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

                            CHAPTER 528-H.F.No. 2405 
                  An act relating to retirement; making various 
                  administrative and minor substantive changes in the 
                  laws governing the Minnesota state retirement system, 
                  the public employees retirement association, the 
                  teachers retirement association, and police and 
                  firefighters retirement; amending Minnesota Statutes 
                  1992, sections 352.01, subdivisions 11 and 13; 
                  352.029, subdivision 1, and by adding subdivisions; 
                  352.04, subdivisions 2 and 3; 352.119, by adding a 
                  subdivision; 352B.265; 352D.04, subdivision 2; 353.03, 
                  subdivisions 1 and 3a; 354.05, subdivisions 2, 21, 22, 
                  35, and by adding subdivisions; 354.06, subdivisions 
                  2a and 4; 354.071, subdivision 5; 354.091; 354.10, 
                  subdivisions 1 and 2; 354.41, subdivision 4, and by 
                  adding subdivisions; 354.42, subdivisions 3 and 5; 
                  354.44, subdivisions 1a, 4, and 5a; 354.47; 354.48, 
                  subdivision 2; 354.49, subdivision 1; 354.52, 
                  subdivisions 2, 2a, 4, and by adding subdivisions; 
                  354.66, subdivisions 2, 3, and by adding a 
                  subdivision; and 356.30, subdivision 1; Minnesota 
                  Statutes 1993 Supplement, sections 3A.02, subdivision 
                  5; 352.22, subdivision 2; 352.93, subdivision 2a; 
                  352.96, subdivision 4; 352B.08, subdivision 2a; 
                  353.01, subdivisions 10, 12a, 16, and 28; 353.017, 
                  subdivisions 1, 3, and by adding subdivisions; 353.27, 
                  subdivision 7; 353.37, subdivisions 1, 2, and 4; 
                  353.65, subdivision 3a; 353A.08, subdivision 3; 
                  354.05, subdivision 8; and 354.46, subdivisions 1 and 
                  5; proposing coding for new law in Minnesota Statutes, 
                  chapters 354; 356; and 423A; repealing Minnesota 
                  Statutes 1992, sections 352.15, subdivision 2; 
                  352D.09, subdivision 6; 354.05, subdivisions 15 and 
                  29; 354.43, subdivision 3; 354.57; 354.65; and 356.18. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
                                   ARTICLE 1
                       MINNESOTA STATE RETIREMENT SYSTEM
           Section 1.  Minnesota Statutes 1993 Supplement, section 
        3A.02, subdivision 5, is amended to read: 
           Subd. 5.  [OPTIONAL ANNUITIES.] (a) The board of directors 
        shall establish an optional retirement annuity in the form of a 
        joint and survivor annuity and an optional retirement annuity in 
        the form of a period certain and life thereafter.  These 
        optional annuities are to be available only to legislators who 
        elect to receive retirement annuities under section 356.30 and 
        who do not meet the legislative length of service requirements 
        under subdivision 1, paragraph (a), clause (1).  Except as 
        provided in paragraph (b), these optional annuity forms must be 
        actuarially equivalent to the normal annuity computed under this 
        section, without the automatic survivor coverage under section 
        3A.04 plus the actuarial value of any surviving spouse benefit 
        otherwise potentially payable at the time of retirement under 
        section 3A.04, subdivision 1.  An individual selecting the 
        optional annuity under this subdivision waives any rights to 
        surviving spouse benefits under section 3A.04, subdivision 1. 
           (b) If a retired legislator selects the joint and survivor 
        annuity option, the retired legislator must receive a normal 
        single-life annuity if the designated optional annuity 
        beneficiary dies before the retired legislator and no reduction 
        may be made in the annuity to provide for restoration of the 
        normal single-life annuity in the event of the death of the 
        designated optional annuity beneficiary. 
           Sec. 2.  Minnesota Statutes 1992, section 352.01, 
        subdivision 11, is amended to read: 
           Subd. 11.  [ALLOWABLE SERVICE.] "Allowable service" means:  
           (1) Service by an employee for which on or before July 1, 
        1957, the employee was entitled to allowable service credit on 
        the records of the system by reason of employee contributions in 
        the form of salary deductions, payments in lieu of salary 
        deductions, or in any other manner authorized by Minnesota 
        Statutes 1953, chapter 352, as amended by Laws 1955, chapter 239.
           (2) Service by an employee for which on or before July 1, 
        1961, the employee chose to obtain credit for service by making 
        payments to the fund under Minnesota Statutes 1961, section 
        352.24. 
           (3) Except as provided in clauses (9) (8) and (10) (9), 
        service by an employee after July 1, 1957, for any calendar 
        month in which the employee is paid salary from which deductions 
        are made, deposited, and credited in the fund, including 
        deductions made, deposited, and credited as provided in section 
        352.041. 
           (4) Except as provided in clauses (9) (8) and (10) (9), 
        service by an employee after July 1, 1957, for any calendar 
        month for which payments in lieu of salary deductions are made, 
        deposited, and credited in the fund, as provided in section 
        352.27 and Minnesota Statutes 1957, section 352.021, subdivision 
        4. 
           For purposes of clauses (3) and (4), except as provided in 
        clauses (9) (8) and (10) (9), any salary paid for a fractional 
        part of any calendar month, including the month of separation 
        from state service, is deemed the compensation for the entire 
        calendar month. 
           (5) The period of absence from their duties by employees 
        who are temporarily disabled because of injuries incurred in the 
        performance of duties and for which disability the state is 
        liable under the workers' compensation law until the date 
        authorized by the director for the commencement of payments of a 
        total and permanent disability benefit from the retirement fund. 
           (6) The unused part of an employee's annual leave allowance 
        for which the employee is paid salary. 
           (7) Any Service covered by a refund repaid as provided in 
        section 352.23 or 352D.05, subdivision 4, except service 
        rendered as an employee of the adjutant general for which the 
        person has credit with the federal civil service retirement 
        system. 
           (8) Any (7) Service before July 1, 1978, by an employee of 
        the transit operating division of the metropolitan transit 
        commission or by an employee on an authorized leave of absence 
        from the transit operating division of the metropolitan transit 
        commission who is employed by the labor organization which is 
        the exclusive bargaining agent representing employees of the 
        transit operating division, which was credited by the 
        metropolitan transit commission-transit operating division 
        employees retirement fund or any of its predecessor plans or 
        funds as past, intermediate, future, continuous, or allowable 
        service as defined in the metropolitan transit 
        commission-transit operating division employees retirement fund 
        plan document in effect on December 31, 1977. 
           (9) (8) Service after July 1, 1983, by an employee who is 
        employed on a part-time basis for less than 50 percent of full 
        time, for which the employee is paid salary from which 
        deductions are made, deposited, and credited in the fund, 
        including deductions made, deposited, and credited as provided 
        in section 352.041 or for which payments in lieu of salary 
        deductions are made, deposited, and credited in the fund as 
        provided in section 352.27 shall be credited on a fractional 
        basis either by pay period, monthly, or annually based on the 
        relationship that the percentage of salary earned bears to a 
        full-time salary, with any salary paid for the fractional 
        service credited on the basis of the rate of salary applicable 
        for a full-time pay period, month, or a full-time year.  For 
        periods of part-time service that is duplicated service credit, 
        section 356.30, subdivision 1, clauses (i) and (j), govern. 
           The Allowable service determined and credited on a 
        fractional basis shall be used in calculating the amount of 
        benefits payable, but service as determined on a fractional 
        basis must not be used in determining the length of service 
        required for eligibility for benefits.  
           (10) (9) Any period of authorized leave of absence without 
        pay that does not exceed one year and for which the employee 
        obtained credit by payment to the fund in lieu of salary 
        deductions.  To obtain credit, the employee shall pay an amount 
        equal to the employee and employer contribution rate in section 
        352.04, subdivisions 2 and 3, multiplied by the employee's 
        hourly rate of salary on the date of return from leave of 
        absence and by the days and months of the leave of absence 
        without pay for which the employee wants allowable service 
        credit.  The employing department, at its option, may pay the 
        employer amount on behalf of its employees.  Payments made under 
        this clause shall must include interest at an annual rate of 8.5 
        percent compounded annually from the date of termination of the 
        leave of absence to the date payment is made unless payment is 
        completed within one year of the return from leave of absence. 
           Sec. 3.  Minnesota Statutes 1992, section 352.01, 
        subdivision 13, is amended to read: 
           Subd. 13.  [SALARY.] "Salary" means the periodical 
        compensation paid to any employee before deductions for deferred 
        compensation, supplemental retirement plans, or other voluntary 
        salary reduction programs.  It also means wages and includes net 
        income from fees.  Lump sum sick leave payments, severance 
        payments, and all lump sum annual leave payments and overtime 
        payments made at the time of separation from state service, 
        payments in lieu of any employer-paid group insurance coverage, 
        including the difference between single and family rates that 
        may be paid to an employee with single coverage, and payments 
        made as an employer-paid fringe benefit and workers' 
        compensation payments are not deemed to be salary.  Workers' 
        compensation payments are not considered salary. 
           Sec. 4.  Minnesota Statutes 1992, section 352.04, 
        subdivision 2, is amended to read: 
           Subd. 2.  [EMPLOYEE CONTRIBUTIONS.] The employee 
        contribution to the fund must be equal to 3.99 4.07 percent of 
        salary.  These contributions must be made by deduction from 
        salary as provided in subdivision 4. 
           Sec. 5.  Minnesota Statutes 1992, section 352.04, 
        subdivision 3, is amended to read: 
           Subd. 3.  [EMPLOYER CONTRIBUTIONS.] (a) The employer 
        contribution to the fund must be equal to 4.12 4.2 percent of 
        salary. 
           (b) By January 1 of each year, the board of directors shall 
        report to the legislative commission on pensions and retirement, 
        the chair of the committee on appropriations of the house of 
        representatives, and the chair of the committee on finance of 
        the senate on the amount raised by the employer and employee 
        contribution rates in effect and whether the total amount is 
        less than, the same as, or more than the actuarial requirement 
        determined under section 356.215. 
           (c) If the legislative commission on pensions and 
        retirement, based on the most recent valuation performed by its 
        actuary, determines that the total amount raised by the employer 
        and employee contributions under subdivision 2 and paragraph (b) 
        is less than the actuarial requirements determined under section 
        356.215, the employer and employee rates must be increased by 
        equal amounts as necessary to meet the actuarial requirements.  
        The employee rate may not exceed 4.15 percent of salary and the 
        employer rate may not exceed 4.29 percent of salary.  The 
        increases are effective on the next January 1 following the 
        determination by the commission.  The executive director of the 
        Minnesota state retirement system shall notify employing units 
        of any increases under this paragraph. 
           Sec. 6.  Minnesota Statutes 1992, section 352.119, is 
        amended by adding a subdivision to read: 
           Subd. 4.  [DETERMINING APPLICABLE LAW.] The annuity is 
        computed under the law in effect as of the last day for which 
        the employee receives pay, or if on medical leave, the day the 
        leave terminates.  However, if the employee has returned to 
        covered employment following a termination, the employee must 
        have earned at least six months of allowable service following 
        their return to qualify for improved benefits resulting from any 
        law change enacted subsequent to that termination. 
           Sec. 7.  Minnesota Statutes 1993 Supplement, section 
        352.22, subdivision 2, is amended to read: 
           Subd. 2.  [AMOUNT OF REFUND.] Except as provided in 
        subdivision 3, any the refund payable to a person who ceased to 
        be a state employee by reason of termination of state 
        service shall receive a refund is in an amount equal to employee 
        accumulated contributions plus interest at the rate of six 
        percent per year compounded annually.  Included with the refund 
        is any interest paid as part of repayment of a past refund, plus 
        interest thereon from the date of repayment.  Interest must be 
        computed to the first day of the month in which the refund is 
        processed and must be based on fiscal year or monthly balances, 
        whichever applies. 
           Sec. 8.  Minnesota Statutes 1993 Supplement, section 
        352.93, subdivision 2a, is amended to read: 
           Subd. 2a.  [EARLY RETIREMENT.] Any covered correctional 
        employee, or former employee if service ended after June 30, 
        1989, who becomes at least 50 years old and who has at least 
        three years of allowable service is entitled upon application to 
        a reduced retirement annuity equal to the normal annuity 
        calculated under subdivision 2, reduced so that the reduced 
        annuity is the actuarial equivalent of the annuity that would be 
        payable if the employee deferred receipt of the annuity from the 
        day the annuity begins to accrue to age 55. 
