Sec. 9.

new text begin EFFECTIVE DATE. new text end

new text begin Sections 1 to 8 are effective the day following final enactment. new text end

ARTICLE 16

PUBLIC PENSION PLANS: MODIFYING THE CIRCUMSTANCES FOR TERMINATING STATE AID AND SUPPLEMENTAL EMPLOYER CONTRIBUTIONS

Section 1.

Minnesota Statutes 2024, section 352.92, subdivision 2a, is amended to read:

Subd. 2a.

Supplemental employer contribution.

(a) Effective July 1, 2019, the employer shall pay a supplemental contribution. The supplemental contribution is 1.45 percent of salary for covered correctional employees from July 1, 2019, through June 30, 2020; 2.95 percent of salary for covered correctional employees from July 1, 2020, through June 30, 2021; and 4.45 percent of salary for covered correctional employees thereafter. The supplemental contribution rate of 4.45 percent remains in effect until, for three consecutive years, the market value of the assets of the correctional state employees retirement plan of the Minnesota State Retirement System equals or exceeds new text begin 110 percent of new text end the actuarial accrued liability of the plan as determined by the actuary retained under section 356.214. The expiration of the supplemental employer contribution is effective the first day of the first full pay period of the fiscal year immediately following the issuance of the third actuarial valuation upon which the expiration is based.

(b) The supplemental contribution under paragraph (a) must be paid starting the first day of the first full pay period after June 30, 2018.

Sec. 2.

Minnesota Statutes 2024, section 352B.02, subdivision 1c, is amended to read:

Subd. 1c.

Employer contributions and supplemental employer contribution.

(a) In addition to member contributions, department heads shall pay a sum equal to the specified percentage of the salary upon which deductions were made, which constitutes the employer contribution to the fund as follows:

	from July 1, 2014, to June 30, 2016	20.1
	from July 1, 2016, to June 30, 2018	21.6
	from July 1, 2018, to June 30, 2019	22.35
	after June 30, 2019	23.1

(b) Department contributions must be paid out of money appropriated to departments for this purpose.

(c) Contribution increases under paragraph (a) must be paid starting the first day of the first full pay period after the effective date of the increase.

(d) Effective July 1, 2018, department heads shall pay a supplemental employer contribution. The supplemental contribution is 1.75 percent of the salary upon which deductions are made from July 1, 2018, through June 30, 2019; three percent of the salary upon which deductions are made from July 1, 2019, through June 30, 2020; five percent of the salary which deductions are made from July 1, 2020, through June 30, 2021; and seven percent of the salary upon which deductions are made thereafter. The supplemental contribution must be paid starting the first day of the first full pay period after June 30, 2018. The supplemental contribution rate of seven percent remains in effect until, for three consecutive years, the market value of the assets of the State Patrol retirement plan of the Minnesota State Retirement System equals or exceeds new text begin 110 percent of new text end the actuarial accrued liability of the plan as determined by the actuary retained under section 356.214. The expiration of the supplemental employer contribution is effective the first day of the first full pay period of the fiscal year immediately following the issuance of the third actuarial valuation upon which the expiration is based.

Sec. 3.

Minnesota Statutes 2024, section 353.65, subdivision 3b, is amended to read:

Subd. 3b.

Direct state aid.

(a) The state must pay $4,500,000 on October 1, 2018, and October 1, 2019, to the public employees police and fire retirement plan. By October 1 of each year after 2019, the state must pay $9,000,000 to the public employees police and fire retirement plan. The commissioner of management and budget must pay the aid specified in this subdivision. The amount required is annually appropriated from the general fund to the commissioner of management and budget.

(b) The aid under paragraph (a) continues until the deleted text begin earlier of: deleted text end new text begin first day of the fiscal year following three consecutive fiscal years in which, for each fiscal year, the actuarial value of assets of the fund equals or exceeds 110 percent of the actuarial accrued liabilities as reported by the actuary retained under section 356.214 in the annual actuarial valuation prepared under section 356.215. new text end

deleted text begin (1) the first day of the fiscal year following three consecutive fiscal years in which, for each fiscal year, the actuarial value of assets of the fund equals or exceeds 100 percent of the actuarial accrued liabilities as reported by the actuary retained under section 356.214 in the annual actuarial valuation prepared under section 356.215; or deleted text end

deleted text begin (2) July 1, 2048. deleted text end

Sec. 4.

Minnesota Statutes 2024, section 423A.022, subdivision 5, is amended to read:

Subd. 5.

Aid termination.

(a) The aid under subdivision 2, paragraph (a), clauses (1) and (3), continues until the deleted text begin earlier of: deleted text end new text begin December 1 following three consecutive fiscal years in which, for each fiscal year, the actuarial value of assets of both the State Patrol retirement plan and the public employees police and fire retirement plan equals or exceeds 100 percent of the actuarial accrued liabilities as reported by the actuary retained under section 356.214 in the annual actuarial valuation prepared under section 356.215. new text end

deleted text begin (1) the December 1 following three consecutive fiscal years in which, for each fiscal year, the actuarial value of assets of both the State Patrol retirement plan and the public employees police and fire retirement plan equals or exceeds 90 percent of the actuarial accrued liabilities as reported by the actuary retained under section 356.214 in the annual actuarial valuation prepared under section 356.215; or deleted text end

deleted text begin (2) July 1, 2048. deleted text end

(b) The aid under subdivision 2, paragraph (a), clause (2), does not terminate.

Sec. 5.

Minnesota Statutes 2024, section 490.123, subdivision 5, is amended to read:

Subd. 5.

Direct state aid.

(a) The state shall pay $6,000,000 annually to the judges' retirement fund. The aid is payable each July 1. The amount required is annually appropriated from the general fund to the judges' retirement fund.

(b) The aid under paragraph (a) continues until the deleted text begin earlier of: deleted text end new text begin first day of the fiscal year following three consecutive fiscal years in which, for each fiscal year, the actuarial value of assets of the fund equals or exceeds 110 percent of the actuarial accrued liabilities as reported by the actuary retained under section 356.214 in the annual actuarial valuation prepared under section 356.215. new text end

deleted text begin (1) the first day of the fiscal year following three consecutive fiscal years in which the actuarial value of assets of the fund equals or exceeds 100 percent of the actuarial accrued liabilities as reported by the actuary retained under section 356.214 in the annual actuarial valuation prepared under section 356.215; or deleted text end

deleted text begin (2) July 1, 2048. deleted text end

Sec. 6.

new text begin EFFECTIVE DATE. new text end

new text begin Sections 1 to 5 are effective the day following final enactment. new text end

ARTICLE 17

WORK GROUP ON PENSION PLANS FOR PROBATION OFFICERS AND 911 TELECOMMUNICATORS

Section 1.

new text begin WORK GROUP ON CREATING PENSION PLANS FOR PROBATION OFFICERS AND 911 TELECOMMUNICATORS. new text end

new text begin Subdivision 1. new text end

new text begin Work group established. new text end

new text begin The executive director of the Legislative Commission on Pensions and Retirement (commission executive director) must convene a work group for the purpose of recommending a pension plan to be administered by the Minnesota State Retirement System (MSRS) for probation officers and 911 telecommunicators who are state employees, as defined in Minnesota Statutes, section 352.01, subdivision 2, and a pension plan to be administered by the Public Employees Retirement Association (PERA) for probation officers and 911 telecommunicators who are public employees, as defined in Minnesota Statutes, section 353.01, subdivision 2. new text end

new text begin Subd. 2. new text end

new text begin Membership. new text end

new text begin (a) The members of the work group are the following: new text end

new text begin (1) the executive director of PERA, or the executive director's designee, and a second member of the PERA staff designated by the executive director; new text end

new text begin (2) the executive director of MSRS, or the executive director's designee, and a second member of the MSRS staff designated by the executive director; new text end

new text begin (3) the commissioner of corrections or the commissioner's designee; new text end

new text begin (4) the commissioner of public safety or the commissioner's designee; new text end

new text begin (5) a representative from the Minnesota Association of County Probation Officers; new text end

new text begin (6) a representative from the Minnesota Corrections Association; new text end

new text begin (7) a representative from the Minnesota Association of Professional Employees; new text end

new text begin (8) a representative from the International Brotherhood of Teamsters Local 320; new text end

new text begin (9) a representative from the American Federation of State, County and Municipal Employees Council 5; new text end

new text begin (10) two representatives from the Association of Minnesota Counties; new text end

new text begin (11) a representative from the League of Minnesota Cities; new text end

new text begin (12) a representative from the Minnesota Inter-County Association; new text end

new text begin (13) a representative from the Minnesota Association of Public Safety Communications Officials or the National Emergency Number Association of Minnesota; new text end

new text begin (14) a representative from the Law Enforcement Labor Services; new text end

new text begin (15) a representative from the Minnesota Association of Community Corrections Act Counties; new text end

new text begin (16) a representative from the Minnesota Professional Fire Fighters Association; and new text end

new text begin (17) a representative from the Minnesota Police and Peace Officers Association. new text end

new text begin (b) The commission executive director may invite others, including the commission's actuary, to participate in one or more meetings of the work group. new text end

