1.1                          A bill for an act
  1.2             relating to retirement; public employees retirement 
  1.3             association; creating a local government correctional 
  1.4             service retirement plan; modifying actuarial cost 
  1.5             provision; amending Minnesota Statutes 1998, sections 
  1.6             3.85, subdivisions 11 and 12; 353.27, subdivisions 2 
  1.7             and 3; 356.19, by adding a subdivision; 356.20, 
  1.8             subdivision 2; 356.30, subdivision 3; 356.302, 
  1.9             subdivision 7; and 356.303, subdivision 4; proposing 
  1.10            coding for new law as Minnesota Statutes, chapter 
  1.11            353E; repealing Minnesota Statutes 1998, section 
  1.12            353.33, subdivision 3a. 
  1.13  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.14     Section 1.  Minnesota Statutes 1998, section 3.85, 
  1.15  subdivision 11, is amended to read: 
  1.16     Subd. 11.  [VALUATIONS AND REPORTS TO LEGISLATURE.] (a) The 
  1.17  commission shall contract with an established actuarial 
  1.18  consulting firm to conduct annual actuarial valuations for the 
  1.19  retirement plans named in paragraph (b).  The contract must 
  1.20  include provisions for performing cost analyses of proposals for 
  1.21  changes in benefit and funding policies.  
  1.22     (b) The contract for actuarial valuation must include the 
  1.23  following retirement plans:  
  1.24     (1) the teachers retirement plan, teachers retirement 
  1.25  association; 
  1.26     (2) the general state employees retirement plan, Minnesota 
  1.27  state retirement system; 
  1.28     (3) the correctional employees retirement plan, Minnesota 
  1.29  state retirement system; 
  2.1      (4) the state patrol retirement plan, Minnesota state 
  2.2   retirement system; 
  2.3      (5) the judges retirement plan, Minnesota state retirement 
  2.4   system; 
  2.5      (6) the Minneapolis employees retirement plan, Minneapolis 
  2.6   employees retirement fund; 
  2.7      (7) the public employees retirement plan, public employees 
  2.8   retirement association; 
  2.9      (8) the public employees police and fire plan, public 
  2.10  employees retirement association; 
  2.11     (9) the Duluth teachers retirement plan, Duluth teachers 
  2.12  retirement fund association; 
  2.13     (10) the Minneapolis teachers retirement plan, Minneapolis 
  2.14  teachers retirement fund association; 
  2.15     (11) the St. Paul teachers retirement plan, St. Paul 
  2.16  teachers retirement fund association; 
  2.17     (12) the legislators retirement plan, Minnesota state 
  2.18  retirement system; ~~and~~ 
  2.19     (13) the elective state officers retirement plan, Minnesota 
  2.20  state retirement system; and 
  2.21     (14) local government correctional service retirement plan, 
  2.22  public employees retirement association.  
  2.23     (c) The contract must specify completion of annual 
  2.24  actuarial valuation calculations on a fiscal year basis with 
  2.25  their contents as specified in section 356.215, and the 
  2.26  standards for actuarial work adopted by the commission.  
  2.27     The contract must specify completion of annual experience 
  2.28  data collection and processing and a quadrennial published 
  2.29  experience study for the plans listed in paragraph (b), clauses 
  2.30  (1), (2), and (7), as provided for in the standards for 
  2.31  actuarial work adopted by the commission.  The experience data 
  2.32  collection, processing, and analysis must evaluate the following:
  2.33     (1) individual salary progression; 
  2.34     (2) rate of return on investments based on current asset 
  2.35  value; 
  2.36     (3) payroll growth; 
  3.1      (4) mortality; 
  3.2      (5) retirement age; 
  3.3      (6) withdrawal; and 
  3.4      (7) disablement.  
  3.5      (d) The actuary retained by the commission shall annually 
  3.6   prepare a report to the legislature, including the commentary on 
  3.7   the actuarial valuation calculations for the plans named in 
  3.8   paragraph (b) and summarizing the results of the actuarial 
  3.9   valuation calculations.  The commission-retained actuary shall 
  3.10  include with the report the actuary's recommendations concerning 
  3.11  the appropriateness of the support rates to achieve proper 
  3.12  funding of the retirement funds by the required funding dates.  
  3.13  The commission-retained actuary shall, as part of the 
  3.14  quadrennial published experience study, include recommendations 
  3.15  to the legislature on the appropriateness of the actuarial 
  3.16  valuation assumptions required for evaluation in the study.  
  3.17     (e) If the actuarial gain and loss analysis in the 
  3.18  actuarial valuation calculations indicates a persistent pattern 
  3.19  of sizable gains or losses, as directed by the commission, the 
  3.20  actuary retained by the commission shall prepare a special 
  3.21  experience study for a plan listed in paragraph (b), clause (3), 
  3.22  (4), (5), (6), (8), (9), (10), (11), (12), ~~or~~ (13), or (14), in 
  3.23  the manner provided for in the standards for actuarial work 
  3.24  adopted by the commission. 
