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

CHAPTER 277--S.F.No. 1057
An act
relating to retirement; merging the Minneapolis Teachers Retirement
Fund Association and the Teachers Retirement Association; modifying the
postretirement adjustment amount calculation; adjusting contribution rates;
limiting certain postretirement adjustments; making technical changes; providing
a benefit increase; making state aid adjustment; amending the powers and
duties of the State Board of Investment; requiring an analysis; requiring certain
studies; requiring certain reports; appropriating money; amending Minnesota
Statutes 2004, sections 11A.07, subdivision 5; 11A.18, subdivision 9; 43A.04,
subdivision 12; 127A.50, subdivision 1; 128D.10; 352.116, subdivision 1a;
352.72, subdivision 2; 352B.30, subdivision 2; 353.30, subdivision 5; 353.71,
subdivision 2; 354.05, subdivisions 2, 13; 354.42, subdivisions 2, 3; 354.55,
subdivision 11; 354A.011, subdivisions 15a, 27; 354A.021, subdivision
1; 354A.092; 354A.093, subdivision 1; 354A.095; 354A.096; 354A.12,
subdivisions 1, 2, 2a, 3a, 3b, 3c, 3d; 354A.30; 354A.31, subdivision 7; 354A.32,
subdivision 1; 354A.37, subdivision 2; 354A.39; 354A.40, subdivision 1;
354A.41; 356.20, subdivision 2; 356.214, subdivision 1; 356.215, subdivision 11;
356.219, by adding subdivisions; 356.30, subdivisions 1, 3; 356.302, subdivision
7; 356.303, subdivision 4; 356.315, by adding subdivisions; 356.42, subdivision
3; 356.465, subdivision 3; 423A.02, subdivision 1b; Minnesota Statutes 2005
Supplement, sections 11A.04; 11A.07, subdivision 4; 354.44, subdivision 6;
354A.31, subdivision 4; 356.215, subdivision 8; Laws 2005, chapter 156, article
1, section 8; proposing coding for new law in Minnesota Statutes, chapters 128D;
354; 354A; repealing Minnesota Statutes 2004, sections 354A.051; 354A.105;
354A.23, subdivision 1; 354A.28.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

ARTICLE 1
MINNESOTA POSTRETIREMENT
INVESTMENT FUND CHANGES

    Section 1. Minnesota Statutes 2004, section 11A.18, subdivision 9, is amended to read:
    Subd. 9. Calculation of postretirement adjustment. (a) Annually, following June
30, the state board shall use the procedures in paragraphs (b), (c), and (d) to determine
whether a postretirement adjustment is payable and to determine the amount of any
postretirement adjustment.
    (b) If the Consumer Price Index for urban wage earners and clerical workers all
items index published by the Bureau of Labor Statistics of the United States Department
of Labor increases from June 30 of the preceding year to June 30 of the current year,
the state board shall certify the percentage increase. The amount certified must not
exceed the lesser of the difference between the preretirement interest assumption and
postretirement interest assumption in section 356.215, subdivision 8, paragraph (a), or
2.5 percent. For the Minneapolis Employees Retirement Fund, the amount certified must
not exceed 3.5 percent.
    (c) In addition to any percentage increase certified under paragraph (b), the board
shall use the following procedures to determine if a postretirement adjustment is payable
under this paragraph:
    (1) The state board shall determine the market value of the fund on June 30 of
that year;
    (2) The amount of reserves required as of the current June 30 for the annuity or
benefit payable to an annuitant and benefit recipient of the participating public pension
plans or funds must be determined by the commission-retained actuary as of the current
June 30 retained under section 356.214. An annuitant or benefit recipient who has been
receiving an annuity or benefit for at least 12 full months as of the current June 30 is
eligible to receive a full postretirement adjustment. An annuitant or benefit recipient who
has been receiving an annuity or benefit for at least one full month, but less than 12 full
months as of the current June 30, is eligible to receive a partial postretirement adjustment.
Each fund shall report separately the amount of the reserves for those annuitants and
benefit recipients who are eligible to receive a full postretirement benefit adjustment. This
amount is known as "eligible reserves." Each fund shall also report separately the amount
of the reserves for those annuitants and benefit recipients who are not eligible to receive
a postretirement adjustment. This amount is known as "noneligible reserves." For an
annuitant or benefit recipient who is eligible to receive a partial postretirement adjustment,
each fund shall report separately as additional "eligible reserves" an amount that bears the
same ratio to the total reserves required for the annuitant or benefit recipient as the number
of full months of annuity or benefit receipt as of the current June 30 bears to 12 full
months. The remainder of the annuitant's or benefit recipient's reserves must be separately
reported as additional "noneligible reserves." The amount of "eligible" and "noneligible"
required reserves must be certified to the board by the commission-retained actuary as
soon as is practical following the current June 30;
    (3) The state board shall determine the percentage increase certified under paragraph
(b) multiplied by the eligible required reserves, as adjusted for mortality gains and losses
under subdivision 11, determined under clause (2);
    (4) The state board shall add the amount of reserves required for the annuities or
benefits payable to annuitants and benefit recipients of the participating public pension
plans or funds as of the current June 30 to the amount determined under clause (3);
    (5) The state board shall subtract the amount determined under clause (4) from the
market value of the fund determined under clause (1);
    (6) The state board shall adjust the amount determined under clause (5) by the
cumulative current balance determined pursuant to under clause (8) and any negative
balance carried forward under clause (9);
    (7) A positive amount resulting from the calculations in clauses (1) to (6) is the
excess market value. A negative amount is the negative balance;
    (8) The state board shall allocate one-fifth of the excess market value or one-fifth
of the negative balance to each of five consecutive years, beginning with the fiscal year
ending the current June 30; and
    (9) To calculate the postretirement adjustment under this paragraph based on
investment performance for a fiscal year, the state board shall add together all excess
market value allocated to that year and subtract from the sum all negative balances
allocated to that year. If this calculation results in a negative number, the entire negative
balance must be carried forward and allocated to the next year. If the resulting amount is
positive, a postretirement adjustment is payable under this paragraph. The board shall
express a positive amount as a percentage of the total eligible required reserves certified to
the board under clause (2).
    (d) The state board shall determine the amount of any postretirement adjustment
which is payable using the following procedure:
    (1) The total "eligible" required reserves as of the first of January next following
the end of the fiscal year for the annuitants and benefit recipients eligible to receive a full
or partial postretirement adjustment as determined by clause (2) must be certified to the
state board by the commission-retained actuary retained under section 356.214. The total
"eligible" required reserves must be determined by the commission-retained actuary
retained under section 356.214 on the assumption that all annuitants and benefit recipients
eligible to receive a full or partial postretirement adjustment will be alive on the January
1 in question; and
    (2) The state board shall add the percentage certified under paragraph (b) to any
positive percentage calculated under paragraph (c). The board shall not subtract from the
percentage certified under paragraph (b) any negative amount calculated under paragraph
(c). The sum of these percentages must be carried to five decimal places and must be
certified to each participating public pension fund or plan as the full postretirement
adjustment percentage. The full postretirement adjustment percentage certified to each
participating public pension plan or fund must not exceed five percent. For the Minneapolis
Employees Retirement Fund, no maximum percentage adjustment is applicable.
    (e) A retirement annuity payable in the event of retirement before becoming eligible
for Social Security benefits as provided in section 352.116, subdivision 3; 353.29,
subdivision 6; or 354.35 must be treated as the sum of a period certain retirement annuity
and a life retirement annuity for the purposes of any postretirement adjustment. The
period certain retirement annuity plus the life retirement annuity must be the annuity
amount payable until age 62 or 65, whichever applies. A postretirement adjustment
granted on the period certain retirement annuity must terminate when the period certain
retirement annuity terminates.

    Sec. 2. [354A.42] ST. PAUL TEACHER INCREASE LIMIT.
Notwithstanding any law to the contrary, the St. Paul Teachers Retirement Fund
Association may not pay a postretirement adjustment of more than five percent in any
year, effective July 1, 2010.

    Sec. 3. EFFECTIVE DATE.
Section 1 is effective July 1, 2010.

ARTICLE 2
DEFERRED ANNUITY
AUGMENTATION RATE CHANGE

    Section 1. Minnesota Statutes 2004, section 352.116, subdivision 1a, is amended to
read:
    Subd. 1a. Actuarial reduction for early retirement. This subdivision applies to a
person who has become at least 55 years old and first became a covered employee after
June 30, 1989, and to any other covered employee who has become at least 55 years
old and whose annuity is higher when calculated under section 352.115, subdivision 3,
paragraph (b), in conjunction with this subdivision than when calculated under section
352.115, subdivision 3, paragraph (a), in conjunction with subdivision 1. A covered
employee who retires before the normal retirement age shall be paid the normal retirement
annuity provided in section 352.115, subdivisions 2 and 3, paragraph (b), reduced so
that the reduced annuity is the actuarial equivalent of the annuity that would be payable
to the employee if the employee deferred receipt of the annuity and the annuity amount
were augmented at an annual rate of three percent compounded annually from the day
the annuity begins to accrue until the normal retirement age if the employee became an
employee before July 1, 2006, and at an annual rate of 2.5 percent compounded annually
from the day the annuity begins to accrue until the normal retirement age if the employee
initially becomes an employee after June 30, 2006.

    Sec. 2. Minnesota Statutes 2004, section 352.72, subdivision 2, is amended to read:
    Subd. 2. Computation of deferred annuity. (a) The deferred annuity, if any,
accruing under subdivision 1, or section 352.22, subdivision 3, must be computed as
provided in section 352.22, subdivision 3, on the basis of allowable service before
termination of state service and augmented as provided herein. The required reserves
applicable to a deferred annuity or to an annuity for which a former employee was eligible
but had not applied or to any deferred segment of an annuity must be determined as of the
date the benefit begins to accrue and augmented by interest compounded annually from
the first day of the month following the month in which the employee ceased to be a state
employee, or July 1, 1971, whichever is later, to the first day of the month in which the
annuity begins to accrue. The rates of interest used for this purpose must be five percent
compounded annually until January 1, 1981, and three percent compounded annually
thereafter until January 1 of the year following the year in which the former employee
attains age 55., and from that date to the effective date of retirement, the rate is five percent
compounded annually if the employee became an employee before July 1, 2006, and at
2.5 percent compounded annually if the employee becomes an employee after June 30,
2006. If a person has more than one period of uninterrupted service, the required reserves
related to each period must be augmented by interest under this subdivision. The sum
of the augmented required reserves so determined is the present value of the annuity.
"Uninterrupted service" for the purpose of this subdivision means periods of covered
employment during which the employee has not been separated from state service for more
than two years. If a person repays a refund, the service restored by the repayment must be
considered continuous with the next period of service for which the employee has credit
with this system. The formula percentages used for each period of uninterrupted service
must be those applicable to a new employee. The mortality table and interest assumption
used to compute the annuity must be those in effect when the employee files application
for annuity. This section does not reduce the annuity otherwise payable under this chapter.
(b) The retirement annuity or disability benefit of, or the survivor benefit payable on
behalf of, a former state employee who terminated service before July 1, 1997, which is
not first payable until after June 30, 1997, must be increased on an actuarial equivalent
basis to reflect the change in the postretirement interest rate actuarial assumption under
section 356.215, subdivision 8, from five percent to six percent under a calculation
procedure and the tables adopted by the board and approved by the actuary retained by
the Legislative Commission on Pensions and Retirement.

    Sec. 3. Minnesota Statutes 2004, section 352B.30, subdivision 2, is amended to read:
    Subd. 2. Computation of deferred annuity. Deferred annuities must be computed
according to this chapter on the basis of allowable service before termination of service
and augmented as provided in this chapter. The required reserves applicable to a deferred
annuity must be augmented by interest compounded annually from the first day of the
month following the month in which the member terminated service, or July 1, 1971,
whichever is later, to the first day of the month in which the annuity begins to accrue. The
rates of interest used for this purpose shall be five percent per year compounded annually
until January 1, 1981, and after that date three percent per year compounded annually if
the employee became an employee before July 1, 2006, and at 2.5 percent compounded
annually if the employee becomes an employee after June 30, 2006. The mortality table
and interest assumption used to compute the annuity shall be those in effect when the
member files application for annuity.

    Sec. 4. Minnesota Statutes 2004, section 353.30, subdivision 5, is amended to read:
    Subd. 5. Actuarial reduction for early retirement. This subdivision applies to a
member who has become at least 55 years old and first became a public employee after
June 30, 1989, and to any other member who has become at least 55 years old and whose
annuity is higher when calculated under section 353.29, subdivision 3, paragraph (b), in
conjunction with this subdivision than when calculated under section 353.29, subdivision
3
, paragraph (a), in conjunction with subdivision 1, 1a, 1b, or 1c. An employee who
retires before normal retirement age shall be paid the retirement annuity provided in
section 353.29, subdivision 3, paragraph (b), reduced so that the reduced annuity is the
actuarial equivalent of the annuity that would be payable to the employee if the employee
deferred receipt of the annuity and the annuity amount were augmented at an annual rate
of three percent compounded annually from the day the annuity begins to accrue until the
normal retirement age if the employee became an employee before July 1, 2006, and at 2.5
percent compounded annually from the day the annuity begins to accrue until the normal
retirement age if the employee initially becomes an employee after June 30, 2006.

    Sec. 5. Minnesota Statutes 2004, section 353.71, subdivision 2, is amended to read:
    Subd. 2. Deferred annuity computation; augmentation. (a) The deferred
annuity accruing under subdivision 1, or under sections 353.34, subdivision 3, and
353.68, subdivision 4, must be computed on the basis of allowable service prior to the
termination of public service and augmented as provided in this paragraph. The required
reserves applicable to a deferred annuity, or to any deferred segment of an annuity must
be determined as of the first day of the month following the month in which the former
member ceased to be a public employee, or July 1, 1971, whichever is later. These
required reserves must be augmented at the rate of five percent annually compounded
annually until January 1, 1981, and at the rate of three percent thereafter until January 1
of the year following the year in which the former member attains age 55. and from that
date to the effective date of retirement, the rate is five percent compounded annually if
the employee became an employee before July 1, 2006, and at 2.5 percent compounded
annually if the employee becomes an employee after June 30, 2006. If a person has more
than one period of uninterrupted service, the required reserves related to each period
must be augmented as specified in this paragraph. The sum of the augmented required
reserves is the present value of the annuity. Uninterrupted service for the purpose of this
subdivision means periods of covered employment during which the employee has not
been separated from public service for more than two years. If a person repays a refund,
the restored service must be considered as continuous with the next period of service
for which the employee has credit with this association. This section must not reduce
the annuity otherwise payable under this chapter. This paragraph applies to individuals
who become deferred annuitants on or after July 1, 1971. For a member who became a
deferred annuitant before July 1, 1971, the paragraph applies from July 1, 1971, if the
former active member applies for an annuity after July 1, 1973.
(b) The retirement annuity or disability benefit of, or the survivor benefit payable on
behalf of, a former member who terminated service before July 1, 1997, or the survivor
benefit payable on behalf of a basic or police and fire member who was receiving disability
benefits before July 1, 1997, which is first payable after June 30, 1997, must be increased
on an actuarial equivalent basis to reflect the change in the postretirement interest rate
actuarial assumption under section 356.215, subdivision 8, from five percent to six percent
under a calculation procedure and tables adopted by the board and approved by the actuary
retained by the Legislative Commission on Pensions and Retirement.