           Sec. 9.  Minnesota Statutes 1993 Supplement, section 
        352.96, subdivision 4, is amended to read: 
           Subd. 4.  [EXECUTIVE DIRECTOR TO ESTABLISH RULES.] The 
        executive director of the system with the advice and consent of 
        the board of directors shall establish rules and procedures to 
        carry out this section including allocation of administrative 
        costs against the assets accumulated under this section.  Funds 
        to pay these costs are appropriated from the fund or account in 
        which the assets accumulated under this section are placed.  The 
        rules established by the executive director must conform to 
        federal and state tax laws, regulations, and rulings, and are 
        not subject to the administrative procedure act.  Except for the 
        marketing rules, rules relating to the options provided under 
        subdivision 2, clauses (2) and (3), must be approved by the 
        state board of investment.  A state employee must not make 
        payments under a plan until the plan or applicable component of 
        the plan has been approved for tax-deferred status by the 
        Internal Revenue Service. 
           Sec. 10.  Minnesota Statutes 1993 Supplement, section 
        352B.08, subdivision 2a, is amended to read: 
           Subd. 2a.  [EARLY RETIREMENT.] Any member who has become at 
        least 50 years old, or former member if service ended after June 
        30, 1989, and who has at least three years of allowable service 
        is entitled upon application to a reduced retirement annuity 
        equal to the normal annuity calculated under subdivision 2, 
        reduced so that the reduced annuity is the actuarial equivalent 
        of the annuity that would be payable if the member deferred 
        receipt of the annuity from the day the annuity begins to accrue 
        to age 55. 
           Sec. 11.  Minnesota Statutes 1992, section 352B.265, is 
        amended to read: 
           352B.265 [PRE-1973 INCREASE.] 
           Total benefits payable to a retiree or surviving spouse 
        whose benefits were computed under the law in effect before June 
        1, 1973, are increased by six percent on July 1, 1982, and on 
        July 1 of each year thereafter until July 1, 1994.  Funds 
        sufficient to pay the increases provided by this section are 
        appropriated annually until June 30, 1995, to the executive 
        director from the state patrol retirement fund.  On June 30, 
        1995, amounts paid under this section must be added to and 
        considered a portion of the annuity otherwise payable to the 
        recipient.  Assets required to fund these benefits must be 
        transferred in accordance with section 352B.26. 
           Sec. 12.  Minnesota Statutes 1992, section 352D.04, 
        subdivision 2, is amended to read: 
           Subd. 2.  The moneys used to purchase shares under this 
        section shall be the employee and employer contributions 
        provided in this subdivision. 
           (a) The employee contribution shall be an amount equal to 
        four percent of salary the employee contribution specified in 
        section 352.04, subdivision 2.  
           (b) The employer contribution shall be an amount equal to 
        six percent of salary.  
           These contributions shall be made by deduction from salary 
        in the manner provided in section 352.04, subdivisions 4, 5, and 
        6.  
           Sec. 13.  [356.88] [PUBLIC PENSION ADMINISTRATION 
        LEGISLATION.] 
           Subdivision 1.  [DUE DATES.] (a) Proposed administrative 
        legislation recommended by or on behalf of the Minnesota state 
        retirement system, the public employees retirement association, 
        the teachers retirement association, the Minneapolis employees 
        retirement fund, or a first class city teachers retirement fund 
        association must be presented to the legislative commission on 
        pensions and retirement, the governmental operations and reform 
        committee of the senate, and the governmental operations and 
        gaming committee of the house of representatives on or before 
        October 1 of each year in order for the proposed administrative 
        legislation to be acted upon during the upcoming legislative 
        session.  The executive director or the deputy executive 
        director of the legislative commission on pensions and 
        retirement shall provide written comments on the proposed 
        provisions to the public pension plans by November 15 of each 
        year. 
           (b) Proposed administrative legislation recommended by or 
        on behalf of a public employee pension plan or system under 
        paragraph (a) must address provisions: 
           (1) authorizing allowable service credit for leaves of 
        absence and related circumstances; 
           (2) governing offsets or deductions from the amount of 
        disability benefits; 
           (3) authorizing the purchase of allowable service credit 
        for prior uncredited periods; 
           (4) governing subsequent employment earnings by reemployed 
        annuitants; and 
           (5) authorizing retroactive effect for retirement annuity 
        or benefit applications. 
           (c) Where possible and desirable, taking into account the 
        differences among the public pension plans in existing law and 
        the unique characteristics of the individual public pension fund 
        memberships, uniform provisions relating to paragraph (b) for 
        all applicable public pension plans must be presented for 
        consideration during the legislative session.  Supporting 
        documentation setting forth the policy rationale for each set of 
        uniform provisions must accompany the proposed administrative 
        legislation. 
           Subd. 2.  [SALARY STUDY ADVISORY COMMITTEE.] In an effort 
        to treat public employees in a fair and equitable manner and to 
        protect the financial integrity of the public pension plans, the 
        legislative commission on pensions and retirement shall 
        establish an advisory committee to study the definitions of 
        salary in chapters 353, 354, and 354A to determine the high-five 
        average consecutive years of salary component for the formula 
        used to calculate retirement annuities and disability benefits. 
           The advisory committee must be composed of at least three 
        executive directors and executive secretaries of the seven 
        public pension plans, and the chair, vice-chair, and executive 
        director of the pension commission. 
           The advisory committee shall report its findings and 
        recommendations to the pension commission by February 15, 1995. 
           Sec. 14.  [FISCAL YEAR 1995 ACTUARIAL VALUATIONS.] 
           For the fiscal year 1995 actuarial valuation period, the 
        legislative commission on pensions and retirement may authorize 
        an alternative set of salary increase assumptions or other 
        assumptions defined under Minnesota Statutes, section 356.215.  
        The actuary retained by the legislative commission on pensions 
        and retirement shall make recommendations for change based on an 
        experience study completed in fiscal year 1994 or 1995. 
           Sec. 15.  [REPEALER.] 
           Minnesota Statutes 1992, sections 352.15, subdivision 2; 
        and 352D.09, subdivision 6, are repealed.  
           Sec. 16.  [EFFECTIVE DATE.] 
           Sections 1, 2, and 5 to 16 are effective the day following 
        final enactment.  Sections 3 and 4 are effective January 1, 1995.
                                   ARTICLE 2
                    PUBLIC EMPLOYEES RETIREMENT ASSOCIATION
           Section 1.  Minnesota Statutes 1993 Supplement, section 
        353.01, subdivision 10, is amended to read: 
           Subd. 10.  [SALARY.] (a) "Salary" means the periodical:  
           (1) periodic compensation of a public employee, before 
        deductions for deferred compensation, supplemental retirement 
        plans, or other voluntary salary reduction programs, and also 
        means "wages" and includes net income from fees; and 
           (2) for a public employee who has prior service covered by 
        a local police or firefighters relief association that has 
        consolidated with the public employees retirement association 
        and who has elected coverage under the public employees police 
        and fire fund benefit plan under section 353A.08 following the 
        consolidation, "salary" means the rate of salary upon which 
        member contributions to the special fund of the relief 
        association were made prior to the effective date of the 
        consolidation as specified by law and by bylaw provisions 
        governing the relief association on the date of the initiation 
        of the consolidation procedure and the actual periodic 
        compensation of the public employee after the effective date of 
        consolidation. 
           (b) Salary does not mean: 
           (1) fees paid to district court reporters, unused annual or 
        sick leave payments, in lump-sum or periodic payments, severance 
        payments, reimbursement of expenses, lump-sum settlements not 
        attached to a specific earnings period, or workers' compensation 
        payments.; 
           Salary does not mean (2) employer-paid amounts used by an 
        employee toward the cost of insurance coverage, employer-paid 
        fringe benefits, flexible spending accounts, cafeteria plans, 
        health care expense accounts, day care expenses, or any payments 
        in lieu of any employer-paid group insurance coverage, including 
        the difference between single and family rates that may be paid 
        to a member with single coverage. and certain amounts determined 
        by the executive director to be ineligible; 
           (3) the amount equal to that which the employing 
        governmental subdivision would otherwise pay toward single or 
        family insurance coverage for a covered employee when, through a 
        contract or agreement with some but not all employees, the 
        employer: 
           (i) discontinues, or for new hires does not provide, 
        payment toward the cost of the employee's selected insurance 
        coverages under a group plan offered by the employer; 
           (ii) makes the employee solely responsible for all 
        contributions toward the cost of the employee's selected 
        insurance coverages under a group plan offered by the employer, 
        including any amount the employer makes toward other employees' 
        selected insurance coverages under a group plan offered by the 
        employer; and 
           (iii) provides increased salary rates for employees who do 
        not have any employer-paid group insurance coverages; and 
           (c) (4) except as provided in sections section 353.86 or 
        353.87, compensation of any kind paid to volunteer ambulance 
        service personnel or volunteer firefighters, as defined in 
        subdivisions 35 and 36, is not salary.  
           (d) For a public employee who has prior service covered by 
        a local police or firefighters relief association that has 
        consolidated with the public employees retirement association 
        and who has elected coverage under the public employees police 
        and fire fund benefit plan under section 353A.08 following the 
        consolidation, "salary" means the rate of salary upon which 
        member contributions to the special fund of the relief 
        association were made prior to the effective date of the 
        consolidation as specified by law and by bylaw provisions 
        governing the relief association on the date of the initiation 
        of the consolidation procedure and the actual periodical 
        compensation of the public employee after the effective date of 
        the consolidation. 
           Sec. 2.  Minnesota Statutes 1993 Supplement, section 
        353.01, subdivision 12a, is amended to read: 
           Subd. 12a.  [TEMPORARY POSITION.] (1) "Temporary position" 
        means an employment position predetermined by the employer at 
        the time of hiring to be a period of six months or less in which 
        a person is a public employee under subdivision 2, but not or an 
        employment position occupied by a person hired by the employer 
        for a predetermined period of six months or less. 
           (2) "Temporary position" does not mean an employment 
        position for an unlimited period in which a person serves a 
        probationary period or works an irregular schedule. 
           Sec. 3.  Minnesota Statutes 1993 Supplement, section 
        353.01, subdivision 16, is amended to read: 
           Subd. 16.  [ALLOWABLE SERVICE.] (a) "Allowable service" 
        means service during years of actual membership in the course of 
        which employee contributions were made, periods covered by 
        payments in lieu of salary deductions under section 353.35, and 
        service in years during which the public employee was not a 
        member but for which the member later elected, while a member, 
        to obtain credit by making payments to the fund as permitted by 
        any law then in effect. 
           (b) "Allowable service" also means a period of authorized 
        leave of absence with pay from which deductions for employee 
        contributions are made, deposited, and credited to the fund. 
           (c) "Allowable service" also means a period of authorized 
        leave of absence without pay that does not exceed one year, and 
        during or for which a member obtained credit by payments to the 
        fund made in place of salary deductions, provided that the 
        payments are made in an amount or amounts based on the member's 
        average salary on which deductions were paid for the last six 
        months of public service, or for that portion of the last six 
        months while the member was in public service, to apply to the 
        period in either case immediately preceding commencement of the 
        leave of absence.  If the employee elects to pay employee 
        contributions for the period of any leave of absence without 
        pay, or for any portion of the leave, the employee shall also, 
        as a condition to the exercise of the election, pay to the fund 
        an amount equivalent to both the required employer and 
        additional employer contributions for the employee.  The payment 
        must be made within one year from the expiration of the leave of 
        absence or within 20 days after termination of public service 
        under subdivision 11a.  The employer by appropriate action of 
        its governing body, made a part of its official records, before 
        the date of the first payment of the employee contribution, may 
        certify to the association in writing its commitment to pay the 
        employer and additional employer contributions from the proceeds 
        of a tax levy made under section 353.28.  Payments under this 
        paragraph must include interest at an annual rate of 8.5 percent 
        compounded annually from the date of the termination of the 
        leave of absence to the date payment is made.  An employee shall 
        return to public service for and receive a minimum of 90 
        calendar days three months of allowable service to be eligible 
        to pay employee and employer contributions for a subsequent 
        authorized leave of absence without pay. 
           (d) "Allowable service" also means a periodic, repetitive 
        leave that is offered to all employees of a governmental 
        subdivision.  The leave program may not exceed 208 hours per 
        annual normal work cycle as certified to the association by the 
        employer.  A participating member obtains service credit by 
        making employee contributions in an amount or amounts based on 
        the member's average salary that would have been paid if the 
        leave had not been taken.  The employer shall pay the employer 
        and additional employer contributions on behalf of the 
        participating member.  The employee and the employer are 
        responsible to pay interest on their respective shares at the 
        rate of six 8.5 percent a year, compounded annually, from the 
        end of the normal cycle until full payment is made.  An employer 
        shall also make the employer and additional employer 
        contributions, plus six 8.5 percent interest, compounded 
        annually, on behalf of an employee who makes employee 
        contributions but terminates public service.  The employee 
        contributions must be made within one year after the end of the 
        annual normal working cycle or within 20 days after termination 
        of public service, whichever is sooner.  The association shall 
        prescribe the manner and forms to be used by a governmental 
        subdivision in administering a periodic, repetitive leave. 
