1.1 	A bill for an act
1.2 	relating to retirement; Minnesota statewide and major local defined benefit 
1.3 	retirement plan actuarial reporting; revising the interest, salary scale, and 
1.4 	payroll growth actuarial assumptions; amending Minnesota Statutes 2010, 
1.5 	sections 3A.03, subdivision 2; 352.01, subdivision 13a; 352.017, subdivision 
1.6 	2; 352.04, subdivisions 8, 9; 352.23; 352.27; 352.271; 352.955, subdivisions 
1.7 	2, 3; 352B.013, subdivision 2; 352B.085; 352B.086; 352B.11, subdivision 
1.8 	4; 352D.05, subdivision 4; 352D.11, subdivision 2; 352D.12; 353.0161, 
1.9 	subdivision 2; 353.0162; 353.27, subdivisions 7a, 12, 12a; 353.28, subdivision 5; 
1.10 	353.35, subdivision 1; 353.665, subdivision 8; 354.42, subdivision 7; 354.50, 
1.11 	subdivision 2; 354.51, subdivision 5; 354.52, subdivision 4; 354.72, subdivision 
1.12 	2; 354A.093, subdivision 6; 354A.096; 354A.108; 354A.38, subdivision 3; 
1.13 	354B.23, subdivision 5; 354C.12, subdivision 2; 356.195, subdivision 2; 
1.14 	356.215, subdivision 1; 356.44; 356.50, subdivision 2; 356.551, subdivision 2; 
1.15 	490.121, subdivision 4; 490.1211; 490.124, subdivision 12; Minnesota Statutes 
1.16 	2011 Supplement, sections 353.01, subdivision 16; 356.215, subdivision 8.
1.17 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.18 	ARTICLE 1
1.19 	ECONOMIC ASSUMPTION REVISIONS

1.20 	Section 1. Minnesota Statutes 2011 Supplement, section 356.215, subdivision 8, 
1.21 	is amended to read:
1.22 		Subd. 8.Interest and salary assumptions. (a) The actuarial valuation must use 
1.23 	the applicable following preretirement interest assumption and the applicable following 
1.24 	postretirement interest assumption:
1.25 	(1) select and ultimate interest rate assumption

2.1
2.2
2.3

2.4

plan

ultimate 
preretirement 
interest
rate assumption

ultimate 
postretirement 
interest
rate assumption

2.5 | general state employees retirement plan | 8.5% | 6.0%
2.6 | correctional state employees retirement plan | 8.5 | 6.0
2.7 | State Patrol retirement plan | 8.5 | 6.0
2.8 | legislators retirement plan | 8.5 | 6.0
2.9 | elective state officers retirement plan | 8.5 | 6.0
2.10 | judges retirement plan | 8.5 | 6.0
2.11 | general public employees retirement plan | 8.5 | 6.0
2.12 | public employees police and fire retirement plan | 8.5 | 6.0
2.13

2.14

local government correctional service 
retirement plan

8.5

6.0

2.15 | teachers retirement plan | 8.5 | 6.0
2.16 | Duluth teachers retirement plan | 8.5 | 8.5
2.17 | St. Paul teachers retirement plan | 8.5 | 8.5
2.18 	The select preretirement interest rate assumption for the period after June 30, 2012, 
2.19 	through June 30, 2021, is 8.0 percent. The select postretirement interest rate assumption 
2.20 	for the period after June 30, 2012, through June 30, 2021, is 5.5 percent, except for the 
2.21 	Duluth teachers retirement plan and the St. Paul teachers retirement plan, each with a 
2.22 	select postretirement interest rate assumption for the period after June 30, 2012, through 
2.23 	June 30, 2021, of 8.0 percent.
2.24 	(2) single rate preretirement and postretirement interest rate assumption

2.25

2.26

plan

interest rate 
assumption

2.27 | Fairmont Police Relief Association | 5.0 | ~~5.0~~
2.28 | Virginia Fire Department Relief Association | 5.0 | ~~5.0~~
2.29 | Bloomington Fire Department Relief Association | 6.0 | ~~6.0~~
2.30

2.31

local monthly benefit volunteer firefighters relief 
associations

5.0

~~5.0~~

2.32 	(b) ~~Before July 1, 2010,~~ The actuarial valuation must use the applicable following 
2.33 	single rate future salary increase assumption, the applicable following modified single 
2.34 	rate future salary increase assumption, or the applicable following graded rate future 
2.35 	salary increase assumption:
2.36 	(1) single rate future salary increase assumption

2.37 | plan | future salary increase assumption
2.38 | legislators retirement plan | | 5.0%
2.39 | judges retirement plan | | 4.0
2.40 | Fairmont Police Relief Association | | 3.5
3.1 | Virginia Fire Department Relief Association | | 3.5
3.2

3.3

Bloomington Fire Department Relief 
Association

4.0

3.4 	(2) age-related select and ultimate future salary increase assumption or graded rate 
3.5 	future salary increase assumption

3.6 | plan | future salary increase assumption
3.7 | correctional state employees retirement plan | assumption D
3.8 | State Patrol retirement plan | assumption C
3.9 | local government correctional service retirement plan | assumption C
3.10 | Duluth teachers retirement plan | assumption A
3.11 | St. Paul teachers retirement plan | assumption B
3.12 	The select calculation is: during the 
3.13 	designated select period, a designated 
3.14 	percentage rate is multiplied by the result of 
3.15 	the designated integer minus T, where T is 
3.16 	the number of completed years of service, 
3.17 	and is added to the applicable future salary 
3.18 	increase assumption. The designated select 
3.19 	period is five years and the designated 
3.20 	integer is five for the general state employees 
3.21 	retirement plan. The designated select period 
3.22 	is ten years and the designated integer is ten 
3.23 	for all other retirement plans covered by 
3.24 	this clause. The designated percentage rate 
3.25 	is: (1) 0.2 percent for the correctional state 
3.26 	employees retirement plan, the State Patrol 
3.27 	retirement plan, and the local government 
3.28 	correctional service retirement plan; (2) 
3.29 	0.6 percent for the general state employees 
3.30 	retirement plan; and (3) 0.3 percent for the 
3.31 	teachers retirement plan, the Duluth Teachers 
3.32 	Retirement Fund Association, and the St. 
3.33 	Paul Teachers Retirement Fund Association. 
3.34 	The select calculation for the Duluth Teachers 
3.35 	Retirement Fund Association is 8.00 percent 
3.36 	per year for service years one through seven, 
3.37 	7.25 percent per year for service years seven 
4.1 	and eight, and 6.50 percent per year for 
4.2 	service years eight and nine.
4.3 	The ultimate future salary increase assumption is:

4.4 | age | A | B | C | D
4.5 | 16 | 8.00% | 6.90% | 7.7500% | 7.2500%
4.6 | 17 | 8.00 | 6.90 | 7.7500 | 7.2500
4.7 | 18 | 8.00 | 6.90 | 7.7500 | 7.2500
4.8 | 19 | 8.00 | 6.90 | 7.7500 | 7.2500
4.9 | 20 | 6.90 | 6.90 | 7.7500 | 7.2500
4.10 | 21 | 6.90 | 6.90 | 7.1454 | 6.6454
4.11 | 22 | 6.90 | 6.90 | 7.0725 | 6.5725
4.12 | 23 | 6.85 | 6.85 | 7.0544 | 6.5544
4.13 | 24 | 6.80 | 6.80 | 7.0363 | 6.5363
4.14 | 25 | 6.75 | 6.75 | 7.0000 | 6.5000
4.15 | 26 | 6.70 | 6.70 | 7.0000 | 6.5000
4.16 | 27 | 6.65 | 6.65 | 7.0000 | 6.5000
4.17 | 28 | 6.60 | 6.60 | 7.0000 | 6.5000
4.18 | 29 | 6.55 | 6.55 | 7.0000 | 6.5000
4.19 | 30 | 6.50 | 6.50 | 7.0000 | 6.5000
4.20 | 31 | 6.45 | 6.45 | 7.0000 | 6.5000
4.21 | 32 | 6.40 | 6.40 | 7.0000 | 6.5000
4.22 | 33 | 6.35 | 6.35 | 7.0000 | 6.5000
4.23 | 34 | 6.30 | 6.30 | 7.0000 | 6.5000
4.24 | 35 | 6.25 | 6.25 | 7.0000 | 6.5000
4.25 | 36 | 6.20 | 6.20 | 6.9019 | 6.4019
4.26 | 37 | 6.15 | 6.15 | 6.8074 | 6.3074
4.27 | 38 | 6.10 | 6.10 | 6.7125 | 6.2125
4.28 | 39 | 6.05 | 6.05 | 6.6054 | 6.1054
4.29 | 40 | 6.00 | 6.00 | 6.5000 | 6.0000
4.30 | 41 | 5.90 | 5.95 | 6.3540 | 5.8540
4.31 | 42 | 5.80 | 5.90 | 6.2087 | 5.7087
4.32 | 43 | 5.70 | 5.85 | 6.0622 | 5.5622
4.33 | 44 | 5.60 | 5.80 | 5.9048 | 5.4078
4.34 | 45 | 5.50 | 5.75 | 5.7500 | 5.2500
4.35 | 46 | 5.40 | 5.70 | 5.6940 | 5.1940
4.36 | 47 | 5.30 | 5.65 | 5.6375 | 5.1375
4.37 | 48 | 5.20 | 5.60 | 5.5822 | 5.0822
4.38 | 49 | 5.10 | 5.55 | 5.5404 | 5.0404
4.39 | 50 | 5.00 | 5.50 | 5.5000 | 5.0000
4.40 | 51 | 4.90 | 5.45 | 5.4384 | 4.9384
4.41 | 52 | 4.80 | 5.40 | 5.3776 | 4.8776
4.42 | 53 | 4.70 | 5.35 | 5.3167 | 4.8167
4.43 | 54 | 4.60 | 5.30 | 5.2826 | 4.7826
5.1 | 55 | 4.50 | 5.25 | 5.2500 | 4.7500
5.2 | 56 | 4.40 | 5.20 | 5.2500 | 4.7500
5.3 | 57 | 4.30 | 5.15 | 5.2500 | 4.7500
5.4 | 58 | 4.20 | 5.10 | 5.2500 | 4.7500
5.5 | 59 | 4.10 | 5.05 | 5.2500 | 4.7500
5.6 | 60 | 4.00 | 5.00 | 5.2500 | 4.7500
5.7 | 61 | 3.90 | 5.00 | 5.2500 | 4.7500
5.8 | 62 | 3.80 | 5.00 | 5.2500 | 4.7500
5.9 | 63 | 3.70 | 5.00 | 5.2500 | 4.7500
5.10 | 64 | 3.60 | 5.00 | 5.2500 | 4.7500
5.11 | 65 | 3.50 | 5.00 | 5.2500 | 4.7500
5.12 | 66 | 3.50 | 5.00 | 5.2500 | 4.7500
5.13 | 67 | 3.50 | 5.00 | 5.2500 | 4.7500
5.14 | 68 | 3.50 | 5.00 | 5.2500 | 4.7500
5.15 | 69 | 3.50 | 5.00 | 5.2500 | 4.7500
5.16 | 70 | 3.50 | 5.00 | 5.2500 | 4.7500
5.17 	(3) service-related ultimate future salary increase assumption

5.18

5.19

general state employees retirement plan of the 
Minnesota State Retirement System

assumption A

5.20

5.21

general employees retirement plan of the Public 
Employees Retirement Association

assumption B

5.22 | Teachers Retirement Association | assumption C
5.23 | public employees police and fire retirement plan | assumption D

5.24

5.25

service
length

A

B

C

D

5.26 | 1 | ~~10.75~~10.00% | ~~12.25~~11.50% | ~~12.00~~11.25% | ~~13.00~~12.25%
5.27 | 2 | ~~8.35~~7.60 | ~~9.15~~8.40 | ~~9.00~~8.25 | ~~11.00~~10.25
5.28 | 3 | ~~7.15~~6.40 | ~~7.75~~7.00 | ~~8.00~~7.25 | ~~9.00~~8.25
5.29 | 4 | ~~6.45~~5.70 | ~~6.85~~6.10 | ~~7.50~~6.75 | ~~8.00~~7.25
5.30 | 5 | ~~5.95~~5.20 | ~~6.25~~5.50 | ~~7.25~~6.50 | ~~6.50~~5.75
5.31 | 6 | ~~5.55~~4.80 | ~~5.75~~5.00 | ~~7.00~~6.25 | ~~6.10~~5.35
5.32 | 7 | ~~5.25~~4.50 | ~~5.45~~4.70 | ~~6.85~~6.10 | ~~5.80~~5.05
5.33 | 8 | ~~4.95~~4.20 | ~~5.15~~4.40 | ~~6.70~~5.95 | ~~5.60~~4.85
5.34 | 9 | ~~4.75~~4.00 | ~~4.85~~4.10 | ~~6.55~~5.80 | ~~5.40~~4.65
5.35 | 10 | ~~4.65~~3.90 | ~~4.65~~3.90 | ~~6.40~~5.65 | ~~5.30~~4.55
5.36 | 11 | ~~4.45~~3.70 | ~~4.45~~3.70 | ~~6.25~~5.50 | ~~5.20~~4.45
5.37 | 12 | ~~4.35~~3.60 | ~~4.35~~3.60 | ~~6.00~~5.25 | ~~5.10~~4.35
5.38 | 13 | ~~4.25~~3.50 | ~~4.15~~3.40 | ~~5.75~~5.00 | ~~5.00~~4.25
5.39 | 14 | ~~4.05~~3.30 | ~~4.05~~3.30 | ~~5.50~~4.75 | ~~4.90~~4.15
5.40 | 15 | ~~3.95~~3.20 | ~~3.95~~3.20 | ~~5.25~~4.50 | ~~4.80~~4.05
5.41 | 16 | ~~3.85~~3.10 | ~~3.85~~3.10 | ~~5.00~~4.00 | ~~4.80~~4.05
5.42 | 17 | ~~3.75~~3.00 | ~~3.75~~3.00 | ~~4.75~~3.75 | ~~4.80~~4.05
5.43 | 18 | ~~3.75~~3.00 | ~~3.75~~3.00 | ~~4.50~~3.50 | ~~4.80~~4.05
6.1 | 19 | ~~3.75~~3.00 | ~~3.75~~3.00 | ~~4.25~~3.25 | ~~4.80~~4.05
6.2 | 20 | ~~3.75~~3.00 | ~~3.75~~3.00 | ~~4.00~~3.15 | ~~4.80~~4.05
6.3 | 21 | ~~3.75~~3.00 | ~~3.75~~3.00 | ~~3.90~~3.05 | ~~4.70~~3.95
6.4 | 22 | ~~3.75~~3.00 | ~~3.75~~3.00 | ~~3.80~~2.95 | ~~4.60~~3.85
6.5 | 23 | ~~3.75~~3.00 | ~~3.75~~3.00 | ~~3.70~~2.85 | ~~4.50~~3.75
6.6 | 24 | ~~3.75~~3.00 | ~~3.75~~3.00 | ~~3.60~~2.75 | ~~4.50~~3.75
6.7 | 25 | ~~3.75~~3.00 | ~~3.75~~3.00 | ~~3.50~~2.75 | ~~4.50~~3.75
6.8 | 26 | ~~3.75~~3.00 | ~~3.75~~3.00 | ~~3.50~~2.75 | ~~4.50~~3.75
6.9 | 27 | ~~3.75~~3.00 | ~~3.75~~3.00 | ~~3.50~~2.75 | ~~4.50~~3.75
6.10 | 28 | ~~3.75~~3.00 | ~~3.75~~3.00 | ~~3.50~~2.75 | ~~4.50~~3.75
6.11 | 29 | ~~3.75~~3.00 | ~~3.75~~3.00 | ~~3.50~~2.75 | ~~4.50~~3.75
6.12 | 30 or more | ~~3.75~~3.00 | ~~3.75~~3.00 | ~~3.50~~2.75 | ~~4.50~~3.75
6.13 	(c) ~~Before July 2, 2010,~~ The actuarial valuation must use the applicable following 
6.14 	payroll growth assumption for calculating the amortization requirement for the unfunded 
6.15 	actuarial accrued liability where the amortization retirement is calculated as a level 
6.16 	percentage of an increasing payroll:

6.17 | plan | payroll growth assumption
6.18

6.19

general state employees retirement plan of the
Minnesota State Retirement System

~~3.75~~3.25%

6.20 | correctional state employees retirement plan | ~~4.50~~3.25
6.21 | State Patrol retirement plan | ~~4.50~~3.25
6.22 | legislators retirement plan | ~~4.50~~3.25
6.23 | judges retirement plan | ~~4.00~~3.25
6.24

6.25

general employees retirement plan of the Public
Employees Retirement Association

~~3.75~~3.25

6.26 | public employees police and fire retirement plan | ~~3.75~~3.25
6.27 | local government correctional service retirement plan | ~~4.50~~3.25
6.28 | teachers retirement plan | ~~3.75~~3.25
6.29 | Duluth teachers retirement plan | ~~4.50~~3.25
6.30 | St. Paul teachers retirement plan | ~~5.00~~3.25
6.31 	(d) ~~After July 1, 2010,~~ The assumptions set forth in paragraphs (b) and (c) continue 
6.32 	to apply, unless a different salary assumption or a different payroll increase assumption:
6.33 	(1) has been proposed by the governing board of the applicable retirement plan;
6.34 	(2) is accompanied by the concurring recommendation of the actuary retained under 
6.35 	section 356.214, subdivision 1, if applicable, or by the approved actuary preparing the 
6.36 	most recent actuarial valuation report if section 356.214 does not apply; and
6.37 	(3) has been approved or deemed approved under subdivision 18.