new text begin (c) The organizations specified in paragraph (a) must provide the commission executive director with the names and contact information for the representatives who will serve on the work group by June 14, 2025. new text end

new text begin Subd. 3. new text end

new text begin Mandate. new text end

new text begin In arriving at the work group's recommendations, the work group must: new text end

new text begin (1) determine the features of each pension plan, including but not limited to: new text end

new text begin (i) employee and employer contribution rates; new text end

new text begin (ii) vesting requirements; new text end

new text begin (iii) the benefit formula; new text end

new text begin (iv) normal and early retirement ages; new text end

new text begin (v) disability benefits; new text end

new text begin (vi) postretirement adjustments; new text end

new text begin (vii) the extent to which past service will be credited and paid for; and new text end

new text begin (viii) definitions for "probation officer" and "911 telecommunicator"; new text end

new text begin (2) determine whether the new plans will be entirely new pension plans or whether the new plans will be component pension plans similar to the special coverage for state fire marshals under Minnesota Statutes, section 352.87; and new text end

new text begin (3) consider: new text end

new text begin (i) the study prepared by PERA that estimates the costs and benefits for a pension plan for probation officers, 911 telecommunicators, and any other public safety adjacent employees; new text end

new text begin (ii) the financial impact resulting from the potential cessation of benefit accruals and contributions for members that transfer from the MSRS general state employees retirement plan or the PERA general employees retirement plan to the new pension plan; new text end

new text begin (iii) the option for members to purchase credit for past service, including the method for purchasing credit for past service; new text end

new text begin (iv) how contributions used to prefund benefit improvements can be made before any new pension plan is created; new text end

new text begin (v) any other public safety adjacent positions that should be included in the new pension plans and how those positions should be defined; new text end

new text begin (vi) the balance of employee and employer contributions, including the interest in funding pension benefit improvements with increased employee contributions; and new text end

new text begin (vii) a bill styled as 2025 H.F. No. 1779/S.F. No. 1986, also referred to as revisor number 25-02845, or its equivalent, passed/introduced in the 2025 regular or special session, including the testimony on the bill at the meetings of the Legislative Commission on Pensions and Retirement. new text end

new text begin Subd. 4. new text end

new text begin Proposed legislation. new text end

new text begin With the assistance of the commission executive director, the work group must prepare proposed legislation that implements the recommendations of the work group under subdivision 3. If the work group recommends more than one approach to improving pension benefits, the work group must provide alternative bills. Recommended legislation must require MSRS and PERA to have any new plan or component plan operational by January 1, 2027. new text end

new text begin Subd. 5. new text end

new text begin Due date for submitting recommendations to the commission. new text end

new text begin The chair of the work group must submit the recommendations of the work group, along with proposed legislation that implements the recommendations, to the chair and executive director of the Legislative Commission on Pensions and Retirement by January 15, 2026. new text end

new text begin Subd. 6. new text end

new text begin Meetings; chair; administrative support. new text end

new text begin (a) The commission executive director must convene the first meeting of the work group by August 1, 2025. new text end

new text begin (b) The members of the work group must elect a chair at the first meeting. new text end

new text begin (c) Meetings may be conducted remotely or in person or a combination of remotely and in person. new text end

new text begin (d) Commission staff must provide meeting space, if needed, and administrative support to the chair of the work group. new text end

new text begin Subd. 7. new text end

new text begin Compensation; lobbying; retaliation. new text end

new text begin (a) Members of the work group serve without compensation. new text end

new text begin (b) Participation in the work group is not lobbying under Minnesota Statutes, chapter 10A. new text end

new text begin (c) An individual's employer or an organization or association of which an individual is a member must not retaliate against the individual because of the individual's participation in the work group. new text end

new text begin Subd. 8. new text end

new text begin Expiration. new text end

new text begin The work group expires June 30, 2027. new text end

ARTICLE 18

LEGISLATIVE COMMISSION ON PENSIONS AND RETIREMENT

Section 1.

Minnesota Statutes 2024, section 3.85, subdivision 2, is amended to read:

Subd. 2.

Powers.

The commission shall make a continuing study and investigation of retirement benefit plans applicable to nonfederal government employees in this state. The powers and duties of the commission include, but are not limited to the following:

(a) studying retirement benefit plans applicable to nonfederal government employees in Minnesota, including federal plans available to the employees;

(b) making recommendations within the scope of its study, including attention to financing of the various pension funds and financing of accrued liabilities;

(c) considering all aspects of pension planning and operation and making recommendations designed to establish and maintain sound pension policy for all funds;

(d) analyzing deleted text begin each item of deleted text end proposed pension and retirement legislation, including amendments deleted text begin to each deleted text end , with particular reference to analysis of deleted text begin their deleted text end new text begin the legislation's new text end cost, actuarial soundness, and adherence to sound pension policy deleted text begin , and reporting its findings to the legislature deleted text end ;

(e) creating and maintaining a library for reference concerning pension and retirement matters, including information about laws and systems in other states; and

(f) studying, analyzing, and preparing reports in regard to subjects certified to the commission for study.

Sec. 2.

Minnesota Statutes 2024, section 3.85, subdivision 3, is amended to read:

Subd. 3.

Membership.

The commission consists of seven members of the senate appointed by the Subcommittee on Committees of the Committee on Rules and Administration and seven members of the house of representatives appointed by the speaker. No more than five members from each chamber may be from the majority caucus in that chamber. Members shall be appointed at the commencement of each regular session of the legislature for a two-year term beginning January 16 of the first year of the regular session. deleted text begin Members continue deleted text end new text begin A member continues new text end to serve until deleted text begin their successors are appointed deleted text end new text begin the earlier of the appointment of the member's successor or the end of the member's legislative term or office new text end . Vacancies that occur while the legislature is in session shall be filled like regular appointments. If the legislature is not in session, senate vacancies shall be filled by the last Subcommittee on Committees of the senate Committee on Rules and Administration or other appointing authority designated by the senate rules, and house of representatives vacancies shall be filled by the last speaker of the house, or if the speaker is not available, by the last chair of the house of representatives Rules Committee.

Sec. 3.

Minnesota Statutes 2024, section 3.85, subdivision 10, is amended to read:

Subd. 10.

Standards for pension valuations and cost estimates.

The commission shall adopt standards prescribing deleted text begin specific detailed deleted text end methods to calculate, evaluate, and display current and deleted text begin proposed law deleted text end new text begin projected new text end liabilities, costs, and actuarial equivalents of deleted text begin all deleted text end new text begin covered new text end public deleted text begin employee deleted text end pension plans deleted text begin in Minnesota deleted text end new text begin under section 356.20, subdivision 2, that are defined benefit plans new text end . These standards deleted text begin shall deleted text end new text begin must new text end be consistent with chapter 356 and be updated deleted text begin annually deleted text end new text begin periodically new text end . At a minimum, the standards deleted text begin shall deleted text end new text begin must new text end contain requirements that comply with deleted text begin generally accepted accounting principles deleted text end new text begin actuarial standards of practice new text end applicable to government pension plans. deleted text begin The standards may include additional financial, funding, or valuation requirements that are not required under generally accepted accounting principles applicable to government pension plans. deleted text end

Sec. 4.

new text begin EFFECTIVE DATE. new text end

new text begin Sections 1 to 3 are effective the day following final enactment. new text end

ARTICLE 19

STATEWIDE VOLUNTEER FIREFIGHTER PLAN

Section 1.

Minnesota Statutes 2024, section 353G.08, subdivision 1a, is amended to read:

Subd. 1a.

Annual funding requirements; monthly division.

(a) Annually, the executive director shall determine the funding requirements of each deleted text begin monthly benefit deleted text end new text begin fire department new text end account in the deleted text begin statewide volunteer firefighter deleted text end new text begin monthly division of the defined benefit new text end plan on or before August 1.

(b) The executive director must determine the funding requirements of a deleted text begin monthly benefit deleted text end new text begin fire department new text end account under this subdivision from:

(1) the most recent actuarial valuation normal cost, administrative expense, including the cost of a regular actuarial valuation, and amortization results for the account determined by the approved actuary retained by the retirement association under sections 356.215 and 356.216; and

(2) the standards for actuarial work, utilizing a six percent investment return actuarial assumption deleted text begin and deleted text end new text begin , new text end other actuarial assumptions approved under section 356.215, subdivision 18 deleted text begin : deleted text end new text begin , and the amortization periods specified in section 356.215, subdivision 11. new text end

deleted text begin (i) with that portion of any unfunded actuarial accrued liability attributable to a benefit deleted text end deleted text begin increase to be amortized over a period of 20 years from the date of the benefit change; deleted text end

deleted text begin (ii) with that portion of any unfunded actuarial accrued liability attributable to an deleted text end deleted text begin assumption change or an actuarial method change to be amortized over a period of 20 years deleted text end deleted text begin from the date of the assumption or method change; deleted text end

deleted text begin (iii) with that portion of any unfunded actuarial accrued liability attributable to an deleted text end deleted text begin investment loss to be amortized over a period of ten years from the date of investment loss; deleted text end deleted text begin and deleted text end

deleted text begin (iv) with the balance of any net unfunded actuarial accrued liability to be amortized over deleted text end deleted text begin a period of five years from the date of the actuarial valuation. deleted text end

(c) The required contributions of the entity or entities associated with the fire department whose active firefighters are covered by the monthly division are the annual financial requirements of the deleted text begin monthly benefit deleted text end new text begin fire department new text end account deleted text begin of the plan deleted text end under paragraph (b) reduced by the amount of any fire state aid payable under chapter 477B, or any police and firefighter retirement supplemental state aid payable under section 423A.022, that is reasonably anticipated to be received by the plan attributable to the entity or entities during the following calendar year. The required contribution must be allocated between the entities if more than one entity is involved. 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.

