1.1                          A bill for an act 
  1.2             relating to retirement; retirement coverage for 
  1.3             teachers employed by independent school district No. 
  1.4             625; providing for a choice about future teacher 
  1.5             retirement coverage by the board of education of 
  1.6             independent school district No. 625; amending 
  1.7             Minnesota Statutes 1996, sections 3.85, subdivisions 
  1.8             11, and 12; 16A.06, subdivision 9; 353.01, subdivision 
  1.9             2b; 354.05, subdivisions 2, and 13; 354A.011, 
  1.10            subdivisions 7, 8, 11, and 15a; 354A.021, subdivision 
  1.11            1; 354A.08; 354A.092; 354A.093; 354A.095; 354A.096; 
  1.12            354A.12, subdivisions 1, 2, 2a, 3a, 3c, and 3d; 
  1.13            354A.23, subdivision 2; 354A.30; 354A.31, subdivision 
  1.14            4; 354A.32, subdivision 1; 354A.36, subdivision 3; 
  1.15            354A.39; 354A.40, subdivision 1; 354A.41; 356.20, 
  1.16            subdivision 2; 356.215, subdivision 2; 356.30, 
  1.17            subdivision 3; 356.302, subdivision 7; 356.303, 
  1.18            subdivision 4; 356.32, subdivision 2; 356.35, 
  1.19            subdivisions 2 and 5; 356.36, subdivision 1; 356.86, 
  1.20            subdivisions 1, 2, and 3; and 423A.02, subdivision 3; 
  1.21            Laws 1965, chapter 705, section 1, subdivision 4; Laws 
  1.22            1989, chapter 319, article 13, section 94; Laws 1990, 
  1.23            chapter 570, article 7, section 4; Laws 1992, chapter 
  1.24            598, article 6, section 18; Laws 1993, chapter 336, 
  1.25            article 2, section 2; Laws 1994, chapter 542, section 
  1.26            5; and Laws 1995, chapter 252, article 1, section 16, 
  1.27            as amended; proposing coding for new law in Minnesota 
  1.28            Statutes, chapter 354A; repealing Minnesota Statutes 
  1.29            1996, sections 354A.23, subdivision 2; 355.201; 
  1.30            355.202; 355.203; 355.204; 355.205; 355.206; 355.207; 
  1.31            355.208; and 355.209; Laws 1976, chapter 238, section 
  1.32            14; Laws 1977, chapter 429, sections 60 and 61; Laws 
  1.33            1979, chapter 109; Laws 1981, chapter 157; Laws 1985, 
  1.34            chapter 259, section 3; Laws 1987, chapter 372, 
  1.35            article 7, section 6; Laws 1988, chapter 709, article 
  1.36            8, section 8; Laws 1990, chapter 570, article 7, 
  1.37            section 3; Laws 1991, chapter 67; Laws 1993, chapter 
  1.38            336, article 3, section 1; and Laws 1994, chapter 565, 
  1.39            article 1, section 2. 
  1.40  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.41                             ARTICLE 1
  1.42                   DETERMINATION OF THE MECHANISM
  2.1                   FOR THE PROVISION OF RETIREMENT
  2.2                   COVERAGE FOR CERTAIN FIRST CLASS
  2.3                    CITY SCHOOL DISTRICT TEACHERS
  2.4      Section 1.  [SCHOOL BOARD CONSIDERATION OF FUTURE TEACHER 
  2.5   RETIREMENT COVERAGE MECHANISM.] 
  2.6      Subdivision 1.  [POLICY AND INTENT.] (a) The legislature 
  2.7   recognizes that the retirement coverage for most general or 
  2.8   nonpublic safety employees is provided through statewide public 
  2.9   pension plans and funds rather than through single employer 
  2.10  local public pension plans and funds.  The legislature also 
  2.11  recognizes the substantial financial and oversight 
  2.12  responsibilities that a local public pension plan and fund 
  2.13  imposes on the applicable employing unit.  
  2.14     (b) Through this legislation, the legislature is providing 
  2.15  to independent school district No. 625 the opportunity to 
  2.16  thoroughly examine and consider the issue of the appropriate and 
  2.17  optimum mechanism to provide public pension coverage to St. Paul 
  2.18  public school system teachers.  Through this legislation, the 
  2.19  legislature is also providing independent school district No. 
  2.20  625 with the means to effect the provision of retirement 
  2.21  coverage through the statewide teachers retirement association 
  2.22  instead of the St. Paul teachers retirement fund association or 
  2.23  to stabilize the future financial conditions of the St. Paul 
  2.24  teachers retirement fund association in the event that the local 
  2.25  pension plan is retained as the mechanism for providing 
  2.26  retirement coverage to St. Paul school district teaching 
  2.27  employees.  
  2.28     Subd. 2.  [CONSIDERATION OF RETIREMENT COVERAGE MECHANISM 
  2.29  ISSUE.] During the period July 1, 1997, to November 30, 1997, 
  2.30  the board of education for independent school district No. 625 
  2.31  shall schedule and hold a set of public hearings sufficient to 
  2.32  ascertain the views of the active and retired St. Paul school 
  2.33  system teachers and the taxpayers of independent school district 
  2.34  No. 625 about the retirement coverage provided by and the 
  2.35  financing of the St. Paul teachers retirement fund association 
  2.36  and its comparison to the statewide teachers retirement 
  3.1   association. 
  3.2      Subd. 3.  [DECISION ON FUTURE TEACHER RETIREMENT COVERAGE 
  3.3   MECHANISM.] (a) On or before December 15, 1997, the board of 
  3.4   education for independent school district No. 625 shall decide 
  3.5   on the future teacher retirement coverage mechanism for teachers 
  3.6   employed by this district. 
  3.7      (b) The board of education may decide to retain the St. 
  3.8   Paul teachers retirement fund association as the future 
  3.9   retirement coverage mechanism for teachers employed by the 
  3.10  district or the board of education may decide to utilize the 
  3.11  statewide teachers retirement association as the future 
  3.12  retirement coverage mechanism for teachers employed by this 
  3.13  district.  
  3.14     (c) If the board of education elects to retain the St. Paul 
  3.15  teachers retirement fund association, article 2 applies to the 
  3.16  future retirement coverage of teachers employed by independent 
  3.17  school district No. 625.  If the board of education elects to 
  3.18  utilize the statewide teachers retirement association, articles 
  3.19  3 and 4 apply to the future retirement coverage of teachers 
  3.20  employed by independent school district No. 625.  If the board 
  3.21  of education fails to make an election under this subdivision, 
  3.22  the administrative responsibilities, with respect to the St. 
  3.23  Paul teachers retirement fund association benefit plan and fund, 
  3.24  transfer from the board of trustees and secretary-treasurer of 
  3.25  the St. Paul teachers retirement fund association to the board 
  3.26  of trustees and executive director of the statewide teacher 
  3.27  retirement association as of June 30, 1998. 
  3.28     Subd. 4.  [NOTIFICATION REQUIREMENT.] (a) Upon making its 
  3.29  decision required under subdivision 3, the board of education 
  3.30  for independent school district No. 625 must notify the 
  3.31  following of its decision: 
  3.32     (1) the commissioner of finance; 
  3.33     (2) the state auditor; 
  3.34     (3) the executive director of the legislative commission on 
  3.35  pensions and retirement; 
  3.36     (4) the secretary of state; 
  4.1      (5) the executive director of the state board of 
  4.2   investment; 
  4.3      (6) the executive secretary of the St. Paul teachers 
  4.4   retirement fund association; and 
  4.5      (7) the executive director of the statewide teachers 
  4.6   retirement association. 
  4.7      (b) Notification required under paragraph (a) must be made 
  4.8   on or before January 1, 1998.  A failure to provide timely 
  4.9   notification to the commissioner of finance must be deemed to be 
  4.10  a failure to make a decision under subdivision 3, paragraph (c). 
  4.11     Sec. 2.  [EFFECTIVE DATE.] 
  4.12     Section 1 is effective on the day following final enactment.
  4.13                             ARTICLE 2 
  4.14                 RETENTION OF THE ST. PAUL TEACHERS  
  4.15                  RETIREMENT FUND ASSOCIATION FOR 
  4.16                 FUTURE TEACHER RETIREMENT COVERAGE
  4.17     Section 1.  [APPLICATION.] 
  4.18     This article applies if the board of education of 
  4.19  independent school district No. 625 elects to retain the St. 
  4.20  Paul teachers retirement fund association as the future teacher 
  4.21  retirement coverage mechanism for its teachers under article 1, 
  4.22  section 1, subdivision 3. 
  4.23     Sec. 2.  [354A.024] [ST. PAUL TEACHERS RETIREMENT FUND 
  4.24  ASSOCIATION GOVERNING BOARD.] 
  4.25     Subdivision 1.  [APPLICATION.] Notwithstanding any 
  4.26  provision of chapter 317A, section 354A.021, article V, of the 
  4.27  restated articles of incorporation of the teachers retirement 
  4.28  fund association of St. Paul effective July 1, 1978, as amended, 
  4.29  or articles II, sections 4 and 5; III, section 1; and V, section 
  4.30  1, of the restated bylaws of the teachers retirement fund 
  4.31  association of St. Paul effective July 1, 1978, as amended, to 
  4.32  the contrary, relative to the St. Paul teachers retirement fund 
  4.33  association, this section governs the membership composition of 
  4.34  its board of trustees, the terms in office of board members, 
  4.35  board member eligibility, electorate composition and 
  4.36  eligibility, and election procedures. 
  5.1      Subd. 2.  [BOARD OF TRUSTEES COMPOSITION.] The management 
  5.2   of the St. Paul teachers retirement fund association is vested 
  5.3   in a board of 13 trustees.  The board membership is composed of 
  5.4   four ex officio board members, one of whom is the then current 
  5.5   chair of the board of education of independent school district 
  5.6   No. 625, one of whom is the then current vice-chair of the board 
  5.7   of education of independent school district No. 625, one of whom 
  5.8   is a member of the board of education of independent school 
  5.9   district No. 625 as selected by a majority vote of the school 
  5.10  board, and one of whom is the superintendent of independent 
  5.11  school district No. 625, and of nine trustees elected by and 
  5.12  from the members of the St. Paul teachers retirement fund 
  5.13  association as provided in subdivision 4. 
  5.14     Subd. 3.  [BOARD OF TRUSTEES TERMS.] (a) The term of an ex 
  5.15  officio board member is coincidental with that person's term of 
  5.16  office giving rise to the ex officio membership. 
  5.17     (b) The term of an elected member of the board is three 
  5.18  years and until the successor has been elected and qualified.  
  5.19  The term begins and ends on the third Thursday in the month of 
  5.20  January of the applicable year.  The terms of the various 
  5.21  elected members of the board must be evenly staggered. 
  5.22     Subd. 4.  [BOARD MEMBER REPRESENTATION.] (a) Of the nine 
  5.23  trustees elected by and from the members of the St. Paul 
  5.24  teachers retirement fund association, six board members must be 
  5.25  active members of the fund and three board members must be fund 
  5.26  retirement annuitants, disabilitants, or surviving spouse 
  5.27  benefit recipients. 
  5.28     (b) Two active member board positions and one annuity or 
  5.29  benefit recipient board position must be filled at each board of 
  5.30  trustee election.  
  5.31     (c) Only active members may vote for the elected board 
  5.32  member positions representing active members and only retirement 
  5.33  annuitants, disabilitants, and surviving spouse benefit 
  5.34  recipients may vote for the elected board member positions 
  5.35  representing annuity or benefit recipients. 
  5.36     (d) If an elected board member changes membership group 
  6.1   status before the end of the person's term, the person must 
  6.2   resign from the board of trustees.  However, the person may be a 
  6.3   candidate for the appropriate membership group board position in 
  6.4   a subsequent election. 
  6.5      (e) If there is a vacancy in an elected board member 
  6.6   position, the vacancy must be filled by a special election held 
  6.7   for that purpose.  The special election must be conducted in a 
  6.8   manner consistent with this section, and, if not inconsistent 
  6.9   with this section, article IV of the bylaws of the St. Paul 
  6.10  teachers retirement fund association in effect on the date of 
  6.11  enactment. 
  6.12     Subd. 5.  [ELECTIONS BY MAIL BALLOT.] (a) Voting for 
  6.13  elected board members must be conducted using paper ballots, 
  6.14  which must be mailed by the chief administrative officers of the 
  6.15  fund to eligible members and which must be returned by mail. 
  6.16     (b) Return envelopes for ballots may not have the postage 
  6.17  paid by the fund unless all return envelopes for ballots are so 
  6.18  treated.  Return envelopes for ballots may not have the postage 
  6.19  paid by any candidate for a board member position or paid on 
  6.20  behalf of any candidate for a board member position. 
  6.21     (c) The ballot for a regular election must be provided to 
  6.22  eligible members by November 1 and must be returned with a 
  6.23  postmark no later than midnight of the Friday of the third week 
  6.24  of November.  In the event of a vacancy in an elected board 
  6.25  member position, the ballot for a special election must be 
  6.26  provided to eligible members within three weeks after the 
  6.27  vacancy and must be returned by eligible voting members with a 
  6.28  postmark no later than midnight of the Friday of the fourth full 
  6.29  week following the vacancy. 
  6.30     Subd. 6.  [SECRETARY-TREASURER NOT TO BE BOARD MEMBER.] (a) 
  6.31  Effective on January 19, 1998, the person who holds the position 
  6.32  of secretary of the St. Paul teachers retirement fund 
  6.33  association and the person who holds the position of treasurer 
  6.34  of the St. Paul teachers retirement fund association or the 
  6.35  person who holds the combined position of secretary-treasurer of 
  6.36  the St. Paul teachers retirement fund association may not also 
  7.1   be an elected board member of the fund association. 
  7.2      (b) The chief administrative officer of the St. Paul 
  7.3   teachers retirement fund association must be known as the 
  7.4   executive director of the fund.  
  7.5      Subd. 7.  [QUORUM REQUIREMENT.] The board of trustees may 
  7.6   not take any action unless a minimum of seven trustees are in 
  7.7   attendance at the meeting, including at least three ex officio 
  7.8   board members. 
  7.9      Subd. 8.  [ARTICLE AND BYLAW AMENDMENTS AUTHORIZED.] At the 
  7.10  next annual meeting of the St. Paul teachers retirement fund 
  7.11  association or at a special meeting of the association called by 
  7.12  the board of trustees for that purpose, the association may 
  7.13  consider and adopt any amendments to its articles of 
  7.14  incorporation or bylaws needed to conform or implement this 
  7.15  section. 
  7.16     Subd. 9.  [APPLICATION; EFFECTIVE DATE.] This section is 
  7.17  effective January 1, 1998, without any requirement that the 
  7.18  provision be approved at an annual or special membership meeting 
  7.19  of the association. 
  7.20     Sec. 3.  Minnesota Statutes 1996, section 354A.08, is 
  7.21  amended to read: 
  7.22     354A.08 [AUTHORIZED INVESTMENTS.] 
  7.23     (a) A teachers retirement fund association other than the 
  7.24  St. Paul teachers retirement fund association may receive, hold, 
  7.25  and dispose of real estate or personal property acquired by it, 
  7.26  whether the acquisition was by purchase, or any other lawful 
  7.27  means, as provided in this chapter or in the association's 
  7.28  articles of incorporation.  In addition to other authorized real 
  7.29  estate investments, an association may also invest funds in 
  7.30  Minnesota situs nonfarm real estate ownership interests or loans 
  7.31  secured by mortgages or deeds of trust. 
  7.32     (b) The St. Paul teachers retirement fund association must 
  7.33  invest the assets of its retirement fund solely in a manner 
  7.34  consistent with sections 356A.04 and 356A.06, subdivisions 1, 2, 
  7.35  3, 4, 5, 7, 8, and 9.  Investments required before January 1, 
  7.36  1998, which are not consistent with those provisions must be 
  8.1   liquidated on or before January 1, 1998. 
  8.2      Sec. 4.  Minnesota Statutes 1996, section 354A.12, 
  8.3   subdivision 1, is amended to read: 
  8.4      Subdivision 1.  [EMPLOYEE CONTRIBUTIONS.] (a) The 
  8.5   contribution required to be paid by each member of a teachers 
  8.6   retirement fund association ~~shall not be less than~~ is the 
  8.7   percentage of total salary specified below for the applicable 
  8.8   association and program: 
  8.9        Association and Program              Percentage of
  8.10                                            Total Salary
  8.11  Duluth teachers retirement
  8.12    association
  8.13            old law and new law
  8.14            coordinated programs              5.5 percent
  8.15  Minneapolis teachers retirement
  8.16    association
  8.17            basic program                     8.5 percent
  8.18            coordinated program               4.5 percent
  8.19  St. Paul teachers retirement
  8.20    association
  8.21            basic program                     ~~8~~ 10.5 percent
  8.22            coordinated program               ~~4.5~~ 6.5 percent
  8.23     (b) Contributions ~~shall~~ must be made by deduction from 
  8.24  salary by the applicable school district and must be remitted by 
  8.25  the applicable school district directly to the respective 
  8.26  teachers retirement fund association at least once each 
  8.27  month for each teacher retirement fund association other than 
  8.28  the St. Paul teachers retirement fund association and within 
  8.29  seven days of the end of the payroll period for the St. Paul 
  8.30  teachers retirement fund association. 
  8.31     Sec. 5.  Minnesota Statutes 1996, section 354A.12, 
  8.32  subdivision 2, is amended to read: 
  8.33     Subd. 2.  [RETIREMENT CONTRIBUTION LEVY DISALLOWED.] (a) 
  8.34  Except as provided in subdivision 3b and in section 423A.02, 
  8.35  subdivision 3, with respect to the city of Minneapolis and 
  8.36  special school district No. 1 ~~and in section 423A.02,~~ 
  9.1   ~~subdivision 3, with respect to independent school district No.~~ 
  9.2   ~~625~~, notwithstanding any law to the contrary, levies for 
  9.3   teachers retirement fund associations in cities of the first 
  9.4   class other than the St. Paul teachers retirement fund 
  9.5   association, including levies for any employer social security 
  9.6   taxes for teachers covered by the Duluth teachers retirement 
  9.7   fund association or the Minneapolis teachers retirement fund 
  9.8   association ~~or the St. Paul teachers retirement fund~~ 
  9.9   ~~association,~~ are disallowed. 
  9.10     (b) Independent school district No. 625 shall annually 
  9.11  impose a levy on the taxable property of the district in an 
  9.12  amount equal to the additional employer contribution required 
  9.13  under subdivision 2a, paragraph (a), clause (6). 