6.38 	EFFECTIVE DATE. This section is effective June 30, 2012.

7.1 	ARTICLE 2
7.2 	CONFORMING CHANGES RELATED TO INTEREST RATE 
7.3 	ASSUMPTION CHANGE

7.4 	Section 1. Minnesota Statutes 2010, section 3A.03, subdivision 2, is amended to read:
7.5 		Subd. 2.Refund; refund repayment.  (a) A former member who has made 
7.6 	contributions under subdivision 1 and who is no longer a member of the legislature is 
7.7 	entitled to receive, upon written application to the executive director on a form prescribed 
7.8 	by the executive director, a refund from the general fund of all contributions credited to 
7.9 	the member's account with interest computed as provided in section 352.22, subdivision 2.
7.10 	(b) The refund of contributions as provided in paragraph (a) terminates all rights 
7.11 	of a former member of the legislature and the survivors of the former member under 
7.12 	this chapter.
7.13 	(c) If the former member of the legislature again becomes a member of the legislature 
7.14 	after having taken a refund as provided in paragraph (a), the member is a member of the 
7.15 	unclassified employees retirement program of the Minnesota State Retirement System.
7.16 	(d) However, the member may reinstate the rights and credit for service previously 
7.17 	forfeited under this chapter if the member repays all refunds taken, plus interest at ~~an~~
7.18 	the applicable annual rate ~~of 8.5 percent~~ compounded annually from the date on which 
7.19 	the refund was taken to the date on which the refund is repaid. The applicable rate is 8.5 
7.20 	percent for the period before July 1, 2012, and the period after June 30, 2021, and is 8.0 
7.21 	percent for the period from July 1, 2012, through June 30, 2021.
7.22 	(e) No person may be required to apply for or to accept a refund.

7.23 	Sec. 2. Minnesota Statutes 2010, section 352.01, subdivision 13a, is amended to read:
7.24 		Subd. 13a.Reduced salary during period of workers' compensation. An 
7.25 	employee on leave of absence receiving temporary workers' compensation payments and a 
7.26 	reduced salary or no salary from the employer who is entitled to allowable service credit 
7.27 	for the period of absence, may make payment to the fund for the difference between salary 
7.28 	received, if any, and the salary the employee would normally receive if not on leave of 
7.29 	absence during the period. The employee shall pay an amount equal to the employee and 
7.30 	employer contribution rate under section 352.04, subdivisions 2 and 3, on the differential 
7.31 	salary amount for the period of the leave of absence.
7.32 	The employing department, at its option, may pay the employer amount on behalf 
7.33 	of its employees. Payment made under this subdivision must include interest at the 
7.34 	applicable rate ~~of 8.5 percent~~ per year, and must be completed within one year of the 
8.1 	return from leave of absence. The applicable rate is 8.5 percent for the period before July 
8.2 	1, 2012, and the period after June 30, 2021, and is 8.0 percent for the period from July 
8.3 	1, 2012, through June 30, 2021.

8.4 	Sec. 3. Minnesota Statutes 2010, section 352.017, subdivision 2, is amended to read:
8.5 		Subd. 2.Purchase procedure. (a) An employee covered by a plan specified in 
8.6 	this chapter may purchase credit for allowable service in that plan for a period specified 
8.7 	in subdivision 1 if the employee makes a payment as specified in paragraph (b) or (c), 
8.8 	whichever applies. The employing unit, at its option, may pay the employer portion of the 
8.9 	amount specified in paragraph (b) on behalf of its employees.
8.10 	(b) If payment is received by the executive director within one year from the date the 
8.11 	employee returned to work following the authorized leave, the payment amount is equal to 
8.12 	the employee and employer contribution rates specified in law for the applicable plan at 
8.13 	the end of the leave period multiplied by the employee's hourly rate of salary on the date 
8.14 	of return from the leave of absence and by the days and months of the leave of absence for 
8.15 	which the employee is eligible for allowable service credit. The payment must include 
8.16 	compound interest at ~~a~~the applicable monthly rate ~~of 0.71 percent~~ from the last day of the 
8.17 	leave period until the last day of the month in which payment is received. The applicable 
8.18 	rate is 0.71 percent before July 1, 2012, and the period after June 30, 2021, and is 0.667 
8.19 	percent for the period from July 1, 2012, through June 30, 2021. If payment is received 
8.20 	by the executive director after one year, the payment amount is the amount determined 
8.21 	under section 356.551. Payment under this paragraph must be made before the date of 
8.22 	termination from public employment covered under this chapter.
8.23 	(c) If the employee terminates employment covered by this chapter during the leave 
8.24 	or following the leave rather than returning to covered employment, payment must be 
8.25 	received by the executive director within 30 days after the termination date. The payment 
8.26 	amount is equal to the employee and employer contribution rates specified in law for the 
8.27 	applicable plan on the day prior to the termination date, multiplied by the employee's 
8.28 	hourly rate of salary on that date and by the days and months of the leave of absence 
8.29 	prior to termination.

8.30 	Sec. 4. Minnesota Statutes 2010, section 352.04, subdivision 8, is amended to read:
8.31 		Subd. 8.Department required to pay omitted salary deductions. (a) If a 
8.32 	department fails to take deductions past due for a period of 60 days or less from an 
8.33 	employee's salary as provided in this section, those deductions must be taken on later 
8.34 	payroll abstracts.
9.1 	(b) If a department fails to take deductions past due for a period in excess of 60 
9.2 	days from an employee's salary as provided in this section, the department, and not the 
9.3 	employee, must pay on later payroll abstracts the employee and employer contributions 
9.4 	and an amount equivalent to ~~8.5~~the applicable percent of the total amount due in lieu of 
9.5 	interest, or if the delay in payment exceeds one year, ~~8.5 percent~~the applicable rate of 
9.6 	compound annual interest. The applicable percent or rate is 8.5 percent for the period 
9.7 	before July 1, 2012, and the period after June 30, 2021, and is 8.0 percent for the period 
9.8 	from July 1, 2012, through June 30, 2021.
9.9 	(c) If a department fails to take deductions past due for a period of 60 days or less 
9.10 	and the employee is no longer in state service so that the required deductions cannot be 
9.11 	taken from the salary of the employee, the department must nevertheless pay the required 
9.12 	employer contributions. If any department fails to take deductions past due for a period in 
9.13 	excess of 60 days and the employee is no longer in state service, the omitted contributions 
9.14 	must be recovered under paragraph (b).
9.15 	(d) If an employee from whose salary required deductions were past due for a period 
9.16 	of 60 days or less leaves state service before the payment of the omitted deductions and 
9.17 	subsequently returns to state service, the unpaid amount is considered the equivalent of a 
9.18 	refund. The employee accrues no right by reason of the unpaid amount, except that the 
9.19 	employee may pay the amount of omitted deductions as provided in section 352.23.

9.20 	Sec. 5. Minnesota Statutes 2010, section 352.04, subdivision 9, is amended to read:
9.21 		Subd. 9.Erroneous deductions, canceled warrants. (a) Deductions taken from 
9.22 	the salary of an employee for the retirement fund in excess of required amounts must, 
9.23 	upon discovery and verification by the department making the deduction, be refunded to 
9.24 	the employee.
9.25 	(b) If a deduction for the retirement fund is taken from a salary warrant or check, 
9.26 	and the check is canceled or the amount of the warrant or check returned to the funds of 
9.27 	the department making the payment, the sum deducted, or the part of it required to adjust 
9.28 	the deductions, must be refunded to the department or institution if the department applies 
9.29 	for the refund on a form furnished by the director. The department's payments must 
9.30 	likewise be refunded to the department.
9.31 	(c) If erroneous employee deductions and employer contributions are caused by an 
9.32 	error in plan coverage involving the plan and any other plans specified in section 356.99, 
9.33 	that section applies. If the employee should have been covered by the plan governed by 
9.34 	chapter 352D, 353D, 354B, or 354D, the employee deductions and employer contributions 
9.35 	taken in error must be directly transferred to the applicable employee's account in the 
10.1 	correct retirement plan, with interest at the applicable monthly rate ~~of 0.71 percent per~~ 
10.2 	~~month~~, compounded annually, from the first day of the month following the month in 
10.3 	which coverage should have commenced in the correct defined contribution plan until 
10.4 	the end of the month in which the transfer occurs. The applicable rate is 0.71 percent per 
10.5 	month before July 1, 2012, and the period after June 30, 2021, and is 0.667 percent per 
10.6 	month for the period from July 1, 2012, through June 30, 2021.

10.7 	Sec. 6. Minnesota Statutes 2010, section 352.23, is amended to read:
10.8 	352.23 TERMINATION OF RIGHTS.
10.9 	When any employee accepts a refund as provided in section 352.22, all existing 
10.10 	service credits and all rights and benefits to which the employee was entitled before 
10.11 	accepting the refund terminate. They must not again be restored until the former employee 
10.12 	acquires at least six months of allowable service credit after taking the last refund. In that 
10.13 	event, the employee may repay all refunds previously taken from the retirement fund. 
10.14 	Repayment of refunds entitles the employee only to credit for service covered by (1) 
10.15 	salary deductions; (2) payments made in lieu of salary deductions; (3) payments made 
10.16 	to obtain credit for service as permitted by laws in effect when payment was made; and 
10.17 	(4) allowable service once credited while receiving temporary workers' compensation as 
10.18 	provided in section 352.01, subdivision 11, clause (5). Payments under this section for 
10.19 	repayment of refunds are to be paid with interest at ~~an~~the applicable annual rate ~~of 8.5~~ 
10.20 	~~percent~~ compounded annually. The applicable rate is 0.71 percent before July 1, 2012, 
10.21 	and the period after June 30, 2021, and is 0.667 percent for the period from July 1, 2012, 
10.22 	through June 30, 2021. They may be paid in a lump sum or by payroll deduction in the 
10.23 	manner provided in section 352.04. Payment may be made in a lump sum up to six months 
10.24 	after termination from service.

10.25 	Sec. 7. Minnesota Statutes 2010, section 352.27, is amended to read:
10.26 	352.27 CREDIT FOR BREAK IN SERVICE TO PROVIDE UNIFORMED 
10.27 	SERVICE.
10.28 	(a) An employee who is absent from employment by reason of service in the 
10.29 	uniformed services, as defined in United States Code, title 38, section 4303(13), and who 
10.30 	returns to state service upon discharge from service in the uniformed service within the 
10.31 	time frames required in United States Code, title 38, section 4312(e), may obtain service 
10.32 	credit for the period of the uniformed service as further specified in this section, provided 
10.33 	that the employee did not separate from uniformed service with a dishonorable or bad 
10.34 	conduct discharge or under other than honorable conditions.
11.1 	(b) The employee may obtain credit by paying into the fund an equivalent employee 
11.2 	contribution based upon the contribution rate or rates in effect at the time that the 
11.3 	uniformed service was performed multiplied by the full and fractional years being 
11.4 	purchased and applied to the annual salary rate. The annual salary rate is the average 
11.5 	annual salary during the purchase period that the employee would have received if the 
11.6 	employee had continued to be employed in covered employment rather than to provide 
11.7 	uniformed service, or, if the determination of that rate is not reasonably certain, the annual 
11.8 	salary rate is the employee's average salary rate during the 12-month period of covered 
11.9 	employment rendered immediately preceding the period of the uniformed service.
11.10 	(c) The equivalent employer contribution and, if applicable, the equivalent additional 
11.11 	employer contribution provided in this chapter must be paid by the department employing 
11.12 	the employee from funds available to the department at the time and in the manner 
11.13 	provided in this chapter, using the employer and additional employer contribution rate or 
11.14 	rates in effect at the time that the uniformed service was performed, applied to the same 
11.15 	annual salary rate or rates used to compute the equivalent employee contribution.
11.16 	(d) If the employee equivalent contributions provided in this section are not paid in 
11.17 	full, the employee's allowable service credit must be prorated by multiplying the full and 
11.18 	fractional number of years of uniformed service eligible for purchase by the ratio obtained 
11.19 	by dividing the total employee contribution received by the total employee contribution 
11.20 	otherwise required under this section.
11.21 	(e) To receive service credit under this section, the contributions specified in this 
11.22 	section must be transmitted to the Minnesota State Retirement System during the period 
11.23 	which begins with the date on which the individual returns to state service and which has a 
11.24 	duration of three times the length of the uniformed service period, but not to exceed five 
11.25 	years. If the determined payment period is less than one year, the contributions required 
11.26 	under this section to receive service credit may be made within one year of the discharge 
11.27 	date.
11.28 	(f) The amount of service credit obtainable under this section may not exceed five 
11.29 	years unless a longer purchase period is required under United States Code, title 38, 
11.30 	section 4312.
11.31 	(g) The employing unit shall pay interest on all equivalent employee and employer 
11.32 	contribution amounts payable under this section. Interest must be computed at ~~a~~the 
11.33 	applicable rate ~~of 8.5 percent~~ compounded annually from the end of each fiscal year of the 
11.34 	leave or the break in service to the end of the month in which the payment is received. The 
11.35 	applicable rate is 8.5 percent for the period before July 1, 2012, and the period after June 
11.36 	30, 2021, and is 8.0 percent for the period from July 1, 2012, through June 30, 2021.

