1997 Minnesota Statutes

CHAPTER 354A. Teachers retirement, certain cities

  354A.01 Repealed, 1979 c 217 s 28 

     354A.011 Definitions. 

    Subdivision 1.    Terms.  For purposes of this chapter, 
 unless the language or context clearly indicates that a 
 different meaning is intended, the following terms shall have 
 the meanings ascribed to them.  

    Subd. 2. Repealed, 1992 c 598 art 6 s 22 

    Subd. 3.    Accumulated contributions.  "Accumulated 
 contributions" means the total of member or employee 
 contributions made by salary deductions and assessments or 
 payments made in lieu of salary deductions, if authorized, which 
 are credited by the teachers retirement fund association to the 
 member's individual account.  

    Subd. 3a.    Actuarial equivalent.  "Actuarial 
 equivalent" means the condition of one annuity or benefit having 
 an equal actuarial present value as another annuity or benefit, 
 determined as of a given date with each actuarial present value 
 based on the appropriate mortality table adopted by the 
 appropriate board of trustees based on the experience of that 
 retirement fund association as recommended by the actuary 
 retained by the legislative commission on pensions and 
 retirement and using the applicable preretirement or 
 postretirement interest rate assumption specified in section 
 356.215, subdivision 4d. 

    Subd. 4.    Allowable service.  "Allowable service" 
 means any service rendered by a teacher during a period in which 
 the teacher receives salary from which employee contribution 
 salary deductions are made to and credited by the teachers 
 retirement fund association or any service rendered by a person 
 during any period where assessments or payments in lieu of 
 salary deductions were made if authorized by any law or 
 provision of the association's articles of incorporation or 
 bylaws then in effect or pursuant to section 354A.091, 354A.092, 
 354A.093, or 354A.094. 

    Subd. 5.    Annuity.  "Annuity" means the payments made 
 by a teachers retirement fund association in the form of a 
 retirement annuity or an optional annuity.  

    Subd. 6.    Approved actuary.  "Approved actuary" means 
 any actuary who is either a fellow of the society of actuaries 
 or who has at least 15 years of service to major public employee 
 retirement funds or any firm which retains such an actuary on 
 its staff.  

    Subd. 7.    Association.  "Association" or "teachers 
 retirement fund association" means the applicable teachers 
 retirement fund association established pursuant to this chapter.

    Subd. 8.    Basic member.  "Basic member" means any 
 member of the teachers retirement fund association who is not 
 covered by any agreement or modification made between the state 
 and the Secretary of Health, Education and Welfare.  

    Subd. 9.    Benefit.  "Benefit" means the allowance paid 
 or payable by the teachers retirement fund association to a 
 surviving spouse, designated beneficiary, surviving child or 
 estate or in periodic payments to a member or former member who 
 is permanently and totally disabled.  

    Subd. 10.    Board.  "Board" means the board of trustees 
 of a teachers retirement fund association.  

    Subd. 11.    Coordinated member.  "Coordinated member" 
 means any member of the teachers retirement fund association who 
 is covered by any agreement or modification made between the 
 state and the Secretary of Health, Education and Welfare making 
 the provisions of the federal old age, survivors and disability 
 insurance act applicable to certain teachers except in the case 
 of a member of the Duluth teachers retirement fund association, 
 in which it means additionally that the member either first 
 became a member prior to July 1, 1981, and elected to be covered 
 by the new law coordinated program of the Duluth teachers 
 retirement fund association or first became a member on or 
 subsequent to July 1, 1981. 

    Subd. 12.    Coordinated service.  "Coordinated service" 
 means the allowable service credited by the respective teachers 
 retirement fund association for which the member was covered by 
 the coordinated program of the association.  

    Subd. 12a.    Dependent child.  "Dependent child" means 
 any biological or adopted child of a deceased member who has not 
 reached the age of 20 and is dependent on the member for more 
 than one-half of the child's support at the time of the member's 
 death.  It also means a child of the member conceived during the 
 member's lifetime and born after the member's death. 

    Subd. 13.    Designated beneficiary.  "Designated 
 beneficiary" means the person designated by a member or retiree 
 of a teachers retirement fund association to receive the 
 benefits to which a beneficiary is entitled under this chapter.  
 A beneficiary designation is valid only if it is made on an 
 appropriate form provided by the executive director and the 
 properly completed form is received by the fund postmarked on or 
 before the date of death of the retiree or member.  If a retiree 
 or member does not designate such a person or if the person 
 designated predeceases the retiree or member, beneficiary in 
 such cases means the estate of the deceased retiree or member.  

    Subd. 14.    Disability.  "Disability" or "permanent and 
 total disability" means the inability of a member to engage in 
 any substantial gainful activity by reason of any medically 
 determinable physical or mental impairment which can be expected 
 to be of long continued and indefinite duration which shall in 
 no event be less than one year.  

    Subd. 14a.    District; school district.  "District" or 
 "school district" means the employing school district or the 
 board of trustees of the Minnesota state colleges and 
 universities. 

    Subd. 15.    Member.  "Member" for purposes of 
 entitlement to annuities or benefits pursuant to sections 
 354A.31 to 354A.41 and any other applicable provisions of this 
 chapter means every teacher who is engaged in teaching service 
 and who under section 354A.05 contributes to the respective 
 teachers retirement fund association and who has not retired.  
 "Member" for purposes of determining who may participate in the 
 organization and governance of the teachers retirement fund 
 association, including the eligibility to elect members of and 
 to serve as a member of the board of trustees, means every 
 teacher who joins and contributes to the respective teachers 
 retirement fund association and any other person designated as a 
 member by the articles of incorporation or the bylaws of the 
 respective teachers retirement fund association.  

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

    Subd. 16.    Normal retirement annuity.  "Normal 
 retirement annuity" means for a coordinated member the 
 retirement annuity computed pursuant to section 354A.31, 
 subdivision 4, and paid or payable to a member upon meeting the 
 age and service requirements specified in section 354A.31, 
 subdivision 5, and for a basic member the retirement annuity 
 computed pursuant to and paid or payable to a member upon 
 meeting the age and service requirements specified in the 
 applicable provisions of the articles of incorporation or bylaws 
 of the respective teachers retirement fund association.  

    Subd. 17.    Optional survivors annuity.  "Optional 
 survivors annuity" means the payments made by the teachers 
 retirement fund association to a survivor of a former member 
 pursuant to an actuarial equivalent optional annuity form 
 established by the applicable board of trustees under section 
 354A.32 and selected by the member at or before retirement.  

    Subd. 18.    Other than normal school operating funds.  
 "Other than normal school operating funds" means funds other 
 than those generated as proceeds of property tax levies, state 
 school maintenance cost aids distributed in accordance with 
 statute, state aid to distressed school districts, proceeds from 
 federal forest reserve lands, state transportation aids, 
 receipts from tuition paid by persons or other school districts, 
 any rental charges received, and any other moneys appropriated 
 by the legislature.  

    Subd. 19.    Program.  "Program" means a separate 
 component plan of a teachers retirement fund association 
 providing a specific set of retirement annuities and disability 
 and survivor benefits for a defined portion of the covered 
 membership of the association.  

    Subd. 20.    Reduced retirement annuity.  "Reduced 
 retirement annuity" means for a coordinated member the 
 retirement annuity computed pursuant to section 354A.31, 
 subdivision 4, reduced pursuant to section 354A.31, subdivision 
 6 or 7, and paid or payable to a member upon meeting the minimum 
 age and service requirements specified in section 354A.31, 
 subdivision 1, but prior to meeting the age and service 
 requirements specified in section 354A.31, subdivision 5, and 
 for a basic member the retirement annuity computed pursuant to 
 and paid or payable to a member upon meeting the minimum age and 
 service requirements specified in but prior to meeting the age 
 and service requirements for a normal retirement annuity 
 specified in the applicable provisions of the articles of 
 incorporation or bylaws of the respective teachers retirement 
 fund association.  

    Subd. 21.    Retirement.  "Retirement" means the time 
 after the date of cessation of active teaching service by a 
 teacher who is thereafter entitled to an accrued retirement 
 annuity commencing as designated by the board of trustees and 
 payable pursuant to an application for an annuity filed with the 
 board.  The applicable provisions of law, articles of 
 incorporation and bylaws in effect on the date of cessation of 
 active teaching service thereafter determine the rights of the 
 person.  

    Subd. 22.    Retirement annuity.  "Retirement annuity" 
 means the payments made by a teachers retirement fund 
 association to a retired teacher.  

    Subd. 23.    Sabbatical leave.  "Sabbatical leave" means 
 an authorized leave of absence period during which the member is 
 compensated at a rate of not less than one-third of the salary 
 which the member received during the plan year immediately 
 preceding the granting of the leave.  

    Subd. 24.    Salary; covered salary.  (a) "Salary" or 
 "covered salary" means the entire compensation, upon which 
 member contributions are required and made, that is paid to a 
 teacher before any allowable reductions permitted under the 
 federal Internal Revenue Code of 1986, as amended, for employee 
 selected fringe benefits, tax sheltered annuities, deferred 
 compensation, or any combination of these items. 

    (b) "Salary" does not mean: 

    (1) lump sum annual leave payments; 

    (2) lump sum wellness and sick leave payments; 

    (3) payments in lieu of any employer-paid group insurance 
 coverage; 

    (4) payments for the difference between single and family 
 premium rates that may be paid to a member with single coverage; 

    (5) employer-paid fringe benefits including, but not 
 limited to, flexible spending accounts, cafeteria plans, health 
 care expense accounts, day care expenses, or automobile 
 allowances and expenses; 

    (6) payments to school principals and all other 
 administrators for services in addition to the normal work year 
 contract if these additional services are performed on an 
 extended duty day, Saturday, Sunday, holiday, annual leave day, 
 sick leave day, or any other nonduty day; 

    (7) payments under section 356.24, subdivision 1, clause 
 (4)(ii); and 

    (8) payments made under section 125.12, subdivision 7, 
 except for payments for sick leave accumulated under the 
 provisions of a uniform school district policy that applies 
 equally to all similarly situated persons in the district. 

    Subd. 25.    Service.  "Service" means all allowable 
 service credited by the teachers retirement fund association, 
 irrespective of whether the member at the time was covered by 
 the basic program or by the coordinated program.  

    Subd. 26.    Spouse.  "Spouse" means the person who was 
 legally married to the member immediately prior to the member's 
 death. 

    Subd. 27.    Teacher.  "Teacher" means any person who 
 renders service in a public school district located in the 
 corporate limits of one of the cities of the first class which 
 was so classified on January 1, 1979, as any of the following: 

    (a) a full-time employee in a position for which a valid 
 license from the state department of children, families, and 
 learning is required; 

    (b) an employee of the teachers retirement fund association 
 located in the city of the first class unless the employee has 
 exercised the option pursuant to Laws 1955, chapter 10, section 
 1, to retain membership in the Minneapolis employees retirement 
 fund established pursuant to chapter 422A; 

    (c) a part-time employee in a position for which a valid 
 license from the state department of children, families, and 
 learning is required; or 

    (d) a part-time employee in a position for which a valid 
 license from the state department of children, families, and 
 learning is required who also renders other nonteaching services 
 for the school district unless the board of trustees of the 
 teachers retirement fund association determines that the 
 combined employment is on the whole so substantially dissimilar 
 to teaching service that the service shall not be covered by the 
 association. 

    The term shall not mean any person who renders service in 
 the school district as any of the following: 

    (1) an independent contractor or the employee of an 
 independent contractor; 

    (2) an employee who is a full-time teacher covered by 
 another teachers retirement fund association established 
 pursuant to this chapter or chapter 354; 

    (3) an employee exempt from licensure pursuant to section 
 125.031; 

    (4) an employee who is a teacher in a technical college 
 located in a city of the first class unless the person elects 
 coverage by the applicable first class city teacher retirement 
 fund association under section 354B.21, subdivision 2; or 

    (5) an employee who is a part-time teacher in a technical 
 college in a city of the first class and who has elected 
 coverage by the applicable first class city teacher retirement 
 fund association under section 354B.21, subdivision 2, but (i) 
 the teaching service is incidental to the regular nonteaching 
 occupation of the person; (ii) the applicable technical college 
 stipulates annually in advance that the part-time teaching 
 service will not exceed 300 hours in a fiscal year; and (iii) 
 the part-time teaching actually does not exceed 300 hours in the 
 fiscal year to which the certification applies.  

    Subd. 28.    Teaching service.  "Teaching service" means 
 any service as a teacher performed by any person included within 
 the definition of teacher.  

    HIST: 1979 c 217 s 1; 1980 c 609 art 5 s 22; 1981 c 224 s 131; 
 1981 c 269 s 1; 1981 c 298 s 11; 1983 c 286 s 9; 1987 c 258 s 
 12; 1987 c 259 s 46,47; 1989 c 246 s 2; 1989 c 319 art 13 s 
 71,72; 1990 c 570 art 12 s 45; 1991 c 269 art 2 s 11; 1992 c 598 
 art 6 s 1-10; 1993 c 336 art 1 s 1; art 6 s 16; 1994 c 508 art 1 
 s 5; 1994 c 542 s 1; 1995 c 141 art 4 s 4,5; 1Sp1995 c 3 art 16 
 s 13; 1997 c 233 art 3 s 1 

  354A.02 Repealed, 1979 c 217 s 28 

     354A.021 Teachers retirement fund associations in cities 
  of the first class. 

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

    Subd. 2.    Organization.  Each teachers retirement fund 
 association shall be organized and governed pursuant to this 
 chapter and chapter 317A, except that each association shall be 
 deemed to be a nonprofit corporation without coming within the 
 definition in section 317A.011, subdivision 6.  Any corporate 
 action of any teachers retirement fund association taken prior 
 to April 9, 1976, shall be deemed to be valid if it conformed 
 with Minnesota Statutes 1976, chapter 317 or 354A, or Revised 
 Laws 1905, chapter 58, as amended through April 9, 1976. 