  9.14     Sec. 6.  Minnesota Statutes 1996, section 354A.12, 
  9.15  subdivision 2a, is amended to read: 
  9.16     Subd. 2a.  [EMPLOYER REGULAR AND ADDITIONAL CONTRIBUTION 
  9.17  RATES.] (a) The employing units ~~shall~~ must make the following 
  9.18  employer contributions to teachers retirement fund associations: 
  9.19     (1) for any coordinated member of a teachers retirement 
  9.20  fund association in a city of the first class, the employing 
  9.21  unit ~~shall~~ must pay the employer social security taxes in 
  9.22  accordance with section 355.46, subdivision 3, clause (b); 
  9.23     (2) for any coordinated member of one of the following 
  9.24  teachers retirement fund associations in a city of the first 
  9.25  class, the employing unit ~~shall~~ must make a regular employer 
  9.26  contribution to the respective retirement fund association in an 
  9.27  amount equal to the designated percentage of the salary of the 
  9.28  coordinated member as provided below: 
  9.29       Duluth teachers retirement
  9.30       fund association                        4.50 percent
  9.31       Minneapolis teachers retirement
  9.32       fund association                        4.50 percent
  9.33       St. Paul teachers retirement
  9.34       fund association                        4.50 percent;
  9.35     (3) for any basic member of one of the following teachers 
  9.36  retirement fund associations in a city of the first class, the 
 10.1   employing unit ~~shall~~ must make a regular employer contribution 
 10.2   to the respective retirement fund in an amount equal to the 
 10.3   designated percentage of the salary of the basic member as 
 10.4   provided below: 
 10.5        Minneapolis teachers retirement
 10.6        fund association                        8.50 percent
 10.7        St. Paul teachers retirement
 10.8        fund association                        8.00 percent
 10.9      (4) for a basic member of a teachers retirement fund 
 10.10  association in a city of the first class, the employing unit 
 10.11  ~~shall~~ must make an additional employer contribution to the 
 10.12  respective fund in an amount equal to the designated percentage 
 10.13  of the salary of the basic member, as provided below: 
 10.14       Minneapolis teachers retirement 
 10.15       fund association 
 10.16        ~~July 1, 1993 - June 30, 1994~~         ~~4.85 percent~~ 
 10.17        ~~July 1, 1994, and thereafter~~         3.64 percent 
 10.18       St. Paul teachers retirement 
 10.19       fund association 
 10.20        ~~July 1, 1993 - June 30, 1995~~         ~~4.63 percent~~ 
 10.21        ~~July 1, 1995, and thereafter~~         3.64 percent 
 10.22     (5) for a coordinated member of a teachers retirement fund 
 10.23  association in a city of the first class, the employing unit 
 10.24  ~~shall~~ must make an additional employer contribution to the 
 10.25  respective fund in an amount equal to the applicable percentage 
 10.26  of the coordinated member's salary, as provided below: 
 10.27       Duluth teachers retirement
 10.28       fund association                   1.29 percent 
 10.29       Minneapolis teachers retirement
 10.30       fund association
 10.31        ~~July 1, 1993 - June 30, 1994~~      ~~0.50 percent~~ 
 10.32        ~~July 1, 1994, and thereafter~~      3.64 percent 
 10.33       St. Paul teachers retirement 
 10.34       fund association 
 10.35        ~~July 1, 1993 - June 30, 1994~~      ~~0.50 percent~~ 
 10.36        ~~July 1, 1994 - June 30, 1995~~      ~~1.50 percent~~ 
 11.1         ~~July 1, 1995, and thereafter~~      3.64 percent
 11.2      (6) with respect to any member of the St. Paul teachers 
 11.3   retirement fund association, independent school district No. 625 
 11.4   must make an additional employer contribution to the St. Paul 
 11.5   teachers retirement fund association beyond the contributions 
 11.6   required under clauses (4) and (5) in an amount equal to the 
 11.7   percentage of covered pay indicated as the contribution 
 11.8   deficiency in the actuarial valuation of the association 
 11.9   prepared under section 356.215 by the consulting actuary 
 11.10  retained by the legislative commission on pensions and 
 11.11  retirement as of the first day of the fiscal year immediately 
 11.12  prior to the current fiscal year. 
 11.13     (b) The regular and additional employer contributions must 
 11.14  be remitted directly to the respective teachers retirement fund 
 11.15  association at least once each month.  For the St. Paul teachers 
 11.16  retirement fund association, the regular and additional 
 11.17  contribution must be remitted directly to the retirement fund 
 11.18  association within seven days of the end of each payroll 
 11.19  period.  Delinquent amounts are payable with interest under the 
 11.20  procedure in subdivision 1a. 
 11.21     (c) Payments of regular and additional employer 
 11.22  contributions for school district or technical college employees 
 11.23  who are paid from normal operating funds must be made from the 
 11.24  appropriate fund of the district or technical college. 
 11.25     Sec. 7.  Minnesota Statutes 1996, section 354A.12, 
 11.26  subdivision 3d, is amended to read: 
 11.27     Subd. 3d.  [SUPPLEMENTAL ADMINISTRATIVE EXPENSE 
 11.28  ASSESSMENT.] (a) The active and retired membership of the 
 11.29  Minneapolis teachers retirement fund association and of the St. 
 11.30  Paul teachers retirement fund association is responsible for 
 11.31  defraying supplemental administrative expenses other than 
 11.32  investment expenses of the respective teacher retirement fund 
 11.33  association. 
 11.34     (b) Investment expenses of the teachers retirement fund 
 11.35  association are those expenses incurred by or on behalf of the 
 11.36  retirement fund in connection with the investment of the assets 
 12.1   of the retirement fund other than investment security 
 12.2   transaction costs.  Other administrative expenses are all 
 12.3   expenses incurred by or on behalf of the retirement fund for all 
 12.4   other retirement fund functions other than the investment of 
 12.5   retirement fund assets.  Investment and other administrative 
 12.6   expenses must be accounted for using generally accepted 
 12.7   accounting principles and in a manner consistent with the 
 12.8   comprehensive annual financial report of the teachers retirement 
 12.9   fund association for the immediately previous fiscal year under 
 12.10  section 356.20.  For the St. Paul teachers retirement fund 
 12.11  association, investment expenses also are limited to those 
 12.12  expenses that are directly paid from the investment income of 
 12.13  the retirement fund or from the invested assets of the 
 12.14  retirement fund. 
 12.15     (c) Supplemental administrative expenses other than 
 12.16  investment expenses of a first class city teacher retirement 
 12.17  fund association are those expenses for the fiscal year that 
 12.18  exceed the amount computed by applying the most recent 
 12.19  percentage of pay administrative expense amount, other than 
 12.20  investment expenses, for the teachers retirement association 
 12.21  governed by chapter 354 to the covered payroll of the respective 
 12.22  teachers retirement fund association for the fiscal year. 
 12.23     (d) The board of trustees of each first class city teachers 
 12.24  retirement fund association shall allocate the total dollar 
 12.25  amount of supplemental administrative expenses other than 
 12.26  investment expenses among the various active and retired 
 12.27  membership groups of the teachers retirement fund association 
 12.28  and shall assess the various membership groups their respective 
 12.29  share of the supplemental administrative expenses other than 
 12.30  investment expenses, in amounts determined by the board of 
 12.31  trustees.  The supplemental administrative expense assessments 
 12.32  must be paid by the membership group in a manner determined by 
 12.33  the board of trustees of the respective teachers retirement 
 12.34  association.  Supplemental administrative expenses payable by 
 12.35  the active members of the pension plan must be picked up by the 
 12.36  employer in accordance with section 356.62. 
 13.1      (e) With respect to the St. Paul teachers retirement fund 
 13.2   association, the supplemental administrative expense assessment 
 13.3   must be fully disclosed to the various active and retired 
 13.4   membership groups of the teachers retirement fund association.  
 13.5   The chief administrative officer of the St. Paul teachers 
 13.6   retirement fund association shall prepare a supplemental 
 13.7   administrative expense assessment disclosure notice, which must 
 13.8   include the following: 
 13.9      (1) the total amount of administrative expenses of the St. 
 13.10  Paul teachers retirement fund association, the amount of the 
 13.11  investment expenses of the St. Paul teachers retirement fund 
 13.12  association, and the net remaining amount of administrative 
 13.13  expenses of the St. Paul teachers retirement fund association; 
 13.14     (2) the amount of administrative expenses for the St. Paul 
 13.15  teachers retirement fund association that would be equivalent to 
 13.16  the teachers retirement association noninvestment administrative 
 13.17  expense level described in paragraph (c); 
 13.18     (3) the total amount of supplemental administrative 
 13.19  expenses required for assessment calculated under paragraph (c); 
 13.20     (4) the portion of the total amount of the supplemental 
 13.21  administrative expense assessment allocated to each membership 
 13.22  group and the rationale for that allocation; 
 13.23     (5) the manner of collecting the supplemental 
 13.24  administrative expense assessment from each membership group, 
 13.25  the number of assessment payments required during the year, and 
 13.26  the amount of each payment or the procedure used to determine 
 13.27  each payment; and 
 13.28     (6) any other information that the chief administrative 
 13.29  officer determines is necessary to fairly portray the manner in 
 13.30  which the supplemental administrative expense assessment was 
 13.31  determined and allocated. 
 13.32     (f) The disclosure notice must be provided annually in the 
 13.33  annual report of the association. 
 13.34     (g) The supplemental administrative expense assessments 
 13.35  must be deposited in the applicable teachers retirement fund 
 13.36  upon receipt. 
 14.1      (h) Any omitted active membership group assessments that 
 14.2   remain undeducted and unpaid to the teachers retirement fund 
 14.3   association for 90 days must be paid by the respective school 
 14.4   district.  The school district may recover any omitted active 
 14.5   membership group assessment amounts that it has previously 
 14.6   paid.  The teachers retirement fund association shall deduct any 
 14.7   omitted retired membership group assessment amounts from the 
 14.8   benefits next payable after the discovery of the omitted amounts.
 14.9      Sec. 9.  Minnesota Statutes 1996, section 354A.23, 
 14.10  subdivision 2, is amended to read: 
 14.11     Subd. 2.  [ST. PAUL TEACHERS RETIREMENT FUND ASSOCIATION 
 14.12  BASIC PROGRAM.] There is established within the St. Paul 
 14.13  teachers retirement fund association a basic program which ~~shall~~ 
 14.14  ~~be~~ is a continuation of the retirement program in existence 
 14.15  ~~prior to~~ before July 1, 1978, to provide retirement coverage for 
 14.16  teachers who are not covered by any agreement or modification 
 14.17  made between the state and the federal Secretary of Health~~,~~ 
 14.18  ~~Education~~ and ~~Welfare~~ Human Services making the provisions of 
 14.19  the federal old age, survivors and disability insurance act 
 14.20  applicable to certain teachers covered by the teachers 
 14.21  retirement fund association.  The provisions governing the basic 
 14.22  program ~~shall~~ must be the ~~applicable~~ portions of ~~this~~ chapter~~,~~ 
 14.23  ~~the articles of incorporation and bylaws in effect as of March~~ 
 14.24  ~~31, 1976, the amendments to the articles of incorporation and~~ 
 14.25  ~~bylaws adopted subsequent to legislative approval contained in~~ 
 14.26  ~~Laws 1976, chapter 238, section 14, and Laws 1977, chapter 429,~~ 
 14.27  ~~section 60, the provisions of Laws 1977, chapter 429, section~~ 
 14.28  ~~61, and any applicable amendments to the articles of~~ 
 14.29  ~~incorporation or bylaws adopted subsequent to July 1, 1979 in~~ 
 14.30  ~~accordance with the provisions of section 354A.12, subdivision 4~~ 
 14.31  354 applicable to the basic program of the statewide teachers 
 14.32  retirement association, including annual postretirement 
 14.33  adjustments in a compounding percentage amount equal to those 
 14.34  provided under section 11A.18.  
 14.35     Sec. 10.  Minnesota Statutes 1996, section 354A.30, is 
 14.36  amended to read: 
 15.1      354A.30 [MINNEAPOLIS AND ST. PAUL TEACHERS RETIREMENT FUND 
 15.2   ASSOCIATIONS; COORDINATED ~~PROGRAM~~ PROGRAMS.] 
 15.3      Subdivision 1.  [COORDINATED PROGRAMS GENERALLY.] There is 
 15.4   established a coordinated program within the Minneapolis 
 15.5   teachers retirement fund association and a coordinated program 
 15.6   within the St. Paul teachers retirement fund association to 
 15.7   provide retirement coverage for teachers who are covered by an 
 15.8   agreement or modification made between the state and the federal 
 15.9   Secretary of Health~~, Education~~ and ~~Welfare~~ Human Services making 
 15.10  the provisions of the federal Old Age, Survivors and Disability 
 15.11  Insurance Act applicable to certain teachers covered by the 
 15.12  applicable teachers retirement fund association.  
 15.13     Subd. 2.  [MINNEAPOLIS TEACHER COORDINATED PROGRAM.] The 
 15.14  provisions governing the Minneapolis teachers retirement fund 
 15.15  association coordinated program shall be sections 354A.31 to 
 15.16  354A.41 and any other applicable provisions of this chapter.  
 15.17     Subd. 3.  [ST. PAUL TEACHER COORDINATED PROGRAM.] The 
 15.18  provisions governing the St. Paul teachers retirement fund 
 15.19  association coordinated program must be the portions of chapter 
 15.20  354 applicable to the coordinated program of the statewide 
 15.21  teachers retirement association, including annual postretirement 
 15.22  adjustments in a compounding percentage amount equal to those 
 15.23  provided under section 11A.18. 
 15.24     Sec. 11.  Minnesota Statutes 1996, section 354A.31, 
 15.25  subdivision 4, is amended to read: 
 15.26     Subd. 4.  [COMPUTATION OF THE NORMAL COORDINATED RETIREMENT 
 15.27  ANNUITY; MINNEAPOLIS ~~AND ST. PAUL FUNDS~~ TEACHERS RETIREMENT FUND 
 15.28  ASSOCIATION.] (a) This subdivision applies to the 
 15.29  coordinated ~~programs~~ program of the Minneapolis teachers 
 15.30  retirement fund association ~~and the St. Paul teachers retirement~~ 
 15.31  ~~fund association~~.  
 15.32     (b) The normal coordinated retirement annuity shall be an 
 15.33  amount equal to a retiring coordinated member's average salary 
 15.34  multiplied by the retirement annuity formula percentage.  
 15.35  Average salary for purposes of this section shall mean an amount 
 15.36  equal to the average salary upon which contributions were made 
 16.1   for the highest five successive years of service credit, but 
 16.2   which shall not in any event include any more than the 
 16.3   equivalent of 60 monthly salary payments.  Average salary must 
 16.4   be based upon all years of service credit if this service credit 
 16.5   is less than five years. 
 16.6      (c) This paragraph, in conjunction with subdivision 6, 
 16.7   applies to a person who first became a member or a member in a 
 16.8   pension fund listed in section 356.30, subdivision 3, before 
 16.9   July 1, 1989, unless paragraph (d), in conjunction with 
 16.10  subdivision 7, produces a higher annuity amount, in which case 
 16.11  paragraph (d) will apply.  The retirement annuity formula 
 16.12  percentage for purposes of this paragraph is one percent per 
 16.13  year for each year of coordinated service for the first ten 
 16.14  years and 1.5 percent for each year of coordinated service 
 16.15  thereafter.  
 16.16     (d) This paragraph applies to a person who has become at 
 16.17  least 55 years old and who first becomes a member after June 30, 
 16.18  1989, and to any other member who has become at least 55 years 
 16.19  old and whose annuity amount, when calculated under this 
 16.20  paragraph and in conjunction with subdivision 7 is higher than 
 16.21  it is when calculated under paragraph (c), in conjunction with 
 16.22  the provisions of subdivision 6.  The retirement annuity formula 
 16.23  percentage for purposes of this paragraph is 1.5 percent for 
 16.24  each year of coordinated service.  
 16.25     Sec. 12.  Minnesota Statutes 1996, section 354A.36, 
 16.26  subdivision 3, is amended to read: 
 16.27     Subd. 3.  [COMPUTATION OF DISABILITY BENEFIT.] The 
 16.28  coordinated permanent disability benefit is an amount equal to 
 16.29  the normal coordinated retirement annuity computed under section 
 16.30  354A.31, subdivision 4 or 5, whichever applies, based on 
 16.31  allowable service credited to the date of disability but without 
 16.32  any reduction for the commencement of the benefit prior to the 
 16.33  attainment of normal retirement age or age 62 with at least 30 
 16.34  years of service credit as specified in section 354A.31, 
 16.35  subdivision 6.  
 16.36     Sec. 13.  [REPEALER.] 
 17.1      Laws 1994, chapter 565, article 1, section 2, is repealed. 
 17.2      Sec. 14.  [EFFECTIVE DATE.] 
 17.3      Sections 1 to 13 are effective on the day following the 
 17.4   election by the board of education of independent school 
 17.5   district No. 625 to have future retirement coverage for its 
 17.6   teachers provided by the St. Paul teachers retirement fund 
 17.7   association. 
 17.8                              ARTICLE 3 
 17.9                CONSOLIDATION OF THE ST. PAUL TEACHERS 
 17.10                  RETIREMENT FUND ASSOCIATION WITH 
 17.11           THE STATEWIDE TEACHERS RETIREMENT ASSOCIATION 
 17.12     Section 1.  [APPLICATION.] 
 17.13     This article applies if the board of education of 
 17.14  independent school district No. 625 elects to utilize the 
 17.15  statewide teachers retirement association to provide future 
 17.16  retirement coverage of its teachers under article 1, section 1, 
 17.17  subdivision 3. 
 17.18     Sec. 2.  [CONSOLIDATION OF ST. PAUL TEACHERS RETIREMENT 
 17.19  PLAN INTO TEACHERS RETIREMENT FUND.] 
 17.20     Notwithstanding any provision of law to the contrary, as of 
 17.21  July 1, 1998, the St. Paul teachers retirement fund association 
 17.22  must consolidate with the teachers retirement fund as provided 
 17.23  in this article. 
 17.24     Sec. 3.  [TRANSFER OF PENSION PLAN COVERAGE.] 
 17.25     Subdivision 1.  [CURRENT TEACHERS.] (a) As of July 1, 1998, 
 17.26  all teachers employed by independent school district No. 625 
 17.27  during the 1997-1998 school year and all teachers on authorized 
 17.28  leaves of absence from independent school district No. 625 as of 
 17.29  July 1, 1998, cease to be active members of the St. Paul 
 17.30  teachers retirement fund association and cease to have any 
 17.31  further accrual of service credit, rights, or benefits under 
 17.32  that retirement benefit plan and fund. 
 17.33     (b) From and after July 1, 1998, the teachers specified in 
 17.34  paragraph (a) are members of the teachers retirement association 
 17.35  governed by Minnesota Statutes, chapter 354, unless specifically 
 17.36  excluded under Minnesota Statutes, section 354.05, subdivision 
 18.1   2, and must have their past service as a teacher employed by 
 18.2   independent school district No. 625, as indicated in the records 
 18.3   of the St. Paul teachers retirement fund association as of June 
 18.4   30, 1998, credited as allowable and formula service credit in 
 18.5   the teachers retirement fund under Minnesota Statutes, section 
 18.6   354.05, subdivisions 13 and 25. 
 18.7      (c) If a teacher described in paragraph (a) was a basic 
 18.8   program member of the St. Paul teachers retirement fund 
 18.9   association on June 30, 1998, and becomes totally and 
 18.10  permanently disabled after July 1, 1998, the disabled teacher is 
 18.11  entitled to a disability benefit during the course of the 
 18.12  disability in an amount equal to the greater of: 
 18.13     (1) the disability benefit specified in Minnesota Statutes, 
 18.14  section 354.48; or 
 18.15     (2)(i) until the month next following the month in which 
 18.16  the person attains age 65, 75 percent of the teacher's annual 
 18.17  contract salary for the teacher's last full year of service 
 18.18  before the disability, reduced by the amount of any benefits 
 18.19  received from the federal Old Age, Survivors, Disability, and 
 18.20  Health Insurance Program and the amount of any benefits received 
 18.21  under Minnesota Statutes, chapter 176; and 
 18.22     (ii) after the month in which the person attains age 65, 
 18.23  the service pension that the disabled teacher would have been 
 18.24  eligible to receive under the St. Paul teachers retirement fund 
 18.25  association benefit plan in effect on June 30, 1996, excluding 
 18.26  Laws 1985, chapter 259, section 3, computed on the average 
 18.27  salary and the length of service credit that the disabled 
 18.28  teacher would have had if the teacher had continued service in 
 18.29  the person's most recent predisability teaching position during 
 18.30  the period of disability. 
 18.31     Subd. 2.  [FORMER TEACHERS AND INACTIVE FUND MEMBERS.] (a) 
 18.32  As of July 1, 1998, inactive members of the St. Paul teachers 
 18.33  retirement fund association, who have not previously taken a 
 18.34  refund of their accumulated member contributions, retain credit 
 18.35  for their past service as a teacher employed by independent 
 18.36  school district No. 625, as indicated in the records of the 
 19.1   association as of June 30, 1998, and are entitled to receive a 
 19.2   retirement annuity from the teachers retirement association, if 
 19.3   otherwise eligible, upon submission of a valid application, upon 
 19.4   attaining at least the earliest retirement age applicable to the 
 19.5   person under the St. Paul teachers retirement fund association 
 19.6   governing plan law and documents in effect when the person's 
 19.7   active teaching service for independent school district No. 625 
 19.8   terminated, in an amount computed under the governing plan law 
 19.9   and documents, excluding Laws 1985, chapter 259, section 3.  