12.1 	Sec. 8. Minnesota Statutes 2010, section 352.271, is amended to read:
12.2 	352.271 METROPOLITAN TRANSIT COMMISSION-TRANSIT 
12.3 	OPERATING DIVISION EMPLOYEES; CREDIT FOR MILITARY SERVICE.
12.4 	Any employee of the Metropolitan Transit Commission Operating Division who 
12.5 	was on a leave of absence to enter military service on July 1, 1978, who has not taken a 
12.6 	refund of employee contributions as authorized by article 12 of the Metropolitan Transit 
12.7 	Commission-Transit Operating Division employees retirement fund document or section 
12.8 	352.22, subdivision 2a, and who returns to service as an employee of the Metropolitan 
12.9 	Transit Commission-Transit Operating Division upon discharge from military service 
12.10 	as provided in section 192.262 is entitled to allowable service credit for the period of 
12.11 	military service. If an employee has taken a refund of employee contributions, and would 
12.12 	otherwise be entitled to allowable service credit under this section, the employee is 
12.13 	entitled to allowable service credit for the period of military service upon repayment to the 
12.14 	executive director of the system of the amount refunded plus interest at ~~an~~the applicable 
12.15 	annual rate ~~of 8.5 percent~~ compounded annually from the date on which the refund was 
12.16 	taken to the date of repayment. No employee is entitled to allowable service credit for any 
12.17 	voluntary extensions of military service at the instance of the employee beyond any initial 
12.18 	period of enlistment, induction, or call to active duty. The applicable rate is 8.5 percent 
12.19 	for the period before July 1, 2012, and the period after June 30, 2021, and is 8.0 percent 
12.20 	for the period from July 1, 2012, through June 30, 2021.

12.21 	Sec. 9. Minnesota Statutes 2010, section 352.955, subdivision 2, is amended to read:
12.22 		Subd. 2.Payment of additional equivalent contributions; pre-July 1, 2007, 
12.23 	coverage transfers. (a) An eligible employee who was transferred to plan coverage 
12.24 	before July 1, 2007, and who elects to transfer past service credit under this section must 
12.25 	pay an additional member contribution for that prior service period. The additional 
12.26 	member contribution is the difference between the member contribution rate or rates for 
12.27 	the general state employees retirement plan of the Minnesota State Retirement System 
12.28 	for the period of employment covered by the service credit to be transferred and the 
12.29 	member contribution rate or rates for the correctional state employees retirement plan for 
12.30 	the period of employment covered by the service credit to be transferred, plus annual 
12.31 	compound interest at the rate of 8.5 percent.
12.32 	(b) The additional equivalent member contribution under this subdivision must be 
12.33 	paid in a lump sum. Payment must accompany the election to transfer the prior service 
12.34 	credit. No transfer election or additional equivalent member contribution payment may be 
13.1 	made by a person or accepted by the executive director after January 1, 2008, or the date 
13.2 	on which the eligible employee terminates state employment, whichever is earlier.
13.3 	(c) If an eligible employee elects to transfer past service credit under this section 
13.4 	and pays the additional equivalent member contribution amount under paragraphs (a) and 
13.5 	(b), the applicable department shall pay an additional equivalent employer contribution 
13.6 	amount. The additional employer contribution is the difference between the employer 
13.7 	contribution rate or rates for the general state employees retirement plan for the period of 
13.8 	employment covered by the service credit to be transferred and the employer contribution 
13.9 	rate or rates for the correctional state employees retirement plan for the period of 
13.10 	employment covered by the service credit to be transferred, plus annual compound interest 
13.11 	at the applicable rate ~~of 8.5 percent~~. The applicable rate is 8.5 percent for the period 
13.12 	before July 1, 2012, and the period after June 30, 2021, and is 8.0 percent for the period 
13.13 	from July 1, 2012, through June 30, 2021.
13.14 	(d) The additional equivalent employer contribution under this subdivision must be 
13.15 	paid in a lump sum and must be paid within 30 days of the date on which the executive 
13.16 	director of the Minnesota State Retirement System certifies to the applicable department 
13.17 	that the employee paid the additional equivalent member contribution.

13.18 	Sec. 10. Minnesota Statutes 2010, section 352.955, subdivision 3, is amended to read:
13.19 		Subd. 3.Payment of additional equivalent contributions; post-June 30, 2007, 
13.20 	coverage transfers. (a) An eligible employee who is transferred to plan coverage after 
13.21 	June 30, 2007, and who elects to transfer past service credit under this section must pay 
13.22 	an additional member contribution for that prior service period. The additional member 
13.23 	contribution is the amount computed under paragraph (b), plus the greater of the amount 
13.24 	computed under paragraph (c), or 40 percent of the unfunded actuarial accrued liability 
13.25 	attributable to the past service credit transfer.
13.26 	(b) The executive director shall compute, for the most recent 12 months of service 
13.27 	credit eligible for transfer, or for the entire period eligible for transfer if less than 12 
13.28 	months, the difference between the employee contribution rate or rates for the general state 
13.29 	employees retirement plan and the employee contribution rate or rates for the correctional 
13.30 	state employees retirement plan applied to the eligible employee's salary during that 
13.31 	transfer period, plus compound interest at a monthly rate of 0.71 percent.
13.32 	(c) The executive director shall compute, for any service credit being transferred 
13.33 	on behalf of the eligible employee and not included under paragraph (b), the difference 
13.34 	between the employee contribution rate or rates for the general state employees retirement 
13.35 	plan and the employee contribution rate or rates for the correctional state employees 
14.1 	retirement plan applied to the eligible employee's salary during that transfer period, plus 
14.2 	compound interest at ~~a~~the applicable monthly rate ~~of 0.71 percent~~. The applicable rate is 
14.3 	0.71 percent before July 1, 2012, and the period after June 30, 2021, and is 0.667 percent 
14.4 	for the period from July 1, 2012, through June 30, 2021.
14.5 	(d) The executive director shall compute an amount using the process specified in 
14.6 	paragraph (b), but based on differences in employer contribution rates between the general 
14.7 	state employees retirement plan and the correctional state employees retirement plan 
14.8 	rather than employee contribution rates.
14.9 	(e) The executive director shall compute an amount using the process specified in 
14.10 	paragraph (c), but based on differences in employer contribution rates between the general 
14.11 	state employees retirement plan and the correctional state employees retirement plan 
14.12 	rather than employee contribution rates.
14.13 	(f) The additional equivalent member contribution under this subdivision must be 
14.14 	paid in a lump sum. Payment must accompany the election to transfer the prior service 
14.15 	credit. No transfer election or additional equivalent member contribution payment may be 
14.16 	made by a person or accepted by the executive director after the one year anniversary date 
14.17 	of the effective date of the retirement coverage transfer, or the date on which the eligible 
14.18 	employee terminates state employment, whichever is earlier.
14.19 	(g) If an eligible employee elects to transfer past service credit under this section 
14.20 	and pays the additional equivalent member contribution amount under paragraph (a), the 
14.21 	applicable department shall pay an additional equivalent employer contribution amount. 
14.22 	The additional employer contribution is the amount computed under paragraph (d), plus 
14.23 	the greater of the amount computed under paragraph (e), or 60 percent of the unfunded 
14.24 	actuarial accrued liability attributable to the past service credit transfer.
14.25 	(h) The unfunded actuarial accrued liability attributable to the past service credit 
14.26 	transfer is the present value of the benefit obtained by the transfer of the service credit 
14.27 	to the correctional state employees retirement plan reduced by the amount of the asset 
14.28 	transfer under subdivision 4, by the amount of the member contribution equivalent 
14.29 	payment computed under paragraph (b), and by the amount of the employer contribution 
14.30 	equivalent payment computed under paragraph (d).
14.31 	(i) The additional equivalent employer contribution under this subdivision must be 
14.32 	paid in a lump sum and must be paid within 30 days of the date on which the executive 
14.33 	director of the Minnesota State Retirement System certifies to the applicable department 
14.34 	that the employee paid the additional equivalent member contribution.

14.35 	Sec. 11. Minnesota Statutes 2010, section 352B.013, subdivision 2, is amended to read:
15.1 		Subd. 2.Purchase procedure. (a) An employee covered by the plan specified in 
15.2 	this chapter may purchase credit for allowable service in the plan for a period specified 
15.3 	in subdivision 1 if the employee makes a payment as specified in paragraph (b) or (c), 
15.4 	whichever applies. The employing unit, at its option, may pay the employer portion of the 
15.5 	amount specified in paragraph (b) on behalf of its employees.
15.6 	(b) If payment is received by the executive director within one year from the date 
15.7 	the employee returned to work following the authorized leave, the payment amount is 
15.8 	equal to the employee and employer contribution rates specified in section 352B.02 at the 
15.9 	end of the leave period multiplied by the employee's hourly rate of salary on the date of 
15.10 	return from the leave of absence and by the days and months of the leave of absence for 
15.11 	which the employee is eligible for allowable service credit. The payment must include 
15.12 	compound interest at ~~a~~the applicable monthly rate ~~of 0.71 percent~~ from the last day 
15.13 	of the leave period until the last day of the month in which payment is received. The 
15.14 	applicable rate is 0.71 percent before July 1, 2012, and the period after June 30, 2021, 
15.15 	and is 0.667 percent for the period from July 1, 2012, through June 30, 2021. If payment 
15.16 	is received by the executive director after one year from the date the employee returned 
15.17 	to work following the authorized leave, the payment amount is the amount determined 
15.18 	under section 356.551. Payment under this paragraph must be made before the date of 
15.19 	termination from public employment covered under this chapter.
15.20 	(c) If the employee terminates employment covered by this chapter during the leave 
15.21 	or following the leave rather than returning to covered employment, payment must 
15.22 	be received by the executive director within 30 days after the termination date. The 
15.23 	payment amount is equal to the employee and employer contribution rates specified in 
15.24 	section 352B.02 on the day prior to the termination date, multiplied by the employee's 
15.25 	hourly rate of salary on that date and by the days and months of the leave of absence 
15.26 	prior to termination.

15.27 	Sec. 12. Minnesota Statutes 2010, section 352B.085, is amended to read:
15.28 	352B.085 SERVICE CREDIT FOR CERTAIN DISABILITY LEAVES OF 
15.29 	ABSENCE.
15.30 	A member on leave of absence receiving temporary workers' compensation payments 
15.31 	and a reduced salary or no salary from the employer who is entitled to allowable service 
15.32 	credit for the period of absence under section 352B.011, subdivision 3, paragraph (b), may 
15.33 	make payment to the fund for the difference between salary received, if any, and the salary 
15.34 	that the member would normally receive if the member was not on leave of absence 
15.35 	during the period. The member shall pay an amount equal to the member and employer 
16.1 	contribution rate under section 352B.02, subdivisions 1b and 1c, on the differential 
16.2 	salary amount for the period of the leave of absence. The employing department, at its 
16.3 	option, may pay the employer amount on behalf of the member. Payment made under 
16.4 	this subdivision must include interest at the applicable rate ~~of 8.5 percent per year~~, and 
16.5 	must be completed within one year of the member's return from the leave of absence. The 
16.6 	applicable rate is 8.5 percent for the period before July 1, 2012, and the period after June 
16.7 	30, 2021, and is 8.0 percent for the period from July 1, 2012, through June 30, 2021.

16.8 	Sec. 13. Minnesota Statutes 2010, section 352B.086, is amended to read:
16.9 	352B.086 SERVICE CREDIT FOR UNIFORMED SERVICE.
16.10 	(a) A member who is absent from employment by reason of service in the uniformed 
16.11 	services, as defined in United States Code, title 38, section 4303(13), and who returns to 
16.12 	state employment in a position covered by the plan upon discharge from service in the 
16.13 	uniformed services within the time frame required in United States Code, title 38, section 
16.14 	4312(e), may obtain service credit for the period of the uniformed service, provided that 
16.15 	the member did not separate from uniformed service with a dishonorable or bad conduct 
16.16 	discharge or under other than honorable conditions.
16.17 	(b) The member may obtain credit by paying into the fund an equivalent member 
16.18 	contribution based on the member contribution rate or rates in effect at the time that 
16.19 	the uniformed service was performed multiplied by the full and fractional years being 
16.20 	purchased and applied to the annual salary rate. The annual salary rate is the average 
16.21 	annual salary during the purchase period that the member would have received if the 
16.22 	member had continued to provide employment services to the state rather than to provide 
16.23 	uniformed service, or if the determination of that rate is not reasonably certain, the annual 
16.24 	salary rate is the member's average salary rate during the 12-month period of covered 
16.25 	employment rendered immediately preceding the purchase period.
16.26 	(c) The equivalent employer contribution and, if applicable, the equivalent employer 
16.27 	additional contribution, must be paid by the employing unit, using the employer and 
16.28 	employer additional contribution rate or rates in effect at the time that the uniformed 
16.29 	service was performed, applied to the same annual salary rate or rates used to compute the 
16.30 	equivalent member contribution.
16.31 	(d) If the member equivalent contributions provided for in this section are not paid 
16.32 	in full, the member's allowable service credit must be prorated by multiplying the full and 
16.33 	fractional number of years of uniformed service eligible for purchase by the ratio obtained 
16.34 	by dividing the total member contributions received by the total member contributions 
16.35 	otherwise required under this section.
17.1 	(e) To receive allowable service credit under this section, the contributions specified 
17.2 	in this section must be transmitted to the fund during the period which begins with the 
17.3 	date on which the individual returns to state employment covered by the plan and which 
17.4 	has a duration of three times the length of the uniformed service period, but not to exceed 
17.5 	five years. If the determined payment period is calculated to be less than one year, the 
17.6 	contributions required under this section to receive service credit must be transmitted to 
17.7 	the fund within one year from the discharge date.
17.8 	(f) The amount of allowable service credit obtainable under this section may not 
17.9 	exceed five years, unless a longer purchase period is required under United States Code, 
17.10 	title 38, section 4312.
17.11 	(g) The employing unit shall pay interest on all equivalent member and employer 
17.12 	contribution amounts payable under this section. Interest must be computed at ~~a~~the 
17.13 	applicable rate ~~of 8.5 percent~~ compounded annually from the end of each fiscal year of 
17.14 	the leave or break in service to the end of the month in which payment is received. The 
17.15 	applicable rate is 8.5 percent for the period before July 1, 2012, and the period after June 
17.16 	30, 2021, and is 8.0 percent for the period from July 1, 2012, through June 30, 2021.

17.17 	Sec. 14. Minnesota Statutes 2010, section 352B.11, subdivision 4, is amended to read:
17.18 		Subd. 4.Reentry into state service. When a former member, who has become 
17.19 	separated from state service that entitled the member to membership and has received a 
17.20 	refund of retirement payments, reenters the state service in a position that entitles the 
17.21 	member to membership, that member shall receive credit for the period of prior allowable 
17.22 	state service if the member repays into the fund the amount of the refund, plus interest on 
17.23 	it at ~~an~~the applicable annual rate ~~of 8.5 percent~~ compounded annually, at any time before 
17.24 	subsequent retirement. The applicable rate is 8.5 percent for the period before July 1, 
17.25 	2012, and the period after June 30, 2021, and is 8.0 percent for the period from July 1, 
17.26 	2012, through June 30, 2021. Repayment may be made in installments or in a lump sum.

17.27 	Sec. 15. Minnesota Statutes 2010, section 352D.05, subdivision 4, is amended to read:
17.28 		Subd. 4.Repayment of refund. (a) A participant in the unclassified program may 
17.29 	repay regular refunds taken under section 352.22, as provided in section 352.23.
17.30 	(b) A participant in the unclassified program or an employee covered by the general 
17.31 	employees retirement plan who has withdrawn the value of the total shares may repay 
17.32 	the refund taken and thereupon restore the service credit, rights and benefits forfeited by 
17.33 	paying into the fund the amount refunded plus interest at ~~an~~the applicable annual rate 
17.34 	~~of 8.5 percent~~ compounded annually from the date that the refund was taken until the date 
18.1 	that the refund is repaid. The applicable rate is 8.5 percent for the period before July 1, 
18.2 	2012, and the period after June 30, 2021, and is 8.0 percent for the period from July 1, 
18.3 	2012, through June 30, 2021. If the participant had withdrawn only the employee shares 
18.4 	as permitted under prior laws, repayment must be pro rata.
18.5 	(c) Except as provided in section 356.441, the repayment of a refund under this 
18.6 	section must be made in a lump sum.