(d) The required contribution calculated in paragraph (c) must be paid to the plan on or before December 31 of the year for which it was calculated. If the contribution is not received by the plan by December 31, it is payable with interest at an annual compound rate of six percent from the date due until the date payment is received by the plan. If the entity does not pay the full amount of the required contribution, the executive director shall collect the unpaid amount under section 353.28, subdivision 6.

Sec. 2.

Minnesota Statutes 2024, section 353G.11, is amended by adding a subdivision to read:

new text begin Subd. 1b. new text end

new text begin Applicable benefit level. new text end

new text begin (a) In determining a member's retirement benefit under section 353G.09, subdivision 1a, the benefit level applicable to the member is the benefit level in effect as of the date the member terminated firefighting services for the fire department of a participating employer. new text end

new text begin (b) Except as provided under section 353G.09, subdivision 4: new text end

new text begin (1) the benefit level for a member of the lump-sum division is the benefit level selected under section 353G.05, subdivision 1d, by the member's relief association or, if applicable, the municipality or firefighting corporation that employs the member or the benefit level as modified under subdivision 2, whichever is in effect as of the date the member terminated firefighting services; or new text end

new text begin (2) the benefit level for a member of the monthly division is the benefit level under the retirement benefit plan document applicable to the member's former relief association or the benefit level under the retirement benefit plan document as modified under subdivision 2a, whichever is in effect as of the date the member terminated firefighting services. new text end

Sec. 3.

Minnesota Statutes 2024, section 353G.11, subdivision 2, is amended to read:

Subd. 2.

Benefit level changes in new text begin the new text end lump-sum division deleted text begin of defined benefit plan deleted text end .

(a) A fire department's fire chief or the governing body operating a fire department may request an increase in the benefit level as provided in this subdivision.

(b) The fire chief or governing body must request a cost estimate from the executive director of an increase in the deleted text begin service pension deleted text end new text begin benefit new text end level applicable to the active firefighters of the fire department.

(c) The executive director must prepare the cost estimate using a procedure certified as accurate by the approved actuary retained by the association.

(d) Within 120 days after receiving the cost estimate from the executive director, the governing body may approve the benefit level change, effective for January 1 of the following calendar year unless the governing body specifies in the approval document an effective date that is January 1 of the second year following the approval date. If the approval occurs after April 30, the required municipal contribution for the following calendar year must be recalculated and the results reported to the governing body. If not approved within 120 days of the receipt of the cost estimate, the benefit level change is considered to have been disapproved.

Sec. 4.

Minnesota Statutes 2024, section 353G.11, subdivision 2a, is amended to read:

Subd. 2a.

deleted text begin Procedure for changing deleted text end Benefit level new text begin changes in the monthly division new text end .

(a) deleted text begin The deleted text end new text begin A fire department's new text end fire chief deleted text begin of a fire department deleted text end new text begin or the governing body operating a fire department new text end that has an active membership deleted text begin that is deleted text end covered by the monthly deleted text begin benefit retirement deleted text end division deleted text begin of the plan deleted text end may deleted text begin initiate the process of modifying deleted text end new text begin request an increase in the benefit level provided in new text end the retirement benefit plan document under this deleted text begin section deleted text end new text begin subdivision new text end .

(b) The modification procedure is initiated when the deleted text begin applicable deleted text end fire chief new text begin or governing body new text end files with the executive director deleted text begin of the association deleted text end a written summary of the desired deleted text begin benefit plan document deleted text end modification, the proposed deleted text begin benefit plan document deleted text end modification language, a written request for the preparation of an actuarial cost estimate for the proposed deleted text begin benefit plan document deleted text end modification, and payment of the estimated cost of the actuarial cost estimate.

(c) Upon receipt of the modification request and related documents, the executive director deleted text begin shall deleted text end new text begin must new text end review the language of the proposed deleted text begin benefit plan document deleted text end modification and, if a clarification is needed in the submitted language, deleted text begin shall deleted text end inform the fire chief new text begin or governing body new text end of the necessary clarification. deleted text begin Once deleted text end new text begin After new text end the deleted text begin proposed benefit plan document modification language deleted text end new text begin fire chief or governing body new text end has deleted text begin been clarified by the fire chief and resubmitted deleted text end new text begin submitted the clarified language new text end to the executive director, the executive director deleted text begin shall arrange for the approved actuary retained by the association to prepare a benefit plan document modification cost estimate under the applicable provisions of section 356.215 and of the standards for actuarial work adopted by the Legislative Commission on Pensions and Retirement deleted text end new text begin must prepare the cost estimate using a procedure certified as accurate by the approved actuary retained by the association new text end . Upon completion of the deleted text begin benefit plan document modification deleted text end cost estimate, the executive director deleted text begin shall deleted text end new text begin must new text end forward the estimate to the fire chief deleted text begin who requested it deleted text end and to the chief financial officer of the municipality or entity with which the fire department is primarily associated.

(d) The fire chief, upon receipt of the cost estimate, deleted text begin shall circulate deleted text end new text begin must distribute new text end the cost estimate deleted text begin with deleted text end new text begin to new text end the active firefighters in the fire department and deleted text begin shall deleted text end take reasonable steps to provide the new text begin cost new text end estimate deleted text begin results deleted text end to any affected retired members of the fire department and their beneficiaries. The chief financial officer of the municipality or entity associated with the fire department deleted text begin shall deleted text end new text begin must new text end present the proposed modification language and the cost estimate to the governing body of the municipality or entity for its consideration at a public hearing held for that purpose.

(e) If the governing body of the municipality or entity approves the modification language, the chief administrative officer of the municipality or entity deleted text begin shall deleted text end new text begin must new text end notify the executive director deleted text begin of the association deleted text end of that approval. The deleted text begin benefit plan document deleted text end modification is effective on deleted text begin the deleted text end January 1 following the date of filing the approval with the association.

Sec. 5.

Minnesota Statutes 2024, section 353G.17, subdivision 4, is amended to read:

Subd. 4.

Transfer process.

(a) Upon completion of the actions required under subdivisions 1 to 3, the plan shall transfer to the relief association as of the effective date identified in the notice under subdivision 1, the records, assets, and liabilities related to the former and current firefighters with benefits under the plan, along with any assets in excess of liabilities deleted text begin credited to the lump-sum account or the monthly benefit retirement account attributable to the firefighters and the municipality deleted text end .

(b) The executive director:

(1) deleted text begin shall deleted text end new text begin must new text end transfer the assets in cash;

(2) deleted text begin shall deleted text end new text begin must new text end transfer any accounts receivable deleted text begin associated with the lump-sum account or monthly benefit retirement account deleted text end ;

(3) deleted text begin shall deleted text end new text begin must new text end settle any accounts payable deleted text begin from the account deleted text end before the transfer; and

(4) may deduct from the assets to be transferred reasonable costs incurred by the plan to conduct the voting process and complete the transfer.

Sec. 6.

Minnesota Statutes 2024, section 353G.17, subdivision 5, is amended to read:

Subd. 5.

Relief association obligations and rights upon transfer from the plan.

(a) Upon transfer of the assets of the deleted text begin lump-sum account or monthly benefit retirement deleted text end new text begin fire department new text end account, the pension liabilities attributable to the benefits for the former and current firefighters deleted text begin shall deleted text end become the obligation of the special fund of the relief association.

(b) Upon the transfer of the assets of the deleted text begin lump-sum account or monthly benefit retirement deleted text end new text begin fire department new text end account, the board of trustees of the relief association has legal title to and management responsibility for the transferred assets as trustees for persons having a beneficial interest in those assets arising out of the benefit coverage provided by the account.

(c) The relief association is the successor in interest with respect to all claims against the plan relating to the transferred deleted text begin lump-sum account or monthly benefit retirement deleted text end new text begin fire department new text end account, except for claims alleging any act or acts by the plan or its fiduciaries that were not done in good faith or that constituted a breach of fiduciary responsibility under chapter 356A.

(d) The value of each volunteer firefighter's benefit in the plan on the day before the asset transfer shall be no less than the value of the volunteer firefighter's benefit on the day after the asset transfer. The relief association shall give credit, with respect to each firefighter whose benefit is being transferred, for all past service, including service credit with the plan and with any predecessor relief association, to the extent credit is given for such service in the records of the plan for that firefighter.