           (e) "Allowable service" also means a period during which a 
        member is on an authorized sick leave of absence, without pay, 
        limited to one year.  An employee who has received one year of 
        allowable service shall return to public service for and receive 
        a minimum of 90 calendar days three months of allowable service 
        to receive allowable service for a subsequent authorized sick 
        leave of absence. 
           (f) "Allowable service" also means an authorized temporary 
        layoff under subdivision 12. The association shall grant a 
        maximum of, limited to three months allowable service per 
        authorized temporary layoff in one calendar year.  An 
        employee who has received the maximum service allowed for an 
        authorized temporary layoff shall return to public service for 
        and receive a minimum of 90 calendar days three months of 
        allowable service to receive allowable service for a subsequent 
        authorized temporary layoff. 
           (g) Notwithstanding any law to the contrary, "allowable 
        service" also means a parental leave.  The association shall 
        grant a maximum of two months service credit for a parental 
        leave, within six months after the birth or adoption, upon 
        documentation from the member's governmental subdivision or 
        presentation of a birth certificate or other evidence of birth 
        or adoption to the association. 
           (h) "Allowable service" also means a period during which a 
        member is on an authorized leave of absence to enter military 
        service, provided that the member returns to public service upon 
        discharge from military service under section 192.262 and pays 
        into the fund employee contributions based upon the employee's 
        salary at the date of return from military service.  Payment 
        must be made within five years of the date of discharge from the 
        military service.  The amount of these contributions must be in 
        accord with the contribution rates and salary limitations, if 
        any, in effect during the leave, plus interest at an annual rate 
        of 8.5 percent compounded annually from the date of return to 
        public service to the date payment is made.  The matching 
        employer contribution and additional employer contribution under 
        section 353.27, subdivisions 3 and 3a, must be paid by the 
        governmental subdivision employing the member upon return to 
        public service if the member makes the employee contributions.  
        The governmental subdivision involved may appropriate money for 
        those payments.  A member may not receive credit for a voluntary 
        extension of military service at the instance of the member 
        beyond the initial period of enlistment, induction, or call to 
        active duty. 
           (i) For calculating benefits under sections 353.30, 353.31, 
        353.32, and 353.33 for state officers and employees displaced by 
        the community corrections act, chapter 401, and transferred into 
        county service under section 401.04, "allowable service" means 
        combined years of allowable service as defined in paragraphs (a) 
        to (h) (i) and section 352.01, subdivision 11.  
           (j) For a public employee who has prior service covered by 
        a local police or firefighters relief association that has 
        consolidated with the public employees retirement association, 
        and who has elected the type of benefit coverage provided by the 
        public employees police and fire fund under section 353A.08 
        following the consolidation, "applicable service" is a period of 
        service credited by the local police or firefighters relief 
        association as of the effective date of the consolidation based 
        on law and on bylaw provisions governing the relief association 
        on the date of the initiation of the consolidation procedure. 
           Sec. 4.  Minnesota Statutes 1993 Supplement, section 
        353.01, subdivision 28, is amended to read: 
           Subd. 28.  [RETIREMENT.] (a) "Retirement" means the 
        commencement of payment of an annuity based on a date designated 
        by the board of trustees.  This date determines the rights under 
        this chapter which occur either before or after retirement.  A 
        right to retirement is subject to termination of public service 
        under subdivision 11a and or termination of membership under 
        subdivision 11b, the earlier of which will determine the date 
        membership and coverage cease.  A right to retirement must not 
        accrue without a complete and continuous separation for 30 days 
        from employment as a public employee under subdivision 2. 
           A former member of the basic or police and fire fund who 
        becomes a coordinated member upon returning to eligible, 
        nontemporary public service, terminates employment before 
        obtaining six months' allowable service under subdivision 16, 
        paragraph (a), in the coordinated fund, and is eligible to 
        receive an annuity the first day of the month after the most 
        recent termination date shall not accrue a right to a retirement 
        annuity under the coordinated fund.  An annuity otherwise 
        payable to the former member must be based on the laws in effect 
        on the date of termination of the most recent service under the 
        basic or police and fire fund and shall be retroactive to the 
        first day of the month following that termination date or one 
        year preceding the filing of an application for retirement 
        annuity as provided by section 353.29, subdivision 7, whichever 
        is later.  The annuity payment must be suspended or reduced 
        under the provisions of section 353.37, if earned compensation 
        for the reemployment equals or exceeds the amounts indicated 
        under that section.  The association will refund the employee 
        deductions made to the coordinated fund, with interest under 
        section 353.34, subdivision 2, return the accompanying employer 
        contributions, and remove the allowable service credits covering 
        the deductions refunded. 
           (b) Notwithstanding the 30-day separation requirement, a 
        member of the defined benefit plan under this chapter, who also 
        participates in the public employees defined contribution plan 
        under chapter 353D for other public service, may be paid, if 
        eligible, a retirement annuity from the defined benefit plan 
        while participating in the defined contribution plan. 
           Sec. 5.  Minnesota Statutes 1993 Supplement, section 
        353.017, is amended by adding a subdivision to read: 
           Subd. 6.  [REEMPLOYMENT OF ANNUITANT.] The annuity of a 
        person otherwise eligible for an annuity under this chapter is 
        subject to the provisions of section 353.37. 
           Sec. 6.  Minnesota Statutes 1992, section 353.03, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [MANAGEMENT; COMPOSITION; ELECTION.] The 
        management of the public employees retirement fund is vested 
        in a an 11-member board of trustees consisting of the state 
        auditor and nine ten members and the state auditor who may 
        designate a deputy auditor with expertise in pension matters as 
        the auditor's representative on the board.  The governor shall 
        appoint six five trustees to four-year terms, one of whom shall 
        be designated to represent school boards, one to represent 
        cities, one to represent counties, one who is a member of the 
        police and fire fund, one who is a retired annuitant, and one 
        who is a public member knowledgeable in pension matters.  The 
        membership of the association, including recipients of 
        retirement annuities and disability and survivor benefits, shall 
        elect three five trustees, one of whom must be a member of the 
        police and fire fund and one of whom must be a former member who 
        met the definition of public employee under section 353.01, 
        subdivisions 2 and 2a, for at least five years prior to 
        terminating membership or a member who receives a disability 
        benefit, for terms of four years.  Except as provided in this 
        subdivision, trustees elected by the membership of the 
        association must be public employees and members of the 
        association.  For seven days beginning October 1 of each year 
        preceding a year in which an election is held, the association 
        shall accept at its office filings in person or by mail of 
        candidates for the board of trustees.  A candidate shall submit 
        at the time of filing a nominating petition signed by 25 or more 
        members of the fund.  No name may be withdrawn from nomination 
        by the nominee after October 15.  At the request of a candidate 
        for an elected position on the board of trustees, the board 
        shall mail a statement of up to 300 words prepared by the 
        candidate to all persons eligible to vote in the election of the 
        candidate.  The board may adopt policies to govern form and 
        length of these statements, timing of mailings, and deadlines 
        for submitting materials to be mailed.  These policies must be 
        approved by the secretary of state.  The secretary of state 
        shall resolve disputes between the board and a candidate 
        concerning application of these policies to a particular 
        statement.  A candidate who: 
           (1) receives contributions or makes expenditures in excess 
        of $100; or 
           (2) has given implicit or explicit consent for any other 
        person to receive contributions or make expenditures in excess 
        of $100 for the purpose of bringing about the candidate's 
        election, shall file a report with the ethical practices board 
        disclosing the source and amount of all contributions to the 
        candidate's campaign.  The ethical practices board shall 
        prescribe forms governing these disclosures.  Expenditures and 
        contributions have the meaning defined in section 10A.01.  These 
        terms do not include the mailing made by the association board 
        on behalf of the candidate.  A candidate shall file a report 
        within 30 days from the day that the results of the election are 
        announced.  The ethical practices board shall maintain these 
        reports and make them available for public inspection in the 
        same manner as the board maintains and makes available other 
        reports filed with it.  By January 10 of each year in which 
        elections are to be held the board shall distribute by mail to 
        the members ballots listing the candidates.  No member may vote 
        for more than one candidate for each board position to be 
        filled.  A ballot indicating a vote for more than one person for 
        any position is void.  No special marking may be used on the 
        ballot to indicate incumbents.  The last day for mailing ballots 
        to the fund is January 31.  Terms expire on January 31 of the 
        fourth year, and positions are vacant until newly elected 
        members are qualified.  The ballot envelopes must be so designed 
        and the ballots counted in a manner that ensures that each vote 
        is secret.  
           The secretary of state shall supervise the elections.  The 
        board of trustees and the executive director shall undertake 
        their activities consistent with chapter 356A. 
           Sec. 7.  Minnesota Statutes 1992, section 353.03, 
        subdivision 3a, is amended to read: 
           Subd. 3a.  [EXECUTIVE DIRECTOR.] (a)  [APPOINTMENT.] The 
        board shall appoint, with the advice and consent of the senate, 
        an executive director on the basis of education, experience in 
        the retirement field, and leadership ability.  The executive 
        director shall have had at least five years' experience in an 
        executive level management position, which has included 
        responsibility for pensions, deferred compensation, or employee 
        benefits.  The executive director serves at the pleasure of the 
        board.  The salary of the executive director is as provided by 
        section 15A.081, subdivision 1. 
           (b)  [DUTIES.] The management of the association is vested 
        in the executive director who shall be the executive and 
        administrative head of the association.  The executive director 
        shall act as adviser to the board on all matters pertaining to 
        the association and shall also act as the secretary of the 
        board.  The executive director shall: 
           (1) attend all meetings of the board; 
           (2) prepare and recommend to the board appropriate rules to 
        carry out the provisions of this chapter; 
           (3) establish and maintain an adequate system of records 
        and accounts following recognized accounting principles and 
        controls; 
           (4) designate an assistant director, with the approval of 
        the board, up to two persons who shall serve in the unclassified 
        service and whose salary is set in accordance with section 
        43A.18, subdivision 3, appoint a confidential secretary in the 
        unclassified service, and appoint employees to carry out this 
        chapter, who are subject to chapters 43A and 179A in the same 
        manner as are executive branch employees; 
           (5) organize the work of the association as the director 
        deems necessary to fulfill the functions of the association, and 
        define the duties of its employees and delegate to them any 
        powers or duties, subject to the control of, and under such 
        conditions as, the executive director may prescribe; 
           (6) with the approval of the board, contract for the 
        services of an approved actuary, professional management 
        services, and any other consulting services as necessary to 
        fulfill the purposes of this chapter.  All contracts are subject 
        to chapter 16B.  The commissioner of administration shall not 
        approve, and the association shall not enter into, any contract 
        to provide lobbying services or legislative advocacy of any 
        kind.  Any approved actuary retained by the executive director 
        shall function as the actuarial advisor of the board and the 
        executive director and may perform actuarial valuations and 
        experience studies to supplement those performed by the actuary 
        retained by the legislative commission on pensions and 
        retirement.  Any supplemental actuarial valuations or experience 
        studies shall be filed with the executive director of the 
        legislative commission on pensions and retirement.  Copies of 
        professional management survey reports shall be transmitted to 
        the secretary of the senate, the chief clerk of the house of 
        representatives, and the legislative reference library as 
        provided by section 3.195, to the executive director of the 
        commission and to the legislative auditor at the same time as 
        reports are furnished to the board.  Only management firms 
        experienced in conducting management surveys of federal, state, 
        or local public retirement systems shall be qualified to 
        contract with the director hereunder; 
           (7) with the approval of the board provide in-service 
        training for the employees of the association; 
           (8) make refunds of accumulated contributions to former 
        members and to the designated beneficiary, surviving spouse, 
        legal representative or next of kin of deceased members or 
        deceased former members, as provided in this chapter; 
           (9) determine the amount of the annuities and disability 
        benefits of members covered by the association and authorize 
        payment of the annuities and benefits beginning as of the dates 
        on which the annuities and benefits begin to accrue, in 
        accordance with the provisions of this chapter; 
           (10) pay annuities, refunds, survivor benefits, salaries, 
        and necessary operating expenses of the association; 
           (11) prepare and submit to the board and the legislature an 
        annual financial report covering the operation of the 
        association, as required by section 356.20; 
           (12) prepare and submit biennial and annual budgets to the 
        board for its approval and submit the approved budgets to the 
        department of finance for approval by the commissioner; and 
           (13) reduce all or part of the accrued interest payable 
        under section 353.27, subdivisions 12, 12a, and 12b or 353.28, 
        subdivision 5, upon receipt of proof by the association of an 
        unreasonable processing delay or other extenuating circumstances 
        of the employing unit.  The executive director shall prescribe 
        and submit for approval by the board the conditions under which 
        such interest may be reduced; and 
           (14) with the approval of the board, perform such other 
        duties as may be required for the administration of the 
        association and the other provisions of this chapter and for the 
        transaction of its business.  