  3.25     (f) The term of the contract between the commission and the 
  3.26  actuary retained by the commission is four years.  The contract 
  3.27  is subject to competitive bidding procedures as specified by the 
  3.28  commission. 
  3.29     Sec. 2.  Minnesota Statutes 1998, section 3.85, subdivision 
  3.30  12, is amended to read: 
  3.31     Subd. 12.  [ALLOCATION OF ACTUARIAL COST.] (a) The 
  3.32  commission shall assess each retirement plan specified in 
  3.33  subdivision 11, paragraph (b), its appropriate portion of the 
  3.34  compensation paid to the actuary retained by the commission for 
  3.35  the actuarial valuation calculations, quadrennial projection 
  3.36  valuations, and quadrennial experience studies.  The total 
  4.1   assessment is 100 percent of the amount of contract compensation 
  4.2   for the actuarial consulting firm retained by the commission for 
  4.3   actuarial valuation calculations, including the public employees 
  4.4   police and fire plan consolidation accounts of the public 
  4.5   employees retirement association, annual experience data 
  4.6   collection and processing, quadrennial projection valuations, 
  4.7   and quadrennial experience studies.  
  4.8      The portion of the total assessment payable by each 
  4.9   retirement system or pension plan must be determined as follows: 
  4.10     (1) Each pension plan specified in subdivision 11, 
  4.11  paragraph (b), clauses (1) to ~~(13)~~ (14), must pay the following 
  4.12  indexed amount based on its total active, deferred, inactive, 
  4.13  and benefit recipient membership: 
  4.14         up to 2,000 members, inclusive         $2.55 per member 
  4.15         2,001 through 10,000 members           $1.13 per member 
  4.16         over 10,000 members                    $0.11 per member  
  4.17     The amount specified is applicable for the assessment of 
  4.18  the July 1, 1991, to June 30, 1992, fiscal year actuarial 
  4.19  compensation amounts.  For the July 1, 1992, to June 30, 1993, 
  4.20  fiscal year and subsequent fiscal year actuarial compensation 
  4.21  amounts, the amount specified must be increased at the same 
  4.22  percentage increase rate as the implicit price deflator for 
  4.23  state and local government purchases of goods and services for 
  4.24  the 12-month period ending with the first quarter of the 
  4.25  calendar year following the completion date for the actuarial 
  4.26  valuation calculations, as published by the federal Department 
  4.27  of Commerce, and rounded upward to the nearest full cent. 
  4.28     (2) The total per-member portion of the allocation must be 
  4.29  determined, and that total per-member amount must be subtracted 
  4.30  from the total amount for allocation.  Of the remainder dollar 
  4.31  amount, the following per-retirement system and per-pension plan 
  4.32  charges must be determined and the charges must be paid by the 
  4.33  system or plan: 
  4.34     (i) 37.87 percent is the total additional per-retirement 
  4.35  system charge, of which one-seventh must be paid by each 
  4.36  retirement system specified in subdivision 11, paragraph (b), 
  5.1   clauses (1), (2), (6), (7), (9), (10), and (11). 
  5.2      (ii) 62.13 percent is the total additional per-pension plan 
  5.3   charge, of which ~~one-thirteenth~~ one-fourteenth must be paid by 
  5.4   each pension plan specified in subdivision 11, paragraph (b), 
  5.5   clauses (1) to ~~(13)~~ (14).  
  5.6      (b) The assessment must be made following the completion of 
  5.7   the actuarial valuation calculations and the experience 
  5.8   analysis.  The amount of the assessment is appropriated from the 
  5.9   retirement fund applicable to the retirement plan.  Receipts 
  5.10  from assessments must be deposited in the state treasury and 
  5.11  credited to the general fund. 
  5.12     Sec. 3.  Minnesota Statutes 1998, section 353.27, 
  5.13  subdivision 2, is amended to read: 
  5.14     Subd. 2.  [EMPLOYEE CONTRIBUTION.] (a) ~~Except as provided~~ 
  5.15  ~~in paragraph (b),~~ The employee contribution ~~shall be~~ is an 
  5.16  amount (1) for a "basic member" equal to 8.75 percent of total 
  5.17  salary; and (2) for a "coordinated member" equal to 4.75 percent 
  5.18  of total salary. 
  5.19     (b) ~~For local government correctional service employees, as~~ 
  5.20  ~~defined in section 353.33, subdivision 3a, the employee~~ 
  5.21  ~~contribution is an amount equal to 4.96 percent of total salary.~~ 
  5.22     ~~(c)~~ These contributions must be made by deduction from 
  5.23  salary in the manner provided in subdivision 4.  Where any 
  5.24  portion of a member's salary is paid from other than public 
  5.25  funds, such member's employee contribution must be based on the 
  5.26  total salary received from all sources. 