 19.10  Entitlement to the annuity is forfeited upon an application for 
 19.11  and payment of a refund of accumulated member contributions. 
 19.12     (b) Persons who were formerly employed as teachers by 
 19.13  independent school district No. 625 and who previously took a 
 19.14  refund of accumulated member contributions, if otherwise 
 19.15  eligible to repay the refund, upon repayment, are entitled to 
 19.16  have their past service credited by the St. Paul teachers 
 19.17  retirement fund association as indicated in the records of the 
 19.18  association as of June 30, 1998, and are entitled to receive a 
 19.19  retirement annuity from the teachers retirement association as 
 19.20  provided in paragraph (a). 
 19.21     Subd. 3.  [NEW EMPLOYEES.] Persons first employed as a 
 19.22  teacher by independent school district No. 625 on or after July 
 19.23  1, 1998, are members of the teachers retirement fund under 
 19.24  Minnesota Statutes, chapter 354, unless specifically excluded 
 19.25  under Minnesota Statutes, section 354.05, subdivision 2. 
 19.26     Subd. 4.  [EXISTING RETIRED MEMBERS AND BENEFIT 
 19.27  RECIPIENTS.] (a) As of July 1, 1998, the liability for the 
 19.28  payment of all service pensions and retirement annuities, 
 19.29  disability benefits, membership annuities, survivor benefits, 
 19.30  family benefits, and refunds of accumulated member contributions 
 19.31  for retired members and other benefit recipients of the St. Paul 
 19.32  teachers retirement fund association, as provided in the 
 19.33  retirement association governing plan law and documents in 
 19.34  effect when the person's active teaching service for independent 
 19.35  school district No. 625 terminated, but excluding Laws 1985, 
 19.36  chapter 259, section 3, is transferred to the teachers 
 20.1   retirement association. 
 20.2      (b) The required actuarial reserves for all service 
 20.3   pensions, including any applicable basic program deceased 
 20.4   retired member survivor benefit, and retirement annuities in 
 20.5   effect on June 30, 1998, and recomputed under section 5, must be 
 20.6   determined using a five percent postretirement interest 
 20.7   assumption and the teachers retirement association mortality 
 20.8   table and must be transferred as soon as practicable after July 
 20.9   1, 1998, to the Minnesota postretirement investment fund under 
 20.10  Minnesota Statutes, section 11A.18.  Interest on late transfers 
 20.11  is payable as provided in Minnesota Statutes, section 11A.18, 
 20.12  subdivision 6, paragraph (b).  All persons who began receiving a 
 20.13  service pension or retirement annuity from the St. Paul teachers 
 20.14  retirement fund association before June 1, 1998, are eligible 
 20.15  for a full or partial postretirement adjustment, whichever 
 20.16  applies, on January 1, 1999, as provided in Minnesota Statutes, 
 20.17  section 11A.18, subdivision 9. 
 20.18     Subd. 5.  [EXISTING DEFERRED MEMBERS.] (a) A former member 
 20.19  of the St. Paul teachers retirement fund association as of July 
 20.20  1, 1998, is entitled to receive a retirement annuity from the 
 20.21  teachers retirement association if the person: 
 20.22     (1) met the association's minimum period of service vesting 
 20.23  requirement in effect when active teaching service with 
 20.24  independent school district No. 625 terminated; 
 20.25     (2) either has not received a refund of accumulated member 
 20.26  contributions or has repaid a previously received refund under 
 20.27  any applicable law before July 1, 1998; and 
 20.28     (3) has not begun receiving a retirement annuity or service 
 20.29  pension from the St. Paul teachers retirement fund association 
 20.30  as of July 1, 1998. 
 20.31     (b) The retirement annuity is payable, upon submission of a 
 20.32  valid application, upon attaining at least the earliest 
 20.33  retirement age applicable to the person under the St. Paul 
 20.34  teachers retirement fund association governing plan law and 
 20.35  documents in effect when the person's active teaching service 
 20.36  for independent school district No. 625 terminated, in an amount 
 21.1   computed under the governing plan law and documents, excluding 
 21.2   Laws 1985, chapter 259, section 3.  As of the date on which the 
 21.3   retirement annuity begins, the required reserves for the 
 21.4   annuity, including any applicable deferred annuities 
 21.5   augmentation, must be transferred to the Minnesota 
 21.6   postretirement investment fund as provided in subdivision 4 and 
 21.7   Minnesota Statutes, section 354.63.  Interest on late transfers 
 21.8   is payable as provided in Minnesota Statutes, section 11A.18, 
 21.9   subdivision 6, paragraph (b).  A deferred retiree under this 
 21.10  subdivision is not eligible to elect an optional annuity form 
 21.11  under Minnesota Statutes, section 354.45, but may elect an 
 21.12  optional annuity form under the St. Paul teachers retirement 
 21.13  fund association governing plan law and documents in effect on 
 21.14  June 30, 1996. 
 21.15     Sec. 4.  [TERMINATION OF ST. PAUL TEACHERS RETIREMENT FUND 
 21.16  AND ASSOCIATION.] 
 21.17     Subdivision 1.  [TRANSFER OF ASSETS.] (a) On June 30, 1998, 
 21.18  the board of trustees and the executive secretary of the St. 
 21.19  Paul teachers retirement fund association shall execute the 
 21.20  documents, effective July 1, 1998, necessary to transfer the 
 21.21  legal title to the entire assets of the fund and association to 
 21.22  the teachers retirement association. 
 21.23     (b) Except for real estate investments in which the St. 
 21.24  Paul teachers retirement fund association has a direct equity 
 21.25  position, for real estate loans that do not comply with 
 21.26  Minnesota Statutes, section 11A.24, subdivision 4, clause (4), 
 21.27  or subdivision 6, paragraphs (a), clause (2), and (b), and for 
 21.28  real estate-related participation loan receivables, the assets 
 21.29  of the St. Paul teachers retirement fund association may be 
 21.30  transferred from the St. Paul teachers retirement fund 
 21.31  association to the teachers retirement association as investment 
 21.32  securities, where applicable, rather than as cash.  The assets 
 21.33  that are ineligible for transfer as investment securities must 
 21.34  be sold at fair market value by the St. Paul teachers retirement 
 21.35  fund association before June 30, 1998, and the proceeds of that 
 21.36  sale transferred to the teachers retirement association.  If an 
 22.1   asset required for sale is not sold before June 30, 1998, or if 
 22.2   the market value of an asset required for sale was written down 
 22.3   to less than 20 percent of its original cost value since July 1, 
 22.4   1988, ownership of the asset transfers to independent school 
 22.5   district No. 625 on June 30, 1998, and the district shall 
 22.6   transfer cash to the teachers retirement association on July 1, 
 22.7   1998, equal to the value of the asset either at original cost or 
 22.8   at market value as of June 30, 1994, whichever is greater. 
 22.9      (c) Any accounts payable from the St. Paul teachers 
 22.10  retirement fund association also must be transferred to the 
 22.11  teachers retirement association.  The teachers retirement 
 22.12  association is the successor in interest to all claims for and 
 22.13  against the St. Paul teachers retirement fund association with 
 22.14  respect to the fund, except any claim against the St. Paul 
 22.15  teachers retirement fund association or any person connected 
 22.16  with the fund association in a fiduciary capacity, based on any 
 22.17  act or acts by that person not done in good faith and 
 22.18  constituting a breach of the person's obligation as a fiduciary 
 22.19  under Minnesota Statutes, chapter 356A, or common law.  As the 
 22.20  successor in interest, the teachers retirement association may 
 22.21  assert any applicable defense in any legal proceeding that the 
 22.22  St. Paul teachers retirement fund association would otherwise 
 22.23  have been entitled to assert. 
 22.24     (d) If any St. Paul teachers retirement fund association 
 22.25  assets transferred as securities are not authorized investments 
 22.26  under Minnesota Statutes, sections 11A.09, 11A.24, and 356A.06, 
 22.27  subdivision 7, the securities may be retained by the state board 
 22.28  of investment until June 30, 1999.  
 22.29     (e) Notwithstanding any provision of Minnesota Statutes, 
 22.30  sections 11A.18 and 354.63, to the contrary, the transfers to 
 22.31  the Minnesota postretirement investment fund under section 3, 
 22.32  subdivision 4, may be made from appropriate transferred 
 22.33  investment securities, cash, or a combination, at the discretion 
 22.34  of the state board of investment. 
 22.35     Subd. 2.  [TRANSFER OF RECORDS.] On July 1, 1998, the 
 22.36  executive secretary of the St. Paul teachers retirement fund 
 23.1   association must transfer to the teachers retirement association 
 23.2   all records and documents relating to the retirement fund and 
 23.3   association. 
 23.4      Subd. 3.  [TERMINATION OF RETIREMENT FUND AND 
 23.5   ASSOCIATION.] (a) As of July 1, 1998, following the transfer of 
 23.6   liabilities, assets, and records to the teachers retirement 
 23.7   association, the St. Paul teachers retirement fund association 
 23.8   ceases to exist as a legal entity. 
 23.9      (b) In winding up the affairs of the St. Paul teachers 
 23.10  retirement fund association, the executive secretary shall 
 23.11  notify in writing the secretary of the federal Department of the 
 23.12  Treasury, the Minnesota state auditor, and the Minnesota 
 23.13  secretary of state of the termination of the fund and the 
 23.14  association and of the transfer of pension coverage and 
 23.15  obligations of the former fund and association to the statewide 
 23.16  teachers retirement association. 
 23.17     Subd. 4.  [REMAINING CONTRACTUAL OBLIGATIONS.] Between the 
 23.18  date of enactment of this act and June 30, 1998, the board and 
 23.19  the executive secretary of the St. Paul teachers retirement fund 
 23.20  association shall undertake all appropriate steps to terminate 
 23.21  any obligation of the retirement fund association under contract 
 23.22  to vendors, consultants, and other third parties in existence on 
 23.23  or before June 30, 1998.  For any contract that cannot be 
 23.24  terminated or concluded by June 30, 1998, the executive director 
 23.25  of the teachers retirement association shall undertake to 
 23.26  negotiate a mutually agreeable settlement with the other party 
 23.27  or parties to the contract.  Any contract settlement costs 
 23.28  incurred by the teachers retirement association resulting from 
 23.29  these negotiations must be reimbursed by independent school 
 23.30  district No. 625 within 30 days of the certification of the 
 23.31  amount to the chief administrative officer of independent school 
 23.32  district No. 625 by the executive director of the teachers 
 23.33  retirement association. 
 23.34     Sec. 5.  [RECOMPUTATION OF RETIREMENT BENEFITS.] 
 23.35     (a) The service pension, retirement annuity, disability 
 23.36  benefit, or survivor benefit of each retiree or benefit 
 24.1   recipient having that status as of June 30, 1998, must be 
 24.2   recomputed under this section. 
 24.3      (b) The recomputed monthly pension, annuity, or benefit is 
 24.4   the sum of the following: 
 24.5      (1) the amount of the person's St. Paul teachers retirement 
 24.6   fund association monthly pension, annuity, or benefit payable 
 24.7   for the month of June 1998, including any optional payment 
 24.8   schedule benefit amount under Minnesota Statutes, section 
 24.9   356.86, subdivision 4, or Laws 1991, chapter 67, section 1, 
 24.10  subdivision 3, and including any additional annuity amount under 
 24.11  Laws 1990, chapter 570, article 7, section 4; 
 24.12     (2) 1/12 of any lump sum postretirement adjustment paid by 
 24.13  the St. Paul teachers retirement fund association under 
 24.14  Minnesota Statutes, section 356.86, on December 1, 1996, if the 
 24.15  optional payment schedule under Minnesota Statutes, section 
 24.16  356.86, subdivision 4, is not applicable; 
 24.17     (3) 1/12 of any lump sum postretirement adjustment paid by 
 24.18  the St. Paul teachers retirement fund association under Laws 
 24.19  1991, chapter 67, on December 1, 1996, if the optional payment 
 24.20  schedule under Laws 1991, chapter 67, section 1, subdivision 3, 
 24.21  is not applicable; and 
 24.22     (4) unless the person elected an additional annuity amount 
 24.23  under Laws 1990, chapter 570, article 7, section 4, 1/12 of the 
 24.24  most recent lump sum investment-related postretirement bonus 
 24.25  payment paid by the St. Paul teachers retirement fund 
 24.26  association before July 1, 1998, to the person, or if the person 
 24.27  had less than three years of pension, annuity, or benefit 
 24.28  receipt, 33.3 percent for a person with one year of receipt or 
 24.29  66.7 percent for a person with two years of receipt, whichever 
 24.30  applies, of the lump sum bonus payment to a bonus recipient 
 24.31  initially qualifying for the most recent lump sum 
 24.32  investment-related postretirement bonus payment before July 1, 
 24.33  1998, who had an equivalent length of active St. Paul teachers 
 24.34  retirement fund association service credit to the person, 
 24.35  rounded to the nearest full year. 
 24.36     Sec. 6.  [DISPOSITION OF CERTAIN RETIREMENT FUND 
 25.1   EMPLOYEES.] 
 25.2      Any employee of the St. Paul teachers retirement fund 
 25.3   association on June 30, 1998, is eligible for an employment 
 25.4   preference for subsequent employment by the teachers retirement 
 25.5   association, by the state of Minnesota, or by independent school 
 25.6   district No. 625.  The employment preference is an increase in 
 25.7   any employment rating system used for evaluating and ranking 
 25.8   employment candidates, whether civil service or otherwise, in an 
 25.9   amount equal to one percent of the person's pre-preference 
 25.10  evaluation result or ranking per full year of employment by the 
 25.11  St. Paul teachers retirement fund association, not to exceed 
 25.12  five years of employment.  The preference may be used by an 
 25.13  eligible employee once.  The preference may only be used if the 
 25.14  person meets the minimum employment evaluation or ranking 
 25.15  criteria of that employing utility without regard to the 
 25.16  preference.  If the employing entity fills the employment 
 25.17  position for which a former St. Paul teachers retirement fund 
 25.18  association employee has applied and does not employ the 
 25.19  applicant utilizing the preference, the employing entity must 
 25.20  notify the applicant in writing of the reason or reasons for not 
 25.21  employing the applicant. 
 25.22     Sec. 7.  [EFFECTIVE DATE.] 
 25.23     Sections 1 to 6 are effective on the day following the 
 25.24  election by the board of education of independent school 
 25.25  district No. 625 to have future retirement coverage for its 
 25.26  teachers provided by the statewide teachers retirement 
 25.27  association. 
 25.28                             ARTICLE 4 
 25.29        CONFORMING AMENDMENTS; ST. PAUL TEACHERS RETIREMENT 
 25.30          FUND ASSOCIATION - STATEWIDE TEACHERS RETIREMENT 
 25.31                     ASSOCIATION CONSOLIDATION   
 25.32     Section 1.  Minnesota Statutes 1996, section 3.85, 
 25.33  subdivision 11, is amended to read: 
 25.34     Subd. 11.  [VALUATIONS AND REPORTS TO LEGISLATURE.] (a) The 
 25.35  commission shall contract with an established actuarial 
 25.36  consulting firm to conduct annual actuarial valuations for the 
 26.1   retirement plans named in paragraph (b).  The contract must 
 26.2   include provisions for performing cost analyses of proposals for 
 26.3   changes in benefit and funding policies.  
 26.4      (b) The contract for actuarial valuation must include the 
 26.5   following retirement plans:  
 26.6      (1) the teachers retirement plan, teachers retirement 
 26.7   association; 
 26.8      (2) the general state employees retirement plan, Minnesota 
 26.9   state retirement system; 
 26.10     (3) the correctional employees retirement plan, Minnesota 
 26.11  state retirement system; 
 26.12     (4) the state patrol retirement plan, Minnesota state 
 26.13  retirement system; 
 26.14     (5) the judges retirement plan, Minnesota state retirement 
 26.15  system; 
 26.16     (6) the Minneapolis employees retirement plan, Minneapolis 
 26.17  employees retirement fund; 
 26.18     (7) the public employees retirement plan, public employees 
 26.19  retirement association; 
 26.20     (8) the public employees police and fire plan, public 
 26.21  employees retirement association; 
 26.22     (9) the Duluth teachers retirement plan, Duluth teachers 
 26.23  retirement fund association; 
 26.24     (10) the Minneapolis teachers retirement plan, Minneapolis 
 26.25  teachers retirement fund association; 
 26.26     (11) ~~the St. Paul teachers retirement plan, St. Paul~~ 
 26.27  ~~teachers retirement fund association;~~ 
 26.28     ~~(12)~~ the legislators retirement plan, Minnesota state 
 26.29  retirement system; 
 26.30     ~~(13)~~ (12) the elective state officers retirement plan, 
 26.31  Minnesota state retirement system; and 
 26.32     ~~(14)~~ (13) the public employees local government 
 26.33  correctional service retirement plan, public employees 
 26.34  retirement association, if there are any participants in that 
 26.35  plan.  
 26.36     (c) The contract must specify completion of annual 
 27.1   actuarial valuation calculations on a fiscal year basis with 
 27.2   their contents as specified in section 356.215, and the 
 27.3   standards for actuarial work adopted by the commission.  
 27.4      The contract must specify completion of annual experience 
 27.5   data collection and processing and a quadrennial published 
 27.6   experience study for the plans listed in paragraph (b), clauses 
 27.7   (1), (2), and (7), as provided for in the standards for 
 27.8   actuarial work adopted by the commission.  The experience data 
 27.9   collection, processing, and analysis must evaluate the following:
 27.10     (1) individual salary progression; 
 27.11     (2) rate of return on investments based on current asset 
 27.12  value; 
 27.13     (3) payroll growth; 
 27.14     (4) mortality; 
 27.15     (5) retirement age; 
 27.16     (6) withdrawal; and 
 27.17     (7) disablement.  
 27.18     (d) The actuary retained by the commission shall annually 
 27.19  prepare a report to the legislature, including the commentary on 
 27.20  the actuarial valuation calculations for the plans named in 
 27.21  paragraph (b) and summarizing the results of the actuarial 
 27.22  valuation calculations.  The commission-retained actuary shall 
 27.23  include with the report the actuary's recommendations concerning 
 27.24  the appropriateness of the support rates to achieve proper 
 27.25  funding of the retirement funds by the required funding dates.  
 27.26  The commission-retained actuary shall, as part of the 
 27.27  quadrennial published experience study, include recommendations 
 27.28  to the legislature on the appropriateness of the actuarial 
 27.29  valuation assumptions required for evaluation in the study.  
 27.30     (e) If the actuarial gain and loss analysis in the 
 27.31  actuarial valuation calculations indicates a persistent pattern 
 27.32  of sizable gains or losses, as directed by the commission, the 
 27.33  actuary retained by the commission shall prepare a special 
 27.34  experience study for a plan listed in paragraph (b), clause (3), 
 27.35  (4), (5), (6), (8), (9), (10), (11), (12), or (13)~~, or (14)~~, in 
 27.36  the manner provided for in the standards for actuarial work 
 28.1   adopted by the commission. 
 28.2      (f) The term of the contract between the commission and the 
 28.3   actuary retained by the commission is two years, plus not to 
 28.4   exceed two one-year extensions before competitive bidding.  The 
 28.5   contract is subject to competitive bidding procedures as 
 28.6   specified by the commission. 