    Subd. 3.    Fund.  Within each teachers retirement fund 
 association there shall be created a special retirement fund, 
 which shall include all of the assets of the teachers retirement 
 fund association other than assets of a tax sheltered annuity 
 program and fund authorized pursuant to subdivision 5 which were 
 acquired for the specific purpose of being credited to that 
 fund.  The special retirement fund shall be credited with all 
 employee and employer contributions, all interest and all other 
 income authorized by law.  Within the special retirement fund 
 there may be established separate special retirement fund 
 accounts for the purpose of providing convenience in the funding 
 of and accounting for retirement annuities and any authorized 
 ancillary benefits.  

    Subd. 4.    Fund disbursement restricted.  The assets 
 of the special retirement fund shall be disbursed only for the 
 purposes provided for in this chapter, the articles of 
 incorporation or bylaws in effect as of March 31, 1975, and the 
 articles of incorporation or bylaws adopted subsequent to March 
 31, 1975 in accordance with the provisions of section 354A.12.  
 All appropriate expenses of and any authorized benefits provided 
 by the teachers retirement fund association shall be paid from 
 the special retirement fund.  Amounts necessary to make payments 
 from the special retirement fund of a teachers retirement fund 
 association are hereby appropriated.  

    Subd. 5.    Tax sheltered annuity program and fund.  Any 
 teachers retirement fund association may establish a tax 
 sheltered annuity program and fund meeting the requirements of 
 section 403(b) of the Internal Revenue Code of 1986, as amended 
 through December 31, 1992, which shall include all assets which 
 were acquired for the specific purpose of being credited to the 
 program and fund and to which shall be credited all employee 
 contributions, and employer contributions if negotiated under a 
 collective bargaining agreement, designated for this purpose and 
 all interest income attributable to the assets of the program 
 and fund.  

    Subd. 6.    Trustees' fiduciary obligation.  The 
 trustees or directors of each teachers retirement fund 
 association shall administer each fund in accordance with the 
 applicable portions of this chapter, of the articles of 
 incorporation, of the bylaws, and of chapters 356 and 356A.  The 
 purpose of this subdivision is to establish each teachers 
 retirement fund association as a trust under the laws of the 
 state of Minnesota for all purposes related to section 401(a) of 
 the Internal Revenue Code of the United States, including all 
 amendments.  

    Subd. 7.    Actuarial consultant.  The board of trustees 
 or directors of each teachers retirement fund association may 
 contract for the services of an approved actuary and fix the 
 reasonable compensation for those services.  Any approved 
 actuary retained by the board shall function as the actuarial 
 advisor to the board and may perform actuarial valuations and 
 experience studies to supplement those performed by the actuary 
 retained by the legislative commission on pensions and 
 retirement.  Any supplemental actuarial valuations or experience 
 studies shall be filed with the executive director of the 
 legislative commission on pensions and retirement. 

    Subd. 8.    Audit by state auditor.  The books and 
 accounts of each teachers retirement fund association must be 
 examined and audited periodically as considered necessary by the 
 state auditor.  A full and detailed report of the examination 
 and audit must be made and a copy provided to the teachers 
 retirement fund association board of trustees.  The cost of any 
 examination and audit must be paid by the teachers retirement 
 fund association in accordance with section 6.56.  For purposes 
 of section 6.56, each teachers retirement fund association is 
 considered a local governmental entity equivalent to a county, 
 city, town, or school district.  

    HIST: 1979 c 217 s 2; 1983 c 286 s 10; 1987 c 259 s 48; 1987 c 
 284 art 7 s 1; 1987 c 372 art 11 s 1; 1989 c 304 s 135; 1989 c 
 319 art 8 s 18; 1990 c 488 s 43; 1992 c 598 art 6 s 11; 1993 c 
 336 art 1 s 2; 1993 c 375 art 8 s 14 

  354A.023 Never Effective 

     354A.026 Duluth teachers retirement fund association; 
  exception to certain actuarial valuation provisions. 

    Notwithstanding any provision of section 356.215, 
 subdivision 4g, to the contrary, the amortization target date 
 for use in determining the amortization contribution requirement 
 in any actuarial valuation of the Duluth teachers retirement 
 fund association after the date of enactment must be June 30, 
 2020. 

    HIST: 1995 c 262 art 2 s 1 

  354A.03 Repealed, 1979 c 217 s 28 

  354A.04 Repealed, 1979 c 217 s 28 

     354A.05 Membership in a teachers retirement association 
  in a city of the first class. 

    Teachers contributing to the respective teachers retirement 
 fund association, as provided in this chapter and the articles 
 of incorporation and the bylaws of the association, are entitled 
 to the benefit of coverage by or entitlement to annuities or 
 benefits from the association.  All teachers in a city of the 
 first class in which there exists a teachers retirement fund 
 association are members of that teachers retirement fund 
 association and participate in the benefits provided by the 
 special retirement fund. 

    HIST: (1362) 1909 c 343 s 5; 1941 c 214 s 1; 1945 c 390 s 1; 
 1951 c 25 s 1; 1973 c 255 s 1; 1976 c 2 s 125; 1979 c 40 s 8; 
 1979 c 217 s 3; 1992 c 598 art 6 s 12 

  354A.06 Repealed, 1975 c 306 s 34 

  354A.07 Repealed, 1975 c 306 s 34 

     354A.08 Authorized investments. 

    A teachers retirement fund association may receive, hold, 
 and dispose of real estate or personal property acquired by it, 
 whether the acquisition was by purchase, or any other lawful 
 means, as provided in this chapter or in the association's 
 articles of incorporation.  In addition to other authorized real 
 estate investments, an association may also invest funds in 
 Minnesota situs nonfarm real estate ownership interests or loans 
 secured by mortgages or deeds of trust. 

    HIST: (1364) 1909 c 343 s 7; 1979 c 217 s 4; 1983 c 291 s 3; 
 1992 c 598 art 6 s 13 

     354A.09 Pro rata distribution of funds. 

    In the event that the assets of the special retirement fund 
 of a teachers retirement fund association are not sufficient to 
 pay annuities and other retirement benefits in full as they come 
 due in any particular year, the amount of special retirement 
 fund assets available for payment shall be prorated among those 
 annuitants and beneficiaries entitled to receive annuities and 
 other retirement benefits. 

    HIST: (1365) 1909 c 343 s 8; 1979 c 217 s 5 

     354A.091 Teachers on extended leave. 

    Subdivision 1.    Retirement contributions.  
 Notwithstanding any provision to the contrary of this chapter or 
 the articles of incorporation or bylaws of an association 
 relating to the salary figure to be used for the determination 
 of contributions or the accrual of service credit an elementary, 
 secondary, or technical college teacher in the public schools of 
 a city of the first class who is granted an extended leave of 
 absence pursuant to section 125.60, may pay employee 
 contributions to the applicable association and shall be 
 entitled to receive allowable service credit in that association 
 for each year of leave, provided the member and the employing 
 board make the required employer contributions, in any 
 proportion they may agree upon, to that association during the 
 period of leave which shall not exceed five years.  The state 
 shall not make an employer contribution on behalf of the 
 teacher.  The employee and employer contributions shall be based 
 upon the rates of contribution prescribed by section 354A.12 as 
 applied to a salary figure equal to the teacher's actual covered 
 salary for the plan year immediately preceding the leave.  
 Payment of the employee and employer contributions authorized 
 pursuant to this section shall be made on or before June 30 of 
 the fiscal year for which service credit is to be received.  No 
 allowable service with respect to a year of extended leave of 
 absence shall be credited to a teacher until payment of the 
 required employee and employer contributions has been received 
 by the association. 

    Subd. 1a.    Exception for leaves since 1981-1982.  
 Notwithstanding subdivision 1, the following provisions apply to 
 elementary and secondary school and technical institute teachers 
 whose extended leaves begin in the 1981-1982, 1982-1983, or 
 1983-1984 school year:  

    (a) A member whose application states the intention to pay 
 employee contributions to the applicable association, requests 
 state payment of the employer contribution, and is approved by 
 the commissioner within the limits of section 125.60, 
 subdivision 7, may pay employee contributions to the applicable 
 association and receive allowable service credit in that 
 association for each year of leave during the period of the 
 leave, which shall not exceed five years; 

    (b) The state shall pay employer contributions for a member 
 described in clause (a) for no more than the first three years 
 of the leave, provided the member who is on extended leave pays 
 the employee contribution to the applicable association by the 
 payment date specified in subdivision 1; 

    (c) A member whose application is approved as to the 
 member's eligibility under section 125.60, subdivisions 1 and 2, 
 but whose application does not request state payment of employer 
 contributions or is disapproved as to state payment of employer 
 contributions, or who is in the fourth or fifth year of leave 
 affected by clause (b) may pay employee contributions and 
 receive allowable service credit as provided in subdivision 1 if 
 the member and the employing school board make the required 
 employer contribution, in any proportion which they may agree 
 upon, by the payment date specified in subdivision 1. 

    Subd. 1b.   Pre-May 16, 1981, leave exception.  
 Notwithstanding subdivision 1, the following provisions apply 
 only to elementary, secondary, and area vocational technical 
 school teachers whose extended leaves began in the 1978-1979, 
 1979-1980, or 1980-1981 school years:  

    (a) A member whose period of extended leave began on or 
 before May 15, 1981, may pay employee contributions and receive 
 allowable service credit toward annuities and other benefits 
 under this chapter for each year of the leave during the period 
 of the leave which does not exceed five years; 

    (b) The state shall pay employer contributions into the 
 applicable fund for a member described in clause (a) for each 
 year of the leave for which the member who is on extended leave 
 pays the employee's contribution into the fund by the payment 
 date specified in subdivision 1.  

    Subd. 2.    Membership retention.  A teacher on extended 
 leave pursuant to section 125.60 whose employee and employer 
 contributions are made to the applicable teachers retirement 
 fund association pursuant to subdivision 1 shall retain 
 membership in the association for each year during which the 
 contributions are made, under the same terms and conditions as 
 if the teacher had continued to teach in the district. 

    Subd. 3.    Effect of nonpayment.  A teacher on extended 
 leave pursuant to section 125.60 who does not make employee 
 contributions or whose employer contribution is not made to the 
 applicable teachers retirement fund association in any year 
 shall be deemed to have ceased to be an active member of the 
 association and to have ceased to render teaching services 
 beginning in that year for purposes of this chapter and the 
 articles of incorporation and bylaws of the association, and may 
 not pay employee or employer contributions into the fund in any 
 subsequent year of the leave.  Nonpayment of contributions into 
 the fund shall not affect the rights or obligations of the 
 teacher or the employing school district under section 125.60. 

    Subd. 4.  If a teacher who has made employee contributions 
 to the applicable teachers retirement fund association for the 
 agreed maximum duration of an extended leave does not resume 
 teaching service in the first school year after that maximum 
 duration has elapsed, the teacher shall be deemed to have ceased 
 to be an active member of the association and to have ceased to 
 render teaching services beginning in that first school year 
 after that maximum duration has elapsed for purposes of this 
 chapter and the articles of incorporation and bylaws of the 
 association. 

    Subd. 5.  The provisions of this section shall not apply to 
 a teacher who is discharged pursuant to section 125.17 while the 
 teacher is on an extended leave of absence pursuant to section 
 125.60. 

    Subd. 6.  A teacher who makes employee contributions to and 
 receives allowable service credit in the applicable teacher's 
 retirement fund association pursuant to this section may not 
 make employee contributions or receive allowable service credit 
 for the same period of time in any other Minnesota public 
 employee pension plan, except a volunteer firefighters' relief 
 association governed by sections 69.771 to 69.776.  This 
 subdivision shall not be construed to prohibit a member who pays 
 employee contributions and receives allowable service credit in 
 the fund pursuant to this section in any year from being 
 employed as a substitute teacher by any school district during 
 that year.  Notwithstanding the provisions of this chapter or 
 the bylaws of a retirement association, a teacher may not pay 
 retirement contributions or receive allowable service credit in 
 the fund for teaching service rendered for any part of any year 
 for which the teacher pays retirement contributions or receives 
 allowable service credit pursuant to section 354.094 or this 
 section while on an extended leave of absence pursuant to 
 section 125.60. 

    HIST: 1977 c 447 art 9 s 6; 1978 c 764 s 120,121; 1979 c 217 s 
 6; 1979 c 334 art 8 s 20-22; 1981 c 224 s 132,133; 1981 c 358 
 art 8 s 14-17; 1983 c 314 art 10 s 12-14; 1986 c 444; 1987 c 258 
 s 12; 1989 c 246 s 2; 1989 c 293 s 79; 1989 c 329 art 9 s 23,24 

     354A.092 Sabbatical leave. 

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

    HIST: 1979 c 217 s 7; 1981 c 224 s 134; 1981 c 269 s 2; 
 1Sp1985 c 12 art 11 s 10; 1996 c 305 art 1 s 87 

     354A.093 Military service credit. 

    Any teacher in the coordinated program of either the 
 Minneapolis teachers retirement fund association or the St.  
 Paul teachers retirement fund association or any teacher in the 
 new law coordinated program of the Duluth teachers retirement 
 fund association who is granted a leave of absence to enter 
 military service and who returns to active teaching service upon 
 discharge from military service as provided in section 192.262, 
 shall be entitled to receive allowable service credit in the 
 applicable association for all or a portion of the period of 
 military service but not for any voluntary extension of military 
 service beyond the initial period of enlistment, induction or 
 call to active duty which occurred at the instance of the 
 teacher.  If the teacher granted the military service leave of 
 absence makes the employee contribution for a period of military 
 service leave of absence pursuant to this section, the employing 
 unit shall make an employer contribution on behalf of the 
 teacher to the applicable association for the period of the 
 military service leave of absence in the manner described in 
 section 354A.12, subdivision 2a.  The employee and employer 
 contributions shall be in an amount equal to the employee and 
 employer contribution rates in effect for other active members 
 of the association covered by the same program applied to a 
 salary figure equal to the teacher's annual salary rate at the 
 date of return from military service, multiplied by the number 
 of years constituting the period of the military service leave 
 of absence which the teacher seeks to purchase.  Payment shall 
 include interest on the amount payable pursuant to this section 
 at the rate of six percent compounded annually from the year the 
 military service was rendered to the date of payment.  If the 
 payments made by a teacher pursuant to this section are less 
 than an amount equal to the applicable contribution rate applied 
 to a salary figure equal to the teacher's annual salary rate at 
 the date of return from military service, multiplied by the 
 number of years constituting the period of the military service 
 leave of absence, service credit shall be prorated.  The 
 prorated service credit shall be determined by the ratio between 
 the amount of the actual payment which was made and the full 
 contribution amount payable pursuant to this section.  In order 
 to be entitled to receive service credit under this section, 
 payment shall be made within five years from the date of 
 discharge from military service. 