  5.27     Sec. 4.  Minnesota Statutes 1998, section 353.27, 
  5.28  subdivision 3, is amended to read: 
  5.29     Subd. 3.  [EMPLOYER CONTRIBUTION.] (a) ~~Except as provided~~ 
  5.30  ~~in paragraph (b),~~ The employer contribution ~~shall be~~ is an 
  5.31  amount equal to the employee contribution under subdivision 2. 
  5.32     (b) ~~On behalf of local government correctional service~~ 
  5.33  ~~employees, as defined in section 353.33, subdivision 3a, the~~ 
  5.34  ~~employer contribution is an amount equal to 5.06 percent of~~ 
  5.35  ~~total salary.~~ 
  5.36     ~~(c)~~ This contribution ~~shall~~ must be made from funds 
  6.1   available to the employing subdivision by the means and in the 
  6.2   manner provided in section 353.28. 
  6.3      Sec. 5.  [353E.01] [LOCAL GOVERNMENT CORRECTIONAL SERVICE 
  6.4   RETIREMENT PLAN.] 
  6.5      Subdivision 1.  [PLAN ADMINISTRATION; FUND.] (a) The public 
  6.6   employees local government correctional service retirement plan 
  6.7   is established as a separate plan to be administered by the 
  6.8   board of trustees and the executive director of the public 
  6.9   employees retirement association. 
  6.10     (b) The board of trustees and the executive director shall 
  6.11  undertake their activities in a manner consistent with chapter 
  6.12  356A.  
  6.13     (c) The association shall maintain a special fund to be 
  6.14  known as the public employees local government correctional 
  6.15  service retirement fund. 
  6.16     Subd. 2.  [REVENUE SOURCES.] Member contributions under 
  6.17  section 353E.03, subdivision 1, and employer contributions under 
  6.18  section 353E.03, subdivision 2, and other amounts authorized by 
  6.19  law, including any investment return on invested fund assets, 
  6.20  must be deposited in the fund.  
  6.21     Subd. 3.  [INVESTMENT.] (a) The public employees local 
  6.22  government correctional service retirement fund participates in 
  6.23  the Minnesota postretirement investment fund.  
  6.24     (b) The amounts provided in section 353.271 must be 
  6.25  deposited in that fund.  
  6.26     (c) The balance of any assets of the fund must be deposited 
  6.27  in the Minnesota combined investment fund as provided in section 
  6.28  11A.14, if applicable, or otherwise invested under section 
  6.29  11A.23. 
  6.30     Subd. 4.  [COLLECTION OF CONTRIBUTIONS.] The collection of 
  6.31  member and employer contributions is governed by section 353.27, 
  6.32  subdivisions 4, 7, 7b, 10, 11, and 12. 
  6.33     Subd. 5.  [FUND DISBURSEMENT RESTRICTED.] (a) The public 
  6.34  employees local government correctional service retirement fund 
  6.35  and its share of participation in the Minnesota postretirement 
  6.36  investment fund may be disbursed only for the purposes provided 
  7.1   for in this chapter.  
  7.2      (b) The proportional share of the necessary and reasonable 
  7.3   administrative expenses of the association and any benefits 
  7.4   provided in this chapter, other than benefits payable from the 
  7.5   Minnesota postretirement investment fund, must be paid from the 
  7.6   public employees local government correctional service 
  7.7   retirement fund.  Retirement annuities, disability benefits, 
  7.8   survivorship benefits, and any refunds of accumulated deductions 
  7.9   may be paid only from the correctional service retirement fund 
  7.10  after those needs have been certified by the executive director 
  7.11  and any applicable amounts withdrawn from the share of 
  7.12  participation in the Minnesota postretirement fund under section 
  7.13  11A.18.  
  7.14     (c) The amounts necessary to make the payments from the 
  7.15  public employees local government correctional service 
  7.16  retirement fund and its participation in the Minnesota 
  7.17  postretirement investment fund are annually appropriated from 
  7.18  those funds for those purposes. 
  7.19     Sec. 6.  [353E.02] [CORRECTIONAL SERVICE EMPLOYEES.] 
  7.20     A local government correctional service employee is a 
  7.21  person who: 
  7.22     (1) is employed in a county-administered jail or 
  7.23  correctional facility or in a regional correctional facility 
  7.24  administered by multiple counties; 
  7.25     (2) spends at least 95 percent of the employee's working 
  7.26  time in direct contact with persons confined in the jail or 
  7.27  facility, as certified in writing, in advance, by the employer 
  7.28  to the executive director of the association; and 
  7.29     (3) is a "public employee" as defined in section 353.01, 
  7.30  but is not a member of the public employees police and fire fund.
