1.1 	A bill for an act
1.2 	relating to retirement; St. Paul Teachers Retirement Fund Association financial 
1.3 	solvency measures; increasing employer contribution rates; modifying the 
1.4 	investment return actuarial assumption; extending the amortization target date; 
1.5 	eliminating postretirement adjustment trigger procedures; authorizing additional 
1.6 	funding for school districts to pay for higher teacher retirement employer 
1.7 	contribution costs; modifying interest rates charged on certain payments; 
1.8 	appropriating money; amending Minnesota Statutes 2016, sections 126C.10, 
1.9 	subdivision 37; 354A.011, subdivision 3a; 354A.093, subdivision 6; 354A.096; 
1.10 	354A.12, subdivisions 1a, 2a, 3a, 7; 354A.29, subdivision 7; 354A.34; 354A.38, 
1.11 	subdivision 3; 356.215, subdivisions 8, 11; proposing coding for new law in 
1.12 	Minnesota Statutes, chapter 356; repealing Minnesota Statutes 2016, section 
1.13 	354A.29, subdivisions 8, 9.
1.14 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.15 	Section 1. Minnesota Statutes 2016, section 126C.10, subdivision 37, is amended to read:
1.16 		Subd. 37.Pension adjustment revenue. A school district's pension adjustment revenue 
1.17 	equals the sum of:
1.18 	(1) the greater of zero or the product of:
1.19 	(i) the difference between the teacher retirement fund employer contribution rate 
1.20 	established in section 354.42 or 354A.12 for the current fiscal year and the employer 
1.21 	contribution rate for fiscal year 2017; and
1.22 	(ii) the salaries paid to employees who are members of the Teachers Retirement 
1.23 	Association or the St. Paul Teachers Retirement Association for the previous fiscal year; 
1.24 	and
1.25 	(2) the greater of zero or the product of:
2.1 	(1) (i) the difference between the district's adjustment under Minnesota Statutes 2012, 
2.2 	section 127A.50, subdivision 1, for fiscal year 2014 per adjusted pupil unit and the state 
2.3 	average adjustment under Minnesota Statutes 2012, section 127A.50, subdivision 1, for 
2.4 	fiscal year 2014 per adjusted pupil unit; and
2.5 	(2) (ii) the district's adjusted pupil units for the fiscal year.

2.6 	EFFECTIVE DATE. This section is effective for fiscal year 2018 and later.

2.7 	Sec. 2. Minnesota Statutes 2016, section 354A.011, subdivision 3a, is amended to read:
2.8 		Subd. 3a.Actuarial equivalent. "Actuarial equivalent" means the condition of one 
2.9 	annuity or benefit having an equal actuarial present value as another annuity or benefit, 
2.10 	determined as of a given date with each actuarial present value based on the appropriate 
2.11 	mortality table adopted by the appropriate board of trustees based on the experience of that 
2.12 	retirement fund association as recommended by the actuary retained under section 356.214, 
2.13 	and approved under section 356.215, subdivision 18, and using the applicable preretirement 
2.14 	or postretirement interest rateinvestment return assumption specified in section 356.215, 
2.15 	subdivision 8.

2.16 	EFFECTIVE DATE. This section is effective July 1, 2017.

2.17 	Sec. 3. Minnesota Statutes 2016, section 354A.093, subdivision 6, is amended to read:
2.18 		Subd. 6.Interest requirements. The employer shall pay interest on all equivalent 
2.19 	employee and employer contribution amounts payable under this section. Interest must be 
2.20 	computed at the rate of 8.5 percent until June 30, 2015, and eight percent thereafterapplicable 
2.21 	rate or rates specified in section 356.59, subdivision 5, compounded annually, from the end 
2.22 	of each fiscal year of the leave or break in service to the end of the month in which payment 
2.23 	is received.

2.24 	EFFECTIVE DATE. This section is effective July 1, 2017.

2.25 	Sec. 4. Minnesota Statutes 2016, section 354A.096, is amended to read:
2.26 	354A.096 MEDICAL LEAVE.
2.27 	Any teacher in the coordinated program of the St. Paul Teachers Retirement Fund 
2.28 	Association who is on an authorized medical leave of absence and subsequently returns to 
2.29 	teaching service is entitled to receive allowable service credit, not to exceed one year, for 
2.30 	the period of leave, upon making the prescribed payment to the fund. This payment must 
2.31 	include the required employee and employer contributions at the rates specified in section 
3.1 	354A.12, subdivisions 1 and 2a, as applied to the member's average full-time monthly salary 
3.2 	rate on the date the leave of absence commenced plus annual interest at the rate of 8.5 
3.3 	percent until June 30, 2015, and eight percent thereafter per yearapplicable rate or rates 
3.4 	specified in section 356.59, subdivision 5, compounded annually, from the end of the fiscal 
3.5 	year during which the leave terminates to the end of the month during which payment is 
3.6 	made. The member must pay the total amount required unless the employing unit, at its 
3.7 	option, pays the employer contributions. The total amount required must be paid by the end 
3.8 	of the fiscal year following the fiscal year in which the leave of absence terminated or before 
3.9 	the member retires, whichever is earlier. Payment must be accompanied by a copy of the 
3.10 	resolution or action of the employing authority granting the leave and the employing 
3.11 	authority, upon granting the leave, must certify the leave to the association in a manner 
3.12 	specified by the executive director. A member may not receive more than one year of 
3.13 	allowable service credit during any fiscal year by making payment under this section. A 
3.14 	member may not receive disability benefits under section 354A.36 and receive allowable 
3.15 	service credit under this section for the same period of time.