           Sec. 8.  Minnesota Statutes 1993 Supplement, section 
        353.27, subdivision 7, is amended to read: 
           Subd. 7.  [ADJUSTMENT FOR ERRONEOUS RECEIPTS OR 
        DISBURSEMENTS.] (a)  [DEDUCTIONS TAKEN IN ERROR.] Except as 
        provided in paragraph (b), erroneous employee deductions and 
        erroneous employer contributions and additional employer 
        contributions for a person, who otherwise does not qualify for 
        membership under this chapter, are considered: 
           (1) valid if the initial erroneous deduction began before 
        January 1, 1990.  Upon determination of the error by the 
        association, the person may:  
           (i) continue membership in the association while employed 
        in the same position for which erroneous deductions were taken;, 
        or 
           (ii) file a written election to terminate membership and 
        apply for a refund or defer an annuity under section 353.34; or 
           (2) invalid, if the initial erroneous employee deduction 
        began on or after January 1, 1990.  Upon determination of the 
        error, the association shall require the employer to discontinue 
        erroneous employee deductions and erroneous employer 
        contributions and additional employer contributions.  Upon 
        discontinuance, the association shall refund all erroneous 
        employee deductions to the person, with interest, under section 
        353.34, subdivision 2, and all erroneous employer contributions 
        and additional employer contributions to the employer.  No 
        person may claim a right to continued or past membership in the 
        association based on erroneous deductions which began on or 
        after January 1, 1990;. 
           (b) Erroneous deductions taken from the salary of a person 
        who did not qualify for membership in the association by virtue 
        of concurrent employment before July 1, 1978, which required 
        contributions to another retirement fund or relief association 
        established for the benefit of officers and employees of a 
        governmental subdivision, are invalid.  Upon discovery of the 
        error, the association shall remove all service and refund all 
        erroneous employee deductions to the person, with interest under 
        section 353.34, subdivision 2, and all erroneous employer 
        contributions to the employer.  This paragraph has both 
        retroactive and prospective application.  
           (3) a refund of (c) Employer contributions and employee 
        deductions taken in error from sick leave, vacation, workers' 
        compensation, and severance pay amounts which are not salary 
        under section 353.01, subdivision 10, are invalid upon discovery 
        by the association and may be made refunded at any time. 
           (b) [ERRONEOUS DISBURSEMENT.] (d) In the event a salary 
        warrant or check from which a deduction for the retirement fund 
        was taken has been canceled or the amount of the warrant or 
        check returned to the funds of the department making the 
        payment, a refund of the sum deducted, or a portion of it that 
        is required to adjust the deductions, must be made to the 
        department or institution. 
           Sec. 9.  Minnesota Statutes 1993 Supplement, section 
        353.37, subdivision 1, is amended to read: 
           Subdivision 1.  [SALARY MAXIMUMS.] The annuity of a person 
        otherwise eligible for an annuity under this chapter must be 
        suspended under subdivision 2 or reduced under subdivision 3, 
        whichever results in the higher annual annuity amount, if the 
        person reenters public service as a nonelective employee of a 
        governmental subdivision in a position covered by this 
        chapter or returns to work as an employee of a labor 
        organization that represents public employees who are 
        association members under this chapter and salary for the 
        reemployment service exceeds the annual maximum earnings 
        allowable for that age for the continued receipt of full benefit 
        amounts monthly under the federal Old Age, Survivors and 
        Disability Insurance Program as set by the secretary of health 
        and human services under United States Code, title 42, section 
        403, in any calendar year.  If the person has not yet reached 
        the minimum age for the receipt of social security benefits, the 
        maximum salary for the person is equal to the annual maximum 
        earnings allowable for the minimum age for the receipt of social 
        security benefits.  
           Sec. 10.  Minnesota Statutes 1993 Supplement, section 
        353.37, subdivision 2, is amended to read: 
           Subd. 2.  [SUSPENSION OF ANNUITY.] The association shall 
        suspend the annuity on the first of the month after the month in 
        which the salary of the reemployed annuitant exceeds the 
        maximums set in subdivision 1, based only on those months in 
        which the annuitant is actually employed in nonelective public 
        service in a position covered under this chapter or employment 
        with a labor organization that represents public employees who 
        are association members under this chapter.  An annuitant who is 
        elected to public office after retirement may hold office and 
        receive an annuity otherwise payable from the association. 
           Sec. 11.  Minnesota Statutes 1993 Supplement, section 
        353.37, subdivision 4, is amended to read: 
           Subd. 4.  [RESUMPTION OF ANNUITY.] The association shall 
        resume paying a full annuity to the reemployed annuitant at the 
        start of each calendar year until the salary exceeds the 
        maximums under subdivision 1, or on the first of the month 
        following termination of public service or termination of 
        membership, whichever is sooner employment which resulted in the 
        suspension of the annuity.  The executive director may adopt 
        policies regarding the suspension and reduction of annuities 
        under this section.  
           Sec. 12.  Minnesota Statutes 1993 Supplement, section 
        353.65, subdivision 3a, is amended to read: 
           Subd. 3a.  [CHANGE IN EMPLOYEE AND EMPLOYER CONTRIBUTIONS 
        IN CERTAIN INSTANCES.] (a) If, for three after four consecutive 
        fiscal years beginning July 1, 1994, the regular actuarial 
        valuation of the public employees police and fire fund under 
        section 356.215 indicates that the fund has no unfunded 
        actuarial accrued liability and that there is a sufficiency in 
        excess of 0.5 percent of covered payroll when the total 
        actuarial funding requirements of the fund are compared to the 
        total support, the employee and employer contribution rates must 
        be decreased as determined under paragraph (c) to a level such 
        that the sufficiency equals 0.5 percent of covered payroll based 
        on the most recent actuarial valuation. 
           (b) If, for three after four consecutive fiscal years 
        beginning July 1, 1994, the regular actuarial valuation of the 
        public employees police and fire fund under section 356.215 
        indicates that the fund has an unfunded actuarial accrued 
        liability and that there is a deficiency in excess of 0.5 
        percent of covered payroll when the total actuarial funding 
        requirements of the fund are compared to the total support, the 
        employee and employer contribution rates must be increased as 
        determined under paragraph (c) so that no deficiency exists 
        based on the most recent actuarial valuation. 
           (c) The increase or decrease in employee and employer 
        contribution rates required under paragraphs (a) and (b) must 
        maintain the current ratio in employer and employee contribution 
        rates of 40 percent employee contribution and 60 percent 
        employer contribution. 
           (d) The contribution rate increase or decrease must be 
        determined by the executive director of the public employees 
        retirement association. 
           (e) The contribution rate increase or decrease is effective 
        on the first full payroll period beginning after June 30 next 
        following the third receipt by the association of the fourth 
        consecutive annual actuarial valuation disclosing the deficiency 
        or sufficiency specified in paragraph (a) or (b). 
           (f) A contribution rate increase or decrease under 
        paragraph (a) or (b) must not occur prior to receipt by the 
        association of the 1997 regular actuarial valuation of the 
        police and fire fund under section 356.215.  A contribution rate 
        increase or decrease under paragraph (a) or (b) must not occur 
        within four years of a prior increase or decrease under 
        paragraph (a) or (b).  
           Sec. 13.  Minnesota Statutes 1993 Supplement, section 
        353A.08, subdivision 3, is amended to read: 
           Subd. 3.  [ELECTION OF COVERAGE BY ACTIVE MEMBERS.] A 
        person who is employed as a police officer or as a firefighter 
        other than a volunteer firefighter, whichever applies, by the 
        municipality and is an active member of the a police or fire 
        relief association, other than a volunteer firefighter, has the 
        option to elect benefit coverage under the relevant provisions 
        of the public employees police and fire fund benefit plan or to 
        retain benefit coverage provided by the relief association 
        benefit plan in effect on the effective date of consolidation.  
        The relevant provisions of the public employee police and fire 
        fund benefit plan for the person electing that benefit coverage 
        are the relevant provisions of the public employee police and 
        fire fund benefit plan applicable to retirement annuities, 
        disability benefits, and survivor benefits, including 
        participation in the Minnesota postretirement investment fund, 
        but excluding any provisions governing the purchase of credit 
        for prior service or making payments in lieu of member 
        contribution deductions applicable to any period which occurred 
        before the effective date of consolidation. 
           An active member is eligible to make an election at one of 
        the following times:  
           (a) within six months of the effective date of 
        consolidation; 
           (b) between the date on which the active member attains the 
        age of 49 years and six months and the date on which the active 
        member attains the age of 50 years; or 
           (c) on the date on which the active member terminates 
        active employment for purposes of receiving a service pension or 
        disability benefits, or within 90 days of the date the member 
        terminates active employment and defers receipt of a service 
        pension, whichever applies. 
           Sec. 14.  Minnesota Statutes 1992, section 356.30, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ELIGIBILITY; COMPUTATION OF ANNUITY.] (1) 
        Notwithstanding any provisions to the contrary of the laws 
        governing the funds enumerated in subdivision 3, a person who 
        has met the qualifications of clause (2) may elect to receive a 
        retirement annuity from each fund in which the person has at 
        least six months allowable service, based on the allowable 
        service in each fund, subject to the provisions of clause (3).  
           (2) A person may receive upon retirement a retirement 
        annuity from each fund in which the person has at least six 
        months allowable service, and augmentation of a deferred annuity 
        calculated under the laws governing each public pension plan or 
        fund named in subdivision 3, from the date the person terminated 
        all public service if: 
           (a) the person has allowable service totaling an amount 
        that allows the person to receive an annuity in any two or more 
        of the enumerated funds; and 
           (b) the person has at least six months of allowable service 
        with the last such fund earned during the last period of 
        employment; and 
           (c) the person has not begun to receive an annuity from any 
        enumerated fund or the person has made application for benefits 
        from all funds the effective dates of the retirement annuity 
        with each fund under which the person chooses to receive an 
        annuity are within a six-month one-year period.  
           (3) The retirement annuity from each fund must be based 
        upon the allowable service in each fund, except that:  
           (a) The laws governing annuities must be the law in effect 
        on the date of final termination from the last period of public 
        service under a covered fund with which the person earned a 
        minimum of one-half year of allowable service credit during that 
        employment.  
           (b) The "average salary" on which the annuity from each 
        covered fund in which the employee has credit in a formula plan 
        shall be based on the employee's highest five successive years 
        of covered salary during the entire service in covered funds.  
           (c) The formula percentages to be used by each fund must be 
        those percentages prescribed by each fund's formula as continued 
        for the respective years of allowable service from one fund to 
        the next, recognizing all previous allowable service with the 
        other covered funds.  
           (d) Allowable service in all the funds must be combined in 
        determining eligibility for and the application of each fund's 
        provisions in respect to actuarial reduction in the benefit 
        annuity amount for retirement prior to normal retirement.  
           (e) The benefit annuity amount payable for any allowable 
        service under a nonformula plan of a covered fund must not be 
        affected but such service and covered salary must be used in the 
        above calculation.  
           (f) This section shall not apply to any person whose final 
        termination from the last public service under a covered fund is 
        prior to May 1, 1975.  
           (g) For the purpose of computing benefits annuities under 
        this section the formula percentages used by any covered fund, 
        except the public employees police and fire fund, must not 
        exceed 2-1/2 percent per year of service for any year of service 
        or fraction thereof.  The formula percentage used by the public 
        employees police and fire fund must not exceed 2.65 percent per 
        year of service for any year of service or fraction thereof.  
           (h) Any period of time for which a person has credit in 
        more than one of the covered funds must be used only once for 
        the purpose of determining total allowable service.  
           (i) If the period of duplicated service credit is more than 
        six months, or the person has credit for more than six months 
        with each of the funds, each fund shall apply its formula to a 
        prorated service credit for the period of duplicated service 
        based on a fraction of the salary on which deductions were paid 
        to that fund for the period divided by the total salary on which 
        deductions were paid to all funds for the period.  
           (j) If the period of duplicated service credit is less than 
        six months, or when added to other service credit with that fund 
        is less than six months, the service credit must be ignored and 
        a refund of contributions made to the person in accord with that 
        fund's refund provisions.  