    HIST: 1979 c 217 s 8; 1981 c 269 s 3; 1Sp1985 c 12 art 11 s 11; 
 1996 c 305 art 1 s 88 

     354A.094 Qualified part-time teachers; participation in 
  fund. 

    Subdivision 1.  For purposes of this section, the term 
 "teachers" shall have the meaning given in section 125.03, 
 subdivision 1, except that the term shall not include 
 superintendents.  

    Subd. 2.  For purposes of this section, the term "part-time 
 teaching position" shall mean a teaching position within the 
 district in which the teacher is employed for at least 50 full 
 days or a fractional equivalent of 50 full days calculated using 
 the appropriate minimum number of hours which would result in a 
 full day of service credit by the appropriate association and 
 for which the teacher is compensated in an amount not to exceed 
 67 percent of the compensation rate established by the board for 
 a full-time teacher with identical education and experience 
 within the district. 

    Subd. 3.  A teacher in the public schools of a city of the 
 first class who has three years or more allowable service in the 
 applicable retirement fund association or three years or more of 
 full-time teaching service in Minnesota public elementary 
 schools, secondary schools, and technical colleges may, by 
 agreement with the board of the employing district, be assigned 
 to teaching service within the district in a part-time teaching 
 position. 

    Subd. 4.    Retirement contributions.  Notwithstanding 
 any provision to the contrary in this chapter or the articles of 
 incorporation or bylaws of an association relating to the salary 
 figure to be used for the determination of contributions or the 
 accrual of service credit, a teacher assigned to a part-time 
 position under this section shall continue to make employee 
 contributions to and to accrue allowable service credit in the 
 applicable association during the period of part-time employment 
 on the same basis and in the same amounts as would have been 
 paid and accrued if the teacher had been employed on a full-time 
 basis provided that, prior to June 30 each year the member and 
 the employing board make that portion of the required employer 
 contribution to the applicable association in any proportion 
 which they may agree upon, that is based on the difference 
 between the amount of compensation that would have been paid if 
 the teacher had been employed on a full-time basis and the 
 amount of compensation actually received by the teacher for 
 services rendered in the part-time assignment.  The employer 
 contributions to the applicable association on behalf of the 
 teacher shall be based on the amount of compensation actually 
 received by the teacher for the services rendered in the 
 part-time assignment in the manner described in section 354A.12, 
 subdivision 2a.  The employee and employer contributions shall 
 be based upon the rates of contribution prescribed by section 
 354A.12.  Full membership, accrual of allowable service credit 
 and employee contributions for part-time teaching service by a 
 teacher pursuant to this section and section 354.66 shall not 
 continue for a period longer than ten years.  

    Subd. 4a. Repealed, 1987 c 398 art 7 s 43 

    Subd. 5.  A teacher entitled to full membership, accrual 
 of allowable service credit and employee contributions for part 
 time teaching service pursuant to this section shall not be 
 entitled during the same period of time to be a member of, 
 accrue allowable service credit in or make employee 
 contributions to any other Minnesota public pension plan, except 
 a volunteer firefighters relief association governed by sections 
 69.771 to 69.776.  

    Subd. 6.  A board of an employing district entering into 
 an agreement authorized by this section shall take all steps 
 necessary to assure continuance of any insurance programs 
 furnished or authorized a full-time teacher on an identical 
 basis and with identical sharing of costs for a part time 
 teacher pursuant to this section.  

    Subd. 7.  Only teachers who are in the bargaining unit as 
 defined in section 179A.03, subdivision 7, during the year 
 preceding the period of part time employment pursuant to this 
 section shall qualify for full membership in, accrual of service 
 credit from, and employee contributions to a teachers retirement 
 fund association for part time teaching service pursuant to 
 subdivision 4.  Notwithstanding the provisions of section 
 179A.03, subdivision 14, clauses (e) and (f), teachers who are 
 employed on a part time basis for purposes of this section and 
 who would therefore be disqualified from the bargaining unit by 
 one or both of those provisions, shall continue to be in the 
 bargaining unit during the period of part time employment 
 pursuant to this section for purposes of compensation, fringe 
 benefits and the grievance procedure.  

    Subd. 8.  No teacher shall qualify for full membership in, 
 accrual of service credit from and employee contributions to the 
 teachers retirement association or a teachers retirement fund 
 association for part time teaching service pursuant to 
 subdivision 4 or section 354.66, subdivision 4, in more than one 
 district at the same time.  No teacher shall qualify for full 
 membership in, accrual of service credit from and employee 
 contributions to a teachers retirement fund association during 
 part time employment in a district pursuant to this section in 
 any year if the teacher also takes a full time or part time 
 teaching position in another Minnesota school district. 

    Subd. 9. Repealed, 1987 c 398 art 7 s 43 

    Subd. 10.  Nothing in this section shall be construed to 
 limit the authority of a school board to assign a teacher to a 
 part time teaching position which does not qualify for employee 
 contributions to a teachers retirement fund association pursuant 
 to this section.  

    Subd. 11.  Neither subdivision 5 nor subdivision 8 shall be 
 construed to prohibit a teacher who qualifies for full 
 membership in, accrual of service credit from and employee 
 contributions to a teachers retirement fund association pursuant 
 to this section in any year from being employed as a substitute 
 teacher by any school district during that year.  
 Notwithstanding the provisions of this chapter or the bylaws of 
 a retirement association, a teacher may not pay retirement 
 contributions or receive allowable service credit in the funds 
 for other teaching service rendered for any part of any year for 
 which the teacher qualifies for full membership in, accrual of 
 service credit from and employee contributions to the teachers 
 retirement association or a teachers retirement fund association 
 pursuant to section 354.66 or this section. 

    Subd. 12.    Information supplied by district.  Each 
 school district covered by the provisions of this chapter shall 
 furnish to the appropriate teachers retirement fund association 
 whatever information and reports deemed necessary by the board 
 of trustees of the applicable teachers retirement fund 
 association to administer the provisions of this section.  

    HIST: 1979 c 217 s 9; 1980 c 509 s 136-139; 1981 c 224 s 
 135-138; 1981 c 358 art 8 s 18; 1982 c 578 art 3 s 6; 1983 c 314 
 art 10 s 15-17; 1984 c 462 s 27; 1Sp1985 c 12 art 6 s 20; art 11 
 s 12; 1987 c 258 s 12; 1989 c 246 s 2; 1989 c 329 art 9 s 25; 
 1991 c 199 art 1 s 72; 1994 c 521 s 3,4; 1995 c 262 art 1 s 6; 
 1996 c 305 art 1 s 89 

     354A.095 Parental and maternity leave. 

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

    HIST: 1989 c 319 art 2 s 21; 1990 c 570 art 12 s 46; 1994 c 
 542 s 2 

     354A.096 Medical leave. 

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

    HIST: 1990 c 570 art 7 s 2; 1992 c 598 art 6 s 14 

  354A.10 Repealed, 1979 c 217 s 28 

     354A.105 Minneapolis teachers retirement fund 
  association; purchase of allowable service credit for teaching 
  service outside Minnesota. 

    (a) Notwithstanding any law, article of incorporation, or 
 bylaw provision of the Minneapolis teachers retirement fund 
 association to the contrary, an active member who has engaged in 
 other elementary or secondary public school teaching employment 
 either outside the state of Minnesota, but rendered in the 
 United States, or for the federal government before first 
 becoming a member of the association and who has met the 
 qualifications of paragraph (b) may elect to purchase and 
 receive allowable service credit in the applicable program of 
 the association for qualified prior service in other elementary 
 or secondary public school teaching employment that satisfies 
 the requirements of paragraph (c) by making the required payment 
 under paragraph (d). 

    (b) A member may elect to purchase allowable service credit 
 for other elementary or secondary public school teaching 
 employment under this subdivision if: 

    (1) the member has at least three years of allowable 
 service credit in the applicable program of the association; and 

    (2) the member did not and could not receive accrued 
 benefits by leaving the person's accumulated member 
 contributions with any other retirement system under the 
 applicable law in effect at the termination of the other public 
 employment. 

    (c) Service in other elementary or secondary public school 
 teaching employment rendered in the United States qualifies for 
 purchase under this subdivision if the service to be credited: 

    (1) does not exceed the lesser of ten years or the member's 
 total years of allowable teaching service in the Minneapolis 
 public schools at the time of the purchase; 

    (2) is equivalent to full-time allowable service as 
 determined in accordance with the statutes and rules applicable 
 to the association at the time of the purchase; 

    (3) is purchased in full year increments; 

    (4) is not for a period of service that has been used by 
 the member to qualify for an annuity from any other public 
 school retirement fund or system, as certified by the chief 
 administrative officer of the applicable retirement system; and 

    (5) is not available to be used for the purpose of 
 qualifying the member for a disability benefit from the 
 association. 

    (d) For a person eligible to purchase credit for qualifying 
 service under this subdivision, there must be paid to the 
 association an amount equal to the present value, on the date of 
 payment, of the amount of the additional retirement annuity that 
 would be obtained by virtue of the purchase of the additional 
 service credit, using the applicable preretirement interest rate 
 specified in section 356.215, subdivision 4d, and the mortality 
 table adopted for the retirement fund association and assuming 
 continuous future service in the retirement fund association 
 until the age at which the minimum requirements are met for 
 normal retirement with an annuity unreduced for retirement 
 before the normal retirement age, including the provisions of 
 section 356.30, and also assuming a future salary history that 
 includes increases at the applicable rate assumed under section 
 356.215, subdivision 4d. 

    (e) Payments under this section must be made only by the 
 member.  The employer unit may not make any payment to or on 
 behalf of any member for the purpose of purchasing service 
 credit under this section. 

    (f) This section is repealed effective July 1, 2005.  On or 
 before January 1, 2006, special school district No. 1 and the 
 Minneapolis teachers retirement fund association shall jointly 
 report to the legislature and the governor on the effects of the 
 provisions under this section on the district, fund, and 
 members.  The report shall include information on use of the 
 service credit purchase provisions, the usefulness of this 
 section in promoting the recruitment and retention objectives of 
 the district, and the portability of pension benefits for 
 teachers and school administrative personnel. 

    HIST: 1996 c 438 art 4 s 4 

     354A.11 Certain money and credits of teachers exempt. 

    All money deposited by a teacher or member or deposited by 
 any other person or corporation, municipal or private, to the 
 credit of a teacher or member of a teachers retirement fund 
 association organized pursuant to this chapter, and all money, 
 rights, and interests or annuities due or to become due to a 
 teacher, member, or annuitant, or their beneficiaries, from any 
 association shall not be assignable, shall be exempt from 
 garnishment, attachment, and execution or sale on any final 
 process issued from a court and other legal process, except as 
 provided in section 518.58, 518.581, or 518.6111, and shall not 
 be subject to the estate tax provisions of this state.  

    HIST: (1366-2) 1939 c 72 s 1; 1967 c 605 s 1; 1971 c 789 s 7; 
 1979 c 217 s 10; 1979 c 303 art 3 s 31; 1982 c 578 art 1 s 9; 
 1983 c 286 s 11; 1984 c 547 s 8; 1987 c 157 s 7; 1997 c 203 art 
 6 s 92 

     354A.12 Contributions by employee and employer. 

    Subdivision 1.    Employee contributions.  The 
 contribution required to be paid by each member of a teachers 
 retirement fund association shall not be less than the 
 percentage of total salary specified below for the applicable 
 association and program: 

      Association and Program              Percentage of

                                           Total Salary

 Duluth teachers retirement

   association

           old law and new law

           coordinated programs              5.5 percent

 Minneapolis teachers retirement

   association

           basic program                     8.5 percent

           coordinated program               5.5 percent

 St. Paul teachers retirement

   association

           basic program                     8 percent

           coordinated program               5.5 percent

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

    Subd. 1a.    Obligation for omitted salary deductions.  
 If the full required contributions are not deducted from the 
 salary of a teacher, payment of the shortage in such deductions 
 is the sole obligation of the employing unit during the 
 three-year period following the end of the fiscal year in which 
 the shortage occurred.  The shortage is payable by the employing 
 unit upon notification of the shortage by the executive director 
 of the applicable retirement fund association.  The employing 
 unit shall also pay any employer contributions related to the 
 shortage.  The amount of the shortage in employee contributions 
 and associated employer contributions is payable with interest 
 at the preretirement interest assumption for the retirement fund 
 as specified in section 356.215, subdivision 4d, stated as a 
 monthly rate from the date due until the date payment is 
 received in the office of the association, with a minimum 
 interest charge of $10.  If the shortage payment and interest is 
 not paid by the employing unit within 60 days of notification, 
 the executive director shall certify the amount of the shortage 
 payment and interest to the commissioner of finance, who shall 
 deduct the amount from any state aid or appropriation amount 
 applicable to the employing unit.  

    Subd. 2.    Retirement contribution levy disallowed.  
 Except as provided in subdivision 3b and in section 423A.02, 
 subdivision 3, with respect to the city of Minneapolis and 
 special school district No. 1 and in section 423A.02, 
 subdivision 3, with respect to independent school district No. 
 625, notwithstanding any law to the contrary, levies for 
 teachers retirement fund associations in cities of the first 
 class, including levies for any employer social security taxes 
 for teachers covered by the Duluth teachers retirement fund 
 association or the Minneapolis teachers retirement fund 
 association or the St. Paul teachers retirement fund 
 association, are disallowed. 