3.16 	EFFECTIVE DATE. This section is effective July 1, 2017.

3.17 	Sec. 5. Minnesota Statutes 2016, section 354A.12, subdivision 1a, is amended to read:
3.18 		Subd. 1a.Obligation for omitted salary deductions. If the full required contributions 
3.19 	are not deducted from the salary of a teacher, payment of the shortage in such deductions 
3.20 	is the sole obligation of the employing unit during the three-year period following the end 
3.21 	of the fiscal year in which the shortage occurred. The shortage is payable by the employing 
3.22 	unit upon notification of the shortage by the executive director of the applicable retirement 
3.23 	fund association. The employing unit shall also pay any employer contributions related to 
3.24 	the shortage. The amount of the shortage in employee contributions and associated employer 
3.25 	contributions is payable with interest at the preretirement interest assumption for the 
3.26 	retirement fund as specified in section 356.215, subdivision 8, stated as a monthly rate
3.27 	applicable rate or rates specified in section 356.59, subdivision 5, from the date due until 
3.28 	the date payment is received in the office of the association, compounded annually, with a 
3.29 	minimum interest charge of $10. If the shortage payment and interest is not paid by the 
3.30 	employing unit within 60 days of notification, the executive director shall certify the amount 
3.31 	of the shortage payment and interest to the commissioner of management and budget, who 
3.32 	shall deduct the amount from any state aid or appropriation amount applicable to the 
3.33 	employing unit.

3.34 	EFFECTIVE DATE. This section is effective July 1, 2017.

4.1 	Sec. 6. Minnesota Statutes 2016, section 354A.12, subdivision 2a, is amended to read:
4.2 		Subd. 2a.Employer regular and additional contributions. (a) The employing units 
4.3 	shall make the following employer contributions to the teachers retirement fund association:
4.4 	(1) for anyeach coordinated member of the St. Paul Teachers Retirement Fund 
4.5 	Association, the employing unit shall make a regular employer contribution to the retirement 
4.6 	fund association in an amount equal to the designated percentage of the salary of the 
4.7 	coordinated member as provided below:

4.8		after June 30, 2014
	5.5 percent
	
4.9		after June 30, 2015
	6 percent
	
4.10		after June 30, 2016
	6.25 percent
	
4.11		after June 30, 2017
	6.57.5 percent
	
4.12		after June 30, 2018
	8.25 percent
	
4.13		after June 30, 2019
	8.75 percent
	
4.14		after June 30, 2020
	9.5 percent
	
4.15 	(2) for anyeach basic member of the St. Paul Teachers Retirement Fund Association, 
4.16 	the employing unit shall make a regular employer contribution to the respective retirement 
4.17 	fund in an amount according to the schedule below:

4.18		after June 30, 2014
	9 percent of salary
	
4.19		after June 30, 2015
	9.5 percent of salary
	
4.20		after June 30, 2016
	9.75 percent of salary
	
4.21		after June 30, 2017
	1011 percent of salary
	
4.22		after June 30, 2018
	11.75 percent of salary
	
4.23		after June 30, 2019
	12.25 percent of salary
	
4.24		after June 30, 2020
	13 percent of salary
	
4.25 	(3) for aeach basic member of the St. Paul Teachers Retirement Fund Association, the 
4.26 	employing unit shall make an additional employer contribution to the respective fund in an 
4.27 	amount equal to 3.64 percent of the salary of the basic member;
4.28 	(4) for aeach coordinated member of the St. Paul Teachers Retirement Fund Association, 
4.29 	the employing unit shall make an additional employer contribution to the respective fund 
4.30 	in an amount equal to 3.84 percent of the coordinated member's salary.
4.31 	(b) The regular and additional employer contributions must be remitted directly to the 
4.32 	St. Paul Teachers Retirement Fund Association at least once each month. Delinquent amounts 
4.33 	are payable with interest under the procedure in subdivision 1a.
5.1 	(c) Payments of regular and additional employer contributions for school district or 
5.2 	technical college employees who are paid from normal operating funds must be made from 
5.3 	the appropriate fund of the district or technical college.
5.4 	(d) When an employer contribution rate changes for a fiscal year, the new contribution 
5.5 	rate is effective for the entire salary paid by the employer with the first payroll cycle reported.

