1999 Minnesota Statutes

CHAPTER 356. Retirement systems, generally

     356.001 Purpose of public plans. 

    Subdivision 1.    Exclusive benefit of members and 
 beneficiaries.  The public plans and funds specified in 
 subdivision 4 are established to provide for the retirement of 
 their members and to provide funds for the beneficiaries of 
 members in the event of death of a member.  The public plans and 
 funds are established and shall be maintained for the exclusive 
 benefit of the members and the beneficiaries of the members. 
 Except as provided in subdivisions 2 and 3, no part of the 
 moneys of the plans and funds shall revert to the plan or fund 
 or be used for or diverted to purposes other than the exclusive 
 benefit of the members or their beneficiaries.  

    Subd. 2.    Allowable expenses.  The necessary, 
 reasonable, and direct expenses of maintaining, protecting, and 
 administering the public plan or fund, as authorized in the laws 
 governing the plan or fund, shall be considered as expenditures 
 for the exclusive benefit of the members or their beneficiaries. 

    Subd. 3.    Effect of amendments or termination.  If a 
 public plan or fund as defined in subdivision 4 is terminated or 
 the plan or fund provisions are amended, no part of the moneys 
 held in the plan or fund shall be used for or diverted to any 
 purpose other than the exclusive benefit of the members or their 
 beneficiaries, except as provided in this subdivision.  

    If a plan or fund is terminated, all affected members have 
 a nonforfeitable interest in their benefits accrued and funded 
 to date.  The value of the accrued benefits to be credited to 
 the account of each affected member shall be calculated as of 
 the date of termination and the funding ratio of the plan or 
 fund applied to the accrued benefit of each affected member.  

    The board of trustees of the plan or fund shall then, as 
 soon as administratively feasible, pay each eligible member or 
 beneficiary on behalf of a member the amount in the member's 
 account in a lump sum.  In the case of a member whose 
 whereabouts is unknown, the board shall notify the member at the 
 last known address by certified mail with return receipt 
 requested advising the member of the member's right to a pending 
 distribution.  If the member cannot be located in this manner, 
 the board shall establish a custodial account for the member's 
 benefit in a federally insured bank, savings association, or 
 credit union in which the member's account balance shall be 
 deposited.  If the board receives proof of death of a member 
 that is satisfactory to the board, the account balance shall be 
 paid to the beneficiary of the member.  

    Subd. 4.    Covered plans and funds.  This section 
 applies to all public pension and retirement plans and funds 
 established pursuant to the laws of the state of Minnesota that 
 receive contributions from moneys derived from taxation.  

    Subd. 5.    Construction.  Nothing contained in this 
 section shall be construed to authorize, or otherwise imply, a 
 legislative policy or intent favoring the termination of any 
 plan or fund to which this section applies.  

    HIST: 1983 c 286 s 23; 1995 c 202 art 1 s 25 

  356.01-356.14 Obsolete 

  356.15 Renumbered 9.28 

  356.16 Obsolete 

  356.17 Renumbered 3.30 

  356.18 Repealed, 1994 c 528 art 3 s 34 

     356.19 Retirement benefit formula percentages. 

    Subdivision 1.    Coordinated plan members.  The 
 applicable benefit accrual rate is 1.2 percent. 

    Subd. 2.    Coordinated plan members.  The applicable 
 benefit accrual rate is 1.7 percent. 

    Subd. 2a.    Coordinated members.  The applicable 
 benefit accrual rate is 2.0 percent. 

    Subd. 3.    Basic plan members.  The applicable benefit 
 accrual rate is 2.2 percent. 

    Subd. 4.    Basic plan members.  The applicable benefit 
 accrual rate is 2.7 percent. 

    Subd. 5.    Correctional plan members.  The applicable 
 benefit accrual rate is 2.4 percent. 

    Subd. 5a.    Local government correctional service plan. 
  The applicable benefit accrual rate is 1.9 percent.  

    Subd. 6.    State troopers plan and police and fire plan 
 members.  The applicable benefit accrual rate is 3.0 percent. 

    Subd. 7.    Judges plan.  The applicable benefit accrual 
 rate is 2.7 percent. 

    Subd. 8.    Judges plan.  The applicable benefit accrual 
 rate is 3.2 percent. 

    Subd. 9.    Future benefit accrual rate increases.  
 After January 2, 1998, benefit accrual rate increases under this 
 section must apply only to allowable service or formula service 
 rendered after the effective date of the benefit accrual rate 
 increase. 

    HIST: 1997 c 233 art 1 s 55; 1999 c 222 art 2 s 15; art 15 s 2 

     356.20 Public pension fund financial reporting 
  requirement. 

    Subdivision 1.    Report required.  The governing or 
 managing board or administrative officials of the public pension 
 and retirement funds enumerated in subdivision 2 shall annually 
 prepare and file a financial report following the close of each 
 fiscal year.  This requirement shall also apply to any fund 
 which may be a successor to any organization so enumerated or to 
 any newly formed retirement fund or association operating under 
 the control or supervision of any public employee group, 
 governmental unit, or institution receiving a portion of its 
 support through legislative appropriations.  The report shall be 
 prepared under the supervision and at the direction of the 
 management of each fund and shall be signed by the presiding 
 officer of the managing board of the fund and the chief 
 administrative official of the fund.  

    Subd. 2.    Covered public pension funds.  This section 
 applies to the following public pension plans: 

    (1) State employees retirement fund. 

    (2) Public employees retirement fund. 

    (3) Teachers retirement association. 

    (4) State patrol retirement fund. 

    (5) Minneapolis teachers retirement fund association. 

    (6) St. Paul teachers retirement fund association. 

    (7) Duluth teachers retirement fund association. 

    (8) Minneapolis employees retirement fund. 

    (9) University of Minnesota faculty retirement plan. 

    (10) University of Minnesota faculty supplemental 
 retirement plan. 

    (11) Judges retirement fund. 

    (12) Any police or firefighter's relief association 
 enumerated in section 69.77, subdivision 1a, or 69.771, 
 subdivision 1. 

    (13) Public employees police and fire fund.  

    (14) Minnesota state retirement system correctional 
 officers retirement fund.  

    (15) Public employees local government correctional service 
 retirement plan. 

    Subd. 3.    Filing requirement.  The financial report is 
 a public record.  A copy of the report or a synopsis of the 
 report containing the information required by this section shall 
 be distributed annually to each member of the fund and to the 
 governing body of each governmental subdivision of the state 
 which makes employers contributions thereto or in whose behalf 
 taxes are levied for the employers' contribution.  A signed copy 
 of the report shall be delivered to the executive director of 
 the legislative commission on pensions and retirement and to the 
 legislative reference library not later than six months after 
 the close of each fiscal year or one month following the 
 completion and delivery to the retirement fund of the actuarial 
 valuation report of the fund by the actuary retained by the 
 legislative commission on pensions and retirement, if 
 applicable, whichever is later.  

    Subd. 4.    Contents of financial report.  The financial 
 report required by this section must contain financial 
 statements and disclosures that indicate the financial 
 operations and position of the retirement plan and fund.  The 
 report must conform with generally accepted governmental 
 accounting principles, applied on a consistent basis.  The 
 report must be audited.  The report must include, as part of its 
 exhibits or footnotes, an actuarial disclosure item based on the 
 actuarial valuation calculations prepared by the 
 commission-retained actuary or by the actuary retained by the 
 retirement fund or plan, if applicable, according to applicable 
 actuarial requirements enumerated in section 356.215, and 
 specified in the most recent standards for actuarial work 
 adopted by the legislative commission on pensions and 
 retirement.  The accrued assets, the accrued liabilities, 
 including accrued reserves, and the unfunded actuarial accrued 
 liability of the fund or plan must be disclosed.  The disclosure 
 item must contain a declaration by the actuary retained by the 
 legislative commission on pensions and retirement or the actuary 
 retained by the fund or plan, whichever applies, specifying that 
 the required reserves for any retirement, disability, or 
 survivor benefits provided under a benefit formula are computed 
 in accordance with the entry age actuarial cost method and with 
 the most recent applicable standards for actuarial work adopted 
 by the legislative commission on pensions and retirement. 

    (a) Assets of the fund or plan contained in the disclosure 
 item must include the following statement of the actuarial value 
 of current assets as defined in section 356.215, subdivision 1: 

                                     Value         Value 

                                    at cost       at market

  Cash, cash equivalents, and  

    short-term securities           .........     ......... 

  Accounts receivable               .........     .........

  Accrued investment income         .........     .........  

  Fixed income investments          .........     ......... 

  Equity investments other 

    than real estate                .........     ......... 

  Real estate investments           .........     ......... 

  Equipment                         .........     ......... 

  Equity in the Minnesota 

    postretirement investment

    fund                            .........     ......... 

  Other                             .........     .........  

   

  Total assets 

    Value at cost                                 .........

    Value at market                               ......... 

    Value of current assets                       ......... 

    (b) The unfunded actuarial accrued liability of the fund or 
 plan contained in the disclosure item must include the following 
 measures of unfunded actuarial accrued liability, using the 
 value of current assets:  

    (1) unfunded actuarial accrued liability, determined by 
 subtracting the current assets and the present value of future 
 normal costs from the total current and expected future benefit 
 obligations; and 

    (2) unfunded pension benefit obligation, determined by 
 subtracting the current assets from the actuarial present value 
 of credited projected benefits. 

    If the current assets of the fund or plan exceed the 
 actuarial accrued liabilities, the excess must be disclosed and 
 indicated as a surplus. 

    (c) The pension benefit obligations schedule included in 
 the disclosure must contain the following information on the 
 benefit obligations: 

    (1) The pension benefit obligation, determined as the 
 actuarial present value of credited projected benefits on 
 account of service rendered to date, separately identified as 
 follows: 

          (i)   For annuitants 
                Retirement annuities 
                Disability benefits
                Surviving spouse and child benefits
          (ii)  For former members without vested rights 
          (iii) For deferred annuitants' benefits, including 
                any augmentation 
          (iv)  For active employees 
                Accumulated employee contributions,
                including allocated investment income
                Employer-financed benefits vested
                Employer-financed benefits nonvested
                Total pension benefit obligation;

    (2) If there are additional benefits not appropriately 
 covered by the foregoing items of benefit obligations, a 
 separate identification of the obligation. 

    (d) Any additional statements or exhibits or more detailed 
 or subdivided itemization of a disclosure item that will enable 
 the management of the fund to portray a true interpretation of 
 the fund's financial condition must be included in the 
 additional statements or exhibits. 

    Subd. 4a.  For any police or firefighter's relief 
 association referred to in subdivision 2, clause (12), a 
 financial report duly filed pursuant to and meeting the 
 requirements of section 69.051 shall be deemed to have met the 
 requirements of subdivision 4. 

    Subd. 5. Repealed, 1984 c 383 s 5 

    HIST: 1965 c 359 s 1; 1969 c 249 s 1; 1971 c 7 s 1-3; 1971 c 
 197 s 4; 1971 c 281 s 1,2; 1975 c 192 s 1,2; 1978 c 563 s 6-8; 
 1979 c 50 s 49; 1981 c 37 s 2; 1981 c 224 s 168; 1981 c 298 s 
 11; 1984 c 564 s 42; 1Sp1985 c 7 s 26; 1986 c 359 s 26; 1987 c 
 259 s 52-54; 1987 c 372 art 1 s 19; 1991 c 269 art 3 s 2; 1995 c 
 141 art 3 s 20; 1997 c 233 art 1 s 56; 1999 c 222 art 2 s 16 

  356.21 Repealed, 1975 c 192 s 7 

  356.211 Repealed, 1975 c 192 s 7 

  356.212 Repealed, 1975 c 192 s 7 

     356.215 Actuarial valuations and experience studies. 

    Subdivision 1.    Definitions.  For the purposes of 
 sections 3.85 and 356.20 to 356.23, each of the following terms 
 have the meaning given: 

    (1) "Actuarial valuation" means a set of calculations 
 prepared by the actuary retained by the legislative commission 
 on pensions and retirement if so required under section 3.85, or 
 otherwise, by an approved actuary, to determine the normal cost 
 and the accrued actuarial liabilities of a benefit plan, 
 according to the entry age actuarial cost method and based upon 
 stated assumptions including, but not limited to rates of 
 interest, mortality, salary increase, disability, withdrawal, 
 and retirement and to determine the payment necessary to 
 amortize over a stated period any unfunded accrued actuarial 
 liability disclosed as a result of the actuarial valuation of 
 the benefit plan. 

    (2) "Approved actuary" means a person who is regularly 
 engaged in the business of providing actuarial services and who 
 has at least 15 years of service to major public employee 
 pension or retirement funds or who is a fellow in the society of 
 actuaries.  

    (3) "Entry age actuarial cost method" means an actuarial 
 cost method under which the actuarial present value of the 
 projected benefits of each individual currently covered by the 
 benefit plan and included in the actuarial valuation is 
 allocated on a level basis over the service of the individual if 
 the benefit plan is governed by section 69.773 or over the 
 earnings of the individual if the benefit plan is governed by 
 any other law between the entry age and the assumed exit age, 
 with the portion of this actuarial present value which is 
 allocated to the valuation year to be the normal cost and the 
 portion of this actuarial present value not provided for at the 
 valuation date by the actuarial present value of future normal 
 costs to be the actuarial accrued liability, with aggregation in 
 the calculation process to be the sum of the calculated result 
 for each covered individual and with recognition given to any 
 different benefit formulas which may apply to various periods of 
 service. 

    (4) "Experience study" means a report providing experience 
 data and an actuarial analysis of the adequacy of the actuarial 
 assumptions on which actuarial valuations are based. 

    (5) "Current assets" means the value of all assets at cost, 
 including realized capital gains or losses, plus one-third of 
 any unrealized capital gains or losses. 

    (6) "Unfunded actuarial accrued liability" means the total 
 current and expected future benefit obligations, reduced by the 
 sum of current assets and the present value of future normal 
 costs. 

    (7) "Pension benefit obligation" means the actuarial 
 present value of credited projected benefits, determined as the 
 actuarial present value of benefits estimated to be payable in 
 the future as a result of employee service attributing an equal 
 benefit amount, including the effect of projected salary 
 increases and any step rate benefit accrual rate differences, to 
 each year of credited and expected future employee service. 

    Subd. 2.    Requirements.  (a) It is the policy of the 
 legislature that it is necessary and appropriate to determine 
 annually the financial status of tax supported retirement and 
 pension plans for public employees.  To achieve this goal, the 
 legislative commission on pensions and retirement shall have 
 prepared by the actuary retained by the commission annual 
 actuarial valuations of the retirement plans enumerated in 
 section 3.85, subdivision 11, paragraph (b), quadrennial 
 experience studies of the retirement plans enumerated in section 
 3.85, subdivision 11, paragraph (b), clauses (1), (2), and (7), 
 and, two years after each set of quadrennial experience studies, 
 quadrennial projection valuations of at least one of the 
 retirement plans enumerated in section 3.85, subdivision 11, 
 paragraph (b), for which it determines that the analysis may be 
 beneficial.  The governing or managing board or administrative 
 officials of each public pension and retirement fund or plan 
 enumerated in section 356.20, subdivision 2, clauses (9), (10), 
 and (12), shall have prepared by an approved actuary annual 
 actuarial valuations of their respective funds as provided in 
 this section.  This requirement also applies to any fund that is 
 the successor to any organization enumerated in section 356.20, 
 subdivision 2, or to the governing or managing board or 
 administrative officials of any newly formed retirement fund or 
 association operating under the control or supervision of any 
 public employee group, governmental unit, or institution 
 receiving a portion of its support through legislative 
 appropriations, and any local police or fire fund coming within 
 the provisions of section 356.216. 