           Sec. 15.  [EFFECTIVE DATE.] 
           Sections 1, 2, 4, 6, and 10 to 13 are effective July 1, 
        1994.  Section 3 is effective May 1, 1994.  Sections 5, 7, and 9 
        are effective January 1, 1994.  Sections 8 and 14 are effective 
        retroactive to July 1, 1993. 
                                   ARTICLE 3
                        TEACHERS RETIREMENT ASSOCIATION
           Section 1.  Minnesota Statutes 1992, section 354.05, 
        subdivision 2, is amended to read: 
           Subd. 2.  [TEACHER.] (a) "Teacher" includes any means: 
           (1) a person who renders service as a teacher, supervisor, 
        principal, superintendent, or librarian, nurse, counselor, 
        social worker, therapist, or psychologist in the public schools 
        of the state located outside of the corporate limits of the 
        cities of the first class as those cities were so classified on 
        January 1, 1979, or in the state colleges and universities 
        system, or in any charitable or state institution including, 
        penal and corrective, or correctional institutions supported, in 
        whole or in part, by public funds of a governmental subdivision, 
        or who is engaged in educational administration in connection 
        with the state public school system, including the 
        state colleges and university system and state community college 
        system, but excluding the University of Minnesota, whether the 
        position be a public office or an employment, not including 
        members or officers of any general governing or managing board 
        or body connected with the systems, or the officers of common, 
        independent, special, or associated school districts, or 
        unorganized territory.  The term shall also include; 
           (2) an employee of the teachers retirement association 
        unless the employee is covered by the Minnesota state retirement 
        system by virtue of prior employment by the association, and any 
        nurse, counselor, social worker, therapist or psychologist who 
        renders service in the public schools as defined above or in 
        state universities.  The term shall also include any; 
           (3) a person who renders teaching service on a part-time 
        basis and who also renders other services for a school district 
        single employing unit.  In such cases, the teachers retirement 
        association shall have the authority to executive director shall 
        determine whether all or none of the combined employment shall 
        be service is covered by the teachers retirement association, 
        however a person whose teaching service comprises at least 50 
        percent of the combined employment salary is a member of the 
        association for all services with the single employing unit. 
           (b) The term does not include mean: 
           (1) an employee described in section 352D.02, subdivision 
        1a, who is hired after the effective date of Laws 1986, chapter 
        458.  The term does not mean any; 
           (2) a person who works for a school or institution as an 
        independent contractor.  The term shall not include any as 
        defined by the Internal Revenue Service; 
           (3) a person employed in subsidized on-the-job training, 
        work experience or public service employment as an enrollee 
        under the federal Comprehensive Employment and Training Act from 
        and after March 30, 1978, unless the person has, as of the later 
        of March 30, 1978 or the date of employment, sufficient service 
        credit in the retirement fund to meet the minimum vesting 
        requirements for a deferred retirement annuity, or the employer 
        agrees in writing on forms prescribed by the executive director 
        to make the required employer contributions, including any 
        employer additional contributions, on account of that person 
        from revenue sources other than funds provided under the federal 
        Comprehensive Training and Employment Act, or the person agrees 
        in writing on forms prescribed by the executive director to make 
        the required employer contribution in addition to the required 
        employee contribution.  The term shall not include any; 
           (4) a person holding a part-time adult supplementary 
        technical college license who renders part-time teaching service 
        in a technical college if (1) (i) the service is incidental to 
        the regular nonteaching occupation of the person; and (2) (ii) 
        the applicable technical college stipulates annually in advance 
        that the part-time teaching service will not exceed 300 hours in 
        a fiscal year and retains the stipulation in its records; 
        and (3) (iii) the part-time teaching service actually does not 
        exceed 300 hours in a fiscal year.  The term also shall not 
        include; or 
           (5) a person exempt from licensure pursuant to section 
        125.031 or any person who was excluded from membership prior to 
        January 1, 1981, pursuant to Laws 1978, chapter 556, section 1, 
        and Laws 1980, chapter 342, section 8, if the person annually 
        certifies on a form prescribed by the executive director that 
        the person has established and is contributing to an individual 
        retirement account which is based on nonteaching employment. 
           Sec. 2.  Minnesota Statutes 1993 Supplement, section 
        354.05, subdivision 8, is amended to read: 
           Subd. 8.  [DEPENDENT CHILD.] For the purpose of survivor 
        benefit eligibility under section 354.46, subdivision 
        1, "Dependent child" means any a biological or adopted child of 
        a deceased member who has not reached the age of 18, or who is 
        under age 22 and is a full-time student throughout the normal 
        school year, unmarried and dependent for more than one-half of 
        support upon the member.  It also includes any means a child of 
        the member conceived while living during the member's lifetime 
        and born after the member's death. 
           Sec. 3.  Minnesota Statutes 1992, section 354.05, is 
        amended by adding a subdivision to read: 
           Subd. 14a.  [SURVIVING SPOUSE.] "Surviving spouse" means 
        the spouse of a deceased member or a disabilitant who was 
        legally married to the member at the time of death. 
           Sec. 4.  Minnesota Statutes 1992, section 354.05, 
        subdivision 21, is amended to read: 
           Subd. 21.  [RETIREMENT.] "Retirement" means the withdrawal 
        of a member from active teaching service who is paid a 
        retirement annuity thereafter and commences with the date 
        designated by the retirement board when the retirement annuity 
        shall first accrue accrues to the former member after withdrawal 
        from active teaching service and application for an annuity 
        under section 354.44, subdivisions 3 and 4.  The effective date 
        of retirement must occur for an annuity plan selection to take 
        effect.  This date shall determine determines any rights 
        specified in this chapter which occur either before or after 
        retirement, as the case may be. 
           Sec. 5.  Minnesota Statutes 1992, section 354.05, 
        subdivision 22, is amended to read: 
           Subd. 22.  [DESIGNATED BENEFICIARY.] "Designated 
        beneficiary" means the person, trust, or organization designated 
        by a retiree or member to receive the benefits to which a 
        beneficiary is entitled under this chapter.  A beneficiary 
        designation is valid only if it is made on an appropriate form 
        provided by the executive director and that is signed by the 
        member and two witnesses to the member's signature.  The 
        properly completed form is must be received by the fund 
        postmarked on or before the date of death of the retiree or 
        member.  If a retiree or a member does not designate such a 
        person, trust, or organization, or if the person designated 
        predeceases the retiree or the member, or the trust or 
        organization ceases to exist before the death of the retiree or 
        the member, the designated beneficiary in such cases means the 
        estate of the deceased retiree or member. 
           Sec. 6.  Minnesota Statutes 1992, section 354.05, 
        subdivision 35, is amended to read: 
           Subd. 35.  [SALARY.] (a) "Salary" means the compensation, 
        upon which member contributions are required and made, that is 
        paid to a teacher before any allowable reductions permitted 
        under the federal Internal Revenue Code of 1986, as amended 
        through December 31, 1988, for employee selected employee-paid 
        fringe benefits, tax sheltered annuities, deferred compensation, 
        or any combination of these employee-paid items are deducted. 
           (b) "Salary" does not include mean: 
           (1) lump sum annual leave payments; 
           (2) lump sum wellness and sick leave payments; 
           (3) payments in lieu of any employer-paid group insurance 
        coverage, including; 
           (4) payments for the difference between single and family 
        premium rates, that may be paid to a member with single 
        coverage; 
           (4) (5) employer-paid fringe benefits including, but not 
        limited to, flexible spending accounts, cafeteria plans, health 
        care expense accounts, day care expenses, or automobile 
        allowances and expenses; 
           (6) any form of payment made in lieu of any other employer- 
        paid fringe benefit or expense; 
           (5) (7) any form of severance payments; 
           (6) (8) workers' compensation payments; 
           (7) (9) disability insurance payments including 
        self-insured disability payments; or 
           (8) (10) payments to school principals and all other 
        administrators for services in addition to the normal work year 
        contract if these additional services are performed on an 
        extended duty day, Saturday, Sunday, holiday, annual leave day, 
        sick leave day, or any other nonduty day; 
           (11) payments under section 356.24, subdivision 1, clause 
        (4)(ii); and 
           (12) payments made under section 125.12, subdivision 7, 
        except for payments for sick leave accumulated under the 
        provisions of a uniform school district policy that applies 
        equally to all similarly situated persons in the district. 
           Sec. 7.  Minnesota Statutes 1992, section 354.05, is 
        amended by adding a subdivision to read: 
           Subd. 40.  [TIMELY RECEIPT.] An application, payment, 
        return, claim, or other document that is not personally 
        delivered to the association before the applicable due date is 
        considered to be a timely receipt if officially postmarked on or 
        before the due date or delivered or filed under section 645.151. 
           Sec. 8.  Minnesota Statutes 1992, section 354.06, 
        subdivision 2a, is amended to read: 
           Subd. 2a.  [DUTIES OF EXECUTIVE DIRECTOR.] The management 
        of the association is vested in the executive director who shall 
        be the executive and administrative head of the association.  
        The executive director shall act as advisor to the board on all 
        matters pertaining to the association and shall also act as the 
        secretary of the board.  The executive director shall: 
           (1) attend all meetings of the board; 
           (2) prepare and recommend to the board appropriate rules to 
        carry out the provisions of this chapter; 
           (3) establish and maintain an adequate system of records 
        and accounts following recognized accounting principles and 
        controls; 
           (4) designate an assistant executive director in the 
        unclassified service and two assistant executive directors in 
        the classified service with the approval of the board, and 
        appoint such employees, both permanent and temporary, as are 
        necessary to carry out the provisions of said this chapter; 
           (5) organize the work of the association as the director 
        deems necessary to fulfill the functions of the association, and 
        define the duties of its employees and delegate to them any 
        powers or duties, subject to the director's control and under 
        such conditions as the director may prescribe; 
           (6) with the approval of the board, contract and set the 
        compensation for the services of an approved actuary, 
        professional management services, and any other consulting 
        services as may be necessary and fix the compensation therefor.  
        Such These contracts shall are not be subject to the 
        competitive bidding procedure prescribed by chapter 
        16B.  Professional management services may not be contracted for 
        more often than once in every six years.  Any An approved 
        actuary retained by the executive director shall function as the 
        actuarial advisor of the board and the executive director and 
        may perform actuarial valuations and experience studies to 
        supplement those performed by the actuary retained by the 
        legislative commission on pensions and retirement.  Any 
        supplemental actuarial valuations or experience studies shall be 
        filed with the executive director of the legislative commission 
        on pensions and retirement.  Copies of professional management 
        survey reports shall must be transmitted to the secretary of the 
        senate, the chief clerk of the house of representatives, and the 
        legislative reference library as provided by section 3.195, to 
        the executive director of the commission and to the legislative 
        auditor at the same time as reports are furnished to the board.  
        Only management firms experienced in conducting management 
        surveys of federal, state, or local public retirement systems 
        shall be are qualified to contract with the executive 
        director hereunder; 
           (7) with the approval of the board, provide in-service 
        training for the employees of the association; 
           (8) make refunds of accumulated contributions to former 
        members and to the designated beneficiary, surviving spouse, 
        legal representative, or next of kin of deceased members or 
        deceased former members, as provided in under this chapter; 
           (9) determine the amount of the annuities and disability 
        benefits of members covered by the association and authorize 
        payment of the annuities and benefits beginning as of the dates 
        on which the annuities and benefits begin to accrue, in 
        accordance with the provisions of under this chapter; 
           (10) pay annuities, refunds, survivor benefits, salaries, 
        and necessary operating expenses of the association; 
           (11) prepare and submit to the board and the legislature an 
        annual financial report covering the operation of the 
        association, as required by section 356.20; 
           (12) certify funds available for investment to the state 
        board of investment; 
           (13) with the advice and approval of the board, request the 
        state board of investment to sell securities on determining that 
        funds are needed for the purposes of the association; 
           (14) prepare and submit biennial and annual budgets to the 
        board and with the approval of the board submit those budgets to 
        the department of finance; and 
           (15) with the approval of the board, perform such other 
        duties as may be required for the administration of the 
        association and the other provisions of this chapter and for the 
        transaction of its business.  The executive director may: 
           (i) reduce all or part of the accrued interest and fines 
        payable by an employing unit for reporting requirements under 
        section 354.52, based on an evaluation of any extenuating 
        circumstances of the employing unit; 
           (ii) assign association employees to conduct field audits 
        of an employing unit to ensure compliance with the provisions of 
        this chapter; and 
           (iii) recover overpayments, if not repaid to the 
        association, by suspending or reducing the payment of a 
        retirement annuity, refund, disability benefit, survivor 
        benefit, or optional annuity under this chapter until the 
        overpayment, plus interest, has been recovered. 