5.6 	EFFECTIVE DATE. This section is effective July 1, 2017.

5.7 	Sec. 7. Minnesota Statutes 2016, section 354A.12, subdivision 3a, is amended to read:
5.8 		Subd. 3a. Direct state aid to first class citythe St. Paul Teachers Retirement Fund 
5.9 	associations Association. (a) The state shall pay $2,827,000$9,827,000 to the St. Paul 
5.10 	Teachers Retirement Fund Association.
5.11 	(b) In addition to other amounts specified in this subdivision the amount in paragraph 
5.12 	(a), the state shall pay $7,000,000$5,000,000 as state aid to the St. Paul Teachers Retirement 
5.13 	Fund Association.
5.14 	(c) The aid under this subdivision is payable October 1 annually. The commissioner of 
5.15 	management and budget shall pay the aid specified in this subdivision. The amount required 
5.16 	is appropriated annually from the general fund to the commissioner of management and 
5.17 	budget.

5.18 	Sec. 8. Minnesota Statutes 2016, section 354A.12, subdivision 7, is amended to read:
5.19 		Subd. 7.Recovery of benefit overpayments. (a) If the executive director discovers, 
5.20 	within the time period specified in subdivision 8 following the payment of a refund or the 
5.21 	accrual date of any retirement annuity, survivor benefit, or disability benefit, that benefit 
5.22 	overpayment has occurred due to using invalid service or salary, or due to any erroneous 
5.23 	calculation procedure, the executive director must recalculate the annuity or benefit payable 
5.24 	and recover any overpayment. The executive director shall recover the overpayment by 
5.25 	requiring direct repayment or by suspending or reducing the payment of a retirement annuity 
5.26 	or other benefit payable under this chapter to the applicable person or the person's estate, 
5.27 	whichever applies, until all outstanding amounts have been recovered. If a benefit 
5.28 	overpayment or improper payment of benefits occurred caused by a failure of the person 
5.29 	to satisfy length of separation requirements for retirement under section 354A.011, 
5.30 	subdivision 21, the executive director shall recover the improper payments by requiring 
5.31 	direct repayment. The repayment must include interest at the rate of 0.71 percent per month
5.32 	applicable rate or rates specified in section 356.59, subdivision 5, from the first of the month 
6.1 	in which a monthly benefit amount was paid to the first of the month in which the amount 
6.2 	is repaid, with annual compounding.
6.3 	(b) In the event the executive director determines that an overpaid annuity or benefit 
6.4 	that is the result of invalid salary included in the average salary used to calculate the payment 
6.5 	amount must be recovered, the executive director must determine the amount of the employee 
6.6 	deductions taken in error on the invalid salary, with interest as determined under 354A.37, 
6.7 	subdivision 3, and must subtract that amount from the total annuity or benefit overpayment, 
6.8 	and the remaining balance of the overpaid annuity or benefit, if any, must be recovered.
6.9 	(c) If the invalid employee deductions plus interest exceed the amount of the overpaid 
6.10 	benefits, the balance must be refunded to the person to whom the benefit or annuity is being 
6.11 	paid.
6.12 	(d) Any invalid employer contributions reported on the invalid salary must be credited 
6.13 	against future contributions payable by the employer.
6.14 	(e) If a member or former member, who is receiving a retirement annuity or disability 
6.15 	benefit for which an overpayment is being recovered, dies before recovery of the overpayment 
6.16 	is completed and an optional annuity or refund is payable, the remaining balance of the 
6.17 	overpaid annuity or benefit must continue to be recovered from the payment to the optional 
6.18 	annuity beneficiary or refund recipient.
6.19 	(f) The board of trustees shall adopt policies directing the period of time and manner 
6.20 	for the collection of any overpaid retirement or optional annuity, and survivor or disability 
6.21 	benefit, or a refund that the executive director determines must be recovered as provided 
6.22 	under this section.

6.23 	EFFECTIVE DATE. This section is effective July 1, 2017.

6.24 	Sec. 9. Minnesota Statutes 2016, section 354A.29, subdivision 7, is amended to read:
6.25 		Subd. 7.Eligibility for payment of Postretirement adjustments. (a) Annually, after 
6.26 	June 30, the board of trustees of the St. Paul Teachers Retirement Fund Association must 
6.27 	determine the amount of any postretirement adjustment using the procedures in this 
6.28 	subdivision and subdivision 8 or 9, whichever is applicable.(b) OnEach January 1, each 
6.29 	person who has been receiving an annuity or benefit under the articles of incorporation, the 
6.30 	bylaws, or this chapter, whose effective date of benefit commencement occurredthat 
6.31 	commenced on or before July 1 of the immediately preceding calendar year immediately 
6.32 	before the adjustment, is eligible towill receive aan annual postretirement increase as 
6.33 	specified in subdivision 8 or 9. adjustment as follows:
7.1 	(1) the monthly annuity or benefit amount of each person whose annuity or benefit 
7.2 	commenced on or before January 1 of the immediately preceding calendar year shall be 
7.3 	increased by one percent of the monthly amount; and
7.4 	(2) the monthly annuity or benefit amount of each person whose annuity or benefit 
7.5 	commenced after January 1 of the immediately preceding calendar year shall be increased 
7.6 	by one-half of one percent of the monthly amount.