(e) Upon completion of the transfer of records, assets, and liabilities, the executive director shall provide written notice to the state auditor, the commissioner of revenue, and the secretary of state that the transfer is complete.

Sec. 7.

Minnesota Statutes 2024, section 353G.19, subdivision 1, is amended to read:

Subdivision 1.

Authority to initiate conversion.

(a) A participating employer associated with a fire department covered by the defined benefit plan, including an entity previously affiliated with a defined benefit relief association when the entity made a request for coverage by the defined contribution plan under section 353G.05, subdivision 1b, paragraph (c), may convert to coverage by the defined contribution plan in accordance with this section.

(b) Conversion from coverage by the defined benefit plan to coverage by the defined contribution plan consists of:

(1) a resolution by the governing body of the participating employer;

(2) notice to all former and active volunteer firefighters of the fire department;

(3) full vesting new text begin on the conversion effective date new text end of all active and former volunteer firefighters with an accrued benefit in the defined benefit plan attributable to service with the fire department new text begin , to the extent funded as of the conversion effective date new text end ; and

(4) allocation of surplus over full funding, if any, to individual accounts in the fire department's new account in the defined contribution plan.

(c) For an entity previously affiliated with a defined benefit relief association when the entity made a request for coverage by the defined contribution plan under section 353G.05, subdivision 1b, paragraph (c), a conversion must occur under paragraph (b) immediately after coverage by the retirement plan of the entity's fire department and the entity's volunteer firefighters takes effect.

Sec. 8.

Minnesota Statutes 2024, section 353G.19, subdivision 2, is amended to read:

Subd. 2.

Resolutions by the governing body.

To initiate a conversion, the governing body of the participating employer must file with the executive director at least 30 days before the end of a calendar year:

(1) a resolution that states that the fire department elects to participate in the defined contribution plan effective on the conversion effective date, which is the first day of the next calendar year; and

(2) if new text begin , as of the valuation immediately preceding the conversion effective date, new text end the fire department account had a deficit from full funding as defined under section 353G.08, subdivision 1, paragraph (c), or the special fund of the defined benefit relief association had a deficit from full funding as defined in section 424A.092, subdivision 3, paragraph (b), a resolution approving a contribution to the retirement plan in the amount necessary to eliminate the deficit, which is to be paid within 30 days of the filing of the resolution or in installments over three years, with the first payment to be made within 30 days of the filing of the resolution.

Sec. 9.

Minnesota Statutes 2024, section 353G.19, subdivision 3, is amended to read:

Subd. 3.

Notice to participants.

The participating employer must provide notice to all active and former volunteer firefighters in the fire department at least 30 days before the conversion effective date. The notice must include:

(1) an explanation that the plan is converting from a defined benefit plan to a defined contribution plan, including definitions of those terms, on the conversion effective date and that the active and former volunteer firefighters will become deleted text begin fully deleted text end vested in their accrued benefit new text begin to the extent funded new text end as of the conversion effective date;

(2) a summary of the terms of the defined contribution plan;

(3) a section tailored to each volunteer firefighter that provides an estimate of the present value of the participant's deleted text begin fully deleted text end vested accrued benefit and the calculation that resulted in that value;

(4) an estimate of any anticipated surplus and an explanation of the allocation of the surplus; and

(5) contact information for the chief administrative officer or chief financial officer of the participating employer and the designated staff member of the retirement plan who will answer questions and directions to a website.

Sec. 10.

Minnesota Statutes 2024, section 353G.19, subdivision 4, is amended to read:

Subd. 4.

Full vesting and determination of accrued benefit.

(a) On the conversion effective date, each active or former volunteer firefighter with a retirement benefit under the defined benefit plan, except any retiree in pay status who is receiving a monthly benefit, becomes 100 percent vested new text begin or, if the defined benefit plan does not have sufficient assets to fund 100 percent vesting, as close to 100 percent vested as the funding permits, new text end as of the conversion effective date in the firefighter's retirement benefit, without regard to the number of years of vesting service credit.

(b) The executive director must determine the present value of each active or former firefighter's accrued benefit as of the conversion effective date, taking into account the full vesting requirement under paragraph (a).

Sec. 11.

Minnesota Statutes 2024, section 353G.19, subdivision 5, is amended to read:

Subd. 5.

Surplus over full funding.

If the fire department account has a surplus over full funding, as defined under section 353G.08, subdivision 1, paragraph (c), the executive director must allocate the surplus over full funding to the individual account of each active deleted text begin and former deleted text end volunteer firefighter, deleted text begin except any former volunteer firefighter receiving an annuity, deleted text end in the same proportion that the volunteer firefighter's accrued benefit bears to the total accrued benefits of all active deleted text begin and former deleted text end volunteer firefighters.

Sec. 12.

new text begin EFFECTIVE DATE. new text end

new text begin Sections 1 to 11 are effective the day following final enactment, except the amendment to section 1, paragraph (b), clause (2), is effective beginning with actuarial valuations on or after July 1, 2025. new text end

ARTICLE 20

IRAP TO TRA TRANSFERS

Section 1.

Minnesota Statutes 2024, section 354B.215, subdivision 3, is amended to read:

Subd. 3.

Eligible person.

(a) An eligible person is a person who:

(1) is employed by Minnesota State;

(2) has an account in the individual retirement account plan; deleted text begin and deleted text end

(3) deleted text begin satisfies deleted text end new text begin was previously eligible to elect coverage by the Teachers Retirement Association under one or more sections of chapter 354B or any prior version of chapter 354B; and new text end

new text begin (4) is not disqualified because Minnesota State produces one or more of the items listed in new text end paragraph (b).

(b) A person deleted text begin satisfies this paragraph deleted text end new text begin is not an eligible person new text end if Minnesota State deleted text begin is not able to produce deleted text end new text begin produces new text end at least one of the following items by the end of the deleted text begin 60-day deleted text end new text begin 75-day new text end period under subdivision 4, paragraph (b):

(1) a record indicating that the person received notice regarding the person's eligibility to elect deleted text begin prospective deleted text end coverage by the Teachers Retirement Association deleted text begin within the election period under section 354B.211, subdivision 4 or 6, or its predecessor deleted text end new text begin during the person's first year of eligibility to participate in the individual retirement account plan new text end ;

new text begin (2) a record indicating that the person received notice regarding the person's eligibility to elect coverage by the Teachers Retirement Association during the person's first year after attaining tenure or comparable permanent status; new text end

deleted text begin (2) deleted text end new text begin (3) new text end a record that the person elected retirement coverage by the individual retirement account plan; or

deleted text begin (3) deleted text end new text begin (4) new text end other credible documentation demonstrating that the person was aware of the person's right to elect retirement coverage by the Teachers Retirement Association.

new text begin (c) The record described in paragraph (b), clause (1), is not effective to disqualify a person if the person was eligible to elect coverage by the Teachers Retirement Association during the person's first year after attaining tenure or comparable permanent status. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from January 1, 2025. new text end

Sec. 2.

Minnesota Statutes 2024, section 354B.215, subdivision 4, is amended to read:

Subd. 4.

Eligible person application; information required from Minnesota State.

(a) To elect coverage by the Teachers Retirement Association, an eligible person must submit a written application to the chancellor on a form provided by Minnesota State. The application must include:

(1) an attestation that the person was not informed of the right to elect a transfer from the individual retirement account plan to the Teachers Retirement Association and the person was unaware of the right to elect such a transfer;

(2) the date on which the person first became a participant in the individual retirement account plan;

(3) a signed release authorizing Minnesota State to provide employment and other personnel information to the Teachers Retirement Association; and

(4) any other information that Minnesota State may require.

(b) No later than deleted text begin 60 deleted text end new text begin 75 new text end days after receipt of the application under paragraph (a), Minnesota State must verify the information provided by the person in the application, determine whether the person is an eligible person under subdivision 3, and provide a written response to the person regarding the determination of eligibility. If Minnesota State determines that the person is not an eligible person, Minnesota State must new text begin specify the reason or reasons for its determination and, if applicable, new text end include a copy of any documentation identified in subdivision 3, paragraph (b), in its written response to the person.

(c) If Minnesota State determines that the person is an eligible person under subdivision 3, Minnesota State must forward to the executive director:

(1) the application;

(2) confirmation or modification of the information provided by the eligible person in the application;

(3) salary history for the eligible person;

(4) an estimate of the amount available for transfer from the eligible person's account in the individual retirement account plan to the Teachers Retirement Association; and

(5) any other relevant information.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from January 1, 2025. new text end

ARTICLE 21

FIRE AND POLICE STATE AID

Section 1.

Minnesota Statutes 2024, section 423A.022, subdivision 2, is amended to read:

Subd. 2.

Allocation.