    (b) A quadrennial projection valuation required under 
 paragraph (a) is intended to serve as an additional analytical 
 tool with which policy makers may assess the future funding 
 status of public plans through forecasting and testing various 
 potential outcomes over time if certain plan assumptions or 
 valuation methods were to be modified.  In consultation with the 
 executive director of the legislative commission on pensions and 
 retirement, the retirement fund directors, the state economist, 
 the state demographer, the commissioner of finance, and the 
 commissioner of employee relations, the actuary retained by the 
 legislative commission on pensions and retirement shall perform 
 the quadrennial projection valuations, testing future 
 implications for plan funding by modifying assumptions and 
 methods currently in place.  The commission-retained actuary 
 shall provide advice to the commission as to the periods over 
 which such projections should be made, the nature and scope of 
 the scenarios to be analyzed, and the measures of funding status 
 to be employed, and shall report the results of these analyses 
 in the same manner as for quadrennial experience studies. 

    Subd. 3.    Reports.  The actuarial valuations required 
 annually must be made as of the beginning of each fiscal year.  
 Two copies of the valuation must be delivered to the executive 
 director of the legislative commission on pensions and 
 retirement, to the commissioner of finance and to the 
 legislative reference library, not later than the first day of 
 the sixth month occurring after the end of the previous fiscal 
 year.  Two copies of a quadrennial experience study must be 
 filed with the executive director of the legislative commission 
 on pensions and retirement, with the commissioner of finance, 
 and with the legislative reference library, not later than the 
 first day of the 11th month occurring after the end of the last 
 fiscal year of the four-year period which the experience study 
 covers.  For actuarial valuations and experience studies 
 prepared at the direction of the legislative commission on 
 pensions and retirement, two copies of the document must be 
 delivered to the governing or managing board or administrative 
 officials of the applicable public pension and retirement fund 
 or plan. 

    Subd. 4.    Actuarial valuation; contents.  The 
 actuarial valuation must be made in conformity with the 
 requirements of the definition contained in subdivision 1 and 
 the most recent standards for actuarial work adopted by the 
 legislative commission on pensions and retirement.  The 
 actuarial valuation must measure all aspects of the benefit plan 
 of the fund in accordance with changes in benefit plans, if any, 
 and salaries reasonably anticipated to be in force during the 
 ensuing fiscal year.  The actuarial valuation must be prepared 
 in accordance with the entry age actuarial cost method. 

    The actuarial valuation required under this section must 
 include the information required in subdivisions 4a to 4k. 

    Subd. 4a.    Normal cost.  For a fund providing benefits 
 in whole or in part under a defined benefit plan, the actuarial 
 valuation must indicate the level normal cost of the benefits 
 provided by the laws governing the fund as of the date of the 
 valuation, calculated in accordance with the entry age actuarial 
 cost method.  The normal cost must be expressed as a level 
 percentage of the present value of future payrolls of the active 
 participants of the fund as of the date of the valuation. 

    Subd. 4b.    Accrued liability.  For a fund providing 
 benefits under a defined benefit plan, the actuarial valuation 
 must contain an exhibit indicating the actuarial accrued 
 liabilities of the fund.  This figure is the present value of 
 future benefits, reduced by the present value of future normal 
 costs, calculated in accordance with the entry age actuarial 
 cost method. 

    Subd. 4c.    Defined contribution accumulations.  For 
 each fund providing benefits under the money purchase or defined 
 contribution plan, the actuarial valuation shall contain an 
 exhibit indicating the member contributions accumulated at 
 interest, as apportioned to members accounts, to the date of the 
 valuation.  These accumulations shall be separately tabulated in 
 a manner which properly reflects any differences in money 
 purchase or defined contribution annuity rates which may apply. 

    Subd. 4d.    Interest and salary assumptions.  (a) The 
 actuarial valuation must use the applicable following 
 preretirement interest assumption and the applicable following 
 postretirement interest assumption: 

                                   preretirement   postretirement 

                                   interest rate   interest rate 

            plan                    assumption       assumption 

  general state employees 

    retirement plan                    8.5%             5.0% 

  correctional state employees 

    retirement plan                    8.5              5.0 

  state patrol retirement plan         8.5              5.0 

  legislators retirement plan          8.5              5.0 

  elective state officers

    retirement plan                    8.5              5.0 

  judges retirement plan               8.5              5.0 

  general public employees 

    retirement plan                    8.5              5.0 

  public employees police and fire 

    retirement plan                    8.5              5.0 

  local government correctional 

    service retirement plan            8.5              5.0 

  teachers retirement plan             8.5              5.0 

  Minneapolis employees 

    retirement plan                    6.0              5.0 

  Duluth teachers retirement plan      8.5              8.5 

  Minneapolis teachers retirement

    plan                               8.5              8.5 

  St. Paul teachers retirement 

    plan                               8.5              7.5 

  Minneapolis police relief 

    association                        6.0              6.0 

  other local police relief 

    associations                       5.0              5.0 

  Minneapolis fire department 

    relief association                 6.0              6.0 

  other local salaried firefighter 

    relief associations                5.0              5.0 

  local monthly benefit volunteer 

    firefighter relief associations    5.0              5.0 

    (b) The actuarial valuation must use the applicable 
 following single rate future salary increase assumption or the 
 applicable following graded rate future salary increase 
 assumption: 

    (1) single rate future salary increase assumption 

                                           future salary 

            plan                        increase assumption 

  legislators retirement plan                  5.0% 

  elective state officers retirement 

    plan                                       5.0 

  judges retirement plan                       5.0 

  Minneapolis employees retirement plan        4.0 

  Minneapolis police relief association        4.0 

  other local police relief associations       3.5 

  Minneapolis fire department relief 

    association                                4.0 

  other local salaried firefighter relief 

    associations                               3.5 

    (2) graded rate future salary increase assumption 

                                           future salary 

            plan                        increase assumption 

  general state employees retirement 

    plan                                   assumption A 

  correctional state employees 

    retirement plan                        assumption A 

  state patrol retirement plan             assumption A 

  general public employees retirement 

    plan                                   assumption B 

  public employees police and fire 

    fund retirement plan                   assumption C 

  local government correctional service 

    retirement plan                        assumption C 

  teachers retirement plan                 assumption D 

  Duluth teachers retirement plan          assumption E 

  Minneapolis teachers retirement plan     assumption F 

  St. Paul teachers retirement plan        assumption G 

  age    A      B      C      D      E      F      G 

  16  7.2500%  8.71% 11.50%  7.25%  8.00%  7.50%  7.25% 

  17  7.2500   8.71  11.50   7.25   8.00   7.50   7.25 

  18  7.2500   8.70  11.50   7.25   8.00   7.50   7.25 

  19  7.2500   8.70  11.50   7.25   8.00   7.50   7.25 

  20  7.2500   7.70  11.50   7.25   8.00   7.50   7.25 

  21  7.1454   7.70  11.50   7.25   8.00   7.50   7.25 

  22  7.1094   7.70  11.00   7.25   8.00   7.50   7.25 

  23  7.0725   7.70  10.50   7.20   7.90   7.40   7.25 

  24  7.0363   7.70  10.00   7.15   7.80   7.30   7.20 

  25  7.0000   7.60   9.50   7.10   7.70   7.20   7.15 

  26  7.0000   7.51   9.20   7.05   7.60   7.10   7.10 

  27  7.0000   7.39   8.90   7.00   7.50   7.00   7.05 

  28  7.0000   7.30   8.60   7.00   7.40   6.90   7.00 

  29  7.0000   7.20   8.30   7.00   7.30   6.80   6.95 

  30  7.0000   7.20   8.00   7.00   7.20   6.70   6.90 

  31  7.0000   7.10   7.80   7.00   7.10   6.60   6.85 

  32  7.0000   7.10   7.60   7.00   7.00   6.50   6.80 

  33  7.0000   7.00   7.40   7.00   6.90   6.40   6.75 

  34  7.0000   7.00   7.20   7.00   6.80   6.30   6.70 

  35  7.0000   6.90   7.00   7.00   6.70   6.20   6.65 

  36  6.9019   6.80   6.80   7.00   6.60   6.10   6.60 

  37  6.8074   6.70   6.60   7.00   6.50   6.00   6.55 

  38  6.7125   6.60   6.40   6.90   6.40   5.90   6.50 

  39  6.6054   6.50   6.20   6.80   6.30   5.80   6.40 

  40  6.5000   6.40   6.00   6.70   6.20   5.70   6.30 

  41  6.3540   6.30   5.90   6.60   6.10   5.60   6.20 

  42  6.2087   6.30   5.80   6.50   6.00   5.50   6.10 

  43  6.0622   6.30   5.70   6.35   5.90   5.45   6.00 

  44  5.9048   6.20   5.60   6.20   5.80   5.40   5.90 

  45  5.7500   6.20   5.50   6.05   5.70   5.35   5.80 

  46  5.6940   6.09   5.45   5.90   5.60   5.30   5.70 

  47  5.6375   6.00   5.40   5.75   5.50   5.25   5.65 

  48  5.5822   5.90   5.35   5.70   5.45   5.20   5.60 

  49  5.5405   5.80   5.30   5.65   5.40   5.15   5.55 

  50  5.5000   5.70   5.25   5.60   5.35   5.10   5.50 

  51  5.4384   5.70   5.25   5.55   5.30   5.05   5.45 

  52  5.3776   5.70   5.25   5.50   5.25   5.00   5.40 

  53  5.3167   5.70   5.25   5.45   5.25   5.00   5.35 

  54  5.2826   5.70   5.25   5.40   5.25   5.00   5.30 

  55  5.2500   5.70   5.25   5.35   5.25   5.00   5.25 

  56  5.2500   5.70   5.25   5.30   5.25   5.00   5.25 

  57  5.2500   5.70   5.25   5.25   5.25   5.00   5.25 

  58  5.2500   5.70   5.25   5.25   5.25   5.00   5.25 

  59  5.2500   5.70   5.25   5.25   5.25   5.00   5.25 

  60  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 

  61  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 

  62  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 

  63  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 

  64  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 

  65  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 

  66  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 

  67  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 

  68  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 

  69  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 

  70  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 

    (c) The actuarial valuation must use the applicable 
 following payroll growth assumption for calculating the 
 amortization requirement for the unfunded actuarial accrued 
 liability where the amortization retirement is calculated as a 
 level percentage of an increasing payroll: 

                                              payroll growth

               plan                             assumption 

  general state employees retirement plan          5.00% 

  correctional state employees retirement plan     5.00 

  state patrol retirement plan                     5.00 

  legislators retirement plan                      5.00 

  elective state officers retirement plan          5.00 

  judges retirement plan                           5.00 

  general public employees retirement plan         6.00 

  public employees police and fire 

    retirement plan                                6.00 

  local government correctional service 

    retirement plan                                6.00 

  teachers retirement plan                         5.00 

  Duluth teachers retirement plan                  5.00 

  Minneapolis teachers retirement plan             5.00 

  St. Paul teachers retirement plan                5.00 

    Subd. 4e.    Other assumptions.  The actuarial valuation 
 must use assumptions concerning mortality, disability, 
 retirement, withdrawal, retirement age, and any other relevant 
 demographic or economic factor.  These must be set at levels 
 consistent with those determined in the most recent quadrennial 
 experience study completed under subdivision 5, if required, or 
 representative of the best estimate of future experience, if a 
 quadrennial experience study is not required.  The actuarial 
 valuation must contain an exhibit indicating any actuarial 
 assumptions used in preparing the valuation report. 

    Subd. 4f.    Public sector accounting disclosure 
 information.  The actuarial valuation must contain those 
 actuarial calculations necessary to allow the retirement plan 
 administration or participating employing units to prepare the 
 pension-related portions of annual financial reporting that meet 
 generally accepted accounting principles for the public sector.  

    Subd. 4g.    Amortization contributions.  (a) In 
 addition to the exhibit indicating the level normal cost, the 
 actuarial valuation must contain an exhibit indicating the 
 additional annual contribution sufficient to amortize the 
 unfunded actuarial accrued liability.  For funds governed by 
 chapters 3A, 352, 352B, 352C, 353, 354, 354A, and 490, the 
 additional contribution must be calculated on a level percentage 
 of covered payroll basis by the established date for full 
 funding in effect when the valuation is prepared.  For funds 
 governed by chapter 3A, sections 352.90 through 352.951, 
 chapters 352B, 352C, sections 353.63 through 353.68, and 
 chapters 353C, 354A, and 490, the level percent additional 
 contribution must be calculated assuming annual payroll growth 
 of 6.5 percent.  For funds governed by sections 352.01 through 
 352.86 and chapter 354, the level percent additional 
 contribution must be calculated assuming an annual payroll 
 growth of five percent.  For the fund governed by sections 
 353.01 through 353.46, the level percent additional contribution 
 must be calculated assuming an annual payroll growth of six 
 percent.  For all other funds, the additional annual 
 contribution must be calculated on a level annual dollar amount 
 basis. 

    (b) For any fund other than the Minneapolis employees 
 retirement fund, after the first actuarial valuation date 
 occurring after June 1, 1989, if there has not been a change in 
 the actuarial assumptions used for calculating the actuarial 
 accrued liability of the fund, a change in the benefit plan 
 governing annuities and benefits payable from the fund, a change 
 in the actuarial cost method used in calculating the actuarial 
 accrued liability of all or a portion of the fund, or a 
 combination of the three, which change or changes by themselves 
 without inclusion of any other items of increase or decrease 
 produce a net increase in the unfunded actuarial accrued 
 liability of the fund, the established date for full funding for 
 the first actuarial valuation made after June 1, 1989, and each 
 successive actuarial valuation is the first actuarial valuation 
 date occurring after June 1, 2020.  

    (c) For any fund or plan other than the Minneapolis 
 employees retirement fund, after the first actuarial valuation 
 date occurring after June 1, 1989, if there has been a change in 
 any or all of the actuarial assumptions used for calculating the 
 actuarial accrued liability of the fund, a change in the benefit 
 plan governing annuities and benefits payable from the fund, a 
 change in the actuarial cost method used in calculating the 
 actuarial accrued liability of all or a portion of the fund, or 
 a combination of the three, and the change or changes, by 
 themselves and without inclusion of any other items of increase 
 or decrease, produce a net increase in the unfunded actuarial 
 accrued liability in the fund, the established date for full 
 funding must be determined using the following procedure:  

    (i) the unfunded actuarial accrued liability of the fund 
 must be determined in accordance with the plan provisions 
 governing annuities and retirement benefits and the actuarial 
 assumptions in effect before an applicable change; 

    (ii) the level annual dollar contribution or level 
 percentage, whichever is applicable, needed to amortize the 
 unfunded actuarial accrued liability amount determined under 
 item (i) by the established date for full funding in effect 
 before the change must be calculated using the interest 
 assumption specified in subdivision 4d in effect before the 
 change; 

    (iii) the unfunded actuarial accrued liability of the fund 
 must be determined in accordance with any new plan provisions 
 governing annuities and benefits payable from the fund and any 
 new actuarial assumptions and the remaining plan provisions 
 governing annuities and benefits payable from the fund and 
 actuarial assumptions in effect before the change; 

    (iv) the level annual dollar contribution or level 
 percentage, whichever is applicable, needed to amortize the 
 difference between the unfunded actuarial accrued liability 
 amount calculated under item (i) and the unfunded actuarial 
 accrued liability amount calculated under item (iii) over a 
 period of 30 years from the end of the plan year in which the 
 applicable change is effective must be calculated using the 
 applicable interest assumption specified in subdivision 4d in 
 effect after any applicable change; 

    (v) the level annual dollar or level percentage 
 amortization contribution under item (iv) must be added to the 
 level annual dollar amortization contribution or level 
 percentage calculated under item (ii); 

    (vi) the period in which the unfunded actuarial accrued 
 liability amount determined in item (iii) is amortized by the 
 total level annual dollar or level percentage amortization 
 contribution computed under item (v) must be calculated using 
 the interest assumption specified in subdivision 4d in effect 
 after any applicable change, rounded to the nearest integral 
 number of years, but not to exceed 30 years from the end of the 
 plan year in which the determination of the established date for 
 full funding using the procedure set forth in this clause is 
 made and not to be less than the period of years beginning in 
 the plan year in which the determination of the established date 
 for full funding using the procedure set forth in this clause is 
 made and ending by the date for full funding in effect before 
 the change; and 

    (vii) the period determined under item (vi) must be added 
 to the date as of which the actuarial valuation was prepared and 
 the date obtained is the new established date for full funding.  

    (d) For the Minneapolis employees retirement fund, the 
 established date for full funding is June 30, 2020. 