  7.31     Sec. 7.  [353E.03] [CORRECTIONAL SERVICE PLAN 
  7.32  CONTRIBUTIONS.] 
  7.33     Subdivision 1.  [MEMBER CONTRIBUTIONS.] A local government 
  7.34  correctional service employee shall make an employee 
  7.35  contribution in an amount equal to 5.83 percent of salary. 
  7.36     Subd. 2.  [EMPLOYER CONTRIBUTIONS.] The employer shall 
  8.1   contribute for a local government correctional service employee 
  8.2   an amount equal to 8.75 percent of salary. 
  8.3      Sec. 8.  [353E.04] [CORRECTIONAL SERVICE PLAN RETIREMENT 
  8.4   ANNUITY.] 
  8.5      Subdivision 1.  [ELIGIBILITY REQUIREMENTS.] After 
  8.6   termination of public employment, an employee covered under 
  8.7   section 353E.02 who has attained the age of at least 55 years 
  8.8   and has credit for not less than three years of coverage in the 
  8.9   local government correctional service plan is entitled, upon 
  8.10  application, to a normal retirement annuity.  Instead of a 
  8.11  normal retirement annuity, a retiring employee may elect to 
  8.12  receive the optional annuity provided in section 353.30, 
  8.13  subdivision 3. 
  8.14     Subd. 2.  [AVERAGE SALARY BASE.] In calculating the annuity 
  8.15  under subdivision 3, "average salary" means an amount equivalent 
  8.16  to the average of the highest salary earned as a local 
  8.17  government correctional employee upon which employee 
  8.18  contributions were paid for any five successive years of 
  8.19  allowable service.  Average salary must be based on all 
  8.20  allowable service if this service is less than five years. 
  8.21     Subd. 3.  [ANNUITY AMOUNT.] The average salary as defined 
  8.22  in subdivision 2, multiplied by the percent specified in section 
  8.23  356.19, subdivision 5a, for each year of allowable service, 
  8.24  determines the amount of the normal retirement annuity.  If a 
  8.25  person has earned allowable service in the public employees 
  8.26  retirement association or the public employees police and fire 
  8.27  fund prior to participation under this chapter, the retirement 
  8.28  annuity representing such service must be computed in accordance 
  8.29  with the formula specified in sections 353.29 and 353.30 or 
  8.30  353.651, whichever applies. 
  8.31     Subd. 4.  [EARLY RETIREMENT.] An employee covered under 
  8.32  section 353E.02 who has attained the age of at least 50 years 
  8.33  and has credit for not less than three years of coverage in the 
  8.34  local government correctional service plan is entitled, upon 
  8.35  application, to a reduced retirement annuity equal to the 
  8.36  annuity calculated under subdivision 3, reduced so that the 
  9.1   reduced annuity is the actuarial equivalent of the annuity that 
  9.2   would be payable if the employee deferred receipt of the annuity 
  9.3   from the day the annuity begins to accrue until age 55. 
  9.4      Subd. 5.  [ACCRUAL AND DURATION.] The retirement annuity 
  9.5   under this section begins to accrue as provided in section 
  9.6   353.29, subdivision 7.  The retirement annuity is payable for 
  9.7   the life of the recipient, or in accordance with the terms of 
  9.8   any optional annuity form selected by the retiring member. 
  9.9      Subd. 6.  [MULTIPLE SERVICE LIMITATION.] A former employee 
  9.10  who has both public employees retirement plan and public 
  9.11  employees local government correctional retirement plan credited 
  9.12  service must, if qualified, receive a retirement annuity from 
  9.13  each retirement plan that takes into account both periods of 
  9.14  service and both covered salary amounts, but no period of 
  9.15  service may be used more than once in calculating the annuity. 
  9.16     Sec. 9.  [353E.05] [AUGMENTATION IN CERTAIN CASES.] 
  9.17     Unless prior service has been transferred or unless a 
  9.18  combined service annuity under section 356.30 has been elected, 
  9.19  an employee who becomes a local government correctional employee 
  9.20  after being a member of the public employees retirement 
  9.21  association or the public employees police and fire fund is 
  9.22  covered under section 353.71, subdivision 2, with respect to 
  9.23  that prior service.  An employee who becomes a member of the 
  9.24  public employees retirement association or the public employees 
  9.25  police and fire plan after being a local government correctional 
  9.26  employee is also covered under section 353.71, subdivision 2, 
  9.27  with respect to that prior service, unless calculated under 
  9.28  section 356.30. 