(a) Of the total amount appropriated as supplemental state aid:

(1) 58.064 percent must be paid to the executive director of the Public Employees Retirement Association for deposit in the public employees police and fire retirement fund established by section 353.65, subdivision 1;

(2) 35.484 percent must be new text begin allocated and new text end paid new text begin as required by paragraphs (b) and (c), respectively, new text end to new text begin or on behalf of new text end municipalities deleted text begin other than municipalities solely deleted text end deleted text begin employing firefighters with retirement coverage provided by deleted text end deleted text begin the public employees police deleted text end deleted text begin and fire retirement plan which deleted text end deleted text begin qualified to receive fire state aid in that calendar year, allocated in deleted text end deleted text begin proportion deleted text end deleted text begin to deleted text end deleted text begin the most recent amount of fire state aid paid under section deleted text end deleted text begin 477B.04 deleted text end deleted text begin , for deleted text end deleted text begin the municipality bears to the most recent total fire state aid deleted text end deleted text begin for deleted text end deleted text begin all municipalities other than the municipalities solely employing firefighters with retirement deleted text end deleted text begin coverage provided by deleted text end deleted text begin the Public deleted text end deleted text begin Employees police and fire Retirement plan paid under section 477B.04, with the allocated amount for fire departments participating in the statewide lump-sum volunteer firefighter plan paid to the executive director of the Public Employees Retirement Association for deposit in the fund established by section 353G.02, subdivision 3, and credited to the respective account and with the balance paid to the treasurer of each municipality for transmittal within 30 days of receipt to the treasurer of the applicable firefighters relief association for deposit in its special fund deleted text end new text begin who qualify for supplemental state aid under paragraph (d) new text end ; and

(3) 6.452 percent must be paid to the executive director of the Minnesota State Retirement System for deposit in the state patrol retirement fund.

new text begin (b) Supplemental state aid under paragraph (a), clause (2), must be allocated to each municipality that qualifies for supplemental state aid under paragraph (d) in the same proportion that the most recent amount of fire state aid paid under section 477B.04 for the municipality bears to the most recent total fire state aid paid under section 477B.04 for all municipalities other than municipalities solely employing firefighters with retirement coverage by one or more pension plans under chapter 353. new text end

new text begin (c) Supplemental state aid under paragraph (a), clause (2), must be paid: new text end

new text begin (1) to the executive director of the Public Employees Retirement Association for each municipality with a fire department that participates in the statewide volunteer firefighter plan for deposit in the fund established by section 352G.02, subdivision 3, and credited to the fire department's account; and new text end

new text begin (2) with the balance to the treasurer of each municipality for transmittal within 30 days of receipt to the treasurer of the applicable firefighters relief association for deposit in its special fund. new text end

new text begin (d) A municipality qualifies for supplemental state aid under paragraph (a), clause (2), if the municipality: new text end

new text begin (1) does not solely employ firefighters with retirement coverage provided by one or more pension plans established under chapter 353; and new text end

new text begin (2) qualified to receive fire state aid in that calendar year. new text end

deleted text begin (b) deleted text end new text begin (e) new text end For purposes of this section, the term "municipalities" includes independent nonprofit firefighting corporations that participate in the statewide deleted text begin lump-sum deleted text end volunteer firefighter plan under chapter 353G or with subsidiary deleted text begin volunteer deleted text end firefighter relief associations operating under chapter 424A.

Sec. 2.

Minnesota Statutes 2024, section 423A.022, subdivision 3, is amended to read:

Subd. 3.

Reporting.

On or before September 1, annually, the executive director of the Public Employees Retirement Association shall report to the commissioner of revenue the following:

(1) the municipalities deleted text begin which deleted text end new text begin that new text end employ firefighters with retirement coverage by the public employees police and fire retirement plan;

new text begin (2) the municipalities that employ firefighters with retirement coverage by the general employees retirement plan; new text end

deleted text begin (2) deleted text end new text begin (3) new text end the fire departments covered by the statewide deleted text begin lump-sum deleted text end volunteer firefighter plan; and

deleted text begin (3) deleted text end new text begin (4) new text end any other information requested by the commissioner to administer the police and firefighter retirement supplemental state aid program.

Sec. 3.

Minnesota Statutes 2024, section 424A.014, subdivision 5, is amended to read:

Subd. 5.

Report by certain municipalities; exceptions.

(a) The chief administrative officer of each municipality that has a fire department but does not have a relief association governed by sections 424A.091 to 424A.095 or Laws 2014, chapter 275, article 2, section 23, and that is not exempted under paragraph (b) or (c) must annually prepare a detailed financial report of the receipts and disbursements by the municipality for fire protection service during the preceding calendar year on a form prescribed by the state auditor. The financial report must contain any information that the state auditor deems necessary to disclose the sources of receipts and the purpose of disbursements for fire protection service. The financial report must be signed by the municipal clerk or clerk-treasurer with the state auditor on or before July 1 annually. The municipality does not qualify initially to receive, and is not entitled subsequently to retain, any fire state aid and police and firefighter retirement supplemental state aid payable under chapter 477B and section 423A.022 if the financial reporting requirement or the applicable requirements of any other statute or special law have not been complied with or are not fulfilled.

(b) Each municipality that has a fire department and provides retirement coverage to its firefighters through the statewide volunteer firefighter plan under chapter 353G qualifies to have fire state aid transmitted to and retained in the statewide volunteer firefighter retirement fund without filing a detailed financial report if the executive director of the Public Employees Retirement Association certifies compliance by the municipality with the requirements of sections 353G.04 and 353G.08, subdivision 1, paragraph (e), and certifies compliance by the applicable fire chief with the requirements of section 353G.07.

(c) Each municipality qualifies to receive fire state aid under chapter 477B without filing a financial report under paragraph (a) if the municipality:

(1) has a fire department;

(2) does not have a firefighters relief association directly associated with its fire department;

(3) does not participate in the statewide volunteer firefighter retirement plan under chapter 353G;

(4) provides retirement coverage to its firefighters through the new text begin general employees retirement plan under chapter 353 or the new text end public employees police and fire retirement plan under sections 353.63 to 353.68; and

(5) is certified by the executive director of the Public Employees Retirement Association to the state auditor to have had an employer contribution under section new text begin 353.27, subdivisions 3 and 3a, or new text end 353.65, subdivision 3, for its firefighters for the immediately prior calendar year equal to or greater than its fire state aid for the immediately prior calendar year.

Sec. 4.

Minnesota Statutes 2024, section 424A.08, is amended to read:

424A.08 MUNICIPALITY WITHOUT RELIEF ASSOCIATION; AUTHORIZED DISBURSEMENTS.

(a) deleted text begin Any deleted text end new text begin A new text end municipality deleted text begin which deleted text end new text begin that new text end is entitled to receive fire state aid deleted text begin but which has no deleted text end new text begin must deposit the fire state aid in a special account established for that purpose in the municipal treasury and disburse the fire state aid in accordance with paragraph (b) or (c), as applicable, if the municipality's fire department is not directly associated with a new text end firefighters relief association deleted text begin directly associated with its fire department deleted text end and deleted text begin which deleted text end new text begin is not a participating employer in the statewide volunteer firefighter plan under chapter 353G. new text end

new text begin (b) If the municipality new text end has no deleted text begin full-time deleted text end firefighters with retirement coverage by the public employees police and fire retirement plan deleted text begin shall deposit the fire state aid in a special account established for that purpose in the municipal treasury. Disbursement deleted text end new text begin and no part-time firefighters with retirement coverage by the general employees retirement plan under chapter 353, the municipality must not disburse fire state aid new text end from the special account deleted text begin may not be made deleted text end for any purpose except:

(1) payment of the fees, dues and assessments to the Minnesota State Fire Department Association and to the state Volunteer Firefighters Benefit Association in order to entitle its firefighters to membership in and the benefits of these state associations;

(2) payment of the cost of purchasing and maintaining needed equipment for the fire department; and

(3) payment of the cost of construction, acquisition, repair, or maintenance of buildings or other premises to house the equipment of the fire department.

deleted text begin (b) A deleted text end new text begin (c) If the new text end municipality deleted text begin which is entitled to receive fire state aid, which has no firefighters relief association directly associated with its fire department, which does not participate in the statewide volunteer firefighter plan under chapter 353G, and which deleted text end has deleted text begin full-time deleted text end firefighters with retirement coverage by the public employees police and fire retirement plan new text begin or part-time firefighters with retirement coverage by the general employees retirement plan or both full-time and part-time firefighters with the applicable retirement coverage, the municipality new text end may disburse the fire state aid deleted text begin as deleted text end new text begin : new text end

new text begin (1) as new text end provided in paragraph deleted text begin (a), deleted text end new text begin (b); new text end

new text begin (2) new text end for the payment of deleted text begin the deleted text end employer deleted text begin contribution requirement with respect to deleted text end new text begin contributions under section 353.65, subdivision 3, for any new text end firefighters covered by the public employees police and fire retirement plan deleted text begin under section 353.65, subdivision 3, deleted text end new text begin ; new text end

new text begin (3) for the payment of employer contributions for any firefighters covered by the general employees retirement plan under section 353.27, subdivisions 3 and 3a; new text end or

new text begin (4) new text end for a combination of the deleted text begin two types of disbursements deleted text end new text begin payments authorized under clauses (1) to (3) new text end .

deleted text begin (c) deleted text end new text begin (d) new text end A municipality that has no firefighters relief association directly associated with it and that participates in the statewide volunteer firefighter plan under chapter 353G shall transmit any fire state aid that it receives to the statewide volunteer firefighter fund.