    (e) For the following plans for which the annual actuarial 
 valuation indicates an excess of valuation assets over the 
 actuarial accrued liability, the valuation assets in excess of 
 the actuarial accrued liability must be recognized in the 
 following manner: 

    (1) the public employees retirement association police and 
 fire plan, the valuation assets in excess of the actuarial 
 accrued liability serve to reduce the current contribution 
 requirements by an amount equal to the amortization of the 
 excess expressed as a level percentage of pay over a 30-year 
 period beginning anew with each annual actuarial valuation of 
 the plan; and 

    (2) the correctional employees retirement plan of the 
 Minnesota state retirement system, and the state patrol 
 retirement plan, an excess of valuation assets over actuarial 
 accrued liability must be amortized in the same manner over the 
 same period as an unfunded actuarial accrued liability but must 
 serve to reduce the required contribution instead of increasing 
 it. 

    Subd. 4h.    Actuarial gains and losses.  The actuarial 
 valuation must contain an exhibit consisting of an analysis by 
 the actuary explaining the net increase or decrease in the 
 unfunded actuarial accrued liability since the last valuation.  
 The explanation must subdivide the net increase or decrease in 
 the unfunded actuarial accrued liability into at least the 
 following parts: 

    (a) increases or decreases in the unfunded actuarial 
 accrued liability because of changes in benefits; 

    (b) increases and decreases in the unfunded actuarial 
 accrued liability because of changes in actuarial assumptions; 

    (c) increases or decreases in the unfunded actuarial 
 accrued liability attributable to actuarial gains or losses 
 resulting from any experience deviations from the assumptions on 
 which the valuation is based, as follows: 

    (i) actual investment earnings; 

    (ii) actual postretirement mortality rates; 

    (iii) actual salary increase rates; and 

    (iv) the remainder of the increase or decrease not 
 attributable to any separate source; 

    (d) increases or decreases in unfunded actuarial accrued 
 liability because of other reasons, including the effect of any 
 amortization contribution paid or additional amortization 
 contribution previously calculated but unpaid; and 

    (e) increases or decreases in unfunded actuarial accrued 
 liability because of changes in eligibility requirements or 
 groups included in the membership of the fund. 

    Subd. 4i.    Membership tabulation.  The actuarial 
 valuation must contain a tabulation of active membership and 
 annuitants in the fund.  If the membership of a fund is under 
 more than one general benefit program, a separate tabulation 
 must be made for each general benefit program.  The tabulations 
 must be prepared by the administration of the pension fund and 
 must contain the following information: 

 (1) Active members                               Number 
      As of last valuation date
                New entrants
            Total 
      Separations from active service
      Refund of contributions
      Separation with deferred annuity
      Separation with neither refund
           nor deferred annuity
      Disability
      Death
      Retirement with service annuity

      Total separations
      As of current valuation date                            
 (2) Annuitants                                   Number          
      As of last valuation date
      New entrants
      Total
      Terminations
      Deaths
      Other

      Total terminations
      As of current valuation date

    The tabulation required under clause (2) must be made 
 separately for each of the following classes of benefit 
 recipients: 

    (1) service retirement annuitants; 

    (2) disability benefit recipients; 

    (3) survivor benefit recipients; and 

    (4) deferred annuitants. 

    Subd. 4j.    Administrative expenses.  The actuarial 
 valuation must indicate the administrative expenses of the fund, 
 expressed both in dollars and as a percentage of covered payroll.
 Administrative expenses are costs incurred by the retirement 
 plans excluding investment expenses.  Investment expenses 
 include all expenses incurred for the retention of professional 
 external investment managers and professional investment 
 consultants, custodian bank fees, investment transaction costs, 
 and the costs incurred by the retirement plans to manage 
 investment portfolios or assets internally.  Investment expenses 
 must be deducted from investment return in the actuarial 
 valuation, and not included in administrative expenses when 
 calculating the allowance for expenses. 

    Subd. 4k.    Plan summary.  The actuarial valuation must 
 contain a summary of the principal provisions of the plan upon 
 which the valuation is based. 

    Subd. 5.    Quadrennial experience study; contents.  A 
 quadrennial experience study, if required, must contain an 
 actuarial analysis of the experience of the fund and a 
 comparison of the experience with the actuarial assumptions on 
 which the most recent actuarial valuation of the retirement fund 
 was based. 

    Subd. 6.    Actuarial services by approved actuaries.  
 (a) The actuarial valuation or quadrennial experience study must 
 be made and any actuarial consulting services for a retirement 
 fund or plan must be provided by an approved actuary.  The 
 actuarial valuation or quadrennial experience study must include 
 a declaration that it has been prepared according to sections 
 356.20 to 356.23 and the most recent standards for actuarial 
 work adopted by the legislative commission on pensions and 
 retirement.  

    (b) Actuarial valuations, or experience studies prepared by 
 an actuary retained by a retirement fund or plan must be 
 submitted to the legislative commission on pensions and 
 retirement within ten days of the submission of the document to 
 the retirement fund or plan. 

    Subd. 7.    Establishment of actuarial assumptions.  
 Actuarial assumptions used for actuarial valuations under this 
 section that are other than those set forth in this section may 
 be changed only with the approval of the legislative commission 
 on pensions and retirement.  A change in the applicable 
 actuarial assumptions may be proposed by the governing board of 
 the applicable pension fund or relief association, by the 
 actuary retained by the legislative commission on pensions and 
 retirement, by the actuarial advisor to a pension fund governed 
 by chapter 352, 353, 354, or 354A, or by the actuary retained by 
 a local police or firefighters relief association governed by 
 sections 69.77 or 69.771 to 69.776, if one is retained. 

    HIST: 1975 c 192 s 3; 1978 c 563 s 9,10; 1979 c 184 s 1; 1981 
 c 224 s 169; 1984 c 564 s 43; 1Sp1985 c 7 s 27; 1986 c 359 s 26; 
 1986 c 458 s 20; 1987 c 259 s 55; 1989 c 319 art 13 s 90,91; 
 1991 c 199 art 2 s 24; 1991 c 269 art 3 s 3-19; 1991 c 345 art 4 
 s 3,4; 1993 c 336 art 4 s 1; 1993 c 352 s 7; 1995 c 141 art 3 s 
 14,15; 1997 c 233 art 1 s 57,59; 1997 c 241 art 4 s 1; 1998 c 
 390 art 8 s 2; 1999 c 222 art 4 s 14 

*   NOTE:  Subdivision 4d was also amended by Laws 1997, 
*chapter 233, article 1, section 58, to read as follows: 

*   "Subd. 4d.    Interest and salary assumptions.  (a) For 
*funds governed by chapter 352B, and by sections 352.90 through 
*352.951 and 353.63 through 353.68, the actuarial valuation must 
*use a preretirement interest assumption of 8.5 percent, a 
*postretirement interest assumption of six percent, and a future 
*salary increase assumption of 6.5 percent. 

*   (b) For funds governed by chapter 354A, the actuarial 
*valuation must use preretirement and postretirement assumptions 
*of 8.5 percent and a future salary increase assumption of 6.5 
*percent, but the actuarial valuation must reflect the payment of 
*postretirement adjustments to retirees, based on the methods 
*specified in the bylaws of the fund as approved by the 
*legislature.  For a fund governed by chapter 422A, the actuarial 
*valuation shall use a preretirement interest assumption of six 
*percent, a postretirement interest assumption of five percent, 
*and an assumption that in each future year the salary on which a 
*retirement or other benefit is based is 1.04 multiplied by the 
*salary for the preceding year.  

*   (c) For all other funds not specified in paragraph (a), 
*(b), (d), or (e), the actuarial valuation must use a 
*preretirement interest assumption of five percent, a 
*postretirement interest assumption of five percent, and a future 
*salary increase assumption of 3.5 percent. 

*   (d) For funds governed by chapters 3A, 352C, and 490, the 
*actuarial valuation must use a preretirement interest assumption 
*of 8.5 percent, a postretirement interest assumption of six 
*percent, and a future salary increase assumption of 6.5 percent 
*in each future year in which the salary amount payable is not 
*determinable from section 3.099, 15A.081, subdivision 6, or 
*15A.083, subdivision 1, whichever applies, or from applicable 
*compensation council recommendations under section 15A.082. 

*   (e) For funds governed by sections 352.01 through 352.86, 
*353.01 through 353.46, and chapter 354, the actuarial valuation 
*must use a preretirement interest assumption of 8.5, a 
*postretirement interest assumption of six percent, and a graded 
*rate future salary increase assumption as follows: 

         General state   General public   

           employees       employees         Teachers  

          retirement      retirement        retirement 

  Age        plan            plan              plan 

  16        7.2500%         8.71%              7.25%

  17        7.2500          8.71               7.25 

  18        7.2500          8.70               7.25 

  19        7.2500          8.70               7.25 

  20        7.2500          7.70               7.25 

  21        7.1454          7.70               7.25 

  22        7.1094          7.70               7.25 

  23        7.0725          7.70               7.20 

  24        7.0363          7.70               7.15 

  25        7.0000          7.60               7.10 

  26        7.0000          7.51               7.05 

  27        7.0000          7.39               7.00 

  28        7.0000          7.30               7.00 

  29        7.0000          7.20               7.00 

  30        7.0000          7.20               7.00 

  31        7.0000          7.10               7.00 

  32        7.0000          7.10               7.00 

  33        7.0000          7.00               7.00 

  34        7.0000          7.00               7.00 

  35        7.0000          6.90               7.00 

  36        6.9019          6.80               7.00 

  37        6.8074          6.70               7.00 

  38        6.7125          6.60               6.90 

  39        6.6054          6.50               6.80 

  40        6.5000          6.40               6.70 

  41        6.3540          6.30               6.60 

  42        6.2087          6.30               6.50 

  43        6.0622          6.30               6.35 

  44        5.9048          6.20               6.20 

  45        5.7500          6.20               6.05 

  46        5.6940          6.09               5.90 

  47        5.6375          6.00               5.75 

  48        5.5822          5.90               5.70 

  49        5.5405          5.80               5.65 

  50        5.5000          5.70               5.60 

  51        5.4384          5.70               5.55 

  52        5.3776          5.70               5.50 

  53        5.3167          5.70               5.45 

  54        5.2826          5.70               5.40 

  55        5.2500          5.70               5.35 

  56        5.2500          5.70               5.30 

  57        5.2500          5.70               5.25 

  58        5.2500          5.70               5.25 

  59        5.2500          5.70               5.25 

  60        5.2500          5.00               5.25 

  61        5.2500          5.00               5.25 

  62        5.2500          5.00               5.25 

  63        5.2500          5.00               5.25 

  64        5.2500          5.00               5.25 

  65        5.2500          5.00               5.25 

  66        5.2500          5.00               5.25 

  67        5.2500          5.00               5.25 

  68        5.2500          5.00               5.25 

  69        5.2500          5.00               5.25 

  70        5.2500          5.00               5.25"

*   NOTE:  The amendment to subdivision 4g by Laws 1999, 
*chapter 222, article 4, section 14, is effective July 1, 2000.  
*Laws 1999, chapter 222, article 4, section 21.

     356.216 Contents of actuarial valuations for local 
  police and fire funds. 

    (a) The provisions of section 356.215 governing the 
 contents of actuarial valuations shall apply to any local police 
 or fire pension fund or relief association required to make an 
 actuarial report under this section except as follows: 

    (1) in calculating normal cost and other requirements, if 
 required to be expressed as a level percentage of covered 
 payroll, the salaries used in computing covered payroll shall be 
 the maximum rate of salary from which retirement and 
 survivorship credits and amounts of benefits are determined and 
 from which any member contributions are calculated and deducted; 

    (2) in lieu of the amortization date specified in section 
 356.215, subdivision 4g, the appropriate amortization target 
 date specified in section 69.77, subdivision 2b, or 69.773, 
 subdivision 4, clause (c), shall be used in calculating any 
 required amortization contribution; 

    (3) in addition to the tabulation of active members and 
 annuitants provided for in section 356.215, subdivision 4i, the 
 member contributions for active members for the calendar year 
 and the prospective annual retirement annuities under the 
 benefit plan for active members shall be reported; 

    (4) actuarial valuations required pursuant to section 
 69.773, subdivision 2, shall be made at least every four years 
 and actuarial valuations required pursuant to section 69.77 
 shall be made annually; and 

    (5) the actuarial balance sheet showing accrued assets 
 valued at market value if the actuarial valuation is required to 
 be prepared at least every four years or valued as current 
 assets under section 356.215, subdivision 1, clause (6), or 
 paragraph (b), whichever applies, if the actuarial valuation is 
 required to be prepared annually, actuarial accrued liabilities, 
 and the unfunded actuarial accrued liability shall include the 
 following required reserves: 

    (a) For active members 

       1.  Retirement benefits 
       2.  Disability benefits 
       3.  Refund liability due to death or withdrawal 
       4.  Survivors' benefits 
      (b) For deferred annuitants' benefits 
      (c) For former members without vested rights 
      (d) For annuitants 
       1.  Retirement annuities 
       2.  Disability annuities 
       3.  Surviving spouses' annuities 
       4.  Surviving children's annuities 

    In addition to those required reserves, separate items 
 shall be shown for additional benefits, if any, which may not be 
 appropriately included in the reserves listed above.  

    (6) actuarial valuations shall be due by the first day of 
 the seventh month after the end of the fiscal year which the 
 actuarial valuation covers. 

    (b) For a relief association in a city of the first class 
 with a population of more than 300,000, the following provisions 
 additionally apply: 

    (1) in calculating the actuarial balance sheet, unfunded 
 actuarial accrued liability, and amortization contribution of 
 the relief association, "current assets" means the value of all 
 assets at cost, including realized capital gains and losses, 
 plus or minus, whichever applies, the average value of total 
 unrealized capital gains or losses for the most recent 
 three-year period ending with the end of the plan year 
 immediately preceding the actuarial valuation report 
 transmission date; and 

    (2) in calculating the applicable portions of the actuarial 
 valuation, an annual preretirement interest assumption of six 
 percent, an annual postretirement interest assumption of six 
 percent, and an annual salary increase assumption of four 
 percent must be used. 

    HIST: 1978 c 563 s 11; 1981 c 224 s 170; 1983 c 71 s 2; 
 1Sp1985 c 7 s 28; 1986 c 359 s 14; 1Sp1986 c 3 art 1 s 46; 1987 
 c 259 s 56; 1989 c 319 art 19 s 4; 1991 c 199 art 1 s 91 

     356.217 Modifications in actuarial services. 

    (a) The cost of any requested benefit projections by the 
 commission-retained actuary relating to the Minnesota 
 postretirement investment fund for the state board of investment 
 is payable by the state board of investment. 

    (b) Actuarial valuations under section 356.215, for July 1, 
 1991, and thereafter, are not required to have an individual 
 commentary section.  The commentary section, if omitted from the 
 individual plan actuarial valuation, must be included in an 
 appropriate generalized format as part of the report to the 
 legislature under section 3.85, subdivision 11. 

    (c) Actuarial valuations under section 356.215, for July 1, 
 1991, and thereafter, are not required to contain separate 
 actuarial valuation results for basic and coordinated programs 
 unless each program has a membership of at least ten percent of 
 the total membership of the fund.  Actuarial valuations under 
 section 356.215, for July 1, 1991, and thereafter, are not 
 required to contain cash flow forecasts. 

    (d) Actuarial valuations of the public employees police and 
 fire fund local consolidation accounts for July 1, 1991, and 
 thereafter, are not required to contain separate tabulations or 
 summaries of active member, service retirement, disability 
 retirement, and survivor data for each local consolidation 
 account. 

    (e) The commission-retained actuary is: 

    (1) required to publish experience findings for plans for 
 which experience findings are required only on a quadrennial 
 basis for the four-year period ending June 30, 1992, and every 
 four years thereafter; 

    (2) not required to prepare a separate experience analysis 
 or publish separate experience findings for basic and 
 coordinated programs if separate actuarial valuation results for 
 the programs are not required; and 

    (3) not required to calculate investment rate of return 
 experience results on any basis other than current asset value 
 as defined in section 356.215, subdivision 1, clause (6). 