7.7 	EFFECTIVE DATE. This section is effective the day following final enactment.

7.8 	Sec. 10. Minnesota Statutes 2016, section 354A.34, is amended to read:
7.9 	354A.34 DISPOSITION OF UNPAID PERIOD CERTAIN FOR LIFE OR 
7.10 	GUARANTEED REFUND OPTIONAL ANNUITIES.
7.11 	If a retiree from a coordinated program who has elected a period certain and for life 
7.12 	thereafter or a guaranteed refund optional annuity form dies without having a designated 
7.13 	beneficiary who has survived the retiree, any remaining unpaid guaranteed annuity payments 
7.14 	shall be computed at the rate of interest specified in section 356.215, subdivision 8, and 
7.15 	paid in one lump sum to the estate of the retiree. If a retiree from a coordinated program 
7.16 	who has elected a period certain and for life or a guaranteed refund optional annuity form 
7.17 	dies with a designated beneficiary who has survived the retiree but the designated beneficiary 
7.18 	dies without there existing another designated beneficiary, any remaining unpaid guaranteed 
7.19 	annuity payments shall be computed with interest at the applicable rate of interestor rates 
7.20 	specified in section 356.215 356.59, subdivision 8 5, and paid in one lump sum to the estate 
7.21 	of the designated beneficiary.

7.22 	EFFECTIVE DATE. This section is effective July 1, 2017.

7.23 	Sec. 11. Minnesota Statutes 2016, section 354A.38, subdivision 3, is amended to read:
7.24 		Subd. 3.Computation of refund repayment amount. If the coordinated member elects 
7.25 	to repay a refund under subdivision 2, the repayment to the fund must be in an amount equal 
7.26 	to refunds the member has accepted plus interest at the rate of 8.5 percent until June 30, 
7.27 	2015, and eight percent thereafterapplicable rate or rates specified in section 356.59, 
7.28 	subdivision 5, compounded annually, from the date that the refund was accepted to the date 
7.29 	that the refund is repaid.

7.30 	EFFECTIVE DATE. This section is effective July 1, 2017.

8.1 	Sec. 12. Minnesota Statutes 2016, section 356.215, subdivision 8, is amended to read:
8.2 		Subd. 8.Interest and salaryActuarial assumptions. (a) The actuarial valuation must 
8.3 	use the applicable following interestinvestment return assumption:
8.4 	(1) select and ultimate interest rate assumption

8.68.5
	plan
	ultimate interest rate 
assumption
		
8.7	teachers retirement plan
	8.5%
		
8.8 	the select preretirement interest rate assumption for the period through June 30, 2017, 
8.9 	is eight percent.
8.10 	(2) single rate interest ratefor all plans other than the teachers retirement plan, the 
8.11 	investment return assumption is:

8.148.12
8.13
	plan
	interest rate
investment return
assumption
		
8.15	general state employees retirement plan
	8%
		
8.16	correctional state employees retirement plan
	8
		
8.17	State Patrol retirement plan
	8
		
8.18
8.19
8.20	legislators retirement plan, and for the 
constitutional officers calculation of total plan 
liabilities
	0
		
8.21	judges retirement plan
	8
		
8.22	general public employees retirement plan
	8
		
8.23	public employees police and fire retirement plan
	8
		
8.24
8.25	local government correctional service retirement 
plan
	8
		
8.26	St. Paul teachers retirement plan
	8 7.5
		
8.27	Bloomington Fire Department Relief Association
	6
		
8.28
8.29	local monthly benefit volunteer firefighter relief 
associations
	5
		
8.30
8.31	monthly benefit retirement plans in the statewide 
volunteer firefighter retirement plan
	6
		
8.32 	(b)(1) If funding stability has been attained, The actuarial valuation for each of the 
8.33 	covered retirement plans listed in section 356.415, subdivision 2, must use atake into account 
8.34 	the postretirement adjustment rate actuarial assumption equal to the postretirement adjustment 
8.35 	rateor rates applicable to the plan as specified in section 354A.27, subdivision 7; 354A.29, 
8.36 	subdivision 9;7, or 356.415, subdivision 1, whichever applies.
9.1 	(2) If funding stability has not been attained, the valuation must use a select postretirement 
9.2 	adjustment rate actuarial assumption equal to the postretirement adjustment rate specified 
9.3 	in section 354A.27, subdivision 6a; 354A.29, subdivision 8; or 356.415, subdivision 1a, 
9.4 	1b, 1c, 1d, 1e, or 1f, whichever applies, for a period ending when the approved actuary 
9.5 	estimates that the plan will attain the defined funding stability measure, and thereafter an 
9.6 	ultimate postretirement adjustment rate actuarial assumption equal to the postretirement 
9.7 	adjustment rate under section 354A.27, subdivision 7; 354A.29, subdivision 9; or 356.415, 
9.8 	subdivision 1, for the applicable period or periods beginning when funding stability is 
9.9 	projected to be attained.
9.10 	(c) The actuarial valuation must use the applicable following single rate future salary 
9.11 	increase assumption, the applicable following modified single rate future salary increase 
9.12 	assumption, or the applicable following graded rate future salary increase assumption:
9.13 	(1) single rate future salary increase assumption