Sec. 5.

Minnesota Statutes 2024, section 477B.02, subdivision 3, is amended to read:

Subd. 3.

Benefits requirements.

(a) The fire department must:

(1) be associated with a firefighters relief association that provides retirement benefits;

(2) participate in new text begin and have firefighters receiving credit for service toward a retirement benefit under new text end the statewide volunteer firefighter plan;

(3) have retirement coverage under the public employees police and fire retirement plan new text begin or the Public Employees Retirement Association general employees retirement plan new text end for the new text begin fire new text end department's full-time firefighters, as defined in section 299N.03, subdivision 5, deleted text begin or the fire department's deleted text end part-time firefighters, or deleted text begin the fire department's deleted text end new text begin both new text end full-time firefighters and part-time firefighters; or

(4) satisfy either clauses (1) and (3) or clauses (2) and (3).

(b) For purposes of retirement benefits, a fire department may be associated with only one firefighters relief association or one account in the statewide firefighters retirement plan at one time.

(c) Notwithstanding paragraph (a), a municipality without a relief association as described under section 424A.08, paragraph (a), may still qualify to receive fire state aid if all other requirements of this section are met.

Sec. 6.

Minnesota Statutes 2024, section 477B.02, subdivision 8, is amended to read:

Subd. 8.

PERA certification to commissioner.

new text begin (a) new text end On or before February 1 each year, the executive director of the Public Employees Retirement Association must certify to the commissioner the fire departments that transferred retirement coverage to, or terminated participation in, the deleted text begin voluntary deleted text end statewide volunteer firefighter retirement plan since the previous certification under this paragraph. This certification must include the number of active deleted text begin volunteer deleted text end firefighters under section 477B.03, subdivision 5, paragraph (e).

new text begin (b) On or before February 1 each year, the executive director of the Public Employees Retirement Association must certify to the commissioner: new text end

new text begin (1) the fire departments that participate in the statewide volunteer firefighter plan and have no firefighters receiving credit for service toward a retirement benefit under the statewide volunteer firefighter plan; and new text end

new text begin (2) the fire departments that employ part-time firefighters who are covered by the general employees retirement plan. new text end

Sec. 7.

Minnesota Statutes 2024, section 477B.03, subdivision 5, is amended to read:

Subd. 5.

Minimum fire state aid allocation amount.

(a) The minimum fire state aid allocation amount is the amount derived from any additional funding amount to support a minimum fire state aid amount under section 423A.02, subdivision 3. The minimum fire state aid allocation amount is allocated to municipalities or independent nonprofit firefighting corporations with deleted text begin volunteer deleted text end firefighters' relief associations or covered by the statewide volunteer firefighter plan. The amount is based on the number of active deleted text begin volunteer deleted text end firefighters who are (1) members of the relief association as reported to the Office of the State Auditor in a specific annual financial reporting year as specified in paragraphs (b) to (d), or (2) covered by the statewide volunteer firefighter plan as specified in paragraph (e).

(b) For relief associations established in calendar year 1993 or a prior year, the number of active deleted text begin volunteer deleted text end firefighters equals the number of active deleted text begin volunteer deleted text end firefighters who were members of the relief association as reported in the annual financial reporting for calendar year 1993, but not to exceed 30 active deleted text begin volunteer deleted text end firefighters.

(c) For relief associations established in calendar year 1994 through calendar year 1999, the number of active deleted text begin volunteer deleted text end firefighters equals the number of active deleted text begin volunteer deleted text end firefighters who were members of the relief association as reported in the annual financial reporting for calendar year 1998 to the Office of the State Auditor, but not to exceed 30 active deleted text begin volunteer deleted text end firefighters.

(d) For relief associations established after calendar year 1999, the number of active deleted text begin volunteer deleted text end firefighters equals the number of active deleted text begin volunteer deleted text end firefighters who are members of the relief association as reported in the first annual financial reporting submitted to the Office of the State Auditor, but not to exceed 20 active deleted text begin volunteer deleted text end firefighters.

(e) For a municipality or independent nonprofit firefighting corporation that is providing retirement coverage for deleted text begin volunteer deleted text end firefighters by the statewide volunteer firefighter plan under chapter 353G, the number of active deleted text begin volunteer deleted text end firefighters equals the number of active deleted text begin volunteer deleted text end firefighters of the municipality or independent nonprofit firefighting corporation covered by the statewide plan as certified by the executive director of the Public Employees Retirement Association to the commissioner and the state auditor within 30 days of the date the municipality or independent nonprofit firefighting corporation begins coverage in the plan, but not to exceed 30 active firefighters.

Sec. 8.

Minnesota Statutes 2024, section 477B.03, subdivision 7, is amended to read:

Subd. 7.

Appeal.

A municipality, an independent nonprofit firefighting corporation, a deleted text begin fire deleted text end new text begin firefighter new text end relief association, or the statewide volunteer firefighter plan may object to the amount of fire state aid apportioned to it by filing a written request with the commissioner to review and adjust the apportionment of funds within the state. The objection of a municipality, an independent nonprofit firefighting corporation, a deleted text begin fire deleted text end new text begin firefighter new text end relief association, or the deleted text begin voluntary deleted text end statewide volunteer firefighter retirement plan must be filed with the commissioner within 60 days of the date the amount of apportioned fire state aid is paid. The decision of the commissioner is subject to appeal, review, and adjustment by the district court in the county in which the applicable municipality or independent nonprofit firefighting corporation is located or by the Ramsey County District Court with respect to the statewide volunteer firefighter plan.

Sec. 9.

Minnesota Statutes 2024, section 477B.04, subdivision 3, is amended to read:

Subd. 3.

Deposit of state aid.

(a) This paragraph applies if the municipality or the independent nonprofit firefighting corporation deleted text begin is deleted text end new text begin has firefighters new text end covered by the statewide volunteer firefighter plan. If this paragraph applies and the executive director of the Public Employees Retirement Association has not approved an aid allocation plan under section 477B.041, the executive director must credit the fire state aid against future municipal contribution requirements under section 353G.08 and must notify the municipality or the independent nonprofit firefighting corporation of the fire state aid so credited at least annually. If this paragraph applies and the executive director has approved an aid allocation plan under section 477B.041, the executive director must allocate fire state aid in the manner described under section 477B.041.

(b) If (1) the municipality or the independent nonprofit firefighting corporation deleted text begin is deleted text end new text begin does new text end not new text begin have firefighters new text end covered by the statewide volunteer firefighter plan and is affiliated with a duly incorporated firefighters relief association, (2) the relief association has filed a financial report with the municipality pursuant to section 424A.014, subdivision 1 or 2, whichever applies, and (3) there is not an aid allocation agreement under section 477B.042 in effect, then the treasurer of the municipality must, within 30 days after receipt, transmit the fire state aid to the treasurer of the relief association. If clauses (1) and (2) are satisfied and there is an aid allocation agreement under section 477B.042 in effect, then fire state aid must be transmitted as described in that section. If the relief association has not filed a financial report with the municipality, then, regardless of whether an aid allocation agreement is in effect, the treasurer of the municipality must delay transmission of the fire state aid to the relief association until the complete financial report is filed.

(c) The treasurer of the municipality must deposit the fire state aid money in the municipal treasury if (1) the municipality or independent nonprofit firefighting corporation deleted text begin is deleted text end new text begin does new text end not new text begin have firefighters new text end covered by the statewide volunteer firefighter plan, (2) there is no relief association organized, (3) the association has dissolved, or (4) the association has been removed as trustees of state aid. The money may be disbursed from the municipal treasury only for the purposes and in the manner set forth in section 424A.08 or for the payment of the employer contribution requirement with respect to firefighters covered by the public employees police and fire retirement plan under section 353.65, subdivision 3.

Sec. 10.

Minnesota Statutes 2024, section 477B.04, subdivision 4, is amended to read:

Subd. 4.

Aid amount corrections.

(a) deleted text begin An deleted text end new text begin The commissioner must make any new text end adjustment needed to correct a fire state aid overpayment or underpayment due to a clerical error deleted text begin must be made deleted text end to subsequent fire state aid payments as provided in paragraphs (b) and (c). The new text begin commissioner's new text end authority to correct an aid payment under this subdivision is limited to three years after the payment was issued.

(b) If an overpayment equals more than ten percent of the most recently paid aid amount, the commissioner must reduce the aid a municipality or independent nonprofit firefighting corporation is to receive by the amount overpaid over a period of no more than three years. If an overpayment equals or is less than ten percent of the most recently paid aid amount, the commissioner must reduce the next aid payment occurring in 30 days or more by the amount overpaid.

(c) In the event of an underpayment, the commissioner must distribute the amount of underpaid funds to the municipality or independent nonprofit firefighting corporation over a period of no more than three years. An additional distribution to a municipality or independent nonprofit firefighting corporation must be paid from the general fund and must not diminish the payments made to other municipalities or independent nonprofit firefighting corporations under this chapter.