18.7 	Sec. 16. Minnesota Statutes 2010, section 352D.11, subdivision 2, is amended to read:
18.8 		Subd. 2.Payments by employee. An employee entitled to purchase service credit 
18.9 	may make the purchase by paying to the state retirement system an amount equal to 
18.10 	the current employee contribution rate in effect for the state retirement system applied 
18.11 	to the current or final salary rate multiplied by the months and days of prior temporary, 
18.12 	intermittent, or contract legislative service. Payment shall be made in one lump sum 
18.13 	unless the executive director of the state retirement system agrees to accept payment in 
18.14 	installments over a period of not more than three years from the date of the agreement. 
18.15 	Installment payments shall be charged interest at ~~an~~the applicable annual rate ~~of 8.5~~ 
18.16 	~~percent~~ compounded annually. The applicable rate is 8.5 percent for the period before July 
18.17 	1, 2012, and the period after June 30, 2021, and is 8.0 percent for the period from July 
18.18 	1, 2012, through June 30, 2021.

18.19 	Sec. 17. Minnesota Statutes 2010, section 352D.12, is amended to read:
18.20 	352D.12 TRANSFER OF PRIOR SERVICE CONTRIBUTIONS.
18.21 	(a) An employee who is a participant in the unclassified program and who has prior 
18.22 	service credit in a covered plan under chapter 352, 353, 354, 354A, or 422A may, within 
18.23 	the time limits specified in this section, elect to transfer to the unclassified program prior 
18.24 	service contributions to one or more of those plans.
18.25 	(b) For participants with prior service credit in a plan governed by chapter 352, 353, 
18.26 	354, 354A, or 422A, "prior service contributions" means the accumulated employee and 
18.27 	equal employer contributions with interest at ~~an~~the applicable annual rate ~~of 8.5 percent~~
18.28 	compounded annually, based on fiscal year balances.
18.29 	(c) If a participant has taken a refund from a retirement plan listed in this section, 
18.30 	the participant may repay the refund to that plan, notwithstanding any restrictions on 
18.31 	repayment to that plan, plus 8.5 percent interest compounded annually and have the 
18.32 	accumulated employee and equal employer contributions transferred to the unclassified 
18.33 	program with interest at ~~an~~the applicable annual rate ~~of 8.5 percent~~ compounded annually 
18.34 	based on fiscal year balances. If a person repays a refund and subsequently elects to have 
19.1 	the money transferred to the unclassified program, the repayment amount, including 
19.2 	interest, is added to the fiscal year balance in the year which the repayment was made.
19.3 	(d) A participant electing to transfer prior service contributions credited to a 
19.4 	retirement plan governed by chapter 352, 353, 354, 354A, or 422A as provided under this 
19.5 	section must complete a written application for the transfer and repay any refund within 
19.6 	one year of the commencement of the employee's participation in the unclassified program.
19.7 	(e) The applicable rate is 8.5 percent for the period before July 1, 2012, and the 
19.8 	period after June 30, 2021, and is 8.0 percent for the period from July 1, 2012, through 
19.9 	June 30, 2021.

19.10 	Sec. 18. Minnesota Statutes 2011 Supplement, section 353.01, subdivision 16, is 
19.11 	amended to read:
19.12 		Subd. 16.Allowable service; limits and computation. (a) "Allowable service" 
19.13 	means:
19.14 	(1) service during years of actual membership in the course of which employee 
19.15 	deductions were withheld from salary and contributions were made at the applicable rates 
19.16 	under section 353.27, 353.65, or 353E.03;
19.17 	(2) periods of service covered by payments in lieu of salary deductions under 
19.18 	sections 353.27, subdivision 12, and 353.35;
19.19 	(3) service in years during which the public employee was not a member but for 
19.20 	which the member later elected, while a member, to obtain credit by making payments to 
19.21 	the fund as permitted by any law then in effect;
19.22 	(4) a period of authorized leave of absence with pay from which deductions for 
19.23 	employee contributions are made, deposited, and credited to the fund;
19.24 	(5) a period of authorized personal, parental, or medical leave of absence without 
19.25 	pay, including a leave of absence covered under the federal Family Medical Leave Act, 
19.26 	that does not exceed one year, and for which a member obtained service credit for each 
19.27 	month in the leave period by payment under section 353.0161 to the fund made in place of 
19.28 	salary deductions. An employee must return to public service and render a minimum of 
19.29 	three months of allowable service in order to be eligible to make payment under section 
19.30 	353.0161 for a subsequent authorized leave of absence without pay. Upon payment, the 
19.31 	employee must be granted allowable service credit for the purchased period;
19.32 	(6) a periodic, repetitive leave that is offered to all employees of a governmental 
19.33 	subdivision. The leave program may not exceed 208 hours per annual normal work cycle 
19.34 	as certified to the association by the employer. A participating member obtains service 
19.35 	credit by making employee contributions in an amount or amounts based on the member's 
20.1 	average salary, excluding overtime pay, that would have been paid if the leave had not 
20.2 	been taken. The employer shall pay the employer and additional employer contributions 
20.3 	on behalf of the participating member. The employee and the employer are responsible 
20.4 	to pay interest on their respective shares at the applicable rate ~~of 8.5 percent a year~~, 
20.5 	compounded annually, from the end of the normal cycle until full payment is made. An 
20.6 	employer shall also make the employer and additional employer contributions, plus ~~8.5~~ 
20.7 	~~percent~~the applicable rate of interest, compounded annually, on behalf of an employee 
20.8 	who makes employee contributions but terminates public service. The applicable rate is 
20.9 	8.5 percent for the period before July 1, 2012, and the period after June 30, 2021, and 
20.10 	is 8.0 percent for the period from July 1, 2012, through June 30, 2021. The employee 
20.11 	contributions must be made within one year after the end of the annual normal working 
20.12 	cycle or within 30 days after termination of public service, whichever is sooner. The 
20.13 	executive director shall prescribe the manner and forms to be used by a governmental 
20.14 	subdivision in administering a periodic, repetitive leave. Upon payment, the member must 
20.15 	be granted allowable service credit for the purchased period;
20.16 	(7) an authorized temporary or seasonal layoff under subdivision 12, limited to three 
20.17 	months allowable service per authorized temporary or seasonal layoff in one calendar year. 
20.18 	An employee who has received the maximum service credit allowed for an authorized 
20.19 	temporary or seasonal layoff must return to public service and must obtain a minimum of 
20.20 	three months of allowable service subsequent to the layoff in order to receive allowable 
20.21 	service for a subsequent authorized temporary or seasonal layoff;
20.22 	(8) a period during which a member is absent from employment by a governmental 
20.23 	subdivision by reason of service in the uniformed services, as defined in United States 
20.24 	Code, title 38, section 4303(13), if the member returns to public service with the same 
20.25 	governmental subdivision upon discharge from service in the uniformed service within the 
20.26 	time frames required under United States Code, title 38, section 4312(e), provided that 
20.27 	the member did not separate from uniformed service with a dishonorable or bad conduct 
20.28 	discharge or under other than honorable conditions. The service must be credited if the 
20.29 	member pays into the fund equivalent employee contributions based upon the contribution 
20.30 	rate or rates in effect at the time that the uniformed service was performed multiplied by 
20.31 	the full and fractional years being purchased and applied to the annual salary rate. The 
20.32 	annual salary rate is the average annual salary, excluding overtime pay, during the purchase 
20.33 	period that the member would have received if the member had continued to be employed 
20.34 	in covered employment rather than to provide uniformed service, or, if the determination 
20.35 	of that rate is not reasonably certain, the annual salary rate is the member's average salary 
20.36 	rate, excluding overtime pay, during the 12-month period of covered employment rendered 
21.1 	immediately preceding the period of the uniformed service. Payment of the member 
21.2 	equivalent contributions must be made during a period that begins with the date on which 
21.3 	the individual returns to public employment and that is three times the length of the 
21.4 	military leave period, or within five years of the date of discharge from the military service, 
21.5 	whichever is less. If the determined payment period is less than one year, the contributions 
21.6 	required under this clause to receive service credit may be made within one year of the 
21.7 	discharge date. Payment may not be accepted following 30 days after termination of 
21.8 	public service under subdivision 11a. If the member equivalent contributions provided for 
21.9 	in this clause are not paid in full, the member's allowable service credit must be prorated 
21.10 	by multiplying the full and fractional number of years of uniformed service eligible for 
21.11 	purchase by the ratio obtained by dividing the total member contributions received by the 
21.12 	total member contributions otherwise required under this clause. The equivalent employer 
21.13 	contribution, and, if applicable, the equivalent additional employer contribution must be 
21.14 	paid by the governmental subdivision employing the member if the member makes the 
21.15 	equivalent employee contributions. The employer payments must be made from funds 
21.16 	available to the employing unit, using the employer and additional employer contribution 
21.17 	rate or rates in effect at the time that the uniformed service was performed, applied to the 
21.18 	same annual salary rate or rates used to compute the equivalent member contribution. The 
21.19 	governmental subdivision involved may appropriate money for those payments. The 
21.20 	amount of service credit obtainable under this section may not exceed five years unless a 
21.21 	longer purchase period is required under United States Code, title 38, section 4312. The 
21.22 	employing unit shall pay interest on all equivalent member and employer contribution 
21.23 	amounts payable under this clause. Interest must be computed at ~~a~~the applicable rate ~~of~~ 
21.24 	~~8.5 percent~~ compounded annually from the end of each fiscal year of the leave or the break 
21.25 	in service to the end of the month in which the payment is received. The applicable rate is 
21.26 	8.5 percent for the period before July 1, 2012, and the period after June 30, 2021, and is 
21.27 	8.0 percent for the period from July 1, 2012, through June 30, 2021. Upon payment, the 
21.28 	employee must be granted allowable service credit for the purchased period; or
21.29 	(9) a period specified under subdivision 40.
21.30 	(b) For calculating benefits under sections 353.30, 353.31, 353.32, and 353.33 for 
21.31 	state officers and employees displaced by the Community Corrections Act, chapter 401, 
21.32 	and transferred into county service under section 401.04, "allowable service" means the 
21.33 	combined years of allowable service as defined in paragraph (a), clauses (1) to (6), and 
21.34 	section 352.01, subdivision 11.
21.35 	(c) For a public employee who has prior service covered by a local police or 
21.36 	firefighters relief association that has consolidated with the Public Employees Retirement 
22.1 	Association under chapter 353A or to which section 353.665 applies, and who has 
22.2 	elected the type of benefit coverage provided by the public employees police and fire 
22.3 	fund either under section 353A.08 following the consolidation or under section 353.665, 
22.4 	subdivision 4, "allowable service" is a period of service credited by the local police or 
22.5 	firefighters relief association as of the effective date of the consolidation based on law 
22.6 	and on bylaw provisions governing the relief association on the date of the initiation 
22.7 	of the consolidation procedure.
22.8 	(d) No member may receive more than 12 months of allowable service credit in a 
22.9 	year either for vesting purposes or for benefit calculation purposes. For an active member 
22.10 	who was an active member of the former Minneapolis Firefighters Relief Association on 
22.11 	the day prior to the effective date of consolidation under Laws 2011, First Special Session 
22.12 	chapter 8, article 6, section 19, "allowable service" is the period of service credited by 
22.13 	the Minneapolis Firefighters Relief Association as reflected in the transferred records of 
22.14 	the association up to the effective date of consolidation under Laws 2011, First Special 
22.15 	Session chapter 8, article 6, section 19, and the period of service credited under paragraph 
22.16 	(a), clause (1), after the effective date of consolidation under Laws 2011, First Special 
22.17 	Session chapter 8, article 6, section 19. For an active member who was an active member 
22.18 	of the former Minneapolis Police Relief Association on the day prior to the effective date 
22.19 	of consolidation under Laws 2011, First Special Session chapter 8, article 7, section 19, 
22.20 	"allowable service" is the period of service credited by the Minneapolis Police Relief 
22.21 	Association as reflected in the transferred records of the association up to the effective date 
22.22 	of consolidation under Laws 2011, First Special Session chapter 8, article 7, section 19, 
22.23 	and the period of service credited under paragraph (a), clause (1), after the effective date 
22.24 	of consolidation under Laws 2011, First Special Session chapter 8, article 7, section 19.
22.25 	(e) MS 2002 [Expired]

22.26 	Sec. 19. Minnesota Statutes 2010, section 353.0161, subdivision 2, is amended to read:
22.27 		Subd. 2.Purchase procedure. (a) An employee covered by a plan specified in 
22.28 	subdivision 1 may purchase credit for allowable service in that plan for a period specified 
22.29 	in subdivision 1 if the employee makes a payment as specified in paragraph (b) or (c), 
22.30 	whichever applies. The employing unit, at its option, may pay the employer portion of the 
22.31 	amount specified in paragraph (b) on behalf of its employees.
22.32 	(b) If payment is received by the executive director within one year from the date the 
22.33 	member returned to work following the authorized leave, or within 30 days after the date 
22.34 	of termination of public service if the member did not return to work, the payment amount 
22.35 	is equal to the employee and employer contribution rates specified in law for the applicable 
23.1 	plan at the end of the leave period, or at termination of public service, whichever is earlier, 
23.2 	multiplied by the employee's average monthly salary, excluding overtime, upon which 
23.3 	deductions were paid during the six months, or portion thereof, before the commencement 
23.4 	of the leave of absence and by the number of months of the leave of absence for which 
23.5 	the employee wants allowable service credit. Payments made under this paragraph must 
23.6 	include compound interest at ~~a~~the applicable monthly rate ~~of 0.71 percent~~ from the last 
23.7 	day of the leave period until the last day of the month in which payment is received. The 
23.8 	applicable rate is 0.71 percent before July 1, 2012, and the period after June 30, 2021, and 
23.9 	is 0.667 percent for the period from July 1, 2012, through June 30, 2021.
23.10 	(c) If payment is received by the executive director after one year, the payment 
23.11 	amount is the amount determined under section 356.551. Payment under this paragraph 
23.12 	must be made before the date the person terminates public service under section 353.01, 
23.13 	subdivision 11a.