 28.7      Sec. 2.  Minnesota Statutes 1996, section 3.85, subdivision 
 28.8   12, is amended to read: 
 28.9      Subd. 12.  [ALLOCATION OF ACTUARIAL COST.] (a) The 
 28.10  commission shall assess each retirement plan specified in 
 28.11  subdivision 11, paragraph (b), the compensation paid to the 
 28.12  actuary retained by the commission for the actuarial valuation 
 28.13  calculations and quadrennial experience studies.  The assessment 
 28.14  is 100 percent of the amount of contract compensation for the 
 28.15  actuarial consulting firm retained by the commission for 
 28.16  actuarial valuation calculations, including the public employees 
 28.17  police and fire plan consolidation accounts of the public 
 28.18  employees retirement association, annual experience data 
 28.19  collection and processing, and quadrennial experience studies.  
 28.20     The portion of the total assessment payable by each 
 28.21  retirement system or pension plan must be determined as follows: 
 28.22     (1) Each pension plan specified in subdivision 11, 
 28.23  paragraph (b), clauses (1) to ~~(14)~~ (13), must pay the following 
 28.24  indexed amount based on its total active, deferred, inactive, 
 28.25  and benefit recipient membership: 
 28.26         up to 2,000 members, inclusive         $2.55 per member 
 28.27         2,001 through 10,000 members           $1.13 per member 
 28.28         over 10,000 members                    $0.11 per member  
 28.29     The amount specified is applicable for the assessment of 
 28.30  the July 1, 1991, to June 30, 1992, fiscal year actuarial 
 28.31  compensation amounts.  For the July 1, 1992, to June 30, 1993, 
 28.32  fiscal year and subsequent fiscal year actuarial compensation 
 28.33  amounts, the amount specified must be increased at the same 
 28.34  percentage increase rate as the implicit price deflator for 
 28.35  state and local government purchases of goods and services for 
 28.36  the 12-month period ending with the first quarter of the 
 29.1   calendar year following the completion date for the actuarial 
 29.2   valuation calculations, as published by the federal Department 
 29.3   of Commerce, and rounded upward to the nearest full cent. 
 29.4      (2) The total per-member portion of the allocation must be 
 29.5   determined, and that total per-member amount must be subtracted 
 29.6   from the total amount for allocation.  Of the remainder dollar 
 29.7   amount, the following per-retirement system and per-pension plan 
 29.8   charges must be determined and the charges must be paid by the 
 29.9   system or plan: 
 29.10     (i) 37.87 percent is the total additional per-retirement 
 29.11  system charge, of which ~~one-seventh~~ one-sixth must be paid by 
 29.12  each retirement system specified in subdivision 11, paragraph 
 29.13  (b), clauses (1), (2), (6), (7), (9), and (10)~~, and (11)~~. 
 29.14     (ii) 62.13 percent is the total additional per-pension plan 
 29.15  charge, of which ~~one-thirteenth~~ 1/12 must be paid by each 
 29.16  pension plan specified in subdivision 11, paragraph (b), clauses 
 29.17  (1) to ~~(13)~~ (12), if there are not any participants in the plan 
 29.18  specified in subdivision 11, paragraph (b), clause ~~(14)~~ (13), or 
 29.19  of which ~~one-fourteenth~~ 1/13 must be paid by each pension plan 
 29.20  specified in subdivision 11, paragraph (b), clauses (1) 
 29.21  to ~~(14)~~ (13), if there are participants in the plan specified in 
 29.22  subdivision 11, paragraph (b), clause ~~(14)~~ (13). 
 29.23     (b) The assessment must be made following the completion of 
 29.24  the actuarial valuation calculations and the experience 
 29.25  analysis.  The amount of the assessment is appropriated from the 
 29.26  retirement fund applicable to the retirement plan.  Receipts 
 29.27  from assessments must be deposited in the state treasury and 
 29.28  credited to the general fund. 
 29.29     Sec. 3.  Minnesota Statutes 1996, section 16A.06, 
 29.30  subdivision 9, is amended to read: 
 29.31     Subd. 9.  [FIRST CLASS CITY TEACHER RETIREMENT FUNDS AIDS 
 29.32  REPORTING.] Each year, on or before April 15, the commissioner 
 29.33  of finance shall report to the chairs of the senate finance 
 29.34  committee and the house ways and means committee on expenditures 
 29.35  for state aids to the Minneapolis ~~and Saint Paul~~ teacher 
 29.36  retirement fund ~~associations~~ association and the statewide 
 30.1   teachers retirement association under sections 354A.12 and 
 30.2   423A.02, subdivision 3.  This report shall include the amounts 
 30.3   expended in the most recent fiscal year and estimates of 
 30.4   expected expenditures for the current and next fiscal year. 
 30.5      Sec. 4.  Minnesota Statutes 1996, section 353.01, 
 30.6   subdivision 2b, is amended to read: 
 30.7      Subd. 2b.  [EXCLUDED EMPLOYEES.] The following public 
 30.8   employees shall not participate as members of the association: 
 30.9      (1) elected public officers, or persons appointed to fill a 
 30.10  vacancy in an elective office, who do not elect to participate 
 30.11  in the association by filing an application for membership; 
 30.12     (2) election officers; 
 30.13     (3) patient and inmate personnel who perform services in 
 30.14  charitable, penal, or correctional institutions of a 
 30.15  governmental subdivision; 
 30.16     (4) employees who are hired for a temporary position under 
 30.17  subdivision 12a, and employees who resign from a nontemporary 
 30.18  position and accept a temporary position within 30 days in the 
 30.19  same governmental subdivision, but not those employees who are 
 30.20  hired for an unlimited period but are serving a probationary 
 30.21  period.  If the period of employment extends beyond six 
 30.22  consecutive months and the employee earns more than $425 from 
 30.23  one governmental subdivision in any one calendar month, the 
 30.24  department head shall report the employee for membership and 
 30.25  require employee deductions be made on behalf of the employee 
 30.26  under section 353.27, subdivision 4. 
 30.27     Membership eligibility of an employee who resigns or is 
 30.28  dismissed from a temporary position and within 30 days accepts 
 30.29  another temporary position in the same governmental subdivision 
 30.30  is determined on the total length of employment rather than on 
 30.31  each separate position.  Membership eligibility of an employee 
 30.32  who holds concurrent temporary and nontemporary positions in one 
 30.33  governmental subdivision is determined by the length of 
 30.34  employment and salary of each separate position; 
 30.35     (5) employees whose actual salary from one governmental 
 30.36  subdivision does not exceed $425 per month, or whose annual 
 31.1   salary from one governmental subdivision does not exceed a 
 31.2   stipulation prepared in advance, in writing, that the salary 
 31.3   must not exceed $5,100 per calendar year or per school year for 
 31.4   school employees for employment expected to be of a full year's 
 31.5   duration or more than the prorated portion of $5,100 per 
 31.6   employment period for employment expected to be of less than a 
 31.7   full year's duration; 
 31.8      (6) employees who are employed by reason of work emergency 
 31.9   caused by fire, flood, storm, or similar disaster; 
 31.10     (7) employees who by virtue of their employment in one 
 31.11  governmental subdivision are required by law to be a member of 
 31.12  and to contribute to any of the plans or funds administered by 
 31.13  the Minnesota state retirement system, the teachers retirement 
 31.14  association, the Duluth teachers retirement fund association, 
 31.15  the Minneapolis teachers retirement association, ~~the St. Paul~~ 
 31.16  ~~teachers retirement fund association,~~ the Minneapolis employees 
 31.17  retirement fund, or any police or firefighters relief 
 31.18  association governed by section 69.77 that has not consolidated 
 31.19  with the public employees retirement association, or any police 
 31.20  or firefighters relief association that has consolidated with 
 31.21  the public employees retirement association but whose members 
 31.22  have not elected the type of benefit coverage provided by the 
 31.23  public employees police and fire fund under sections 353A.01 to 
 31.24  353A.10.  This clause must not be construed to prevent a person 
 31.25  from being a member of and contributing to the public employees 
 31.26  retirement association and also belonging to and contributing to 
 31.27  another public pension fund for other service occurring during 
 31.28  the same period of time.  A person who meets the definition of 
 31.29  "public employee" in subdivision 2 by virtue of other service 
 31.30  occurring during the same period of time becomes a member of the 
 31.31  association unless contributions are made to another public 
 31.32  retirement fund on the salary based on the other service or to 
 31.33  the teachers retirement association by a teacher as defined in 
 31.34  section 354.05, subdivision 2; 
 31.35     (8) persons who are excluded from coverage under the 
 31.36  federal Old Age, Survivors, Disability, and Health Insurance 
 32.1   Program for the performance of service as specified in United 
 32.2   States Code, title 42, section 410(a)(8)(A), as amended through 
 32.3   January 1, 1987, if no irrevocable election of coverage has been 
 32.4   made under section 3121(r) of the Internal Revenue Code of 1954, 
 32.5   as amended; 
 32.6      (9) full-time students who are enrolled and are regularly 
 32.7   attending classes at an accredited school, college, or 
 32.8   university and who are part-time employees as defined by a 
 32.9   governmental subdivision; 
 32.10     (10) resident physicians, medical interns, and pharmacist 
 32.11  residents and pharmacist interns who are serving in a degree or 
 32.12  residency program in public hospitals; 
 32.13     (11) students who are serving in an internship or residency 
 32.14  program sponsored by an accredited educational institution; 
 32.15     (12) persons who hold a part-time adult supplementary 
 32.16  technical college license who render part-time teaching service 
 32.17  in a technical college; 
 32.18     (13) foreign citizens working for a governmental 
 32.19  subdivision with a work permit of less than three years, or an 
 32.20  H-1b visa valid for less than three years of employment.  Upon 
 32.21  notice to the association that the work permit or visa extends 
 32.22  beyond the three-year period, the foreign citizens are eligible 
 32.23  for membership from the date of the extension; 
 32.24     (14) public hospital employees who elected not to 
 32.25  participate as members of the association before 1972 and who 
 32.26  did not elect to participate from July 1, 1988 to October 1, 
 32.27  1988; 
 32.28     (15) except as provided in section 353.86, volunteer 
 32.29  ambulance service personnel, as defined in subdivision 35, but 
 32.30  persons who serve as volunteer ambulance service personnel may 
 32.31  still qualify as public employees under subdivision 2 and may be 
 32.32  members of the public employees retirement association and 
 32.33  participants in the public employees retirement fund or the 
 32.34  public employees police and fire fund on the basis of 
 32.35  compensation received from public employment service other than 
 32.36  service as volunteer ambulance service personnel; and 
 33.1      (16) except as provided in section 353.87, volunteer 
 33.2   firefighters, as defined in subdivision 36, engaging in 
 33.3   activities undertaken as part of volunteer firefighter duties; 
 33.4   provided that a person who is a volunteer firefighter may still 
 33.5   qualify as a public employee under subdivision 2 and may be a 
 33.6   member of the public employees retirement association and a 
 33.7   participant in the public employees retirement fund or the 
 33.8   public employees police and fire fund on the basis of 
 33.9   compensation received from public employment activities other 
 33.10  than those as a volunteer firefighter. 
 33.11     Sec. 5.  Minnesota Statutes 1996, section 354.05, 
 33.12  subdivision 2, is amended to read: 
 33.13     Subd. 2.  [TEACHER.] (a) "Teacher" means: 
 33.14     (1) a person who renders service as a teacher, supervisor, 
 33.15  principal, superintendent, librarian, nurse, counselor, social 
 33.16  worker, therapist, or psychologist in the public schools of the 
 33.17  state located outside of the corporate limits of the ~~cities~~ city 
 33.18  of ~~the first class as those cities were so classified on January~~ 
 33.19  ~~1, 1979~~ Duluth or Minneapolis, or in the state colleges and 
 33.20  universities system, or in any charitable, penal, or 
 33.21  correctional institutions of a governmental subdivision, or who 
 33.22  is engaged in educational administration in connection with the 
 33.23  state public school system, including the state colleges and 
 33.24  university system, but excluding the University of Minnesota, 
 33.25  whether the position be a public office or an employment, not 
 33.26  including members or officers of any general governing or 
 33.27  managing board or body; 
 33.28     (2) an employee of the teachers retirement association 
 33.29  unless the employee is covered by the Minnesota state retirement 
 33.30  system by virtue of prior employment by the association; 
 33.31     (3) a person who renders teaching service on a part-time 
 33.32  basis and who also renders other services for a single employing 
 33.33  unit.  In such cases, the executive director shall determine 
 33.34  whether all or none of the combined service is covered by the 
 33.35  association, however a person whose teaching service comprises 
 33.36  at least 50 percent of the combined employment salary is a 
 34.1   member of the association for all services with the single 
 34.2   employing unit. 
 34.3      (b) The term does not mean: 
 34.4      (1) an employee described in section 352D.02, subdivision 
 34.5   1a, who is hired after the effective date of Laws 1986, chapter 
 34.6   458; 
 34.7      (2) a person who works for a school or institution as an 
 34.8   independent contractor as defined by the Internal Revenue 
 34.9   Service; 
 34.10     (3) a person employed in subsidized on-the-job training, 
 34.11  work experience or public service employment as an enrollee 
 34.12  under the federal Comprehensive Employment and Training Act from 
 34.13  and after March 30, 1978, unless the person has, as of the later 
 34.14  of March 30, 1978, or the date of employment, sufficient service 
 34.15  credit in the retirement association to meet the minimum vesting 
 34.16  requirements for a deferred retirement annuity, or the employer 
 34.17  agrees in writing on forms prescribed by the executive director 
 34.18  to make the required employer contributions, including any 
 34.19  employer additional contributions, on account of that person 
 34.20  from revenue sources other than funds provided under the federal 
 34.21  Comprehensive Training and Employment Act, or the person agrees 
 34.22  in writing on forms prescribed by the executive director to make 
 34.23  the required employer contribution in addition to the required 
 34.24  employee contribution; 
 34.25     (4) a person holding a part-time adult supplementary 
 34.26  technical college license who renders part-time teaching service 
 34.27  in a technical college if (i) the service is incidental to the 
 34.28  regular nonteaching occupation of the person; and (ii) the 
 34.29  applicable technical college stipulates annually in advance that 
 34.30  the part-time teaching service will not exceed 300 hours in a 
 34.31  fiscal year and retains the stipulation in its records; and 
 34.32  (iii) the part-time teaching service actually does not exceed 
 34.33  300 hours in a fiscal year; or 
 34.34     (5) a person exempt from licensure pursuant to section 
 34.35  125.031. 
 34.36     Sec. 6.  Minnesota Statutes 1996, section 354.05, 
 35.1   subdivision 13, is amended to read: 
 35.2      Subd. 13.  [ALLOWABLE SERVICE.] "Allowable service" means: 
 35.3      (1) Any service rendered by a teacher for which on or 
 35.4   before July 1, 1957, the teacher's account in the retirement 
 35.5   fund was credited by reason of employee contributions in the 
 35.6   form of salary deductions, payments in lieu of salary 
 35.7   deductions, or in any other manner authorized by Minnesota 
 35.8   Statutes 1953, sections 135.01 to 135.13, as amended by Laws 
 35.9   1955, chapters 361, 549, 550, 611, or 
 35.10     (2) Any service rendered by a teacher for which on or 
 35.11  before July 1, 1961, the teacher elected to obtain credit for 
 35.12  service by making payments to the fund pursuant to Minnesota 
 35.13  Statutes 1980, section 354.09 and section 354.51, or 
 35.14     (3) Any service rendered by a teacher after July 1, 1957, 
 35.15  for any calendar month when the member receives salary from 
 35.16  which deductions are made, deposited and credited in the fund, 
 35.17  or 
 35.18     (4) Any service rendered by a person after July 1, 1957, 
 35.19  for any calendar month where payments in lieu of salary 
 35.20  deductions are made, deposited and credited into the fund as 
 35.21  provided in Minnesota Statutes 1980, section 354.09, subdivision 
 35.22  4, and section 354.53, or 
 35.23     (5) Any service rendered by a teacher for which the teacher 
 35.24  elected to obtain credit for service by making payments to the 
 35.25  fund pursuant to Minnesota Statutes 1980, section 354.09, 
 35.26  subdivisions 1 and 4, sections 354.50, 354.51, Minnesota 
 35.27  Statutes 1957, section 135.41, subdivision 4, Minnesota Statutes 
 35.28  1971, section 354.09, subdivision 2, or Minnesota Statutes, 1973 
 35.29  Supplement, section 354.09, subdivision 3, or 
 35.30     (6) Both service during years of actual membership in the 
 35.31  course of which contributions were currently made and service in 
 35.32  years during which the teacher was not a member but for which 
 35.33  the teacher later elected to obtain credit by making payments to 
 35.34  the fund as permitted by any law then in effect, or 
 35.35     (7) Any service rendered where contributions were made and 
 35.36  no allowable service credit was established because of the 
 36.1   limitations contained in Minnesota Statutes 1957, section 
 36.2   135.09, subdivision 2, as determined by the ratio between the 
 36.3   amounts of money credited to the teacher's account in a fiscal 
 36.4   year and the maximum retirement contribution allowable for that 
 36.5   year, or 
 36.6      (8) Any service rendered by a teacher to whom article 3, 
 36.7   section 3, subdivision 1, applies before July 1, 1998, that was 
 36.8   credited by the former St. Paul teachers retirement fund 
 36.9   association before July 1, 1998, as reflected in records 
 36.10  transferred from the St. Paul teachers retirement fund 
 36.11  association under article 3, section 4, subdivision 2.  
 36.12     Sec. 7.  Minnesota Statutes 1996, section 354A.011, 
 36.13  subdivision 7, is amended to read: 
 36.14     Subd. 7.  [ASSOCIATION.] "Association" or "teachers 
 36.15  retirement fund association" means the ~~applicable~~ Minneapolis 
 36.16  teachers retirement fund association or the St. Paul teachers 
 36.17  retirement fund association, whichever applies, established 
 36.18  pursuant to this chapter. 
 36.19     Sec. 8.  Minnesota Statutes 1996, section 354A.011, 
 36.20  subdivision 8, is amended to read: 
 36.21     Subd. 8.  [BASIC MEMBER.] "Basic member" means any member 
 36.22  of the Minneapolis teachers retirement fund association who is 
 36.23  not covered by any agreement or modification made between the 
 36.24  state and the federal Secretary of Health~~, Education and Welfare~~ 
 36.25  and Human Services.  
 36.26     Sec. 9.  Minnesota Statutes 1996, section 354A.011, 
 36.27  subdivision 11, is amended to read: 
 36.28     Subd. 11.  [COORDINATED MEMBER.] "Coordinated member" means 
 36.29  any member of the Duluth teachers retirement fund association or 
 36.30  the Minneapolis teachers retirement fund association who is 
 36.31  covered by any agreement or modification made between the state 
 36.32  and the federal Secretary of Health~~, Education~~ and ~~Welfare~~ Human 
 36.33  Services making the provisions of the federal old age, survivors 
 36.34  and disability insurance act applicable to certain teachers 
 36.35  except in the case of a member of the Duluth teachers retirement 
 36.36  fund association, in which it means additionally that the member 
 37.1   either first became a member prior to July 1, 1981, and elected 
 37.2   to be covered by the new law coordinated program of the Duluth 
 37.3   teachers retirement fund association or first became a member on 
 37.4   or subsequent to July 1, 1981. 
 37.5      Sec. 10.  Minnesota Statutes 1996, section 354A.011, 
 37.6   subdivision 15a, is amended to read: 
 37.7      Subd. 15a.  [NORMAL RETIREMENT AGE.] "Normal retirement 
 37.8   age" means age 65 for a person who first became a member of the 
 37.9   coordinated program of the Minneapolis ~~or St. Paul~~ teachers 
 37.10  retirement fund association or the new law coordinated program 
 37.11  of the Duluth teachers retirement fund association or a member 
 37.12  of a pension fund listed in section 356.30, subdivision 3, 
 37.13  before July 1, 1989.  For a person who first became a member of 
 37.14  the coordinated program of the Minneapolis ~~or St. Paul~~ teachers 
 37.15  retirement fund association or the new law coordinated program 
 37.16  of the Duluth teachers retirement fund association after June 
 37.17  30, 1989, normal retirement age means the higher of age 65 or 
 37.18  retirement age, as defined in United States Code, title 42, 
 37.19  section 416(l), as amended.  For a person who is a member of the 
 37.20  basic program of the Minneapolis ~~or St. Paul~~ teachers retirement 
 37.21  fund association or the old law coordinated program of the 
 37.22  Duluth teachers retirement fund association, normal retirement 
 37.23  age means the age at which a teacher becomes eligible for a 
 37.24  normal retirement annuity computed upon meeting the age and 
 37.25  service requirements specified in the applicable provisions of 
 37.26  the articles of incorporation or bylaws of the respective 
 37.27  teachers retirement fund association. 