    Sec. 6. Minnesota Statutes 2005 Supplement, section 354.44, subdivision 6, is
amended to read:
    Subd. 6. Computation of formula program retirement annuity. (a) The formula
retirement annuity must be computed in accordance with the applicable provisions of the
formulas stated in paragraph (b) or (d) on the basis of each member's average salary under
section 354.05, subdivision 13a, for the period of the member's formula service credit.
(b) This paragraph, in conjunction with paragraph (c), applies to a person who first
became a member of the association or a member of a pension fund listed in section
356.30, subdivision 3, before July 1, 1989, unless paragraph (d), in conjunction with
paragraph (e), produces a higher annuity amount, in which case paragraph (d) applies. The
average salary as defined in section 354.05, subdivision 13a, multiplied by the following
percentages per year of formula service credit shall determine the amount of the annuity to
which the member qualifying therefor is entitled:

Coordinated Member
Basic Member





Each year of service
during first ten
the percent specified
in section 356.315,
subdivision 1, per year
the percent
specified in
section 356.315,
subdivision 3, per
year





Each year of service
thereafter
the percent specified
in section 356.315,
subdivision 2, per year
the percent
specified in
section 356.315,
subdivision 4, per
year
(c)(i) This paragraph applies only to a person who first became a member of the
association or a member of a pension fund listed in section 356.30, subdivision 3, before
July 1, 1989, and whose annuity is higher when calculated under paragraph (b), in
conjunction with this paragraph than when calculated under paragraph (d), in conjunction
with paragraph (e).
(ii) Where any member retires prior to normal retirement age under a formula
annuity, the member shall be paid a retirement annuity in an amount equal to the normal
annuity provided in paragraph (b) reduced by one-quarter of one percent for each month
that the member is under normal retirement age at the time of retirement except that for
any member who has 30 or more years of allowable service credit, the reduction shall be
applied only for each month that the member is under age 62.
(iii) Any member whose attained age plus credited allowable service totals 90 years
is entitled, upon application, to a retirement annuity in an amount equal to the normal
annuity provided in paragraph (b), without any reduction by reason of early retirement.
(d) This paragraph applies to a member who has become at least 55 years old and
first became a member of the association after June 30, 1989, and to any other member
who has become at least 55 years old and whose annuity amount when calculated under
this paragraph and in conjunction with paragraph (e), is higher than it is when calculated
under paragraph (b), in conjunction with paragraph (c). The average salary, as defined in
section 354.05, subdivision 13a, multiplied by the percent specified by section 356.315,
subdivision 4
, for each year of service for a basic member and by the percent specified in
section 356.315, subdivision 2, for each year of service for a coordinated member shall
determine the amount of the retirement annuity to which the member is entitled.
(e) This paragraph applies to a person who has become at least 55 years old and first
becomes a member of the association after June 30, 1989, and to any other member who
has become at least 55 years old and whose annuity is higher when calculated under
paragraph (d) in conjunction with this paragraph than when calculated under paragraph
(b), in conjunction with paragraph (c). An employee who retires under the formula annuity
before the normal retirement age shall be paid the normal annuity provided in paragraph
(d) reduced so that the reduced annuity is the actuarial equivalent of the annuity that would
be payable to the employee if the employee deferred receipt of the annuity and the annuity
amount were augmented at an annual rate of three percent compounded annually from the
day the annuity begins to accrue until the normal retirement age if the employee became
an employee before July 1, 2006, and at 2.5 percent compounded annually if the employee
becomes an employee after June 30, 2006.
(f) No retirement annuity is payable to a former employee with a salary that exceeds
95 percent of the governor's salary unless and until the salary figures used in computing
the highest five successive years average salary under paragraph (a) have been audited by
the Teachers Retirement Association and determined by the executive director to comply
with the requirements and limitations of section 354.05, subdivisions 35 and 35a.

    Sec. 7. Minnesota Statutes 2004, section 354.55, subdivision 11, is amended to read:
    Subd. 11. Deferred annuity; augmentation. (a) Any person covered under section
354.44, subdivision 6, who ceases to render teaching service, may leave the person's
accumulated deductions in the fund for the purpose of receiving a deferred annuity at
retirement. Eligibility for an annuity under this subdivision is governed pursuant to
section 354.44, subdivision 1, or 354.60.
(b) The amount of the deferred retirement annuity is determined by section 354.44,
subdivision 6
, and augmented as provided in this subdivision. The required reserves
related to that portion of the annuity which had accrued when the member ceased to
render teaching service must be augmented by interest compounded annually from the
first day of the month following the month during which the member ceased to render
teaching service to the effective date of retirement. There shall be no augmentation if
this period is less than three months or if this period commences prior to July 1, 1971.
The rates of interest used for this purpose must be five percent compounded annually
commencing July 1, 1971, until January 1, 1981, and three percent compounded annually
thereafter until January 1 of the year following the year in which the former member
attains age 55. and from that date to the effective date of retirement, the rate is five percent
compounded annually if the employee became an employee before July 1, 2006, and at
2.5 percent compounded annually if the employee becomes an employee after June 30,
2006. If a person has more than one period of uninterrupted service, a separate average
salary determined under section 354.44, subdivision 6, must be used for each period and
the required reserves related to each period must be augmented by interest pursuant to
this subdivision. The sum of the augmented required reserves so determined shall be the
basis for purchasing the deferred annuity. If a person repays a refund, the service restored
by the repayment must be considered as continuous with the next period of service for
which the person has credit with this fund. If a person does not render teaching service in
any one fiscal year or more consecutive fiscal years and then resumes teaching service,
the formula percentages used from the date of the resumption of teaching service must be
those applicable to new members. The mortality table and interest assumption used to
compute the annuity must be the applicable mortality table established by the board under
section 354.07, subdivision 1, and the interest rate assumption under section 356.215 in
effect when the member retires. A period of uninterrupted service for the purposes of this
subdivision means a period of covered teaching service during which the member has not
been separated from active service for more than one fiscal year.
(c) In no case shall the annuity payable under this subdivision be less than the
amount of annuity payable pursuant to section 354.44, subdivision 6.
(d) The requirements and provisions for retirement before normal retirement age
contained in section 354.44, subdivision 6, clause (3) or (5), shall also apply to an
employee fulfilling the requirements with a combination of service as provided in section
354.60.
(e) The augmentation provided by this subdivision applies to the benefit provided
in section 354.46, subdivision 2.
(f) The augmentation provided by this subdivision shall not apply to any period in
which a person is on an approved leave of absence from an employer unit covered by the
provisions of this chapter.
(g) The retirement annuity or disability benefit of, or the survivor benefit payable on
behalf of, a former teacher who terminated service before July 1, 1997, which is not first
payable until after June 30, 1997, must be increased on an actuarial equivalent basis to
reflect the change in the postretirement interest rate actuarial assumption under section
356.215, subdivision 8, from five percent to six percent under a calculation procedure and
tables adopted by the board as recommended by an approved actuary and approved by the
actuary retained by the Legislative Commission on Pensions and Retirement.

    Sec. 8. Minnesota Statutes 2004, section 354A.31, subdivision 7, is amended to read:
    Subd. 7. Actuarial reduction for early retirement. This subdivision applies to
a person who has become at least 55 years old and first becomes a coordinated member
after June 30, 1989, and to any other coordinated member who has become at least 55
years old and whose annuity is higher when calculated using the retirement annuity
formula percentage in subdivision 4, paragraph (d), and subdivision 4a, paragraph (d), in
conjunction with this subdivision than when calculated under subdivision 4, paragraph
(c), or subdivision 4a, paragraph (c), in conjunction with subdivision 6. A coordinated
member who retires before the full benefit age shall be paid the retirement annuity
calculated using the retirement annuity formula percentage in subdivision 4, paragraph
(d), or subdivision 4a, paragraph (d), reduced so that the reduced annuity is the actuarial
equivalent of the annuity that would be payable to the member if the member deferred
receipt of the annuity and the annuity amount were augmented at an annual rate of three
percent compounded annually from the day the annuity begins to accrue until the normal
retirement age if the employee became an employee before July 1, 2006, and at 2.5
percent compounded annually from the day the annuity begins to accrue until the normal
retirement age if the person initially becomes a teacher after June 30, 2006.

    Sec. 9. Minnesota Statutes 2004, section 354A.37, subdivision 2, is amended to read:
    Subd. 2. Eligibility for deferred retirement annuity. Any coordinated member
who ceases to render teaching services for the school district in which the teachers
retirement fund association is located, with sufficient allowable service credit to meet
the minimum service requirements specified in section 354A.31, subdivision 1, shall be
entitled to a deferred retirement annuity in lieu of a refund pursuant to subdivision 1. The
deferred retirement annuity shall be computed pursuant to section 354A.31 and shall be
augmented as provided in this subdivision. The deferred annuity shall commence upon
application after the person on deferred status attains at least the minimum age specified in
section 354A.31, subdivision 1.
The monthly annuity amount that had accrued when the member ceased to render
teaching service must be augmented from the first day of the month following the month
during which the member ceased to render teaching service to the effective date of
retirement. There is no augmentation if this period is less than three months. The rate of
augmentation is three percent compounded annually until January 1 of the year following
the year in which the former member attains age 55, and five percent compounded
annually after that date to the effective date of retirement if the employee became an
employee before July 1, 2006, and at 2.5 percent compounded annually if the employee
becomes an employee after June 30, 2006. If a person has more than one period of
uninterrupted service, a separate average salary determined under section 354A.31 must
be used for each period, and the monthly annuity amount related to each period must be
augmented as provided in this subdivision. The sum of the augmented monthly annuity
amounts determines the total deferred annuity payable. If a person repays a refund, the
service restored by the repayment must be considered as continuous with the next period
of service for which the person has credit with the fund. If a person does not render
teaching services in any one fiscal year or more consecutive fiscal years and then resumes
teaching service, the formula percentages used from the date of resumption of teaching
service are those applicable to new members. The mortality table and interest assumption
used to compute the annuity are the table established by the fund to compute other
annuities, and the interest assumption under section 356.215 in effect when the member
retires. A period of uninterrupted service for the purpose of this subdivision means a
period of covered teaching service during which the member has not been separated from
active service for more than one fiscal year.
The augmentation provided by this subdivision applies to the benefit provided in
section 354A.35, subdivision 2. The augmentation provided by this subdivision does
not apply to any period in which a person is on an approved leave of absence from an
employer unit.

    Sec. 10. Minnesota Statutes 2004, section 356.30, subdivision 1, is amended to read:
    Subdivision 1. Eligibility; computation of annuity. (a) Notwithstanding any
provisions of the laws governing the retirement plans enumerated in subdivision 3, a
person who has met the qualifications of paragraph (b) may elect to receive a retirement
annuity from each enumerated retirement plan in which the person has at least one-half
year of allowable service, based on the allowable service in each plan, subject to the
provisions of paragraph (c).
(b) A person may receive, upon retirement, a retirement annuity from each
enumerated retirement plan in which the person has at least one-half year of allowable
service, and augmentation of a deferred annuity calculated at the appropriate rate under
the laws governing each public pension plan or fund named in subdivision 3, based on
the date of the person's initial entry into public employment from the date the person
terminated all public service if:
(1) the person has allowable service totaling an amount that allows the person to
receive an annuity in any two or more of the enumerated plans; and
(2) the person has not begun to receive an annuity from any enumerated plan or the
person has made application for benefits from each applicable plan and the effective
dates of the retirement annuity with each plan under which the person chooses to receive
an annuity are within a one-year period.
(c) The retirement annuity from each plan must be based upon the allowable service,
accrual rates, and average salary in the applicable plan except as further specified or
modified in the following clauses:
(1) the laws governing annuities must be the law in effect on the date of termination
from the last period of public service under a covered retirement plan with which the
person earned a minimum of one-half year of allowable service credit during that
employment;
(2) the "average salary" on which the annuity from each covered plan in which
the employee has credit in a formula plan must be based on the employee's highest five
successive years of covered salary during the entire service in covered plans;
(3) the accrual rates to be used by each plan must be those percentages prescribed by
each plan's formula as continued for the respective years of allowable service from one
plan to the next, recognizing all previous allowable service with the other covered plans;
(4) the allowable service in all the plans must be combined in determining eligibility
for and the application of each plan's provisions in respect to reduction in the annuity
amount for retirement prior to normal retirement age; and
(5) the annuity amount payable for any allowable service under a nonformula plan
of a covered plan must not be affected, but such service and covered salary must be used
in the above calculation.
(d) This section does not apply to any person whose final termination from the last
public service under a covered plan was before May 1, 1975.
(e) For the purpose of computing annuities under this section, the accrual rates
used by any covered plan, except the public employees police and fire plan, the judges'
retirement fund, and the State Patrol retirement plan, must not exceed the percent specified
in section 356.315, subdivision 4, per year of service for any year of service or fraction
thereof. The formula percentage used by the judges' retirement fund must not exceed the
percentage rate specified in section 356.315, subdivision 8, per year of service for any
year of service or fraction thereof. The accrual rate used by the public employees police
and fire plan and the State Patrol retirement plan must not exceed the percentage rate
specified in section 356.315, subdivision 6, per year of service for any year of service or
fraction thereof. The accrual rate or rates used by the legislators retirement plan and the
elective state officers retirement plan must not exceed 2.5 percent, but this limit does not
apply to the adjustment provided under section 3A.02, subdivision 1, paragraph (c), or
352C.031, paragraph (b).
(f) Any period of time for which a person has credit in more than one of the covered
plans must be used only once for the purpose of determining total allowable service.
(g) If the period of duplicated service credit is more than one-half year, or the person
has credit for more than one-half year, with each of the plans, each plan must 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 plans for the period.
(h) If the period of duplicated service credit is less than one-half year, or when
added to other service credit with that plan is less than one-half year, the service credit
must be ignored and a refund of contributions made to the person in accord with that
plan's refund provisions.

    Sec. 11. EFFECTIVE DATE.
Sections 1 to 10 are effective July 1, 2006.

ARTICLE 3
TEACHERS RETIREMENT ASSOCIATION
COVERAGE AND BENEFIT RESTRUCTURING

    Section 1. Minnesota Statutes 2004, section 127A.50, subdivision 1, is amended to
read:
    Subdivision 1. Aid adjustment. Beginning in fiscal year 1998 and each year
thereafter, the commissioner of education shall adjust state aid payments to school
operating funds for Independent School District No. 625, and Independent School District
No. 709, and Special School District No. 1 by the net amount of clauses (1) and (2),
for Special School District No. 1 by the net amount of clauses (1), (2), and (4), and for
all other districts, including charter schools, but excluding any education organizations
that are prohibited from receiving direct state aids under section 123A.26 or 125A.75,
subdivision 7
, by the net amount of clauses (1), (2), and (3), and (4):
(1) a decrease equal to each district's share of the fiscal year 1997 adjustment
effected under Minnesota Statutes 1996, section 124.2139;
(2) an increase equal to one percent of the salaries paid to members of the general
plan of the Public Employees Retirement Association in fiscal year 1997, multiplied by
0.35 for fiscal year 1998 and 0.70 each year thereafter;
(3) a decrease equal to 2.34 percent of the salaries paid to members of the Teachers
Retirement Association in fiscal year 1997.; and
(4) an increase equal to 0.5 percent of the salaries paid to members of the Teachers
Retirement Association in fiscal year 2007.
EFFECTIVE DATE.This section is effective for revenue for fiscal year 2008.

    Sec. 2. Minnesota Statutes 2004, section 128D.10, is amended to read:
128D.10 CONTINUITY ON TENURE, PENSIONS, AND RETIREMENT.
(a) The tenure, pension, and retirement provisions of any law applicable to
employees of the special school district of Minneapolis, including employees belonging to
the municipal employees retirement fund and those belonging to the Minneapolis Teachers'
Retirement Fund Association before April 24, 1959, shall continue to be applicable in
the same manner and to the same extent to employees of the special independent school
district after April 24, 1959, except as otherwise provided in law.
(b) The provisions of any general law or laws which are applicable only to
independent school districts wholly or partially within cities of the first class shall not be
applicable to the special independent school district of Minneapolis.
(c) The powers, duties, and corporate structure of the Minneapolis Teachers'
Retirement Fund Association, and the laws applicable thereto, shall be and remain the
same in the special independent school district of Minneapolis as at the time of enactment
of the within law, until changed in accordance with law.