  9.29     Sec. 10.  [353E.06] [DISABILITY BENEFITS.] 
  9.30     Subdivision 1.  [DUTY DISABILITY QUALIFICATION 
  9.31  REQUIREMENTS.] A local government correctional employee who 
  9.32  becomes disabled and physically or mentally unfit to perform the 
  9.33  duties of the position as a direct result of an injury, 
  9.34  sickness, or other disability that is medically determinable, 
  9.35  that was incurred in or arose out of any act of duty, and that 
  9.36  renders the employee physically or mentally unable to perform 
 10.1   the employee's duties, is entitled to a disability benefit.  The 
 10.2   disability benefit must be based on covered service under this 
 10.3   chapter only and is an amount equal to 50 percent of the average 
 10.4   salary defined in section 353E.04, subdivision 2, plus an 
 10.5   additional percent equal to that specified in section 356.19, 
 10.6   subdivision 5a, for each year of covered service under this 
 10.7   chapter in excess of 25 years. 
 10.8      Subd. 2.  [NONDUTY DISABILITY QUALIFICATION 
 10.9   REQUIREMENTS.] A local government correctional employee who has 
 10.10  at least one year of covered service under this chapter and 
 10.11  becomes disabled and physically or mentally unfit to perform the 
 10.12  duties of the position because of sickness or injury that is 
 10.13  medically determinable and that occurs while not engaged in 
 10.14  covered employment, is entitled to a disability benefit based on 
 10.15  covered service under this chapter.  The disability benefit must 
 10.16  be computed in the same manner as an annuity under section 
 10.17  353E.04, subdivision 3, and as though the employee had at least 
 10.18  ten years of covered correctional service. 
 10.19     Subd. 3.  [OPTIONAL ANNUITY.] A disabled local government 
 10.20  correctional employee may elect the normal disability benefit or 
 10.21  an optional annuity as provided in section 353.30, subdivision 
 10.22  3.  The election of an optional annuity must be made before the 
 10.23  commencement of payment of the disability benefit and is 
 10.24  effective on the date on which the disability benefit begins to 
 10.25  accrue as provided in section 353.33, subdivision 2.  Upon 
 10.26  becoming effective, the optional annuity begins to accrue on the 
 10.27  same date as provided for the disability benefit. 
 10.28     Subd. 4.  [DISABILITY BENEFIT APPLICATION.] A claim or 
 10.29  demand for a disability benefit must be initiated by written 
 10.30  application in the manner and form prescribed by the executive 
 10.31  director, filed in the office of the association, showing 
 10.32  compliance with the statutory conditions qualifying the 
 10.33  applicant for a disability benefit.  A member or former member 
 10.34  who became disabled during a period of membership may file an 
 10.35  application for disability benefits within three years following 
 10.36  termination of local government correctional service, but not 
 11.1   after that time has elapsed.  The disability benefit begins to 
 11.2   accrue the day following the commencement of disability, 90 days 
 11.3   preceding the filing of the application, or, if annual or sick 
 11.4   leave is paid for more than the 90-day period, from the date 
 11.5   salary ceased, whichever is latest.  No payment may accrue 
 11.6   beyond the end of the month in which entitlement has 
 11.7   terminated.  If the disabilitant dies before negotiating the 
 11.8   check for the month in which death occurs, payment must be made 
 11.9   to the optional annuitant or beneficiary. 
 11.10     Subd. 5.  [DISABILITY BENEFIT TERMINATION.] The disability 
 11.11  benefit paid to a disabled local government correctional 
 11.12  employee terminates at the end of the month in which the 
 11.13  employee reaches age 65.  If the disabled local government 
 11.14  correctional employee is still disabled when the employee 
 11.15  reaches age 65, the employee is deemed to be a retired employee 
 11.16  and, if the employee had elected an optional annuity under 
 11.17  subdivision 3, must receive an annuity in accordance with the 
 11.18  terms of the optional annuity previously elected.  If the 
 11.19  employee had not elected an optional annuity under subdivision 
 11.20  3, the employee may elect either to receive a normal retirement 
 11.21  annuity computed in the manner provided in section 353E.04, 
 11.22  subdivision 3, or to receive an optional annuity as provided in 
 11.23  section 353.30, subdivision 3, based on the same length of 
 11.24  service as used in the calculation of the disability benefit.  
 11.25  Election of an optional annuity must be made within 90 days 
 11.26  before attaining the age of 65 years, or reaching the five-year 
 11.27  anniversary of the effective date of the disability benefit, 
 11.28  whichever is later. 
 11.29     Subd. 6.  [RESUMPTION OF EMPLOYMENT.] If a disabled 
 11.30  employee resumes a gainful occupation from which earnings are 
 11.31  less than salary received at the date of disability or the 
 11.32  salary currently paid for similar positions, or should the 
 11.33  employee be entitled to receive workers' compensation benefits, 
 11.34  the disability benefit must be continued in an amount that, when 
 11.35  added to such earnings and workers' compensation benefits, does 
 11.36  not exceed the salary received at the date of disability or the 
 12.1   salary currently payable for the same employment position or an 
 12.2   employment position substantially similar to the one the person 
 12.3   held as of the date of the disability, whichever is greater. 