 37.28     Sec. 11.  Minnesota Statutes 1996, section 354A.021, 
 37.29  subdivision 1, is amended to read: 
 37.30     Subdivision 1.  [ESTABLISHMENT.] There is established a 
 37.31  teachers retirement fund association in ~~each of~~ the ~~cities of~~ 
 37.32  ~~the first class which were so classified on January 1, 1979~~ city 
 37.33  of Duluth and in the city of Minneapolis.  The associations 
 37.34  shall be known respectively as the "Duluth Teachers Retirement 
 37.35  Fund Association~~,~~" and the "Minneapolis Teachers Retirement Fund 
 37.36  Association~~" and the "St. Paul Teachers Retirement Fund~~ 
 38.1   ~~Association~~."  Each association shall be a continuation of the 
 38.2   teachers retirement fund association with the same corporate 
 38.3   name established pursuant to the authorization contained in Laws 
 38.4   1909, chapter 343, section 1.  
 38.5      Sec. 12.  Minnesota Statutes 1996, section 354A.092, is 
 38.6   amended to read: 
 38.7      354A.092 [SABBATICAL LEAVE.] 
 38.8      Any teacher in the coordinated program of ~~either~~ the 
 38.9   Minneapolis teachers retirement fund association ~~or the St.~~  
 38.10  ~~Paul teachers retirement fund association~~ or any teacher in the 
 38.11  new law coordinated program of the Duluth teachers retirement 
 38.12  fund association who is granted a sabbatical leave shall be 
 38.13  entitled to receive allowable service credit in the applicable 
 38.14  association for periods of sabbatical leave.  To obtain the 
 38.15  service credit, the teacher on sabbatical leave shall make an 
 38.16  employee contribution to the applicable association.  No teacher 
 38.17  shall be entitled to receive more than three years of allowable 
 38.18  service credit pursuant to this section for a period or periods 
 38.19  of sabbatical leave during any ten consecutive fiscal or 
 38.20  calendar years, whichever is the applicable plan year for the 
 38.21  teachers retirement fund association.  If the teacher granted a 
 38.22  sabbatical leave makes the employee contribution for a period of 
 38.23  sabbatical leave pursuant to this section, the employing unit 
 38.24  shall make an employer contribution on behalf of the teacher to 
 38.25  the applicable association for that period of sabbatical leave 
 38.26  in the manner described in section 354A.12, subdivision 2a.  The 
 38.27  employee and employer contributions shall be in an amount equal 
 38.28  to the employee and employer contribution rates in effect for 
 38.29  other active members of the association covered by the same 
 38.30  program applied to a salary figure equal to the teacher's actual 
 38.31  covered salary for the plan year immediately preceding the 
 38.32  sabbatical leave period.  Payment of the employee contribution 
 38.33  authorized pursuant to this section shall be made by the teacher 
 38.34  on or before June 30 of year next following the year in which 
 38.35  the sabbatical leave terminated and shall be made without 
 38.36  interest.  For sabbatical leaves taken after June 30, 1986, the 
 39.1   required employer contributions shall be paid by the employing 
 39.2   unit within 30 days after notification by the association of the 
 39.3   amount due.  If the employee contributions for the sabbatical 
 39.4   leave period are less than an amount equal to the applicable 
 39.5   contribution rate applied to a salary figure equal to the 
 39.6   teacher's actual covered salary for the plan year immediately 
 39.7   preceding the sabbatical leave period, service credit shall be 
 39.8   prorated.  The prorated service credit shall be determined by 
 39.9   the ratio between the amount of the actual payment which was 
 39.10  made and the full contribution amount payable pursuant to this 
 39.11  section. 
 39.12     Sec. 13.  Minnesota Statutes 1996, section 354A.093, is 
 39.13  amended to read: 
 39.14     354A.093 [MILITARY SERVICE CREDIT.] 
 39.15     Any teacher in the coordinated program of ~~either~~ the 
 39.16  Minneapolis teachers retirement fund association ~~or the St.~~  
 39.17  ~~Paul teachers retirement fund association~~ or any teacher in the 
 39.18  new law coordinated program of the Duluth teachers retirement 
 39.19  fund association who is granted a leave of absence to enter 
 39.20  military service and who returns to active teaching service upon 
 39.21  discharge from military service as provided in section 192.262, 
 39.22  shall be entitled to receive allowable service credit in the 
 39.23  applicable association for all or a portion of the period of 
 39.24  military service but not for any voluntary extension of military 
 39.25  service beyond the initial period of enlistment, induction or 
 39.26  call to active duty which occurred at the instance of the 
 39.27  teacher.  If the teacher granted the military service leave of 
 39.28  absence makes the employee contribution for a period of military 
 39.29  service leave of absence pursuant to this section, the employing 
 39.30  unit shall make an employer contribution on behalf of the 
 39.31  teacher to the applicable association for the period of the 
 39.32  military service leave of absence in the manner described in 
 39.33  section 354A.12, subdivision 2a.  The employee and employer 
 39.34  contributions shall be in an amount equal to the employee and 
 39.35  employer contribution rates in effect for other active members 
 39.36  of the association covered by the same program applied to a 
 40.1   salary figure equal to the teacher's annual salary rate at the 
 40.2   date of return from military service, multiplied by the number 
 40.3   of years constituting the period of the military service leave 
 40.4   of absence which the teacher seeks to purchase.  Payment shall 
 40.5   include interest on the amount payable pursuant to this section 
 40.6   at the rate of six percent compounded annually from the year the 
 40.7   military service was rendered to the date of payment.  If the 
 40.8   payments made by a teacher pursuant to this section are less 
 40.9   than an amount equal to the applicable contribution rate applied 
 40.10  to a salary figure equal to the teacher's annual salary rate at 
 40.11  the date of return from military service, multiplied by the 
 40.12  number of years constituting the period of the military service 
 40.13  leave of absence, service credit shall be prorated.  The 
 40.14  prorated service credit shall be determined by the ratio between 
 40.15  the amount of the actual payment which was made and the full 
 40.16  contribution amount payable pursuant to this section.  In order 
 40.17  to be entitled to receive service credit under this section, 
 40.18  payment shall be made within five years from the date of 
 40.19  discharge from military service. 
 40.20     Sec. 14.  Minnesota Statutes 1996, section 354A.095, is 
 40.21  amended to read: 
 40.22     354A.095 [PARENTAL AND MATERNITY LEAVE.] 
 40.23     Basic or coordinated members of ~~the St. Paul teachers~~ 
 40.24  ~~retirement fund association,~~ the Minneapolis teachers retirement 
 40.25  fund association~~,~~ and new coordinated members of the Duluth 
 40.26  teachers retirement fund association~~,~~ who are granted parental 
 40.27  or maternity leave of absence by the employing authority, are 
 40.28  entitled to obtain service credit not to exceed one year for the 
 40.29  period of leave upon payment to the applicable fund by the end 
 40.30  of the fiscal year following the fiscal year in which the leave 
 40.31  of absence terminated.  The amount of the payment must include 
 40.32  the total required employee and employer contributions for the 
 40.33  period of leave prescribed in section 354A.12.  Payment must be 
 40.34  based on the member's average monthly salary rate upon return to 
 40.35  teaching service, and is payable without interest.  Payment must 
 40.36  be accompanied by a certified or otherwise adequate copy of the 
 41.1   resolution or action of the employing authority granting or 
 41.2   approving the leave. 
 41.3      Sec. 15.  Minnesota Statutes 1996, section 354A.096, is 
 41.4   amended to read: 
 41.5      354A.096 [MEDICAL LEAVE.] 
 41.6      Any teacher in the coordinated program of ~~either~~ the 
 41.7   Minneapolis teachers retirement fund association ~~or the St. Paul~~ 
 41.8   ~~teachers retirement fund association~~ or the new law coordinated 
 41.9   program of the Duluth teachers retirement fund association who 
 41.10  is on an authorized medical leave of absence and subsequently 
 41.11  returns to teaching service is entitled to receive allowable 
 41.12  service credit, not to exceed one year, for the period of leave, 
 41.13  upon making the prescribed payment to the fund.  This payment 
 41.14  must include the required employee and employer contributions at 
 41.15  the rates specified in section 354A.12, subdivisions 1 and 2, as 
 41.16  applied to the member's average full-time monthly salary rate on 
 41.17  the date the leave of absence commenced plus annual interest at 
 41.18  the rate of 8.5 percent per year from the end of the fiscal year 
 41.19  during which the leave terminates to the end of the month during 
 41.20  which payment is made.  The member must pay the total amount 
 41.21  required unless the employing unit, at its option, pays the 
 41.22  employer contributions.  The total amount required must be paid 
 41.23  by the end of the fiscal year following the fiscal year in which 
 41.24  the leave of absence terminated or before the member retires, 
 41.25  whichever is earlier.  Payment must be accompanied by a copy of 
 41.26  the resolution or action of the employing authority granting the 
 41.27  leave and the employing authority, upon granting the leave, must 
 41.28  certify the leave to the association in a manner specified by 
 41.29  the executive director.  A member may not receive more than one 
 41.30  year of allowable service credit during any fiscal year by 
 41.31  making payment under this section.  A member may not receive 
 41.32  disability benefits under section 354A.36 and receive allowable 
 41.33  service credit under this section for the same period of time. 
 41.34     Sec. 16.  Minnesota Statutes 1996, section 354A.12, 
 41.35  subdivision 1, is amended to read: 
 41.36     Subdivision 1.  [EMPLOYEE CONTRIBUTIONS.] The contribution 
 42.1   required to be paid by each member of a teachers retirement fund 
 42.2   association shall not be less than the percentage of total 
 42.3   salary specified below for the applicable association and 
 42.4   program: 
 42.5        Association and Program              Percentage of
 42.6                                             Total Salary
 42.7   Duluth teachers retirement
 42.8     association
 42.9             old law and new law
 42.10            coordinated programs              5.5 percent
 42.11  Minneapolis teachers retirement
 42.12    association
 42.13            basic program                     8.5 percent
 42.14            coordinated program               4.5 percent
 42.15  ~~St. Paul teachers retirement~~
 42.16   ~~association~~
 42.17            ~~basic program~~                    ~~8 percent~~
 42.18            ~~coordinated program~~              ~~4.5 percent~~.
 42.19     Contributions shall be made by deduction from salary and 
 42.20  must be remitted directly to the respective teachers retirement 
 42.21  fund association at least once each month. 
 42.22     Sec. 17.  Minnesota Statutes 1996, section 354A.12, 
 42.23  subdivision 2, is amended to read: 
 42.24     Subd. 2.  [RETIREMENT CONTRIBUTION LEVY DISALLOWED.] Except 
 42.25  as provided in subdivision 3b and in section 423A.02, 
 42.26  subdivision 3, with respect to the city of Minneapolis and 
 42.27  special school district No. 1 ~~and in section 423A.02,~~ 
 42.28  ~~subdivision 3, with respect to independent school district No.~~ 
 42.29  ~~625~~, notwithstanding any law to the contrary, levies for 
 42.30  teachers retirement fund associations in cities of ~~the first~~ 
 42.31  ~~class~~ Duluth and Minneapolis, including levies for any employer 
 42.32  social security taxes for teachers covered by the Duluth 
 42.33  teachers retirement fund association or the Minneapolis teachers 
 42.34  retirement fund association ~~or the St. Paul teachers retirement~~ 
 42.35  ~~fund association~~, are disallowed. 
 42.36     Sec. 18.  Minnesota Statutes 1996, section 354A.12, 
 43.1   subdivision 2a, is amended to read: 
 43.2      Subd. 2a.  [EMPLOYER REGULAR AND ADDITIONAL CONTRIBUTION 
 43.3   RATES.] (a) The employing units shall make the following 
 43.4   employer contributions to teachers retirement fund associations: 
 43.5      (1) for any coordinated member of a teachers retirement 
 43.6   fund association in a city of the first class, the employing 
 43.7   unit shall pay the employer social security taxes in accordance 
 43.8   with section 355.46, subdivision 3, clause (b); 
 43.9      (2) for any coordinated member of one of the following 
 43.10  teachers retirement fund associations in a city of the first 
 43.11  class, the employing unit shall make a regular employer 
 43.12  contribution to the respective retirement fund association in an 
 43.13  amount equal to the designated percentage of the salary of the 
 43.14  coordinated member as provided below: 
 43.15       Duluth teachers retirement
 43.16       fund association                        4.50 percent
 43.17       Minneapolis teachers retirement
 43.18       fund association                        4.50 percent
 43.19       ~~St. Paul teachers retirement~~
 43.20       ~~fund association~~                        ~~4.50 percent~~;
 43.21     (3) for any basic member ~~of one~~ of the ~~following~~ 
 43.22  Minneapolis teachers retirement fund ~~associations in a city of~~ 
 43.23  ~~the first class~~ association, the employing unit shall make a 
 43.24  regular employer contribution to the respective retirement fund 
 43.25  in an amount equal to ~~the designated percentage~~ 8.5 percent of 
 43.26  the salary of the basic member ~~as provided below:~~ 
 43.27       ~~Minneapolis teachers retirement~~
 43.28       ~~fund association~~                       ~~8.50 percent~~
 43.29       ~~St. Paul teachers retirement~~
 43.30       ~~fund association~~                       ~~8.00 percent~~;
 43.31     (4) for a basic member of ~~a~~ the Minneapolis teachers 
 43.32  retirement fund association ~~in a city of the first class~~, the 
 43.33  employing unit shall make an additional employer contribution to 
 43.34  the respective fund in an amount equal to ~~the designated~~ 
 43.35  ~~percentage~~ 3.64 percent of the salary of the basic member~~, as~~ 
 43.36  ~~provided below:~~ 
 44.1        ~~Minneapolis teachers retirement~~ 
 44.2        ~~fund association~~ 
 44.3          ~~July 1, 1993 - June 30, 1994~~          ~~4.85 percent~~ 
 44.4          ~~July 1, 1994, and thereafter~~          ~~3.64 percent~~ 
 44.5        ~~St. Paul teachers retirement~~ 
 44.6        ~~fund association~~ 
 44.7          ~~July 1, 1993 - June 30, 1995~~          ~~4.63 percent~~ 
 44.8          ~~July 1, 1995, and thereafter~~          ~~3.64 percent~~; 
 44.9      (5) for a coordinated member of a teachers retirement fund 
 44.10  association in a city of the first class, the employing unit 
 44.11  shall make an additional employer contribution to the respective 
 44.12  fund in an amount equal to the applicable percentage of the 
 44.13  coordinated member's salary, as provided below: 
 44.14       Duluth teachers retirement
 44.15       fund association                        1.29 percent 
 44.16       Minneapolis teachers retirement
 44.17       fund association
 44.18         ~~July 1, 1993 - June 30, 1994~~          ~~0.50 percent~~ 
 44.19         ~~July 1, 1994, and thereafter~~          3.64 percent 
 44.20      ~~St. Paul teachers retirement~~ 
 44.21       ~~fund association~~ 
 44.22         ~~July 1, 1993 - June 30, 1994~~          ~~0.50 percent~~ 
 44.23         ~~July 1, 1994 - June 30, 1995~~          ~~1.50 percent~~ 
 44.24         ~~July 1, 1995, and thereafter~~          ~~3.64 percent~~. 
 44.25     (b) The regular and additional employer contributions must 
 44.26  be remitted directly to the respective teachers retirement fund 
 44.27  association at least once each month.  Delinquent amounts are 
 44.28  payable with interest under the procedure in subdivision 1a. 
 44.29     (c) Payments of regular and additional employer 
 44.30  contributions for school district or technical college employees 
 44.31  who are paid from normal operating funds must be made from the 
 44.32  appropriate fund of the district or technical college. 
 44.33     Sec. 19.  Minnesota Statutes 1996, section 354A.12, 
 44.34  subdivision 3a, is amended to read: 
 44.35     Subd. 3a.  [SPECIAL DIRECT STATE AID TO ~~ST. PAUL~~ STATEWIDE 
 44.36  TEACHERS RETIREMENT ~~FUND~~ ASSOCIATION.] (a) The state shall pay 
 45.1   to the ~~St. Paul~~ statewide teachers retirement ~~fund~~ association 
 45.2   $500,000 in fiscal year 1994.  In each subsequent fiscal year, 
 45.3   the payment to the ~~St. Paul~~ statewide teachers retirement ~~fund~~ 
 45.4   association must be increased at the same rate as the increase 
 45.5   in the general education revenue formula allowance under section 
 45.6   124A.22, subdivision 2, in subsequent fiscal years. 
 45.7      (b) The direct state aid is payable October 1 annually.  
 45.8   The commissioner of finance shall pay the direct state aid.  The 
 45.9   amount required under this subdivision is appropriated annually 
 45.10  to the commissioner of finance. 
 45.11     Sec. 20.  Minnesota Statutes 1996, section 354A.12, 
 45.12  subdivision 3c, is amended to read: 
 45.13     Subd. 3c.  [TERMINATION OF SUPPLEMENTAL CONTRIBUTIONS AND 
 45.14  DIRECT MATCHING AND STATE AID.] (a) The supplemental 
 45.15  contributions payable to the Minneapolis teachers retirement 
 45.16  fund association by special school district No. 1 and the city 
 45.17  of Minneapolis under section 423A.02, subdivision 3, ~~or to the~~ 
 45.18  ~~St. Paul teachers retirement fund association by independent~~ 
 45.19  ~~school district No. 625 under section 423A.02, subdivision 3,~~ 
 45.20  ~~the direct state aid under subdivision 3a to the St. Paul~~ 
 45.21  ~~teachers retirement association,~~ and the direct matching and 
 45.22  state aid under subdivision 3b to the Minneapolis teachers 
 45.23  retirement fund association terminates for the ~~respective~~ fund 
 45.24  at the end of the fiscal year in which the accrued liability 
 45.25  funding ratio for ~~that~~ the fund, as determined in the most 
 45.26  recent actuarial report for ~~that~~ the fund by the actuary 
 45.27  retained by the legislative commission on pensions and 
 45.28  retirement, equals or exceeds the accrued liability funding 
 45.29  ratio for the teachers retirement association, as determined in 
 45.30  the most recent actuarial report for the teachers retirement 
 45.31  association by the actuary retained by the legislative 
 45.32  commission on pensions and retirement. 
 45.33     (b) If the direct matching, supplemental, or state aid is 
 45.34  terminated for the ~~St. Paul teachers retirement fund association~~ 
 45.35  ~~or the~~ Minneapolis teachers retirement fund association under 
 45.36  paragraph (a), it may not again be received by ~~that~~ the fund. 
 46.1      ~~(c) If either the Minneapolis teachers retirement fund~~ 
 46.2   ~~association or the St. Paul teachers retirement fund association~~ 
 46.3   ~~remain funded at less than the funding ratio applicable to the~~ 
 46.4   ~~teachers retirement association when the provisions of paragraph~~ 
 46.5   ~~(b) become effective, then any state aid not distributed to that~~ 
 46.6   ~~association must be immediately transferred to the other~~ 
 46.7   ~~association.~~ 
 46.8      Sec. 21.  Minnesota Statutes 1996, section 354A.12, 
 46.9   subdivision 3d, is amended to read: 
 46.10     Subd. 3d.  [SUPPLEMENTAL ADMINISTRATIVE EXPENSE 
 46.11  ASSESSMENT.] (a) The active and retired membership of the 
 46.12  Minneapolis teachers retirement fund association ~~and of the St.~~ 
 46.13  ~~Paul teachers retirement fund association~~ is responsible for 
 46.14  defraying supplemental administrative expenses other than 
 46.15  investment expenses of the ~~respective~~ teacher retirement fund 
 46.16  association. 