    HIST: 1991 c 269 art 3 s 20; 1997 c 233 art 1 s 60 

  356.218 Repealed, 1997 c 241 art 10 s 7 

     356.219 Disclosure of public pension plan investment 
  information. 

    Subdivision 1.    Report required.  (a) Except as 
 indicated in subdivision 4, the state board of investment on 
 behalf of the public pension funds and programs for which it is 
 the investment authority and any Minnesota public pension plan 
 not fully invested through the state board of investment, 
 including a local police or firefighters' relief association 
 governed by sections 69.77 or 69.771 to 69.775, shall report the 
 information specified in subdivision 3 to the state auditor.  
 The state auditor may prescribe a form or forms for the purposes 
 of the reporting requirements contained in this section. 

    (b) A local police or firefighters' relief association 
 governed by section 69.77 or sections 69.771 to 69.775 is fully 
 invested during a given calendar year for purposes of this 
 section if all assets of the applicable pension plan beyond 
 sufficient cash equivalent investments to cover six months 
 expected expenses are invested under section 11A.17.  The board 
 of any fully invested public pension plan remains responsible 
 for submitting investment policy statements and subsequent 
 revisions as required by subdivision 3, paragraph (a). 

    (c) For purposes of this section, the state board of 
 investment is considered to be the investment authority for any 
 Minnesota public pension fund required to be invested by the 
 state board of investment under section 11A.23, or for any 
 Minnesota public pension fund authorized to invest in the 
 supplemental investment fund under section 11A.17 and which is 
 fully invested. 

    Subd. 2.    Asset class definition.  (a) For purposes of 
 this section, "asset class" means any of the following asset 
 groupings as authorized in applicable law, bylaws, or articles 
 of incorporation: 

    (1) cash and any cash equivalent investments with 
 maturities of one year or less when issued; 

    (2) debt securities with maturities greater than one year 
 when issued, including but not limited to mortgage participation 
 certificates and pools, asset backed securities, guaranteed 
 investment contracts, and authorized government and corporate 
 obligations of corporations organized under laws of the United 
 States or any state, or the Dominion of Canada or its provinces; 

    (3) stocks or convertible issues of any corporation 
 organized under laws of the United States or any state, or the 
 Dominion of Canada or its provinces, or any corporation listed 
 on the New York Stock Exchange or the American Stock Exchange; 

    (4) international stocks or convertible issues; 

    (5) international debt securities; and 

    (6) real estate and venture capital. 

    (b) If the pension plan is investing under section 69.77, 
 subdivision 2g, section 69.775, or other applicable law, in 
 open-end investment companies registered under the federal 
 Investment Company Act of 1940, or in the Minnesota supplemental 
 investment fund under section 11A.17, this investment must be 
 included under an asset class indicated in paragraph (a), 
 clauses (1) through (6), as appropriate.  If the investment 
 vehicle includes underlying securities from more than one asset 
 class as indicated by paragraph (a), clauses (1) through (6), 
 the investment may be treated as a separate asset class. 

    Subd. 3.    Content of reports.  (a) The report required 
 by subdivision 1 must include a written statement of the 
 investment policy in effect on June 30, 1997, if that statement 
 has not been previously submitted.  Following that date, 
 subsequent reports must include investment policy changes and 
 the effective date of each policy change rather than a complete 
 statement of investment policy, unless the state auditor 
 requests submission of a complete current statement.  The report 
 must also include the information required by the following 
 paragraphs, as applicable. 

    (b) If a public pension plan has a total market value of 
 $10,000,000 or more as of the beginning of the calendar year, 
 the report required by subdivision 1 must include the market 
 value of the total portfolio and the market value of each 
 investment account, investment portfolio, or asset class 
 included in the pension fund as of the beginning of the calendar 
 year and for each month, and the amount and date of each 
 injection and withdrawal to the total portfolio and to each 
 investment account, investment portfolio, or asset class.  If a 
 public pension plan once files a report under this paragraph, it 
 must continue reporting under this paragraph for any year in 
 which the public pension plan is not fully invested as specified 
 in subdivision 1, paragraph (b), even if asset values drop below 
 $10,000,000 in market value in a subsequent year. 

    (c) For public pension plans to which paragraph (b) 
 applies, the report required by subdivision 1 must also include 
 a calculation of the total time-weighted rate of return 
 available from index-matching investments assuming the asset 
 class performance targets and target asset mix indicated in the 
 written statement of investment policy.  The provided 
 information must include a description of indices used in the 
 analyses and an explanation of why those indices are 
 appropriate.  This paragraph does not apply to any fully 
 invested plan, as defined by subdivision 1, paragraph (b).  
 Reporting by the state board of investment under this paragraph 
 is limited to information on the Minnesota public pension plans 
 required to be invested by the state board of investment under 
 section 11A.23. 

    (d) If a public pension plan has a total market value of 
 less than $10,000,000 as of the beginning of the calendar year 
 and was never required to file under paragraph (b), the report 
 required by subdivision 1 must include the amount and date of 
 each total portfolio injection and withdrawal.  In addition, the 
 report must include the market value of the total portfolio as 
 of the beginning of the calendar year and for each quarter. 

    (e) Any public pension plan reporting under paragraph (b) 
 or (d) may include computed time-weighted rates of return with 
 the report, in addition to all other required information, as 
 applicable.  If returns are supplied, the individual who 
 computed the returns must certify that the returns are net of 
 all costs and fees, including investment management fees, and 
 that the procedures used to compute the returns are consistent 
 with bank administration institute studies of investment 
 performance measurement and association of investment management 
 and research presentation standards. 

    (f) For public pension plans reporting under paragraph (d), 
 the public pension plan must retain information specifying the 
 date and amount of each injection and withdrawal to each 
 investment account and investment portfolio.  The public pension 
 plan must also retain the market value of each investment 
 account and investment portfolio at the beginning of the 
 calendar year and for each quarter.  Information that is 
 required to be collected and retained for any given year or 
 years under this paragraph must be submitted to the office of 
 the state auditor if the office of the state auditor requests in 
 writing that the information be submitted by a public pension 
 plan or plans, or be submitted by the state board of investment 
 for any plan or plans for which the state board of investment is 
 the investment authority under this section.  If the state 
 auditor requests information under this subdivision, and the 
 public plan fails to comply, the pension plan will be subject to 
 penalties under subdivision 5, unless penalties are waived by 
 the state auditor under that subdivision. 

    Subd. 4.    Alternative reporting; certain plans.  In 
 lieu of requirements in subdivision 3, the applicable 
 administration for the individual retirement account plans under 
 chapters 354B and 354D and for the University of Minnesota 
 faculty retirement plan shall submit computed time-weighted 
 rates of return to the office of the state auditor.  These 
 time-weighted rates of return must cover the most recent 
 complete calendar year, and must be computed for each investment 
 option available to plan members.  To the extent feasible, the 
 returns must be computed net of all costs, fees, and charges, so 
 that the computed return reflects the net time-weighted return 
 available to the investor.  If this is not practical, the 
 existence of any remaining cost, fee, or charge which could 
 further lower the net return must be disclosed.  The procedures 
 used to compute the returns must be consistent with bank 
 administration institute studies of investment performance 
 measurement and association of investment management and 
 research presentation standards, or, if applicable, securities 
 exchange commission requirements.  The individual who computes 
 the returns must certify that the supplied returns comply with 
 this subdivision.  The applicable plan administrator must also 
 submit, with the return information, the total amounts invested 
 by the plan members, in aggregate, in each investment option as 
 of the last day of the calendar year. 

    Subd. 5.    Penalty for noncompliance.  Failure to 
 comply with the reporting requirements of this section shall 
 result in a withholding of all state aid or state appropriation 
 to which the pension plan may otherwise be directly or 
 indirectly entitled until the pension plan has complied with the 
 reporting requirements.  The state auditor shall instruct the 
 commissioners of revenue and finance to withhold state aid or 
 state appropriation from any pension plan that fails to comply 
 with the reporting requirements contained in this section, until 
 the pension plan has complied with the reporting requirements.  
 The state auditor may waive the withholding of state aid or 
 state appropriations if the state auditor determines in writing 
 that compliance would create an excessive hardship. 

    Subd. 6.    Investment disclosure report.  (a) The state 
 auditor shall prepare an annual report to the legislature on the 
 investment performance of the various public pension plans 
 subject to this section.  The content of the report is specified 
 in paragraphs (b) to (e). 

    (b) For each public pension plan reporting under 
 subdivision 3, paragraph (b), the state auditor shall compute 
 and report total portfolio and asset class time-weighted rates 
 of return, net of all costs and fees. 

    (c) For each public pension plan reporting under 
 subdivision 3, paragraph (d), the state auditor shall compute 
 and report total portfolio time-weighted rates of return, net of 
 all costs and fees.  If the state auditor has requested data for 
 a plan under subdivision 3, paragraph (f), the state auditor may 
 also compute and report asset class time-weighted rates of 
 return, net of all costs and fees. 

    (d) The report by the state auditor must include the 
 information submitted by the pension plans under subdivision 3, 
 paragraph (c), or a synopsis of that information. 

    (e) The report by the state auditor may also include a 
 presentation of multiyear performance, information collected 
 under subdivision 4, and any other information or analysis 
 deemed appropriate by the state auditor.  

    Subd. 7.    Expense of report.  All expenses incurred 
 relating to the investment report by the state auditor described 
 in subdivision 6 must be borne by the office of the state 
 auditor and may not be charged back to the entities described in 
 subdivisions 1 or 4. 

    Subd. 8.    Timing of reports.  (a) For salaried 
 firefighter relief associations, police relief associations, and 
 volunteer firefighter relief associations, the information 
 required under this section must be submitted by the due date 
 for reports required under section 69.051, subdivision 1 or 1a, 
 as applicable.  If a relief association satisfies the definition 
 of a fully invested plan under subdivision 1, paragraph (b), for 
 the calendar year covered by the report required under section 
 69.051, subdivision 1 or 1a, as applicable, the chief 
 administrative officer of the covered pension plan shall certify 
 compliance on a form prescribed by the state auditor.  The state 
 auditor shall transmit annually to the state board of investment 
 a list or lists of covered pension plans which submitted 
 certifications, in order to facilitate reporting by the state 
 board of investment under paragraph (c) of this subdivision. 

    (b) For the Minneapolis teachers retirement fund 
 association, the St. Paul teachers retirement fund association, 
 the Duluth teachers retirement fund association, the Minneapolis 
 employees retirement fund, the University of Minnesota faculty 
 supplemental retirement plan, and the applicable administrators 
 for the University of Minnesota faculty retirement plan and the 
 individual retirement account plans under chapters 354B and 
 354D, the information required under this section must be 
 submitted to the state auditor by June 1 of each year. 

    (c) The state board of investment, on behalf of pension 
 funds specified in subdivision 1, paragraph (c), must report 
 information required under this section by September 1 of each 
 year. 

    HIST: 1994 c 565 art 2 s 1; 1995 c 262 art 9 s 1; 1996 c 438 
 art 10 s 1; 1997 c 241 art 10 s 4 

     356.22 Interpretation. 

    Subdivision 1.  No provision in sections 356.20 to 356.23 
 shall be construed to in any way limit any of the enumerated 
 pension and retirement funds from furnishing additional 
 actuarial valuations or experience studies, or data and 
 calculations, as may be requested by the legislature or any 
 standing committee or the legislative commission on pensions and 
 retirement. 

    Subd. 2.    Accelerated amortization.  No provision in 
 sections 356.20 to 356.23 shall be construed to preclude any 
 public pension and retirement fund enumerated in section 356.20, 
 subdivision 2, from requesting, or the legislature from 
 providing for, the amortization of any unfunded actuarial 
 accrued liability in a shorter period of time than by the 
 established date for full funding as determined pursuant to 
 section 356.215, subdivision 4g.  

    Subd. 3.  The legislature or any committee or commission 
 thereof now in existence or hereafter created which has assigned 
 to it the subject of public pensions or public retirement plans 
 may require actuarial valuations and experience studies in 
 conformity with the provisions of sections 356.20 to 356.23 from 
 any public pension and retirement fund, whether enumerated in 
 sections 356.20 to 356.23 or otherwise.  

    HIST: 1965 c 359 s 3; 1975 c 192 s 4,5; 1979 c 184 s 2; 1981 c 
 224 s 171; 1Sp1985 c 7 s 35; 1987 c 259 s 57 

     356.23 Supplemental valuations; alternative reports and 
  valuations. 

    Subdivision 1.    Supplemental actuarial valuations.  
 Any supplemental actuarial valuations prepared on behalf of any 
 governing or managing board of any pension and retirement fund 
 enumerated in section 356.20, subdivision 2, by an approved 
 actuary, shall be prepared in accordance with the applicable 
 provisions of sections 356.20 to 356.23 and the standards 
 adopted by the legislative commission on pensions and 
 retirement.  Any pension and retirement fund which prepares an 
 alternative actuarial valuation under subdivision 2 shall also 
 have a supplemental actuarial valuation prepared.  

    Subd. 2.    Alternative reports and valuations.  In 
 addition to the financial reports and actuarial valuations 
 required by sections 356.20 to 356.23, the governing or managing 
 board of any fund concerned may submit alternative reports and 
 valuations for distribution to the legislature, any of its 
 committees, or the legislative commission on pensions and 
 retirement on a different basis or on different assumptions than 
 are specified in sections 356.20 to 356.23.  The assumptions and 
 basis of any alternative reports and valuations shall be clearly 
 stated in the document.  

    HIST: 1965 c 359 s 4; 1971 c 7 s 7; 1975 c 192 s 6; 1984 c 655 
 art 1 s 59; 1987 c 259 s 58 

     356.24 Supplemental pension or deferred compensation 
  plans, restrictions upon government units. 

    Subdivision 1.    Restriction; exceptions.  It is 
 unlawful for a school district or other governmental subdivision 
 or state agency to levy taxes for, or contribute public funds to 
 a supplemental pension or deferred compensation plan that is 
 established, maintained, and operated in addition to a primary 
 pension program for the benefit of the governmental subdivision 
 employees other than: 

    (1) to a supplemental pension plan that was established, 
 maintained, and operated before May 6, 1971; 

    (2) to a plan that provides solely for group health, 
 hospital, disability, or death benefits; 

    (3) to the individual retirement account plan established 
 by chapter 354B; 

    (4) to a plan that provides solely for severance pay under 
 section 465.72 to a retiring or terminating employee; 

    (5) for employees other than personnel employed by the 
 state university board or the community college board and 
 covered by the board of trustees of the Minnesota state colleges 
 and universities supplemental retirement plan under chapter 
 354C, if provided for in a personnel policy of the public 
 employer or in the collective bargaining agreement between the 
 public employer and the exclusive representative of public 
 employees in an appropriate unit, in an amount matching employee 
 contributions on a dollar for dollar basis, but not to exceed an 
 employer contribution of $2,000 a year per employee; 

    (i) to the state of Minnesota deferred compensation plan 
 under section 352.96; or 

    (ii) in payment of the applicable portion of the premium on 
 a tax-sheltered annuity contract qualified under section 403(b) 
 of the Internal Revenue Code, if purchased from a qualified 
 insurance company, or to a qualified investment entity, as 
 defined in subdivision 1a, and, in either case, if the employing 
 unit has complied with any applicable pension plan provisions of 
 the Internal Revenue Code with respect to the tax-sheltered 
 annuity program during the preceding calendar year; or 

    (6) for personnel employed by the state university board or 
 the community college board and not covered by clause (5), to 
 the supplemental retirement plan under chapter 354C, if provided 
 for in a personnel policy or in the collective bargaining 
 agreement of the public employer with the exclusive 
 representative of the covered employees in an appropriate unit, 
 in an amount matching employee contributions on a dollar for 
 dollar basis, but not to exceed an employer contribution of 
 $2,000 a year for each employee.  

    Subd. 1a.    Qualified insurance company; qualified 
 investment entities; definitions.  (a) A qualified insurance 
 company is a company that: 

    (1) meets the definition in section 60A.02, subdivision 4; 

    (2) is licensed to engage in life insurance or annuity 
 business in the state; 

    (3) is determined by the commissioner of commerce to have a 
 rating within the top two rating categories by a recognized 
 national rating agency or organization that regularly rates 
 insurance companies; and 

    (4) is determined by the state board of investment to be 
 among up to 20 applicant insurance companies with competitive 
 investment options and investment returns. 