    Subd. 2a.    Employer regular and additional contribution 
 rates.  (a) The employing units shall make the following 
 employer contributions to teachers retirement fund associations: 

    (1) for any coordinated member of a teachers retirement 
 fund association in a city of the first class, the employing 
 unit shall pay the employer social security taxes in accordance 
 with section 355.46, subdivision 3, clause (b); 

    (2) for any coordinated member of one of the following 
 teachers retirement fund associations in a city of the first 
 class, the employing unit shall make a regular employer 
 contribution to the respective retirement fund association in an 
 amount equal to the designated percentage of the salary of the 
 coordinated member as provided below: 

      Duluth teachers retirement
      fund association                        4.50 percent
      Minneapolis teachers retirement
      fund association                        4.50 percent
      St. Paul teachers retirement
      fund association                        4.50 percent;

    (3) for any basic member of one of the following teachers 
 retirement fund associations in a city of the first class, the 
 employing unit shall make a regular employer contribution to the 
 respective retirement fund in an amount equal to the designated 
 percentage of the salary of the basic member as provided below: 

      Minneapolis teachers retirement

      fund association                        8.50 percent

      St. Paul teachers retirement

      fund association                        8.00 percent

    (4) for a basic member of a teachers retirement fund 
 association in a city of the first class, the employing unit 
 shall make an additional employer contribution to the respective 
 fund in an amount equal to the designated percentage of the 
 salary of the basic member, as provided below: 

      Minneapolis teachers retirement 

      fund association 

        July 1, 1993 - June 30, 1994          4.85 percent 

        July 1, 1994, and thereafter          3.64 percent

      St. Paul teachers retirement 

      fund association 

        July 1, 1993 - June 30, 1995          4.63 percent 

        July 1, 1995, and thereafter          3.64 percent

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

      Duluth teachers retirement

      fund association                        1.29 percent 

      Minneapolis teachers retirement

      fund association

        July 1, 1993 - June 30, 1994          0.50 percent 

        July 1, 1994, and thereafter          3.64 percent

      St. Paul teachers retirement 

      fund association 

        July 1, 1993 - June 30, 1994          0.50 percent 

        July 1, 1994 - June 30, 1995          1.50 percent 

        July 1, 1997, and thereafter          3.84 percent 

    (b) The regular and additional employer contributions must 
 be remitted directly to the respective teachers retirement fund 
 association at least once each month.  Delinquent amounts are 
 payable with interest under the procedure in subdivision 1a. 

    (c) Payments of regular and additional employer 
 contributions for school district or technical college employees 
 who are paid from normal operating funds must be made from the 
 appropriate fund of the district or technical college. 

    Subd. 2b. Repealed, 1997 c 233 art 3 s 12 

    Subd. 3.  Repealed, 1Sp1985 c 12 art 11 s 22 

    Subd. 3a.    Special direct state aid to first class city 
 teachers retirement fund associations.  (a) In fiscal year 
 1998, the state shall pay $4,827,000 to the St. Paul teachers 
 retirement fund association, $17,954,000 to the Minneapolis 
 teachers retirement fund association, and $486,000 to the Duluth 
 teachers retirement fund association.  In each subsequent fiscal 
 year, these payments to the first class city teachers retirement 
 fund associations must be $2,827,000 for St. Paul, $12,954,000 
 for Minneapolis, and $486,000 for Duluth. 

    (b) The direct state aids under this subdivision are 
 payable October 1 annually.  The commissioner of finance shall 
 pay the direct state aid.  The amount required under this 
 subdivision is appropriated annually from the general fund to 
 the commissioner of finance. 

    Subd. 3b.    Special direct state matching aid to the 
 Minneapolis teachers retirement fund association.  (a) Special 
 school district No. 1 may make an additional employer 
 contribution to the Minneapolis teachers retirement fund 
 association.  The city of Minneapolis may make a contribution to 
 the Minneapolis teachers retirement fund association.  This 
 contribution may be made by a levy of the board of estimate and 
 taxation of the city of Minneapolis and the levy, if made, is 
 classified as that of a special taxing district for purposes of 
 sections 275.065 and 276.04, and for all other property tax 
 purposes. 

    (b) For every $1,000 contributed in equal proportion by 
 special school district No. 1 and by the city of Minneapolis to 
 the Minneapolis teachers retirement fund association under 
 paragraph (a), the state shall pay to the Minneapolis teachers 
 retirement fund association $1,000, but not to exceed $2,500,000 
 in total in fiscal year 1994.  The superintendent of special 
 school district No. 1, the mayor of the city of Minneapolis, and 
 the executive director of the Minneapolis teachers retirement 
 fund association shall jointly certify to the commissioner of 
 finance the total amount that has been contributed by special 
 school district No. 1 and by the city of Minneapolis to the 
 Minneapolis teachers retirement fund association.  Any 
 certification to the commissioner of children, families, and 
 learning must be made quarterly.  If the total certifications 
 for a fiscal year exceed the maximum annual direct state 
 matching aid amount in any quarter, the amount of direct state 
 matching aid payable to the Minneapolis teachers retirement fund 
 association must be limited to the balance of the maximum annual 
 direct state matching aid amount available.  The amount required 
 under this paragraph, subject to the maximum direct state 
 matching aid amount, is appropriated annually to the 
 commissioner of finance. 

    (c) The commissioner of finance may prescribe the form of 
 the certifications required under paragraph (b). 

    Subd. 3c.    Termination of supplemental contributions and 
 direct matching and state aid.  (a) The supplemental 
 contributions payable to the Minneapolis teachers retirement 
 fund association by special school district No. 1 and the city 
 of Minneapolis under section 423A.02, subdivision 3, or to the 
 St. Paul teachers retirement fund association by independent 
 school district No. 625 under section 423A.02, subdivision 3, or 
 the direct state aids under subdivision 3a to the first class 
 city teachers retirement associations, and the direct matching 
 and state aid under subdivision 3b to the Minneapolis teachers 
 retirement fund association terminate for the respective fund at 
 the end of the fiscal year in which the accrued liability 
 funding ratio for that fund, as determined in the most recent 
 actuarial report for that fund by the actuary retained by the 
 legislative commission on pensions and retirement, equals or 
 exceeds the accrued liability funding ratio for the teachers 
 retirement association, as determined in the most recent 
 actuarial report for the teachers retirement association by the 
 actuary retained by the legislative commission on pensions and 
 retirement. 

    (b) If the state direct matching, state supplemental, or 
 state aid is terminated for a first class city teachers 
 retirement fund association under paragraph (a), it may not 
 again be received by that fund. 

    (c) If either the Minneapolis teachers retirement fund 
 association, the St. Paul teachers retirement fund association, 
 or the Duluth teachers retirement fund association remain funded 
 at less than the funding ratio applicable to the teachers 
 retirement association when the provisions of paragraph (b) 
 become effective, then any state aid not distributed to that 
 association must be immediately transferred to the other 
 associations in proportion to the relative sizes of their 
 unfunded actuarial accrued liabilities. 

    Subd. 3d.    Supplemental administrative expense 
 assessment.  (a) The active and retired membership of the 
 Minneapolis teachers retirement fund association and of the St. 
 Paul teachers retirement fund association is responsible for 
 defraying supplemental administrative expenses other than 
 investment expenses of the respective teacher retirement fund 
 association. 

    (b) Investment expenses of the teachers retirement fund 
 association are those expenses incurred by or on behalf of the 
 retirement fund in connection with the investment of the assets 
 of the retirement fund other than investment security 
 transaction costs.  Other administrative expenses are all 
 expenses incurred by or on behalf of the retirement fund for all 
 other retirement fund functions other than the investment of 
 retirement fund assets.  Investment and other administrative 
 expenses must be accounted for using generally accepted 
 accounting principles and in a manner consistent with the 
 comprehensive annual financial report of the teachers retirement 
 fund association for the immediately previous fiscal year under 
 section 356.20. 

    (c) Supplemental administrative expenses other than 
 investment expenses of a first class city teacher retirement 
 fund association are those expenses for the fiscal year that 
 exceed the amount computed by applying the most recent 
 percentage of pay administrative expense amount, other than 
 investment expenses, for the teachers retirement association 
 governed by chapter 354 to the covered payroll of the respective 
 teachers retirement fund association for the fiscal year. 

    (d) The board of trustees of each first class city teachers 
 retirement fund association shall allocate the total dollar 
 amount of supplemental administrative expenses other than 
 investment expenses among the various active and retired 
 membership groups of the teachers retirement fund association 
 and shall assess the various membership groups their respective 
 share of the supplemental administrative expenses other than 
 investment expenses, in amounts determined by the board of 
 trustees.  The supplemental administrative expense assessments 
 must be paid by the membership group in a manner determined by 
 the board of trustees of the respective teachers retirement 
 association.  Supplemental administrative expenses payable by 
 the active members of the pension plan must be picked up by the 
 employer in accordance with section 356.62. 

    (e) With respect to the St. Paul teachers retirement fund 
 association, the supplemental administrative expense assessment 
 must be fully disclosed to the various active and retired 
 membership groups of the teachers retirement fund association.  
 The chief administrative officer of the St. Paul teachers 
 retirement fund association shall prepare a supplemental 
 administrative expense assessment disclosure notice, which must 
 include the following: 

    (1) the total amount of administrative expenses of the St. 
 Paul teachers retirement fund association, the amount of the 
 investment expenses of the St. Paul teachers retirement fund 
 association, and the net remaining amount of administrative 
 expenses of the St. Paul teachers retirement fund association; 

    (2) the amount of administrative expenses for the St. Paul 
 teachers retirement fund association that would be equivalent to 
 the teachers retirement association noninvestment administrative 
 expense level described in paragraph (c); 

    (3) the total amount of supplemental administrative 
 expenses required for assessment calculated under paragraph (c); 

    (4) the portion of the total amount of the supplemental 
 administrative expense assessment allocated to each membership 
 group and the rationale for that allocation; 

    (5) the manner of collecting the supplemental 
 administrative expense assessment from each membership group, 
 the number of assessment payments required during the year, and 
 the amount of each payment or the procedure used to determine 
 each payment; and 

    (6) any other information that the chief administrative 
 officer determines is necessary to fairly portray the manner in 
 which the supplemental administrative expense assessment was 
 determined and allocated. 

    (f) The disclosure notice must be provided annually in the 
 annual report of the association. 

    (g) The supplemental administrative expense assessments 
 must be deposited in the applicable teachers retirement fund 
 upon receipt. 

    (h) Any omitted active membership group assessments that 
 remain undeducted and unpaid to the teachers retirement fund 
 association for 90 days must be paid by the respective school 
 district.  The school district may recover any omitted active 
 membership group assessment amounts that it has previously 
 paid.  The teachers retirement fund association shall deduct any 
 omitted retired membership group assessment amounts from the 
 benefits next payable after the discovery of the omitted amounts.

    Subd. 4.    Limitation on certain articles of 
 incorporation or bylaw amendments.  No amendment to the bylaws 
 or articles of incorporation of a teachers retirement fund 
 association in a city of the first class affecting benefits, 
 contributions or actuarial assumptions shall be made without 
 approval by the legislature.  Approval shall be deemed granted 
 and the amendment shall become effective only upon enactment of 
 special or general legislation detailing the substance of the 
 amendment and upon submission of the text of the proposed 
 amendment to the articles of incorporation or bylaws by the 
 teachers retirement fund association involved to the legislative 
 commission on pensions and retirement prior to the effective 
 date of the amendment.  Notwithstanding any provision of the 
 articles of incorporation or bylaws to the contrary, amendments 
 may be adopted at an annual meeting or at a special meeting 
 called for that purpose, without further local approval. 

    Subd. 5.    Employee reporting.  Each school district 
 shall provide to the appropriate teachers retirement fund 
 association information regarding all new or returning employees 
 on a form provided by the executive secretary or director before 
 the employee's first payroll date. 

    HIST: 1975 c 306 s 30; 1976 c 238 s 1; 1976 c 239 s 107; 1978 
 c 781 s 8; 1979 c 293 s 3; 1980 c 614 s 143; 1981 c 269 s 4; 
 1982 c 578 art 3 s 7; 1Sp1985 c 12 art 11 s 13; 1Sp1986 c 1 art 
 9 s 24; 1987 c 258 s 12; 1989 c 246 s 2; 1991 c 317 s 3; 1992 c 
 598 art 5 s 1; 1993 c 336 art 1 s 3-7; 1993 c 357 s 1-6; 1994 c 
 420 s 1; 1995 c 141 art 3 s 12; 1995 c 262 art 2 s 2; 1Sp1995 c 
 3 art 16 s 13; 1996 c 438 art 4 s 5,6; 1997 c 233 art 3 s 2-6 

  354A.13 Repealed, 1979 c 217 s 28 

     354A.21 Proportionate annuity. 

    A teacher who terminates employment at any time during the 
 academic year at the end of which the teacher is required to 
 terminate employment pursuant to this section shall be entitled 
 upon application to a proportionate retirement annuity pursuant 
 to section 356.32.  Nothing contained in this section shall 
 preclude a district from employing a retired teacher as a 
 substitute teacher but upon having earned an amount equal to the 
 annual maximum earnings allowable for that age for the continued 
 receipt of full benefit amounts monthly under the federal old 
 age, survivors and disability insurance program as set by the 
 secretary of health and human services pursuant to the 
 provisions of United States Code, title 42, section 403, in any 
 academic year from employment as a substitute teacher, any 
 person over the age of 70 years shall terminate employment for 
 the remainder of that academic year.  No person employed as a 
 substitute teacher after reaching the normal retirement age and 
 who has retired under this chapter shall resume membership in 
 the teachers retirement fund association by virtue of the 
 employment as a substitute teacher. 