23.14 	Sec. 20. Minnesota Statutes 2010, section 353.0162, is amended to read:
23.15 	353.0162 REDUCED SALARY PERIODS SALARY CREDIT PURCHASE.
23.16 	(a) A member may purchase additional salary credit for a period specified in this 
23.17 	section.
23.18 	(b) The applicable period is a period during which the member is receiving a reduced 
23.19 	salary from the employer while the member is:
23.20 	(1) receiving temporary workers' compensation payments related to the member's 
23.21 	service to the public employer;
23.22 	(2) on an authorized medical leave of absence; or
23.23 	(3) on an authorized partial paid leave of absence as a result of a budgetary or salary 
23.24 	savings program offered or mandated by a governmental subdivision.
23.25 	(c) The differential salary amount is the difference between the average monthly 
23.26 	salary received by the member during the period of reduced salary under this section and 
23.27 	the average monthly salary of the member, excluding overtime, on which contributions 
23.28 	to the applicable plan were made during the period of the last six months of covered 
23.29 	employment occurring immediately before the period of reduced salary, applied to the 
23.30 	member's normal employment period, measured in hours or otherwise, as applicable.
23.31 	(d) To receive eligible salary credit, the member shall pay an amount equal to:
23.32 	(1) the applicable employee contribution rate under section 353.27, subdivision 
23.33 	2; 353.65, subdivision 2; or 353E.03, subdivision 1, as applicable, multiplied by the 
23.34 	differential salary amount;
24.1 	(2) plus an employer equivalent payment equal to the applicable employer 
24.2 	contribution rate in section 353.27, subdivision 3; 353.65, subdivision 3; or 353E.03, 
24.3 	subdivision 2, as applicable, multiplied by the differential salary amount;
24.4 	(3) plus, if applicable, an equivalent employer additional amount equal to the 
24.5 	additional employer contribution rate in section 353.27, subdivision 3a, multiplied by the 
24.6 	differential salary amount.
24.7 	(e) The employer, by appropriate action of its governing body and documented in its 
24.8 	official records, may pay the employer equivalent contributions and, as applicable, the 
24.9 	equivalent employer additional contributions on behalf of the member.
24.10 	(f) Payment under this section must include interest on the contribution amount or 
24.11 	amounts, whichever applies, at ~~an 8.5 percent~~the applicable annual rate, prorated for 
24.12 	applicable months from the date on which the period of reduced salary specified under 
24.13 	this section terminates to the date on which the payment or payments are received by the 
24.14 	executive director. The applicable rate is 8.5 percent for the period before July 1, 2012, 
24.15 	and the period after June 30, 2021, and is 8.0 percent for the period from July 1, 2012, 
24.16 	through June 30, 2021. Payment under this section must be completed within the earlier 
24.17 	of 30 days from termination of public service by the employee under section 353.01, 
24.18 	subdivision 11a, or one year after the termination of the period specified in paragraph 
24.19 	(b), as further restricted under this section.
24.20 	(g) The period for which additional allowable salary credit may be purchased is 
24.21 	limited to the period during which the person receives temporary workers' compensation 
24.22 	payments or for those business years in which the governmental subdivision offers or 
24.23 	mandates a budget or salary savings program, as certified to the executive director by a 
24.24 	resolution of the governing body of the governmental subdivision. For an authorized 
24.25 	medical leave of absence, the period for which allowable salary credit may be purchased 
24.26 	may not exceed 12 consecutive months of authorized medical leave.
24.27 	(h) To purchase salary credit for a subsequent period of temporary workers' 
24.28 	compensation benefits or subsequent authorized medical leave of absence, the member 
24.29 	must return to public service and render a minimum of three months of allowable service.

24.30 	Sec. 21. Minnesota Statutes 2010, section 353.27, subdivision 7a, is amended to read:
24.31 		Subd. 7a.Deductions or contributions transmitted by error. (a) If employee 
24.32 	deductions and employer contributions under this section, section 353.50, 353.65, or 
24.33 	353E.03 were erroneously transmitted to the association, but should have been transmitted 
24.34 	to a plan covered by chapter 352D, 353D, 354B, or 354D, the executive director shall 
24.35 	transfer the erroneous employee deductions and employer contributions to the appropriate 
25.1 	retirement fund or individual account, as applicable. The time limitations specified in 
25.2 	subdivisions 7 and 12 do not apply. The transfer to the applicable defined contribution 
25.3 	plan account must include interest at the applicable rate ~~of 0.71 percent~~ per month, 
25.4 	compounded annually, from the first day of the month following the month in which 
25.5 	coverage should have commenced in the defined contribution plan until the end of the 
25.6 	month in which the transfer occurs. The applicable rate is 0.71 percent before July 1, 
25.7 	2012, and the period after June 30, 2021, and is 0.667 percent for the period from July 
25.8 	1, 2012, through June 30, 2021.
25.9 	(b) A potential transfer under paragraph (a) that is reasonably determined to cause 
25.10 	the plan to fail to be a qualified plan under section 401(a) of the federal Internal Revenue 
25.11 	Code, as amended, must not be made by the executive director of the association. Within 
25.12 	30 days after being notified by the Public Employees Retirement Association of an 
25.13 	unmade potential transfer under this paragraph, the employer of the affected person 
25.14 	must transmit an amount representing the applicable salary deductions and employer 
25.15 	contributions, without interest, to the retirement fund of the appropriate Minnesota public 
25.16 	pension plan, or to the applicable individual account if the proper coverage is by a defined 
25.17 	contribution plan. The association must provide the employing unit a credit for the amount 
25.18 	of the erroneous salary deductions and employer contributions against future contributions 
25.19 	from the employer. If the employing unit receives a credit under this paragraph, the 
25.20 	employing unit is responsible for refunding to the applicable employee any amount that 
25.21 	had been erroneously deducted from the person's salary.
25.22 	(c) If erroneous employee deductions and employer contributions reflect a plan 
25.23 	coverage error involving any Public Employees Retirement Association plan specified in 
25.24 	section 356.99 and any other plan specified in that section, section 356.99 applies.

25.25 	Sec. 22. Minnesota Statutes 2010, section 353.27, subdivision 12, is amended to read:
25.26 		Subd. 12.Omitted salary deductions; obligations. (a) In the case of omission 
25.27 	of required deductions for the general employees retirement plan, the public employees 
25.28 	police and fire retirement plan, or the local government correctional employees retirement 
25.29 	plan from the salary of an employee, the department head or designee shall immediately, 
25.30 	upon discovery, report the employee for membership and deduct the employee deductions 
25.31 	under subdivision 4 during the current pay period or during the pay period immediately 
25.32 	following the discovery of the omission. Payment for the omitted obligations may only be 
25.33 	made in accordance with reporting procedures and methods established by the executive 
25.34 	director.
26.1 	(b) When the entire omission period of an employee does not exceed 60 days, the 
26.2 	governmental subdivision may report and submit payment of the omitted employee 
26.3 	deductions and the omitted employer contributions through the reporting processes under 
26.4 	subdivision 4.
26.5 	(c) When the omission period of an employee exceeds 60 days, the governmental 
26.6 	subdivision shall furnish to the association sufficient data and documentation upon which 
26.7 	the obligation for omitted employee and employer contributions can be calculated. 
26.8 	The omitted employee deductions must be deducted from the employee's subsequent 
26.9 	salary payment or payments and remitted to the association for deposit in the applicable 
26.10 	retirement fund. The employee shall pay omitted employee deductions due for the 60 
26.11 	days prior to the end of the last pay period in the omission period during which salary 
26.12 	was earned. The employer shall pay any remaining omitted employee deductions and any 
26.13 	omitted employer contributions, plus cumulative interest at ~~an~~the applicable annual 
26.14 	rate ~~of 8.5 percent~~ compounded annually, from the date or dates each omitted employee 
26.15 	contribution was first payable.
26.16 	(d) An employer shall not hold an employee liable for omitted employee deductions 
26.17 	beyond the pay period dates under paragraph (c), nor attempt to recover from the employee 
26.18 	those employee deductions paid by the employer on behalf of the employee. Omitted 
26.19 	deductions due under paragraph (c) which are not paid by the employee constitute a 
26.20 	liability of the employer that failed to deduct the omitted deductions from the employee's 
26.21 	salary. The employer shall make payment with interest at ~~an~~the applicable annual rate 
26.22 	~~of 8.5 percent~~ compounded annually. Omitted employee deductions are no longer due 
26.23 	if an employee terminates public service before making payment of omitted employee 
26.24 	deductions to the association, but the employer remains liable to pay omitted employer 
26.25 	contributions plus interest at an annual rate of 8.5 percent compounded annually from the 
26.26 	date the contributions were first payable.
26.27 	(e) The association may not commence action for the recovery of omitted employee 
26.28 	deductions and employer contributions after the expiration of three calendar years after 
26.29 	the calendar year in which the contributions and deductions were omitted. Except as 
26.30 	provided under paragraph (b), no payment may be made or accepted unless the association 
26.31 	has already commenced action for recovery of omitted deductions. An action for recovery 
26.32 	commences on the date of the mailing of any written correspondence from the association 
26.33 	requesting information from the governmental subdivision upon which to determine 
26.34 	whether or not omitted deductions occurred.
27.1 	(f) The applicable rate is 8.5 percent for the period before July 1, 2012, and the 
27.2 	period after June 30, 2021, and is 8.0 percent for the period from July 1, 2012, through 
27.3 	June 30, 2021.

27.4 	Sec. 23. Minnesota Statutes 2010, section 353.27, subdivision 12a, is amended to read:
27.5 		Subd. 12a.Terminated employees: omitted deductions. A terminated employee 
27.6 	who was a member of the general employees retirement plan of the Public Employees 
27.7 	Retirement Association, the public employees police and fire retirement plan, or the local 
27.8 	government correctional employees retirement plan and who has a period of employment 
27.9 	in which previously omitted employer contributions were made under subdivision 12 
27.10 	but for whom no, or only partial, omitted employee contributions have been made, or a 
27.11 	member who had prior coverage in the association for which previously omitted employer 
27.12 	contributions were made under subdivision 12 but who terminated service before required 
27.13 	omitted employee deductions could be withheld from salary, may pay the omitted 
27.14 	employee deductions for the period on which omitted employer contributions were 
27.15 	previously paid plus interest at ~~an~~the applicable annual rate ~~of 8.5 percent~~ compounded 
27.16 	annually. The applicable rate is 8.5 percent for the period before July 1, 2012, and the 
27.17 	period after June 30, 2021, and is 8.0 percent for the period from July 1, 2012, through 
27.18 	June 30, 2021. A terminated employee may pay the omitted employee deductions plus 
27.19 	interest within six months of an initial notification from the association of eligibility 
27.20 	to pay those omitted deductions. If a terminated employee is reemployed in a position 
27.21 	covered under a public pension fund under section 356.30, subdivision 3, and elects to 
27.22 	pay omitted employee deductions, payment must be made no later than six months after a 
27.23 	subsequent termination of public service.

27.24 	Sec. 24. Minnesota Statutes 2010, section 353.28, subdivision 5, is amended to read:
27.25 		Subd. 5.Interest chargeable on amounts due. Any amount due under this section 
27.26 	or section 353.27, subdivision 4, is payable with interest at ~~an~~the applicable annual 
27.27 	compound rate ~~of 8.5 percent~~ from the date due until the date payment is received by the 
27.28 	association, with a minimum interest charge of $10. The applicable rate is 8.5 percent 
27.29 	for the period before July 1, 2012, and the period after June 30, 2021, and is 8.0 percent 
27.30 	for the period from July 1, 2012, through June 30, 2021.

27.31 	Sec. 25. Minnesota Statutes 2010, section 353.35, subdivision 1, is amended to read:
27.32 		Subdivision 1.Refund rights. When any former member accepts a refund, all 
27.33 	existing service credits and all rights and benefits to which the person was entitled prior 
28.1 	to the acceptance of the refund must terminate. The rights and benefits of a former 
28.2 	member must not be restored until the person returns to active service and acquires at 
28.3 	least six months of allowable service credit after taking the last refund and repays the 
28.4 	refund or refunds taken and interest received under section 353.34, subdivisions 1 and 2, 
28.5 	plus interest at ~~an~~the applicable annual rate ~~of 8.5 percent~~ compounded annually. The 
28.6 	applicable rate is 8.5 percent for the period before July 1, 2012, and the period after June 
28.7 	30, 2021, and is 8.0 percent for the period from July 1, 2012, through June 30, 2021. If the 
28.8 	person elects to restore service credit in a particular fund from which the person has taken 
28.9 	more than one refund, the person must repay all refunds to that fund. All refunds must be 
28.10 	repaid within six months of the last date of termination of public service.

28.11 	Sec. 26. Minnesota Statutes 2010, section 353.665, subdivision 8, is amended to read:
28.12 		Subd. 8.Member and employer contributions. (a) Effective on the first day 
28.13 	of the first full pay period following June 30, 1999, the employee contribution rate for 
28.14 	merging former consolidation account active members is the rate specified in section 
28.15 	353.65, subdivision 2, and the regular municipal contribution rate on behalf of former 
28.16 	consolidation account active members is the rate specified in section 353.65, subdivision 3.
28.17 	(b) The municipality associated with a merging former local consolidation account 
28.18 	that had a positive value amortizable base calculation under subdivision 7, paragraph (d), 
28.19 	after the preliminary calculation or the second calculation, whichever applies, must make 
28.20 	an additional municipal contribution to the public employees police and fire plan for 
28.21 	the period from January 1, 2000, to December 31, 2009. The amount of the additional 
28.22 	municipal contribution is the amount calculated by the actuary retained under section 
28.23 	356.214 and certified by the executive director of the Public Employees Retirement 
28.24 	Association by which the amortizable base amount would be amortized on a level dollar 
28.25 	annual end-of-the-year contribution basis, using ~~an 8.5 percent~~the applicable interest 
28.26 	rate ~~assumption~~. The applicable rate is 8.5 percent for the period before July 1, 2012, 
28.27 	and the period after June 30, 2021, and is 8.0 percent for the period from July 1, 2012, 
28.28 	through June 30, 2021. The additional municipal contribution is payable during the 
28.29 	month of January, is without any interest, or if made after January 31, but before the next 
28.30 	following December 31, is payable with interest for the period since January 1 at a rate 
28.31 	which is equal to the preretirement interest rate assumption specified in section 356.215, 
28.32 	subdivision 8, applicable to the public employees police and fire fund expressed as a 
28.33 	monthly rate and compounded on a monthly basis or if made after December 31 of the 
28.34 	year in which the additional municipal contribution is due is payable with interest at a 
28.35 	rate which is four percent greater than the highest interest rate assumption specified in 
29.1 	section 356.215, subdivision 8, expressed as a monthly rate and compounded monthly 
29.2 	from January 1 of the year in which the additional municipal contribution is due until the 
29.3 	date on which payment is made.

29.4 	Sec. 27. Minnesota Statutes 2010, section 354.42, subdivision 7, is amended to read:
29.5 		Subd. 7.Erroneous salary deductions or direct payments. (a) Any deductions 
29.6 	taken from the salary of an employee for the retirement fund in excess of amounts required 
29.7 	must be refunded to the employee upon the discovery of the error and after the verification 
29.8 	of the error by the employing unit making the deduction. The corresponding excess 
29.9 	employer contribution and excess additional employer contribution amounts attributable 
29.10 	to the erroneous salary deduction must be refunded to the employing unit.
29.11 	(b) If salary deductions and employer contributions were erroneously transmitted to 
29.12 	the retirement fund and should have been transmitted to the plan covered by chapter 352D, 
29.13 	353D, 354B, or 354D, the executive director must transfer these salary deductions and 
29.14 	employer contributions to the account of the appropriate person under the applicable plan. 
29.15 	The transfer to the applicable defined contribution plan account must include interest at 
29.16 	the applicable rate ~~of 0.71 percent~~ per month, compounded annually, from the first day of 
29.17 	the month following the month in which coverage should have commenced in the defined 
29.18 	contribution plan until the end of the month in which the transfer occurs. The applicable 
29.19 	rate is 0.71 percent before July 1, 2012, and the period after June 30, 2021, and is 0.667 
29.20 	percent for the period from July 1, 2012, through June 30, 2021.
29.21 	(c) A potential transfer under paragraph (b) that would cause the plan to fail to 
29.22 	be a qualified plan under section 401(a) of the Internal Revenue Code, as amended, 
29.23 	must not be made by the executive director. Within 30 days after being notified by the 
29.24 	Teachers Retirement Association of an unmade potential transfer under this paragraph, 
29.25 	the employer of the affected person must transmit an amount representing the applicable 
29.26 	salary deductions and employer contributions, without interest, to the account of the 
29.27 	applicable person under the appropriate plan. The retirement association must provide a 
29.28 	credit for the amount of the erroneous salary deductions and employer contributions 
29.29 	against future contributions from the employer.
29.30 	(d) If a salary warrant or check from which a deduction for the retirement fund was 
29.31 	taken has been canceled or the amount of the warrant or if a check has been returned to 
29.32 	the funds of the employing unit making the payment, a refund of the amount deducted, 
29.33 	or any portion of it that is required to adjust the salary deductions, must be made to the 
29.34 	employing unit.
30.1 	(e) Erroneous direct payments of member-paid contributions or erroneous salary 
30.2 	deductions that were not refunded during the regular payroll cycle processing must be 
30.3 	refunded to the member, plus interest computed using the rate and method specified in 
30.4 	section 354.49, subdivision 2.
30.5 	(f) Any refund under this subdivision that would cause the plan to fail to be a 
30.6 	qualified plan under section 401(a) of the Internal Revenue Code, as amended, may not 
30.7 	be refunded and instead must be credited against future contributions payable by the 
30.8 	employer. The employer is responsible for refunding to the applicable employee any 
30.9 	amount that was erroneously deducted from the salary of the employee, with interest as 
30.10 	specified in paragraph (e).
30.11 	(g) If erroneous employee deductions and employer contributions are caused by an 
30.12 	error in plan coverage involving the plan and any other plan specified in section 356.99, 
30.13 	that section applies.