9.14	plan
	future salary increase assumption
	
9.15	legislators retirement plan
		5%
	
9.16	judges retirement plan
		2.75
	
9.17	Bloomington Fire Department Relief Association
		4
	
9.18 	(2) age-related future salary increase age-related select and ultimate future salary increase 
9.19 	assumption or graded rate future salary increase assumption

9.20	plan
	future salary increase assumption
	
9.21	local government correctional service retirement plan
	assumption B
	
9.22	St. Paul teachers retirement plan
	assumption A
	
9.23 	For plans other than the St. Paul teachers 
9.24 	retirement plan and the local government 
9.25 	correctional service retirement plan, the select 
9.26 	calculation is: during the designated select 
9.27 	period, a designated percentage rate is 
9.28 	multiplied by the result of the designated 
9.29 	integer minus T, where T is the number of 
9.30 	completed years of service, and is added to 
9.31 	the applicable future salary increase 
9.32 	assumption. The designated select period is 
9.33 	ten years and the designated integer is ten for 
9.34 	the local government correctional service 
9.35 	retirement plan and 15 for the St. Paul 
10.1 	Teachers Retirement Fund Association. The 
10.2 	designated percentage rate is 0.2 percent for 
10.3 	the St. Paul Teachers Retirement Fund 
10.4 	Association.
10.5 	The ultimate future salary increase assumption is:

10.6	age
	A
	B
		
10.7	16
	5.9%
	8.75%
		
10.8	17
	5.9
	8.75
		
10.9	18
	5.9
	8.75
		
10.10	19
	5.9
	8.75
		
10.11	20
	5.9
	8.75
		
10.12	21
	5.9
	8.5
		
10.13	22
	5.9
	8.25
		
10.14	23
	5.85
	8
		
10.15	24
	5.8
	7.75
		
10.16	25
	5.75
	7.5
		
10.17	26
	5.7
	7.25
		
10.18	27
	5.65
	7
		
10.19	28
	5.6
	6.75
		
10.20	29
	5.55
	6.5
		
10.21	30
	5.5
	6.5
		
10.22	31
	5.45
	6.25
		
10.23	32
	5.4
	6.25
		
10.24	33
	5.35
	6.25
		
10.25	34
	5.3
	6
		
10.26	35
	5.25
	6
		
10.27	36
	5.2
	5.75
		
10.28	37
	5.15
	5.75
		
10.29	38
	5.1
	5.75
		
10.30	39
	5.05
	5.5
		
10.31	40
	5
	5.5
		
10.32	41
	4.95
	5.5
		
10.33	42
	4.9
	5.25
		
10.34	43
	4.85
	5
		
10.35	44
	4.8
	5
		
10.36	45
	4.75
	4.75
		
10.37	46
	4.7
	4.75
		
11.1	47
	4.65
	4.75
		
11.2	48
	4.6
	4.75
		
11.3	49
	4.55
	4.75
		
11.4	50
	4.5
	4.75
		
11.5	51
	4.45
	4.75
		
11.6	52
	4.4
	4.75
		
11.7	53
	4.35
	4.75
		
11.8	54
	4.3
	4.75
		
11.9	55
	4.25
	4.5
		
11.10	56
	4.2
	4.5
		
11.11	57
	4.15
	4.25
		
11.12	58
	4.1
	4
		
11.13	59
	4.05
	4
		
11.14	60
	4
	4
		
11.15	61
	4
	4
		
11.16	62
	4
	4
		
11.17	63
	4
	4
		
11.18	64
	4
	4
		
11.19	65
	4
	3.75
		
11.20	66
	4
	3.75
		
11.21	67
	4
	3.75
		
11.22	68
	4
	3.75
		
11.23	69
	4
	3.75
		
11.24	70
	4
	3.75
		
11.25 	(3) service-related ultimate future salary increase assumption

11.26
11.27	general state employees retirement plan of the Minnesota 
State Retirement System
	assumption A
	
11.28
11.29	general employees retirement plan of the Public 
Employees Retirement Association
	assumption B
	
11.30	Teachers Retirement Association
	assumption C
	
11.31	public employees police and fire retirement plan
	assumption D
	
11.32	State Patrol retirement plan
	assumption E
	
11.33
11.34	correctional state employees retirement plan of the 
Minnesota State Retirement System
	assumption F