 46.17     (b) Investment expenses of the Minneapolis teachers 
 46.18  retirement fund association are those expenses incurred by or on 
 46.19  behalf of the retirement fund in connection with the investment 
 46.20  of the assets of the retirement fund other than investment 
 46.21  security transaction costs.  Other administrative expenses are 
 46.22  all expenses incurred by or on behalf of the retirement fund for 
 46.23  all other retirement fund functions other than the investment of 
 46.24  retirement fund assets.  Investment and other administrative 
 46.25  expenses must be accounted for using generally accepted 
 46.26  accounting principles and in a manner consistent with the 
 46.27  comprehensive annual financial report of the Minneapolis 
 46.28  teachers retirement fund association for the immediately 
 46.29  previous fiscal year under section 356.20. 
 46.30     (c) Supplemental administrative expenses other than 
 46.31  investment expenses of ~~a first class city teacher~~ the 
 46.32  Minneapolis teachers retirement fund association are those 
 46.33  expenses for the fiscal year that exceed the amount computed by 
 46.34  applying the most recent percentage of pay administrative 
 46.35  expense amount, other than investment expenses, for the teachers 
 46.36  retirement association governed by chapter 354 to the covered 
 47.1   payroll of the ~~respective~~ Minneapolis teachers retirement fund 
 47.2   association for the fiscal year. 
 47.3      (d) The board of trustees of ~~each first class city~~ the 
 47.4   Minneapolis teachers retirement fund association shall allocate 
 47.5   the total dollar amount of supplemental administrative expenses 
 47.6   other than investment expenses among the various active and 
 47.7   retired membership groups of the Minneapolis teachers retirement 
 47.8   fund association and shall assess the various membership groups 
 47.9   their respective share of the supplemental administrative 
 47.10  expenses other than investment expenses, in amounts determined 
 47.11  by the board of trustees.  The supplemental administrative 
 47.12  expense assessments must be paid by the membership group in a 
 47.13  manner determined by the board of trustees of the ~~respective~~ 
 47.14  Minneapolis teachers retirement fund association.  Supplemental 
 47.15  administrative expenses payable by the active members of the 
 47.16  pension plan must be picked up by the employer in accordance 
 47.17  with section 356.62. 
 47.18     (e) ~~With respect to the St. Paul teachers retirement fund~~ 
 47.19  ~~association, the supplemental administrative expense assessment~~ 
 47.20  ~~must be fully disclosed to the various active and retired~~ 
 47.21  ~~membership groups of the teachers retirement fund association.~~  
 47.22  ~~The chief administrative officer of the St. Paul teachers~~ 
 47.23  ~~retirement fund association shall prepare a supplemental~~ 
 47.24  ~~administrative expense assessment disclosure notice, which must~~ 
 47.25  ~~include the following:~~ 
 47.26     ~~(1) the total amount of administrative expenses of the St.~~ 
 47.27  ~~Paul teachers retirement fund association, the amount of the~~ 
 47.28  ~~investment expenses of the St. Paul teachers retirement fund~~ 
 47.29  ~~association, and the net remaining amount of administrative~~ 
 47.30  ~~expenses of the St. Paul teachers retirement fund association;~~ 
 47.31     ~~(2) the amount of administrative expenses for the St. Paul~~ 
 47.32  ~~teachers retirement fund association that would be equivalent to~~ 
 47.33  ~~the teachers retirement association noninvestment administrative~~ 
 47.34  ~~expense level described in paragraph (c);~~ 
 47.35     ~~(3) the total amount of supplemental administrative~~ 
 47.36  ~~expenses required for assessment calculated under paragraph (c);~~ 
 48.1      ~~(4) the portion of the total amount of the supplemental~~ 
 48.2   ~~administrative expense assessment allocated to each membership~~ 
 48.3   ~~group and the rationale for that allocation;~~ 
 48.4      ~~(5) the manner of collecting the supplemental~~ 
 48.5   ~~administrative expense assessment from each membership group,~~ 
 48.6   ~~the number of assessment payments required during the year, and~~ 
 48.7   ~~the amount of each payment or the procedure used to determine~~ 
 48.8   ~~each payment; and~~ 
 48.9      ~~(6) any other information that the chief administrative~~ 
 48.10  ~~officer determines is necessary to fairly portray the manner in~~ 
 48.11  ~~which the supplemental administrative expense assessment was~~ 
 48.12  ~~determined and allocated.~~ 
 48.13     ~~(f) The disclosure notice must be provided annually in the~~ 
 48.14  ~~annual report of the association.~~ 
 48.15     ~~(g)~~ The supplemental administrative expense assessments 
 48.16  must be deposited in the ~~applicable~~ Minneapolis teachers 
 48.17  retirement fund upon receipt. 
 48.18     ~~(h)~~ (f) Any omitted active membership group assessments 
 48.19  that remain undeducted and unpaid to the Minneapolis teachers 
 48.20  retirement fund association for 90 days must be paid by the 
 48.21  respective school district.  The school district may recover any 
 48.22  omitted active membership group assessment amounts that it has 
 48.23  previously paid.  The Minneapolis teachers retirement fund 
 48.24  association shall deduct any omitted retired membership group 
 48.25  assessment amounts from the benefits next payable after the 
 48.26  discovery of the omitted amounts. 
 48.27     Sec. 22.  Minnesota Statutes 1996, section 354A.30, is 
 48.28  amended to read: 
 48.29     354A.30 [MINNEAPOLIS ~~AND ST. PAUL~~ TEACHERS RETIREMENT 
 48.30  FUND ~~ASSOCIATIONS~~ ASSOCIATION; COORDINATED PROGRAM.] 
 48.31     There is established a coordinated program within the 
 48.32  Minneapolis teachers retirement fund association ~~and a~~ 
 48.33  ~~coordinated program within the St. Paul teachers retirement fund~~ 
 48.34  ~~association~~ to provide retirement coverage for teachers who are 
 48.35  covered by an agreement or modification made between the state 
 48.36  and the federal Secretary of Health~~, Education~~ and ~~Welfare~~ Human 
 49.1   Services making the provisions of the federal Old Age, Survivors 
 49.2   and Disability Insurance Act applicable to certain teachers 
 49.3   covered by the teachers retirement fund association.  The 
 49.4   provisions governing the coordinated program shall be sections 
 49.5   354A.31 to 354A.41 and any other applicable provisions of this 
 49.6   chapter.  
 49.7      Sec. 23.  Minnesota Statutes 1996, section 354A.31, 
 49.8   subdivision 4, is amended to read: 
 49.9      Subd. 4.  [COMPUTATION OF THE NORMAL COORDINATED RETIREMENT 
 49.10  ANNUITY; MINNEAPOLIS ~~AND ST. PAUL FUNDS~~ TEACHERS RETIREMENT FUND 
 49.11  ASSOCIATION.] (a) This subdivision applies to the 
 49.12  coordinated ~~programs~~ program of the Minneapolis teachers 
 49.13  retirement fund association ~~and the St. Paul teachers retirement~~ 
 49.14  ~~fund association~~.  
 49.15     (b) The normal coordinated retirement annuity shall be an 
 49.16  amount equal to a retiring coordinated member's average salary 
 49.17  multiplied by the retirement annuity formula percentage.  
 49.18  Average salary for purposes of this section shall mean an amount 
 49.19  equal to the average salary upon which contributions were made 
 49.20  for the highest five successive years of service credit, but 
 49.21  which shall not in any event include any more than the 
 49.22  equivalent of 60 monthly salary payments.  Average salary must 
 49.23  be based upon all years of service credit if this service credit 
 49.24  is less than five years. 
 49.25     (c) This paragraph, in conjunction with subdivision 6, 
 49.26  applies to a person who first became a member or a member in a 
 49.27  pension fund listed in section 356.30, subdivision 3, before 
 49.28  July 1, 1989, unless paragraph (d), in conjunction with 
 49.29  subdivision 7, produces a higher annuity amount, in which case 
 49.30  paragraph (d) will apply.  The retirement annuity formula 
 49.31  percentage for purposes of this paragraph is one percent per 
 49.32  year for each year of coordinated service for the first ten 
 49.33  years and 1.5 percent for each year of coordinated service 
 49.34  thereafter.  
 49.35     (d) This paragraph applies to a person who has become at 
 49.36  least 55 years old and who first becomes a member after June 30, 
 50.1   1989, and to any other member who has become at least 55 years 
 50.2   old and whose annuity amount, when calculated under this 
 50.3   paragraph and in conjunction with subdivision 7 is higher than 
 50.4   it is when calculated under paragraph (c), in conjunction with 
 50.5   the provisions of subdivision 6.  The retirement annuity formula 
 50.6   percentage for purposes of this paragraph is 1.5 percent for 
 50.7   each year of coordinated service.  
 50.8      Sec. 24.  Minnesota Statutes 1996, section 354A.32, 
 50.9   subdivision 1, is amended to read: 
 50.10     Subdivision 1.  [OPTIONAL FORMS GENERALLY.] The ~~boards~~ 
 50.11  board of the Minneapolis ~~and the St. Paul~~ teachers retirement 
 50.12  fund ~~associations~~ association shall ~~each~~ establish for the 
 50.13  coordinated program and the board of the Duluth teachers 
 50.14  retirement fund association shall establish for the new law 
 50.15  coordinated program an optional retirement annuity which shall 
 50.16  take the form of a joint and survivor annuity.  Each board may 
 50.17  also in its discretion establish an optional annuity which shall 
 50.18  take the form of an annuity payable for a period certain and for 
 50.19  life thereafter.  Each board shall also establish an optional 
 50.20  retirement annuity that guarantees payment of the balance of the 
 50.21  annuity recipient's accumulated deductions to a designated 
 50.22  beneficiary upon the death of the annuity recipient.  Except as 
 50.23  provided in subdivision 1a, optional annuity forms shall be the 
 50.24  actuarial equivalent of the normal forms provided in section 
 50.25  354A.31.  In establishing these optional annuity forms, the 
 50.26  board shall obtain the written recommendation of the 
 50.27  commission-retained actuary.  The recommendation shall be a part 
 50.28  of the permanent records of the board. 
 50.29     Sec. 25.  Minnesota Statutes 1996, section 354A.39, is 
 50.30  amended to read: 
 50.31     354A.39 [SERVICE IN OTHER PUBLIC RETIREMENT FUNDS; 
 50.32  ANNUITY.] 
 50.33     Any person who has been a member of the Minnesota state 
 50.34  retirement system, the public employees retirement association 
 50.35  including the public employees retirement association police and 
 50.36  fire fund, the teachers retirement association, the Minnesota 
 51.1   state patrol retirement association, the legislators retirement 
 51.2   plan, the constitutional officers retirement plan, the 
 51.3   Minneapolis employees retirement fund, the Duluth teachers 
 51.4   retirement fund association new law coordinated program, the 
 51.5   Minneapolis teachers retirement fund association coordinated 
 51.6   program, ~~the St. Paul teachers retirement fund association~~ 
 51.7   ~~coordinated program,~~ or any other public employee retirement 
 51.8   system in the state of Minnesota having a like provision but 
 51.9   excluding all other funds providing retirement benefits for 
 51.10  police officers or firefighters shall be entitled when qualified 
 51.11  to an annuity from each fund if the person's total allowable 
 51.12  service in all of the funds or in any two or more of the funds 
 51.13  totals three or more years, provided that no portion of the 
 51.14  allowable service upon which the retirement annuity from one 
 51.15  fund is based is used again in the computation for a retirement 
 51.16  annuity from another fund and provided further that the person 
 51.17  has not taken a refund from any of funds or associations since 
 51.18  the person's membership in the fund or association has 
 51.19  terminated.  The annuity from each fund or association shall be 
 51.20  determined by the appropriate provisions of the law governing 
 51.21  each fund or association, except that the requirement that a 
 51.22  person must have at least three years of allowable service in 
 51.23  the respective fund or association shall not apply for the 
 51.24  purposes of this section, provided that the aggregate service in 
 51.25  two or more of these funds equals three or more years. 
 51.26     Sec. 26.  Minnesota Statutes 1996, section 354A.40, 
 51.27  subdivision 1, is amended to read: 
 51.28     Subdivision 1.  [RETIREMENT ANNUITY.] Any coordinated 
 51.29  member of ~~either~~ the Minneapolis teachers retirement fund 
 51.30  association ~~or of the St. Paul teachers retirement fund~~ 
 51.31  ~~association~~ who has credited service prior to July 1, 1978 shall 
 51.32  be entitled to receive a retirement annuity when otherwise 
 51.33  qualified, the calculation of which shall utilize the applicable 
 51.34  retirement annuity formula specified in articles of 
 51.35  incorporation and bylaws of the Minneapolis teachers retirement 
 51.36  fund association governing the basic program for that portion of 
 52.1   credited service which was served prior to July 1, 1978, and the 
 52.2   retirement annuity formula specified in section 354A.31 for the 
 52.3   remainder of the member's credited service, both applied to the 
 52.4   member's average salary as specified in section 354A.31, 
 52.5   subdivision 4.  The formula percentages to be used in 
 52.6   calculating the coordinated portion of the retirement annuity or 
 52.7   coordinated service under this section shall recognize the 
 52.8   coordinated service as a continuation of any service prior to 
 52.9   July 1, 1978.  
 52.10     Sec. 27.  Minnesota Statutes 1996, section 354A.41, is 
 52.11  amended to read: 
 52.12     354A.41 [ADMINISTRATION OF COORDINATED PROGRAM.] 
 52.13     Subdivision 1.  [ADMINISTRATIVE PROVISIONS.] The provisions 
 52.14  of the articles of incorporation and bylaws of the 
 52.15  Minneapolis ~~or the St. Paul~~ teachers retirement fund 
 52.16  association~~, whichever is applicable,~~ relating to the 
 52.17  administration of the fund shall govern the administration of 
 52.18  the coordinated program and the provisions of the articles of 
 52.19  incorporation and bylaws of the Duluth teachers retirement fund 
 52.20  association relating to the administration of the fund shall 
 52.21  govern the administration of the new law coordinated program in 
 52.22  instances where the administrative provisions are not 
 52.23  inconsistent with the provisions of sections 354A.31 to 354A.41, 
 52.24  including but not limited to provisions relating to the 
 52.25  composition and function of the board of trustees, the 
 52.26  investment of assets of the teachers retirement fund 
 52.27  association, and the definition of the plan year. 
 52.28     Subd. 2.  [ACTUARIAL VALUATIONS.] In any actuarial 
 52.29  valuation of the Minneapolis teachers retirement fund 
 52.30  association~~, the St. Paul teachers retirement fund association,~~ 
 52.31  or the Duluth teachers retirement fund association under section 
 52.32  356.215 prepared by the commission-retained actuary or 
 52.33  supplemental actuarial valuation prepared by an approved actuary 
 52.34  retained by the teachers retirement fund association, there 
 52.35  shall be included a finding of the condition of the fund showing 
 52.36  separately the basic and coordinated programs or the old law 
 53.1   coordinated and new law coordinated programs, as appropriate.  
 53.2   The finding shall include the level normal cost and the 
 53.3   applicable employee and employer contribution rates for each 
 53.4   program. 
 53.5      Sec. 28.  Minnesota Statutes 1996, section 356.20, 
 53.6   subdivision 2, is amended to read: 
 53.7      Subd. 2.  [COVERED PUBLIC PENSION FUNDS.] This section and 
 53.8   section 356.215 apply to the following retirement plans:  
 53.9      (1) State employees retirement fund. 
 53.10     (2) Public employees retirement fund. 
 53.11     (3) Teachers retirement association. 
 53.12     (4) State patrol retirement fund. 
 53.13     (5) Minneapolis teachers retirement fund association. 
 53.14     (6) ~~St. Paul teachers retirement fund association.~~ 
 53.15     ~~(7)~~ Duluth teachers retirement fund association. 
 53.16     ~~(8)~~ (7) Minneapolis employees retirement fund. 
 53.17     ~~(9)~~ (8) University of Minnesota faculty retirement plan. 
 53.18     ~~(10)~~ (9) University of Minnesota faculty supplemental 
 53.19  retirement plan. 
 53.20     ~~(11)~~ (10) Judges retirement fund. 
 53.21     ~~(12)~~ (11) Any police or firefighter's relief association 
 53.22  enumerated in section 69.77, subdivision 1a or 69.771, 
 53.23  subdivision 1. 
 53.24     ~~(13)~~ (12) Public employees police and fire fund.  
 53.25     ~~(14)~~ (13) Minnesota state retirement system correctional 
 53.26  officers retirement fund.  
 53.27     ~~(15)~~ (14) Public employees local government correctional 
 53.28  service retirement plan. 
 53.29     Sec. 29.  Minnesota Statutes 1996, section 356.215, 
 53.30  subdivision 2, is amended to read: 
 53.31     Subd. 2.  [REQUIREMENTS.] It is the policy of the 
 53.32  legislature that it is necessary and appropriate to determine 
 53.33  annually the financial status of tax supported retirement and 
 53.34  pension plans for public employees.  To achieve this goal, the 
 53.35  legislative commission on pensions and retirement shall have 
 53.36  prepared by the actuary retained by the commission annual 
 54.1   actuarial valuations of the retirement plans enumerated in 
 54.2   section 3.85, subdivision 11, paragraph (b), and quadrennial 
 54.3   experience studies of the retirement plans enumerated in section 
 54.4   3.85, subdivision 11, paragraph (b), clauses (1), (2), and (7).  
 54.5   The governing or managing board or administrative officials of 
 54.6   each public pension and retirement fund or plan enumerated in 
 54.7   section 356.20, subdivision 2, clauses (8), (9), ~~(10),~~ 
 54.8   and ~~(12)~~ (11), shall have prepared by an approved actuary annual 
 54.9   actuarial valuations of their respective funds as provided in 
 54.10  this section.  This requirement also applies to any fund that is 
 54.11  the successor to any organization enumerated in section 356.20, 
 54.12  subdivision 2, or to the governing or managing board or 
 54.13  administrative officials of any newly formed retirement fund or 
 54.14  association operating under the control or supervision of any 
 54.15  public employee group, governmental unit, or institution 
 54.16  receiving a portion of its support through legislative 
 54.17  appropriations, and any local police or fire fund coming within 
 54.18  the provisions of section 356.216. 
 54.19     Sec. 30.  Minnesota Statutes 1996, section 356.30, 
 54.20  subdivision 3, is amended to read: 
 54.21     Subd. 3.  [COVERED FUNDS.] This section applies to the 
 54.22  following retirement funds: 
 54.23     (1) state employees retirement fund, established pursuant 
 54.24  to chapter 352; 
 54.25     (2) correctional employees retirement program, established 
 54.26  pursuant to chapter 352; 
 54.27     (3) unclassified employees retirement plan, established 
 54.28  pursuant to chapter 352D; 
 54.29     (4) state patrol retirement fund, established pursuant to 
 54.30  chapter 352B; 
 54.31     (5) legislators' retirement plan, established pursuant to 
 54.32  chapter 3A; 
 54.33     (6) elective state officers' retirement plan, established 
 54.34  pursuant to chapter 352C; 
 54.35     (7) public employees retirement association, established 
 54.36  pursuant to chapter 353; 
 55.1      (8) public employees police and fire fund, established 
 55.2   pursuant to chapter 353; 
 55.3      (9) teachers retirement association, established pursuant 
 55.4   to chapter 354; 
 55.5      (10) Minneapolis employees retirement fund, established 
 55.6   pursuant to chapter 422A; 
 55.7      (11) Minneapolis teachers retirement fund association, 
 55.8   established pursuant to chapter 354A; 
 55.9      (12) ~~St. Paul teachers retirement fund association,~~ 
 55.10  ~~established pursuant to chapter 354A;~~ 
 55.11     ~~(13)~~ Duluth teachers retirement fund association, 
 55.12  established pursuant to chapter 354A; 
 55.13     ~~(14)~~ (13) public employees local government correctional 
 55.14  service retirement plan established by sections 353C.01 to 
 55.15  353C.10; and 
 55.16     ~~(15)~~ (14) judges' retirement fund, established by sections 
 55.17  490.121 to 490.132. 