    (b) A qualified investment entity is an open-end investment 
 company that: 

    (1) is registered under the federal Investment Company Act 
 of 1940; 

    (2) is licensed to do business in the state; 

    (3) is determined by the commissioner of commerce to be in 
 sound financial standing; and 

    (4) is determined by the state board of investment to be 
 among up to five applicant investment entities with competitive 
 investment options and investment returns. 

    (c) The state board of investment determination must be 
 made on or before July 1, 2000, and must be reviewed 
 periodically.  The state board of investment may retain 
 actuarial services to assist it in this determination and in its 
 periodic review.  The state board of investment may annually 
 establish a budget for its costs in any determination and 
 periodic review processes.  The state board of investment may 
 charge a proportional share of all costs related to the periodic 
 review to those qualified insurance companies and qualified 
 investment entities currently under contract and may charge a 
 proportional share of all costs related to soliciting and 
 evaluating bids in a determination process to each company and 
 investment entity selected by the state board of investment.  
 All contracts must be approved before execution by the state 
 board of investment.  The state board of investment shall 
 establish policies and procedures under section 11A.04, clause 
 (2), to carry out this paragraph. 

    Subd. 1b.    Vendor restrictions.  A personnel policy 
 for unrepresented employees or a collective bargaining agreement 
 may establish limits on the number of vendors under subdivision 
 1 that it will utilize and conditions under which the vendors 
 may contact employees both during working hours and after 
 working hours. 

    Subd. 2.    Limit on certain contributions or benefit 
 changes.  No change in benefits or employer contributions in a 
 supplemental pension plan to which this section applies after 
 May 6, 1971, is effective without prior legislative 
 authorization. 

    HIST: 1971 c 222 s 1; 1980 c 600 s 7; 1981 c 224 s 172; 1988 c 
 605 s 9; 1988 c 709 art 11 s 6; 1989 c 319 art 12 s 3; 1992 c 
 464 art 1 s 42; 1992 c 487 s 4; 1993 c 192 s 90; 1993 c 239 art 
 3 s 1; 1993 c 300 s 12; 1995 c 141 art 3 s 16; art 4 s 7; 1995 c 
 212 art 4 s 64; 1999 c 222 art 18 s 1 

*   NOTE:  The amendment to subdivision 1 by Laws 1999, chapter 
*222, article 18, section 1, is effective May 15, 2000.  Laws 
*1999, chapter 222, article 18, section 3.

     356.245 Local elected officials. 

    An elected official covered by section 353.01, subdivision 
 2a, is eligible to participate in the state of Minnesota 
 deferred compensation plan under section 356.24.  A local 
 governmental unit may make the matching employer contributions 
 authorized by that section on the part of a participating 
 elected official. 

    HIST: 1988 c 709 art 9 s 3 

     356.25 Local governmental pension fund prohibitions; 
  exclusions. 

    Notwithstanding any other provision of law or charter, no 
 city, county, public agency or instrumentality, or other 
 political subdivision shall, after August 1, 1975, establish for 
 any of its employees any local pension plan or fund financed in 
 whole or in part from public funds, other than a volunteer 
 firefighter's relief association established pursuant to chapter 
 424A and governed by sections 69.771 to 69.776. 

    HIST: 1975 c 405 s 1; 1977 c 429 s 63; 1981 c 224 s 173; 1984 
 c 655 art 1 s 60 

  356.26 Repealed, 1976 c 129 s 1 

     356.30 Combined service annuity. 

    Subdivision 1.    Eligibility; computation of annuity.  
 (1) Notwithstanding any provisions to the contrary of the laws 
 governing the funds enumerated in subdivision 3, a person who 
 has met the qualifications of clause (2) may elect to receive a 
 retirement annuity from each fund in which the person has at 
 least six months allowable service, based on the allowable 
 service in each fund, subject to the provisions of clause (3).  

    (2) A person may receive upon retirement a retirement 
 annuity from each fund in which the person has at least six 
 months allowable service, and augmentation of a deferred annuity 
 calculated under the laws governing each public pension plan or 
 fund named in subdivision 3, from the date the person terminated 
 all public service if: 

    (a) the person has allowable service totaling an amount 
 that allows the person to receive an annuity in any two or more 
 of the enumerated funds; and 

    (b) the person has not begun to receive an annuity from any 
 enumerated fund or the person has made application for benefits 
 from all funds and the effective dates of the retirement annuity 
 with each fund under which the person chooses to receive an 
 annuity are within a one-year period.  

    (3) The retirement annuity from each fund must be based 
 upon the allowable service in each fund, except that:  

    (a) The laws governing annuities must be the law in effect 
 on the date of termination from the last period of public 
 service under a covered fund with which the person earned a 
 minimum of one-half year of allowable service credit during that 
 employment.  

    (b) The "average salary" on which the annuity from each 
 covered fund in which the employee has credit in a formula plan 
 shall be based on the employee's highest five successive years 
 of covered salary during the entire service in covered funds.  

    (c) The formula percentages to be used by each fund must be 
 those percentages prescribed by each fund's formula as continued 
 for the respective years of allowable service from one fund to 
 the next, recognizing all previous allowable service with the 
 other covered funds.  

    (d) Allowable service in all the funds must be combined in 
 determining eligibility for and the application of each fund's 
 provisions in respect to actuarial reduction in the annuity 
 amount for retirement prior to normal retirement.  

    (e) The annuity amount payable for any allowable service 
 under a nonformula plan of a covered fund must not be affected 
 but such service and covered salary must be used in the above 
 calculation.  

    (f) This section shall not apply to any person whose final 
 termination from the last public service under a covered fund is 
 prior to May 1, 1975.  

    (g) For the purpose of computing annuities under this 
 section the formula percentages used by any covered fund, except 
 the public employees police and fire fund and the state patrol 
 retirement fund, must not exceed the percent specified in 
 section 356.19, subdivision 4, per year of service for any year 
 of service or fraction thereof.  The formula percentage used by 
 the public employees police and fire fund and the state patrol 
 retirement fund must not exceed the percent specified in section 
 356.19, subdivision 6, per year of service for any year of 
 service or fraction thereof.  The formula percentage used by the 
 legislators retirement plan and the elective state officers 
 retirement must not exceed 2.5 percent, but this limit does not 
 apply to the adjustment provided under section 3A.02, 
 subdivision 1, paragraph (c), or 352C.031, paragraph (b). 

    (h) Any period of time for which a person has credit in 
 more than one of the covered funds must be used only once for 
 the purpose of determining total allowable service.  

    (i) If the period of duplicated service credit is more than 
 six months, or the person has credit for more than six months 
 with each of the funds, each fund shall apply its formula to a 
 prorated service credit for the period of duplicated service 
 based on a fraction of the salary on which deductions were paid 
 to that fund for the period divided by the total salary on which 
 deductions were paid to all funds for the period.  

    (j) If the period of duplicated service credit is less than 
 six months, or when added to other service credit with that fund 
 is less than six months, the service credit must be ignored and 
 a refund of contributions made to the person in accord with that 
 fund's refund provisions.  

    Subd. 2.    Repayment of refunds.  A person who has 
 service credit in one of the funds enumerated in subdivision 3 
 and who is employed or was formerly employed in a position 
 covered by one of these funds but also has received a refund 
 from any other of these funds, may repay the refund to the 
 respective fund under terms and conditions that are consistent 
 with the laws governing the other fund, except that the person 
 need not be a currently contributing member of the fund to which 
 the refund is repaid at the time the repayment is made.  Unless 
 otherwise provided by statute, the repayment of a refund under 
 this subdivision may only be made within six months following 
 termination of employment from a position covered by one of the 
 funds enumerated in subdivision 3 or before the date of 
 retirement from the fund to which the refund is repaid, 
 whichever is earlier. 

    Subd. 2a.    Purchases of prior service.  If a purchase 
 of prior service is made under the provisions of Laws 1988, 
 chapter 709, article 3, or any similar provision which allows a 
 purchase of service credit in any of the funds enumerated in 
 subdivision 3, the amount of required reserves calculated as 
 prescribed in Laws 1988, chapter 709, article 3, must be paid to 
 each fund based on the amount of benefit increase payable from 
 that fund as a result of the purchase of prior service. 

    Subd. 3.    Covered funds.  This section applies to the 
 following retirement funds: 

    (1) state employees retirement fund, established pursuant 
 to chapter 352; 

    (2) correctional employees retirement program, established 
 pursuant to chapter 352; 

    (3) unclassified employees retirement plan, established 
 pursuant to chapter 352D; 

    (4) state patrol retirement fund, established pursuant to 
 chapter 352B; 

    (5) legislators retirement plan, established pursuant to 
 chapter 3A; 

    (6) elective state officers' retirement plan, established 
 pursuant to chapter 352C; 

    (7) public employees retirement association, established 
 pursuant to chapter 353; 

    (8) public employees police and fire fund, established 
 pursuant to chapter 353; 

    (9) public employees local government correctional service 
 retirement plan, established pursuant to chapter 353E; 

    (10) teachers retirement association, established pursuant 
 to chapter 354; 

    (11) Minneapolis employees retirement fund, established 
 pursuant to chapter 422A; 

    (12) Minneapolis teachers retirement fund association, 
 established pursuant to chapter 354A; 

    (13) St. Paul teachers retirement fund association, 
 established pursuant to chapter 354A; 

    (14) Duluth teachers retirement fund association, 
 established pursuant to chapter 354A; and 

    (15) judges' retirement fund, established by sections 
 490.121 to 490.132. 

    HIST: 1975 c 232 s 1; 1981 c 37 s 2; 1981 c 298 s 11; 1983 c 
 286 s 14; 1986 c 444; 1987 c 372 art 1 s 20; art 9 s 35; 1989 c 
 319 art 2 s 23; art 5 s 4; art 13 s 92; 1991 c 340 s 31; 1992 c 
 432 art 2 s 45; 1994 c 528 art 2 s 14; 1995 c 141 art 3 s 20; 
 1995 c 262 art 1 s 13; art 3 s 6; 1997 c 233 art 1 s 61,62; 1999 
 c 222 art 2 s 17 

  356.301 Repealed, 1987 c 284 art 8 s 3 

     356.302 Disability benefit with combined service. 

    Subdivision 1.    Definitions.  (a) The terms used in 
 this section are defined in this subdivision. 

    (b) "Average salary" means the highest average of covered 
 salary for the appropriate period of credited service that is 
 required for the calculation of a disability benefit by the 
 covered retirement plan and that is drawn from any period of 
 credited service and successive years of covered salary in a 
 covered retirement plan. 

    (c) "Covered retirement plan" or "plan" means a retirement 
 plan listed in subdivision 7. 

    (d) "Duty-related" means a disabling illness or injury that 
 occurred while the person was actively engaged in employment 
 duties or that arose out of the person's active employment 
 duties. 

    (e) "General employee retirement plan" means a covered 
 retirement plan listed in subdivision 7, clauses (1) to (8). 

    (f) "Occupationally disabled" means having a medically 
 determinable physical or mental impairment that makes a person 
 unable to satisfactorily perform the minimum requirements of the 
 person's employment position or a substantially similar 
 employment position. 

    (g) "Public safety employee retirement plan" means a 
 covered retirement plan listed in subdivision 7, clauses (9) to 
 (11). 

    (h) "Totally and permanently disabled" means having a 
 medically determinable physical or mental impairment that makes 
 a person unable to engage in any substantial gainful activity 
 and that is expected to continue or has continued for a period 
 of at least one year or that is expected to result directly in 
 the person's death. 

    Subd. 2.    Entitlement.  Notwithstanding any law to the 
 contrary governing any covered retirement plan, a member of a 
 covered retirement plan may receive a combined service 
 disability benefit from each covered retirement plan in which 
 the person has credit for at least six months of allowable 
 service if that person meets the applicable qualifying 
 conditions.  Subdivision 3 applies to a member of a general 
 employee retirement plan.  Subdivision 4 applies to a member of 
 a public safety employee retirement plan.  Subdivision 5 applies 
 to a member of a covered retirement plan with general employee 
 and public safety employee retirement plan service. 

    Subd. 3.    General employee plan eligibility 
 requirements.  A disabled member of a covered retirement plan 
 who has credit for allowable service in a combination of general 
 employee retirement plans is entitled to a combined service 
 disability benefit if the member: 

    (1) is less than 65 years of age on the date of application 
 for the disability benefit; 

    (2) has become totally and permanently disabled; 

    (3) has credit for allowable service in any combination of 
 general employee retirement plans totaling at least three years; 

    (4) has credit for at least six months of allowable service 
 with the current general employee retirement plan before the 
 commencement of the disability; 

    (5) has at least three continuous years of allowable 
 service credit by the general employee retirement plan or has at 
 least a total of three years of allowable service credit by a 
 combination of general employee retirement plans in a 72-month 
 period during which no interruption of allowable service credit 
 from a termination of employment exceeded 29 days; and 

    (6) is not receiving a retirement annuity or disability 
 benefit from any covered general employee retirement plan at the 
 time of the commencement of the disability.  

    Subd. 4.    Public safety plan eligibility requirements. 
  A disabled member of a covered retirement plan who has credit 
 for allowable service in a combination of public safety employee 
 retirement plans is entitled to a combined service disability 
 benefit if the member: 

    (1) has become occupationally disabled; 

    (2) has credit for allowable service in any combination of 
 public safety employee retirement plans totaling at least one 
 year if the disability is duty-related or totaling at least 
 three years if the disability is not duty-related; 

    (3) has credit for at least six months of allowable service 
 with the current public safety employee retirement plan before 
 the commencement of the disability; and 

    (4) is not receiving a retirement annuity or disability 
 benefit from any covered public safety employee retirement plan 
 at the time of the commencement of the disability. 

    Subd. 5.    General and public safety plan eligibility 
 requirements.  A disabled member of a covered retirement plan 
 who has credit for allowable service in a combination of both 
 public safety employee retirement plans and general employee 
 retirement plans must meet the qualifying requirements in 
 subdivisions 3 and 4 to receive a combined service disability 
 benefit from the applicable general employee and public safety 
 employee retirement plans, except that the person need only be a 
 member of a covered retirement plan at the time of the 
 commencement of the disability and that the minimum allowable 
 service requirements of subdivisions 3, clauses (3) and (5), and 
 4, clauses (3) and (4), may be met in any combination of covered 
 retirement plans. 

    Subd. 6.    Combined service disability benefit 
 computation.  (a) The combined service disability benefit from 
 each covered retirement plan must be based on the allowable 
 service in each retirement plan, except as specified in 
 paragraphs (b) to (f). 

    (b) The disability benefit must be governed by the law in 
 effect for each covered retirement plan on the date of the 
 commencement of the member's most recent qualifying disability 
 as a member of a covered retirement plan. 

    (c) All plans must base the disability benefit on the same 
 average salary to the extent practicable. 

    (d) If the method of the covered retirement plan used to 
 compute a disability benefit varies based on the length of 
 allowable service credit, the benefit accrual formula 
 percentages used by the plan must recognize the allowable 
 service credit in the plan as a continuation of any previous 
 allowable service credit with other covered retirement plans. 

    (e) If the covered retirement plan is a defined benefit or 
 formula plan and the method used to compute a disability benefit 
 does not vary based on the length of allowable service credit, 
 the portion of the specified benefit amount from the plan must 
 bear the same proportion to the total specified benefit amount 
 as the allowable service credit in that plan bears to the total 
 allowable service credit in all covered retirement plans.  If 
 the covered retirement plan is a defined contribution or 
 nonformula plan, the disability benefit amount for allowable 
 service under the plan is not affected, but the service and 
 covered salary under the plan must be used in calculations by 
 other covered retirement plans. 

    (f) A period for which a person has allowable service 
 credit in more than one covered retirement plan must be used 
 only once in determining the total allowable service credit for 
 calculating the combined service disability benefit, with any 
 period of duplicated service credit handled under section 
 356.30, subdivision 1, clause (3), items (i) and (j). 