    HIST: 1975 c 306 s 32; 1976 c 329 s 31; 1979 c 217 s 12; 1980 
 c 342 s 14; 1Sp1981 c 4 art 2 s 35; 1987 c 284 art 2 s 6; 1989 c 
 319 art 13 s 73 

  354A.22 Repealed, 1980 c 509 s 140 

     354A.23 Minneapolis and St. Paul teachers retirement 
  fund associations; basic programs. 

    Subdivision 1.    Minneapolis teachers retirement fund 
 association basic program.  There is established within the 
 Minneapolis teachers retirement fund association a basic program 
 which shall be a continuation of the retirement program in 
 existence prior to July 1, 1978 to provide retirement coverage 
 for teachers who are not covered by any agreement or 
 modification made between the state and the Secretary of Health, 
 Education and Welfare making the provisions of the federal old 
 age, survivors and disability insurance act applicable to 
 certain teachers covered by the teachers retirement fund 
 association.  The provisions governing the basic program shall 
 be the applicable portions of this chapter, the articles of 
 incorporation and bylaws in effect as of March 31, 1975, the 
 amendments to the articles of incorporation and bylaws adopted 
 subsequent to legislative approval contained in Laws 1976, 
 chapter 238, section 13 and Laws 1977, chapter 429, section 59, 
 and any applicable amendments to the articles of incorporation 
 or bylaws adopted subsequent to July 1, 1979 in accordance with 
 the provisions of section 354A.12, subdivision 4.  

    Subd. 2.    St. Paul teachers retirement fund association 
 basic program.  There is established within the St. Paul 
 teachers retirement fund association a basic program which shall 
 be a continuation of the retirement program in existence prior 
 to July 1, 1978 to provide retirement coverage for teachers who 
 are not covered by any agreement or modification made between 
 the state and the Secretary of Health, Education and Welfare 
 making the provisions of the federal old age, survivors and 
 disability insurance act applicable to certain teachers covered 
 by the teachers retirement fund association.  The provisions 
 governing the basic program shall be the applicable portions of 
 this chapter, the articles of incorporation and bylaws in effect 
 as of March 31, 1976, the amendments to the articles of 
 incorporation and bylaws adopted subsequent to legislative 
 approval contained in Laws 1976, chapter 238, section 14, and 
 Laws 1977, chapter 429, section 60, the provisions of Laws 1977, 
 chapter 429, section 61, and any applicable amendments to the 
 articles of incorporation or bylaws adopted subsequent to July 
 1, 1979 in accordance with the provisions of section 354A.12, 
 subdivision 4.  

    Subd. 3.    Eligibility for refunds and interest.  
 Notwithstanding anything to the contrary in the articles and 
 bylaws of the basic programs enumerated in chapter 354A, 
 eligibility for payment and the payment of interest on refunds 
 and interest on repayment of refunds shall be determined in the 
 same manner as for the coordinated programs covered by this 
 chapter.  

    HIST: 1979 c 217 s 13; 1984 c 564 s 39; 1993 c 336 art 1 s 8 

     354A.24 Duluth teachers retirement fund association 
  coordinated programs. 

    There is established within the Duluth teachers retirement 
 fund association for teachers who are covered by an agreement or 
 modification made between the state and the Secretary of Health, 
 Education and Welfare making the provisions of the federal old 
 age, survivors and disability insurance act applicable to 
 teachers covered by the teachers retirement fund association, 
 two coordinated programs:  

    (1) an old law coordinated program to provide retirement 
 coverage for teachers who were first employed prior to July 1, 
 1981 and do not elect to be covered by the new law coordinated 
 program, which program shall be a continuation of the retirement 
 program in existence prior to July 1, 1978; and 

    (2) a new law coordinated program to provide retirement 
 coverage for teachers who were first employed on or subsequent 
 to July 1, 1981 or for teachers who were first employed prior to 
 July 1, 1981 and elect to be covered by the new law coordinated 
 program.  The provisions governing the old law coordinated 
 program shall be the portions of this chapter which do not apply 
 specifically to a coordinated program or a coordinated or former 
 coordinated member, the articles of incorporation and bylaws in 
 effect as of March 31, 1975, the provisions of Laws 1976, 
 chapter 238, section 15, and any applicable amendments to the 
 articles of incorporation or bylaws of the teachers retirement 
 fund association adopted subsequent to July 1, 1979 in 
 accordance with the provisions of section 354A.12, subdivision 
 4.  The provisions governing the new law coordinated program 
 shall be sections 354A.31 to 354A.41 and any other applicable 
 portions of this chapter, the provisions of Laws 1981, chapter 
 269, sections 9 and 10, and any applicable amendments to the 
 articles of incorporation or bylaws of the teachers retirement 
 fund association adopted subsequent to July 1, 1981 in 
 accordance with the provisions of section 354A.12, subdivision 4.

    HIST: 1979 c 217 s 14; 1981 c 269 s 5 

     354A.27 Duluth teachers retirement fund association; 
  lump sum postretirement adjustment mechanism. 

    Subdivision 1.    Postretirement adjustment modification. 
  Any postretirement adjustment payable from the Duluth 
 teachers retirement fund association must be computed and paid 
 according to this section. 

    Subd. 2. Repealed, 1995 c 262 art 2 s 14 

    Subd. 3. Repealed, 1995 c 262 art 2 s 14 

    Subd. 4. Repealed, 1995 c 262 art 2 s 14 

    Subd. 5.    Calculation of postretirement adjustments.  
 (a) Annually, after June 30, the board of trustees determines 
 the amount of any postretirement adjustment using the procedures 
 in this subdivision and subdivision 6. 

    (b) Each person who has been receiving an annuity or 
 benefit under the articles of incorporation, bylaws, or under 
 this section for at least 12 months as of the date of the 
 postretirement adjustment shall be eligible for a postretirement 
 adjustment.  The postretirement adjustment shall be payable each 
 January 1.  The postretirement adjustment shall be equal to two 
 percent of the annuity or benefit to which the person is 
 entitled one month prior to the payment of the postretirement 
 adjustment. 

    Subd. 6.    Additional increase.  (a) In addition to the 
 postretirement increases granted under subdivision 5, an 
 additional percentage increase must be computed and paid under 
 this subdivision. 

    (b) The board of trustees shall determine the number of 
 annuitants or benefit recipients who have been receiving an 
 annuity or benefit for at least 12 months as of the current June 
 30.  These recipients are entitled to receive the surplus 
 investment earnings additional postretirement increase. 

    (c) Annually, as of each June 30, the board shall determine 
 the five-year annualized rate of return attributable to the 
 assets of the Duluth teachers retirement fund association under 
 the formula or formulas specified in section 11A.04, clause (11).

    (d) The board shall determine the amount of excess 
 five-year annualized rate of return over the preretirement 
 interest assumption as specified in section 356.215. 

    (e) The additional percentage increase must be determined 
 by multiplying the quantity one minus the rate of contribution 
 deficiency, as specified in the most recent actuarial report of 
 the actuary retained by the legislative commission on pensions 
 and retirement, times the rate of return excess as determined in 
 paragraph (d). 

    (f) The additional increase is payable to all eligible 
 annuitants or benefit recipients on the following January 1. 

    HIST: 1992 c 403 s 1; 1995 c 262 art 2 s 3-5 

     354A.28 Modification in Minneapolis teachers retirement 
  fund association postretirement adjustment. 

    Subdivision 1.    Postretirement adjustment modification. 
  Any postretirement adjustment payable from the Minneapolis 
 teachers retirement fund association after June 1, 1993, must be 
 modified as provided in this section. 

    Subd. 2.    Establishment.  The Minneapolis teachers 
 retirement fund association shall establish an annuity reserve 
 fund for providing an investment vehicle for the reserves for 
 various retirement annuities and benefits payable by the fund. 

    Subd. 3.    Assets.  The assets of the annuity reserve 
 fund consist of the money representing the actuarially 
 determined required reserves for various retirement annuities 
 and benefits payable by the Minneapolis teachers retirement fund 
 association. 

    Subd. 4.    Management.  The Minneapolis teachers 
 retirement fund association annuity reserve fund must be managed 
 by the board of trustees of the Minneapolis teachers retirement 
 fund association. 

    Subd. 5.    Investment.  The assets of the annuity 
 reserve fund must be invested, reinvested, and retained in the 
 discretion of the board of trustees of the Minneapolis teachers 
 retirement fund association in authorized investments under 
 section 11A.24. 

    Subd. 6.    Allocation of assets.  No later than the 
 last business day of the month in which the benefit payment 
 begins, the board of trustees of the Minneapolis teachers 
 retirement fund association shall determine the reserves to be 
 allocated to the respective annuity reserve fund in the 
 following manner: 

    (1) the present value of the benefit payable to the 
 annuitant or benefit recipient must be determined using the 
 postretirement earnings assumptions specified for the first 
 class city teachers retirement funds in section 356.215, and the 
 mortality table applicable to the fund; and 

    (2) the amount determined in clause (1) must be multiplied 
 by the funding ratio of the teachers retirement fund association 
 determined for the previous fiscal year end, and the product 
 must be identified as the amount allocated to the annuity 
 reserve fund. 

    Subd. 7.    Withdrawal of money.  If the executive 
 director of the Minneapolis teachers retirement fund association 
 concludes that money is required for the payment of retirement 
 annuities or benefits, the executive director shall sell 
 sufficient securities in the reserve fund or transfer available 
 cash to pay benefits. 

    Subd. 8.    Calculation of postretirement adjustments.  
 (a) Annually, after June 30, the board of trustees of the 
 Minneapolis teachers retirement fund association shall use the 
 procedures in this subdivision and subdivision 9 to determine 
 the amount of any postretirement adjustment.  The authority to 
 pay the automatic two percent annual postretirement increase as 
 specified in the articles and bylaws continues. 

    Subd. 9.    Additional increase.  (a) In addition to the 
 postretirement increases granted under subdivision 8, an 
 additional percentage increase must be computed and paid under 
 this subdivision. 

    (b) The board of trustees shall determine the number of 
 annuities or benefit recipients who have been receiving an 
 annuity or benefit for at least 12 months as of the current June 
 30.  These recipients are entitled to receive the surplus 
 investment earnings additional postretirement increase. 

    (c) Annually, on June 30, the board of trustees of the 
 teachers retirement fund association shall determine the amount 
 of reserves in the annuity reserve fund as specified in 
 subdivision 6. 

    (d) Annually, on June 30, the board of trustees of the 
 Minneapolis teachers retirement fund association shall determine 
 the five-year annualized rate of return attributable to the 
 assets in the annuity reserve fund under the formula or formulas 
 specified in section 11A.04, clause (11). 

    (e) The board of trustees shall determine the amount of 
 excess five-year annualized rate of return over the 
 preretirement interest assumption as specified in section 
 356.215. 

    (f) The additional increase must be determined by 
 multiplying the quantity one minus the rate of contribution 
 deficiency, as specified in the most recent actuarial report of 
 the actuary retained by the legislative commission on pensions 
 and retirement, times the rate of return excess as determined in 
 paragraph (e). 

    (g) The additional increase is payable to all eligible 
 annuitants or benefit recipients on January 1 following the June 
 30 determination date under paragraphs (c) and (d). 

    HIST: 1993 c 357 s 7 

     354A.29 St. Paul teachers retirement fund association 
  postretirement adjustment. 

    Subdivision 1.    Articles of incorporation and bylaws.  
 Permission is granted for the St. Paul teachers retirement fund 
 association under Minnesota Statutes, section 354A.12, 
 subdivision 4, to amend its articles of incorporation and bylaws 
 to provide postretirement adjustments under this section. 

    Subd. 2.    Elimination of prior lump sum postretirement 
 adjustment mechanism.  As a condition precedent to the 
 implementation of subdivisions 3 to 6, the lump sum 
 postretirement adjustment mechanism in effect on July 1, 1997, 
 must be eliminated and the articles of incorporation and bylaws 
 of the association must be amended accordingly. 

    Subd. 3.    Postretirement adjustment.  (a) The 
 postretirement adjustment described in the articles and bylaws 
 of the St. Paul teachers retirement fund association must be 
 determined by the board annually after June 30 using the 
 procedures under this section. 

    (b) Each eligible person who has been receiving an annuity 
 or benefit under the articles of incorporation, the bylaws, or 
 this chapter for at least 12 months as of the end of the fiscal 
 year is eligible to receive a postretirement adjustment of 2.0 
 percent that is payable each January 1. 

    Subd. 4.    Additional investment percentage adjustment. 
  (a) An excess investment earnings percentage adjustment must 
 be computed and paid under this subdivision to those annuitants 
 and eligible benefit recipients who have been receiving an 
 annuity or benefit for at least 12 months as determined each 
 June 30 by the board of trustees. 

    (b) The board shall also determine the five-year annualized 
 rate of return attributable to the assets of the St. Paul 
 teachers retirement fund association under the formula specified 
 in section 11A.04, clause (11), and the amount of the excess 
 five-year annualized rate of return over the preretirement 
 interest assumption specified in section 356.215. 

    (c) The excess investment percentage adjustment must be 
 determined by multiplying the quantity one minus the rate of 
 contribution deficiency, as specified in the most recent 
 actuarial report of the actuary retained by the legislative 
 commission on pensions and retirement under section 356.215, by 
 the rate of return excess as determined in paragraph (b). 

    (d) The excess investment percentage adjustment is payable 
 to all annuitants and benefit recipients on the following 
 January 1. 

    Subd. 5.    Effect on annuity.  The adjustments 
 calculated under subdivisions 3 and 4 must be included in all 
 annuities or benefits paid to the recipient after the 
 adjustments take effect. 