 12.4      Subd. 7.  [COMBINED SERVICE DISABILITY BENEFIT.] If the 
 12.5   employee is entitled to receive a disability benefit as provided 
 12.6   in subdivision 1 or 2 and has credit for less covered 
 12.7   correctional service than the length of service upon which the 
 12.8   correctional disability benefit is based, and also has credit 
 12.9   for public employees retirement plan service, the employee is 
 12.10  entitled to a disability benefit or deferred retirement annuity 
 12.11  based on the regular plan service only for the service that, 
 12.12  when combined with the correctional service, exceeds the number 
 12.13  of years on which the correctional disability benefit is based.  
 12.14  The disabled employee who also has credit for regular plan 
 12.15  service must in all respects qualify under section 353.33 to be 
 12.16  entitled to receive a disability benefit based on the public 
 12.17  employees retirement plan service, except that the service may 
 12.18  be combined to satisfy length of service requirements.  Any 
 12.19  deferred annuity to which the employee may be entitled based on 
 12.20  public employees retirement plan service must be augmented as 
 12.21  provided in section 353.71 while the employee is receiving a 
 12.22  disability benefit under this section. 
 12.23     Subd. 8.  [CONTINUING BENEFIT ELIGIBILITY.] Continuing 
 12.24  eligibility for a disability benefit is subject to section 
 12.25  353.33, subdivision 6. 
 12.26     Sec. 11.  [353E.07] [SURVIVOR BENEFITS.] 
 12.27     Subdivision 1.  [MEMBER AT LEAST AGE 50.] If a member or 
 12.28  former member of the local government correctional service 
 12.29  retirement plan who has attained the age of at least 50 years 
 12.30  and has credit for not less than three years of allowable 
 12.31  service dies before the annuity or disability benefit has become 
 12.32  payable, notwithstanding any designation of beneficiary to the 
 12.33  contrary, the surviving spouse may elect to receive, in lieu of 
 12.34  a refund with interest provided in section 353.32, subdivision 
 12.35  1, a surviving spouse annuity equal to the 100 percent joint and 
 12.36  survivor annuity for which the member could have qualified had 
 13.1   the member terminated service on the date of death. 
 13.2      Subd. 2.  [MEMBER NOT YET AGE 50.] If the member was under 
 13.3   age 50, dies, and had credit for not less than three years of 
 13.4   allowable service on the date of death but did not yet qualify 
 13.5   for retirement, the surviving spouse may elect to receive a 100 
 13.6   percent joint and survivor annuity based on the age of the 
 13.7   employee and the surviving spouse at the time of death.  The 
 13.8   annuity is payable using the early retirement reduction under 
 13.9   section 353E.04, subdivision 4, to age 50 and one-half the early 
 13.10  retirement reduction from age 50 to the age payment begins.  
 13.11  Sections 353.34, subdivision 3, and 353.71, subdivision 2, apply 
 13.12  to a deferred annuity or surviving spouse benefit payable under 
 13.13  this subdivision. 
 13.14     Subd. 3.  [ELECTION; ACCRUAL.] A surviving spouse election 
 13.15  under subdivisions 1 and 2 may be made at any time after the 
 13.16  date of death of the local government correctional service 
 13.17  employee.  The surviving spouse benefit begins to accrue as of 
 13.18  the first of the next month following the date on which the 
 13.19  application for the benefit was filed. 
 13.20     Subd. 4.  [SURVIVING SPOUSE COVERAGE; TERM CERTAIN.] In 
 13.21  lieu of the 100 percent optional annuity under subdivision 1, 
 13.22  the surviving spouse of a deceased local government correctional 
 13.23  service employee may elect to receive survivor coverage in a 
 13.24  term certain of ten, 15, or 20 years.  The monthly term certain 
 13.25  annuity must be actuarially equivalent to the 100 percent 
 13.26  optional annuity under subdivision 1 and must be based on tables 
 13.27  approved by the actuary retained by the legislative commission 
 13.28  on pensions and retirement.  The optional annuity ceases upon 
 13.29  the expiration of the term certain period.  If a survivor elects 
 13.30  a term certain annuity and dies before the expiration of the 
 13.31  specified term certain period, the commuted value of the 
 13.32  remaining annuity payments must be paid in a lump sum to the 
 13.33  survivor's estate. 