 55.18     Sec. 31.  Minnesota Statutes 1996, section 356.302, 
 55.19  subdivision 7, is amended to read: 
 55.20     Subd. 7.  [COVERED RETIREMENT PLANS.] This section applies 
 55.21  to the following retirement plans: 
 55.22     (1) state employees retirement fund, established by chapter 
 55.23  352; 
 55.24     (2) unclassified employees retirement plan, established by 
 55.25  chapter 352D; 
 55.26     (3) public employees retirement association, established by 
 55.27  chapter 353; 
 55.28     (4) teachers retirement association, established by chapter 
 55.29  354; 
 55.30     (5) Duluth teachers retirement fund association, 
 55.31  established by chapter 354A; 
 55.32     (6) Minneapolis teachers retirement fund association, 
 55.33  established by chapter 354A; 
 55.34     (7) ~~St. Paul teachers retirement fund association,~~ 
 55.35  ~~established by chapter 354A;~~ 
 55.36     ~~(8)~~ Minneapolis employees retirement fund, established by 
 56.1   chapter 422A; 
 56.2      ~~(9)~~ (8) correctional employees retirement plan, established 
 56.3   by chapter 352; 
 56.4      ~~(10)~~ (9) state patrol retirement fund, established by 
 56.5   chapter 352B; 
 56.6      ~~(11)~~ (10) public employees police and fire fund, 
 56.7   established by chapter 353; and 
 56.8      ~~(12)~~ (11) judges' retirement fund, established by sections 
 56.9   490.121 to 490.132. 
 56.10     Sec. 32.  Minnesota Statutes 1996, section 356.303, 
 56.11  subdivision 4, is amended to read: 
 56.12     Subd. 4.  [COVERED RETIREMENT PLANS.] This section applies 
 56.13  to the following retirement plans: 
 56.14     (1) legislators retirement plan, established by chapter 3A; 
 56.15     (2) state employees retirement fund, established by chapter 
 56.16  352; 
 56.17     (3) correctional employees retirement plan, established by 
 56.18  chapter 352; 
 56.19     (4) state patrol retirement fund, established by chapter 
 56.20  352B; 
 56.21     (5) elective state officers retirement plan, established by 
 56.22  chapter 352C; 
 56.23     (6) unclassified employees retirement plan, established by 
 56.24  chapter 352D; 
 56.25     (7) public employees retirement association, established by 
 56.26  chapter 353; 
 56.27     (8) public employees police and fire fund, established by 
 56.28  chapter 353; 
 56.29     (9) teachers retirement association, established by chapter 
 56.30  354; 
 56.31     (10) Duluth teachers retirement fund association, 
 56.32  established by chapter 354A; 
 56.33     (11) Minneapolis teachers retirement fund association, 
 56.34  established by chapter 354A; 
 56.35     (12) ~~St. Paul teachers retirement fund association,~~ 
 56.36  ~~established by chapter 354A;~~ 
 57.1      ~~(13)~~ Minneapolis employees retirement fund, established by 
 57.2   chapter 422A; and 
 57.3      ~~(14)~~ (13) judges' retirement fund, established by sections 
 57.4   490.121 to 490.132. 
 57.5      Sec. 33.  Minnesota Statutes 1996, section 356.32, 
 57.6   subdivision 2, is amended to read: 
 57.7      Subd. 2.  [COVERED FUNDS.] The provisions of this section 
 57.8   shall apply to the following retirement funds: 
 57.9      (1) state employees retirement fund, established pursuant 
 57.10  to chapter 352; 
 57.11     (2) correctional employees retirement program, established 
 57.12  pursuant to chapter 352; 
 57.13     (3) state patrol retirement fund, established pursuant to 
 57.14  chapter 352B; 
 57.15     (4) public employees retirement fund, established pursuant 
 57.16  to chapter 353; 
 57.17     (5) public employees police and fire fund, established 
 57.18  pursuant to chapter 353; 
 57.19     (6) teachers retirement association, established pursuant 
 57.20  to chapter 354; 
 57.21     (7) Minneapolis employees retirement fund, established 
 57.22  pursuant to chapter 422A; 
 57.23     (8) Duluth teachers retirement fund association, 
 57.24  established pursuant to chapter 354A; 
 57.25     (9) Minneapolis teachers retirement fund association, 
 57.26  established pursuant to chapter 354A; and 
 57.27     (10) ~~St. Paul teachers retirement fund association,~~ 
 57.28  ~~established pursuant to chapter 354A;~~ 
 57.29     ~~(11)~~ public employees local government correctional service 
 57.30  retirement plan established by sections 353B.01 to 353B.10. 
 57.31     Sec. 34.  Minnesota Statutes 1996, section 356.35, 
 57.32  subdivision 2, is amended to read: 
 57.33     Subd. 2.  [DETERMINANT DATE.] "Determinant date" means June 
 57.34  1, 1973, with respect to the state patrol retirement fund; June 
 57.35  27, 1973, with respect to permanent disability benefits, 
 57.36  retirement annuities, and retirement allowance options II, III 
 58.1   and IV paid to surviving spouses pursuant to Minnesota Statutes 
 58.2   1971, Section 422.08 provided by the Minneapolis employees 
 58.3   retirement fund; April 25, 1959, with respect to survivor 
 58.4   benefits paid to surviving spouses of contributing members 
 58.5   provided by the Minneapolis employees retirement fund; ~~January~~ 
 58.6   ~~1, 1970, with respect to the St. Paul teachers retirement fund;~~ 
 58.7   July 1, 1971, with respect to the Duluth teachers retirement 
 58.8   fund; and July 1, 1973, with respect to all other covered 
 58.9   retirement funds. 
 58.10     Sec. 35.  Minnesota Statutes 1996, section 356.35, 
 58.11  subdivision 5, is amended to read: 
 58.12     Subd. 5.  [COVERED RETIREMENT PLANS.] "Covered retirement 
 58.13  fund" means: 
 58.14     (1) the state patrol retirement fund; 
 58.15     (2) the public employees police and fire fund; 
 58.16     (3) the public employees retirement fund; 
 58.17     (4) the state employees retirement fund; 
 58.18     (5) the teachers retirement association; 
 58.19     (6) the Minneapolis employees retirement fund; 
 58.20     (7) the legislators' retirement plan; or 
 58.21     (8) ~~the St. Paul teachers retirement fund; or~~ 
 58.22     ~~(9)~~ the Duluth teachers retirement fund. 
 58.23     Sec. 36.  Minnesota Statutes 1996, section 356.36, 
 58.24  subdivision 1, is amended to read: 
 58.25     Subdivision 1.  [ENTITLEMENT.] Except as provided in 
 58.26  section 356.38, any plan participant who began receiving a 
 58.27  permanent disability benefit or a retirement annuity prior to 
 58.28  the determinant date and is receiving a permanent disability 
 58.29  benefit or a retirement annuity based on laws in effect prior to 
 58.30  such date from a covered retirement fund or any combination of 
 58.31  such funds shall receive, beginning with the first monthly 
 58.32  benefit or annuity accruing after June 30, 1976, an increase in 
 58.33  the benefit or annuity from each such fund as provided in 
 58.34  subdivisions 2 and 3.  Provided however, that no plan 
 58.35  participant who is receiving a permanent disability benefit or a 
 58.36  retirement annuity from the Minneapolis employees retirement 
 59.1   fund in excess of $300 per month shall be entitled to an 
 59.2   increase in such benefit or annuity pursuant to Laws 1976, 
 59.3   chapter 326.  ~~Provided further, that no plan participant who is~~ 
 59.4   ~~less than 70 years of age and is receiving a permanent~~ 
 59.5   ~~disability benefit or a retirement annuity from the St. Paul~~ 
 59.6   ~~teachers retirement fund shall be entitled to an increase in the~~ 
 59.7   ~~benefit or annuity pursuant to Laws 1976, chapter 326 until the~~ 
 59.8   ~~plan participant attains the age of 70 years.~~ 
 59.9      Sec. 37.  Minnesota Statutes 1996, section 356.86, 
 59.10  subdivision 1, is amended to read: 
 59.11     Subdivision 1.  [ENTITLEMENT.] A person who is receiving a 
 59.12  retirement annuity, a disability benefit, or a surviving 
 59.13  spouse's annuity or benefit from a retirement fund specified in 
 59.14  subdivision 3, clauses (1) to (8), is entitled to receive a 
 59.15  postretirement adjustment from the applicable retirement fund in 
 59.16  the amount specified in subdivision 2, if the annuity or benefit 
 59.17  was computed under: 
 59.18     (1) the laws in effect before June 1, 1973, if the person 
 59.19  is receiving an annuity or benefit from the retirement fund 
 59.20  specified in subdivision 3, clause (4); or 
 59.21     (2) the laws in effect before July 1, 1973, if the person 
 59.22  is receiving an annuity or benefit from a retirement fund 
 59.23  specified in subdivision 3, clause (1), (2), (3), or (5); or 
 59.24     (3) the metropolitan transit commission-transit operating 
 59.25  division employees retirement fund plan document in effect on or 
 59.26  before December 31, 1977, if the person is receiving a 
 59.27  retirement annuity, a disability benefit, or a surviving 
 59.28  spouse's annuity or benefit from the retirement fund specified 
 59.29  in subdivision 3, clause (5); or 
 59.30     (4) the laws in effect before May 1, 1974, and before any 
 59.31  adjustment under Laws 1987, chapter 372, article 3, if the 
 59.32  person is receiving an annuity or benefit from the retirement 
 59.33  fund specified in subdivision 3, clause (6); or 
 59.34     (5) ~~the laws in effect before January 1, 1970, if the~~ 
 59.35  ~~person is receiving an annuity or benefit from the retirement~~ 
 59.36  ~~fund specified in subdivision 3, clause (7); or~~ 
 60.1      ~~(6)~~ the laws in effect before June 30, 1971, if the person 
 60.2   is receiving an annuity or benefit from the retirement fund 
 60.3   specified in subdivision 3, clause (8). 
 60.4      Sec. 38.  Minnesota Statutes 1996, section 356.86, 
 60.5   subdivision 2, is amended to read: 
 60.6      Subd. 2.  [AMOUNT OF POSTRETIREMENT ADJUSTMENT; PAYMENT.] 
 60.7   (a) For any person receiving an annuity or benefit on November 
 60.8   30, 1989, and entitled to receive a postretirement adjustment 
 60.9   under subdivision 1, the postretirement adjustment is a lump sum 
 60.10  payment calculated under paragraph (b) or (c). 
 60.11     (b) For coordinated plan annuity or benefit recipients, the 
 60.12  postretirement adjustment in 1989 is $25 for each full year of 
 60.13  allowable service credited to the person by the respective 
 60.14  retirement fund.  In 1990 and each following year, the 
 60.15  postretirement adjustment is the amount payable in the preceding 
 60.16  year increased by the same percentage applied to regular 
 60.17  annuities paid from the postretirement fund or, for the 
 60.18  retirement funds specified in subdivision 3, clauses 
 60.19  (6), and (7)~~, and (8)~~, by the same percentage applied under the 
 60.20  articles of incorporation and bylaws of these funds. 
 60.21     (c) For basic plan annuity or benefit recipients, the 
 60.22  postretirement adjustment in 1989 is the greater of: 
 60.23     (1) $25 for each full year of allowable service credited to 
 60.24  the person by the respective retirement fund; or 
 60.25     (2) the difference between: 
 60.26     (i) the product of $400 times the number of full years of 
 60.27  allowable service credited to the person by the respective 
 60.28  retirement fund; and 
 60.29     (ii) the sum of the benefits payable to the person from any 
 60.30  Minnesota public employee pension plan, and cash benefits 
 60.31  payable to the person from the Social Security Administration. 
 60.32     In 1990 and each following year, each eligible basic plan 
 60.33  annuity or benefit recipient shall receive the amount received 
 60.34  in the preceding year increased by the same percentage applied 
 60.35  to regular annuities paid from the postretirement fund or, for 
 60.36  the retirement funds specified in subdivision 3, clauses 
 61.1   (6)~~,~~ and (7), ~~and (8),~~ by the same percentage applied under the 
 61.2   articles of incorporation and bylaws of these funds. 
 61.3      (d) The postretirement adjustment provided for in this 
 61.4   section is payable for those persons receiving an annuity or 
 61.5   benefit on November 30, 1989, on December 1, 1989.  In 
 61.6   subsequent years, the adjustment must be paid on December 1 to 
 61.7   those persons receiving an annuity or benefit on the preceding 
 61.8   November 30.  A person who is eligible may elect to participate 
 61.9   in an optional annuity or benefit receipt schedule under 
 61.10  subdivision 4.  This section does not authorize the payment of a 
 61.11  postretirement adjustment to an estate if the annuity or benefit 
 61.12  recipient dies before the November 30 eligibility date.  The 
 61.13  postretirement adjustment provided for in this section must be 
 61.14  paid automatically unless the intended recipient files a written 
 61.15  notice with the retirement fund requesting that the 
 61.16  postretirement adjustment not be paid or returns the amount of 
 61.17  adjustment to the retirement fund.  Written notice of the waiver 
 61.18  of the postretirement adjustment is irrevocable for the year 
 61.19  during which it was made. 
 61.20     Sec. 39.  Minnesota Statutes 1996, section 356.86, 
 61.21  subdivision 3, is amended to read: 
 61.22     Subd. 3.  [COVERED RETIREMENT FUNDS.] The postretirement 
 61.23  adjustment provided in this section applies to the following 
 61.24  retirement funds: 
 61.25     (1) public employees retirement fund; 
 61.26     (2) public employees police and fire fund; 
 61.27     (3) teachers retirement association; 
 61.28     (4) state patrol retirement fund; 
 61.29     (5) state employees retirement fund of the Minnesota state 
 61.30  retirement system; 
 61.31     (6) Minneapolis teachers retirement fund association 
 61.32  established under chapter 354A; and 
 61.33     (7) ~~St. Paul teachers retirement fund association,~~ 
 61.34  ~~established under chapter 354A; and~~ 
 61.35     ~~(8)~~ Duluth teachers retirement fund association established 
 61.36  under chapter 354A. 
 62.1      Sec. 40.  Minnesota Statutes 1996, section 423A.02, 
 62.2   subdivision 3, is amended to read: 
 62.3      Subd. 3.  [REALLOCATION OF AMORTIZATION OR SUPPLEMENTARY 
 62.4   AMORTIZATION STATE AID.] (a) Seventy percent of the difference 
 62.5   between $5,720,000 and the current year amortization aid or 
 62.6   supplemental amortization aid distributed under subdivisions 1 
 62.7   and 1a that is not distributed for any reason to a municipality 
 62.8   for use by a local police or salaried fire relief association 
 62.9   must be distributed by the commissioner of revenue according to 
 62.10  this paragraph.  The commissioner shall distribute 70 percent of 
 62.11  the amounts derived under this paragraph to the Minneapolis 
 62.12  teachers retirement fund association and 30 percent to the ~~St.~~ 
 62.13  ~~Paul~~ statewide teachers retirement ~~fund~~ association to fund the 
 62.14  unfunded actuarial accrued liabilities of the respective funds.  
 62.15  These payments shall be made on or before June 30 each fiscal 
 62.16  year.  The amount required under this paragraph is appropriated 
 62.17  annually from the general fund to the commissioner of revenue.  
 62.18  ~~If either the Minneapolis teachers retirement fund association~~ 
 62.19  ~~or the St. Paul teachers retirement fund association becomes~~ 
 62.20  ~~funded at the funding ratio applicable to the teachers~~ 
 62.21  ~~retirement association based on the actuarial reports prepared~~ 
 62.22  ~~by the actuary for the legislative commission on pensions and~~ 
 62.23  ~~retirement, then the commissioner shall distribute that fund's~~ 
 62.24  ~~share under this paragraph to the other fund.~~  The appropriation 
 62.25  under this paragraph terminates when ~~both funds become fully~~ 
 62.26  ~~funded~~ the Minneapolis teachers retirement fund association 
 62.27  becomes funded at the funding ratio applicable to the teachers 
 62.28  retirement association based on the actuarial reports prepared 
 62.29  by the actuary retained by the legislative commission on 
 62.30  pensions and retirement.  Amounts remaining in the undistributed 
 62.31  balance account at the end of the biennium cancel to the general 
 62.32  fund. 
 62.33     (b) ~~In order to receive amortization and supplementary~~ 
 62.34  ~~amortization aid under paragraph (a), independent school~~ 
 62.35  ~~district No. 625, St. Paul, must make contributions to the St.~~ 
 62.36  ~~Paul teachers retirement fund association in accordance with the~~ 
 63.1   ~~following schedule:~~ 
 63.2              ~~Fiscal Year~~                ~~Amount~~ 
 63.3                ~~1996~~                       ~~$0~~ 
 63.4                ~~1997~~                       ~~$0~~ 
 63.5                ~~1998~~                    ~~$200,000~~ 
 63.6                ~~1999~~                    ~~$400,000~~ 
 63.7                ~~2000~~                    ~~$600,000~~ 
 63.8                ~~2001 and thereafter~~     ~~$800,000~~ 
 63.9      ~~(c)~~ In order to receive amortization and supplementary 
 63.10  amortization aid under paragraph (a), special school district No.
 63.11  1, Minneapolis, and the city of Minneapolis must each make 
 63.12  contributions to the Minneapolis teachers retirement fund 
 63.13  association in accordance with the following schedule: 
 63.14       Fiscal Year       City           School district 
 63.15                        amount              amount
 63.16           1996           $0                  $0
 63.17           1997           $0                  $0 
 63.18           1998        $250,000            $250,000 
 63.19           1999        $400,000            $400,000 
 63.20           2000        $550,000            $550,000 
 63.21           2001        $700,000            $700,000 
 63.22           2002        $850,000            $850,000 
 63.23           2003 and  $1,000,000          $1,000,000 
 63.24           thereafter                                
 63.25     ~~(d)~~ (c) Money contributed under ~~paragraph~~ paragraphs (a) 
 63.26  and ~~either paragraph~~ (b) ~~or (c), as applicable,~~ must be credited 
 63.27  to a separate account in the ~~applicable~~ Minneapolis teachers 
 63.28  retirement fund and may not be used in determining any benefit 
 63.29  increases.  The separate account terminates for a fund when the 
 63.30  aid payments to the fund under paragraph (a) cease. 
 63.31     ~~(e)~~ (d) Thirty percent of the difference between $5,720,000 
 63.32  and the current year amortization aid or supplemental 
 63.33  amortization aid under subdivisions 1 and 1a that is not 
 63.34  distributed for any reason to a municipality for use by a local 
 63.35  police or salaried firefighter relief association must be 
 63.36  distributed under section 69.021, subdivision 7, paragraph (d), 
 64.1   as additional funding to support a minimum fire state aid amount 
 64.2   for volunteer firefighter relief associations.  The amount 
 64.3   required under this paragraph is appropriated annually to the 
 64.4   commissioner of revenue. 