           Sec. 9.  Minnesota Statutes 1992, section 354.06, 
        subdivision 4, is amended to read: 
           Subd. 4.  [TREASURER; DUTIES.] All members of the board 
        shall serve without compensation but.  A member shall receive 
        necessary expenses while attending all to attend meetings of the 
        board or meetings of any committee and its committees, and 
        association functions and presentations authorized by the board, 
        to.  The necessary expenses must be paid out of the fund.  
        Necessary expenses may include the salary of any substitute 
        teacher which the employing unit is required to hire.  The board 
        may reimburse the employing unit for the salary of the 
        substitute teacher. Members of the board shall suffer no loss of 
        compensation from their employing units by reason of service on 
        or for the association, the board, or any committee authorized 
        by the board.  Necessary expenses may include the salary of any 
        substitute teacher which the employing unit is required to hire 
        in the absence of the board member.  The board may reimburse the 
        employing unit for the cost of the substitute teacher. 
           Sec. 10.  Minnesota Statutes 1992, section 354.071, 
        subdivision 5, is amended to read: 
           Subd. 5.  [PETITION FOR REVIEW HEARING.] The board shall 
        hold a timely hearing on a petition for review.  The board shall 
        and make its decision on a petition solely on the proceedings 
        and the relevant documentation as submitted and the proceedings 
        of the hearing.  At the hearing, the petitioner, the 
        petitioner's attorney, and the executive director, and an 
        assistant executive director may state and discuss with the 
        board their positions with respect to the petition.  The board 
        may allow further documentation to be placed in the record at 
        during or subsequent to after the board meeting at which the 
        petition is considered hearing.  If the board allows additional 
        documentation into the record at during or subsequent to after 
        the board meeting hearing, it may make a final determination on 
        the petition at that board meeting hearing only upon the 
        agreement of both the petitioner and the executive director. 
           Sec. 11.  Minnesota Statutes 1992, section 354.091, is 
        amended to read: 
           354.091 [SERVICE CREDIT.] 
           In computing the time of service of a teacher, the length 
        of a legal school year in the district or institution where such 
        service was rendered shall must constitute a year under sections 
        354.05 to 354.10, provided such the year is not less than the 
        legal minimum school year of this state.  No person shall be 
        allowed receive credit for more than one year of teaching 
        service for any fiscal year.  Commencing July 1, 1961, (1) if a 
        teacher teaches only a fractional part of a day, credit shall 
        must be given for a day of teaching service for each five hours 
        taught, and (2) if a teacher teaches at least 170 full days in 
        any fiscal year, credit shall must be given for a full year of 
        teaching service, and (3) if a teacher teaches for only a 
        fractional part of the year, credit shall must be given for such 
        fractional part of the year as the term of service rendered 
        bears to 170 days.  A person who teaches in the state colleges 
        and university system shall receive a full year of service 
        credit based on the number of days in the system's full school 
        year if it is less than 170 days.  Teaching service performed 
        prior to July 1, 1961, shall must be computed pursuant to under 
        the law in effect at the time it was rendered. 
           In no event shall any A teacher shall not lose or gain 
        retirement service credit as a result of the employer converting 
        to a four-day work week.  If the employer does convert to a 
        four-day work week, the forms for reporting and procedures for 
        determining service credit shall be determined by the executive 
        director with the approval of the board of trustees.  
           Sec. 12.  [354.096] [FAMILY LEAVE.] 
           Subdivision 1.  [CERTIFICATION.] Upon granting a family 
        leave to a member, an employing unit must certify the leave to 
        the association on a form specified by the executive director 
        before the end of the fiscal year during which the leave was 
        granted. 
           Subd. 2.  [PAYMENT.] (a) Notwithstanding any laws to the 
        contrary, a member who is granted a family leave under United 
        States Code, title 42, section 12631, may receive allowable 
        service credit for the leave by making payment of the employee, 
        employer, and additional employer contributions at the rates 
        under section 354.42, during the leave period as applied to the 
        member's average full-time monthly salary rate on the date the 
        leave commenced.  
           (b) The member may make payment, without interest, to the 
        association by the end of the fiscal year following the fiscal 
        year in which the leave terminated or before the effective date 
        of the member's retirement, whichever is earlier. 
           Subd. 3.  [SUBSEQUENT ELIGIBILITY.] The member shall return 
        to public service after the leave period under United States 
        Code, title 42, section 12631, to receive allowable service for 
        a subsequent authorized family leave. 
           Sec. 13.  Minnesota Statutes 1992, section 354.10, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [EXEMPTION; EXCEPTIONS.] The right of a 
        teacher to take advantage of the benefits provided by this 
        chapter, is a personal right only and is not assignable.  All 
        money to the credit of a teacher's account in the fund or any 
        money payable to the teacher from the fund belongs to the state 
        of Minnesota until actually paid to the teacher or a beneficiary 
        pursuant to the provisions of under this chapter.  Any power of 
        attorney, The association may acknowledge a properly completed 
        power of attorney form.  An assignment or attempted assignment 
        of a teacher's interest in the fund, or of the beneficiary's 
        interest therein in the fund, by a teacher or a beneficiary is 
        void and is exempt from taxation under chapter 291 and from 
        garnishment or levy under attachment or execution, except as 
        provided in subdivision 2 or 3, or section 518.58, 518.581, or 
        518.611.  
           Sec. 14.  Minnesota Statutes 1992, section 354.10, 
        subdivision 2, is amended to read: 
           Subd. 2.  [AUTOMATIC DEPOSITS.] The board may pay an 
        annuity or benefit to a banking institution, qualified under 
        chapter 48, that is a trustee for a person eligible to receive 
        the annuity or benefit.  Upon completion receipt of the proper 
        properly completed forms as provided by the executive director, 
        the annuity or benefit amount may be electronically transferred 
        or the annuity or benefit check may be mailed to a banking 
        institution, savings association, or credit union for deposit to 
        the recipient's individual account or joint account with the 
        recipient's spouse or any other person designated by the 
        recipient.  Any An overpayment to a joint account after the 
        death of the annuity or benefit recipient must be repaid to the 
        fund by the joint tenant if the overpayment is not repaid to the 
        fund by the banking institution, savings association, or credit 
        union.  The board may prescribe the conditions which govern 
        these procedures.  
           Sec. 15.  Minnesota Statutes 1992, section 354.42, 
        subdivision 3, is amended to read: 
           Subd. 3.  The employer contribution to the fund shall be an 
        amount equal to 4-1/2 percent of the salary of each coordinated 
        member and 8-1/2 percent of the salary of each basic member.  
        This contribution shall be made in the manner provided in 
        section 354.43.  
           Sec. 16.  Minnesota Statutes 1992, section 354.42, 
        subdivision 5, is amended to read: 
           Subd. 5.  [ADDITIONAL EMPLOYER CONTRIBUTION.] To amortize 
        the unfunded actuarial accrued liability computed under the 
        entry age actuarial cost method and disclosed under the annual 
        actuarial valuations prepared by the commission-retained actuary 
        under section 356.215, an additional employer contribution shall 
        be made in the amount of 3.64 percent of the salary of each 
        member.  
           This contribution must be made in the manner provided in 
        section 354.43 354.52, subdivision 4. 
           By January 1 of each year, the board of directors shall 
        report to the legislative commission on pensions and retirement, 
        the chair of the committee on appropriations of the house of 
        representatives, and the chair of the committee on finance of 
        the senate on the amount raised by the additional employer 
        contribution rate in effect and whether that amount is less 
        than, the same as, or more than the required amortization 
        contribution determined under section 356.215. 
           Sec. 17.  Minnesota Statutes 1992, section 354.44, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [MANDATORY RETIREMENT PROPORTIONATE 
        ANNUITY.] Notwithstanding the provisions of sections 43A.11 or 
        197.455 to 197.48, a member who is serving as a faculty member 
        or administrator under a contract of unlimited tenure or similar 
        arrangement providing for unlimited tenure at an institution of 
        higher education, as defined in section 1201(a) of the federal 
        Higher Education Act of 1965, as amended through January 1, 
        1987, shall terminate employment at the end of the academic year 
        in which the member reaches the age of 70.  For purposes of this 
        subdivision, an academic year shall be deemed to end August 31.  
        No other member shall be subject to a mandatory retirement age 
        provision.  A member who terminates employment at any time 
        during the academic year at the end of which the person is at 
        the normal retirement age or older shall, for the purpose of 
        determining eligibility for a proportionate retirement annuity, 
        be considered to have been required to terminate employment at 
        normal retirement age or older pursuant to section 
        356.32.  Nothing contained in this subdivision shall preclude an 
        employing unit covered by this chapter from employing a retired 
        teacher as a substitute or part-time teacher.  Any person who 
        has attained normal retirement age, who is employed as a 
        substitute or part-time teacher, and who earns an amount equal 
        to the annual maximum earnings allowable for that age for the 
        continued receipt of full benefit amounts monthly under the 
        federal old age, survivors and disability insurance program as 
        set by the secretary of health and human services pursuant to 
        the provisions of United States Code, title 42, section 403, in 
        any academic year from employment as a substitute or part-time 
        teacher, shall terminate employment for the remainder of that 
        academic year.  No person who has attained normal retirement age 
        and who has retired under this chapter may resume membership in 
        the retirement association as a result of subsequent employment 
        as a substitute or part-time teacher For purposes of this 
        subdivision, an academic year ends August 31.  
           Sec. 18.  Minnesota Statutes 1992, section 354.44, 
        subdivision 4, is amended to read: 
           Subd. 4.  [TIME AND MANNER OF PAYMENTS.] A member may make 
        application to the board for a retirement annuity any time after 
        the member has satisfied the age and service requirements of 
        this chapter for retirement except that no an application for 
        retirement may must not be made more than 60 days before 
        termination of teaching service.  The annuity payment shall 
        begin begins to accrue after the termination of teaching 
        service, or after the application for retirement has been filed 
        with the board, whichever is later, as follows: 
           (a) on the 16th day of the month of termination or filing 
        if the termination or filing occurs on or before the 15th day of 
        the month or, 
           (b) on the first day of the month following the month of 
        termination or filing if the termination or filing occurs on or 
        after the 16th day of the month, or 
           (c) on July 1 for all school principals and other 
        administrators who receive a full annual contract salary during 
        the fiscal year for performance of a full year's contract duties.
           If an application for retirement is filed with the board 
        during the 90-day six-month period immediately following the 
        termination of teaching service, the annuity may begin to accrue 
        as if the application for retirement had been filed with the 
        board on the date teaching service terminated or a later date 
        occurring within the six-month period as specified by the 
        member.  In no event may An annuity must not begin to accrue 
        more than one month before the date of final salary receipt. 
           Sec. 19.  Minnesota Statutes 1992, section 354.44, 
        subdivision 5a, is amended to read: 
           Subd. 5a.  [EXEMPTION FOR INTERIM SUPERINTENDENT.] A person 
        who performs services as an interim superintendent because of 
        the death, disability, termination, or resignation of the 
        previous superintendent is exempt from the earnings limitations 
        and reductions in annuity payments in subdivision 5 for up to 90 
        working days of service as an interim superintendent.  During 
        this period of up to 90 working days, the school board may pay 
        the interim superintendent at any rate, up to the rate paid to 
        the previous superintendent.  This exemption applies only if the 
        school board hiring the interim superintendent submits an 
        application for the exemption to on a form prescribed by the 
        executive director, and the executive director approves the 
        application before the services as interim superintendent 
        begin.  The application must certify that the school board has 
        unanimously approved the exemption from the earnings limitations 
        and reductions.  The executive director may prescribe a form for 
        the application.  A school board may shall not apply for more 
        than one exemption in a fiscal year.  No more than three 
        exemptions may be approved for any person.  Only one exemption 
        may be approved for any person in a fiscal year.  The exemption 
        under this subdivision does not apply to a person who retires 
        from a school district and within one year after retirement 
        returns to the same school district as an interim superintendent.