 13.34     Subd. 5.  [DEPENDENT CHILD SURVIVOR COVERAGE.] If there is 
 13.35  no surviving spouse eligible for benefits under subdivisions 1, 
 13.36  2, and 4, a dependent child as defined in section 353.01, 
 14.1   subdivision 15a, is eligible for a dependent child survivor 
 14.2   benefit.  Benefits to a dependent child must be paid from the 
 14.3   date of the employee's death to the date the dependent child 
 14.4   attains age 20 if the child is under age 15 on the date of 
 14.5   death.  If the child is 15 years or older on the date of death, 
 14.6   the benefit is payable for five years.  The payment to a 
 14.7   dependent child is an amount actuarially equivalent to the value 
 14.8   of a 100 percent joint and survivor optional annuity using the 
 14.9   age of the employee and age of the dependent child at the date 
 14.10  of death in lieu of the age of the surviving spouse.  If there 
 14.11  is more than one dependent child, each dependent child shall 
 14.12  receive a proportionate share of the actuarial value of the 
 14.13  employee's account, with the amount of the benefit payable to 
 14.14  each child to be determined based on the portion of the total 
 14.15  eligibility period that each child is eligible.  The process for 
 14.16  calculating the dependent child survivor benefit must be 
 14.17  approved by the actuary retained by the legislative commission 
 14.18  on pensions and retirement. 
 14.19     Subd. 6.  [PAYMENT TO DESIGNATED BENEFICIARY.] An amount 
 14.20  equal to any excess of the accumulated contributions that were 
 14.21  credited to the account of the deceased employee over and above 
 14.22  the total of the annuities paid and payable to the surviving 
 14.23  spouse or dependent children must be paid to the deceased 
 14.24  member's last designated beneficiary or, if none, to the legal 
 14.25  representative of the estate of the deceased member. 
 14.26     Subd. 7.  [ELECTION THAT SECTION DOES NOT APPLY.] A member 
 14.27  may specify in writing that this section does not apply and that 
 14.28  payment must be made only to the designated beneficiary, as 
 14.29  otherwise provided by this chapter. 
 14.30     Sec. 12.  [353E.08] [SCOPE AND APPLICATION.] 
 14.31     The general provisions of chapter 353 apply to the local 
 14.32  government correctional service retirement plan except where 
 14.33  otherwise specifically provided in sections 353E.01 to 353E.07.  
 14.34     Sec. 13.  Minnesota Statutes 1998, section 356.19, is 
 14.35  amended by adding a subdivision to read: 
 14.36     Subd. 5a.  [LOCAL GOVERNMENT CORRECTIONAL SERVICE 
 15.1   PLAN.] The applicable benefit accrual rate is 2.0 percent.  
 15.2      Sec. 14.  Minnesota Statutes 1998, section 356.20, 
 15.3   subdivision 2, is amended to read: 
 15.4      Subd. 2.  [COVERED PUBLIC PENSION FUNDS.] This section 
 15.5   applies to the following public pension plans: 
 15.6      (1) State employees retirement fund. 
 15.7      (2) Public employees retirement fund. 
 15.8      (3) Teachers retirement association. 
 15.9      (4) State patrol retirement fund. 
 15.10     (5) Minneapolis teachers retirement fund association. 
 15.11     (6) St. Paul teachers retirement fund association. 
 15.12     (7) Duluth teachers retirement fund association. 
 15.13     (8) Minneapolis employees retirement fund. 
 15.14     (9) University of Minnesota faculty retirement plan. 
 15.15     (10) University of Minnesota faculty supplemental 
 15.16  retirement plan. 
 15.17     (11) Judges retirement fund. 
 15.18     (12) Any police or firefighter's relief association 
 15.19  enumerated in section 69.77, subdivision 1a, or 69.771, 
 15.20  subdivision 1. 
 15.21     (13) Public employees police and fire fund.  
 15.22     (14) Minnesota state retirement system correctional 
 15.23  officers retirement fund.  
 15.24     (15) Public employees local government correctional service 
 15.25  retirement plan. 