30.14 	Sec. 28. Minnesota Statutes 2010, section 354.50, subdivision 2, is amended to read:
30.15 		Subd. 2.Interest charge. If a member desires to repay the refunds, payment shall 
30.16 	include interest at ~~an~~the applicable annual rate ~~of 8.5 percent~~ compounded annually from 
30.17 	date of withdrawal to the date payment is made and shall be credited to the fund. The 
30.18 	applicable rate is 8.5 percent for the period before July 1, 2012, and the period after June 
30.19 	30, 2021, and is 8.0 percent for the period from July 1, 2012, through June 30, 2021.

30.20 	Sec. 29. Minnesota Statutes 2010, section 354.51, subdivision 5, is amended to read:
30.21 		Subd. 5.Payment of shortages. (a) Except as provided in paragraph (b), in the 
30.22 	event that full required member contributions are not deducted from the salary of a 
30.23 	teacher, payment must be made as follows:
30.24 	(1) Payment of shortages in member deductions on salary earned after June 30, 
30.25 	1957, and before July 1, 1981, may be made any time before retirement. Payment must 
30.26 	include interest at ~~an~~the applicable annual rate ~~of 8.5 percent~~ compounded annually from 
30.27 	the end of the fiscal year in which the shortage occurred to the end of the month in which 
30.28 	payment is made and the interest must be credited to the fund. If payment of a shortage in 
30.29 	deductions is not made, the formula service credit of the member must be prorated under 
30.30 	section 354.05, subdivision 25, clause (3).
30.31 	(2) Payment of shortages in member deductions on salary earned after June 30, 
30.32 	1981, are the sole obligation of the employing unit and are payable by the employing unit 
30.33 	upon notification by the executive director of the shortage with interest at ~~an~~the applicable 
30.34 	annual rate ~~of 8.5 percent~~ compounded annually from the end of the fiscal year in which 
31.1 	the shortage occurred to the end of the month in which payment is made and the interest 
31.2 	must be credited to the fund. Effective July 1, 1986, the employing unit shall also pay 
31.3 	the employer contributions as specified in section 354.42, subdivisions 3 and 5 for the 
31.4 	shortages. If the shortage payment is not paid by the employing unit within 60 days of 
31.5 	notification, the executive director shall certify the amount of the shortage payment to the 
31.6 	applicable county auditor, who shall spread a levy in the amount of the shortage payment 
31.7 	over the taxable property of the taxing district of the employing unit if the employing unit 
31.8 	is supported by property taxes, or to the commissioner of management and budget, who 
31.9 	shall deduct the amount from any state aid or appropriation amount applicable to the 
31.10 	employing unit if the employing unit is not supported by property taxes.
31.11 	(3) Payment may not be made for shortages in member deductions on salary earned 
31.12 	before July 1, 1957, for shortages in member deductions on salary paid or payable under 
31.13 	paragraph (b), or for shortages in member deductions for persons employed by the 
31.14 	Minnesota State Colleges and Universities system in a faculty position or in an eligible 
31.15 	unclassified administrative position and whose employment was less than 25 percent 
31.16 	of a full academic year, exclusive of the summer session, for the applicable institution 
31.17 	that exceeds the most recent 36 months.
31.18 	(b) For a person who is employed by the Minnesota State Colleges and Universities 
31.19 	system in a faculty position or in an eligible unclassified administrative position and 
31.20 	whose employment was less than 25 percent of a full academic year, exclusive of the 
31.21 	summer session, for the applicable institution, upon the person's election under section 
31.22 	354B.21 of retirement coverage under this chapter, the shortage in member deductions 
31.23 	on the salary for employment by the Minnesota State Colleges and Universities system 
31.24 	institution of less than 25 percent of a full academic year, exclusive of the summer session, 
31.25 	for the applicable institution for the most recent 36 months and the associated employer 
31.26 	contributions must be paid by the Minnesota State Colleges and Universities system 
31.27 	institution, plus annual compound interest at the applicable rate ~~of 8.5 percent~~ from the 
31.28 	end of the fiscal year in which the shortage occurred to the end of the month in which the 
31.29 	Teachers Retirement Association coverage election is made. If the shortage payment is not 
31.30 	made by the institution within 60 days of notification, the executive director shall certify 
31.31 	the amount of the shortage payment to the commissioner of management and budget, 
31.32 	who shall deduct the amount from any state appropriation to the system. An individual 
31.33 	electing coverage under this paragraph shall repay the amount of the shortage in member 
31.34 	deductions, plus interest, through deduction from salary or compensation payments within 
31.35 	the first year of employment after the election under section 354B.21, subject to the 
31.36 	limitations in section 16D.16. The Minnesota State Colleges and Universities system may 
32.1 	use any means available to recover amounts which were not recovered through deductions 
32.2 	from salary or compensation payments. No payment of the shortage in member deductions 
32.3 	under this paragraph may be made for a period longer than the most recent 36 months.
32.4 	(c) The applicable rate is 8.5 percent for the period before July 1, 2012, and the 
32.5 	period after June 30, 2021, and is 8.0 percent for the period from July 1, 2012, through 
32.6 	June 30, 2021.

32.7 	Sec. 30. Minnesota Statutes 2010, section 354.52, subdivision 4, is amended to read:
32.8 		Subd. 4.Reporting and remittance requirements. An employer shall remit all 
32.9 	amounts due to the association and furnish a statement indicating the amount due and 
32.10 	transmitted with any other information required by the executive director. If an amount 
32.11 	due is not received by the association within 14 calendar days of the payroll warrant, 
32.12 	the amount accrues interest at ~~an~~the applicable annual rate ~~of 8.5 percent~~ compounded 
32.13 	annually from the due date until the amount is received by the association. The applicable 
32.14 	rate is 8.5 percent for the period before July 1, 2012, and the period after June 30, 2021, 
32.15 	and is 8.0 percent for the period from July 1, 2012, through June 30, 2021. All amounts 
32.16 	due and other employer obligations not remitted within 60 days of notification by the 
32.17 	association must be certified to the commissioner of management and budget who shall 
32.18 	deduct the amount from any state aid or appropriation amount applicable to the employing 
32.19 	unit.

32.20 	Sec. 31. Minnesota Statutes 2010, section 354.72, subdivision 2, is amended to read:
32.21 		Subd. 2.Purchase procedure. (a) A teacher may purchase credit for allowable and 
32.22 	formula service in the plan for a period specified in subdivision 1 if the teacher makes a 
32.23 	payment as specified in paragraph (b), (c), or (d), whichever applies. The employing unit, 
32.24 	at its option, may pay the employer portion of the amount on behalf of its employees.
32.25 	(b) If payment is received by the executive director by June 30 of the fiscal year of 
32.26 	the strike period or authorized leave included under section 354.093, 354.095, or 354.096, 
32.27 	payment must equal the total employee and employer contribution rates, including 
32.28 	amortization contribution rates if applicable, multiplied by the member's average monthly 
32.29 	salary rate on the date the leave or strike period commenced, or for an extended leave 
32.30 	under section 354.094, on the salary received during the year immediately preceding the 
32.31 	initial year of the leave, multiplied by the months and portions of a month of the leave or 
32.32 	strike period for which the teacher seeks allowable service credit.
32.33 	(c) If payment is made after June 30 and before the following June 30 for a strike 
32.34 	period or for leaves of absence under section 354.093, 354.095, or 354.096, or for an 
33.1 	extended leave of absence under section 354.094, the payment must include the amount 
33.2 	determined in paragraph (b) plus compound interest at ~~a~~the applicable monthly rate ~~of~~ 
33.3 	~~0.71 percent~~ from June 30 until the last day of the month in which payment is received.
33.4 	The applicable rate is 0.71 percent before July 1, 2012, and the period after June 30, 2021, 
33.5 	and is 0.667 percent for the period from July 1, 2012, through June 30, 2021.
33.6 	(d) If payment is received by the executive director after the applicable last permitted 
33.7 	date under paragraph (c), the payment amount is the amount determined under section 
33.8 	356.551. Notwithstanding payment deadlines specified in section 356.551, payment under 
33.9 	this section may be made anytime before the effective date of retirement.

33.10 	Sec. 32. Minnesota Statutes 2010, section 354A.093, subdivision 6, is amended to read:
33.11 		Subd. 6.Interest requirements. The employer shall pay interest on all equivalent 
33.12 	employee and employer contribution amounts payable under this section. Interest must 
33.13 	be computed at ~~a~~the applicable rate ~~of 8.5 percent~~ compounded annually from the end 
33.14 	of each fiscal year of the leave or break in service to the end of the month in which 
33.15 	payment is received. The applicable rate is 8.5 percent for the period before July 1, 2012, 
33.16 	and the period after June 30, 2021, and is 8.0 percent for the period from July 1, 2012, 
33.17 	through June 30, 2021.

33.18 	Sec. 33. Minnesota Statutes 2010, section 354A.096, is amended to read:
33.19 	354A.096 MEDICAL LEAVE.
33.20 	Any teacher in the coordinated program of the St. Paul Teachers Retirement Fund 
33.21 	Association or the new law coordinated program of the Duluth Teachers Retirement Fund 
33.22 	Association who is on an authorized medical leave of absence and subsequently returns 
33.23 	to teaching service is entitled to receive allowable service credit, not to exceed one year, 
33.24 	for the period of leave, upon making the prescribed payment to the fund. This payment 
33.25 	must include the required employee and employer contributions at the rates specified in 
33.26 	section 354A.12, subdivisions 1 and 2a, as applied to the member's average full-time 
33.27 	monthly salary rate on the date the leave of absence commenced plus annual interest at the 
33.28 	applicable rate ~~of 8.5 percent~~ per year from the end of the fiscal year during which the 
33.29 	leave terminates to the end of the month during which payment is made. The applicable 
33.30 	rate is 8.5 percent for the period before July 1, 2012, and the period after June 30, 2021, 
33.31 	and is 8.0 percent for the period from July 1, 2012, through June 30, 2021. The member 
33.32 	must pay the total amount required unless the employing unit, at its option, pays the 
33.33 	employer contributions. The total amount required must be paid by the end of the fiscal 
33.34 	year following the fiscal year in which the leave of absence terminated or before the 
34.1 	member retires, whichever is earlier. Payment must be accompanied by a copy of the 
34.2 	resolution or action of the employing authority granting the leave and the employing 
34.3 	authority, upon granting the leave, must certify the leave to the association in a manner 
34.4 	specified by the executive director. A member may not receive more than one year of 
34.5 	allowable service credit during any fiscal year by making payment under this section. A 
34.6 	member may not receive disability benefits under section 354A.36 and receive allowable 
34.7 	service credit under this section for the same period of time.

34.8 	Sec. 34. Minnesota Statutes 2010, section 354A.108, is amended to read:
34.9 	354A.108 PAYMENT BY TEACHERS COLLECTING WORKERS' 
34.10 	COMPENSATION.
34.11 	(a) A member of the Duluth Teachers Retirement Fund Association who is receiving 
34.12 	temporary workers' compensation payments related to the member's teaching service 
34.13 	and who either is receiving a reduced salary from the employer or is receiving no salary 
34.14 	from the employer is entitled to receive allowable service credit for the period of time 
34.15 	that the member is receiving the workers' compensation payments upon making the 
34.16 	required payment amount.
34.17 	(b) The required amount payable by the member must be calculated first by 
34.18 	determining the differential salary amount, which is the difference between the salary 
34.19 	received, if any, during the period of time that the member is collecting workers' 
34.20 	compensation payments, and the salary that the member received for an identical length 
34.21 	period immediately before collecting the workers' compensation payments. The member 
34.22 	shall pay an amount equal to the employee contribution rate under section 354A.12, 
34.23 	subdivision 1, multiplied by the differential salary amount.
34.24 	(c) If the member makes the employee payment under this section, the employing 
34.25 	unit shall make an employer payment to the Duluth Teachers Retirement Fund Association 
34.26 	equal to the employer contribution rate under section 354A.12, subdivision 2a, multiplied 
34.27 	by the differential salary amount.
34.28 	(d) Payments made under this subdivision are payable without interest if paid by 
34.29 	June 30 of the year during which the workers' compensation payments are received by 
34.30 	the member. If paid after June 30, payments made under this subdivision must include 
34.31 	interest at the applicable rate ~~of 8.5 percent~~ per year. The applicable rate is 8.5 percent for 
34.32 	the period before July 1, 2012, and the period after June 30, 2021, and is 8.0 percent for 
34.33 	the period from July 1, 2012, through June 30, 2021. Payment under this section must 
34.34 	be completed within one year of the termination of the workers' compensation payments 
34.35 	to the member.

35.1 	Sec. 35. Minnesota Statutes 2010, section 354A.38, subdivision 3, is amended to read:
35.2 		Subd. 3.Computation of refund repayment amount. If the coordinated member 
35.3 	elects to repay a refund under subdivision 2, the repayment to the fund must be in an 
35.4 	amount equal to refunds the member has accepted plus interest at the applicable rate 
35.5 	~~of 8.5 percent~~ compounded annually from the date that the refund was accepted to the 
35.6 	date that the refund is repaid. The applicable rate is 8.5 percent for the period before July 
35.7 	1, 2012, and the period after June 30, 2021, and is 8.0 percent for the period from July 
35.8 	1, 2012, through June 30, 2021.

35.9 	Sec. 36. Minnesota Statutes 2010, section 354B.23, subdivision 5, is amended to read:
35.10 		Subd. 5.Omitted member deductions. (a) If the employing unit that employs a 
35.11 	plan participant fails to deduct the member contribution from the participant's salary and 
35.12 	a period of less than 60 days from the date on which the deduction should have been 
35.13 	made has elapsed, the employing unit must obtain the omitted member deduction by an 
35.14 	additional payroll deduction during the pay period next following the discovery of the 
35.15 	omission.
35.16 	(b) If the employing unit of a plan participant fails to deduct the member contribution 
35.17 	from the participant's salary and that omission continues for at least 60 days from the 
35.18 	date on which the deduction should have been made, the employing unit must pay the 
35.19 	amount representing the omitted member contribution, and the full required employer 
35.20 	contribution, plus compound interest at ~~an~~the applicable annual rate ~~of 8.5 percent~~. The 
35.21 	applicable rate is 8.5 percent for the period before July 1, 2012, and the period after June 
35.22 	30, 2021, and is 8.0 percent for the period from July 1, 2012, through June 30, 2021. The 
35.23 	contributions and any interest must be made within one year of the date on which the 
35.24 	omission was discovered.