    Sec. 3. [128D.18] AID REDEDICATION.
Notwithstanding any law to the contrary and subject to section 354A.12, subdivision
3c, special direct state aid previously paid to the Minneapolis Teachers Retirement Fund
Association under sections 354A.12, subdivisions 3a and 3b, and 423A.02, must be paid
to the Teachers Retirement Association.

    Sec. 4. Minnesota Statutes 2004, section 354.05, subdivision 2, is amended to read:
    Subd. 2. Teacher. (a) "Teacher" means:
(1) a person who renders service as a teacher, supervisor, principal, superintendent,
librarian, nurse, counselor, social worker, therapist, or psychologist in a public school of
the state located outside of the corporate limits of a city of the first class the city of Duluth
or the city of St. Paul, or in any charter school, irrespective of the location of the school,
or in any charitable, penal, or correctional institutions of a governmental subdivision, or
who is engaged in educational administration in connection with the state public school
system, but excluding the University of Minnesota, whether the position be a public office
or an employment, and not including the members or officers of any general governing or
managing board or body;
(2) an employee of the Teachers Retirement Association;
(3) a person who renders teaching service on a part-time basis and who also renders
other services for a single employing unit. 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. If the person's teaching service comprises less
than 50 percent of the combined employment salary, the executive director must determine
whether all or none of the combined service is covered by the association; or
(4) a person who is not covered by the plans established under chapter 352D, 354A,
or 354B and who is employed by the Board of Trustees of the Minnesota State Colleges
and Universities system in an unclassified position as:
(i) a president, vice-president, or dean;
(ii) a manager or a professional in an academic or an academic support program
other than specified in item (i);
(iii) an administrative or a service support faculty position; or
(iv) a teacher or a research assistant.
(b) "Teacher" does not mean:
(1) a person who works for a school or institution as an independent contractor as
defined by the Internal Revenue Service;
(2) a person who renders part-time teaching service or who is a customized trainer
as defined by the Minnesota State Colleges and Universities system if (i) the service is
incidental to the regular nonteaching occupation of the person; and (ii) the employer
stipulates annually in advance that the part-time teaching service or customized training
service will not exceed 300 hours in a fiscal year and retains the stipulation in its records;
and (iii) the part-time teaching service or customized training service actually does not
exceed 300 hours in a fiscal year; or
(3) a person exempt from licensure under section 122A.30.

    Sec. 5. Minnesota Statutes 2004, section 354.05, subdivision 13, is amended to read:
    Subd. 13. Allowable service. "Allowable service" means:
(1) Any service rendered by a teacher for which on or before July 1, 1957, the
teacher's account in the retirement fund was credited 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, sections 135.01 to 135.13, as amended by
Laws 1955, chapters 361, 549, 550, 611, or
(2) Any service rendered by a teacher for which on or before July 1, 1961, the
teacher elected to obtain credit for service by making payments to the fund pursuant to
Minnesota Statutes 1980, section 354.09 and section 354.51, or
(3) Any service rendered by a teacher after July 1, 1957, for any calendar month
when the member receives salary from which deductions are made, deposited and credited
in the fund, or
(4) Any service rendered by a person after July 1, 1957, for any calendar month
where payments in lieu of salary deductions are made, deposited and credited into the
fund as provided in Minnesota Statutes 1980, section 354.09, subdivision 4, and section
354.53, or
(5) Any service rendered by a teacher for which the teacher elected to obtain
credit for service by making payments to the fund pursuant to Minnesota Statutes 1980,
section 354.09, subdivisions 1 and 4, sections 354.50, 354.51, Minnesota Statutes 1957,
section 135.41, subdivision 4, Minnesota Statutes 1971, section 354.09, subdivision 2, or
Minnesota Statutes, 1973 Supplement, section 354.09, subdivision 3, or
(6) Both service during years of actual membership in the course of which
contributions were currently made and service in years during which the teacher was not a
member but for which the teacher later elected to obtain credit by making payments to the
fund as permitted by any law then in effect, or
(7) Any service rendered where contributions were made and no allowable service
credit was established because of the limitations contained in Minnesota Statutes 1957,
section 135.09, subdivision 2, as determined by the ratio between the amounts of money
credited to the teacher's account in a fiscal year and the maximum retirement contribution
allowable for that year, or
(8) MS 2002 (Expired)
(9) A period of time during which a teacher who is a state employee was on strike
without pay, not to exceed a period of one year, if the teacher makes a payment in lieu of
salary deductions or makes a prior service credit purchase payment, whichever applies. If
the payment is made within 12 months, the payment by the teacher must be an amount
equal to the employee and employer contribution rates set forth in section 354.42,
subdivisions 2 and 3
, applied to the teacher's rate of salary in effect on the conclusion of
the strike for the period of the strike without pay, plus compound interest at a monthly rate
of 0.71 percent from the last day of the strike until the date of payment. If the payment by
the employee is not made within 12 months, the payment must be in an amount equal to
the payment amount determined under section 356.55 or 356.551, whichever applies, or
(10) A period of service before July 1, 2006, that was properly credited as allowable
service by the Minneapolis Teachers Retirement Fund Association, and that was rendered
by a teacher as an employee of Special School District No. 1, Minneapolis, or by an
employee of the Minneapolis Teachers Retirement Fund Association who was a member
of the Minneapolis Teachers Retirement Fund Association by virtue of that employment,
who has not begun receiving an annuity or other retirement benefit from the former
Minneapolis Teachers Retirement Fund Association calculated in whole or in part on that
service before July 1, 2006, and who has not taken a refund of member contributions
related to that service unless the refund is repaid under section 354.50, subdivision 4.
Service as an employee of Special School District No. 1, Minneapolis on or after July 1,
2006 is "allowable service" only as provided by this chapter.

    Sec. 6. Minnesota Statutes 2004, section 354.42, subdivision 2, is amended to read:
    Subd. 2. Employee. (a) The employee contribution to the fund is an amount equal
to 5.0 the following percentage of the salary of a member:
(1) after July 1, 2006, for a teacher employed by Special School District No. 1,
Minneapolis, 5.5 percent if the teacher is a coordinated member, and 9.0 percent if the
teacher is a basic member;
(2) for every other teacher, after July 1, 2006, 5.5 percent of if the salary of every
teacher is a coordinated member and 9.0 percent of if the salary of every teacher is a
basic member.
(b) This contribution must be made by deduction from salary. Where any portion
of a member's salary is paid from other than public funds, the member's employee
contribution must be based on the entire salary received.

    Sec. 7. Minnesota Statutes 2004, section 354.42, subdivision 3, is amended to read:
    Subd. 3. Employer. (a) The regular employer contribution to the fund by Special
School District No. 1, Minneapolis, after July 1, 2006, and before July 1, 2007, is an
amount equal to 5.00 percent of the salary of each of its teachers who is a coordinated
member and 9.00 percent of the salary of each of its teachers who is a basic member. After
July 1, 2007, the regular employer contribution to the fund by Special School District No.
1, Minneapolis, is an amount equal to 5.50 percent of salary of each coordinated member
and 9.50 percent of salary of each basic member. The additional employer contribution to
the fund by Special School District No. 1, Minneapolis, after July 1, 2006, is an amount
equal to 3.64 percent of the salary of each teacher who is a coordinated member or is a
basic member.
(b) The employer contribution to the fund for every other employer, is an amount
equal to 5.0 percent of the salary of each coordinated member and 9.0 percent of the salary
of each basic member before July 1, 2007, and 5.5 percent of the salary of each coordinated
member and 9.5 percent of the salary of each basic member after June 30, 2007.

    Sec. 8. Minnesota Statutes 2005 Supplement, section 354.44, subdivision 6, is
amended to read:
    Subd. 6. Computation of formula program retirement annuity. (a) The formula
retirement annuity must be computed in accordance with the applicable provisions of the
formulas stated in paragraph (b) or (d) on the basis of each member's average salary under
section 354.05, subdivision 13a, for the period of the member's formula service credit.
(b) This paragraph, in conjunction with paragraph (c), applies to a person who first
became a member of the association or a member of a pension fund listed in section
356.30, subdivision 3, before July 1, 1989, unless paragraph (d), in conjunction with
paragraph (e), produces a higher annuity amount, in which case paragraph (d) applies. The
average salary as defined in section 354.05, subdivision 13a, multiplied by the following
percentages per year of formula service credit shall determine the amount of the annuity to
which the member qualifying therefor is entitled for service rendered before July 1, 2006:

Coordinated Member
Basic Member





Each year of service
during first ten
the percent specified
in section 356.315,
subdivision 1, per year
the percent
specified in
section 356.315,
subdivision 3, per
year





Each year of service
thereafter
the percent specified
in section 356.315,
subdivision 2, per year
the percent
specified in
section 356.315,
subdivision 4, per
year
For service rendered on or after July 1, 2006, the average salary as defined in section
354.05, subdivision 13a, multiplied by the following percentages per year of service
credit, determines the amount the annuity to which the member qualifying therefor is:

Coordinated Member
Basic Member





Each year of service
during first ten
the percent specified
in section 356.315,
subdivision 1a, per year
the percent
specified in
section 356.315,
subdivision 3, per
year





Each year of service after
ten years of service
the percent specified
in section 356.315,
subdivision 2b, per year
the percent
specified in
section 356.315,
subdivision 4, per
year
(c)(i) This paragraph applies only to a person who first became a member of the
association or a member of a pension fund listed in section 356.30, subdivision 3, before
July 1, 1989, and whose annuity is higher when calculated under paragraph (b), in
conjunction with this paragraph than when calculated under paragraph (d), in conjunction
with paragraph (e).
(ii) Where any member retires prior to normal retirement age under a formula
annuity, the member shall be paid a retirement annuity in an amount equal to the normal
annuity provided in paragraph (b) reduced by one-quarter of one percent for each month
that the member is under normal retirement age at the time of retirement except that for
any member who has 30 or more years of allowable service credit, the reduction shall be
applied only for each month that the member is under age 62.
(iii) Any member whose attained age plus credited allowable service totals 90 years
is entitled, upon application, to a retirement annuity in an amount equal to the normal
annuity provided in paragraph (b), without any reduction by reason of early retirement.
(d) This paragraph applies to a member who has become at least 55 years old and
first became a member of the association after June 30, 1989, and to any other member
who has become at least 55 years old and whose annuity amount when calculated under
this paragraph and in conjunction with paragraph (e), is higher than it is when calculated
under paragraph (b), in conjunction with paragraph (c). For a basic member, the average
salary, as defined in section 354.05, subdivision 13a, multiplied by the percent specified
by section 356.315, subdivision 4, for each year of service for a basic member and by
the percent specified in section 356.315, subdivision 2, for each year of service for a
coordinated member shall determine the amount of the retirement annuity to which the
basic member is entitled. The annuity of a basic member who was a member for the
former Minneapolis Teachers Retirement Fund Association as of June 30, 2006, must
be determined according to the annuity formula under the articles of incorporation of
the former Minneapolis Teachers Retirement Fund Association in effect as of that date.
For a coordinated member, the average salary, as defined in section 354.05, subdivision
13a, multiplied by the percent specified in section 356.315, subdivision 2, for each year
of service rendered before July 1, 2006, and by the percent specified in section 356.315,
subdivision 2b, for each year of service rendered on or after July 1, 2006, determines the
amount of the retirement annuity to which the coordinated member is entitled.
(e) This paragraph applies to a person who has become at least 55 years old and first
becomes a member of the association after June 30, 1989, and to any other member who
has become at least 55 years old and whose annuity is higher when calculated under
paragraph (d) in conjunction with this paragraph than when calculated under paragraph
(b), in conjunction with paragraph (c). An employee who retires under the formula annuity
before the normal retirement age shall be paid the normal annuity provided in paragraph
(d) reduced so that the reduced annuity is the actuarial equivalent of the annuity that would
be payable to the employee if the employee deferred receipt of the annuity and the annuity
amount were augmented at an annual rate of three percent compounded annually from the
day the annuity begins to accrue until the normal retirement age.
(f) No retirement annuity is payable to a former employee with a salary that exceeds
95 percent of the governor's salary unless and until the salary figures used in computing
the highest five successive years average salary under paragraph (a) have been audited by
the Teachers Retirement Association and determined by the executive director to comply
with the requirements and limitations of section 354.05, subdivisions 35 and 35a.