Sec. 11.

new text begin EFFECTIVE DATE. new text end

new text begin Sections 1 to 10 are effective beginning with aids payable in 2026. new text end

ARTICLE 22

STATE BOARD OF INVESTMENT

Section 1.

Minnesota Statutes 2024, section 11A.07, subdivision 4, is amended to read:

Subd. 4.

Duties and powers.

The director, at the direction of the state board, shall:

(1) plan, direct, coordinate, and execute administrative and investment functions in conformity with the policies and directives of the state board and the requirements of this chapter and of chapter 356A;

(2) prepare and submit biennial and annual budgets to the board and with the approval of the board submit the budgets to the Department of Management and Budget;

(3) employ professional and clerical staff as necessary;

(4) report to the state board on all operations under the director's control and supervision;

(5) maintain accurate and complete records of securities transactions and official activities;

(6) establish a policy, which is subject to state board approval, relating to the purchase and sale of securities on the basis of competitive offerings or bids;

(7) cause securities acquired to be kept in the custody of the commissioner of management and budget or other depositories consistent with chapter 356A, as the state board deems appropriate;

(8) prepare and file with the director of the Legislative Reference Library deleted text begin , by December 31 of each year, deleted text end a report summarizing the activities of the state board, the council, and the director during the preceding fiscal year;

(9) include on the state board's website its annual report and an executive summary of its quarterly reports;

(10) require state officials from any department or agency to produce and provide access to any financial documents the state board deems necessary in the conduct of its investment activities;

(11) receive and expend legislative appropriations; and

(12) undertake any other activities necessary to implement the duties and powers set forth in this subdivision consistent with chapter 356A.

Sec. 2.

Minnesota Statutes 2024, section 11A.07, subdivision 4b, is amended to read:

Subd. 4b.

Annual report.

The report required under subdivision 4, clause (8), must include an executive summary new text begin , must be prepared and filed after the completion of the applicable fiscal year audit but no later than March 31 of each year, new text end and must be prepared so as to provide the legislature and the people of the state with:

(1) a clear, comprehensive summary of the portfolio composition, the transactions, the total annual rate of return, and the yield to the state treasury and to each of the funds with assets invested by the state board; and

(2) the recipients of business placed or commissions allocated among the various commercial banks, investment bankers, money managers, and brokerage organizations and the amount of these commissions or other fees.

Sec. 3.

new text begin REPEALER. new text end

new text begin Minnesota Statutes 2024, section 11A.27, new text end new text begin is repealed. new text end

Sec. 4.

new text begin EFFECTIVE DATE. new text end

new text begin Sections 1 to 3 are effective the day following final enactment. new text end

ARTICLE 23

MISCELLANEOUS TECHNICAL CORRECTIONS

Section 1.

Minnesota Statutes 2024, section 124E.12, subdivision 4, is amended to read:

Subd. 4.

Teacher and other employee retirement.

(a) Teachers in a charter school must be public school teachers for the purposes of chapters 354 and 354A deleted text begin governing the Teacher Retirement Act deleted text end .

(b) Except for teachers under paragraph (a), employees in a charter school must be public employees for the purposes of chapter 353 deleted text begin governing the Public Employees Retirement Act deleted text end .

Sec. 2.

Minnesota Statutes 2024, section 124E.12, subdivision 6, is amended to read:

Subd. 6.

Leave to teach in a charter school.

If a teacher employed by a district makes a written request for an extended leave of absence to teach at a charter school, the district must grant the leave. The district must grant a leave not to exceed a total of five years. Any request to extend the leave shall be granted only at the discretion of the school board. The district may require a teacher to make the request for a leave or extension of leave before February 1 in the school year preceding the school year in which the teacher intends to leave, or February 1 of the calendar year in which the teacher's leave is scheduled to terminate. Except as otherwise provided in this subdivision and section 122A.46, subdivision 7, governing employment in another district, the leave is governed by section 122A.46, including, but not limited to, reinstatement, notice of intention to return, seniority, salary, and insurance.

During a leave, the teacher may continue to deleted text begin aggregate benefits and credits deleted text end new text begin earn service and salary credit toward a pension new text end in the Teachers' Retirement Association deleted text begin account deleted text end new text begin or the St. Paul Teachers Retirement Fund Association new text end under chapters 354 and 354A, new text begin respectively, new text end consistent with subdivision 4.

Sec. 3.

Minnesota Statutes 2024, section 181.101, is amended to read:

181.101 WAGES; HOW OFTEN PAID.

(a) Except as provided in paragraph (b), every employer must pay all wages, including salary, earnings, and gratuities earned by an employee at least once every 31 days and all commissions earned by an employee at least once every three months, on a regular payday designated in advance by the employer regardless of whether the employee requests payment at longer intervals. Unless paid earlier, the wages earned during the first half of the first 31-day pay period become due on the first regular payday following the first day of work. If wages or commissions earned are not paid, the commissioner of labor and industry or the commissioner's representative may serve a demand for payment on behalf of an employee. In addition to other remedies under section 177.27, if payment of wages is not made within ten days of service of the demand, the commissioner may charge and collect the wages earned at the employee's rate or rates of pay or at the rate or rates required by law, including any applicable statute, regulation, rule, ordinance, government resolution or policy, contract, or other legal authority, whichever rate of pay is greater, and a penalty in the amount of the employee's average daily earnings at the same rate or rates for each day beyond the ten-day limit following the demand. If payment of commissions is not made within ten days of service of the demand, the commissioner may charge and collect the commissions earned and a penalty equal to 1/15 of the commissions earned but unpaid for each day beyond the ten-day limit. Money collected by the commissioner must be paid to the employee concerned. This section does not prevent an employee from prosecuting a claim for wages. This section does not prevent a school district, other public school entity, or other school, as defined under section 120A.22, from paying any wages earned by its employees during a school year on regular paydays in the manner provided by an applicable contract or collective bargaining agreement, or a personnel policy adopted by the governing board. For purposes of this section, "employee" includes a person who performs agricultural labor as defined in section 181.85, subdivision 2. For purposes of this section, wages are earned on the day an employee works. This section provides a substantive right for employees to the payment of wages, including salary, earnings, and gratuities, as well as commissions, in addition to the right to be paid at certain times.

(b) An employer of a volunteer new text begin or paid on-call new text end firefighter, as defined in section 424A.001, subdivision 10, a member of an organized first responder squad that is formally recognized by a political subdivision in the state, or a volunteer ambulance driver or attendant must pay all wages earned by the volunteer firefighter, first responder, or volunteer ambulance driver or attendant at least once every 31 days, unless the employer and the employee mutually agree upon payment at longer intervals.

Sec. 4.

Minnesota Statutes 2024, section 356.633, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

(a) For purposes of this section, the following terms have the meanings given.

new text begin (b) "Covered retirement plan" means a pension or retirement plan listed in section 356.611, subdivision 6, and the Minnesota deferred compensation plan established under section 352.965. new text end

deleted text begin (b) deleted text end new text begin (c) new text end "Distributee" means:

(1) a new text begin member of or new text end participant in a covered retirement plan deleted text begin listed in section 356.611, subdivision 6 deleted text end ;

(2) the surviving spouse of a new text begin member of or new text end participant new text begin in a covered retirement plan new text end ;

(3) the former spouse of deleted text begin the deleted text end new text begin a member of or new text end participant new text begin in a covered retirement plan new text end who is the alternate payee under a qualified domestic relations order as defined in section 414(p) of the Internal Revenue Code, or who is a recipient of a court-ordered equitable distribution of marital property, as provided in section 518.58; or

(4) a nonspousal beneficiary of a new text begin member of or new text end participant new text begin in a covered retirement plan new text end who qualifies for a distribution under the plan and is a designated beneficiary as defined in section 401(a)(9)(E) of the Internal Revenue Code.

deleted text begin (c) deleted text end new text begin (d) new text end "Eligible retirement plan" means:

(1) an individual retirement account under section 408(a) or 408A of the Internal Revenue Code;

(2) an individual retirement annuity plan under section 408(b) of the Internal Revenue Code;

(3) an annuity plan under section 403(a) of the Internal Revenue Code;

(4) a qualified trust plan under section 401(a) of the Internal Revenue Code that accepts deleted text begin the distributee's deleted text end eligible rollover deleted text begin distribution deleted text end new text begin distributions new text end ;

(5) an annuity contract under section 403(b) of the Internal Revenue Code;

(6) an eligible deferred compensation plan under section 457(b) of the Internal Revenue Code, deleted text begin which deleted text end new text begin including the Minnesota deferred compensation plan, that new text end is maintained by a state or local government new text begin , accepts eligible rollover distributions, new text end and deleted text begin which deleted text end agrees to separately account for the amounts transferred into the plan;

(7) deleted text begin in the case of an eligible rollover distribution to a deleted text end new text begin if the distributee is a surviving spouse or new text end nonspousal beneficiary, an individual account or annuity treated as an inherited individual retirement account under section 402(c)(11) of the Internal Revenue Code; or

(8) a savings incentive match plan for employees of small employers (SIMPLE) individual retirement account under section 408(p) of the Internal Revenue Code, provided that the rollover distribution is made after the two-year period beginning on the date the distributee first participated in any qualified salary reduction arrangement maintained by the distributee's employer under section 408(p)(2) of the Internal Revenue Code, as described in section 72(t)(6) of the Internal Revenue Code.

deleted text begin (d) deleted text end new text begin (e) new text end "Eligible rollover distribution" means any distribution of all or any portion of the balance to the credit of the distributee. An eligible rollover distribution does not include:

(1) a distribution that is one of a series of substantially equal periodic payments, receivable annually or more frequently, that is made for the life or life expectancy of the distributee, the joint lives or joint life expectancies of the distributee and the distributee's designated beneficiary, or for a specified period of ten years or more;

(2) a distribution that is required under section 401(a)(9) of the Internal Revenue Code; deleted text begin or deleted text end

new text begin (3) a distribution that is less than $200; or new text end

deleted text begin (3) deleted text end new text begin (4) new text end any other exception required by law or the Internal Revenue Code.