 15.26     Sec. 15.  Minnesota Statutes 1998, section 356.30, 
 15.27  subdivision 3, is amended to read: 
 15.28     Subd. 3.  [COVERED FUNDS.] This section applies to the 
 15.29  following retirement funds: 
 15.30     (1) state employees retirement fund, established pursuant 
 15.31  to chapter 352; 
 15.32     (2) correctional employees retirement program, established 
 15.33  pursuant to chapter 352; 
 15.34     (3) unclassified employees retirement plan, established 
 15.35  pursuant to chapter 352D; 
 15.36     (4) state patrol retirement fund, established pursuant to 
 16.1   chapter 352B; 
 16.2      (5) legislators retirement plan, established pursuant to 
 16.3   chapter 3A; 
 16.4      (6) elective state officers' retirement plan, established 
 16.5   pursuant to chapter 352C; 
 16.6      (7) public employees retirement association, established 
 16.7   pursuant to chapter 353; 
 16.8      (8) public employees police and fire fund, established 
 16.9   pursuant to chapter 353; 
 16.10     (9) public employees local government correctional service 
 16.11  retirement plan, established pursuant to chapter 353E; 
 16.12     (10) teachers retirement association, established pursuant 
 16.13  to chapter 354; 
 16.14     ~~(10)~~ (11) Minneapolis employees retirement fund, 
 16.15  established pursuant to chapter 422A; 
 16.16     ~~(11)~~ (12) Minneapolis teachers retirement fund association, 
 16.17  established pursuant to chapter 354A; 
 16.18     ~~(12)~~ (13) St. Paul teachers retirement fund association, 
 16.19  established pursuant to chapter 354A; 
 16.20     ~~(13)~~ (14) Duluth teachers retirement fund association, 
 16.21  established pursuant to chapter 354A; and 
 16.22     ~~(14)~~ (15) judges' retirement fund, established by sections 
 16.23  490.121 to 490.132. 
 16.24     Sec. 16.  Minnesota Statutes 1998, section 356.302, 
 16.25  subdivision 7, is amended to read: 
 16.26     Subd. 7.  [COVERED RETIREMENT PLANS.] This section applies 
 16.27  to the following retirement plans: 
 16.28     (1) state employees retirement fund, established by chapter 
 16.29  352; 
 16.30     (2) unclassified employees retirement plan, established by 
 16.31  chapter 352D; 
 16.32     (3) public employees retirement association, established by 
 16.33  chapter 353; 
 16.34     (4) teachers retirement association, established by chapter 
 16.35  354; 
 16.36     (5) Duluth teachers retirement fund association, 
 17.1   established by chapter 354A; 
 17.2      (6) Minneapolis teachers retirement fund association, 
 17.3   established by chapter 354A; 
 17.4      (7) St. Paul teachers retirement fund association, 
 17.5   established by chapter 354A; 
 17.6      (8) Minneapolis employees retirement fund, established by 
 17.7   chapter 422A; 
 17.8      (9) correctional employees retirement plan, established by 
 17.9   chapter 352; 
 17.10     (10) state patrol retirement fund, established by chapter 
 17.11  352B; 
 17.12     (11) public employees police and fire fund, established by 
 17.13  chapter 353; ~~and~~ 
 17.14     (12) public employees local government correctional service 
 17.15  retirement plan, established by chapter 353E; and 
 17.16     (13) judges' retirement fund, established by sections 
 17.17  490.121 to 490.132. 
 17.18     Sec. 17.  Minnesota Statutes 1998, section 356.303, 
 17.19  subdivision 4, is amended to read: 
 17.20     Subd. 4.  [COVERED RETIREMENT PLANS.] This section applies 
 17.21  to the following retirement plans: 
 17.22     (1) legislators retirement plan, established by chapter 3A; 
 17.23     (2) state employees retirement fund, established by chapter 
 17.24  352; 
 17.25     (3) correctional employees retirement plan, established by 
 17.26  chapter 352; 
 17.27     (4) state patrol retirement fund, established by chapter 
 17.28  352B; 
 17.29     (5) elective state officers retirement plan, established by 
 17.30  chapter 352C; 
 17.31     (6) unclassified employees retirement plan, established by 
 17.32  chapter 352D; 
 17.33     (7) public employees retirement association, established by 
 17.34  chapter 353; 
 17.35     (8) public employees police and fire fund, established by 
 17.36  chapter 353; 
 18.1      (9) public employees local government correctional service 
 18.2   retirement plan, established by chapter 353E; 
 18.3      (10) teachers retirement association, established by 
 18.4   chapter 354; 
 18.5      ~~(10)~~ (11) Duluth teachers retirement fund association, 
 18.6   established by chapter 354A; 
 18.7      ~~(11)~~ (12) Minneapolis teachers retirement fund association, 
 18.8   established by chapter 354A; 
 18.9      ~~(12)~~ (13) St. Paul teachers retirement fund association, 
 18.10  established by chapter 354A; 
 18.11     ~~(13)~~ (14) Minneapolis employees retirement fund, 
 18.12  established by chapter 422A; and 
 18.13     ~~(14)~~ (15) judges' retirement fund, established by sections 
 18.14  490.121 to 490.132. 
 18.15     Sec. 18.  [REPEALER.] 
 18.16     Minnesota Statutes 1998, section 353.33, subdivision 3a, is 
 18.17  repealed. 
 18.18     Sec. 19.  [EFFECTIVE DATE.] 
 18.19     Sections 1 to 6 and 8 to 18 are effective on July 1, 1999.  
 18.20  Section 7 is effective on the first day of the first payroll 
 18.21  period beginning after June 30, 1999.