    Sec. 9. [354.70] CONSOLIDATION OF MINNEAPOLIS TEACHERS
RETIREMENT FUND ASSOCIATION.
    Subdivision 1. Membership transfer. All active, inactive, and retired members of
the Minneapolis Teachers Retirement Fund Association are transferred to the Teachers
Retirement Association and are no longer members of the Minneapolis Teachers
Retirement Fund Association as of July 1, 2006.
    Subd. 2. TRA membership. A person first hired as a teacher by Special School
District No. 1, Minneapolis, after June 30, 2006, and who is a teacher as defined in
section 354.05, subdivision 2, is a member of the Teachers Retirement Association for the
person's teaching service.
    Subd. 3. Service credit and liability transfer. All allowable service and salary
credit of the members and other individuals transferred under subdivision 1 as specified in
the records of the Minneapolis Teachers Retirement Fund Association on the transfer date
is allowable service credit under section 354.05, subdivision 13, formula service credit
under section 354.05, subdivision 25, and salary credit under section 354.05, subdivision
35, for the Teachers Retirement Association.
    Subd. 4. Transfer of records. On or before June 30, 2006, the chief administrative
officer of the Minneapolis Teachers Retirement Fund Association shall transfer all
records and documents relating to the funds and the benefit plans of the association to the
executive director of the Teachers Retirement Association. To the extent possible, original
copies of all records and documents must be transferred.
    Subd. 5. Transfer of assets. (a) On or before June 30, 2006, the chief administrative
officer of the Minneapolis Teachers Retirement Fund Association shall transfer to the
Teachers Retirement Association the entire assets of the special retirement fund of the
Minneapolis Teachers Retirement Fund Association. The transfer of the assets of the
Minneapolis Teachers Retirement Fund Association special retirement fund must include
any accounts receivable that are determined by the executive director of the State Board of
Investment as reasonably capable of being collected. Legal title to account receivables that
are determined by the executive director of the State Board of Investment as not reasonably
capable of being collected transfers to Special School District No. 1, Minneapolis, as of
the date of the determination of the executive director of the State Board of Investment.
If the account receivables transferred to Special School District No. 1, Minneapolis,
are subsequently recovered by the school district, the superintendent of Special School
District No. 1, Minneapolis, shall transfer the recovered amount to the executive director
of the Teachers Retirement Association, in cash, for deposit in the teachers retirement
fund, less the reasonable expenses of the school district related to the recovery.
(b) As of June 30, 2006, assets of the special retirement fund of the Minneapolis
Teachers Retirement Fund Association are assets of the Teachers Retirement Association
to be invested by the State Board of Investment pursuant to the provisions of section
354.07, subdivision 4. The Teachers Retirement Association is the successor in interest to
all claims which the Minneapolis Teachers Retirement Fund Association may have or may
assert against any person and is the successor in interest to all claims which could have
been asserted against the former Minneapolis Teachers Retirement Fund Association,
subject to the following exceptions and qualifications:
(1) the Teachers Retirement Association is not liable for any claim against the
Minneapolis Teachers Retirement Fund Association, its former board or board members,
which is founded upon a claim of breach of fiduciary duty, where the act or acts
constituting the claimed breach were not done in good faith;
(2) the Teachers Retirement Association may assert any applicable defense to any
claim in any judicial or administrative proceeding that the former Minneapolis Teachers
Retirement Fund Association or its Board would otherwise have been entitled to assert;
(3) the Teachers Retirement Association may assert any applicable defense that the
Teachers Retirement Association may assert in its capacity as a statewide agency; and
(4) the Teachers Retirement Association shall indemnify any former fiduciary of the
Minneapolis Teachers Retirement Fund Association consistent with the provisions of the
Public Pension Fiduciary Responsibility Act, in section 356A.11.
(c) From the assets of the former Minneapolis Teachers Retirement Fund Association
transferred to the Teachers Retirement Association, an amount equal to the percentage
figure that represents the ratio between the market value of the Minnesota postretirement
investment fund as of June 30, 2006, and the required reserves of the Minnesota post
retirement investment fund as of June 30, 2006, applied to the present value of future
benefits payable to annuitants of the former Minneapolis Teachers Retirement Fund
Association as of June 30, 2006, including any postretirement adjustment from the
Minnesota postretirement investment fund expected to be payable on January 1, 2007,
must be transferred to the Minnesota postretirement investment fund. The executive
director of the State Board of Investment shall estimate this ratio at the time of the
transfer. By January 1, 2007, after all necessary financial information becomes available
to determine the actual funded ratio of the Minnesota postretirement investment fund, the
postretirement investment fund must refund to the Teachers Retirement Association any
excess assets or the Teachers Retirement Association must contribute any deficiency
to the Minnesota postretirement investment fund with interest under section 11A.18,
subdivision 6. The balance of the assets of the former Minneapolis Teachers Retirement
Fund Association after the transfer to the Minnesota postretirement investment fund must
be credited to the Teachers Retirement Association.
If the assets transferred by the Minneapolis Teachers Retirement Fund Association
to the Teachers Retirement Association are insufficient to meet its obligation to the
Minnesota postretirement investment fund, additional assets must be transferred by the
executive director of the Teachers Retirement Association to meet the amount required.
    Subd. 6. Benefit calculation. (a) For every deferred, inactive, disabled, and retired
member of the Minneapolis Teachers Retirement Fund Association transferred under
subdivision 1, and the survivors of these members, annuities or benefits earned before
the date of the transfer, other than future postretirement adjustments, must be calculated
and paid by the Teachers Retirement Association under the laws, articles of incorporation,
and bylaws of the former Minneapolis Teachers Retirement Fund Association that were
in effect relative to the person on the date of the person's termination of active service
covered by the former Minneapolis Teachers Retirement Fund Association.
(b) Former Minneapolis Teachers Retirement Fund Association members who retired
before July 1, 2006, must receive postretirement adjustments after December 31, 2006,
only as provided in section 11A.18. All other benefit recipients of the former Minneapolis
Teachers Retirement Fund Association must receive postretirement adjustments after
December 31, 2006, only as provided in section 356.41.
(c) This consolidation does not impair or diminish benefits for an active, deferred,
or retired member or a survivor of an active, deferred, or retired member under the
former Minneapolis Teachers Retirement Fund Association in existence at the time of the
consolidation, except that any future guaranteed or investment-related postretirement
adjustments must be paid after July 1, 2006, in accordance with paragraph (b), and all
benefits based on service on or after July 1, 2006 must be determined only by laws
governing the Teachers Retirement Association.
    Subd. 7. Termination of Minneapolis Teachers Retirement Fund Association
special retirement fund. (a) As of June 30, 2006, the Minneapolis Teachers Retirement
Fund Association ceases to exist.
(b) Contracts, records, and obligations of the Minneapolis Teachers Retirement Fund
Association special retirement fund existing at the time of consolidation with the Teachers
Retirement Association are transferred to the Teachers Retirement Association pursuant to
the provisions of section 15.039, subdivisions 5 and 5a, except that contracts, records, and
obligations of the Minneapolis Teachers Retirement Fund Association special retirement
fund related to investment and safekeeping of assets are transferred to the State Board
of Investment pursuant to the provisions of section 15.039, subdivisions 5 and 5a. The
State Board of Investment has the authority to pay the investment-related liabilities and
obligations from the assets transferred from the Minnesota Teachers Retirement Fund
Association incurred by the Teachers Retirement Association. The audit or examination of
the Minneapolis Teachers Retirement Fund Association for year-end June 30, 2006 must
be performed by either the State Auditor or the Legislative Auditor under an agreement
with the Teachers Retirement Association. The costs of the audit or examination must
be paid by the Teachers Retirement Association. Between the date of enactment of this
section and June 30, 2006, the Minneapolis Teachers Retirement Fund Association cannot
incur a new or additional enforceable contractual liability or obligation without approval
of the Teachers Retirement Association.

    Sec. 10. [354.71] MINNEAPOLIS EMPLOYEES RETIREMENT FUND STATE
AID REDEDICATED.
    Subdivision 1. Appropriation. The positive difference, if any, between the actual
state aid paid to the Minneapolis Employees Retirement fund under section 422A.101,
subdivision 3, and $8,065,000 annually is appropriated from the general fund to the
commissioner of finance for deposit in the Teachers Retirement Association to offset all or
a portion of the current and future unfunded actuarial accrued liability of the Minneapolis
Teachers Retirement Fund Association.
    Subd. 2. Financial requirements. The appropriation in subdivision 1 is available
to the extent that financial requirements of the Minneapolis Employees Retirement Fund
under section 422A.101, subdivision 3, have been satisfied.

    Sec. 11. Minnesota Statutes 2004, section 354A.011, subdivision 15a, is amended to
read:
    Subd. 15a. Normal retirement age. "Normal retirement age" means age 65 for
a person who first became a member of the coordinated program of the Minneapolis or
St. Paul Teachers Retirement Fund Association or the new law coordinated program of
the Duluth Teachers Retirement Fund Association or a member of a pension fund listed
in section 356.30, subdivision 3, before July 1, 1989. For a person who first became a
member of the coordinated program of the Minneapolis or St. Paul Teachers Retirement
Fund Association or the new law coordinated program of the Duluth Teachers Retirement
Fund Association after June 30, 1989, normal retirement age means the higher of age 65
or retirement age, as defined in United States Code, title 42, section 416(l), as amended,
but not to exceed age 66. For a person who is a member of the basic program of the
Minneapolis or St. Paul Teachers Retirement Fund Association or the old law coordinated
program of the Duluth Teachers Retirement Fund Association, normal retirement age
means the age at which a teacher becomes eligible for a normal retirement annuity
computed upon meeting the age and service requirements specified in the applicable
provisions of the articles of incorporation or bylaws of the respective teachers retirement
fund association.

    Sec. 12. Minnesota Statutes 2004, section 354A.011, subdivision 27, is amended to
read:
    Subd. 27. Teacher. (a) "Teacher" means any person who renders service for a public
school district, other than a charter school, located in the corporate limits of one of the
cities of the first class which was so classified on January 1, 1979 Duluth and St. Paul,
as any of the following:
(1) a full-time employee in a position for which a valid license from the state
Department of Education is required;
(2) an employee of the teachers retirement fund association located in the city of
the first class unless the employee has exercised the option pursuant to Laws 1955,
chapter 10, section 1, to retain membership in the Minneapolis Employees Retirement
Fund established pursuant to chapter 422A;
(3) a part-time employee in a position for which a valid license from the state
Department of Education is required; or
(4) a part-time employee in a position for which a valid license from the state
Department of Education is required who also renders other nonteaching services for the
school district, unless the board of trustees of the teachers retirement fund association
determines that the combined employment is on the whole so substantially dissimilar to
teaching service that the service may not be covered by the association.
(b) The term does not mean any person who renders service in the school district
as any of the following:
(1) an independent contractor or the employee of an independent contractor;
(2) an employee who is a full-time teacher covered by the Teachers Retirement
Association or by another teachers retirement fund association established pursuant to this
chapter or chapter 354;
(3) an employee exempt from licensure pursuant to section 122A.30;
(4) an employee who is a teacher in a technical college located in a city of the first
class unless the person elects coverage by the applicable first class city teacher retirement
fund association under section 354B.21, subdivision 2;
(5) a teacher employed by a charter school, irrespective of the location of the
school; or
(6) an employee who is a part-time teacher in a technical college in a city of the first
class and who has elected coverage by the applicable first class city teacher retirement
fund association under section 354B.21, subdivision 2, but (i) the teaching service is
incidental to the regular nonteaching occupation of the person; (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 (iii) the part-time teaching actually does not exceed 300
hours in the fiscal year to which the certification applies.

    Sec. 13. Minnesota Statutes 2004, section 354A.021, subdivision 1, is amended to read:
    Subdivision 1. Establishment. There is established a teachers retirement fund
association in each of the cities of the first class which were so classified on January 1,
1979 Duluth and St. Paul. The associations shall be known respectively as the "Duluth
Teachers Retirement Fund Association," the "Minneapolis Teachers Retirement Fund
Association" and the "St. Paul Teachers Retirement Fund Association." Each association
shall be a continuation of the teachers retirement fund association with the same corporate
name established pursuant to the authorization contained in Laws 1909, chapter 343,
section 1.

    Sec. 14. Minnesota Statutes 2004, section 354A.092, is amended to read:
354A.092 SABBATICAL LEAVE.
Any teacher in the coordinated program of either the Minneapolis Teachers
Retirement Fund Association or the St. Paul Teachers Retirement Fund Association or
any teacher in the new law coordinated program of the Duluth Teachers Retirement
Fund Association who is granted a sabbatical leave shall be entitled to receive allowable
service credit in the applicable association for periods of sabbatical leave. To obtain the
service credit, the teacher on sabbatical leave shall make an employee contribution to the
applicable association. No teacher shall be entitled to receive more than three years of
allowable service credit pursuant to this section for a period or periods of sabbatical
leave during any ten consecutive fiscal or calendar years, whichever is the applicable
plan year for the teachers retirement fund association. If the teacher granted a sabbatical
leave makes the employee contribution for a period of sabbatical leave pursuant to this
section, the employing unit shall make an employer contribution on behalf of the teacher
to the applicable association for that period of sabbatical leave in the manner described
in section 354A.12, subdivision 2a. The employee and employer contributions shall be
in an amount equal to the employee and employer contribution rates in effect for other
active members of the association covered by the same program applied to a salary figure
equal to the teacher's actual covered salary for the plan year immediately preceding the
sabbatical leave period. Payment of the employee contribution authorized pursuant to this
section shall be made by the teacher on or before June 30 of year next following the year
in which the sabbatical leave terminated and shall be made without interest. For sabbatical
leaves taken after June 30, 1986, the required employer contributions shall be paid by the
employing unit within 30 days after notification by the association of the amount due.
If the employee contributions for the sabbatical leave period are less than an amount
equal to the applicable contribution rate applied to a salary figure equal to the teacher's
actual covered salary for the plan year immediately preceding the sabbatical leave period,
service credit shall be prorated. The prorated service credit shall be determined by the
ratio between the amount of the actual payment which was made and the full contribution
amount payable pursuant to this section.

    Sec. 15. Minnesota Statutes 2004, section 354A.093, subdivision 1, is amended to read:
    Subdivision 1. Eligibility. Any teacher in the coordinated program of either the
Minneapolis Teachers Retirement Fund Association or the St. Paul Teachers Retirement
Fund Association or any teacher in the new law coordinated program of the Duluth
Teachers Retirement Fund Association who is absent from employment by reason of
service in the uniformed services as defined in United States Code, title 38, section
4303(13) and who returns to the employer providing active teaching service upon
discharge from uniformed service within the time frames required under United States
Code, title 38, section 4312(e), may receive allowable service credit in the applicable
association for all or a portion of the period of uniformed service, provided that the teacher
did not separate from uniformed service with a dishonorable or bad conduct discharge
or under other than honorable conditions.

    Sec. 16. Minnesota Statutes 2004, section 354A.095, is amended to read:
354A.095 PARENTAL AND MATERNITY LEAVE.
Basic or coordinated members of the St. Paul Teachers Retirement Fund
Association, the Minneapolis Teachers Retirement Fund Association, and new coordinated
members of the Duluth Teachers Retirement Fund Association, who are granted parental
or maternity leave of absence by the employing authority, are entitled to obtain service
credit not to exceed one year for the period of leave upon payment to the applicable
fund by the end of the fiscal year following the fiscal year in which the leave of absence
terminated. The amount of the payment must include the total required employee and
employer contributions for the period of leave prescribed in section 354A.12. Payment
must be based on the member's average monthly salary rate upon return to teaching
service, and is payable without interest. Payment must be accompanied by a certified or
otherwise adequate copy of the resolution or action of the employing authority granting
or approving the leave.

    Sec. 17. Minnesota Statutes 2004, section 354A.096, is amended to read:
354A.096 MEDICAL LEAVE.
Any teacher in the coordinated program of either the Minneapolis Teachers
Retirement Fund Association or the St. Paul Teachers Retirement Fund Association or the
new law coordinated program of the Duluth Teachers Retirement Fund Association who is
on an authorized medical leave of absence and subsequently returns to teaching service
is entitled to receive allowable service credit, not to exceed one year, for the period of
leave, upon making the prescribed payment to the fund. This payment must include the
required employee and employer contributions at the rates specified in section 354A.12,
subdivisions 1 and 2
, as applied to the member's average full-time monthly salary rate on
the date the leave of absence commenced plus annual interest at the rate of 8.5 percent per
year from the end of the fiscal year during which the leave terminates to the end of the
month during which payment is made. The member must pay the total amount required
unless the employing unit, at its option, pays the employer contributions. The total amount
required must be paid by the end of the fiscal year following the fiscal year in which the
leave of absence terminated or before the member retires, whichever is earlier. Payment
must be accompanied by a copy of the resolution or action of the employing authority
granting the leave and the employing authority, upon granting the leave, must certify
the leave to the association in a manner specified by the executive director. A member
may not receive more than one year of allowable service credit during any fiscal year by
making payment under this section. A member may not receive disability benefits under
section 354A.36 and receive allowable service credit under this section for the same
period of time.

    Sec. 18. Minnesota Statutes 2004, section 354A.12, subdivision 1, is amended to read:
    Subdivision 1. Employee contributions. The contribution required to be paid by
each member of a teachers retirement fund association shall not be less than the percentage
of total salary specified below for the applicable association and program:

Association and Program
Percentage of

Total Salary

Duluth Teachers Retirement Association

old law and new law

coordinated programs
5.5 percent


Minneapolis Teachers Retirement
Association

basic program
8.5 percent

coordinated program
5.5 percent

St. Paul Teachers Retirement Association

basic program
8 percent

coordinated program
5.5 percent
Contributions shall be made by deduction from salary and must be remitted directly
to the respective teachers retirement fund association at least once each month.

    Sec. 19. Minnesota Statutes 2004, section 354A.12, subdivision 2, is amended to read:
    Subd. 2. Retirement contribution levy disallowed. Except as provided in
subdivision 3b and in section 423A.02, subdivision 3, with respect to the city of
Minneapolis and special school district No. 1 and in section 423A.02, subdivision 3, with
respect to independent school district No. 625, notwithstanding any law to the contrary,
levies for teachers retirement fund associations in the cities of the first class Duluth and St.
Paul, including levies for any employer Social Security taxes for teachers covered by the
Duluth Teachers Retirement Fund Association or the Minneapolis Teachers Retirement
Fund Association or the St. Paul Teachers Retirement Fund Association, are disallowed.