Sec. 5.

Minnesota Statutes 2024, section 356.633, subdivision 2, is amended to read:

Subd. 2.

Right to elect direct rollover.

Except as provided in subdivision 3 for after-tax contributions, a distributee may elect, at the time and in the manner prescribed by the plan administrator, to have all or any portion of an eligible rollover distribution new text begin from a covered retirement plan new text end paid directly to an eligible retirement plan as specified by the distributee.

Sec. 6.

Minnesota Statutes 2024, section 356.633, is amended by adding a subdivision to read:

new text begin Subd. 4. new text end

new text begin Notice. new text end

new text begin A covered retirement plan must provide the distributee of an eligible rollover distribution from the covered retirement plan with the notice required by section 402(f) of the Internal Revenue Code within the time period prior to making the eligible rollover distribution, as required by regulations issued pursuant to section 402(f) of the Internal Revenue Code. new text end

Sec. 7.

new text begin [356.638] MILITARY SERVICE. new text end

new text begin A covered retirement plan as defined in section 356.633, subdivision 1, paragraph (b), must require contributions and provide benefits, including death and disability benefits under section 401(a)(37) of the Internal Revenue Code, and service credit with respect to qualified military service according to section 414(u) of the Internal Revenue Code. If a member dies while the member is performing qualified military service as defined in United States Code, title 38, chapter 43, to the extent required by section 401(a)(37) of the Internal Revenue Code, survivors of the member are entitled to any additional benefits that the covered retirement plan would have provided if the member had resumed employment and then died, including but not limited to accelerated vesting or survivor benefits that are contingent on the member's death while employed. A deceased member's period of qualified military service must be counted for vesting purposes. new text end

Sec. 8.

Minnesota Statutes 2024, section 424B.22, subdivision 1, is amended to read:

Subdivision 1.

Application.

(a) Notwithstanding any laws to the contrary, this section applies to:

(1) the termination of a retirement plan established and administered by a relief association, whether or not the relief association is also dissolved or eliminated; and

(2) the dissolution of a relief association that is not consolidating with another relief association under sections 424B.01 to 424B.10.

new text begin (b) new text end This section does not apply to the dissolution of a relief association or the termination of a retirement plan that occurs due to the change in retirement coverage from a retirement plan administered by a relief association to the Public Employees Retirement Association statewide volunteer firefighter plan under section 353G.06.

deleted text begin (b) To terminate a retirement plan, the board of trustees must comply with subdivisions 3, 5 to 11, and, if desired, subdivision 4. deleted text end

deleted text begin (c) To dissolve a relief association, the board of trustees of the relief association must: deleted text end

deleted text begin (1) terminate the retirement plan in accordance with paragraph (b); deleted text end

deleted text begin (2) determine all legal obligations of the special and general funds of the relief association, as required by subdivision 5; deleted text end

deleted text begin (3) take the actions required by subdivision 12; and deleted text end

deleted text begin (4) comply with the requirements governing dissolution of nonprofit corporations under chapter 317A. deleted text end

deleted text begin (d) A relief association that terminates its retirement plan must liquidate its special fund as provided in subdivision 8, but need not liquidate its general fund if the relief association is not being dissolved. deleted text end

Sec. 9.

Minnesota Statutes 2024, section 424B.22, is amended by adding a subdivision to read:

new text begin Subd. 1a. new text end

new text begin Voluntary dissolution and termination. new text end

new text begin (a) To terminate a retirement plan, the board of trustees must comply with subdivisions 3, 5 to 11, and, if desired, subdivision 4. new text end

new text begin (b) To dissolve a relief association, the board of trustees of the relief association must: new text end

new text begin (1) terminate the retirement plan in accordance with paragraph (a); new text end

new text begin (2) determine all legal obligations of the special and general funds of the relief association, as required by subdivision 5; new text end

new text begin (3) take the actions required by subdivision 12; and new text end

new text begin (4) comply with the requirements governing dissolution of nonprofit corporations under chapter 317A. new text end

new text begin (c) A relief association that terminates its retirement plan must liquidate its special fund as provided in subdivision 8, but need not liquidate its general fund if the relief association is not being dissolved. new text end

Sec. 10.

Minnesota Statutes 2024, section 424B.22, subdivision 2, is amended to read:

Subd. 2.

Involuntary dissolution and termination.

(a) A relief association is dissolved and the retirement plan administered by the relief association is terminated automatically if:

(1) the fire department affiliated with a relief association is dissolved by action of the governing body of the municipality in which the fire department is located or by the governing body of the independent nonprofit firefighting corporation, whichever applies; deleted text begin or deleted text end

(2) the fire department affiliated with a relief association has terminated the employment or services of all active members of the relief association deleted text begin . deleted text end new text begin ; or new text end

new text begin (3) the governing body with which the fire department is affiliated has resolved to transfer the fire department's active firefighters who are members of the relief association to one or more pension plans established under chapter 353 and has filed the resolution, if applicable, with the Public Employees Retirement Association, and the relief association's retirement plan will have no remaining active firefighters earning service toward a retirement benefit when the transfer is completed. new text end

(b) An involuntary termination of a relief association under this subdivision is effective on the December 31 that is at least eight months after the date on which the fire department is dissolved or the termination of employment or services of all active members of the relief association occurs.

new text begin (c) new text end The board of trustees must comply with subdivisions 3 and 5 to 12. The board of trustees may comply with subdivision 4. The state auditor has the discretion to waive these requirements if the board of trustees requests a waiver in advance and provides adequate demonstration that meeting these requirements is not practicable.

deleted text begin (c) deleted text end new text begin (d) new text end The retirement plan administered by a relief association is terminated automatically if the relief association is dissolved, effective on the date of the dissolution of the relief association.

Sec. 11.

Minnesota Statutes 2024, section 424B.22, subdivision 3, is amended to read:

Subd. 3.

Retirement plan termination date, full vesting, and forfeitures.

(a) Unless subdivision 2 applies, the effective date of the termination of a retirement plan is the date approved by the board of trustees of the relief association. If the board of trustees does not approve a termination date, the effective date of the termination of a retirement plan is the effective date of the dissolution of the relief association or, if the relief association is not being dissolved, the end of the calendar year in which the termination of employment or services of all active members of the relief association occurs.

(b) As deleted text begin of the earlier of the retirement plan termination date or the date on which the termination of employment or services of all active members of the relief association occurs deleted text end new text begin required by section 356.001, subdivision 3 new text end , each deleted text begin participant becomes fully (100 percent) deleted text end new text begin member must become 100 percent new text end vested in the deleted text begin participant's deleted text end new text begin member's new text end retirement benefit deleted text begin under deleted text end new text begin accrued and funded to the earlier of new text end the retirement plan new text begin termination date or the date on which the termination of employment or services of all active members of the relief association occurs new text end , notwithstanding any bylaws or laws to the contrary deleted text begin , except for deleted text end new text begin . new text end new text begin For purposes of this paragraph: new text end

new text begin (1) "member" does not mean new text end any retiree in pay status who is receiving a monthly service pension from a relief association described in section 424A.093 deleted text begin . deleted text end new text begin ; and new text end

new text begin (2) crediting of interest on deferred service pensions under the terms of the bylaws of a defined benefit relief association and section 424A.02, subdivision 7, ends on the retirement plan termination date. new text end

(c) If the relief association is a defined contribution relief association, the account of each participant who becomes 100 percent vested under paragraph (b) shall include an allocation of any forfeiture that is required, under the bylaws of the relief association, to occur on or as of the end of the calendar year during which the termination of the retirement plan is effective, if the participant is entitled to an allocation of forfeitures under the bylaws. Any account so forfeited shall not be included in the retirement benefits that become 100 percent vested under paragraph (b).

Sec. 12.

new text begin REPEALER. new text end

new text begin Minnesota Statutes 2024, section 356.635, subdivision 9, new text end new text begin is repealed. new text end

Sec. 13.

new text begin EFFECTIVE DATE. new text end

new text begin Sections 1 to 12 are effective the day following final enactment. new text end

Presented to the governor May 20, 2025

Signed by the governor May 23, 2025, 11:36 a.m.