    (g) If a person is entitled to a minimum benefit payable 
 from one of the public pension plans named in section 356.30, 
 subdivision 3, the person may receive additional credit for only 
 those years of service in another covered pension plan that, 
 when added to the years of service in the pension plan that is 
 paying the minimum benefit, exceed the years of service on which 
 the minimum benefit is based. 

    (h) A partially employed recipient of a disability benefit 
 must have any current income plus disability payment from all 
 plans listed in subdivision 7 added together, and then compared 
 to their final salary rate as a public employee.  If current 
 income plus disability payments exceed the final salary, then 
 disability benefit payments from all the plans will be reduced 
 on a prorated basis relative to the years of service in each 
 fund so that earnings plus benefit payments do not exceed their 
 final salary rate. 

    Subd. 7.    Covered retirement plans.  This section 
 applies to the following retirement plans: 

    (1) state employees retirement fund, established by chapter 
 352; 

    (2) unclassified employees retirement plan, established by 
 chapter 352D; 

    (3) public employees retirement association, established by 
 chapter 353; 

    (4) teachers retirement association, established by chapter 
 354; 

    (5) Duluth teachers retirement fund association, 
 established by chapter 354A; 

    (6) Minneapolis teachers retirement fund association, 
 established by chapter 354A; 

    (7) St. Paul teachers retirement fund association, 
 established by chapter 354A; 

    (8) Minneapolis employees retirement fund, established by 
 chapter 422A; 

    (9) correctional employees retirement plan, established by 
 chapter 352; 

    (10) state patrol retirement fund, established by chapter 
 352B; 

    (11) public employees police and fire fund, established by 
 chapter 353; 

    (12) public employees local government correctional service 
 retirement plan, established by chapter 353E; and 

    (13) judges' retirement fund, established by sections 
 490.121 to 490.132. 

    HIST: 1987 c 284 art 8 s 1; 1988 c 709 art 5 s 39,40; 1989 c 
 319 art 5 s 5; 1990 c 570 art 12 s 56,57; 1992 c 432 art 2 s 46; 
 1993 c 307 art 2 s 18; art 4 s 51; 1995 c 141 art 3 s 20; 1999 c 
 222 art 2 s 18 

     356.303 Survivor benefit with combined service. 

    Subdivision 1.    Definitions.  (a) The terms used in 
 this section are defined in this subdivision. 

    (b) "Average salary" means the highest average of covered 
 salary for the appropriate period of credited service that is 
 required for the calculation of a survivor annuity or a survivor 
 benefit, whichever applies, by the covered retirement plan and 
 that is drawn from any period of credited service and covered 
 salary in a covered retirement plan. 

    (c) "Covered retirement plan" or "plan" means a retirement 
 plan listed in subdivision 4. 

    (d) "Deceased member" means a person who on the date of 
 death was an active member of a covered retirement plan and who 
 has reached the minimum age, if any, required by the covered 
 retirement plan as part of qualifying for a survivor annuity or 
 survivor benefit. 

    (e) "Surviving child" means a child of a deceased member 
 (1) who is unmarried, (2) who has not reached age 18, or, if a 
 full-time student, who has not reached a higher age specified in 
 the applicable covered retirement plan, and (3) if specified by 
 that plan, who was actually dependent on the deceased member for 
 a specified proportion of support before the deceased member's 
 death.  "Surviving child" includes a natural child, an adopted 
 child, or a child of a deceased member who is conceived during 
 the member's lifetime and is born after the member's death. 

    (f) "Surviving spouse" means the legally married husband or 
 wife of the deceased member who was residing with the deceased 
 member on the date of death and who, if specified by the 
 applicable covered retirement plan, had been married to the 
 deceased member for a specified period of time before the death 
 of the deceased member. 

    (g) "Survivor annuity" means the entitlement to a future 
 amount payable to a survivor as the remainder interest of an 
 optional annuity form implied by law as having been chosen by a 
 deceased member before the date of death and effective on the 
 date of death or provided automatically. 

    (h) "Survivor benefit" means an entitlement to a future 
 amount payable to a survivor that is not included in the 
 definition of a survivor annuity. 

    Subd. 2.    Entitlement; eligibility.  Notwithstanding 
 any law to the contrary governing a covered retirement plan, a 
 person who is the survivor of a deceased member of a covered 
 retirement plan may receive a combined service survivor benefit 
 from each covered retirement plan in which the deceased member 
 had credit for at least six months of allowable service if the 
 deceased member: 

    (1) had credit for sufficient allowable service in any 
 combination of covered retirement plans to meet any minimum 
 allowable service credit requirement of the covered retirement 
 fund for qualification for a survivor benefit or annuity; 

    (2) had credit for at least six months of allowable service 
 with the most recent covered retirement plan before the date of 
 death and was an active member of that covered retirement plan 
 on the date of death; and 

    (3) was not receiving a retirement annuity from any covered 
 retirement plan on the date of death. 

    Subd. 3.    Combined service survivor benefit computation. 
  (a) The combined service survivor annuity or survivor benefit 
 from each covered retirement plan must be based on the allowable 
 service in each covered retirement plan, except as provided by 
 paragraphs (b) to (f). 

    (b) The survivor annuity or survivor benefit must be 
 governed by the law in effect for each covered retirement plan 
 on the date of death of the deceased member. 

    (c) All plans must base the survivor annuity or survivor 
 benefit on the same average salary. 

    (d) If the method of the covered retirement plan used to 
 compute a survivor benefit or annuity varies based on the length 
 of allowable service credit, the benefit accrual formula 
 percentages used by the plan must recognize the allowable 
 service credit in the plan as a continuation of any previous 
 allowable service credit with other covered retirement plans. 

    (e) If the covered retirement plan is a defined benefit or 
 formula plan and the method used to compute a survivor benefit 
 or annuity does not vary based on the length of allowable 
 service credit, the portion of the specified benefit or annuity 
 amount from the plan must bear the same proportion to the total 
 specified benefit or annuity amount as the allowable service 
 credit in that plan bears to the total allowable service credit 
 in all covered retirement plans.  If the covered retirement plan 
 is a defined contribution or nonformula plan, the survivor 
 benefit amount for allowable service under the plan is not 
 affected, but the service and covered salary under the plan must 
 be used in calculations by other covered retirement plans. 

    (f) A period for which a person has allowable service 
 credit in more than one covered retirement plan must be used 
 only once in determining the total allowable service credit for 
 calculating the combined service survivor annuity or survivor 
 benefit.  A period of duplicated service credit must be handled 
 as provided in section 356.30, subdivision 1, clause (3), items 
 (i) and (j). 

    (g) If a person is entitled to a minimum benefit payable 
 from a public pension plan named in section 356.30, subdivision 
 3, the person may receive additional credit for only those years 
 of service in another covered pension plan that, when added to 
 the years of service in the pension plan that is paying the 
 minimum benefit, exceed the years of service on which the 
 minimum benefit is based. 

    Subd. 4.    Covered retirement plans.  This section 
 applies to the following retirement plans: 

    (1) legislators retirement plan, established by chapter 3A; 

    (2) state employees retirement fund, established by chapter 
 352; 

    (3) correctional employees retirement plan, established by 
 chapter 352; 

    (4) state patrol retirement fund, established by chapter 
 352B; 

    (5) elective state officers retirement plan, established by 
 chapter 352C; 

    (6) unclassified employees retirement plan, established by 
 chapter 352D; 

    (7) public employees retirement association, established by 
 chapter 353; 

    (8) public employees police and fire fund, established by 
 chapter 353; 

    (9) public employees local government correctional service 
 retirement plan, established by chapter 353E; 

    (10) teachers retirement association, established by 
 chapter 354; 

    (11) Duluth teachers retirement fund association, 
 established by chapter 354A; 

    (12) Minneapolis teachers retirement fund association, 
 established by chapter 354A; 

    (13) St. Paul teachers retirement fund association, 
 established by chapter 354A; 

    (14) Minneapolis employees retirement fund, established by 
 chapter 422A; and 

    (15) judges' retirement fund, established by sections 
 490.121 to 490.132. 

    HIST: 1987 c 284 art 8 s 2; 1989 c 319 art 5 s 6; 1992 c 432 
 art 2 s 47; 1995 c 141 art 3 s 20; 1999 c 222 art 2 s 19 

     356.305 Loss of entitlement to benefits for survivor 
  causing death of pension plan member. 

    Subdivision 1.    Definitions.  (a) Each of the words or 
 terms defined in this subdivision has the meaning indicated. 

    (b) "Public pension plan" means any retirement plan or fund 
 enumerated in section 356.20, subdivision 2, or 356.30, 
 subdivision 3, any relief association governed by section 69.77 
 or sections 69.771 through 69.775, any retirement plan governed 
 by chapter 354B or 354C, the Hennepin county supplemental 
 retirement plan governed by sections 383B.46 through 383B.52, or 
 any housing and redevelopment authority retirement plan. 

    (c) "Public pension plan member" means a person who is a 
 participant covered by a public pension plan, a former 
 participant of a public pension plan who has sufficient service 
 to be entitled to receive a future retirement annuity or service 
 pension, a recipient of a retirement annuity, service pension, 
 or disability benefit from a public pension plan, or a former 
 participant of a public pension plan who has member or employee 
 contributions to the person's credit in the public pension plan. 

    (d) "Survivor" means the surviving spouse, a former spouse, 
 a surviving child, a joint annuitant, a designated recipient of 
 a second or remainder portion of an optional annuity form, a 
 beneficiary, or the estate of a deceased public pension plan 
 member, as those terms are commonly understood or defined in the 
 benefit plan document of the public pension plan. 

    (e) "Survivor benefit" means a surviving spouse benefit, 
 surviving child benefit, second or remainder portion of an 
 optional annuity form, a death benefit, a funeral benefit, or a 
 refund of member or employee contributions payable on account of 
 the death of a public pension plan member as provided for in the 
 benefit plan document of the public pension plan. 

    Subd. 2.    Suspension of survivor benefits upon felony 
 charge.  During the pendency of a charge of a survivor of a 
 felony that caused the death of a public pension plan member, of 
 criminal liability for a death by wrongful act felony, or of 
 conspiracy to commit a death by wrongful act felony, the 
 entitlement of that survivor to receive a survivor benefit is 
 suspended. 

    Subd. 3.    Forfeiture of survivor benefits upon felony 
 conviction.  Upon final conviction of a survivor of a felony 
 that caused the death of a public pension plan member, of 
 criminal liability for a death by wrongful act felony, or of 
 conspiracy to commit a death by wrongful act felony, the 
 entitlement of that survivor to receive a survivor benefit is 
 forfeited, including entitlement for any previously suspended 
 survivor benefits under subdivision 2. 

    Subd. 4.    Suspension or forfeiture actions separate.  
 The charge of one survivor under subdivision 2 or the conviction 
 of one survivor under subdivision 3 does not affect the 
 entitlement of another survivor to a survivor benefit. 

    Subd. 5.    Recovery of certain benefits.  If monthly 
 benefits or a refund or balance of a participant or former 
 participant's account have already been paid to an individual 
 who is later charged or convicted as described under this 
 section, the executive director or chief administrative officer 
 of the public pension plan shall attempt to recover the amounts 
 paid.  Payment may be made to the next beneficiary or survivor 
 only in an amount equal to the amount recovered and in the 
 amount of any future payments that would legally accrue to 
 another survivor under the applicable laws of the retirement 
 plan. 

    Subd. 6.    Disposition of forfeited survivor benefits.  
 If the benefit plan document governing the public pension plan 
 does not provide for the disposition of forfeited benefits, 
 survivor benefits forfeited under this section must be deposited 
 in the general fund of the state. 

    HIST: 1995 c 141 art 1 s 1 

     356.306 Partial payment of pension plan refund. 

    (a) Notwithstanding any provision of law to the contrary, a 
 member of a pension plan listed in section 356.30, subdivision 
 3, with at least two years of forfeited service taken from a 
 single pension plan may repay a portion of all refunds.  A 
 partial refund repayment must comply with this section. 

    (b) The minimum portion of a refund repayment is one-third 
 of the total service credit period of all refunds taken from a 
 single plan.  

    (c) The cost of the partial refund repayment is the product 
 of the cost of the total repayment multiplied by the ratio of 
 the restored service credit to the total forfeited service 
 credit.  The total repayment amount includes interest at the 
 annual rate of 8.5 percent, compounded annually, from the refund 
 date to the date repayment is received.  

    (d) The restored service credit is allocated based on the 
 relationship the restored service bears to the total service 
 credit period for all refunds taken from a single pension plan. 

    (e) This section does not authorize a public pension plan 
 member to repay a refund if the law governing the plan does not 
 authorize the repayment of a refund of member contributions. 

    HIST: 1995 c 262 art 1 s 14 

     356.31 Restoration of survivor benefits. 

    Subdivision 1.    Restoration upon termination of 
 remarriage.  Notwithstanding any provision to the contrary of 
 the laws governing any of the retirement funds enumerated in 
 subdivision 2, any person who was receiving a surviving spouse's 
 benefit from any of such funds and whose benefit terminated 
 solely because of remarriage shall, if the remarriage terminates 
 for any reason, again be entitled upon reapplication to a 
 surviving spouse's benefit; provided, however, that such person 
 shall not be entitled to retroactive payments for the period of 
 remarriage.  The benefit shall resume at the level which such 
 person would have been receiving if there had been no 
 remarriage.  This section shall apply prospectively to any 
 person who first becomes entitled to receive a surviving 
 spouse's benefit on or after May 18, 1975, and shall also apply 
 retroactively to any person who first became entitled to receive 
 a surviving spouse's benefit before May 18, 1975; provided, 
 however, that no such person shall be entitled to retroactive 
 payments for any period of time prior to May 18, 1975.  

    Subd. 2.    Covered funds.  The provisions of this 
 section shall apply to the following retirement funds: 

    (1) Public employees retirement fund, established pursuant 
 to chapter 353; 

    (2) Public employees police and fire fund, established 
 pursuant to chapter 353; 

    (3) State patrol retirement fund, established pursuant to 
 chapter 352B; 

    (4) Legislators' retirement plan, established pursuant to 
 chapter 3A; 

    (5) Elective state officers retirement plan, established 
 pursuant to chapter 352C; 

    (6) Teachers retirement association, established pursuant 
 to chapter 354; 

    (7) Minneapolis employees retirement fund, established 
 pursuant to chapter 422A.  

    HIST: 1975 c 183 s 1; 1981 c 37 s 2; 1981 c 298 s 11; 1995 c 
 141 art 3 s 20 

     356.32 Proportionate annuity at age 65. 

    Subdivision 1.    Proportionate retirement annuity.  
 Notwithstanding any provision to the contrary of the laws 
 governing any of the retirement funds referred to in subdivision 
 2, any person who is an active member of any applicable fund, 
 who has credit for at least one year but less than ten years of 
 allowable service in one or more of the applicable funds, and 
 who terminates active service pursuant to a mandatory retirement 
 law or policy or at age 65 or older, or the normal retirement 
 age if this age is not age 65, for any reason shall be entitled 
 upon making written application on the form prescribed by 
 executive director or executive secretary of the fund to a 
 proportionate retirement annuity from each applicable fund in 
 which the person has allowable service credit.  The 
 proportionate annuity shall be calculated under the applicable 
 laws governing annuities based upon allowable service credit at 
 the time of retirement and the person's average salary for the 
 highest five successive years of allowable service or the 
 average salary for the entire period of allowable service if 
 less than five years.  Nothing in this section shall prevent the 
 imposition of the appropriate early retirement reduction of an 
 annuity which commences prior to normal retirement age. 

    Subd. 2.    Covered funds.  The provisions of this 
 section shall apply to the following retirement funds: 

    (1) state employees retirement fund, established pursuant 
 to chapter 352; 

    (2) correctional employees retirement program, established 
 pursuant to chapter 352; 

    (3) state patrol retirement fund, established pursuant to 
 chapter 352B; 

    (4) public employees retirement fund, established pursuant 
 to chapter 353; 

    (5) public employees police and fire fund, established 
 pursuant to chapter 353; 

    (6) teachers retirement association, established pursuant 
 to chapter 354; 

    (7) Minneapolis employees retirement fund, established 
 pursuant to chapter 422A; 

    (8) Duluth teachers retirement fund association, 
 established pursuant to chapter 354A; 

    (9) Minneapolis teachers retirement fund association, 
 established pursuant to chapter 354A; and 

    (10) St. Paul teachers retirement fund association, 
 established pursuant to chapter 354A.  