35.25 	Sec. 37. Minnesota Statutes 2010, section 354C.12, subdivision 2, is amended to read:
35.26 		Subd. 2.Omitted deductions. If the employer of personnel covered by the 
35.27 	supplemental retirement plan as provided in section 354C.11 fails to deduct the member 
35.28 	basic contribution from the covered employee's salary and a period of less than 60 days 
35.29 	from the date on which the deduction should have been made has elapsed, the employer 
35.30 	must obtain the omitted member deduction by an additional payroll deduction during the 
35.31 	pay period next following the discovery of the omission. If the employer fails to deduct the 
35.32 	member basic contribution from the covered employee's salary and that omission continues 
35.33 	for at least 60 days from the date on which the member basic contribution deduction 
35.34 	should have been made, the employer must pay the amount representing the omitted 
36.1 	member basic contribution, and the full required omitted employer basic contribution, 
36.2 	plus compound interest at ~~an~~the applicable annual rate ~~of 8.5 percent~~. The applicable rate 
36.3 	is 8.5 percent for the period before July 1, 2012, and the period after June 30, 2021, and is 
36.4 	8.0 percent for the period from July 1, 2012, through June 30, 2021. The contributions 
36.5 	must be made within one year of the date on which the omission was discovered.

36.6 	Sec. 38. Minnesota Statutes 2010, section 356.195, subdivision 2, is amended to read:
36.7 		Subd. 2.Purchase procedure for strike periods. (a) An employee covered by a 
36.8 	plan specified in subdivision 1 may purchase allowable service credit in the applicable 
36.9 	plan for any period of time during which the employee was on a public employee strike 
36.10 	without pay, not to exceed a period of one year, if the employee makes a payment in 
36.11 	lieu of salary deductions as specified in paragraph (b) or (c), whichever applies. The 
36.12 	employing unit, at its option, may pay the employer portion of the amount specified in 
36.13 	paragraph (b) on behalf of its employees.
36.14 	(b) If payment is received by the applicable pension plan executive director within 
36.15 	one year from the end of the strike, the payment amount is equal to the applicable 
36.16 	employee and employer contribution rates specified in law for the applicable plan during 
36.17 	the strike period, applied to the employee's rate of salary in effect at the conclusion of the 
36.18 	strike for the period of the strike without pay, plus compound interest at ~~a~~the applicable 
36.19 	monthly rate ~~of 0.71 percent~~ from the last day of the strike period until the date payment is 
36.20 	received. The applicable rate is 0.71 percent before July 1, 2012, and the period after June 
36.21 	30, 2021, and is 0.667 percent for the period from July 1, 2012, through June 30, 2021.
36.22 	(c) If payment is received by the applicable pension fund director after one year and 
36.23 	before five years from the end of the strike, the payment amount is the amount determined 
36.24 	under section 356.551.
36.25 	(d) Payments may not be made more than five years after the end of the strike.

36.26 	Sec. 39. Minnesota Statutes 2010, section 356.215, subdivision 1, is amended to read:
36.27 		Subdivision 1.Definitions. (a) For the purposes of sections 3.85 and 356.20 to 
36.28 	356.23, each of the terms in the following paragraphs has the meaning given.
36.29 	(b) "Actuarial valuation" means a set of calculations prepared by an actuary retained 
36.30 	under section 356.214 if so required under section 3.85, or otherwise, by an approved 
36.31 	actuary, to determine the normal cost and the accrued actuarial liabilities of a benefit 
36.32 	plan, according to the entry age actuarial cost method and based upon stated assumptions 
36.33 	including, but not limited to rates of interest, mortality, salary increase, disability, 
36.34 	withdrawal, and retirement and to determine the payment necessary to amortize over a 
37.1 	stated period any unfunded accrued actuarial liability disclosed as a result of the actuarial 
37.2 	valuation of the benefit plan.
37.3 	(c) "Approved actuary" means a person who is regularly engaged in the business of 
37.4 	providing actuarial services and who is a fellow in the Society of Actuaries.
37.5 	(d) "Entry age actuarial cost method" means an actuarial cost method under which 
37.6 	the actuarial present value of the projected benefits of each individual currently covered 
37.7 	by the benefit plan and included in the actuarial valuation is allocated on a level basis over 
37.8 	the service of the individual, if the benefit plan is governed by section 69.773, or over the 
37.9 	earnings of the individual, if the benefit plan is governed by any other law, between the 
37.10 	entry age and the assumed exit age, with the portion of the actuarial present value which is 
37.11 	allocated to the valuation year to be the normal cost and the portion of the actuarial present 
37.12 	value not provided for at the valuation date by the actuarial present value of future normal 
37.13 	costs to be the actuarial accrued liability, with aggregation in the calculation process to be 
37.14 	the sum of the calculated result for each covered individual and with recognition given to 
37.15 	any different benefit formulas which may apply to various periods of service.
37.16 	(e) "Experience study" means a report providing experience data and an actuarial 
37.17 	analysis of the adequacy of the actuarial assumptions on which actuarial valuations are 
37.18 	based.
37.19 	(f) "Actuarial value of assets" means:
37.20 	~~(1) For the July 1, 2009, actuarial valuation, the market value of all assets as of~~ 
37.21 	~~June 30, 2009, reduced by:~~
37.22 	~~(i) 20 percent of the difference between the actual net change in the market value of~~ 
37.23 	~~assets other than the Minnesota postretirement investment fund between June 30, 2006,~~ 
37.24 	~~and June 30, 2005, and the computed increase in the market value of assets other than the~~ 
37.25 	~~Minnesota postretirement investment fund over that fiscal year period if the assets had~~ 
37.26 	~~earned a rate of return on assets equal to the annual percentage preretirement interest rate~~ 
37.27 	~~assumption used in the actuarial valuation for July 1, 2005;~~
37.28 	~~(ii) 40 percent of the difference between the actual net change in the market value of~~ 
37.29 	~~assets other than the Minnesota postretirement investment fund between June 30, 2007,~~ 
37.30 	~~and June 30, 2006, and the computed increase in the market value of assets other than the~~ 
37.31 	~~Minnesota postretirement investment fund over that fiscal year period if the assets had~~ 
37.32 	~~earned a rate of return on assets equal to the annual percentage preretirement interest rate~~ 
37.33 	~~assumption used in the actuarial valuation for July 1, 2006;~~
37.34 	~~(iii) 60 percent of the difference between the actual net change in the market value~~ 
37.35 	~~of assets other than the Minnesota postretirement investment fund between June 30, 2008,~~ 
37.36 	~~and June 30, 2007, and the computed increase in the market value of assets other than the~~ 
38.1 	~~Minnesota postretirement investment fund over that fiscal year period if the assets had~~ 
38.2 	~~earned a rate of return on assets equal to the annual percentage preretirement interest rate~~ 
38.3 	~~assumption used in the actuarial valuation for July 1, 2007;~~
38.4 	~~(iv) 80 percent of the difference between the actual net change in the market value of~~ 
38.5 	~~assets other than the Minnesota postretirement investment fund between June 30, 2009,~~ 
38.6 	~~and June 30, 2008, and the computed increase in the market value of assets other than the~~ 
38.7 	~~Minnesota postretirement investment fund over that fiscal year period if the assets had~~ 
38.8 	~~earned a rate of return on assets equal to the annual percentage preretirement interest rate~~ 
38.9 	~~assumption used in the actuarial valuation for July 1, 2008; and~~
38.10 	~~(v) if applicable, 80 percent of the difference between the actual net change in the~~ 
38.11 	~~market value of the Minnesota postretirement investment fund between June 30, 2009,~~ 
38.12 	~~and June 30, 2008, and the computed increase in the market value of assets over that fiscal~~ 
38.13 	~~year period if the assets had increased at 8.5 percent annually.~~
38.14 	~~(2) For the July 1, 2010, actuarial valuation, the market value of all assets as of~~ 
38.15 	~~June 30, 2010, reduced by:~~
38.16 	~~(i) 20 percent of the difference between the actual net change in the market value of~~ 
38.17 	~~assets other than the Minnesota postretirement investment fund between June 30, 2007,~~ 
38.18 	~~and June 30, 2006, and the computed increase in the market value of assets other than the~~ 
38.19 	~~Minnesota postretirement investment fund over that fiscal year period if the assets had~~ 
38.20 	~~earned a rate of return on assets equal to the annual percentage preretirement interest rate~~ 
38.21 	~~assumption used in the actuarial valuation for July 1, 2006;~~
38.22 	~~(ii) 40 percent of the difference between the actual net change in the market value of~~ 
38.23 	~~assets other than the Minnesota postretirement investment fund between June 30, 2008,~~ 
38.24 	~~and June 30, 2007, and the computed increase in the market value of assets other than the~~ 
38.25 	~~Minnesota postretirement investment fund over that fiscal year period if the assets had~~ 
38.26 	~~earned a rate of return on assets equal to the annual percentage preretirement interest rate~~ 
38.27 	~~assumption used in the actuarial valuation for July 1, 2007;~~
38.28 	~~(iii) 60 percent of the difference between the actual net change in the market value~~ 
38.29 	~~of assets other than the Minnesota postretirement investment fund between June 30, 2009,~~ 
38.30 	~~and June 30, 2008, and the computed increase in the market value of assets other than the~~ 
38.31 	~~Minnesota postretirement investment fund over that fiscal year period if the assets had~~ 
38.32 	~~earned a rate of return on assets equal to the annual percentage preretirement interest rate~~ 
38.33 	~~assumption used in the actuarial valuation for July 1, 2008;~~
38.34 	~~(iv) 80 percent of the difference between the actual net change in the market value of~~ 
38.35 	~~total assets between June 30, 2010, and June 30, 2009, and the computed increase in the~~ 
38.36 	~~market value of total assets over that fiscal year period if the assets had earned a rate of~~ 
39.1 	~~return on assets equal to the annual percentage preretirement interest rate assumption used~~ 
39.2 	~~in the actuarial valuation for July 1, 2009; and~~
39.3 	~~(v) if applicable, 60 percent of the difference between the actual net change in the~~ 
39.4 	~~market value of the Minnesota postretirement investment fund between June 30, 2009,~~ 
39.5 	~~and June 30, 2008, and the computed increase in the market value of assets over that fiscal~~ 
39.6 	~~year period if the assets had increased at 8.5 percent annually.~~
39.7 	~~(3) For the July 1, 2011, actuarial valuation, the market value of all assets as of~~ 
39.8 	~~June 30, 2011, reduced by:~~
39.9 	~~(i) 20 percent of the difference between the actual net change in the market value of~~ 
39.10 	~~assets other than the Minnesota postretirement investment fund between June 30, 2008,~~ 
39.11 	~~and June 30, 2007, and the computed increase in the market value of assets other than the~~ 
39.12 	~~Minnesota postretirement investment fund over that fiscal year period if the assets had~~ 
39.13 	~~earned a rate of return on assets equal to the annual percentage preretirement interest rate~~ 
39.14 	~~assumption used in the actuarial valuation for July 1, 2007;~~
39.15 	~~(ii) 40 percent of the difference between the actual net change in the market value of~~ 
39.16 	~~assets other than the Minnesota postretirement investment fund between June 30, 2009,~~ 
39.17 	~~and June 30, 2008, and the computed increase in the market value of assets other than the~~ 
39.18 	~~Minnesota postretirement investment fund over that fiscal year period if the assets had~~ 
39.19 	~~earned a rate of return on assets equal to the annual percentage preretirement interest rate~~ 
39.20 	~~assumption used in the actuarial valuation for July 1, 2008;~~
39.21 	~~(iii) 60 percent of the difference between the actual net change in the market value~~ 
39.22 	~~of the total assets between June 30, 2010, and June 30, 2009, and the computed increase in~~ 
39.23 	~~the market value of the total assets over that fiscal year period if the assets had earned~~ 
39.24 	~~a rate of return on assets equal to the annual percentage preretirement interest rate~~ 
39.25 	~~assumption used in the actuarial valuation for July 1, 2009;~~
39.26 	~~(iv) 80 percent of the difference between the actual net change in the market value of~~ 
39.27 	~~total assets between June 30, 2011, and June 30, 2010, and the computed increase in the~~ 
39.28 	~~market value of total assets over that fiscal year period if the assets had earned a rate of~~ 
39.29 	~~return on assets equal to the annual percentage preretirement interest rate assumption used~~ 
39.30 	~~in the actuarial valuation for July 1, 2010; and~~
39.31 	~~(v) if applicable, 40 percent of the difference between the actual net change in the~~ 
39.32 	~~market value of the Minnesota postretirement investment fund between June 30, 2009,~~ 
39.33 	~~and June 30, 2008, and the computed increase in the market value of assets over that fiscal~~ 
39.34 	~~year period if the assets had increased at 8.5 percent annually.~~
39.35 	~~(4)~~(1) For the July 1, 2012, actuarial valuation, the market value of all assets as of 
39.36 	June 30, 2012, reduced by:
40.1 	(i) 20 percent of the difference between the actual net change in the market value of 
40.2 	assets other than the Minnesota postretirement investment fund between June 30, 2009, 
40.3 	and June 30, 2008, and the computed increase in the market value of assets other than the 
40.4 	Minnesota postretirement investment fund over that fiscal year period if the assets had 
40.5 	earned a rate of return on assets equal to the annual percentage preretirement interest rate 
40.6 	assumption used in the actuarial valuation for July 1, 2008;
40.7 	(ii) 40 percent of the difference between the actual net change in the market value of 
40.8 	total assets between June 30, 2010, and June 30, 2009, and the computed increase in the 
40.9 	market value of total assets over that fiscal year period if the assets had earned a rate of 
40.10 	return on assets equal to the annual percentage preretirement interest rate assumption used 
40.11 	in the actuarial valuation for July 1, 2009;
40.12 	(iii) 60 percent of the difference between the actual net change in the market value 
40.13 	of total assets between June 30, 2011, and June 30, 2010, and the computed increase in the 
40.14 	market value of total assets over that fiscal year period if the assets had earned a rate of 
40.15 	return on assets equal to the annual percentage preretirement interest rate assumption used 
40.16 	in the actuarial valuation for July 1, 2010;
40.17 	(iv) 80 percent of the difference between the actual net change in the market value of 
40.18 	total assets between June 30, 2012, and June 30, 2011, and the computed increase in the 
40.19 	market value of total assets over that fiscal year period if the assets had earned a rate of 
40.20 	return on assets equal to the annual percentage preretirement interest rate assumption used 
40.21 	in the actuarial valuation for July 1, 2011; and
40.22 	(v) if applicable, 20 percent of the difference between the actual net change in the 
40.23 	market value of the Minnesota postretirement investment fund between June 30, 2009, 
40.24 	and June 30, 2008, and the computed increase in the market value of assets over that fiscal 
40.25 	year period if the assets had increased at 8.5 percent annually.
40.26 	~~(5)~~(2) For the July 1, 2013, and following actuarial valuations, the market value of 
40.27 	all assets as of the preceding June 30, reduced by:
40.28 	(i) 20 percent of the difference between the actual net change in the market value 
40.29 	of total assets between the June 30 that occurred three years earlier and the June 30 that 
40.30 	occurred four years earlier and the computed increase in the market value of total assets 
40.31 	over that fiscal year period if the assets had earned a rate of return on assets equal to the 
40.32 	annual percentage preretirement interest rate assumption used in the actuarial valuation 
40.33 	for the July 1 that occurred four years earlier;
40.34 	(ii) 40 percent of the difference between the actual net change in the market value 
40.35 	of total assets between the June 30 that occurred two years earlier and the June 30 that 
40.36 	occurred three years earlier and the computed increase in the market value of total assets 
41.1 	over that fiscal year period if the assets had earned a rate of return on assets equal to the 
41.2 	annual percentage preretirement interest rate assumption used in the actuarial valuation 
41.3 	for the July 1 that occurred three years earlier;
41.4 	(iii) 60 percent of the difference between the actual net change in the market value 
41.5 	of total assets between the June 30 that occurred one year earlier and the June 30 that 
41.6 	occurred two years earlier and the computed increase in the market value of total assets 
41.7 	over that fiscal year period if the assets had earned a rate of return on assets equal to the 
41.8 	annual percentage preretirement interest rate assumption used in the actuarial valuation 
41.9 	for the July 1 that occurred two years earlier; and
41.10 	(iv) 80 percent of the difference between the actual net change in the market value 
41.11 	of total assets between the most recent June 30 and the June 30 that occurred one year 
41.12 	earlier and the computed increase in the market value of total assets over that fiscal year 
41.13 	period if the assets had earned a rate of return on assets equal to the annual percentage 
41.14 	preretirement interest rate assumption used in the actuarial valuation for the July 1 that 
41.15 	occurred one year earlier.
41.16 	(g) "Unfunded actuarial accrued liability" means the total current and expected 
41.17 	future benefit obligations, reduced by the sum of the actuarial value of assets and the 
41.18 	present value of future normal costs.
41.19 	(h) "Pension benefit obligation" means the actuarial present value of credited 
41.20 	projected benefits, determined as the actuarial present value of benefits estimated to be 
41.21 	payable in the future as a result of employee service attributing an equal benefit amount, 
41.22 	including the effect of projected salary increases and any step rate benefit accrual rate 
41.23 	differences, to each year of credited and expected future employee service.