           Sec. 20.  Minnesota Statutes 1993 Supplement, section 
        354.46, subdivision 1, is amended to read: 
           Subdivision 1.  [BASIC PROGRAM; BENEFITS FOR SPOUSE AND 
        CHILDREN OF TEACHER.] If a basic member who has at least 18 
        months of allowable service credit and who has an average salary 
        as defined in section 354.44, subdivision 6, equal to or greater 
        than $75 dies prior to retirement or if a former basic member 
        who, at the time of death, was totally and permanently disabled 
        and receiving disability benefits pursuant to section 354.48 
        dies before attaining age 65 or reaching the five-year 
        anniversary of the effective date of the disability benefit, 
        whichever is later, the surviving dependent spouse and dependent 
        children of the basic member or former basic member shall be are 
        entitled to receive a monthly benefit as follows: 
          (a) Surviving
          dependent
          spouse .....50 percent of the basic member's monthly
                      average salary paid in the last full
                      fiscal year preceding death
          (b) Each
          dependent
          child ......ten percent of the basic member's
                      monthly average salary paid in the
                      last full fiscal year preceding death
           Payments for the benefit of any dependent child under the 
        age of 22 years shall must be made to the surviving parent, or 
        if there be none, to the legal guardian of the child.  The 
        maximum monthly benefit shall must not exceed $1,000 for any one 
        family, and the minimum benefit per family shall must not be 
        less than 50 percent of the basic member's average salary, 
        subject to the foregoing maximum.  The surviving dependent 
        children's benefit shall must be reduced pro tanto when any 
        surviving child is no longer dependent. 
           If the basic member and the surviving dependent spouse are 
        killed in a common disaster and if the total of all survivors 
        benefits payable pursuant to this subdivision is less than the 
        accumulated deductions plus interest payable, the surviving 
        dependent children shall receive the difference in a lump sum 
        payment. 
           If the survivor benefits provided in this subdivision 
        exceed in total the monthly average salary of the deceased basic 
        member, these benefits shall must be reduced to an amount equal 
        to the deceased basic member's monthly average salary. 
           Prior to payment of any survivor benefit pursuant to this 
        subdivision, in lieu of that benefit, the surviving dependent 
        spouse may elect to receive the joint and survivor annuity 
        provided pursuant to subdivision 2, or may elect to receive a 
        refund of accumulated deductions with interest in a lump sum as 
        provided pursuant to section 354.47, subdivision 1.  If there 
        are any surviving dependent children, the surviving dependent 
        spouse may elect to receive the refund of accumulated deductions 
        only with the consent of the district court of the district in 
        which the surviving dependent child or children reside. 
           Sec. 21.  Minnesota Statutes 1993 Supplement, section 
        354.46, subdivision 5, is amended to read: 
           Subd. 5.  [PAYMENT TO DESIGNATED BENEFICIARY.] Any A member 
        and the spouse of the member may make a joint specification in 
        writing on a form prescribed by the executive director that the 
        benefits provided in subdivision 2, or in section 354.47, 
        subdivision 1, shall must be paid only to a designated 
        beneficiary.  For purposes of this subdivision 2, a designated 
        beneficiary may only be either a former spouse or a biological 
        or adopted child, either biological or adopted, of the member, 
        but more than one beneficiary may be designated for the benefit 
        provided in section 354.47, subdivision 1. 
           Sec. 22.  Minnesota Statutes 1992, section 354.47, is 
        amended to read: 
           354.47 [REFUND PAYMENT AFTER DEATH.] 
           Subdivision 1.  [DEATH BEFORE RETIREMENT.] (1) If a member 
        dies before retirement and is covered pursuant to the provisions 
        of under section 354.44, subdivision 2, and neither an optional 
        annuity, nor a reversionary annuity, nor a benefit pursuant 
        to under section 354.46, subdivision 1, is payable to the 
        survivors if the member was a basic member, the surviving 
        spouse, or if there is no surviving spouse, the designated 
        beneficiary shall be is entitled to an amount equal to the 
        member's accumulated deductions with interest credited to the 
        account of the member to the date of death. 
           (2) If a member dies before retirement and is covered 
        pursuant to the provisions of under section 354.44, subdivision 
        6, and neither an optional annuity, nor reversionary annuity, 
        nor the benefit described in section 354.46, subdivision 1, is 
        payable to the survivors if the member was a basic member, the 
        surviving spouse, or if there is no surviving spouse, the 
        designated beneficiary shall be is entitled to an amount equal 
        to the member's accumulated deductions credited to the account 
        of the member as of June 30, 1957, and from July 1, 1957, to the 
        date of death the member's accumulated deductions plus interest 
        at the rate of six percent per annum compounded annually. 
           Subd. 1a.  [UNCASHED ANNUITY OR BENEFIT WARRANTS.] Uncashed 
        annuity or benefit warrants issued before the recipient's death 
        are payable to the designated beneficiary, and if none, to the 
        recipient's estate. 
           Subd. 2.  [BENEFITS OF $1,500 OR LESS.] If a member or a 
        former member dies without having a surviving designated 
        beneficiary and the amount to the credit of the decedent is 
        $1,500 or less, the board of trustees may 90 days after the date 
        of death, in the absence of probate proceedings, make payment to 
        the surviving spouse of the decedent.  This payment shall be is 
        a bar to recovery of this payment from the association by any 
        other person or persons.  Any accrued retirement annuity, 
        disability, or survivor benefit may be paid in the same manner. 
           Sec. 23.  Minnesota Statutes 1992, section 354.48, 
        subdivision 2, is amended to read: 
           Subd. 2.  [APPLICATIONS.] Any A person described in 
        subdivision 1, or another person authorized to act on behalf of 
        the person, may make application for a total and permanent 
        disability benefit only within the 18-month period following the 
        termination of teaching service.  This benefit accrues from the 
        day following the commencement of disability or the day 
        following the last day for which salary is paid, whichever is 
        later, but may does not begin to accrue more than 90 days six 
        months before the date the application is filed with the 
        executive director.  If salary is being received for either 
        annual or sick leave during the period, payments accrue from the 
        day following the last day for which this salary is paid. 
           Sec. 24.  Minnesota Statutes 1992, section 354.49, 
        subdivision 1, is amended to read: 
           Subdivision 1.  Any A person who ceases to render teaching 
        service in any school or institution to which the provisions of 
        this chapter apply shall be is entitled to a refund provided in 
        subdivision 2, or a deferred retirement annuity under section 
        354.55, subdivision 11.  An application for a refund may must 
        not be made no sooner than 30 days after termination of teaching 
        service if the applicant has not again become a teacher.  This 
        payment will must be made within 90 days after receipt of 
        application for refund or upon completion of processing the 
        report made pursuant to section 354.52, subdivision 2 whichever 
        is later. 
           Sec. 25.  Minnesota Statutes 1992, section 354.52, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ANNUAL SUMMARY REPORTS.] On or before August 1 
        each year, each school board or managing body a representative 
        authorized by an employing unit must report to the executive 
        director giving an itemized summary of the total amount withheld 
        from the salaries of teachers for teachers retirement deductions 
        and all other information required by the executive 
        director requires.  If the itemized summary is received after 
        August 1 in any year, there is a penalty not to exceed $50 for 
        each month or portion thereof which the summary is delinquent, 
        as determined by the executive director.  The penalty must be 
        paid by the school board or the managing body.  
           Sec. 26.  Minnesota Statutes 1992, section 354.52, 
        subdivision 2a, is amended to read: 
           Subd. 2a.  [ANNUAL POSTRETIREMENT INCOME REPORTS.] On or 
        before each February 15, each school board or managing body a 
        representative authorized by an employing unit must report to 
        the executive director the amount of income earned during the 
        previous calendar year by each retiree for teaching service 
        performed after retirement.  This annual report must be based on 
        reemployment income as defined in section 354.44, subdivision 5, 
        and it must be made on a form provided by the executive 
        director.  Signing the report has the force and effect of an 
        oath as to the correctness of the amount of postretirement 
        reemployment income earned.  If the required report is received 
        after February 15 in any year there is a penalty not to exceed 
        $50 for each month or portion thereof which the report is late, 
        as determined by the executive director.  The penalty must be 
        paid by the school board or managing body. 
           Sec. 27.  Minnesota Statutes 1992, section 354.52, 
        subdivision 4, is amended to read: 
           Subd. 4.  [REPORTING AND REMITTANCE REQUIREMENTS.] At least 
        once each month, the chief administrative officer of each a 
        representative authorized by an employing school district or 
        managing body of schools and institutions to which the 
        provisions of this chapter apply unit shall transmit all amounts 
        due to the association and furnish a signed statement indicating 
        the amount due and transmitted, and shall transmit a statement 
        containing such with other information as required by the 
        executive director shall require.  Signing the statement shall 
        have has the force and effect of an oath as to the correctness 
        of the amount due and transmitted.  Any An amount thus due and 
        not transmitted shall accrue accrues interest at an annual rate 
        of 8.5 percent compounded annually commencing 15 days after the 
        date first due until the amount is transmitted and shall must be 
        paid by the employing school district or other managing body 
        unit.  The state treasurer shall credit all money received or 
        withheld pursuant to the provisions of this chapter to the fund 
        and the reports and date received by the state treasurer from 
        each reporting agency shall be available for the board.  Any 
        person willfully failing to perform any of the duties imposed by 
        this section shall be guilty of a misdemeanor.  These payments 
        and other employing unit obligations not remitted within 60 days 
        of notification by the association must be certified to the 
        commissioner of finance who shall deduct the amount from any 
        state aid or appropriation amount applicable to the employing 
        unit. 
           Sec. 28.  Minnesota Statutes 1992, section 354.52, is 
        amended by adding a subdivision to read: 
           Subd. 4a.  [MEMBER DATA REPORTING REQUIREMENTS.] (a) An 
        employing unit shall initially provide the following member data 
        or any of that data not previously provided to the association 
        for payroll warrants dated after June 30, 1995, in a format 
        prescribed by the executive director.  Data changes and the 
        dates of those changes must be reported to the association on an 
        ongoing basis for the payroll cycle in which they occur with the 
        data under subdivision 4b.  Data on the member includes:  
           (1) legal name, address, association member number, 
        employer-assigned employee number, and social security number; 
           (2) association status, including, but not limited to, 
        basic, coordinated, exempt annuitant, exempt technical college 
        teacher, and exempt independent contractor or consultant; 
           (3) employment status, including, but not limited to, full 
        time, part time, intermittent, substitute, or part-time 
        mobility; 
           (4) employment position, including, but not limited to, 
        teacher, superintendent, principal, administrator, or other; 
           (5) employment activity, including, but not limited to, 
        hire, termination, resumption of employment, disability, or 
        death; 
           (6) leaves of absence; 
           (7) county district number assigned by the association for 
        the employing unit; 
           (8) data center identification number, if applicable; and 
           (9) other information as may be required by the executive 
        director. 
           Sec. 29.  Minnesota Statutes 1992, section 354.52, is 
        amended by adding a subdivision to read: 
           Subd. 4b.  [PAYROLL CYCLE REPORTING REQUIREMENTS.] An 
        employing unit shall provide the following data to the 
        association for payroll warrants dated after June 30, 1995, for 
        each payroll cycle in a format prescribed by the executive 
        director:  
           (1) association member number; 
           (2) employer-assigned employee number; 
           (3) social security number; 
           (4) amount of each salary deduction; 
           (5) amount of salary as defined in section 354.05, 
        subdivision 35, from which each deduction was made; 
           (6) reason for payment; 
           (7) service credit; 
           (8) the beginning and ending dates of the payroll period 
        covered and the date of actual payment; 
           (9) fiscal year of salary earnings; 
           (10) total remittance amount including employee, employer, 
        and additional employer contributions; and 
           (11) other information as may be required by the executive 
        director. 
           Sec. 30.  Minnesota Statutes 1992, section 354.52, is 
        amended by adding a subdivision to read: 
           Subd. 6.  [NONCOMPLIANCE CONSEQUENCES.] An employing unit 
        that does not comply with the reporting requirements under this 
        section shall pay a fine of $5 per calendar day until the 
        association receives the required data. 
           Sec. 31.  Minnesota Statutes 1992, section 354.66, is 
        amended by adding a subdivision to read: 
           Subd. 1c.  [PARTICIPATION.] Participation in the part-time 
        mobility program must be based on a full fiscal year and the 
        employment pattern of the teacher during the most recent fiscal 
        year. 
           Sec. 32.  Minnesota Statutes 1992, section 354.66, 
        subdivision 2, is amended to read: 
           Subd. 2.  A teacher in the public elementary schools, 
        secondary schools, or technical colleges or in the community 
        college system or the state university system of the state who 
        has 20 years or more of allowable service in the fund or 20 
        years or more of full-time teaching service in Minnesota public 
        elementary schools, secondary schools, or technical colleges or 
        in the community college system or the state university system, 
        or a teacher in the community college system or state university 
        system who has attained attains at least age 55 and has ten 
        years or more of allowable service in the fund or ten years or 
        more of full-time teaching service as described in this 
        subdivision, may, by agreement with the board of the employing 
        district, be assigned to teaching service within the district in 
        a part-time teaching position.  The association must receive a 
        copy of the agreement before October 1 of the year for which the 
        teacher requests to make retirement contributions under 
        subdivision 4. 