 64.5      Sec. 41.  Laws 1965, chapter 705, section 1, subdivision 4, 
 64.6   is amended to read: 
 64.7      Subd. 4.  As of July 1, 1965, the organization, operation, 
 64.8   maintenance and conduct of the affairs of the converted district 
 64.9   shall be governed by general laws relating to independent 
 64.10  districts, except as otherwise provided in Extra Session Laws 
 64.11  1959, Chapter 71, as amended, and all special laws and charter 
 64.12  provisions relating only to the converted district are 
 64.13  repealed.  ~~Where an existing pension law is applicable to~~ 
 64.14  ~~employees of the special district such law shall continue to be~~ 
 64.15  ~~applicable in the same manner and to the same extent to~~ 
 64.16  ~~employees of the converted district.~~  General laws applicable to 
 64.17  independent school districts wholly or partly within cities of 
 64.18  the first class shall not be applicable to the converted 
 64.19  district.  ~~The provision of the statutes applicable only to~~ 
 64.20  ~~teachers retirement fund associations in cities of the first~~ 
 64.21  ~~class, limiting the amount of annuity to be paid from public~~ 
 64.22  ~~funds, limiting the taxes to be levied to carry out the plan of~~ 
 64.23  ~~such associations, and limiting the amount of annuities to be~~ 
 64.24  ~~paid to beneficiaries, all as contained in Minnesota Statutes,~~ 
 64.25  ~~Section 135.24, shall not be applicable to such converted~~ 
 64.26  ~~district, but the statutes applicable to such special district~~ 
 64.27  ~~prior to the conversion shall continue to be applicable and the~~ 
 64.28  ~~pension plan in operation prior to the conversion shall continue~~ 
 64.29  ~~in operation until changed in accordance with law, and~~ The 
 64.30  teacher tenure law applicable to the special district shall 
 64.31  continue to apply to the converted district in the same manner 
 64.32  and to the same extent to teachers in the converted district; 
 64.33  provided further, where existing civil service provisions of any 
 64.34  law or charter are applicable to special district employees, 
 64.35  such provision shall continue to be applicable in the same 
 64.36  manner and to the same extent to employees of the converted 
 65.1   district.  ~~Notwithstanding any contrary provision of Extra~~ 
 65.2   ~~Session Laws 1959, Chapter 71, as amended, if there was in the~~ 
 65.3   ~~special district a teachers retirement fund association~~ 
 65.4   ~~operating and existing under the provisions of Laws 1909,~~ 
 65.5   ~~Chapter 343, and all acts amendatory thereof, then such teachers~~ 
 65.6   ~~retirement fund association shall continue to exist and operate~~ 
 65.7   ~~in the converted district under and to be subject to the~~ 
 65.8   ~~provisions of Laws 1909, Chapter 343, and all acts amendatory~~ 
 65.9   ~~thereof, to the same extent and in the same manner as before the~~ 
 65.10  ~~conversion, and, without limiting the generality of the~~ 
 65.11  ~~foregoing, such teachers retirement fund association shall~~ 
 65.12  ~~continue, after the conversion as before the conversion, to~~ 
 65.13  ~~certify to the same authorities the amount necessary to raise by~~ 
 65.14  ~~taxation in order to carry out its retirement plan, and it shall~~ 
 65.15  ~~continue, after the conversion as before the conversion, to be~~ 
 65.16  ~~the duty of said authorities to include in the tax levy for the~~ 
 65.17  ~~ensuing year a tax in addition to all other taxes sufficient to~~ 
 65.18  ~~produce so much of the sums so certified as said authorities~~ 
 65.19  ~~shall approve, and such teachers retirement fund association~~ 
 65.20  ~~shall not be subject after the conversion to any limitation on~~ 
 65.21  ~~payments to any beneficiary from public funds or on taxes to be~~ 
 65.22  ~~levied to carry out the plan of such association to which it was~~ 
 65.23  ~~not subject before the conversion.~~ 
 65.24     Sec. 42.  Laws 1989, chapter 319, article 13, section 94, 
 65.25  is amended to read: 
 65.26     Sec. 94.  [FIRST CLASS CITY TEACHER FUNDS.] 
 65.27     In accordance with Minnesota Statutes, section 354A.12, 
 65.28  subdivision 4, approval is granted for the teachers retirement 
 65.29  fund associations in each of the cities of the first class to 
 65.30  amend their articles of incorporation or bylaws in the manner 
 65.31  specified in this section.  The amendments apply only to basic 
 65.32  members in the Minneapolis teachers retirement fund association 
 65.33  ~~and the St. Paul teachers retirement fund association,~~ and to 
 65.34  old law coordinated program members in the Duluth teachers 
 65.35  retirement fund association. 
 65.36     (a) For purposes of this paragraph, the retirement formula 
 66.1   percentages are: 
 66.2      (1) for Minneapolis teachers retirement fund:  2.25 percent 
 66.3   for each year of service; and 
 66.4      (2) ~~for St. Paul teachers retirement fund:  2.0 percent for~~ 
 66.5   ~~each year of service; and~~ 
 66.6      ~~(3)~~ for Duluth teachers retirement fund old coordinated 
 66.7   plan:  1.25 percent for each year of service. 
 66.8      A member whose age plus credited allowable service totals 
 66.9   90 years, is entitled upon termination of active service and 
 66.10  application, to a normal retirement annuity provided in the 
 66.11  articles and bylaws without any reduction in the amount of the 
 66.12  annuity by reason of early retirement unless the benefit in 
 66.13  paragraph (b) in conjunction with paragraph (c) produces a 
 66.14  higher annuity in which case, paragraph (b) applies.  A member 
 66.15  who retires before the normal retirement age shall be provided a 
 66.16  normal retirement annuity provided in the articles and bylaws, 
 66.17  reduced by one-fourth of one percent for each month that the 
 66.18  employee is under normal retirement age at the time of 
 66.19  retirement unless the benefit in paragraph (b) in conjunction 
 66.20  with paragraph (c) produces a higher annuity, in which case 
 66.21  paragraph (b) applies.  For the Minneapolis teachers retirement 
 66.22  association, this paragraph applies only to basic members with 
 66.23  less than 30 years of service who have attained age 55.  For 
 66.24  Minneapolis teachers retirement fund basic members who were 
 66.25  first hired after July 1, 1977, and who have 30 or more years of 
 66.26  service, the early retirement penalty contained in the articles 
 66.27  and bylaws is repealed.  
 66.28     (b) This paragraph applies only to a member whose annuity, 
 66.29  when calculated under this paragraph in conjunction with 
 66.30  paragraph (c), is higher than when calculated under paragraph 
 66.31  (a).  The average salary, as specified in ~~the bylaws of St. Paul~~ 
 66.32  ~~teachers retirement fund association,~~ the bylaws of Duluth 
 66.33  teachers retirement fund association~~,~~ and the bylaws of 
 66.34  Minneapolis teachers retirement fund association, multiplied by 
 66.35  2.5 percent for each year of service for basic members of the 
 66.36  Minneapolis teachers retirement fund association and 1.5 percent 
 67.1   for each year of service for old coordinated members of Duluth 
 67.2   teachers retirement fund association, shall determine the amount 
 67.3   of the retirement annuity to which a member is entitled. 
 67.4      (c) This paragraph applies only to a member whose annuity 
 67.5   under paragraph (b) in conjunction with this paragraph is higher 
 67.6   than when calculated under paragraph (a).  A member who retires 
 67.7   under the formula annuity specified in paragraph (b) before the 
 67.8   normal retirement age defined in section 354A.011, shall be paid 
 67.9   the normal annuity provided in paragraph (b) reduced so that the 
 67.10  reduced annuity is the actuarial equivalent of the annuity that 
 67.11  would be payable to the employee if the employee deferred 
 67.12  receipt of the annuity and the annuity amount were augmented at 
 67.13  an annual rate of three percent compounded annually from the day 
 67.14  the annuity begins to accrue until the normal retirement age. 
 67.15     (d) The interest rate to be paid on refunds is six percent 
 67.16  per annum compounded annually. 
 67.17     (e) Any joint and survivor annuity option is subject to an 
 67.18  automatic bounce-back annuity as provided in section 354A.32, 
 67.19  subdivision 1a. 
 67.20     (f) A member who is eligible for a deferred retirement 
 67.21  annuity shall have the annuity augmented as provided in section 
 67.22  354A.37, subdivision 2. 
 67.23     (g)  The ~~first class city~~ Duluth teachers retirement ~~funds,~~ 
 67.24  fund association and the Minneapolis teachers retirement fund 
 67.25  association may provide optional annuity forms to its retirement 
 67.26  program which are the actuarial equivalent of its normal 
 67.27  retirement annuity.  For all optional forms, the board shall 
 67.28  obtain the written recommendation of an approved actuary and the 
 67.29  recommendation shall be a part of the permanent records of the 
 67.30  board.  
 67.31     Sec. 43.  Laws 1990, chapter 570, article 7, section 4, is 
 67.32  amended: 
 67.33     Sec. 4.  [DULUTH TEACHERS RETIREMENT FUND ~~AND ST. PAUL~~ 
 67.34  ~~TEACHERS RETIREMENT FUND:~~; ALTERNATE METHOD OF PAYING ADDITIONAL 
 67.35  LUMP SUM AMOUNT.] 
 67.36     Notwithstanding any provision of the articles or bylaws of 
 68.1   the Duluth teachers retirement fund association ~~or St. Paul~~ 
 68.2   ~~teachers retirement fund association~~ to the contrary, approval 
 68.3   is granted for the Duluth teachers retirement fund 
 68.4   association ~~and St. Paul teachers retirement fund association~~ to 
 68.5   provide that a lump sum postretirement adjustment that is 
 68.6   payable may, upon the request of the annuitant or survivor and 
 68.7   approval of the board of trustees of the fund, be converted to a 
 68.8   monthly annuity benefit of equivalent actuarial value.  The 
 68.9   amount of the additional annuity shall be determined by: 
 68.10     (1) the age of the annuitant or survivor on the date of the 
 68.11  lump sum postretirement adjustment; 
 68.12     (2) use of an annuity table of mortality established by the 
 68.13  board of trustees of the association as required by Minnesota 
 68.14  Statutes, section 356.215; and 
 68.15     (3) use of the postretirement interest rate assumption 
 68.16  specified in Minnesota Statutes, section 11A.18. 
 68.17     Sec. 44.  Laws 1992, chapter 598, article 6, section 18, is 
 68.18  amended to read: 
 68.19     Sec. 18.  [FIRST CLASS CITY TEACHERS PLANS; RETIREE 
 68.20  RESUMING SERVICE.] 
 68.21     In accordance with Minnesota Statutes, section 354A.12, 
 68.22  subdivision 4, the Minneapolis teachers retirement fund 
 68.23  association~~, the St. Paul teachers retirement fund association,~~ 
 68.24  and the Duluth teachers retirement fund association may amend 
 68.25  the articles of incorporation or bylaws of the respective 
 68.26  association.  This authorization is to provide that any person 
 68.27  who is retired and receiving a basic program formula retirement 
 68.28  annuity under the articles of incorporation or bylaws of the 
 68.29  Minneapolis teachers retirement fund association ~~or the St. Paul~~ 
 68.30  ~~teachers retirement fund association~~, or any person who is 
 68.31  retired and receiving an old law coordinated program formula 
 68.32  retirement annuity under the articles of incorporation or bylaws 
 68.33  of the Duluth retirement fund association, and who has resumed 
 68.34  teaching service for the school district covered by that same 
 68.35  retirement fund association, is entitled to continue to receive 
 68.36  retirement annuity payments.  However, the annuity payments must 
 69.1   be reduced in accordance with Minnesota Statutes, section 
 69.2   354A.31, subdivision 3, if the person's income from teaching 
 69.3   service is an amount greater than the maximum earnings allowable 
 69.4   for that age for the continued receipt of full benefit amounts 
 69.5   monthly under the federal old age, survivors, and disability 
 69.6   insurance program as set by the Secretary of Health and Human 
 69.7   Services under United States Code, title 42, section 403. 
 69.8      Sec. 45.  Laws 1993, chapter 336, article 2, section 2, is 
 69.9   amended to read: 
 69.10     Sec. 2.  [BYLAW AMENDMENT.] 
 69.11     Consistent with Minnesota Statutes, section 354A.12, 
 69.12  subdivision 4, the boards of the Duluth teachers retirement fund 
 69.13  association~~,~~ and the Minneapolis teachers retirement fund 
 69.14  association~~, and the St. Paul teachers retirement fund~~ 
 69.15  ~~association~~ may amend the bylaws or articles of incorporation to 
 69.16  provide that, if an application for retirement is filed with the 
 69.17  board during the 90-day period immediately following the 
 69.18  termination of teaching service, the annuity may begin to accrue 
 69.19  as if the application for retirement has been filed with the 
 69.20  board on the date teaching service terminated.  An annuity may 
 69.21  not begin to accrue more than one month before the date of final 
 69.22  salary receipt. 
 69.23     Sec. 46.  Laws 1994, chapter 542, section 5, is amended to 
 69.24  read: 
 69.25     Sec. 5. [~~ST. PAUL TEACHERS RETIREMENT FUND ASSOCIATION AND~~ 
 69.26  MINNEAPOLIS TEACHERS RETIREMENT FUND ASSOCIATION BYLAW 
 69.27  AMENDMENTS.] 
 69.28     Consistent with Minnesota Statutes, section 354A.12, 
 69.29  subdivision 4, the board of the Minneapolis teachers retirement 
 69.30  fund association ~~and the board of the St. Paul teachers~~ 
 69.31  ~~retirement fund association~~ may amend the bylaws or articles of 
 69.32  incorporation to provide that: 
 69.33     (1) a person receiving a basic program retirement annuity 
 69.34  under the governing sections in articles of incorporation or 
 69.35  bylaws and who resumes teaching service for ~~the~~ special school 
 69.36  district ~~in which the teachers retirement fund association~~ 
 70.1   ~~exists~~ No. 1 is entitled to continue to receive retirement 
 70.2   annuity payments, except that annuity payments must be reduced 
 70.3   during the calendar year immediately following the calendar year 
 70.4   in which the person's income from the teaching service is in an 
 70.5   amount greater than the annual maximum earnings allowable for 
 70.6   that age for the continued receipt of full benefit amounts 
 70.7   monthly under the federal old age, survivors, and disability 
 70.8   insurance program as set by the Secretary of Health and Human 
 70.9   Services under United States Code, title 42, section 403; 
 70.10     (2) the amount of the reduction must be one-third the 
 70.11  amount in excess of the applicable reemployment income maximum 
 70.12  and must be deducted from the annuity payable for the calendar 
 70.13  year immediately following the calendar year in which the excess 
 70.14  amount was earned; 
 70.15     (3) if the person has not yet reached the minimum age for 
 70.16  the receipt of social security benefits, the maximum earnings 
 70.17  for the person must be equal to the annual maximum earnings 
 70.18  allowable for the minimum age for the receipt of social security 
 70.19  benefits; 
 70.20     (4) if the person is retired for only a fractional part of 
 70.21  the calendar year during the initial year of retirement, the 
 70.22  maximum reemployment income must be prorated for that calendar 
 70.23  year; 
 70.24     (5) after a person has reached the age of 70, no 
 70.25  reemployment income maximum is applicable regardless of the 
 70.26  amount of any compensation received for teaching service for ~~the~~ 
 70.27  special school district ~~in which the teachers retirement fund~~ 
 70.28  ~~association exists~~ No. 1; and 
 70.29     (6) for the purposes of the bylaw amendment, income from 
 70.30  teaching service includes: (i) all income for services performed 
 70.31  as a consultant, independent contractor, or income resulting 
 70.32  from working with the school district in any capacity; and (ii) 
 70.33  the greater of either the income receive or an amount based on 
 70.34  the rate paid with respect to an administrative position, 
 70.35  consultant, or independent contractor in ~~the~~ special school 
 70.36  district ~~in which the teachers retirement fund association~~ 
 71.1   ~~exists~~ No. 1 and at the same level as the position occupied by 
 71.2   the person who resumes teaching service. 
 71.3      Sec. 47.  Laws 1995, chapter 252, article 1, section 16, as 
 71.4   amended by Laws 1996, chapter 438, article 9, section 1, is 
 71.5   amended to read: 
 71.6      Sec. 16.  [RETROACTIVE PROVISIONS.] 
 71.7      (a) A teacher who had at least three years of allowable 
 71.8   service credit under Minnesota Statutes, chapter 354 or 354A, on 
 71.9   July 1, 1994, and who worked part-time between July 1, 1994, and 
 71.10  June 30, 1995, may be allowed to make contributions to and 
 71.11  accrue allowable service credit in the applicable retirement 
 71.12  fund, as if the teacher had been working full time, as provided 
 71.13  in Minnesota Statutes, section 354.66, subdivision 4, and 
 71.14  354A.094, subdivision 4, for service after July 1, 1994, and 
 71.15  before June 30, 1995.  If a teacher described in this paragraph 
 71.16  wishes to obtain allowable service credit as if the teacher had 
 71.17  been working full time for th period from July 1, 1994, to June 
 71.18  30, 1995, the teacher must:  
 71.19     (1) make a lump sum payment to the applicable pension 
 71.20  fund ~~within 60 days after the effective date of this section~~ 
 71.21  ~~before August 2, 1996, with respect to the St. Paul teachers~~ 
 71.22  ~~retirement fund association or~~ before August 2, 1995, ~~with~~ 
 71.23  ~~respect to any other teacher retirement plan~~ of the difference 
 71.24  between the amount of the employer and employee contributions to 
 71.25  the pension fund that would have been paid if the teacher had 
 71.26  been working full time, and that amount that was actually paid 
 71.27  for part-time service during that period; and 
 71.28     (2) submit to the association a letter or other document 
 71.29  from the board of the teacher's employing district stating that 
 71.30  the board would have agreed to the teacher's participation in 
 71.31  the part-time mobility program during the 1994-1995 school year 
 71.32  but for the requirement then in effect that the district make 
 71.33  the full employer contribution to the retirement fund for 
 71.34  teachers with 20 or more years of service, based on the 
 71.35  compensation that would have been paid if the teacher had been 
 71.36  employed on a full-time basis. 
 72.1      (b) An employer of a teacher covered by paragraph (a) must 
 72.2   notify the teacher of the option available under paragraph (a) 
 72.3   in writing before July 3, ~~1996, with respect to the St. Paul~~ 
 72.4   ~~teachers retirement fund association, or before July 3,~~ 1995 
 72.5   ~~with respect to any other teacher retirement plan~~. 
 72.6      ~~(c) With respect to the St. Paul teachers retirement fund~~ 
 72.7   ~~association, any payment must include compound interest at an~~ 
 72.8   ~~annual rate of 8.5 percent from August 3, 1995, to the date on~~ 
 72.9   ~~which payment is made.~~  
 72.10     Sec. 48.  [INSTRUCTIONS TO THE REVISOR.] 
 72.11     In Minnesota Statutes 1997 Supplement and in subsequent 
 72.12  editions of Minnesota Statutes, the revisor of statutes shall 
 72.13  remove the reference to the St. Paul teachers retirement fund 
 72.14  association from the headnote to Minnesota Statutes, section 
 72.15  354A.23, and from any other headnote. 
 72.16     Sec. 49.  [REPEALER; GENERAL AND SPECIAL LAW; ST. PAUL 
 72.17  TEACHERS RETIREMENT FUND ASSOCIATION.] 
 72.18     (a) Minnesota Statutes 1996, sections 354A.23, subdivision 
 72.19  2; 355.201; 355.202; 355.203; 355.204; 355.205; 355.206; 
 72.20  355.207; 355.208; and 355.209, are repealed. 
 72.21     (b) Laws 1976, chapter 238, section 14; Laws 1977, chapter 
 72.22  429, sections 60 and 61; Laws 1979, chapter 109; Laws 1981, 
 72.23  chapter 157; Laws 1985, chapter 259, section 3; Laws 1987, 
 72.24  chapter 372, article 7, section 6; Laws 1988, chapter 709, 
 72.25  article 8, section 8; Laws 1990, chapter 570, article 7, section 
 72.26  3; Laws 1991, chapter 67; and Laws 1993, chapter 336, article 3, 
 72.27  section 1, are repealed. 
 72.28     Sec. 50.  [EFFECTIVE DATE.] 
 72.29     Sections 1 to 49 are effective July 1, 1998, if the board 
 72.30  of education of independent school district No. 625 elects to 
 72.31  have the statewide teachers retirement association provide 
 72.32  future retirement coverage to its teachers.