11.35
11.36	service 
length
	A
	B
	C
	D
	E
	F
	
11.37	1
	10.25%
	11.78%
	12%
	12.75%
	7.75%
	5.75%
	
11.38	2
	7.85
	8.65
	9
	10.75
	7.25
	5.6
	
12.1	3
	6.65
	7.21
	8
	8.75
	6.75
	5.45
	
12.2	4
	5.95
	6.33
	7.5
	7.75
	6.5
	5.3
	
12.3	5
	5.45
	5.72
	7.25
	6.25
	6.25
	5.15
	
12.4	6
	5.05
	5.27
	7
	5.85
	6
	5
	
12.5	7
	4.75
	4.91
	6.85
	5.55
	5.75
	4.85
	
12.6	8
	4.45
	4.62
	6.7
	5.35
	5.6
	4.7
	
12.7	9
	4.25
	4.38
	6.55
	5.15
	5.45
	4.55
	
12.8	10
	4.15
	4.17
	6.4
	5.05
	5.3
	4.4
	
12.9	11
	3.95
	3.99
	6.25
	4.95
	5.15
	4.3
	
12.10	12
	3.85
	3.83
	6
	4.85
	5
	4.2
	
12.11	13
	3.75
	3.69
	5.75
	4.75
	4.85
	4.1
	
12.12	14
	3.55
	3.57
	5.5
	4.65
	4.7
	4
	
12.13	15
	3.45
	3.45
	5.25
	4.55
	4.55
	3.9
	
12.14	16
	3.35
	3.35
	5
	4.55
	4.4
	3.8
	
12.15	17
	3.25
	3.26
	4.75
	4.55
	4.25
	3.7
	
12.16	18
	3.25
	3.25
	4.5
	4.55
	4.1
	3.6
	
12.17	19
	3.25
	3.25
	4.25
	4.55
	3.95
	3.5
	
12.18	20
	3.25
	3.25
	4
	4.55
	3.8
	3.5
	
12.19	21
	3.25
	3.25
	3.9
	4.45
	3.75
	3.5
	
12.20	22
	3.25
	3.25
	3.8
	4.35
	3.75
	3.5
	
12.21	23
	3.25
	3.25
	3.7
	4.25
	3.75
	3.5
	
12.22	24
	3.25
	3.25
	3.6
	4.25
	3.75
	3.5
	
12.23	25
	3.25
	3.25
	3.5
	4.25
	3.75
	3.5
	
12.24	26
	3.25
	3.25
	3.5
	4.25
	3.75
	3.5
	
12.25	27
	3.25
	3.25
	3.5
	4.25
	3.75
	3.5
	
12.26	28
	3.25
	3.25
	3.5
	4.25
	3.75
	3.5
	
12.27	29
	3.25
	3.25
	3.5
	4.25
	3.75
	3.5
	
12.28	30 or more
	3.25
	3.25
	3.5
	4.25
	3.75
	3.5
	
12.29 	(d) The actuarial valuation must use the applicable following payroll growth assumption 
12.30 	for calculating the amortization requirement for the unfunded actuarial accrued liability 
12.31 	where the amortization retirement is calculated as a level percentage of an increasing payroll:

12.32	plan
	payroll growth assumption
	
12.33
12.34	general state employees retirement plan of the Minnesota 
State Retirement System
	3.5%
	
12.35	correctional state employees retirement plan
	3.5
	
12.36	State Patrol retirement plan
	3.5
	
12.37	judges retirement plan
	2.75
	
13.1
13.2	general employees retirement plan of the Public 
Employees Retirement Association
	3.5
	
13.3	public employees police and fire retirement plan
	3.5
	
13.4	local government correctional service retirement plan
	3.5
	
13.5	teachers retirement plan
	3.75
	
13.6	St. Paul teachers retirement plan
	4
	
13.7 	(e) The assumptions set forth in paragraphs (c) and (d) continue to apply, unless a 
13.8 	different salary assumption or a different payroll increase assumption:
13.9 	(1) has been proposed by the governing board of the applicable retirement plan;
13.10 	(2) is accompanied by the concurring recommendation of the actuary retained under 
13.11 	section 356.214, subdivision 1, if applicable, or by the approved actuary preparing the most 
13.12 	recent actuarial valuation report if section 356.214 does not apply; and
13.13 	(3) has been approved or deemed approved under subdivision 18.