    HIST: 1975 c 183 s 2; 1976 c 130 s 1; 1978 c 649 s 3; 1978 c 
 796 s 44; 1979 c 40 s 10; 1979 c 217 s 27; 1980 c 342 s 15; 1981 
 c 37 s 2; 1981 c 224 s 174; 1981 c 298 s 11; 1987 c 372 art 1 s 
 21; 1989 c 319 art 13 s 93; 1995 c 141 art 3 s 20; 1997 c 233 
 art 1 s 63 

     356.325 Hennepin county; certain employees; 
  proportionate annuities. 

    Employees and former employees of Hennepin county who were 
 members of the public employees retirement association on May 1, 
 1975 and have at least three years but less than ten years of 
 allowable service in such fund, or a combination of such fund 
 and funds listed in Minnesota Statutes 1975 Supplement, section 
 356.32, subdivision 2, shall be entitled to proportionate 
 annuities under Minnesota Statutes 1975 Supplement, Section 
 356.32, even if they are over 65 years of age.  With respect to 
 such persons who are over 65 years of age and whose public 
 service terminated between May 1, 1975, and April 21, 1976, 
 proportionate annuity payments may be made retroactive to 
 January 1, 1976, or the date of termination of public service, 
 whichever is later. 

    HIST: 1976 c 329 s 35 

  356.34 Repealed, 1978 c 781 s 13 

     356.35 Definitions. 

    Subdivision 1.  Unless the language or context clearly 
 indicates that a different meaning is intended, the following 
 terms, for the purpose of Laws 1976, chapter 326, shall have the 
 meanings subjoined to them. 

    Subd. 2.  "Determinant date" means June 1, 1973, with 
 respect to the state patrol retirement fund; June 27, 1973, with 
 respect to permanent disability benefits, retirement annuities, 
 and retirement allowance options II, III and IV paid to 
 surviving spouses pursuant to Minnesota Statutes 1971, Section 
 422.08 provided by the Minneapolis employees retirement fund; 
 April 25, 1959, with respect to survivor benefits paid to 
 surviving spouses of contributing members provided by the 
 Minneapolis employees retirement fund; January 1, 1970, with 
 respect to the St. Paul teachers retirement fund; July 1, 1971, 
 with respect to the Duluth teachers retirement fund; and July 1, 
 1973, with respect to all other covered retirement funds. 

    Subd. 3.  "Plan participant" means the person receiving the 
 permanent disability benefit or retirement annuity with respect 
 to disabilitants and retired members of a covered fund; and the 
 deceased member or deceased retired member on behalf of whom the 
 survivor benefit or annuity is being paid with respect to 
 surviving beneficiaries of a covered fund. 

    Subd. 4.  "Years of retirement" means the number of years 
 which have elapsed between: 

    (1) June 30 of the calendar year in which the earliest 
 applicable event among the following occurred; 

    (a) the commencement of the plan participant's permanent 
 disability benefit, 

    (b) the commencement of the plan participant's retirement 
 annuity, or 

    (c) the death of the plan participant, and 

    (2) July 1, 1976. 

    Subd. 5.  "Covered retirement fund" means: 

    (1) the state patrol retirement fund; 

    (2) the public employees police and fire fund; 

    (3) the public employees retirement fund; 

    (4) the state employees retirement fund; 

    (5) the teachers retirement association; 

    (6) the Minneapolis employees retirement fund; 

    (7) the legislators' retirement plan; 

    (8) the St. Paul teachers retirement fund; or 

    (9) the Duluth teachers retirement fund. 

    HIST: 1976 c 326 s 1; 1981 c 37 s 2; 1981 c 298 s 11; 1995 c 
 141 art 3 s 20 

     356.36 Permanent disability benefits and retirement 
  annuities; increase; exceptions. 

    Subdivision 1.  Except as provided in section 356.38, any 
 plan participant who began receiving a permanent disability 
 benefit or a retirement annuity prior to the determinant date 
 and is receiving a permanent disability benefit or a retirement 
 annuity based on laws in effect prior to such date from a 
 covered retirement fund or any combination of such funds shall 
 receive, beginning with the first monthly benefit or annuity 
 accruing after June 30, 1976, an increase in the benefit or 
 annuity from each such fund as provided in subdivisions 2 and 
 3.  Provided however, that no plan participant who is receiving 
 a permanent disability benefit or a retirement annuity from the 
 Minneapolis employees retirement fund in excess of $300 per 
 month shall be entitled to an increase in such benefit or 
 annuity pursuant to Laws 1976, chapter 326.  Provided further, 
 that no plan participant who is less than 70 years of age and is 
 receiving a permanent disability benefit or a retirement annuity 
 from the St. Paul teachers retirement fund shall be entitled to 
 an increase in the benefit or annuity pursuant to Laws 1976, 
 chapter 326 until the plan participant attains the age of 70 
 years. 

    Subd. 2.  In the case of permanent disability benefits and 
 retirement annuities computed under the provisions of a "basic" 
 retirement program, there shall be: 

    (1) a $4.50 increase in annual payments for each full year 
 of allowable service earned by the plan participant in the 
 respective covered retirement fund; and 

    (2) a $9 increase in annual payments for each year of 
 retirement. 

    Subd. 3.  In the case of permanent disability benefits and 
 retirement annuities computed under the provisions of a 
 "coordinated" retirement program, there shall be: 

    (1) a $1.20 increase in annual payments for each full year 
 of allowable service earned by the plan participant in the 
 respective retirement fund; and 

    (2) a $2.40 increase in annual payments for each year of 
 retirement. 

    Subd. 4.  In the case of a retirement annuity which is 
 increased pursuant to this section and which may become payable 
 to a surviving beneficiary after the death of the plan 
 participant, the survivor annuity ultimately payable in such 
 event shall include only one-half the increase paid to the plan 
 participant pursuant to this section. 

    HIST: 1976 c 326 s 2; 1981 c 298 s 11 

     356.37 Survivor benefits; increase; exceptions. 

    Subdivision 1.  Except as provided in section 356.38, any 
 person who is receiving a survivor benefit or survivor annuity 
 based on laws in effect prior to the determinant date and is the 
 surviving spouse of a plan participant who died or retired prior 
 to such date; and any person who is receiving a survivor annuity 
 based on laws in effect prior to the determinant date and is the 
 named beneficiary of a plan participant who died or retired 
 prior to such date; and any person who is receiving any 
 combination of such benefits and annuities from a covered 
 retirement fund or any combination of such funds shall receive, 
 beginning with the first monthly benefit or annuity accruing 
 after June 30, 1976, an increase in each such benefit or annuity 
 as provided in subdivisions 2 and 3.  Provided however, that no 
 surviving spouse who is receiving an option II, III or IV 
 survivor retirement allowance pursuant to Minnesota Statutes 
 1971, Section 422.08 provided by the Minneapolis employees 
 retirement fund shall be entitled to an increase in such annuity 
 pursuant to Laws 1976, chapter 326 if the retirement annuity 
 which was paid or payable to the plan participant was in excess 
 of $300 per month. 

    Subd. 2.  In the case of survivor benefits and annuities 
 computed under the provisions of a "basic" retirement program, 
 there shall be: 

    (1) a $2.25 increase in annual payments for each full year 
 of allowable service earned by the plan participant in the 
 respective covered retirement fund; and 

    (2) a $4.50 increase in annual payments for each year of 
 retirement. 

    Subd. 3.  In the case of survivor benefits and annuities 
 computed under the provisions of a "coordinated" retirement 
 program, there shall be: 

    (1) a $.60 increase in annual payments for each full year 
 of allowable service earned by the plan participant in the 
 respective retirement fund; and 

    (2) a $1.20 increase in annual payments for each year of 
 retirement. 

    HIST: 1976 c 326 s 3; 1981 c 298 s 11 

     356.371 Application for retirement annuity; procedure 
  for electing annuity form. 

    Subdivision 1.    Definitions.  As used in this section, 
 the following terms shall have the meanings given. 

    (1) "Annuity form" means the payment procedure and duration 
 of a retirement annuity or disability benefit available to a 
 member of a public pension fund, based on the period over which 
 a retirement annuity or disability benefit is payable, 
 determined by the number of persons to whom the retirement 
 annuity or disability benefit is payable, and the amount of the 
 retirement annuity or disability benefit which is payable to 
 each person. 

    (2) "Joint and survivor optional annuity" means an optional 
 annuity form which provides a retirement annuity or disability 
 benefit to a retired member and the spouse of the member on a 
 joint basis during the lifetime of the retired member and all or 
 a portion of the original retirement annuity or disability 
 benefit amount to the surviving spouse in the event of the death 
 of the retired member. 

    (3) "Optional annuity form" means an annuity form which is 
 elected by a member and is not provided automatically as the 
 standard annuity form of the public pension fund. 

    (4) "Public pension fund" means a public pension plan as 
 defined pursuant to section 356.61. 

    (5) "Retirement annuity" means a series of monthly payments 
 to which a former or retired member of a public pension fund is 
 entitled on account of attaining a specified age and acquiring 
 credit for a specified period of service, which shall include a 
 retirement annuity, retirement allowance or service pension.  

    (6) "Disability benefit" means a series of monthly payments 
 to which a former or disabled member of a public pension fund is 
 entitled on account of a physical or mental inability to engage 
 in specified employment.  

    Subd. 2.    Provision of information on annuity forms.  
 Every public pension fund which provides for an annuity form 
 other than a single life retirement annuity as an option which 
 can be elected by an active, disabled or retiring member shall 
 provide as a part of, or accompanying the annuity application 
 form, a written statement summarizing the optional annuity forms 
 which are available, a general indication of the consequences of 
 selecting one annuity form over another, a calculation of the 
 actuarial reduction in the amount of the retirement annuity 
 which would be required for each optional annuity form and the 
 procedure to be followed to obtain more information from the 
 public pension fund concerning the optional annuity forms 
 provided by the fund. 

    Subd. 3.    Requirement of notice to member's spouse.  
 If a public pension fund provides optional retirement annuity 
 forms which include a joint and survivor optional retirement 
 annuity form potentially applicable to the surviving spouse of a 
 member, the executive director of the public pension fund shall 
 send a copy of the written statement required by subdivision 2 
 to the spouse of the member before the member's election of an 
 optional retirement annuity.  

    Following the election of a retirement annuity by the 
 member, a copy of the completed retirement annuity application 
 and retirement annuity beneficiary form, if applicable, must be 
 sent by the public pension fund to the spouse of the retiring 
 member.  A signed acknowledgment must be required from the 
 spouse confirming receipt of a copy of the completed retirement 
 annuity application and retirement annuity beneficiary form 
 unless the spouse's signature confirming the receipt is on the 
 annuity application form.  If the required signed acknowledgment 
 is not received from the spouse within 30 days, the public 
 pension fund must send another copy of the completed retirement 
 annuity application and retirement annuity beneficiary form, if 
 applicable, to the spouse by certified mail with restricted 
 delivery. 

    HIST: 1981 c 68 s 29; 1981 c 156 s 6; 1982 c 578 art 3 s 9,10; 
 1987 c 384 art 2 s 1; 1989 c 319 art 2 s 24; 1990 c 570 art 12 s 
 58; 1991 c 341 s 44 

     356.372 Supplemental needs trust as optional annuity 
  form recipient. 

    Subdivision 1.    Inclusion as recipient.  
 Notwithstanding any provision to the contrary of the laws, 
 articles of incorporation, or bylaws governing a covered 
 retirement plan specified in subdivision 3, a retiring member 
 may designate a qualified supplemental needs trust under 
 subdivision 2 as the remainder recipient on an optional 
 retirement annuity form for a period not to exceed the lifetime 
 of the beneficiary of the supplemental needs trust. 

    Subd. 2.    Qualified supplemental needs trust.  A 
 qualified supplemental needs trust is a trust that: 

    (1) was established on or after July 1, 1992; 

    (2) was established solely for the benefit of one person 
 who has a disability under federal Social Security 
 Administration supplemental security income or retirement, 
 survivors, and disability insurance disability determination 
 standards and who was determined as such before the creation of 
 the trust; 

    (3) is funded, in whole or in part, by the primary 
 recipient of the optional annuity form and, unless the trust is 
 a Zebley trust, is not funded by the beneficiary, the 
 beneficiary's spouse, or a person who is required to pay a sum 
 to or for the trust beneficiary under the terms of litigation or 
 a litigation settlement; 

    (4) is established to cover reasonable living expenses and 
 other basic needs of the disabilitant, in whole or in part, in 
 instances when public assistance does not provide sufficiently 
 for these needs; 

    (5) is not permitted to make disbursement to replace or 
 reduce public assistance otherwise available; 

    (6) is irrevocable; 

    (7) terminates upon the death of the disabled person for 
 whose benefit it was established; and 

    (8) is determined by the executive director to be a trust 
 that contains excluded assets for purposes of the qualification 
 for public entitlement benefits under the applicable federal and 
 state laws and regulations. 

    Subd. 3.    Covered retirement plan.  The provisions of 
 this section apply to the following retirement plans: 

    (1) general state employees retirement plan of the 
 Minnesota state retirement system, established under chapter 
 352; 

    (2) correctional employees retirement plan of the Minnesota 
 state retirement system, established under chapter 352; 

    (3) state patrol retirement plan, established under chapter 
 352B; 

    (4) legislators retirement plan, established under chapter 
 3A; 

    (5) judges retirement plan, established under chapter 490; 

    (6) public employees retirement plan, established under 
 chapter 353; 

    (7) public employees police and fire plan, established 
 under chapter 353; 

    (8) teachers retirement plan, established under chapter 
 354; 

    (9) Duluth teachers retirement fund association, 
 established under chapter 354A; 

    (10) St. Paul teachers retirement fund association, 
 established under chapter 354A; 

    (11) Minneapolis teachers retirement fund association, 
 established under chapter 354A; 

    (12) Minneapolis employees retirement plan, established 
 under chapter 422A; 

    (13) Minneapolis firefighters relief association, 
 established under chapter 69; 

    (14) Minneapolis police relief association, established 
 under chapter 423B; and 

    (15) public employees local government correctional service 
 retirement plan, established under chapter 353E. 

    HIST: 1999 c 222 art 10 s 1 

     356.38 Multiple benefits and annuities; limitation on 
  increases. 

    Any person who is receiving more than one benefit or 
 annuity to which the increases in sections 356.36 and 356.37 
 apply shall not receive an increase based on years of retirement 
 for each benefit or annuity but shall receive the increase based 
 on years of retirement only for the benefit or annuity which 
 will result in the largest such increase. 

    HIST: 1976 c 326 s 4 

     356.39 Basis for subsequent postretirement adjustments. 

    The increased benefit amounts pursuant to sections 356.35 
 to 356.39 shall be considered the base annuity or benefit amount 
 for the purpose of further adjustments pursuant to section 
 11A.18. 

    HIST: 1976 c 326 s 6; 1980 c 607 art 14 s 45 subd 2; s 46; 
 1981 c 224 s 175 

     356.40 Date for payment of annuities and benefits. 

    Notwithstanding any law to the contrary, all annuities and 
 benefits payable on and after December 1, 1977 by a covered 
 retirement fund, as defined in section 356.30, subdivision 3, 
 shall be paid in advance for each month during the first week of 
 that month.  Bylaws of municipal retirement funds shall be 
 amended accordingly.  In no event, however, shall this section 
 authorize more than one payment in any one month where the law 
 governing the applicable retirement fund as of June 30, 1977 
 already provides for the full payment or accrual of annuities 
 and benefits in advance for each month or as of the first day of 
 the month, nor shall it authorize the payment of both a 
 retirement annuity and a surviving spouse's benefit in one month 
 where the law governing the applicable retirement fund provides 
 for the payment of the retired member's retirement annuity to 
 the surviving spouse for the month in which the retired member 
 dies. 