    Sec. 20. Minnesota Statutes 2004, section 354A.12, subdivision 2a, is amended to read:
    Subd. 2a. Employer regular and additional contribution rates. (a) The
employing units shall make the following employer contributions to teachers retirement
fund associations:
(1) for any coordinated member of a teachers retirement fund association in a city
of the first class, the employing unit shall pay the employer Social Security taxes in
accordance with section 355.46, subdivision 3, clause (b);
(2) for any coordinated member of one of the following teachers retirement fund
associations in a city of the first class, the employing unit shall make a regular employer
contribution to the respective retirement fund association in an amount equal to the
designated percentage of the salary of the coordinated member as provided below:

Duluth Teachers Retirement

Fund Association
4.50 percent

Minneapolis Teachers Retirement

Fund Association
4.50 percent

St. Paul Teachers Retirement

Fund Association
4.50 percent
(3) for any basic member of one of the following St. Paul Teachers Retirement
Fund associations in a city of the first class Association, the employing unit shall make a
regular employer contribution to the respective retirement fund in an amount equal to the
designated percentage 8.00 percent of the salary of the basic member as provided below:;

Minneapolis Teachers Retirement

Fund Association
8.50 percent

St. Paul Teachers Retirement

Fund Association
8.00 percent
(4) for a basic member of a the St. Paul Teachers Retirement Fund Association in a
city of the first class, the employing unit shall make an additional employer contribution to
the respective fund in an amount equal to the designated percentage 3.64 percent of the
salary of the basic member, as provided below:;

Minneapolis Teachers Retirement

Fund Association

July 1, 1993 - June 30, 1994
4.85 percent

July 1, 1994, and thereafter
3.64 percent

St. Paul Teachers Retirement

Fund Association

July 1, 1993 - June 30, 1995
4.63 percent

July 1, 1995, and thereafter
3.64 percent
(5) for a coordinated member of a teachers retirement fund association in a city
of the first class, the employing unit shall make an additional employer contribution to
the respective fund in an amount equal to the applicable percentage of the coordinated
member's salary, as provided below:

Duluth Teachers Retirement

Fund Association
1.29 percent

Minneapolis Teachers Retirement

Fund Association

July 1, 1993 - June 30, 1994
0.50 percent

July 1, 1994, and thereafter
3.64 percent

St. Paul Teachers Retirement

Fund Association

July 1, 1993 - June 30, 1994
0.50 percent

July 1, 1994 - June 30, 1995
1.50 percent

July 1, 1997, and thereafter
3.84 percent
(b) The regular and additional employer contributions must be remitted directly to
the respective teachers retirement fund association at least once each month. Delinquent
amounts are payable with interest under the procedure in subdivision 1a.
(c) Payments of regular and additional employer contributions for school district
or technical college employees who are paid from normal operating funds must be made
from the appropriate fund of the district or technical college.

    Sec. 21. Minnesota Statutes 2004, section 354A.12, subdivision 3a, is amended to read:
    Subd. 3a. Special direct state aid to first class city teachers retirement fund
associations. (a) In fiscal year 1998, the state shall pay $4,827,000 to the St. Paul
Teachers Retirement Fund Association, $17,954,000 to the Minneapolis Teachers
Retirement Fund Association, and $486,000 to the Duluth Teachers Retirement Fund
Association. In each subsequent fiscal year after fiscal year 2006, these payments to the
first class city teachers retirement fund associations must be $2,827,000 for St. Paul,
$12,954,000 to the Teachers Retirement Association for the former Minneapolis Teachers
Retirement Fund Association, and $486,000 for Duluth.
(b) The direct state aids under this subdivision are payable October 1 annually. The
commissioner of finance shall pay the direct state aid. The amount required under this
subdivision is appropriated annually from the general fund to the commissioner of finance.

    Sec. 22. Minnesota Statutes 2004, section 354A.12, subdivision 3b, is amended to read:
    Subd. 3b. Special direct state matching aid to the Minneapolis Teachers
Retirement Fund Association. (a) Special School District No. 1 may must make
an additional employer contribution to the Minneapolis Teachers Retirement Fund
Association. The city of Minneapolis may must make a contribution to the Minneapolis
Teachers Retirement Fund Association. This contribution may must be made by a levy
of the board of estimate and taxation of the city of Minneapolis and the levy, if made, is
classified as that of a special taxing district for purposes of sections 275.065 and 276.04,
and for all other property tax purposes.
(b) For every $1,000 $1,125,000 must be contributed in equal proportion by Special
School District No. 1 and $1,125,000 must be contributed by the city of Minneapolis to
the Minneapolis Teachers Retirement Fund Association under paragraph (a), and the
state shall pay to the Minneapolis Teachers Retirement Fund Association $1,000, but not
to exceed $2,500,000 in total in each fiscal year 1994. The superintendent of Special
School District No. 1, the mayor of the city of Minneapolis, and the executive director
of the Minneapolis Teachers Retirement Fund Association shall jointly certify to the
commissioner of finance the total amount that has been contributed by Special School
District No. 1 and by the city of Minneapolis to the Minneapolis Teachers Retirement
Fund Association. Any certification to the commissioner of education must be made
quarterly. If the total certifications for a fiscal year exceed the maximum annual direct state
matching aid amount in any quarter, the amount of direct state matching aid payable to the
Minneapolis Teachers Retirement Fund Association must be limited to the balance of the
maximum annual direct state matching aid amount available. The amount required under
this paragraph, subject to the maximum direct state matching aid amount, is appropriated
annually to the commissioner of finance.
(c) The commissioner of finance may prescribe the form of the certifications
required under paragraph (b).

    Sec. 23. Minnesota Statutes 2004, section 354A.12, subdivision 3c, is amended to read:
    Subd. 3c. Termination of supplemental contributions and direct matching
and state aid. (a) The supplemental contributions payable to the Minneapolis Teachers
Retirement Fund Association by Special School District No. 1 and the city of Minneapolis
under section 423A.02, subdivision 3, which must continue to be paid to the Teachers
Retirement Association until 2037, or to the St. Paul Teachers Retirement Fund
Association by Independent School District No. 625 under section 423A.02, subdivision
3
, or the direct state aids under subdivision 3a to the first class city St. Paul Teachers
Retirement associations, and the direct matching and state aid under subdivision 3b to
the Minneapolis Teachers Retirement Fund Association terminate for the respective fund
at the end of the fiscal year in which the accrued liability funding ratio for that fund, as
determined in the most recent actuarial report for that fund by the actuary retained by the
Legislative Commission on Pensions and Retirement, equals or exceeds the accrued
liability funding ratio for the teachers retirement association, as determined in the most
recent actuarial report for the Teachers Retirement Association by the actuary retained by
the Legislative Commission on Pensions and Retirement.
(b) If the state direct matching, state supplemental, or state aid is terminated for a
first class city teachers retirement fund association under paragraph (a), it may not again
be received by that fund.
(c) If either the Minneapolis Teachers Retirement Fund Association, the St.
Paul Teachers Retirement Fund Association, or the Duluth Teachers Retirement Fund
Association remain is funded at less than the funding ratio applicable to the Teachers
Retirement Association when the provisions of paragraph (b) become effective, then any
state aid not previously distributed to that association must be immediately transferred to
the other associations in proportion to the relative sizes of their unfunded actuarial accrued
liabilities Teachers Retirement Association.

    Sec. 24. Minnesota Statutes 2004, section 354A.12, subdivision 3d, is amended to read:
    Subd. 3d. Supplemental administrative expense assessment. (a) The active
and retired membership of the Minneapolis Teachers Retirement Fund Association and
of the St. Paul Teachers Retirement Fund Association is responsible for defraying
supplemental administrative expenses other than investment expenses of the respective
teacher retirement fund association.
(b) Investment expenses of the teachers retirement fund association are those
expenses incurred by or on behalf of the retirement fund in connection with the investment
of the assets of the retirement fund other than investment security transaction costs. Other
administrative expenses are all expenses incurred by or on behalf of the retirement fund
for all other retirement fund functions other than the investment of retirement fund assets.
Investment and other administrative expenses must be accounted for using generally
accepted accounting principles and in a manner consistent with the comprehensive annual
financial report of the teachers retirement fund association for the immediately previous
fiscal year under section 356.20.
(c) Supplemental administrative expenses other than investment expenses of a first
class city teacher the St. Paul Teachers Retirement Fund Association are those expenses
for the fiscal year that:
(1) exceed, for the St. Paul Teachers Retirement Fund Association, $443,745, or
for the Minneapolis Teacher Retirement Fund Association $671,513, plus, in each case,
an additional amount derived by applying the percentage increase in the Consumer Price
Index for Urban Wage Earners and Clerical Workers All Items Index published by the
Bureau of Labor Statistics of the United States Department of Labor since July 1, 2001, to
the applicable dollar amount; and
(2) exceed the amount computed by applying the most recent percentage of
pay administrative expense amount, other than investment expenses, for the teachers
retirement association governed by chapter 354 to the covered payroll of the respective
teachers retirement fund association for the fiscal year.
(d) The board of trustees of each first class city the St. Paul Teachers Retirement
Fund Association shall allocate the total dollar amount of supplemental administrative
expenses other than investment expenses determined under paragraph (c), clause (2),
among the various active and retired membership groups of the teachers retirement fund
association and shall assess the various membership groups their respective share of
the supplemental administrative expenses other than investment expenses, in amounts
determined by the board of trustees. The supplemental administrative expense assessments
must be paid by the membership group in a manner determined by the board of trustees
of the respective teachers retirement association. Supplemental administrative expenses
payable by the active members of the pension plan must be picked up by the employer in
accordance with section 356.62.
(e) With respect to the St. Paul Teachers Retirement Fund Association, the
supplemental administrative expense assessment must be fully disclosed to the various
active and retired membership groups of the teachers retirement fund association. The
chief administrative officer of the St. Paul Teachers Retirement Fund Association shall
prepare a supplemental administrative expense assessment disclosure notice, which must
include the following:
(1) the total amount of administrative expenses of the St. Paul Teachers Retirement
Fund Association, the amount of the investment expenses of the St. Paul Teachers
Retirement Fund Association, and the net remaining amount of administrative expenses of
the St. Paul Teachers Retirement Fund Association;
(2) the amount of administrative expenses for the St. Paul Teachers Retirement Fund
Association that would be equivalent to the teachers retirement association noninvestment
administrative expense level described in paragraph (c);
(3) the total amount of supplemental administrative expenses required for assessment
calculated under paragraph (c);
(4) the portion of the total amount of the supplemental administrative expense
assessment allocated to each membership group and the rationale for that allocation;
(5) the manner of collecting the supplemental administrative expense assessment
from each membership group, the number of assessment payments required during the
year, and the amount of each payment or the procedure used to determine each payment;
and
(6) any other information that the chief administrative officer determines is necessary
to fairly portray the manner in which the supplemental administrative expense assessment
was determined and allocated.
(f) The disclosure notice must be provided annually in the annual report of the
association.
(g) The supplemental administrative expense assessments must be deposited in the
applicable teachers retirement fund upon receipt.
(h) Any omitted active membership group assessments that remain undeducted
and unpaid to the teachers retirement fund association for 90 days must be paid by the
respective school district. The school district may recover any omitted active membership
group assessment amounts that it has previously paid. The teachers retirement fund
association shall deduct any omitted retired membership group assessment amounts from
the benefits next payable after the discovery of the omitted amounts.

    Sec. 25. Minnesota Statutes 2004, section 354A.30, is amended to read:
354A.30 MINNEAPOLIS AND ST. PAUL TEACHERS RETIREMENT FUND
ASSOCIATIONS ASSOCIATION; COORDINATED PROGRAM.
There is established a coordinated program within the Minneapolis Teachers
Retirement Fund Association and a coordinated program within the St. Paul Teachers
Retirement Fund Association to provide retirement coverage for teachers who are covered
by an agreement or modification made between the state and the secretary of health,
education and welfare making the provisions of the federal Old Age, Survivors and
Disability Insurance Act applicable to certain teachers covered by the teachers retirement
fund association. The provisions governing the coordinated program shall be sections
354A.31 to 354A.41 and any other applicable provisions of this chapter.

    Sec. 26. Minnesota Statutes 2005 Supplement, section 354A.31, subdivision 4, is
amended to read:
    Subd. 4. Computation of the normal coordinated retirement annuity;
Minneapolis and St. Paul funds fund. (a) This subdivision applies to the coordinated
programs program of the Minneapolis Teachers Retirement Fund Association and the St.
Paul Teachers Retirement Fund Association.
(b) The normal coordinated retirement annuity is an amount equal to a retiring
coordinated member's average salary under section 354A.011, subdivision 7a, multiplied
by the retirement annuity formula percentage.
(c) This paragraph, in conjunction with subdivision 6, applies to a person who first
became a member or a member in a pension fund listed in section 356.30, subdivision 3,
before July 1, 1989, unless paragraph (d), in conjunction with subdivision 7, produces a
higher annuity amount, in which case paragraph (d) will apply. The retirement annuity
formula percentage for purposes of this paragraph is the percent specified in section
356.315, subdivision 1, per year for each year of coordinated service for the first ten years
and the percent specified in section 356.315, subdivision 2, for each year of coordinated
service thereafter.
(d) This paragraph applies to a person who has become at least 55 years old and who
first becomes a member after June 30, 1989, and to any other member who has become
at least 55 years old and whose annuity amount, when calculated under this paragraph
and in conjunction with subdivision 7 is higher than it is when calculated under paragraph
(c), in conjunction with the provisions of subdivision 6. The retirement annuity formula
percentage for purposes of this paragraph is the percent specified in section 356.315,
subdivision 2
, for each year of coordinated service.

    Sec. 27. Minnesota Statutes 2004, section 354A.32, subdivision 1, is amended to read:
    Subdivision 1. Optional forms generally. The boards board of the Minneapolis
and the St. Paul Teachers Retirement Fund Associations Association shall each establish
for the coordinated program and the board of the Duluth Teachers Retirement Fund
Association shall establish for the new law coordinated program an optional retirement
annuity which shall take the form of a joint and survivor annuity. Each board may also
in its discretion establish an optional annuity which shall take the form of an annuity
payable for a period certain and for life thereafter. Each board shall also establish
an optional retirement annuity that guarantees payment of the balance of the annuity
recipient's accumulated deductions to a designated beneficiary upon the death of the
annuity recipient. Except as provided in subdivision 1a, optional annuity forms shall be
the actuarial equivalent of the normal forms provided in section 354A.31. In establishing
these optional annuity forms, the board shall obtain the written recommendation of the
commission-retained actuary. The recommendation shall be a part of the permanent
records of the board.

    Sec. 28. Minnesota Statutes 2004, section 354A.39, is amended to read:
354A.39 SERVICE IN OTHER PUBLIC RETIREMENT FUNDS; ANNUITY.
Any person who has been a member of the Minnesota State Retirement System, the
Public Employees Retirement Association including the Public Employees Retirement
Association Police and Fire Fund, the Teachers Retirement Association, the Minnesota
State Patrol Retirement Association, the legislators retirement plan, the constitutional
officers retirement plan, the Minneapolis Employees Retirement Fund, the Duluth
Teachers Retirement Fund Association new law coordinated program, the Minneapolis
Teachers Retirement Fund Association coordinated program, the St. Paul Teachers
Retirement Fund Association coordinated program, or any other public employee
retirement system in the state of Minnesota having a like provision but excluding all other
funds providing retirement benefits for police officers or firefighters shall be entitled
when qualified to an annuity from each fund if the person's total allowable service in all
of the funds or in any two or more of the funds totals three or more years, provided that
no portion of the allowable service upon which the retirement annuity from one fund is
based is used again in the computation for a retirement annuity from another fund and
provided further that the person has not taken a refund from any of funds or associations
since the person's membership in the fund or association has terminated. The annuity
from each fund or association shall be determined by the appropriate provisions of the
law governing each fund or association, except that the requirement that a person must
have at least three years of allowable service in the respective fund or association shall not
apply for the purposes of this section, provided that the aggregate service in two or more
of these funds equals three or more years.

    Sec. 29. Minnesota Statutes 2004, section 354A.40, subdivision 1, is amended to read:
    Subdivision 1. Retirement annuity. Any coordinated member of either the
Minneapolis Teachers Retirement Fund Association or of the St. Paul Teachers Retirement
Fund Association who has credited service prior to July 1, 1978 shall be entitled to receive
a retirement annuity when otherwise qualified, the calculation of which shall utilize the
applicable retirement annuity formula specified in articles of incorporation and bylaws
of the teachers retirement fund association governing the basic program for that portion
of credited service which was served prior to July 1, 1978, and the retirement annuity
formula specified in section 354A.31 for the remainder of the member's credited service,
both applied to the member's average salary as specified in section 354A.31, subdivision 4.
The formula percentages to be used in calculating the coordinated portion of the retirement
annuity or coordinated service under this section shall recognize the coordinated service
as a continuation of any service prior to July 1, 1978.