13.14 	EFFECTIVE DATE. This section is effective July 1, 2017.

13.15 	Sec. 13. Minnesota Statutes 2016, section 356.215, subdivision 11, is amended to read:
13.16 		Subd. 11.Amortization contributions. (a) In addition to the exhibit indicating the level 
13.17 	normal cost, the actuarial valuation of the retirement plan must contain an exhibit for financial 
13.18 	reporting purposes indicating the additional annual contribution sufficient to amortize the 
13.19 	unfunded actuarial accrued liability and must contain an exhibit for contribution 
13.20 	determination purposes indicating the additional contribution sufficient to amortize the 
13.21 	unfunded actuarial accrued liability. For the retirement plans listed in subdivision 8, paragraph 
13.22 	(c), but excluding the legislators retirement plan, the additional contribution must be 
13.23 	calculated on a level percentage of covered payroll basis by the established date for full 
13.24 	funding in effect when the valuation is prepared, assuming annual payroll growth at the 
13.25 	applicable percentage rate set forth in subdivision 8, paragraph (d). For all other retirement 
13.26 	plans and for the legislators retirement plan, the additional annual contribution must be 
13.27 	calculated on a level annual dollar amount basis.
13.28 	(b) For any retirement plan other than a retirement plan governed by paragraph (d), (e), 
13.29 	(f), (g), (h), (i), or (j), if there has not been a change in the actuarial assumptions used for 
13.30 	calculating the actuarial accrued liability of the fund, a change in the benefit plan governing 
13.31 	annuities and benefits payable from the fund, a change in the actuarial cost method used in 
13.32 	calculating the actuarial accrued liability of all or a portion of the fund, or a combination 
13.33 	of the three, which change or changes by itself or by themselves without inclusion of any 
14.1 	other items of increase or decrease produce a net increase in the unfunded actuarial accrued 
14.2 	liability of the fund, the established date for full funding is the first actuarial valuation date 
14.3 	occurring after June 1, 2020.
14.4 	(c) For any retirement plan, if there has been a change in any or all of the actuarial 
14.5 	assumptions used for calculating the actuarial accrued liability of the fund, a change in the 
14.6 	benefit plan governing annuities and benefits payable from the fund, a change in the actuarial 
14.7 	cost method used in calculating the actuarial accrued liability of all or a portion of the fund, 
14.8 	or a combination of the three, and the change or changes, by itself or by themselves and 
14.9 	without inclusion of any other items of increase or decrease, produce a net increase in the 
14.10 	unfunded actuarial accrued liability in the fund, the established date for full funding must 
14.11 	be determined using the following procedure:
14.12 	(i) the unfunded actuarial accrued liability of the fund must be determined in accordance 
14.13 	with the plan provisions governing annuities and retirement benefits and the actuarial 
14.14 	assumptions in effect before an applicable change;
14.15 	(ii) the level annual dollar contribution or level percentage, whichever is applicable, 
14.16 	needed to amortize the unfunded actuarial accrued liability amount determined under item 
14.17 	(i) by the established date for full funding in effect before the change must be calculated 
14.18 	using the interest assumption specified in subdivision 8 in effect before the change;
14.19 	(iii) the unfunded actuarial accrued liability of the fund must be determined in accordance 
14.20 	with any new plan provisions governing annuities and benefits payable from the fund and 
14.21 	any new actuarial assumptions and the remaining plan provisions governing annuities and 
14.22 	benefits payable from the fund and actuarial assumptions in effect before the change;
14.23 	(iv) the level annual dollar contribution or level percentage, whichever is applicable, 
14.24 	needed to amortize the difference between the unfunded actuarial accrued liability amount 
14.25 	calculated under item (i) and the unfunded actuarial accrued liability amount calculated 
14.26 	under item (iii) over a period of 30 years from the end of the plan year in which the applicable 
14.27 	change is effective must be calculated using the applicable interest assumption specified in 
14.28 	subdivision 8 in effect after any applicable change;
14.29 	(v) the level annual dollar or level percentage amortization contribution under item (iv) 
14.30 	must be added to the level annual dollar amortization contribution or level percentage 
14.31 	calculated under item (ii);
14.32 	(vi) the period in which the unfunded actuarial accrued liability amount determined in 
14.33 	item (iii) is amortized by the total level annual dollar or level percentage amortization 
14.34 	contribution computed under item (v) must be calculated using the interest assumption 
15.1 	specified in subdivision 8 in effect after any applicable change, rounded to the nearest 
15.2 	integral number of years, but not to exceed 30 years from the end of the plan year in which 
15.3 	the determination of the established date for full funding using the procedure set forth in 
15.4 	this clause is made and not to be less than the period of years beginning in the plan year in 
15.5 	which the determination of the established date for full funding using the procedure set forth 
15.6 	in this clause is made and ending by the date for full funding in effect before the change; 
15.7 	and
15.8 	(vii) the period determined under item (vi) must be added to the date as of which the 
15.9 	actuarial valuation was prepared and the date obtained is the new established date for full 
15.10 	funding.
15.11 	(d) For the general employees retirement plan of the Public Employees Retirement 
15.12 	Association, the established date for full funding is June 30, 2031.
15.13 	(e) For the Teachers Retirement Association, the established date for full funding is June 
15.14 	30, 2037.
15.15 	(f) For the correctional state employees retirement plan of the Minnesota State Retirement 
15.16 	System, the established date for full funding is June 30, 2038.
15.17 	(g) For the judges retirement plan, the established date for full funding is June 30, 2038.
15.18 	(h) For the public employees police and fire retirement plan, the established date for full 
15.19 	funding is June 30, 2038.
15.20 	(i) For the St. Paul Teachers Retirement Fund Association, the established date for full 
15.21 	funding is June 30, 2042. In addition to other requirements of this chapter, the annual 
15.22 	actuarial valuation must contain an exhibit indicating the funded ratio and the deficiency 
15.23 	or sufficiency in annual contributions when comparing liabilities to the market value of the 
15.24 	assets of the fund as of the close of the most recent fiscal year 2047.
15.25 	(j) For the general state employees retirement plan of the Minnesota State Retirement 
15.26 	System, the established date for full funding is June 30, 2040.
15.27 	(k) For the retirement plans for which the annual actuarial valuation indicates an excess 
15.28 	of valuation assets over the actuarial accrued liability, the valuation assets in excess of the 
15.29 	actuarial accrued liability must be recognized as a reduction in the current contribution 
15.30 	requirements by an amount equal to the amortization of the excess expressed as a level 
15.31 	percentage of pay over a 30-year period beginning anew with each annual actuarial valuation 
15.32 	of the plan.