    Subd. 6.    Lump sum postretirement adjustment transition. 
  This subdivision applies to all annuitants and beneficiaries 
 of the association who received a lump sum postretirement 
 adjustment before the calculation of the first postretirement 
 adjustment under subdivisions 3 and 4.  Before the calculation 
 of the first postretirement adjustment under subdivisions 3 and 
 4, the annual retirement annuity must be increased by the amount 
 of the lump sum postretirement adjustment described in the 
 association bylaws and paid to the annuitant or beneficiary in 
 1997 before July 1, 1997, or if the annuitant or beneficiary was 
 not eligible for a lump sum postretirement adjustment, then the 
 annual benefit paid to that annuitant or benefit recipient must 
 be increased by the cumulative percentage increase in the 
 Consumer Price Index for urban wage earners and clerical workers 
 All Items Index published by the United States Department of 
 Labor, Bureau of Labor Statistics, from the date of the initial 
 receipt of a retirement annuity or benefit of the person whose 
 service is the basis of the benefit to June 30, 1997. 

    HIST: 1997 c 233 art 3 s 7 

     354A.30 Minneapolis and St. Paul teachers retirement 
  fund associations; coordinated program. 

    There is established a coordinated program within the 
 Minneapolis teachers retirement fund association and a 
 coordinated program within the St. Paul teachers retirement fund 
 association to provide retirement coverage for teachers who are 
 covered by an agreement or modification made between the state 
 and the secretary of health, education and welfare making the 
 provisions of the federal old age, survivors and disability 
 insurance act applicable to certain teachers covered by the 
 teachers retirement fund association.  The provisions governing 
 the coordinated program shall be sections 354A.31 to 354A.41 and 
 any other applicable provisions of this chapter.  

    HIST: 1979 c 217 s 15 

     354A.31 Coordinated program retirement benefits. 

    Subdivision 1.    Age and service requirements.  Any 
 coordinated member or former coordinated member who has ceased 
 to render teaching service for the school district in which the 
 teachers retirement fund association exists and who has either 
 attained the age of at least 55 years with not less than three 
 years of allowable service credit or received credit for not 
 less than 30 years of allowable service regardless of age, shall 
 be entitled upon written application to a retirement annuity.  

    Subd. 1a.    Application for annuity.  Application for a 
 retirement annuity may be made by a member or by a person 
 authorized to act on behalf of the member.  Every application 
 for retirement must be made in writing on a form prescribed by 
 the executive secretary or director and must be substantiated by 
 written proof of the member's age and identity.  The notarized 
 signature of a member's spouse on a retirement annuity 
 application acknowledging the member's annuity selection meets 
 the notice requirement to the spouse under section 356.371, 
 subdivision 3.  An application for a retirement annuity is not 
 complete until all necessary supporting documents are received 
 by the executive secretary or director. 

    Subd. 2.    Time and manner of payments.  A coordinated 
 member or former coordinated member may make application to the 
 board of the teachers retirement fund association for a 
 retirement annuity any time after the member has satisfied the 
 age and service requirements specified in subdivision 1, but no 
 application for retirement may be accepted by the board more 
 than 60 days prior to the termination of teaching service.  The 
 retirement annuity shall begin to accrue after the occurrence of 
 a retirement precondition event, which for purposes of this 
 subdivision is the later of the termination of teaching service 
 for the school district in which the teachers retirement fund 
 association exists, the filing of an application for a 
 retirement annuity with the board, or receipt of the final 
 salary payment.  Accrual shall commence on the sixteenth day of 
 the month if the retirement precondition event occurs on or 
 before the fifteenth day of that month or on the first day of 
 the month next following if the retirement precondition event 
 occurs on or after the sixteenth day of the month.  

    Subd. 2a.    Applications after retirement.  If an 
 application for retirement is filed with the board during the 
 90-day period immediately following the termination of teaching 
 service, the annuity may begin to accrue as if the application 
 for retirement had been filed with the board on the date 
 teaching service terminated.  In no event may an annuity begin 
 to accrue more than one month before the date of final salary 
 receipt. 

    Subd. 3.    Resumption of teaching after commencement of a 
 retirement annuity.  Any person who retired and is receiving a 
 coordinated program retirement annuity under the provisions of 
 sections 354A.31 to 354A.41 or any person receiving a basic 
 program retirement annuity under the governing sections in the 
 articles of incorporation or bylaws and who has resumed teaching 
 service for the school district in which the teachers retirement 
 fund association exists is entitled to continue to receive 
 retirement annuity payments, except that annuity payments must 
 be reduced during the calendar year immediately following the 
 calendar year in which the person's income from the teaching 
 service is in an amount greater than the annual maximum earnings 
 allowable for that age for the continued receipt of full benefit 
 amounts monthly under the federal old age, survivors, and 
 disability insurance program as set by the secretary of health 
 and human services under United States Code, title 42, section 
 403.  The amount of the reduction must be one-third the amount 
 in excess of the applicable reemployment income maximum 
 specified in this subdivision and must be deducted from the 
 annuity payable for the calendar year immediately following the 
 calendar year in which the excess amount was earned.  If the 
 person has not yet reached the minimum age for the receipt of 
 social security benefits, the maximum earnings for the person 
 must be equal to the annual maximum earnings allowable for the 
 minimum age for the receipt of social security benefits. 

    If the person is retired for only a fractional part of the 
 calendar year during the initial year of retirement, the maximum 
 reemployment income specified in this subdivision must be 
 prorated for that calendar year. 

    After a person has reached the age of 70, no reemployment 
 income maximum is applicable regardless of the amount of any 
 compensation received for teaching service for the school 
 district in which the teachers retirement fund association 
 exists.  For the purpose of this subdivision, income from 
 teaching service includes:  (i) all income for services 
 performed as a consultant or independent contractor; or income 
 resulting from working with the school district in any capacity; 
 and (ii) the greater of either the income received or an amount 
 based on the rate paid with respect to an administrative 
 position, consultant, or independent contractor in the school 
 district in which the teachers retirement fund association 
 exists and at the same level as the position occupied by the 
 person who resumes teaching service. 

    Subd. 3a.    No annuity reduction.  (a) The annuity 
 reduction provisions of subdivision 3 do not apply to a person 
 who: 

    (1) retires from the technical college system with at least 
 ten years of service credit in the system from which the person 
 retires; 

    (2) was employed on a full-time basis immediately preceding 
 retirement as a technical college faculty member; 

    (3) begins drawing an annuity from a first class city 
 teachers retirement association; and 

    (4) returns to work on not less than a one-third time basis 
 and not more than a two-thirds time basis in the technical 
 college system under an agreement in which the person may not 
 earn a salary of more than $35,000 in a calendar year from the 
 technical college system. 

    (b) Initial participation, the amount of time worked, and 
 the duration of participation under this section must be 
 mutually agreed upon by the employer and the employee.  The 
 employer may require up to a one-year notice of intent to 
 participate in the program as a condition of participation under 
 this section.  The employer shall determine the time of year the 
 employee shall work. 

    (c) Notwithstanding any law to the contrary, a person 
 eligible under paragraphs (a) and (b) may not earn further 
 service credit in a first class city teachers retirement 
 association and is not eligible to participate in the individual 
 retirement account plan or the supplemental retirement plan 
 established in chapter 354B as a result of service under this 
 section.  No employer or employee contribution to any of these 
 plans may be made on behalf of such a person. 

    Subd. 4.    Computation of the normal coordinated 
 retirement annuity; Minneapolis and St. Paul funds.  (a) This 
 subdivision applies to the coordinated programs of the 
 Minneapolis teachers retirement fund association and the St. 
 Paul teachers retirement fund association.  

    (b) The normal coordinated retirement annuity shall be an 
 amount equal to a retiring coordinated member's average salary 
 multiplied by the retirement annuity formula percentage.  
 Average salary for purposes of this section shall mean an amount 
 equal to the average salary upon which contributions were made 
 for the highest five successive years of service credit, but 
 which shall not in any event include any more than the 
 equivalent of 60 monthly salary payments.  Average salary must 
 be based upon all years of service credit if this service credit 
 is less than five years. 

    (c) This paragraph, in conjunction with subdivision 6, 
 applies to a person who first became a member or a member in a 
 pension fund listed in section 356.30, subdivision 3, before 
 July 1, 1989, unless paragraph (d), in conjunction with 
 subdivision 7, produces a higher annuity amount, in which case 
 paragraph (d) will apply.  The retirement annuity formula 
 percentage for purposes of this paragraph is the percent 
 specified in section 356.19, subdivision 1, per year for each 
 year of coordinated service for the first ten years and the 
 percent specified in section 356.19, subdivision 2, for each 
 year of coordinated service thereafter.  

    (d) This paragraph applies to a person who has become at 
 least 55 years old and who first becomes a member after June 30, 
 1989, and to any other member who has become at least 55 years 
 old and whose annuity amount, when calculated under this 
 paragraph and in conjunction with subdivision 7 is higher than 
 it is when calculated under paragraph (c), in conjunction with 
 the provisions of subdivision 6.  The retirement annuity formula 
 percentage for purposes of this paragraph is the percent 
 specified in section 356.19, subdivision 2, for each year of 
 coordinated service.  

    Subd. 4a.    Computation of the normal coordinated 
 retirement annuity; Duluth fund.  (a) This subdivision applies 
 to the new law coordinated program of the Duluth teachers 
 retirement fund association. 

    (b) The normal coordinated retirement annuity is an amount 
 equal to a retiring coordinated member's average salary 
 multiplied by the retirement annuity formula percentage.  
 Average salary for purposes of this section means an amount 
 equal to the average salary upon which contributions were made 
 for the highest five successive years of service credit, but may 
 not in any event include any more than the equivalent of 60 
 monthly salary payments.  Average salary must be based upon all 
 years of service credit if this service credit is less than five 
 years. 

    (c) This paragraph, in conjunction with subdivision 6, 
 applies to a person who first became a member or a member in a 
 pension fund listed in section 356.30, subdivision 3, before 
 July 1, 1989, unless paragraph (d), in conjunction with 
 subdivision 7, produces a higher annuity amount, in which case 
 paragraph (d) applies.  The retirement annuity formula 
 percentage for purposes of this paragraph is the percent 
 specified in section 356.19, subdivision 1, per year for each 
 year of coordinated service for the first ten years and the 
 percent specified in section 356.19, subdivision 2, for each 
 subsequent year of coordinated service. 

    (d) This paragraph applies to a person who is at least 55 
 years old and who first becomes a member after June 30, 1989, 
 and to any other member who is at least 55 years old and whose 
 annuity amount, when calculated under this paragraph and in 
 conjunction with subdivision 7, is higher than it is when 
 calculated under paragraph (c) in conjunction with subdivision 
 6.  The retirement annuity formula percentage for purposes of 
 this paragraph is the percent specified in section 356.19, 
 subdivision 2, for each year of coordinated service. 

    Subd. 5.    Unreduced normal retirement annuity.  Upon 
 retirement at normal retirement age with at least three years of 
 service credit, a coordinated member shall be entitled to a 
 normal retirement annuity calculated pursuant to subdivision 4.  

    Subd. 6.    Reduced retirement annuity.  This 
 subdivision applies only to a person who first became a 
 coordinated member or a member of a pension fund listed in 
 section 356.30, subdivision 3, before July 1, 1989, and whose 
 annuity is higher when calculated using the retirement annuity 
 formula percentage in subdivision 4, paragraph (b), in 
 conjunction with this subdivision than when calculated under 
 subdivision 4, paragraph (c), in conjunction with subdivision 7. 

    (a) Upon retirement at an age before normal retirement age 
 with three years of service credit or prior to age 62 with at 
 least 30 years of service credit, a coordinated member shall be 
 entitled to a retirement annuity in an amount equal to the 
 normal retirement annuity calculated using the retirement 
 annuity formula percentage in subdivision 4, paragraph (b), 
 reduced by one-quarter of one percent for each month that the 
 coordinated member is under normal retirement age if the 
 coordinated member has less than 30 years of service credit or 
 is under the age of 62 if the coordinated member has at least 30 
 years of service credit.  

    (b) Any coordinated member whose attained age plus credited 
 allowable service totals 90 years is entitled, upon application, 
 to a retirement annuity in an amount equal to the normal 
 retirement annuity calculated using the retirement annuity 
 formula percentage in subdivision 4, paragraph (b), without any 
 reduction by reason of early retirement. 

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

    Subd. 8.    Determining applicable law.  An employee who 
 returns to covered service following a termination and who is 
 not receiving a retirement annuity under this section must have 
 earned at least 85 days of credited service following the return 
 to covered service to be eligible for improved benefits 
 resulting from any law change enacted subsequent to that 
 termination. 

    HIST: 1979 c 217 s 16; 1981 c 224 s 139; 1987 c 372 art 9 s 
 29-31; 1989 c 319 art 2 s 22; art 13 s 74-78; 1990 c 570 art 12 
 s 47-49; 1992 c 598 art 6 s 15; 1993 c 336 art 1 s 9; art 2 s 1; 
 1994 c 542 s 3; 1995 c 141 art 3 s 13; 1995 c 262 art 1 s 7; art 
 2 s 6,7; 1997 c 233 art 3 s 8,9 

     354A.32 Optional retirement annuities. 

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

    Subd. 1a.    Bounce-back annuity.  (a) If a former 
 coordinated member or disabilitant has selected a joint and 
 survivor annuity option under subdivision 1, the former member 
 or disabilitant must receive a normal single life annuity if the 
 designated optional annuity beneficiary dies before the former 
 member or disabilitant.  Under this option, no reduction may be 
 made in the person's annuity to provide for restoration of the 
 normal single life annuity in the event of the death of the 
 designated optional annuity beneficiary. 

    (b) A former coordinated member or disabilitant who 
 selected an optional joint and survivor annuity before July 1, 
 1989, but did not choose an option that provides that the normal 
 single life annuity is payable to the former member or the 
 disabilitant if the designated optional annuity beneficiary dies 
 first, is eligible for restoration of the normal single life 
 annuity if the designated optional annuity beneficiary dies 
 first, without further actuarial reduction of the person's 
 annuity.  A former member or disabilitant who selected an 
 optional joint and survivor annuity, but whose designated 
 optional annuity beneficiary died before July 1, 1989, shall 
 receive a normal single life annuity after that date, but shall 
 not receive retroactive payments for periods before that date. 