    Sec. 30. Minnesota Statutes 2004, section 354A.41, is amended to read:
354A.41 ADMINISTRATION OF COORDINATED PROGRAM.
    Subdivision 1. Administrative provisions. The provisions of the articles of
incorporation and bylaws of the Minneapolis or the St. Paul Teachers Retirement
Fund Association, whichever is applicable, relating to the administration of the fund
shall govern the administration of the coordinated program and basic programs and the
provisions of the articles of incorporation and bylaws of the Duluth Teachers Retirement
Fund Association relating to the administration of the fund shall govern the administration
of the new law coordinated program in instances where the administrative provisions are
not inconsistent with the provisions of sections 354A.31 to 354A.41, including but not
limited to provisions relating to the composition and function of the board of trustees, the
investment of assets of the teachers retirement fund association, and the definition of the
plan year. The administrative provisions in the articles of incorporation and the bylaws
of the Minneapolis Teachers Retirement Fund Association pertaining to the granting of
pension benefits of the basic and coordinated programs are no longer in effect after June
30, 2006.
    Subd. 2. Actuarial valuations. In any actuarial valuation of the Minneapolis
Teachers Retirement Fund Association, the St. Paul Teachers Retirement Fund
Association, or the Duluth Teachers Retirement Fund Association under section 356.215
prepared by the commission-retained actuary or supplemental actuarial valuation prepared
by an approved actuary retained by the teachers retirement fund association, there shall
be included a finding of the condition of the fund showing separately the basic and
coordinated programs or the old law coordinated and new law coordinated programs, as
appropriate. The finding shall include the level normal cost and the applicable employee
and employer contribution rates for each program.

    Sec. 31. Minnesota Statutes 2004, section 356.20, subdivision 2, is amended to read:
    Subd. 2. Covered public pension plans and funds. This section applies to the
following public pension plans:
(1) the general state employees retirement plan of the Minnesota State Retirement
System;
(2) the general employees retirement plan of the Public Employees Retirement
Association;
(3) the Teachers Retirement Association;
(4) the State Patrol retirement plan;
(5) the Minneapolis Teachers Retirement Fund Association;
(6) the St. Paul Teachers Retirement Fund Association;
(7) (6) the Duluth Teachers Retirement Fund Association;
(8) (7) the Minneapolis Employees Retirement Fund;
(9) (8) the University of Minnesota faculty retirement plan;
(10) (9) the University of Minnesota faculty supplemental retirement plan;
(11) (10) the judges retirement fund;
(12) (11) a police or firefighter's relief association specified or described in section
69.77, subdivision 1a, or 69.771, subdivision 1;
(13) (12) the public employees police and fire plan of the Public Employees
Retirement Association;
(14) (13) the correctional state employees retirement plan of the Minnesota State
Retirement System; and
(15) (14) the local government correctional service retirement plan of the Public
Employees Retirement Association.

    Sec. 32. Minnesota Statutes 2004, section 356.214, subdivision 1, is amended to read:
    Subdivision 1. Joint retention. (a) The chief administrative officers of the
Minnesota State Retirement System, the Public Employees Retirement Association, the
Teachers Retirement Association, the Duluth Teachers Retirement Fund Association,
the Minneapolis Teachers Retirement Fund Association, the Minneapolis Employees
Retirement Fund, and the St. Paul Teachers Retirement Fund Association, jointly, on
behalf of the state, its employees, its taxpayers, and its various public pension plans,
shall contract with an established actuarial consulting firm to conduct annual actuarial
valuations and related services for the retirement plans named in paragraph (b). The
principal from the actuarial consulting firm on the contract must be an approved actuary
under section 356.215, subdivision 1, paragraph (c). Prior to becoming effective,
the contract under this section is subject to a review and approval by the Legislative
Commission on Pensions and Retirement.
(b) The contract for actuarial services must include the preparation of actuarial
valuations and related actuarial work for the following retirement plans:
(1) the teachers retirement plan, Teachers Retirement Association;
(2) the general state employees retirement plan, Minnesota State Retirement System;
(3) the correctional employees retirement plan, Minnesota State Retirement System;
(4) the State Patrol retirement plan, Minnesota State Retirement System;
(5) the judges retirement plan, Minnesota State Retirement System;
(6) the Minneapolis employees retirement plan, Minneapolis Employees Retirement
Fund;
(7) the public employees retirement plan, Public Employees Retirement Association;
(8) the public employees police and fire plan, Public Employees Retirement
Association;
(9) the Duluth teachers retirement plan, Duluth Teachers Retirement Fund
Association;
(10) the Minneapolis teachers retirement plan, Minneapolis Teachers Retirement
Fund Association;
(11) (10) the St. Paul teachers retirement plan, St. Paul Teachers Retirement Fund
Association;
(12) (11) the legislators retirement plan, Minnesota State Retirement System;
(13) (12) the elective state officers retirement plan, Minnesota State Retirement
System; and
(14) (13) local government correctional service retirement plan, Public Employees
Retirement Association.
(c) The contract must require completion of the annual actuarial valuation
calculations on a fiscal year basis, with the contents of the actuarial valuation calculations
as specified in section 356.215, and in conformity with the standards for actuarial work
adopted by the Legislative Commission on Pensions and Retirement.
The contract must require completion of annual experience data collection and
processing and a quadrennial published experience study for the plans listed in paragraph
(b), clauses (1), (2), and (7), as provided for in the standards for actuarial work adopted by
the commission. The experience data collection, processing, and analysis must evaluate
the following:
(1) individual salary progression;
(2) the rate of return on investments based on the current asset value;
(3) payroll growth;
(4) mortality;
(5) retirement age;
(6) withdrawal; and
(7) disablement.
The contract must include provisions for the preparation of cost analyses by the
jointly retained actuary for proposed legislation that include changes in benefit provisions
or funding policies prior to their consideration by the Legislative Commission on Pensions
and Retirement.
(d) The actuary retained by the joint retirement systems shall annually prepare a
report to the legislature, including a commentary on the actuarial valuation calculations
for the plans named in paragraph (b) and summarizing the results of the actuarial valuation
calculations. The actuary shall include with the report the actuary's recommendations
to the legislature concerning the appropriateness of the support rates to achieve proper
funding of the retirement plans by the required funding dates. The actuary shall, as part
of the quadrennial experience study, include recommendations to the legislature on the
appropriateness of the actuarial valuation assumptions required for evaluation in the study.
(e) If the actuarial gain and loss analysis in the actuarial valuation calculations
indicates a persistent pattern of sizable gains or losses, as directed by the joint retirement
systems or as requested by the chair of the Legislative Commission on Pensions and
Retirement, the actuary shall prepare a special experience study for a plan listed in
paragraph (b), clause (3), (4), (5), (6), (8), (9), (10), (11), (12), (13), or (14) (13), in the
manner provided for in the standards for actuarial work adopted by the commission.
(f) The term of the contract between the joint retirement systems and the actuary
retained may not exceed five years. The joint retirement system administrative officers
shall establish procedures for the consideration and selection of contract bidders and
the requirements for the contents of an actuarial services contract under this section.
The procedures and requirements must be submitted to the Legislative Commission on
Pensions and Retirement for review and comment prior to final approval by the joint
administrators. The contract is subject to the procurement procedures under chapter 16C.
The consideration of bids and the selection of a consulting actuarial firm by the chief
administrative officers must occur at a meeting that is open to the public and reasonable
timely public notice of the date and the time of the meeting and its subject matter must
be given.
(g) The actuarial services contract may not limit the ability of the Minnesota
legislature and its standing committees and commissions to rely on the actuarial results
of the work prepared under the contract.
(h) The joint retirement systems shall designate one of the retirement system
executive directors as the actuarial services contract manager.

    Sec. 33. Minnesota Statutes 2005 Supplement, section 356.215, subdivision 8, is
amended to read:
    Subd. 8. Interest and salary assumptions. (a) The actuarial valuation must use
the applicable following preretirement interest assumption and the applicable following
postretirement interest assumption:

preretirement
postretirement

interest rate
interest rate

plan
assumption
assumption

general state employees retirement plan
8.5%
6.0%


correctional state employees retirement
plan
8.5
6.0

State Patrol retirement plan
8.5
6.0

legislators retirement plan
8.5
6.0

elective state officers retirement plan
8.5
6.0

judges retirement plan
8.5
6.0


general public employees retirement
plan
8.5
6.0


public employees police and fire
retirement plan
8.5
6.0


local government correctional service
retirement plan
8.5
6.0

teachers retirement plan
8.5
6.0

Minneapolis employees retirement plan
6.0
5.0

Duluth teachers retirement plan
8.5
8.5

Minneapolis teachers retirement plan
8.5
8.5

St. Paul teachers retirement plan
8.5
8.5

Minneapolis Police Relief Association
6.0
6.0

Fairmont Police Relief Association
5.0
5.0


Minneapolis Fire Department Relief
Association
6.0
6.0


Virginia Fire Department Relief
Association
5.0
5.0


Bloomington Fire Department Relief
Association
6.0
6.0


local monthly benefit volunteer
firefighters relief associations
5.0
5.0
(b) The actuarial valuation must use the applicable following single rate future salary
increase assumption, the applicable following modified single rate future salary increase
assumption, or the applicable following graded rate future salary increase assumption:
(1) single rate future salary increase assumption

future salary

plan
increase assumption

legislators retirement plan
5.0%

elective state officers retirement plan
5.0

judges retirement plan
5.0

Minneapolis Police Relief Association
4.0

Fairmont Police Relief Association
3.5


Minneapolis Fire Department Relief
Association
4.0

Virginia Fire Department Relief Association
3.5


Bloomington Fire Department Relief
Association
4.0
(2) modified single rate future salary increase assumption

future salary

plan
increase assumption





Minneapolis employees
retirement plan
the prior calendar year amount
increased first by 1.0198 percent to
prior fiscal year date and then increased
by 4.0 percent annually for each future
year
(3) select and ultimate future salary increase assumption or graded rate future salary
increase assumption

future salary

plan
increase assumption


general state employees
retirement plan
select calculation and assumption A


correctional state employees
retirement plan
assumption HG

State Patrol retirement plan
assumption HG


general public employees
retirement plan
select calculation and assumption B


public employees police and fire
fund retirement plan
assumption C


local government correctional
service retirement plan
assumption HG

teachers retirement plan
assumption D

Duluth teachers retirement plan
assumption E


Minneapolis teachers retirement
plan
assumption F

St. Paul teachers retirement plan
assumption GF
The select calculation is: during the ten-year
select period, a designated percent is
multiplied by the result of ten minus T,
where T is the number of completed years of
service, and is added to the applicable future
salary increase assumption. The designated
percent is 0.2 percent for the correctional
state employees retirement plan, the State
Patrol retirement plan, the public employees
police and fire plan, and the local government
correctional service plan; and 0.3 percent for
the general state employees retirement plan,
the general public employees retirement
plan, the teachers retirement plan, the Duluth
Teachers Retirement Fund Association,
and the St. Paul Teachers Retirement
Fund Association; and 0.4 percent for the
Minneapolis Teachers Retirement Fund
Association.
    The ultimate future salary increase assumption is:

age
A
B
C
D
E
F
GF
HG

16
6.95%
6.95%
11.50%
8.20%
8.00%
6.50%
6.90%
7.7500

17
6.90
6.90
11.50
8.15
8.00
6.50
6.90
7.7500

18
6.85
6.85
11.50
8.10
8.00
6.50
6.90
7.7500

19
6.80
6.80
11.50
8.05
8.00
6.50
6.90
7.7500

20
6.75
6.40
11.50
6.00
6.90
6.50
6.90
7.7500

21
6.75
6.40
11.50
6.00
6.90
6.50
6.90
7.1454

22
6.75
6.40
11.00
6.00
6.90
6.50
6.90
7.0725

23
6.75
6.40
10.50
6.00
6.85
6.50
6.85
7.0544

24
6.75
6.40
10.00
6.00
6.80
6.50
6.80
7.0363

25
6.75
6.40
9.50
6.00
6.75
6.50
6.75
7.0000

26
6.75
6.36
9.20
6.00
6.70
6.50
6.70
7.0000

27
6.75
6.32
8.90
6.00
6.65
6.50
6.65
7.0000

28
6.75
6.28
8.60
6.00
6.60
6.50
6.60
7.0000

29
6.75
6.24
8.30
6.00
6.55
6.50
6.55
7.0000

30
6.75
6.20
8.00
6.00
6.50
6.50
6.50
7.0000

31
6.75
6.16
7.80
6.00
6.45
6.50
6.45
7.0000

32
6.75
6.12
7.60
6.00
6.40
6.50
6.40
7.0000

33
6.75
6.08
7.40
6.00
6.35
6.50
6.35
7.0000

34
6.75
6.04
7.20
6.00
6.30
6.50
6.30
7.0000

35
6.75
6.00
7.00
6.00
6.25
6.50
6.25
7.0000

36
6.75
5.96
6.80
6.00
6.20
6.50
6.20
6.9019

37
6.75
5.92
6.60
6.00
6.15
6.50
6.15
6.8074

38
6.75
5.88
6.40
5.90
6.10
6.50
6.10
6.7125

39
6.75
5.84
6.20
5.80
6.05
6.50
6.05
6.6054

40
6.75
5.80
6.00
5.70
6.00
6.50
6.00
6.5000

41
6.75
5.76
5.90
5.60
5.90
6.50
5.95
6.3540

42
6.75
5.72
5.80
5.50
5.80
6.50
5.90
6.2087

43
6.65
5.68
5.70
5.40
5.70
6.50
5.85
6.0622

44
6.55
5.64
5.60
5.30
5.60
6.50
5.80
5.9048

45
6.45
5.60
5.50
5.20
5.50
6.50
5.75
5.7500

46
6.35
5.56
5.45
5.10
5.40
6.40
5.70
5.6940

47
6.25
5.52
5.40
5.00
5.30
6.30
5.65
5.6375

48
6.15
5.48
5.35
5.00
5.20
6.20
5.60
5.5822

49
6.05
5.44
5.30
5.00
5.10
6.10
5.55
5.5404

50
5.95
5.40
5.25
5.00
5.00
6.00
5.50
5.5000

51
5.85
5.36
5.25
5.00
5.00
5.90
5.45
5.4384

52
5.75
5.32
5.25
5.00
5.00
5.80
5.40
5.3776

53
5.65
5.28
5.25
5.00
5.00
5.70
5.35
5.3167

54
5.55
5.24
5.25
5.00
5.00
5.60
5.30
5.2826

55
5.45
5.20
5.25
5.00
5.00
5.50
5.25
5.2500

56
5.35
5.16
5.25
5.00
5.00
5.40
5.20
5.2500

57
5.25
5.12
5.25
5.00
5.00
5.30
5.15
5.2500

58
5.25
5.08
5.25
5.10
5.00
5.20
5.10
5.2500

59
5.25
5.04
5.25
5.20
5.00
5.10
5.05
5.2500

60
5.25
5.00
5.25
5.30
5.00
5.00
5.00
5.2500

61
5.25
5.00
5.25
5.40
5.00
5.00
5.00
5.2500

62
5.25
5.00
5.25
5.50
5.00
5.00
5.00
5.2500

63
5.25
5.00
5.25
5.60
5.00
5.00
5.00
5.2500

64
5.25
5.00
5.25
5.70
5.00
5.00
5.00
5.2500

65
5.25
5.00
5.25
5.70
5.00
5.00
5.00
5.2500

66
5.25
5.00
5.25
5.70
5.00
5.00
5.00
5.2500

67
5.25
5.00
5.25
5.70
5.00
5.00
5.00
5.2500

68
5.25
5.00
5.25
5.70
5.00
5.00
5.00
5.2500

69
5.25
5.00
5.25
5.70
5.00
5.00
5.00
5.2500

70
5.25
5.00
5.25
5.70
5.00
5.00
5.00
5.2500

71
5.25
5.00
5.70
(c) The actuarial valuation must use the applicable following payroll growth
assumption for calculating the amortization requirement for the unfunded actuarial
accrued liability where the amortization retirement is calculated as a level percentage
of an increasing payroll:

payroll growth

plan
assumption

general state employees retirement plan
5.00%

correctional state employees retirement plan
5.00

State Patrol retirement plan
5.00

legislators retirement plan
5.00

elective state officers retirement plan
5.00

judges retirement plan
5.00

general public employees retirement plan
6.00


public employees police and fire retirement
plan
6.00


local government correctional service
retirement plan
6.00

teachers retirement plan
5.00

Duluth teachers retirement plan
5.00

Minneapolis teachers retirement plan
5.00

St. Paul teachers retirement plan
5.00

    Sec. 34. Minnesota Statutes 2004, section 356.215, subdivision 11, is amended to read:
    Subd. 11. Amortization contributions. (a) In addition to the exhibit indicating the
level normal cost, the actuarial valuation must contain an exhibit indicating the additional
annual contribution sufficient to amortize the unfunded actuarial accrued liability. For
funds governed by chapters 3A, 352, 352B, 352C, 353, 354, 354A, and 490, the additional
contribution must be calculated on a level percentage of covered payroll basis by the
established date for full funding in effect when the valuation is prepared. For funds
governed by chapter 3A, sections 352.90 through 352.951, chapters 352B, 352C, sections
353.63 through 353.68, and chapters 353C, 354A, and 490, the level percent additional
contribution must be calculated assuming annual payroll growth of 6.5 percent. For funds
governed by sections 352.01 through 352.86 and chapter 354, the level percent additional
contribution must be calculated assuming an annual payroll growth of five percent. For the
fund governed by sections 353.01 through 353.46, the level percent additional contribution
must be calculated assuming an annual payroll growth of six percent. For all other funds,
the additional annual contribution must be calculated on a level annual dollar amount basis.
(b) For any fund other than the Minneapolis Employees Retirement Fund and the
Public Employees Retirement Association general plan, if there has not been a change in
the actuarial assumptions used for calculating the actuarial accrued liability of the fund, a
change in the benefit plan governing annuities and benefits payable from the fund, a
change in the actuarial cost method used in calculating the actuarial accrued liability of all
or a portion of the fund, or a combination of the three, which change or changes by itself
or by themselves without inclusion of any other items of increase or decrease produce a
net increase in the unfunded actuarial accrued liability of the fund, the established date for
full funding is the first actuarial valuation date occurring after June 1, 2020.
(c) For any fund or plan other than the Minneapolis Employees Retirement Fund and
the Public Employees Retirement Association general plan, if there has been a change in
any or all of the actuarial assumptions used for calculating the actuarial accrued liability
of the fund, a change in the benefit plan governing annuities and benefits payable from
the fund, a change in the actuarial cost method used in calculating the actuarial accrued
liability of all or a portion of the fund, or a combination of the three, and the change or
changes, by itself or by themselves and without inclusion of any other items of increase or
decrease, produce a net increase in the unfunded actuarial accrued liability in the fund, the
established date for full funding must be determined using the following procedure:
(i) the unfunded actuarial accrued liability of the fund must be determined in
accordance with the plan provisions governing annuities and retirement benefits and the
actuarial assumptions in effect before an applicable change;
(ii) the level annual dollar contribution or level percentage, whichever is applicable,
needed to amortize the unfunded actuarial accrued liability amount determined under item
(i) by the established date for full funding in effect before the change must be calculated
using the interest assumption specified in subdivision 8 in effect before the change;
(iii) the unfunded actuarial accrued liability of the fund must be determined in
accordance with any new plan provisions governing annuities and benefits payable from
the fund and any new actuarial assumptions and the remaining plan provisions governing
annuities and benefits payable from the fund and actuarial assumptions in effect before
the change;
(iv) the level annual dollar contribution or level percentage, whichever is applicable,
needed to amortize the difference between the unfunded actuarial accrued liability amount
calculated under item (i) and the unfunded actuarial accrued liability amount calculated
under item (iii) over a period of 30 years from the end of the plan year in which the
applicable change is effective must be calculated using the applicable interest assumption
specified in subdivision 8 in effect after any applicable change;
(v) the level annual dollar or level percentage amortization contribution under item
(iv) must be added to the level annual dollar amortization contribution or level percentage
calculated under item (ii);
(vi) the period in which the unfunded actuarial accrued liability amount determined
in item (iii) is amortized by the total level annual dollar or level percentage amortization
contribution computed under item (v) must be calculated using the interest assumption
specified in subdivision 8 in effect after any applicable change, rounded to the nearest
integral number of years, but not to exceed 30 years from the end of the plan year in
which the determination of the established date for full funding using the procedure set
forth in this clause is made and not to be less than the period of years beginning in the
plan year in which the determination of the established date for full funding using the
procedure set forth in this clause is made and ending by the date for full funding in effect
before the change; and
(vii) the period determined under item (vi) must be added to the date as of which
the actuarial valuation was prepared and the date obtained is the new established date
for full funding.
(d) For the Minneapolis Employees Retirement Fund, the established date for full
funding is June 30, 2020.
(e) For the general employees retirement plan of the Public Employees Retirement
Association, the established date for full funding is June 30, 2031.
(f) For the Teachers Retirement Association, the established date for full funding is
June 30, 2037.
(g) For the retirement plans for which the annual actuarial valuation indicates an
excess of valuation assets over the actuarial accrued liability, the valuation assets in
excess of the actuarial accrued liability must be recognized as a reduction in the current
contribution requirements by an amount equal to the amortization of the excess expressed
as a level percentage of pay over a 30-year period beginning anew with each annual
actuarial valuation of the plan.

    Sec. 35. Minnesota Statutes 2004, section 356.30, subdivision 3, is amended to read:
    Subd. 3. Covered plans. This section applies to the following retirement plans:
(1) the general state employees retirement plan of the Minnesota State Retirement
System, established under chapter 352;
(2) the correctional state employees retirement plan of the Minnesota State
Retirement System, established under chapter 352;
(3) the unclassified employees retirement program, established under chapter 352D;
(4) the State Patrol retirement plan, established under chapter 352B;
(5) the legislators retirement plan, established under chapter 3A;
(6) the elective state officers' retirement plan, established under chapter 352C;
(7) the general employees retirement plan of the Public Employees Retirement
Association, established under chapter 353;
(8) the public employees police and fire retirement plan of the Public Employees
Retirement Association, established under chapter 353;
(9) the local government correctional service retirement plan of the Public
Employees Retirement Association, established under chapter 353E;
(10) the Teachers Retirement Association, established under chapter 354;
(11) the Minneapolis Employees Retirement Fund, established under chapter 422A;
(12) the Minneapolis Teachers Retirement Fund Association, established under
chapter 354A;
(13) (12) the St. Paul Teachers Retirement Fund Association, established under
chapter 354A;
(14) (13) the Duluth Teachers Retirement Fund Association, established under
chapter 354A; and
(15) (14) the judges' retirement fund, established by sections 490.121 to 490.132.

    Sec. 36. Minnesota Statutes 2004, section 356.302, subdivision 7, is amended to read:
    Subd. 7. Covered retirement plans. This section applies to the following
retirement plans:
(1) the general state employees retirement plan of the Minnesota State Retirement
System, established by chapter 352;
(2) the unclassified state employees retirement program of the Minnesota State
Retirement System, established by chapter 352D;
(3) the general employees retirement plan of the Public Employees Retirement
Association, established by chapter 353;
(4) the Teachers Retirement Association, established by chapter 354;
(5) the Duluth Teachers Retirement Fund Association, established by chapter 354A;
(6) the Minneapolis Teachers Retirement Fund Association, established by chapter
354A;
(7) (6) the St. Paul Teachers Retirement Fund Association, established by chapter
354A;
(8) (7) the Minneapolis Employees Retirement Fund, established by chapter 422A;
(9) (8) the state correctional employees retirement plan of the Minnesota State
Retirement System, established by chapter 352;
(10) (9) the State Patrol retirement plan, established by chapter 352B;
(11) (10) the public employees police and fire plan of the Public Employees
Retirement Association, established by chapter 353;
(12) (11) the local government correctional service retirement plan of the Public
Employees Retirement Association, established by chapter 353E; and
(13) (12) the judges' retirement plan, established by sections 490.121 to 490.132.

    Sec. 37. Minnesota Statutes 2004, section 356.303, subdivision 4, is amended to read:
    Subd. 4. Covered retirement plans. This section applies to the following
retirement plans:
(1) the legislators retirement plan, established by chapter 3A;
(2) the general state employees retirement plan of the Minnesota State Retirement
System, established by chapter 352;
(3) the correctional state employees retirement plan of the Minnesota State
Retirement System, established by chapter 352;
(4) the State Patrol retirement plan, established by chapter 352B;
(5) the elective state officers retirement plan, established by chapter 352C;
(6) the unclassified state employees retirement program, established by chapter
352D;
(7) the general employees retirement plan of the Public Employees Retirement
Association, established by chapter 353;
(8) the public employees police and fire plan of the Public Employees Retirement
Association, established by chapter 353;
(9) the local government correctional service retirement plan of the Public
Employees Retirement Association, established by chapter 353E;
(10) the Teachers Retirement Association, established by chapter 354;
(11) the Duluth Teachers Retirement Fund Association, established by chapter 354A;
(12) the Minneapolis Teachers Retirement Fund Association, established by chapter
354A;
(13) (12) the St. Paul Teachers Retirement Fund Association, established by chapter
354A;
(14) (13) the Minneapolis Employees Retirement Fund, established by chapter
422A; and
(15) (14) the judges' retirement fund, established by sections 490.121 to 490.132.

    Sec. 38. Minnesota Statutes 2004, section 356.315, is amended by adding a subdivision
to read:
    Subd. 1a. Coordinated plan members. The applicable benefit accrual rate is
1.4 percent.

    Sec. 39. Minnesota Statutes 2004, section 356.315, is amended by adding a subdivision
to read:
    Subd. 2b. Certain coordinated program members. The applicable benefit accrual
rate is 1.9 percent.

    Sec. 40. Minnesota Statutes 2004, section 356.42, subdivision 3, is amended to read:
    Subd. 3. Covered retirement plans. The postretirement adjustment provided in
this section applies to the following retirement funds:
(1) the general employees retirement plans of the Public Employees Retirement
Association;
(2) the public employees police and fire plan of the Public Employees Retirement
Association;
(3) the teachers retirement association;
(4) the State Patrol retirement plan;
(5) the state employees retirement plan of the Minnesota State Retirement System;
(6) the Minneapolis Teachers Retirement Fund Association established under
chapter 354A;
(7) (6) the St. Paul Teachers Retirement Fund Association established under chapter
354A; and
(8) (7) the Duluth Teachers Retirement Fund Association established under chapter
354A.

    Sec. 41. Minnesota Statutes 2004, section 356.465, subdivision 3, is amended to read:
    Subd. 3. Covered retirement plans. The provisions of this section apply to the
following retirement plans:
(1) the general state employees retirement plan of the Minnesota State Retirement
System established under chapter 352;
(2) the correctional state employees retirement plan of the Minnesota State
Retirement System established under chapter 352;
(3) the State Patrol retirement plan established under chapter 352B;
(4) the legislators retirement plan established under chapter 3A;
(5) the judges retirement plan established under chapter 490;
(6) the general employees retirement plan of the Public Employees Retirement
Association established under chapter 353;
(7) the public employees police and fire plan of the Public Employees Retirement
Association established under chapter 353;
(8) the teachers retirement plan established under chapter 354;
(9) the Duluth Teachers Retirement Fund Association established under chapter
354A;
(10) the St. Paul Teachers Retirement Fund Association established under chapter
354A;
(11) the Minneapolis Teachers Retirement Fund Association established under
chapter 354A;
(12) (11) the Minneapolis employees retirement plan established under chapter
422A;
(13) (12) the Minneapolis Firefighters Relief Association established under chapter
423C;
(14) (13) the Minneapolis Police Relief Association established under chapter
423B; and
(15) (14) the local government correctional service retirement plan of the Public
Employees Retirement Association established under chapter 353E.

    Sec. 42. Minnesota Statutes 2004, section 423A.02, subdivision 1b, is amended to read:
    Subd. 1b. Additional amortization state aid. (a) Annually, on October 1, the
commissioner of revenue shall allocate the additional amortization state aid transferred
under section 69.021, subdivision 11, to:
(1) all police or salaried firefighters relief associations governed by and in full
compliance with the requirements of section 69.77, that had an unfunded actuarial accrued
liability in the actuarial valuation prepared under sections 356.215 and 356.216 as of the
preceding December 31;
(2) all local police or salaried firefighter consolidation accounts governed by chapter
353A that are certified by the executive director of the public employees retirement
association as having for the current fiscal year an additional municipal contribution
amount under section 353A.09, subdivision 5, paragraph (b), and that have implemented
section 353A.083, subdivision 1, if the effective date of the consolidation preceded May
24, 1993, and that have implemented section 353A.083, subdivision 2, if the effective date
of the consolidation preceded June 1, 1995; and
(3) the municipalities that are required to make an additional municipal contribution
under section 353.665, subdivision 8, for the duration of the required additional
contribution.
(b) The commissioner shall allocate the state aid on the basis of the proportional share
of the relief association or consolidation account of the total unfunded actuarial accrued
liability of all recipient relief associations and consolidation accounts as of December 31,
1993, for relief associations, and as of June 30, 1994, for consolidation accounts.
(c) Beginning October 1, 2000, and annually thereafter, the commissioner shall
allocate the state aid, including any state aid in excess of the limitation in subdivision
4, on the following basis:
(1) 64.5 percent to the municipalities to which section 353.665, subdivision
8
, paragraph (b), or 353A.09, subdivision 5, paragraph (b), apply for distribution in
accordance with paragraph (b) and subject to the limitation in subdivision 4;
(2) 34.2 percent to the city of Minneapolis to fund any unfunded actuarial accrued
liability in the actuarial valuation prepared under sections 356.215 and 356.216 as of the
preceding December 31 for the Minneapolis Police Relief Association or the Minneapolis
Fire Department Relief Association; and
(3) 1.3 percent to the city of Virginia to fund any unfunded actuarial accrued liability
in the actuarial valuation prepared under sections 356.215 and 356.216 as of the preceding
December 31 for the Virginia Fire Department Relief Association.
If there is no unfunded actuarial accrued liability in both the Minneapolis Police
Relief Association and the Minneapolis Fire Department Relief Association as disclosed
in the most recent actuarial valuations for the relief associations prepared under sections
356.215 and 356.216, the commissioner shall allocate that 34.2 percent of the aid as
follows: 49 percent to the Minneapolis Teachers Retirement Fund Association, 21 percent
to the St. Paul Teachers Retirement Fund Association, and 30 percent as additional
funding to support minimum fire state aid for volunteer firefighters relief associations.
If there is no unfunded actuarial accrued liability in the Virginia Fire Department Relief
Association as disclosed in the most recent actuarial valuation for the relief association
prepared under sections 356.215 and 356.216, the commissioner shall allocate that 1.3
percent of the aid as follows: 49 percent to the Minneapolis Teachers Retirement Fund
Association, 21 percent to the St. Paul Teachers Retirement Fund Association, and 30
percent as additional funding to support minimum fire state aid for volunteer firefighters
relief associations. The allocation must be made by the commissioner at the same time and
under the same procedures as specified in subdivision 3. With respect to the Minneapolis
Teachers Retirement Fund Association or the St. Paul Teachers Retirement Fund
Association, annually, beginning on July 1, 2005, if the applicable teacher's association
five-year average time-weighted rate of investment return does not equal or exceed the
performance of a composite portfolio assumed passively managed (indexed) invested ten
percent in cash equivalents, 60 percent in bonds and similar debt securities, and 30 percent
in domestic stock calculated using the formula under section 11A.04, clause (11), the aid
allocation to that retirement fund under this section ceases until the five-year annual rate
of investment return equals or exceeds the performance of that composite portfolio.
(d) The amounts required under this subdivision are annually appropriated to the
commissioner of revenue.