15.33 	EFFECTIVE DATE. This section is effective July 1, 2017.

16.1 	Sec. 14. [356.59] INTEREST RATES.
16.2 		Subdivision 1.Applicable interest rates. Whenever the payment of interest is required 
16.3 	with respect to any payment, including refunds, remittances, shortages, contributions, or 
16.4 	repayments, the rate of interest is the rate or rates specified in subdivisions 2 to 4 for each 
16.5 	public retirement plan.
16.6 		Subd. 2.Minnesota State Retirement System. The interest rates for all retirement plans 
16.7 	administered by the Minnesota State Retirement System are as follows:

16.8				Annual
		Monthly
	
16.9		before July 1, 2015
	8.5 percent
	0.71 percent
	
16.10		from July 1, 2015, to June 30, 2017
	8.0 percent
	0.667 percent
	
16.11		after June 30, 2017
	7.5 percent
	0.625 percent
	
16.12 		Subd. 3.Public Employees Retirement Association. The interest rates for all retirement 
16.13 	plans administered by the Public Employees Retirement Association are as follows:

16.14				Annual
		Monthly
	
16.15		before July 1, 2015
	8.5 percent
	0.71 percent
	
16.16		from July 1, 2015, to June 30, 2017
	8.0 percent
	0.667 percent
	
16.17		after June 30, 2017
	7.5 percent
	0.625 percent
	
16.18 		Subd. 4.Teachers Retirement Association. The interest rates for the retirement plan 
16.19 	administered by the Teachers Retirement Association are as follows:

16.20				Annual
		Monthly
	
16.21			8.5 percent
	0.71 percent
	
16.22 		Subd. 5.St. Paul Teachers Retirement Fund Association. The interest rates for the 
16.23 	retirement plan administered by the St. Paul Teachers Retirement Fund Association are as 
16.24 	follows:

16.25				Annual
		Monthly
	
16.26		before July 1, 2015
	8.5 percent
	0.71 percent
	
16.27		from July 1, 2015, to June 30, 2017
	8.0 percent
	0.667 percent
	
16.28		after June 30, 2017
	7.5 percent
	0.625 percent

16.29 	EFFECTIVE DATE. This section is effective July 1, 2017.

16.30 	Sec. 15.  REPEALER.
 16.31 	Minnesota Statutes 2016, section 354A.29, subdivisions 8 and 9, are repealed.

16.32 	EFFECTIVE DATE. This section is effective July 1, 2017.

APPENDIX 

Repealed Minnesota Statutes: 17-2806 

354A.29 ST. PAUL TEACHERS RETIREMENT FUND ASSOCIATION POSTRETIREMENT ADJUSTMENT.Subd. 8.Calculation of postretirement adjustments; percentage based. 
(a) For purposes of computing postretirement adjustments for eligible benefit recipients of the St. Paul Teachers Retirement Fund Association, the accrued liability funding ratio based on the actuarial value of assets of the plan as determined by the two most recent actuarial valuations prepared under sections 356.214 and 356.215 determines the postretirement increase, as follows: 

		Funding ratio	Postretirement increase	
		Less than 80 percent	1 percent	
		At least 80 percent but less than 90 percent	2 percent	

(b) The amount determined under paragraph (a) is the full postretirement increase to be applied as a permanent increase to the regular payment of each eligible member on January 1 of the next calendar year. For any eligible member whose effective date of benefit commencement occurred after January 1 of the calendar year immediately before the postretirement increase is applied, the amount determined under paragraph (a) must be reduced by 50 percent. 

(c) If the accrued liability funding ratio based on the actuarial value of assets is at least 90 percent in two consecutive actuarial valuations, subsequent postretirement increases must be paid as specified in subdivision 9. 

(d) If, following a postretirement increase under paragraph (a), the accrued liability funding ratio, based on the actuarial value of assets, falls below 80 percent for two consecutive actuarial valuations, the applicable postretirement increase must be reduced to one percent until January 1 of the calendar year next following the date on which the requirements for an increase under paragraph (a) are again satisfied. 

Subd. 9.Calculation of postretirement adjustments. 
(a) This subdivision applies if the requirements of subdivision 8, paragraph (c), have been satisfied. 

(b) A percentage adjustment must be paid under this subdivision to eligible persons under subdivision 7. 

(c) The amount of 2.5 percent is the full postretirement adjustment to be applied as a permanent increase to the regular payment of each eligible member on January 1 of the next calendar year. For any eligible member whose effective date of benefit commencement occurred after January 1 of the calendar year immediately before the postretirement adjustment is applied, the postretirement adjustment amount must be reduced by 50 percent. 

(d) In the event the accrued liability funding ratio based on the actuarial value of assets falls below 90 percent for two consecutive actuarial valuations, the applicable postretirement increase must be determined under subdivision 8 until January 1 of the calendar year next following the date on which the requirements of subdivision 8, paragraph (c), are again satisfied.