41.24 	Sec. 40. Minnesota Statutes 2010, section 356.44, is amended to read:
41.25 	356.44 PARTIAL PAYMENT OF PENSION PLAN REFUND.
41.26 	(a) Notwithstanding any provision of law to the contrary, a member of a pension 
41.27 	plan listed in section 356.30, subdivision 3, with at least two years of forfeited service 
41.28 	taken from a single pension plan, may repay a portion of all refunds. A partial refund 
41.29 	repayment must comply with this section.
41.30 	(b) The minimum portion of a refund repayment is one-third of the total service 
41.31 	credit period of all refunds taken from a single plan.
41.32 	(c) The cost of the partial refund repayment is the product of the cost of the total 
41.33 	repayment multiplied by the ratio of the restored service credit to the total forfeited service 
41.34 	credit. The total repayment amount includes interest at the applicable annual rate ~~of 8.5~~ 
41.35 	~~percent~~, compounded annually, from the refund date to the date repayment is received.
42.1 	(d) The applicable rate is 8.5 percent for the period before July 1, 2012, and the 
42.2 	period after June 30, 2021, and is 8.0 percent for the period from July 1, 2012, through 
42.3 	June 30, 2021.
42.4 	~~(d)~~(e) The restored service credit must be allocated based on the relationship the 
42.5 	restored service bears to the total service credit period for all refunds taken from a single 
42.6 	pension plan.
42.7 	~~(e)~~(f) This section does not authorize a public pension plan member to repay a 
42.8 	refund if the law governing the plan does not authorize the repayment of a refund of 
42.9 	member contributions.

42.10 	Sec. 41. Minnesota Statutes 2010, section 356.50, subdivision 2, is amended to read:
42.11 		Subd. 2.Service credit procedure.  (a) To obtain the public pension plan 
42.12 	allowable service credit, the eligible person under subdivision 1 shall pay the required 
42.13 	member contribution amount. The required member contribution amount is the member 
42.14 	contribution rate or rates in effect for the pension plan during the period of service covered 
42.15 	by the back pay award, applied to the unpaid gross salary amounts of the back pay award 
42.16 	including unemployment insurance, workers' compensation, or wages from other sources 
42.17 	which reduced the back award. No contributions may be made under this clause for 
42.18 	compensation covered by a public pension plan listed in section 356.30, subdivision 3, 
42.19 	for employment during the removal period. The person shall pay the required member 
42.20 	contribution amount within 60 days of the date of receipt of the back pay award or within 
42.21 	60 days of a billing from the retirement fund, whichever is later.
42.22 	 (b) The public employer who wrongfully discharged the public employee must pay 
42.23 	an employer contribution on the back pay award. The employer contribution must be 
42.24 	based on the employer contribution rate or rates in effect for the pension plan during the 
42.25 	period of service covered by the back pay award, applied to the salary amount on which 
42.26 	the member contribution amount was determined under paragraph (a). Interest on both the 
42.27 	required member and employer contribution amount must be paid by the employer at the 
42.28 	applicable annual compound rate ~~of 8.5 percent~~ per year, expressed monthly, between the 
42.29 	date the contribution amount would have been paid to the date of actual payment. The 
42.30 	applicable rate is 8.5 percent for the period before July 1, 2012, and the period after June 
42.31 	30, 2021, and is 8.0 percent for the period from July 1, 2012, through June 30, 2021. The 
42.32 	employer payment must be made within 30 days of the payment under paragraph (a).

42.33 	Sec. 42. Minnesota Statutes 2010, section 356.551, subdivision 2, is amended to read:
43.1 		Subd. 2.Determination. (a) Unless the minimum purchase amount set forth in 
43.2 	paragraph (c) applies, the prior service credit purchase amount is an amount equal to the 
43.3 	actuarial present value, on the date of payment, as calculated by the chief administrative 
43.4 	officer of the pension plan and reviewed by the actuary retained under section 356.214, 
43.5 	of the amount of the additional retirement annuity obtained by the acquisition of the 
43.6 	additional service credit in this section.
43.7 	(b) Calculation of this amount must be made using the preretirement interest rate 
43.8 	applicable to the public pension plan specified in section 356.215, subdivision 8, and 
43.9 	the mortality table adopted for the public pension plan. The calculation must assume 
43.10 	continuous future service in the public pension plan until, and retirement at, the age at 
43.11 	which the minimum requirements of the fund for normal retirement or retirement with an 
43.12 	annuity unreduced for retirement at an early age, including section 356.30, are met with 
43.13 	the additional service credit purchased. The calculation must also assume a full-time 
43.14 	equivalent salary, or actual salary, whichever is greater, and a future salary history that 
43.15 	includes annual salary increases at the applicable salary increase rate for the plan specified 
43.16 	in section 356.215, subdivision 4d.
43.17 	(c) The prior service credit purchase amount may not be less than the amount 
43.18 	determined by applying, for each year or fraction of a year being purchased, the sum 
43.19 	of the employee contribution rate, the employer contribution rate, and the additional 
43.20 	employer contribution rate, if any, applicable during that period, to the person's annual 
43.21 	salary during that period, or fractional portion of a year's salary, if applicable, plus interest 
43.22 	at the applicable annual rate ~~of 8.5 percent~~ compounded annually from the end of the 
43.23 	year in which contributions would otherwise have been made to the date on which the 
43.24 	payment is received.
43.25 	(d) Unless otherwise provided by statutes governing a specific plan, payment must 
43.26 	be made in one lump sum within one year of the prior service credit authorization or prior 
43.27 	to the member's effective date of retirement, whichever is earlier. Payment of the amount 
43.28 	calculated under this section must be made by the applicable eligible person.
43.29 	(e) However, the current employer or the prior employer may, at its discretion, pay 
43.30 	all or any portion of the payment amount that exceeds an amount equal to the employee 
43.31 	contribution rates in effect during the period or periods of prior service applied to the 
43.32 	actual salary rates in effect during the period or periods of prior service, plus interest at 
43.33 	the applicable rate ~~of 8.5 percent a year~~ compounded annually from the date on which 
43.34 	the contributions would otherwise have been made to the date on which the payment is 
43.35 	made. If the employer agrees to payments under this subdivision, the purchaser must 
43.36 	make the employee payments required under this subdivision within 90 days of the prior 
44.1 	service credit authorization. If that employee payment is made, the employer payment 
44.2 	under this subdivision must be remitted to the chief administrative officer of the public 
44.3 	pension plan within 60 days of receipt by the chief administrative officer of the employee 
44.4 	payments specified under this subdivision.
44.5 	(f) The applicable rate is 8.5 percent for the period before July 1, 2012, and the 
44.6 	period after June 30, 2021, and is 8.0 percent for the period from July 1, 2012, through 
44.7 	June 30, 2021. 

44.8 	Sec. 43. Minnesota Statutes 2010, section 490.121, subdivision 4, is amended to read:
44.9 		Subd. 4.Allowable service. (a) "Allowable service" means any calendar month, 
44.10 	subject to the service credit limit in subdivision 22, served as a judge at any time, during 
44.11 	which the judge received compensation for that service from the state, municipality, 
44.12 	or county, whichever applies, and for which the judge made any required member 
44.13 	contribution. It also includes any month served as a referee in probate for all referees in 
44.14 	probate who were in office before January 1, 1974.
44.15 	(b) "Allowable service" also means a period of authorized leave of absence for which 
44.16 	the judge has made a payment in lieu of contributions, not in an amount in excess of the 
44.17 	service credit limit under subdivision 22. To obtain the service credit, the judge shall pay 
44.18 	an amount equal to the normal cost of the judges retirement plan on the date of return from 
44.19 	the leave of absence, as determined in the most recent actuarial report for the plan filed 
44.20 	with the Legislative Commission on Pensions and Retirement, multiplied by the judge's 
44.21 	average monthly salary rate during the authorized leave of absence and multiplied by the 
44.22 	number of months of the authorized leave of absence, plus annual compound interest at 
44.23 	the applicable rate ~~of 8.5 percent~~ from the date of the termination of the leave to the date 
44.24 	on which payment is made. The applicable rate is 8.5 percent for the period before July 1, 
44.25 	2012, and the period after June 30, 2021, and is 8.0 percent for the period from July 1, 
44.26 	2012, through June 30, 2021. The payment must be made within one year of the date on 
44.27 	which the authorized leave of absence terminated. Service credit for an authorized leave 
44.28 	of absence is in addition to a uniformed service leave under section 490.1211.
44.29 	(c) "Allowable service" does not mean service as a retired judge.

44.30 	Sec. 44. Minnesota Statutes 2010, section 490.1211, is amended to read:
44.31 	490.1211 UNIFORMED SERVICE.
44.32 	(a) A judge who is absent from employment by reason of service in the uniformed 
44.33 	services, as defined in United States Code, title 38, section 4303(13), and who returns 
44.34 	to state employment as a judge upon discharge from service in the uniformed service 
45.1 	within the time frame required in United States Code, title 38, section 4312(e), may obtain 
45.2 	service credit for the period of the uniformed service, provided that the judge did not 
45.3 	separate from uniformed service with a dishonorable or bad conduct discharge or under 
45.4 	other than honorable conditions.
45.5 	(b) The judge may obtain credit by paying into the fund equivalent member 
45.6 	contribution based on the contribution rate or rates in effect at the time that the uniformed 
45.7 	service was performed multiplied by the full and fractional years being purchased and 
45.8 	applied to the annual salary rate. The annual salary rate is the average annual salary 
45.9 	during the purchase period that the judge would have received if the judge had continued 
45.10 	to provide employment services to the state rather than to provide uniformed service, or 
45.11 	if the determination of that rate is not reasonably certain, the annual salary rate is the 
45.12 	judge's average salary rate during the 12-month period of judicial employment rendered 
45.13 	immediately preceding the purchase period.
45.14 	(c) The equivalent employer contribution and, if applicable, the equivalent employer 
45.15 	additional contribution, must be paid by the employing unit, using the employer and 
45.16 	employer additional contribution rate or rates in effect at the time that the uniformed 
45.17 	service was performed, applied to the same annual salary rate or rates used to compute the 
45.18 	equivalent member contribution.
45.19 	(d) If the member equivalent contributions provided for in this section are not paid 
45.20 	in full, the judge's allowable service credit must be prorated by multiplying the full and 
45.21 	fractional number of years of uniformed service eligible for purchase by the ratio obtained 
45.22 	by dividing the total member contributions received by the total member contributions 
45.23 	otherwise required under this section.
45.24 	(e) To receive allowable service credit under this section, the contributions specified 
45.25 	in this section and section 490.121 must be transmitted to the fund during the period 
45.26 	which begins with the date on which the individual returns to judicial employment and 
45.27 	which has a duration of three times the length of the uniformed service period, but not 
45.28 	to exceed five years. If the determined payment period is calculated to be less than one 
45.29 	year, the contributions required under this section to receive service credit may be within 
45.30 	one year from the discharge date.
45.31 	(f) The amount of allowable service credit obtainable under this section and section 
45.32 	490.121 may not exceed five years, unless a longer purchase period is required under 
45.33 	United States Code, title 38, section 4312.
45.34 	(g) The state court administrator shall pay interest on all equivalent member and 
45.35 	employer contribution amounts payable under this section. Interest must be computed at ~~a~~
45.36 	the applicable rate ~~of 8.5 percent~~ compounded annually from the end of each fiscal year of 
46.1 	the leave or break in service to the end of the month in which payment is received. The 
46.2 	applicable rate is 8.5 percent for the period before July 1, 2012, and the period after June 
46.3 	30, 2021, and is 8.0 percent for the period from July 1, 2012, through June 30, 2021.

46.4 	Sec. 45. Minnesota Statutes 2010, section 490.124, subdivision 12, is amended to read:
46.5 		Subd. 12.Refund.  (a) A person who ceases to be a judge is entitled to a refund 
46.6 	in an amount that is equal to all of the member's employee contributions to the judges' 
46.7 	retirement fund plus interest computed under section 352.22, subdivision 2.
46.8 	(b) A refund of contributions under paragraph (a) terminates all service credits and 
46.9 	all rights and benefits of the judge and the judge's survivors under this chapter.
46.10 	(c) A person who becomes a judge again after taking a refund under paragraph (a) 
46.11 	may reinstate the previously terminated allowable service credit, rights, and benefits by 
46.12 	repaying the total amount of the previously received refund. The refund repayment must 
46.13 	include interest on the total amount previously received at ~~an~~the applicable annual rate ~~of~~ 
46.14 	~~8.5 percent~~, compounded annually, from the date on which the refund was received until 
46.15 	the date on which the refund is repaid. The applicable rate is 8.5 percent for the period 
46.16 	before July 1, 2012, and the period after June 30, 2021, and is 8.0 percent for the period 
46.17 	from July 1, 2012, through June 30, 2021.

46.18 	Sec. 46. TEMPORARY PROVISION; REVISION OF ANNUITY RESERVE, 
46.19 	OPTIONAL ANNUITY FORM, AND EARLY RETIREMENT FACTORS.
 46.20 	On or before January 1, 2013, the governing boards of the Minnesota State 
46.21 	Retirement System, the Public Employees Retirement Association, the Teachers 
46.22 	Retirement Association, the Duluth Teachers Retirement Fund Association, and the 
46.23 	St. Paul Teachers Retirement Fund Association shall revise, for the retirement plan 
46.24 	or plans administered, the annuity reserve factors, optional annuity form factors, and 
46.25 	early retirement annuity factors, if the annuity is required to be the actuarial equivalent 
46.26 	of the normal retirement annuity form. The revision shall be undertaken with the 
46.27 	recommendation of the approved actuary retained by the retirement system, which 
46.28 	recommendation must be retained in the permanent records of the governing board. The 
46.29 	revised reserve factors also must be submitted for review by the auditing and reviewing 
46.30 	actuary retained by the Legislative Commission on Pensions and Retirement and the 
46.31 	applicable retirement fund shall reimburse the Legislative Commission on Pensions and 
46.32 	Retirement for the cost of the reserve review.

46.33 	Sec. 47. EFFECTIVE DATE.
 47.1 	Sections 1 to 46 are effective July 1, 2012.