    (c) A former coordinated member or disabilitant who took a 
 further actuarial reduction to elect an optional joint and 
 survivor annuity that provides that the normal annuity is 
 payable to the former member or disabilitant if the designated 
 optional beneficiary dies first but has not died before July 1, 
 1989, shall have the annuity increased as of July 1, 1989, to 
 the amount the person would have received if, at the time of 
 retirement or disability, the person had selected only optional 
 survivor coverage that would not have provided for restoration 
 of the normal annuity upon the death of the designated optional 
 annuity beneficiary.  Any annuity or benefit increase under this 
 paragraph is effective only for payments made after June 30, 
 1989, and is not retroactive for payments made before July 1, 
 1989. 

    (d) The restoration of the normal single life annuity under 
 this subdivision will take effect on the first of the month 
 following the date of death of the designated optional annuity 
 beneficiary or on the first of the month following one year 
 before the date on which a certified copy of the death 
 certificate of the designated optional annuity beneficiary is 
 received in the office of the appropriate teachers retirement 
 fund association, whichever date is later. 

    Subd. 2. Repealed, 1989 c 319 art 13 s 98 

    HIST: 1979 c 217 s 17; 1981 c 269 s 6; 1983 c 286 s 12; 1987 c 
 259 s 49; 1989 c 319 art 13 s 79,80; 1990 c 570 art 12 s 50,51 

     354A.33 Social security leveling adjustment option. 

    Any coordinated member who retires prior to the time the 
 member becomes eligible for social security old age retirement 
 benefits shall be entitled to elect to receive a social security 
 leveling adjustment optional annuity from the teachers 
 retirement fund association.  The social security leveling 
 adjustment optional annuity shall be established by the board of 
 the teachers retirement fund association.  It shall take the 
 form of an annuity payable for the period prior to the member's 
 becoming eligible for social security old age retirement 
 benefits in an amount greater than the amount of the member's 
 annuity calculated pursuant to section 354A.31 on the basis of 
 the age of the member at retirement but equal insofar as 
 possible to the social security old age retirement benefit and 
 the adjusted retirement annuity amounts payable immediately 
 subsequent to becoming eligible for social security old age 
 retirement benefits in an amount less than the amount of the 
 member's annuity calculated pursuant to section 354A.31 on the 
 basis of the age of the member at retirement.  The optional form 
 shall be the actuarial equivalent to the normal forms provided 
 in section 354A.31.  In establishing the optional form, the 
 board shall obtain the written recommendation of the 
 commission-retained actuary and the recommendation shall be a 
 part of the permanent records of the board. 

    HIST: 1979 c 217 s 18; 1987 c 259 s 50 

     354A.34 Disposition of unpaid period certain for life or 
  guaranteed refund optional annuities. 

    If a retiree from a coordinated program who has elected a 
 period certain and for life thereafter or a guaranteed refund 
 optional annuity form dies without having a designated 
 beneficiary who has survived the retiree, any remaining unpaid 
 guaranteed annuity payments shall be computed at the rate of 
 interest specified in section 356.215, subdivision 4d and paid 
 in one lump sum to the estate of the retiree.  If a retiree from 
 a coordinated program who has elected a period certain and for 
 life or a guaranteed refund optional annuity form dies with a 
 designated beneficiary who has survived the retiree but the 
 designated beneficiary dies without there existing another 
 designated beneficiary, any remaining unpaid guaranteed annuity 
 payments shall be computed at the rate of interest specified in 
 section 356.215, subdivision 4d, and paid in one lump sum to the 
 estate of the designated beneficiary.  

    HIST: 1979 c 217 s 19; 1Sp1985 c 7 s 35 

     354A.35 Survivor benefits. 

    Subdivision 1.    Death before retirement; refund.  If a 
 coordinated member or former coordinated member dies prior to 
 retirement or prior to the receipt of any retirement annuity or 
 other benefit payment which is or may be payable and a surviving 
 spouse optional annuity is not payable pursuant to subdivision 
 2, a refund shall be paid to the person's surviving spouse, or 
 if there is none, to the person's designated beneficiary, or if 
 there is none, to the legal representative of the person's 
 estate.  The refund shall be in an amount equal to the person's 
 accumulated contributions plus interest at the rate of six 
 percent per annum compounded annually.  

    Subd. 2.    Death while eligible to retire; surviving 
 spouse optional annuity.  (a) The surviving spouse of a 
 coordinated member who has credit for at least three years of 
 service and dies prior to retirement may elect to receive, 
 instead of a refund with interest under subdivision 1, an 
 annuity equal to the 100 percent joint and survivor annuity the 
 member could have qualified for had the member terminated 
 service on the date of death.  The surviving spouse eligible for 
 a surviving spouse benefit under this paragraph may apply for 
 the annuity at any time after the date on which the deceased 
 employee would have attained the required age for retirement 
 based on the employee's allowable service.  A surviving spouse 
 eligible for surviving spouse benefits under paragraph (b) or 
 (c) may apply for an annuity at any time after the member's 
 death.  The member's surviving spouse shall be paid a joint and 
 survivor annuity under section 354A.32 and computed under 
 section 354A.31.  

    (b) If the member was under age 55 and has credit for at 
 least 30 years of allowable service on the date of death, the 
 surviving spouse may elect to receive a 100 percent joint and 
 survivor annuity based on the age of the member and surviving 
 spouse on the date of death.  The annuity is payable using the 
 full early retirement reduction under section 354A.31, 
 subdivision 6, paragraph (a), to age 55 and one-half of the 
 early retirement reduction from age 55 to the age payment begins.

    (c) If the member was under age 55 and has credit for at 
 least three years of allowable service on the date of death but 
 did not yet qualify for retirement, the surviving spouse may 
 elect to receive the 100 percent joint and survivor annuity 
 based on the age of the member and the survivor at the time of 
 death.  The annuity is payable using the full early retirement 
 reduction under section 354A.31, subdivision 6 or 7, to age 55 
 and one-half of the early retirement reduction from age 55 to 
 the date payment begins. 

    Sections 354A.37, subdivision 2, and 354A.39 apply to a 
 deferred annuity or surviving spouse benefit payable under this 
 section.  The benefits are payable for the life of the surviving 
 spouse, or upon expiration of the term certain benefit payment 
 under subdivision 2b.  

    Subd. 2a.    Modification in survivor coverage in certain 
 instances.  Any person who elected joint and survivor annuity 
 coverage pursuant to subdivision 2 prior to July 1, 1981 and the 
 spouse of the person shall be entitled to modify that election 
 by making a joint specification in writing on a form prescribed 
 by the executive secretary that the benefits provided in this 
 section, whichever is applicable, shall be paid only to a 
 designated beneficiary.  Authority for any person and the spouse 
 of the person to modify the prior election shall expire on the 
 date of the retirement of the person who elected the coverage or 
 the date of death of the person who elected the coverage, 
 whichever occurs first.  

    Subd. 2b.    Survivor coverage term certain.  In lieu of 
 the 100 percent optional annuity under subdivision 2, or a 
 refund under subdivision 1, the surviving spouse of a deceased 
 member may elect to receive survivor coverage in a term certain 
 of five, ten, 15, or 20 years, but monthly payments must not 
 exceed 75 percent of the average high-five monthly salary of the 
 deceased member.  The monthly term certain annuity must be 
 actuarially equivalent to the 100 percent optional annuity under 
 subdivision 2. 

    If a surviving spouse elects a term certain annuity and 
 dies before the expiration of the specified term certain period, 
 the commuted value of the remaining annuity payments must be 
 paid in a lump sum to the survivor's estate. 

    Subd. 2c.    Dependent child survivor coverage.  If 
 there is no surviving spouse eligible for benefits under 
 subdivision 2, a dependent child or children as defined in 
 section 354A.011, subdivision 12a, is eligible for monthly 
 payments.  Payments to a dependent child must be paid from the 
 date of the member's death to the date the dependent child 
 attains age 20 if the child is under age 15.  If the child is 15 
 years or older on the date of death, payment must be made for 
 five years.  The payment to a dependent child is an amount 
 actuarially equivalent to the value of a 100 percent optional 
 annuity under subdivision 2 using the age of the member and age 
 of the dependent child at the date of death.  If there is more 
 than one dependent child, each dependent child shall receive a 
 proportionate share of the actuarial value of the employee's 
 account.  

    Subd. 3.    Death after retirement.  If a retiree from a 
 coordinated program dies after retirement, the retiree or the 
 retiree's designated beneficiary shall be entitled to the 
 annuity payment due for the full month during which death occurs 
 unless an optional annuity was elected by the retiree pursuant 
 to subdivision 2 or section 354A.32.  If a joint and survivor 
 optional annuity covering the spouse of the retiree was elected 
 by the retiree from a coordinated program, the retiree's 
 surviving spouse shall be paid a joint and survivor annuity as 
 provided in section 354A.32 and computed pursuant to section 
 354A.31.  If an optional annuity other than a joint and survivor 
 optional annuity covering the spouse of the retiree was elected 
 by the retiree from a coordinated program, the optional annuity 
 shall be paid according to its terms.  

    Subd. 4.    Payment of minimal refund and benefit 
 amounts.  If a coordinated member or former coordinated member 
 dies without having designated a beneficiary or if the 
 designated beneficiary dies without there existing any other 
 designated beneficiary and prior to making application for the 
 refund credited to the deceased coordinated member or 
 coordinated former member, and if the amount of the refund does 
 not exceed $500, the board in its discretion may, in absence of 
 probate proceedings, make payment 90 days after the date of 
 death of the coordinated member or former coordinated member to 
 the surviving spouse of the deceased coordinated member or 
 former coordinated member, or if none, to the next of kin as 
 determined under the laws of descent of the state.  A payment 
 under this subdivision shall be a bar to recovery by any other 
 person or persons.  Any retirement annuity in any amount which 
 has accrued at the time of the death of a coordinated retiree 
 may be paid by the board in its discretion using the procedure 
 set forth in this subdivision.  

    Subd. 5.    Payment to designated beneficiary.  Any 
 coordinated member and the spouse of the coordinated member may 
 make a joint specification in writing on a form prescribed by 
 the executive secretary that the benefits provided in 
 subdivision 1 or 2, shall be paid only to a designated 
 beneficiary.  For purposes of this subdivision, a designated 
 beneficiary may only be either a former spouse or a child, 
 either natural or adopted, of the member.  

    HIST: 1979 c 217 s 20; 1981 c 156 s 5; 1981 c 224 s 140,141; 
 1982 c 578 art 3 s 8; 1983 c 286 s 13; 1Sp1985 c 7 s 25; 1986 c 
 458 s 19; 1987 c 372 art 9 s 32; 1989 c 319 art 13 s 81,82; 1993 
 c 336 art 5 s 1; art 6 s 17-19 

     354A.36 Permanent disability benefits. 

    Subdivision 1.    Minimum age, service, and salary 
 requirements.  Any coordinated member who has at least three 
 years of allowable service credit, has an average salary of at 
 least $75 per month, and has become totally and permanently 
 disabled shall be entitled to a disability benefit.  If the 
 disabled coordinated member's allowable service credit has not 
 been continuous, at least two years of the required allowable 
 service shall be required to have been rendered subsequent to 
 the last interruption in service.  

    Subd. 2.    Time and manner of payments.  The 
 disability benefit shall begin to accrue from the later of 
 either 90 days following the commencement of the permanent 
 disability or the first day of the month following the date on 
 which the written application for the disability benefit has 
 been filed with the board, but payment shall not begin to accrue 
 until any salary which is received by the disabled coordinated 
 member for either annual or sick leave during the period of 
 disability ceases.  

    Subd. 3.    Computation of disability benefit.  The 
 coordinated permanent disability benefit is an amount equal to 
 the normal coordinated retirement annuity computed under section 
 354A.31, subdivision 4, based on allowable service credited to 
 the date of disability but without any reduction for the 
 commencement of the benefit prior to the attainment of normal 
 retirement age or age 62 with at least 30 years of service 
 credit as specified in section 354A.31, subdivision 6.  

    Subd. 3a.    Optional annuity election.  A disabled 
 coordinated member may elect to receive the normal disability 
 benefit or an optional annuity as provided in section 354A.32.  
 The election of an optional annuity shall be made prior to 
 commencement of payment of the disability benefit and shall be 
 effective 30 days after receipt of the election or the date on 
 which the disability benefit begins to accrue, whichever occurs 
 later.  Upon becoming effective, the optional annuity shall 
 begin to accrue on the same date as provided for the disability 
 benefit.  

    Subd. 4.    Determination of disability.  The board of 
 the teachers retirement fund association shall make the final 
 determination of the existence of a permanent and total 
 disability.  The board shall have the coordinated member 
 examined by at least two licensed physicians who shall be 
 selected by the board.  After making any required examinations, 
 each physician shall make a written report to the board 
 concerning the coordinated member, which shall include a 
 statement of the physician's medical opinion as to whether or 
 not the member is permanently and totally disabled within the 
 meaning of section 354A.011, subdivision 14.  The board shall 
 also obtain a written statement from the school district as to 
 whether or not the coordinated member was terminated or 
 separated from active employment due to a disability which is 
 deemed by the district to reasonably prevent further service by 
 the member to the district and which caused the coordinated 
 member not to be entitled to further compensation from the 
 district for services rendered by the member.  If, after 
 consideration of the reports of the physicians and any evidence 
 presented by the member or any other interested parties, the 
 board determines that the coordinated member is totally and 
 permanently disabled within the meaning of section 354A.011, 
 subdivision 14, it shall grant the coordinated member a 
 disability benefit.  The fact that a member has been placed on a 
 leave of absence without compensation as a result of the 
 disability shall not operate to bar a coordinated member from 
 receiving a disability benefit under this section.  

    Subd. 5.    Offset against benefits paid under other 
 laws.  The coordinated disability benefit shall be reduced by 
 any amounts received or receivable by a coordinated member from 
 the school district under applicable workers' compensation laws. 