    Sec. 43. MTRFA EMPLOYEES.
Effective June 30, 2006, the Minneapolis Teachers Retirement Fund Association
employees have their employment with the Minneapolis Teachers Retirement Fund
Association terminated and, effective July 1, 2006, the Minneapolis Teachers Retirement
Fund Association employees, excluding the Executive Director, become employees
of the Teachers Retirement Association until December 31, 2007. The commissioner
of employee relations shall place employees from the former Minneapolis Teachers
Retirement Fund Association into state service in their proper classifications, except that
employees are appointed without examination and must be compensated at their current
hourly salary rate. Employees must have their accumulated, but unused, vacation leave
balance as of June 30, 2006, posted to their credit by the Teachers Retirement Association
but if the employee has vacation time in excess of the applicable maximum no additional
vacation may accrue until the employee's balance falls below the maximum permitted
by the state for the employee's position. The employees must receive length of service
credit for vacation leave accrual for time served at the Minneapolis Teachers Retirement
Fund Association. Minneapolis Teachers Retirement Fund Association employees who
become employees of the Teachers Retirement Association effective on July 1, 2006
must be considered to have completed six months of continuous service for vacation use
purposes. Employees of the former Minneapolis Teachers Retirement Fund Association
appointed to the classified service are subject to a probationary period under the collective
bargaining agreement or compensation plan applicable to the employee's position at the
Teachers Retirement Association. Effective July 1, 2006, all transferred employees must
be enrolled in the state employees' group insurance program as provided in Minnesota
Statutes, sections 43A.22 to 43A.31 and the commissioner of employee relations shall
provide open enrollment in all state employee health and dental insurance plans with
no limitation on preexisting conditions except as specified in existing state employee
certificates of coverage. The commissioner of employee relations shall provide these
transferred employees with the opportunity to purchase optional life and disability
insurance as provided by the state group insurance program in accordance with the
policies of the department of employee relations.

    Sec. 44. MTRFA ARTICLES AND BYLAWS; REPEAL; APPLICABILITY.
(a) The articles of incorporation and bylaws of the Minneapolis Teachers Retirement
Fund Association are repealed and have application only as provided in section 9,
subdivision 6, and in paragraph (b).
(b) The articles of incorporation and bylaws of the Minneapolis Teachers Retirement
Fund Association only apply to members of the former Minneapolis Teachers Retirement
Fund Association with service credit in the plan on or before June 30, 2006, and apply
solely for purposes of determining the retirement annuity for or benefit on behalf of a
member of the basic program of that retirement plan.
(c) No annuity adjustment or increase under article 30 of the articles of incorporation
of the Minneapolis Teachers Retirement Fund Association is applicable or payable after
June 30, 2006.

    Sec. 45. REPEALER.
Minnesota Statutes 2004, sections 354A.051; 354A.105; 354A.23, subdivision 1;
and 354A.28, are repealed effective June 30, 2006.

    Sec. 46. EFFECTIVE DATE.
Sections 2 to 45 are effective July 1, 2006, except that section 9, subdivision 7, is
effective the day following final enactment.

ARTICLE 4
STATE BOARD OF INVESTMENT

    Section 1. Laws 2005, chapter 156, article 1, section 8, is amended to read:


Sec. 8. INVESTMENT BOARD
2,167,000
2,167,000
151,000

    Sec. 2. Minnesota Statutes 2005 Supplement, section 11A.04, is amended to read:
11A.04 DUTIES AND POWERS.
The state board shall:
(1) Act as trustees for each fund for which it invests or manages money in
accordance with the standard of care set forth in section 11A.09 if state assets are involved
and in accordance with chapter 356A if pension assets are involved.
(2) Formulate policies and procedures deemed necessary and appropriate to carry
out its functions. Procedures adopted by the board must allow fund beneficiaries and
members of the public to become informed of proposed board actions. Procedures and
policies of the board are not subject to the Administrative Procedure Act.
(3) Employ an executive director as provided in section 11A.07.
(4) Employ investment advisors and consultants as it deems necessary.
(5) Prescribe policies concerning personal investments of all employees of the board
to prevent conflicts of interest.
(6) Maintain a record of its proceedings.
(7) As it deems necessary, establish advisory committees subject to section 15.059 to
assist the board in carrying out its duties.
(8) Not permit state funds to be used for the underwriting or direct purchase of
municipal securities from the issuer or the issuer's agent.
(9) Direct the commissioner of finance to sell property other than money that has
escheated to the state when the board determines that sale of the property is in the best
interest of the state. Escheated property must be sold to the highest bidder in the manner
and upon terms and conditions prescribed by the board.
(10) Undertake any other activities necessary to implement the duties and powers
set forth in this section.
(11) Establish a formula or formulas to measure management performance and
return on investment. Public pension funds in the state shall utilize the formula or
formulas developed by the state board.
(12) Except as otherwise provided in article XI, section 8, of the Constitution of the
state of Minnesota, employ, at its discretion, qualified private firms to invest and manage
the assets of funds over which the state board has investment management responsibility.
There is annually appropriated to the state board, from the assets of the funds for which
the state board utilizes a private investment manager, sums sufficient to pay the costs of
employing private firms. Each year, by January 15, the board shall report to the governor
and legislature on the cost and the investment performance of each investment manager
employed by the board.
(13) Adopt an investment policy statement that includes investment objectives, asset
allocation, and the investment management structure for the retirement fund assets under
its control. The statement may be revised at the discretion of the state board. The state
board shall seek the advice of the council regarding its investment policy statement.
Adoption of the statement is not subject to chapter 14.
(14) Adopt a compensation plan setting the terms and conditions of employment for
unclassified board employees who are not covered by a collective bargaining agreement.
There is annually appropriated to the state board, from the assets of the funds for
which the state board provides investment services, sums sufficient to pay the costs of
all necessary expenses for the administration of the board. These sums will be deposited
in the State Board of Investment operating account, which must be established by the
commissioner of finance.

    Sec. 3. Minnesota Statutes 2005 Supplement, section 11A.07, subdivision 4, is
amended to read:
    Subd. 4. Duties and powers. The director, at the direction of the state board, shall:
(1) plan, direct, coordinate, and execute administrative and investment functions
in conformity with the policies and directives of the state board and the requirements of
this chapter and of chapter 356A;
(2) prepare and submit biennial and annual budgets to the board and with the
approval of the board submit the budgets to the Department of Finance;
(3) employ professional and clerical staff as necessary. Employees whose primary
responsibility is to invest or manage money or employees who hold positions designated
as unclassified under section 43A.08, subdivision 1a, are in the unclassified service of the
state. Other employees are in the classified service. Unclassified employees who are
not covered by a collective bargaining agreement are employed under the terms and
conditions of the compensation plan approved under section 43A.18, subdivision 3b;
(3) (4) report to the state board on all operations under the director's control and
supervision;
(4) (5) maintain accurate and complete records of securities transactions and official
activities;
(5) (6) establish a policy relating to the purchase and sale of securities on the basis of
competitive offerings or bids. The policy is subject to board approval;
(6) (7) cause securities acquired to be kept in the custody of the commissioner of
finance or other depositories consistent with chapter 356A, as the state board deems
appropriate;
(7) (8) prepare and file with the director of the Legislative Reference Library, by
December 31 of each year, a report summarizing the activities of the state board, the
council, and the director during the preceding fiscal year. The report must be prepared
so as to provide the legislature and the people of the state with a clear, comprehensive
summary of the portfolio composition, the transactions, the total annual rate of return, and
the yield to the state treasury and to each of the funds whose assets are invested by the
state board, and the recipients of business placed or commissions allocated among the
various commercial banks, investment bankers, and brokerage organizations. The report
must contain financial statements for funds managed by the board prepared in accordance
with generally accepted accounting principles;
(8) (9) require state officials from any department or agency to produce and provide
access to any financial documents the state board deems necessary in the conduct of
its investment activities;
(9) (10) receive and expend legislative appropriations; and
(10) (11) undertake any other activities necessary to implement the duties and
powers set forth in this subdivision consistent with chapter 356A.

    Sec. 4. Minnesota Statutes 2004, section 11A.07, subdivision 5, is amended to read:
     Subd. 5. Apportionment of expenses. The executive director shall apportion the
actual expenses incurred by the board on an accrual basis among the several funds whose
assets are invested by the board based on the weighted average assets under management
during each quarter. The charge to each fund must be calculated, billed, and paid on a
quarterly basis in accordance with procedures for interdepartmental payments established
by the commissioner of finance. The amounts necessary to pay these charges are
appropriated from the investment earnings of each fund. Receipts must be credited to the
general fund as nondedicated receipts. The annual expenses incurred by the State Board
of Investment will be apportioned among the state general fund, the retirement funds
administered by the Minnesota State Retirement System, Public Employees Retirement
Association, and Teachers Retirement Association, and all other funds as follows:
    (1) on a biennial basis, the State Board of Investment, in accordance with biennial
budget procedures established by the commissioner of finance, may request a direct
appropriation that represents the portion of the State Board of Investment expenses
necessary to provide investment services to the state general fund. This appropriation
must be deposited in the State Board of Investment operating account;
    (2) the executive director shall apportion the actual expenses incurred by the State
Board of Investment, less the charge to the state general fund, among the funds whose
assets are invested by the State Board of Investment, with the exception of the state general
fund, based on the weighted average assets under management during the fiscal year. The
amounts necessary to pay these charges are apportioned from the investment earnings of
each fund. Receipts must be credited to the State Board of Investment operating account;
    (3) the actual expenses apportioned and charged to the funds, with the exception
of the state general fund and the retirement funds administered by the Minnesota State
Retirement System, Public Employees Retirement Association, and Teachers Retirement
Association, must be calculated, billed, and paid on a quarterly basis in accordance with
procedures for interdepartmental payments established by the commissioner of finance;
and
    (4) the annual estimated expenses to be incurred by the State Board of Investment
that will be payable by the retirement funds administered by the Minnesota State
Retirement System, Public Employees Retirement Association, and Teachers Retirement
Association must be deposited in the State Board of Investment operating account on the
first business day of each fiscal year. A reconciliation of the actual expenses compared to
the estimated costs must occur at the end of each fiscal year with any surplus or deficit
being credited or debited to each of the respective funds. The State Board of Investment
must present a statement of accrued actual expenses to each fund at the end of each
quarter during each fiscal year.

ARTICLE 5
BUDGET PRESENTATION OF
EMPLOYER PENSION CONTRIBUTIONS

    Section 1. Minnesota Statutes 2004, section 43A.04, subdivision 12, is amended to
read:
    Subd. 12. Total compensation reporting. (a) The commissioner, in consultation
with the commissioner of finance, shall report to the governor and the legislature by
January 15 each year on executive branch employee salary and benefits. The purpose of
the report is to assist in effective long-range planning and to provide data necessary to
compute annual and biennial costs related to the state workforce. The report must use data
available in the biennial budget system and other necessary sources. The report also must
be made available to the public in an electronic format.
(b) The report must be organized by agency. The report must list the salary or
hourly rate of pay for each agency employee. The report may list the employee by name
or by an identification number.
(c) The report must also include an estimate of the average cost to the state of
providing insurance and other benefits to a state employee.
(d) The report must also include the number of employees by agency or department,
separated by retirement plan membership, and for each plan, the total compensation,
the total employee retirement plan contribution, and the total employer retirement plan
contributions.

    Sec. 2. EFFECTIVE DATE.
Section 1 is effective the day following final enactment.

ARTICLE 6
INVESTMENT PERFORMANCE REPORTING

    Section 1. Minnesota Statutes 2004, section 356.219, is amended by adding a
subdivision to read:
    Subd. 9. Data availability. Any information received by the state auditor under
this section, if the data are public, must be made available to individuals or organizations
which request that information. The state auditor is authorized to charge fees sufficient to
cover the cost of providing the requested information in usable formats.

    Sec. 2. Minnesota Statutes 2004, section 356.219, is amended by adding a subdivision
to read:
    Subd. 10. Pension performance reporting. In addition to report presentations
that the state auditor is required to provide elsewhere in this section, the state auditor
shall provide an analysis comparing the one year and the five year rate of return for each
pension fund and the benchmark rate of return for each fund. The state auditor shall select
the benchmark rate of return based on the best practice in the industry.

    Sec. 3. EFFECTIVE DATE.
Sections 1 and 2 are effective the day following final enactment.

ARTICLE 7
STUDY OF COMPARATIVE
PUBLIC RETIREMENT PLAN PROVISIONS

    Section 1. STUDY BY LEGISLATIVE COMMISSION ON PENSIONS AND
RETIREMENT.
(a) The Legislative Commission on Pensions and Retirement shall study the structure
and implications of procedures used by the Minnesota State Retirement System plans,
Public Employees Retirement Association plans, the Teachers Retirement Association,
the Minneapolis Employees Retirement Fund, the first class city teacher retirement fund
associations, and the Minneapolis police and fire relief associations to provide investment
performance based postretirement increases to plan benefit recipients. The study shall
include but not be limited to consideration of the ability of these systems offset the impact
of inflation; the cost, budget, and aid implications of these systems; and consistency
across plans. In addition, the study must compare Minnesota teacher retirement plans
with teacher pension plans in other states on the following items: normal retirement
age; penalties that attach to early retirement; taxation of benefits; and pension benefits,
including, but not limited to, the coordination with Social Security benefits, formula
multipliers, final average salary periods, and special early normal retirement provisions.
(b) The Legislative Commission on Pensions and Retirement shall produce a report
of the findings of the study. The Legislative Commission on Pensions and Retirement
shall include draft proposed legislation to implement any recommended changes included
in the report.
(c) The report must be filed by December 1, 2006, with the chairs of the Senate State
and Local Government Operations Committee, the Senate Finance Committee, the House
Government Operations and Veterans Affairs Committee, the House State Government
Finance Committee, and the House Ways and Means Committee.

    Sec. 2. EFFECTIVE DATE.
Section 1 is effective the day following final enactment.

ARTICLE 8
STUDY OF STATEWIDE
RETIREMENT PLAN STRUCTURE

    Section 1. STUDY BY LEGISLATIVE COMMISSION ON PENSIONS AND
RETIREMENT.
(a) The Legislative Commission on Pensions and Retirement shall study the structure
of the Minnesota combined investment funds under Minnesota Statutes, section 11A.14,
and the Minnesota postretirement investment fund under Minnesota Statutes, section
11A.18, including transfer requirements between these funds.
(b) The Legislative Commission on Pensions and Retirement shall produce a report
of the findings from the study. The Legislative Commission on Pensions and Retirement
shall include draft proposed legislation to implement any recommended changes included
in the report.
(c) The report must be filed by December 1, 2006, with the chairs of the Senate State
and Local Government Operations Committee, the Senate Finance Committee, the House
Government Operations and Veterans Affairs Committee, the House State Government
Finance Committee, and the House Ways and Means Committee.

    Sec. 2. EFFECTIVE DATE.
Section 1 is effective the day following final enactment.
Presented to the governor May 22, 2006
Signed by the governor May 26, 2006, 5:02 p.m.

700 State Office Building, 100 Rev. Dr. Martin Luther King Jr. Blvd., St. Paul, MN 55155 ♦ Phone: (651) 296-2868 ♦ TTY: 1-800-627-3529 ♦ Fax: (651) 296-0569