           Sec. 33.  Minnesota Statutes 1992, section 354.66, 
        subdivision 3, is amended to read: 
           Subd. 3.  For purposes of this section, the term "part-time 
        teaching position" shall mean a teaching position within the 
        district in which the teacher is employed for at least 50 full 
        days or a fractional equivalent thereof as prescribed in section 
        354.091, and for which the teacher is compensated in an amount 
        not exceeding 67 percent of the compensation established by the 
        board for a full-time teacher with identical education and 
        experience within with the district employing unit.  The 
        compensation of a teacher in the state colleges and university 
        system may exceed the 67 percent limit if the teacher does not 
        teach just one of the three quarters in the system's full school 
        year, provided no additional services are performed while the 
        teacher participates in the program. 
           Sec. 34.  [REPEALER.] 
           Minnesota Statutes 1992, sections 354.05, subdivisions 15 
        and 29; 354.43, subdivision 3; 354.57; 354.65; and 356.18, are 
        repealed. 
           Sec. 35.  [EFFECTIVE DATE.] 
           Sections 1 to 27 and 30 to 34 are effective the day 
        following final enactment.  Sections 28 and 29 are effective 
        July 1, 1995. 
                                   ARTICLE 4 
                     RESTRICTIONS ON CERTAIN PUBLIC PENSION  
                         PLAN MEMBERSHIP AUTHORIZATIONS  
           Section 1.  Minnesota Statutes 1992, section 352.029, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [QUALIFICATIONS.] An employee of a labor 
        organization that is an exclusive bargaining agent representing 
        state employees or Unless specifically excluded under section 
        352.01, subdivision 2b, a state employee on leave of absence 
        without pay to provide service as an employee or officer of a 
        labor organization that is an exclusive bargaining agent 
        representing state employees, may choose elect under subdivision 
        2 to be covered by the general state employees retirement plan 
        of the Minnesota state retirement system for service with the 
        labor organization unless specifically excluded under section 
        352.01, subdivision 2b, subject to the limitations set forth in 
        subdivisions 2a and 2b.  
           Sec. 2.  Minnesota Statutes 1992, section 352.029, is 
        amended by adding a subdivision to read: 
           Subd. 2a.  [LIMITATIONS ON SALARY FOR BENEFITS AND 
        CONTRIBUTIONS.] (a) The covered salary for a labor organization 
        employee who qualifies for membership under this section or 
        section 352.75 is limited to the lesser of: 
           (1) the employee's actual salary as defined under section 
        352.01, subdivision 13; or 
           (2) 75 percent of the salary of the governor as set under 
        section 15A.082. 
           (b) The limited covered salary determined under this 
        subdivision must be used in determining employee, employer, and 
        employer additional contributions under section 352.04, 
        subdivisions 2 and 3, and in determining retirement annuities 
        and other benefits under this chapter and chapter 356. 
           Sec. 3.  Minnesota Statutes 1992, section 352.029, is 
        amended by adding a subdivision to read: 
           Subd. 2b.  [EARNING RESTRICTIONS APPLY.] A retirement 
        annuity is only payable, if the person has met any other 
        applicable requirements, upon the termination by the person who 
        elected coverage under subdivision 1 of employment by the labor 
        organization.  The reemployed annuitant earnings limitation set 
        forth in section 352.115, subdivision 10, applies in the event 
        that the person who elected coverage under subdivision 1 retires 
        and is subsequently reemployed while an annuitant by the labor 
        organization or by any other entity employing persons who are 
        covered by the Minnesota state retirement system by virtue of 
        that employment. 
           Sec. 4.  Minnesota Statutes 1993 Supplement, section 
        353.017, subdivision 1, is amended to read: 
           Subdivision 1.  [QUALIFICATIONS.] Unless specifically 
        exempt under section 353.01, subdivision 2b, a former member of 
        the association, or a current coordinated member of the 
        association who is on an authorized leave of absence, and who is 
        an employee of a labor organization that represents public 
        employees who are association members may elect, under 
        subdivision 2, to continue to be a coordinated member with 
        respect to service with employment by the labor 
        organization unless specifically exempt under section 353.01, 
        subdivision 2b subject to the limitations set forth in 
        subdivisions 4 and 7. 
           Sec. 5.  Minnesota Statutes 1993 Supplement, section 
        353.017, subdivision 3, is amended to read: 
           Subd. 3.  [CONTRIBUTIONS.] The employee, employer and 
        additional employer contributions shall be are the obligation of 
        the employee who elects coverage herein in accord with this 
        chapter; provided, however, the employer, labor organization, 
        may pay the employer and additional employer contributions.  The 
        employer shall, in any event, deduct the necessary contributions 
        from the employee's salary, subject to the limitations under 
        subdivision 7, and remit all contributions to the public 
        employees retirement association pursuant to under section 
        353.27, subdivisions 4, 7, 10, 11, and 12. 
           Sec. 6.  Minnesota Statutes 1993 Supplement, section 
        353.017, is amended by adding a subdivision to read: 
           Subd. 4.  [TERMINATION OF MEMBERSHIP FOR RETIREMENT 
        ELIGIBILITY.] A retirement annuity is only payable, if the 
        person has met any other applicable requirements, upon the 
        termination by the person who elected coverage under subdivision 
        1 of employment by the labor organization.  The reemployed 
        annuitant earnings limitation set forth in section 353.37, 
        subdivision 1, applies in the event that the person who elected 
        coverage under subdivision 1 retires and is subsequently 
        reemployed while an annuitant by the labor organization or by 
        any other entity employing persons who are covered by the public 
        employees retirement association by virtue of that employment. 
           Sec. 7.  Minnesota Statutes 1993 Supplement, section 
        353.017, is amended by adding a subdivision to read: 
           Subd. 7.  [LIMITATIONS ON SALARY AND CONTRIBUTIONS.] The 
        covered salary for a labor organization employee who qualifies 
        for membership under this section is limited to the lesser of: 
           (1) the employee's actual salary as defined under section 
        353.01, subdivision 10; or 
           (2) 75 percent of the salary of the governor as set under 
        section 15A.082. 
           The limited covered salary determined under this 
        subdivision must be used in determining employee and employer 
        contributions under section 353.27, subdivisions 2, 3, and 3a, 
        and in determining retirement annuities and other benefits under 
        this chapter and chapter 356. 
           Sec. 8.  Minnesota Statutes 1992, section 354.41, 
        subdivision 4, is amended to read: 
           Subd. 4.  Any (a) A person who is a former member on an 
        authorized leave of absence and is presently employed by the 
        Minnesota federation of teachers or its affiliated branches 
        within the state, the Minnesota education association, the 
        Minnesota association of school principals, the Minnesota 
        association of secondary school principals or the Minnesota 
        association of school administrators may elect to be a 
        coordinated member in the fund based on such that employment; 
        provided, subject to the limitations set forth in subdivisions 
        4a and 4b.  However, that no person shall also be is entitled to 
        such membership under this section if the person also is a 
        member of a teachers retirement association in a city of the 
        first class organized pursuant to under chapter 354A for the 
        same period of service.  For such persons so employed on June 
        30, 1975, the election must be made prior to July 1, 1976.  For 
        such persons so employed after June 30, 1975, 
           (b) The election must be made upon within 90 days of 
        commencing employment by the labor organization. 
           Sec. 9.  Minnesota Statutes 1992, section 354.41, is 
        amended by adding a subdivision to read: 
           Subd. 4a.  [LIMITATIONS ON SALARY AND CONTRIBUTIONS.] The 
        covered salary for a labor organization employee who qualifies 
        for membership under this section is limited to the lesser of: 
           (1) the employee's actual salary as defined under section 
        354.05, subdivision 35; or 
           (2) 75 percent of the salary of the governor as set under 
        section 15A.082. 
           The limited covered salary determined under this 
        subdivision must be used in determining employee, employer, and 
        employer additional contributions under section 354.42, 
        subdivisions 2, 3, and 5, and in determining retirement 
        annuities and other benefits under this chapter and chapter 356. 
           Sec. 10.  Minnesota Statutes 1992, section 354.41, is 
        amended by adding a subdivision to read: 
           Subd. 4b.  [EARNING RESTRICTIONS APPLY.] A retirement 
        annuity is only payable, if the person has met any other 
        applicable requirements, upon the termination by the person who 
        elected coverage under subdivision 4 of employment by the labor 
        organization.  The reemployed annuitant earnings limitation set 
        forth in section 354.44, subdivision 5, applies in the event 
        that the person who elected coverage under subdivision 4 retires 
        and is subsequently reemployed while an annuitant by the labor 
        organization or by any other entity employing persons who are 
        covered by the Minnesota teachers retirement association by 
        virtue of that employment. 
           Sec. 11.  [356.611] [LIMITATION ON PUBLIC EMPLOYEE SALARIES 
        FOR PENSION PURPOSES.] 
           (a) Notwithstanding any provision of law, bylaws, articles 
        or incorporation, retirement and disability allowance plan 
        agreements, or retirement plan contracts to the contrary, the 
        covered salary for pension purposes for a plan participant of a 
        covered retirement fund under section 356.30, subdivision 3, may 
        not exceed 95 percent of the salary established for the governor 
        under section 15A.082 at the time the person received the salary.
           (b) This section does not apply to a salary paid: 
           (1) to the governor; 
           (2) to an employee of a political subdivision in a position 
        that is excluded from the limit as specified under section 
        43A.17, subdivision 9; or 
           (3) to a state employee in a position for which the 
        commissioner of employee relations has approved a salary rate 
        that exceeds 95 percent of the governor's salary. 
           (c) The limited covered salary determined under this 
        section must be used in determining employee and employer 
        contributions and in determining retirement annuities and other 
        benefits under the respective covered retirement fund and under 
        this chapter. 
           Sec. 12.  [EFFECTIVE DATE.] 
           (a) Sections 1 to 11 are effective the day following final 
        enactment. 
           (b) Sections 1, 4, and 8 apply to labor organization 
        employees initially employed in that employment position after 
        the effective date specified in paragraph (a).  Sections 2, 5, 
        7, 9, and 11 apply to the plan salary and contributions after 
        July 1, 1994, for labor organization employees who were 
        employees in that employment position before the effective date 
        specified in paragraph (a). 
                                   ARTICLE 5 
                    PUBLIC EMPLOYEES RETIREMENT ASSOCIATION
           Section 1.  [CONSOLIDATED LOCAL RELIEF ASSOCIATIONS; 
        RETIREMENT COVERAGE OPTION.] 
           Notwithstanding the 180-day limitation contained in 
        Minnesota Statutes, section 353A.08, subdivision 3, an active 
        member of a former local relief association that consolidated 
        with the public employees retirement association before July 1, 
        1993, may make an election to have retirement benefit coverage 
        provided by the public employees police and fire fund as 
        authorized by the cited law.  An election under this section 
        must be made within six months after the effective date of this 
        section, and shall in all other respects be governed by 
        Minnesota Statutes, section 353A.08, and other applicable laws. 
           Sec. 2.  [EFFECTIVE DATE.] 
           Section 1 is effective on July 1, 1994. 
                                   ARTICLE 6
                             LOCAL POLICE AND FIRE
           Section 1.  [423A.171] [BYLAW AMENDMENTS.] 
           (a) Notwithstanding a provision of section 69.48; 423.387, 
        subdivision 1; 423.58, subdivision 1; 423.810, subdivision 1; 
        423B.10; or 424.24, subdivision 1, or other law governing a 
        local police or salaried firefighters relief association to the 
        contrary, the board of trustees of a local relief association 
        governed by section 69.77 or its successor board under chapter 
        353A or 353B, with municipal approval as provided in section 
        69.77, subdivision 2i, may amend the bylaws of the relief 
        association to provide that a surviving spouse benefit is 
        payable to a surviving spouse who married a deferred or retired 
        member after the member's retirement, provided the marriage 
        occurred at least five years before the death of the member. 
           (b) If the surviving spouse benefit change described in 
        paragraph (a) is made, the change applies to a surviving spouse 
        benefit payable on the effective date of the change and to the 
        potential surviving spouses of all deferred or retired members 
        of the relief association who have that status on the effective 
        date of the change. 
           (c) The bylaw amendment is not effective until a certified 
        copy of the amendment and the municipal approval has been filed 
        by the municipal clerk with the executive director of the 
        legislative commission on pensions and retirement, the state 
        auditor, and the secretary of state. 
           (d) Notwithstanding the provisions of section 353B.11, a 
        surviving spouse benefit change made under this section for a 
        relief association that has consolidated with the public 
        employees retirement association is effective upon approval by 
        the public employees retirement association and the municipality 
        pursuant to clause (c). 
           Presented to the governor April 26, 1994 
           Signed by the governor April 28, 1994, 2:25 p.m.

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