    Subd. 6.    Requirement for regular physical 
 examinations.  At least once each year during the first five 
 years following the granting of a disability benefit to a 
 coordinated member by the board and at least once in every three 
 year period thereafter, the board shall require the disability 
 benefit recipient to undergo a medical examination as a 
 condition for continued entitlement of the benefit recipient to 
 receive a disability benefit.  The medical examination shall be 
 made at the place of residence of the disability benefit 
 recipient or at any other place mutually agreeable to the 
 disability benefit recipient and the board.  The medical 
 examination shall be made by a physician or physicians engaged 
 by the board.  The physician or physicians conducting the 
 medical examination shall make a written report to the board 
 concerning the disability benefit recipient and the recipient's 
 disability, including a statement of the physician's medical 
 opinion as to whether or not the member remains permanently and 
 totally disabled within the meaning of section 354A.011, 
 subdivision 14.  If the board determines from consideration of 
 the physician's written medical examination report that the 
 disability benefit recipient is no longer permanently and 
 totally disabled or if the board determines that the benefit 
 recipient is engaged or is able to engage in a gainful 
 occupation unless the disability benefit recipient is partially 
 employed pursuant to subdivision 7, then further disability 
 benefit payments from the fund shall be discontinued.  The 
 discontinuation of disability benefits shall occur immediately 
 if the disability recipient is reinstated to the district 
 payroll following sick leave and within 60 days of the 
 determination by the board following the medical examination and 
 report of the physician or physicians engaged by the board that 
 the disability benefit recipient is no longer permanently and 
 totally disabled within the meaning of section 354A.011, 
 subdivision 14.  

    Subd. 7.    Partial reemployment of disability benefit 
 recipient.  If a disability benefit recipient resumes gainful 
 employment but the compensation from the employment is less than 
 the recipient's salary at the date of disability or the salary 
 paid currently to positions similar to the position which the 
 recipient held at the date of disability, the recipient shall be 
 entitled to a disability benefit from the board in an amount 
 which when added to the compensation for the partial 
 reemployment does not exceed the lower of the recipient's salary 
 at the date of disability or the salary paid currently to 
 positions similar to the position which the recipient held at 
 the date of disability, and does not in any event exceed the 
 disability benefit originally computed pursuant to subdivision 3.

    Subd. 8.    Examination refusal.  If a disability 
 benefit recipient refuses to submit to a medical examination as 
 provided in subdivision 6, then further disability benefit 
 payments from the fund shall be discontinued and all rights of 
 the recipient to a disability benefit shall be revoked by the 
 board.  

    Subd. 9.    Return to teaching service.  Any disability 
 benefit recipient who resumes active teaching service in the 
 district in which the teachers retirement fund association is 
 located shall also resume making employee contributions to the 
 fund pursuant to section 354A.12, subdivision 1.  

    Subd. 10.    Retirement status upon attaining normal 
 retirement age.  No person shall be entitled to receive both a 
 disability benefit under this section and a retirement annuity 
 under section 354A.31.  If a disability benefit recipient 
 remains totally and permanently disabled upon attaining normal 
 retirement age, the disability benefit shall terminate and the 
 former disability benefit recipient shall be deemed to be on 
 retirement status.  If the former disability benefit recipient 
 had elected an optional annuity pursuant to subdivision 3a, the 
 recipient shall receive an annuity in accordance with the terms 
 of the optional annuity previously elected, or if the recipient 
 had not elected an optional annuity pursuant to subdivision 3a, 
 the recipient shall be entitled either to receive a retirement 
 annuity in an amount equal to the greater of either a single 
 life retirement annuity calculated pursuant to section 354A.31 
 or the disability benefit paid to the recipient immediately 
 prior to the recipient's attaining normal retirement age or 
 elect either a single life retirement annuity as provided in 
 this section or an actuarial equivalent optional form retirement 
 annuity as provided in section 354A.32.  Election of an optional 
 annuity shall be made prior to the person attaining normal 
 retirement age.  If an optional annuity is elected, the election 
 shall be effective on the date on which the person attains the 
 normal retirement age and the optional annuity shall begin to 
 accrue on the first day of the month next following the month in 
 which the person attains normal retirement age.  

    HIST: 1979 c 217 s 21; 1981 c 68 s 27,28; 1987 c 372 art 9 s 
 33; 1989 c 319 art 13 s 83-85; 1992 c 598 art 6 s 16 

     354A.37 Refunds. 

    Subdivision 1.    Eligibility for refund.  Any 
 coordinated member who ceases to render teaching service for the 
 school district in which the teachers retirement fund 
 association is located shall be entitled to a refund in lieu of 
 any other annuity or benefit from the teachers retirement fund 
 association other than an annuity from a tax shelter annuity 
 program and fund as authorized pursuant to section 354A.021, 
 subdivision 5.  The amount of the refund shall be calculated 
 pursuant to subdivision 3.  The application for the refund shall 
 not be made prior to 30 days after the cessation of teaching 
 services if the coordinated member has not resumed active 
 teaching services for the district.  Payment of the refund shall 
 be made within 90 days after receipt of the refund application 
 by the board.  

    Subd. 2.    Eligibility for deferred retirement annuity. 
  Any coordinated member who ceases to render teaching services 
 for the school district in which the teachers retirement fund 
 association is located, with sufficient allowable service credit 
 to meet the minimum service requirements specified in section 
 354A.31, subdivision 1, shall be entitled to a deferred 
 retirement annuity in lieu of a refund pursuant to subdivision 
 1.  The deferred retirement annuity shall be computed pursuant 
 to section 354A.31 and shall be augmented as provided in this 
 subdivision.  The deferred annuity shall commence upon 
 application after the person on deferred status attains at least 
 the minimum age specified in section 354A.31, subdivision 1.  

    The monthly annuity amount that had accrued when the member 
 ceased to render teaching service must be augmented from the 
 first day of the month following the month during which the 
 member ceased to render teaching service to the effective date 
 of retirement.  There is no augmentation if this period is less 
 than three months.  The rate of augmentation is three percent 
 compounded annually until January 1 of the year following the 
 year in which the former member attains age 55, and five percent 
 compounded annually after that date to the effective date of 
 retirement.  If a person has more than one period of 
 uninterrupted service, a separate average salary determined 
 under section 354A.31 must be used for each period, and the 
 monthly annuity amount related to each period must be augmented 
 as provided in this subdivision.  The sum of the augmented 
 monthly annuity amounts determines the total deferred annuity 
 payable.  If a person repays a refund, the service restored by 
 the repayment must be considered as continuous with the next 
 period of service for which the person has credit with the 
 fund.  If a person does not render teaching services in any one 
 fiscal year or more consecutive fiscal years and then resumes 
 teaching service, the formula percentages used from the date of 
 resumption of teaching service are those applicable to new 
 members.  The mortality table and interest assumption used to 
 compute the annuity are the table established by the fund to 
 compute other annuities, and the interest assumption under 
 section 356.215 in effect when the member retires.  A period of 
 uninterrupted service for the purpose of this subdivision means 
 a period of covered teaching service during which the member has 
 not been separated from active service for more than one fiscal 
 year.  

    The augmentation provided by this subdivision applies to 
 the benefit provided in section 354A.35, subdivision 2.  The 
 augmentation provided by this subdivision does not apply to any 
 period in which a person is on an approved leave of absence from 
 an employer unit. 

    Subd. 3.    Computation of refund amount.  A former 
 coordinated member who qualifies for a refund pursuant to 
 subdivision 1 shall receive a refund equal to the amount of the 
 former coordinated member's accumulated contributions with 
 interest at the rate of six percent per annum compounded 
 annually.  

    Subd. 4.    Certain refunds at normal retirement age.  
 Any coordinated member who has attained the normal retirement 
 age with less than ten years of allowable service credit and has 
 terminated active teaching service shall be entitled to a refund 
 in lieu of a proportionate annuity pursuant to section 356.32.  
 The refund shall be equal to the coordinated member's 
 accumulated employee contributions plus interest at the rate of 
 six percent compounded annually.  

    Subd. 5.    Unclaimed minimal refund amounts; 
 disposition.  If a coordinated member ceases to render 
 teaching services for the school district in which the teachers 
 retirement fund association is located but does not apply for a 
 refund pursuant to subdivision 1 within five years after the end 
 of the plan year next following the cessation of teaching 
 services and if the amount of the refund that the former 
 coordinated member would have been entitled to pursuant to 
 subdivision 3 is $500 or less, then the amount of the refund and 
 any accumulated interest shall be credited to and become a part 
 of the retirement fund.  If the former coordinated member 
 subsequently renders teaching services for the school district 
 in which the teachers retirement fund association is located and 
 the amount of the refund that the former coordinated member 
 would have previously been entitled to pursuant to subdivision 3 
 is at least $5, then the amount of the refund and any 
 accumulated interest shall be restored to the member's 
 individual account.  If the amount of the refund that the former 
 coordinated member would have previously been entitled to 
 pursuant to subdivision 3 is at least $5 and the former 
 coordinated member applies for a refund pursuant to subdivision 
 1 or for an annuity pursuant to sections 354A.31 and 354A.32 or 
 section 356.30, the amount of the refund and any accumulated 
 interest shall be restored to the member's individual account.  

    HIST: 1979 c 217 s 22; 1984 c 564 s 40,41; 1989 c 319 art 13 s 
 86-88 

     354A.38 Effect of refund; repayment of refund. 

    Subdivision 1.    Effect of refund; termination of service 
 credit.  If a coordinated member or former coordinated member 
 applies for and accepts a refund pursuant to section 354A.37, 
 all allowable service which was credited to the member or former 
 member shall be terminated.  

    Subd. 2.    Repayment of refund.  A coordinated member 
 with at least two years of allowable service credited subsequent 
 to the member's last application for and acceptance of a refund 
 pursuant to section 354A.37 shall be entitled to repay the 
 refund.  The amount of the refund repayment shall be calculated 
 pursuant to subdivision 3.  If the member has previously applied 
 for and accepted more than one refund, and the previous refund 
 or refunds have not been repaid, then the member shall be 
 entitled only to repay all outstanding refunds and shall not be 
 entitled to repay only the most recent refund.  

    Subd. 3.    Computation of refund repayment amount.  If 
 the coordinated member elects to repay a refund under 
 subdivision 2, the repayment to the fund must be in an amount 
 equal to refunds the member has accepted plus interest at the 
 rate of 8.5 percent compounded annually from the date that the 
 refund was accepted to the date that the refund is repaid. 

    HIST: 1979 c 217 s 23; 1980 c 509 s 141; 1992 c 598 art 6 s 17 

     354A.39 Service in other public retirement funds; 
  annuity. 

    Any person who has been a member of the Minnesota state 
 retirement system, the public employees retirement association 
 including the public employees retirement association police and 
 fire fund, the teachers retirement association, the Minnesota 
 state patrol retirement association, the legislators retirement 
 plan, the constitutional officers retirement plan, the 
 Minneapolis employees retirement fund, the Duluth teachers 
 retirement fund association new law coordinated program, the 
 Minneapolis teachers retirement fund association coordinated 
 program, the St. Paul teachers retirement fund association 
 coordinated program, or any other public employee retirement 
 system in the state of Minnesota having a like provision but 
 excluding all other funds providing retirement benefits for 
 police officers or firefighters shall be entitled when qualified 
 to an annuity from each fund if the person's total allowable 
 service in all of the funds or in any two or more of the funds 
 totals three or more years, provided that no portion of the 
 allowable service upon which the retirement annuity from one 
 fund is based is used again in the computation for a retirement 
 annuity from another fund and provided further that the person 
 has not taken a refund from any of funds or associations since 
 the person's membership in the fund or association has 
 terminated.  The annuity from each fund or association shall be 
 determined by the appropriate provisions of the law governing 
 each fund or association, except that the requirement that a 
 person must have at least three years of allowable service in 
 the respective fund or association shall not apply for the 
 purposes of this section, provided that the aggregate service in 
 two or more of these funds equals three or more years. 

    HIST: 1979 c 217 s 24; 1981 c 37 s 2; 1981 c 269 s 7; 1981 c 
 298 s 11; 1987 c 372 art 9 s 34; 1989 c 319 art 13 s 89 

     354A.40 Computation of benefits with partial service as 
  coordinated member. 

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

    Subd. 2. Repealed, 1992 c 598 art 6 s 22 

    Subd. 3. Repealed, 1992 c 598 art 6 s 22 

    HIST: 1979 c 217 s 25 

     354A.41 Administration of coordinated program. 

    Subdivision 1.    Administrative provisions.  The 
 provisions of the articles of incorporation and bylaws of the 
 Minneapolis or the St. Paul teachers retirement fund 
 association, whichever is applicable, relating to the 
 administration of the fund shall govern the administration of 
 the coordinated program and the provisions of the articles of 
 incorporation and bylaws of the Duluth teachers retirement fund 
 association relating to the administration of the fund shall 
 govern the administration of the new law coordinated program in 
 instances where the administrative provisions are not 
 inconsistent with the provisions of sections 354A.31 to 354A.41, 
 including but not limited to provisions relating to the 
 composition and function of the board of trustees, the 
 investment of assets of the teachers retirement fund 
 association, and the definition of the plan year. 

    Subd. 2.    Actuarial valuations.  In any actuarial 
 valuation of the Minneapolis teachers retirement fund 
 association, the St. Paul teachers retirement fund association, 
 or the Duluth teachers retirement fund association under section 
 356.215 prepared by the commission-retained actuary or 
 supplemental actuarial valuation prepared by an approved actuary 
 retained by the teachers retirement fund association, there 
 shall be included a finding of the condition of the fund showing 
 separately the basic and coordinated programs or the old law 
 coordinated and new law coordinated programs, as appropriate.  
 The finding shall include the level normal cost and the 
 applicable employee and employer contribution rates for each 
 program. 

    HIST: 1979 c 217 s 26; 1981 c 269 s 8; 1Sp1985 c 7 s 35; 1987 
 c 259 s 51