    HIST: 1977 c 388 s 3 

     356.41 Benefit adjustments for certain disability and 
  survivor benefits. 

    Disability benefits payable to a disabilitant, if not 
 otherwise included in the participation in the Minnesota 
 postretirement investment fund, and survivor benefits payable to 
 a survivor from any public pension fund which participates in 
 the Minnesota postretirement investment fund shall be adjusted 
 in the same manner, at the same times and in the same amounts as 
 are benefits payable from the Minnesota postretirement 
 investment fund to eligible benefit recipients of that public 
 pension fund.  If a disability benefit is not included in the 
 participation in the Minnesota postretirement investment fund, 
 the disability benefit is recomputed as a retirement annuity and 
 the recipient would have been eligible for an adjustment 
 pursuant to this section if the disability benefit was not 
 recomputed, the recipient will continue to be eligible for the 
 adjustment pursuant to this section after the recomputation.  
 For the survivor of a deceased annuitant who receives a survivor 
 benefit calculated pursuant to a prior law rather than the 
 second portion of a joint and survivor annuity, any period of 
 receipt of a retirement annuity by the annuitant shall be 
 utilized in determining the period of receipt for eligibility to 
 receive an adjustment pursuant to this section.  No recipient 
 shall, however, be entitled to more than one adjustment pursuant 
 to this section or section 11A.18 applicable to one benefit at 
 one time by reason of this section. 

    HIST: 1978 c 665 s 1; 1980 c 607 art 14 s 45 subd 2; 1982 c 
 578 art 3 s 11; 1987 c 259 s 59 

     356.45 Membership of certain persons in various 
  retirement funds or plans. 

    Subdivision 1.    Exclusion of certain employees in 
 certain federal programs.  No person employed in subsidized 
 on-the-job training, work experience or public service 
 employment as an enrollee under the federal Comprehensive 
 Employment and Training Act from and after March 30, 1978 shall 
 be included as a member of a public retirement fund, unless the 
 person is employed by an employer where public retirement 
 coverage is to be provided by a covered fund enumerated in 
 section 356.451, subdivision 2, and the city council of the city 
 of Minneapolis specifies that the person is to be considered as 
 a provisional member of the relief association pursuant to 
 section 356.451, or unless the person has as of the later of 
 March 30, 1978 or the date of employment sufficient service 
 credit under the provisions of the plan to meet the minimum 
 vesting requirements for a deferred retirement annuity, or the 
 employer agrees in writing to make the total required employer 
 contributions, including any employer additional contribution, 
 on account of that person from revenue sources other than funds 
 provided under the federal Comprehensive Training and Employment 
 Act, or the person agrees in writing to make the required 
 employer contributions in addition to any required employee 
 contribution. 

    Subd. 2.    Covered funds.  The provisions of this 
 section shall apply to the following retirement funds or plans: 

    (1) University of Minnesota faculty retirement plan; 

    (2) University of Minnesota faculty supplemental retirement 
 plan; 

    (3) any municipal retirement fund or plan providing pension 
 or retirement coverage for police officers or paid firefighters 
 which was established and is governed in whole or in part by 
 special legislation; 

    (4) any retirement fund or plan established, maintained, or 
 supported by any governmental subdivision or public body whose 
 revenues are derived from taxation, fees, assessments or from 
 other public sources which provides pension or retirement 
 coverage for public employees, other than police officers or 
 paid firefighters, who are not covered by a retirement fund 
 enumerated in section 356.30, subdivision 3; or 

    (5) any supplemental retirement plan established, 
 maintained, or supported by any government subdivision or public 
 body whose revenues are derived from taxation, fees, assessments 
 or other public sources. 

    HIST: 1978 c 720 s 10; 1981 c 224 s 176 

     356.451 Provisional membership for certain persons in 
  various retirement funds or plans. 

    Subdivision 1.    Reserve account for provisional members; 
 authorization.  Notwithstanding any provisions to the contrary 
 of the laws governing the funds enumerated in subdivision 2, any 
 person who is employed in subsidized on-the-job training, work 
 experience or public service employment as an enrollee under the 
 federal Comprehensive Employment and Training Act, who does not 
 have as of the later of March 30, 1978, or the date of 
 employment sufficient service credit in the retirement fund to 
 meet the minimum vesting requirements for a deferred annuity, 
 who otherwise meets all of the applicable eligibility 
 requirements of the fund and who is designated as such by the 
 city council of the city of Minneapolis or the board of 
 education of special school district No. 1, whichever is 
 applicable, shall be considered a provisional member of the 
 fund.  There shall be established a subsidiary reserve account 
 for provisional members which shall be managed by the board of 
 trustees of the fund as a separate account and which shall not 
 be considered as an asset or a liability of the fund.  To this 
 account shall be credited all employee and required employer 
 contributions made by or on account of provisional members.  A 
 separate record for each provisional member shall be maintained 
 showing the length of service completed, the accrued employee 
 and required employer contributions made by or on account of 
 each provisional member, and the actual rate of interest earned 
 on the assets of the account.  The assets of the separate 
 account shall be invested in the same manner as and subject to 
 the same limitations as are applicable to the general assets of 
 the retirement fund.  The board of trustees shall remit back to 
 the prime sponsor of the federal Comprehensive Employment and 
 Training Act program periodically as required by the applicable 
 federal regulation an amount equal to the total required 
 employer contributions made on account of provisional members 
 who terminate or who are terminated from subsidized on-the-job 
 training, work experience or public service employment without 
 obtaining unsubsidized employment with an employer who employs 
 members who regularly have retirement coverage provided by that 
 retirement fund or by a retirement fund enumerated in section 
 356.30, subdivision 3, or without obtaining sufficient service 
 credit to become entitled to a deferred retirement annuity had 
 they been regular members of that retirement fund during the 
 period of their provisional membership, plus interest at the 
 rate or rates actually earned and in addition any amounts which 
 exceed the funds required to cover current provisional members 
 as projected by the board of trustees.  Any provisional member 
 who terminates or is terminated from subsidized on-the-job 
 training, work experience, or public service employment without 
 obtaining unsubsidized employment with an employer who employs 
 members who regularly have retirement coverage provided by that 
 retirement fund or by a retirement fund enumerated in section 
 356.30, subdivision 3, or without obtaining sufficient service 
 to become entitled to a deferred retirement annuity had the 
 provisional member been a regular member of the retirement fund 
 during the period of provisional membership shall be entitled 
 upon making valid written application to a refund of all 
 employee contributions credited to the member in the subsidiary 
 reserve account for provisional members, plus interest at the 
 average actual rate of interest earned on the assets of the 
 account, but not to exceed the rate of 3-1/2 percent per annum 
 compounded annually from the date of commencement of provisional 
 membership, computed to the first day of the month in which the 
 refund is processed, and based on fiscal year balances.  If the 
 provisional member obtains unsubsidized employment with an 
 employer who employs members who regularly have retirement 
 coverage provided by that retirement fund or by a retirement 
 fund enumerated in section 356.30, subdivision 3, or obtains 
 sufficient service to become entitled to a deferred retirement 
 annuity had the period of provisional membership been as a 
 regular member, the board of trustees shall transfer the total 
 employee and required employer contributions and any interest 
 attributable to those contributions to the regular retirement 
 fund and shall credit the period of service as a provisional 
 member as allowable or formula service.  Unless the provisional 
 member becomes a regular member of that retirement fund or a 
 retirement fund enumerated in section 356.30, subdivision 3, 
 within the time period allowed under the applicable federal 
 regulations following the person's termination of provisional 
 status, no period of provisional membership shall be considered 
 allowable service for purposes of the combined service annuity 
 pursuant to section 356.30 or any service in more than one 
 retirement fund provision.  For any former provisional member 
 who becomes a regular member of a retirement fund enumerated in 
 section 356.30, subdivision 3, the board of trustees shall 
 require written certification of the fact of unsubsidized 
 employment from the subsequent employer and of the fact of 
 regular fund membership from the subsequent retirement fund.  If 
 any provisional member obtains service in an amount sufficient 
 to entitle the provisional member to a disability benefit or the 
 provisional member's survivor to a survivor's benefit had the 
 provisional member been a regular member for that period of 
 service, then the provisional member or the provisional member's 
 survivor shall be entitled to a benefit when otherwise qualified 
 notwithstanding the fact that the person was a provisional 
 member.  Upon the commencement of the benefit, an amount equal 
 to the contributions and interest credited to the provisional 
 member shall be transferred from the reserve account for 
 provisional members to the regular fund.  

    Subd. 2.    Covered funds.  Subdivision 1 applies to 
 the following funds: 

    (1) Minneapolis employees retirement fund established 
 pursuant to chapter 422A; 

    (2) Minneapolis firefighters relief association established 
 pursuant to chapter 69; 

    (3) Minneapolis police relief association established 
 pursuant to Laws 1949, chapter 406, as amended; 

    (4) Any plan covering employees of the housing and 
 redevelopment agency of the city of Minneapolis as established 
 by law, ordinance, or otherwise; 

    (5) Minneapolis teachers retirement fund association 
 established pursuant to chapter 354A. 

    HIST: 1978 c 720 s 11; 1981 c 298 s 11; 1Sp1985 c 7 s 35; 1986 
 c 444; 1987 c 259 s 60 

     356.452 Refund. 

    Any person who is a member of any public pension plan or 
 fund to which the provisions of Laws 1978, chapter 720 apply on 
 March 30, 1978, and who is excluded from that membership 
 pursuant to Laws 1978, chapter 720 shall be entitled, upon 
 making a valid application, to a refund of the accumulated 
 employee or member contributions to the person's credit for the 
 period of employment in subsidized on-the-job training, work 
 experience or public service employment as an enrollee under the 
 federal Comprehensive Employment and Training Act plus interest 
 at the rate of 3-1/2 percent per annum compounded annually from 
 the date of commencement of coverage by the pension plan or 
 fund, computed to the first day of the month in which the refund 
 is processed, and based on the fiscal year balances.  The refund 
 shall be made without any requirement that the person terminate 
 service prior to becoming eligible to receive the refund and 
 shall be made without any minimum waiting period provided for in 
 the provisions of the plan.  Notwithstanding any law to the 
 contrary, a refund taken under this section may be repaid to the 
 fund from which it was taken at the fund's applicable rate of 
 interest after attaining unsubsidized public employment with 
 public pension plan or fund coverage and while so employed prior 
 to retirement whether with the same public employer which 
 provided the subsidized employment or another public employer. 

    HIST: 1978 c 720 s 20 

     356.453 Purchase of prior service. 

    A person who is excluded from pension coverage under the 
 provisions of Laws 1978, chapter 720, but who subsequently 
 becomes employed in unsubsidized public employment with public 
 pension plan or fund coverage, whether with the same public 
 employer which provided the subsidized employment or another 
 public employer, is entitled to purchase service credit for that 
 period of prior subsidized public employment, other than a 
 period of prior subsidized public employment for which a 
 repayment of a refund under section 356.452 is made, with the 
 public pension plan or fund which, except for the exclusion 
 provided for by Laws 1978, chapter 720, would have provided 
 pension coverage for the subsidized employment.  Payment must 
 include all employee and employer contributions at the rates and 
 on the salary in effect when the subsidized employment was 
 rendered plus interest at the rate of 8.5 percent per annum 
 compounded annually from the year purchased to the date payment 
 is made; provided, however, that the employer for the 
 unsubsidized employment, the employer for the subsidized 
 employment, or the applicable federal Comprehensive Employment 
 and Training Act prime sponsor from funds provided under the 
 federal Comprehensive Employment and Training Act, as funds 
 permit, may pay the employer contribution and the employer 
 additional contribution, if any, plus interest at the specified 
 rate.  The public employer which provided the subsidized 
 employment shall provide whatever documentation of periods of 
 subsidized public employment and the salary received that the 
 pension plan or fund shall require.  Payment must be made in one 
 lump sum by the date of retirement and no service credit with 
 respect to the payment may be granted until payment is received 
 by the pension plan or fund. 

    HIST: 1978 c 720 s 21; 1993 c 307 art 4 s 52 

     356.454 Intent and interpretation of exclusion. 

    The exclusion from pension or retirement fund coverage 
 provided for by Laws 1978, chapter 720 is intended to comply 
 with the minimum requirements of the amended federal regulations 
 governing the Comprehensive Employment and Training Act of 1973, 
 as amended by the Emergency Jobs Program Extension Act of 1976, 
 Code of Federal Regulations, title 29, section 98.25, effective 
 June 13, 1977, for authorized expenditures after October 1, 
 1977.  Any administrative or judicial interpretation of the 
 exclusion provided for by Laws 1978, chapter 720, shall limit 
 the extension of this exclusion to the minimum requirements of 
 the amended federal regulation. 

    HIST: 1978 c 720 s 22 

     356.455 Correction of erroneous interpretation of 
  exclusion of certain employees in certain federal programs. 

    The employment of a person as an enrollee under the federal 
 Comprehensive Employment and Training Act in a subsidized 
 on-the-job training, work experience or public service 
 employment position shall not be deemed to be two employments 
 for purposes of implementing the exclusion from retirement fund 
 coverage provided for in Laws 1978, chapter 720, even though the 
 compensation for the person is paid in part from federal 
 Comprehensive Employment and Training Act subsidy funds and is 
 paid in part from local supplementary revenue sources other than 
 funds provided under the federal Comprehensive Employment and 
 Training Act, and any contrary prior administrative 
 interpretation of the provisions of Laws 1978, chapter 720, is 
 deemed to be erroneous.  This section shall be deemed to be 
 remedial in nature and shall be effective retroactively to March 
 30, 1978.  Any employee contributions and any employer and 
 employer additional contributions taken from or on behalf of any 
 person who would have been excluded from retirement fund 
 coverage pursuant to Laws 1978, chapter 720 except for the 
 erroneous prior administrative interpretation shall be deemed to 
 be erroneous deductions and shall be refunded as soon as 
 practicable to the person and employing unit involved.  The 
 refund shall be accompanied by interest at the rate of five 
 percent per annum compounded, payable from the date that the 
 erroneous deduction was taken to the first day of the month in 
 which the refund is processed.  

    HIST: 1979 c 216 s 22 

     356.50 Service and salary credit from back pay awards in 
  the event of wrongful discharge. 

    (a) A person who is wrongfully discharged from public 
 employment that gave rise to coverage by a public employee 
 pension plan listed in section 356.30, subdivision 3, is 
 entitled to obtain allowable service credit from the applicable 
 public employee pension plan for the applicable period caused by 
 the wrongful discharge.  A person is wrongfully discharged for 
 purposes of this section if: 

    (1) the person has been determined by a court of competent 
 jurisdiction or an arbitrator in binding arbitration to have 
 been wrongfully discharged from public employment; 

    (2) the person received an award of back pay with respect 
 to that discharge; and 

    (3) the award does not include any amount for any lost or 
 interrupted public pension plan coverage. 

    (b) To obtain the public pension plan allowable service 
 credit, the person shall pay the required member contribution 
 amount.  The required member contribution amount is the member 
 contribution rate or rates in effect for the pension plan during 
 the period of service covered by the back pay award, applied to 
 the unpaid gross salary amounts of the back pay award including 
 reemployment insurance, workers' compensation or wages from 
 other sources which reduced the back award.  No contributions 
 shall be made under this clause for compensation covered by a 
 public pension plan listed in section 356.30, subdivision 3, for 
 employment during the removal period.  The person shall pay the 
 required member contribution amount within 60 days of the date 
 of receipt of the back pay award, within 60 days of April 14, 
 1992, or within 60 days of a billing from the retirement fund, 
 whichever is later. 

    (c) The public employer who wrongfully discharged the 
 public employee must pay an employer contribution on the back 
 pay award.  The employer contribution must be based on the 
 employer contribution rate or rates in effect for the pension 
 plan during the period of service covered by the back pay award, 
 applied to the salary amount on which the member contribution 
 amount was determined under paragraph (b).  Interest on both the 
 required member and employer contribution amount must be paid by 
 the employer at the annual compound rate of 8.5 percent per 
 year, expressed monthly, between the date the contribution 
 amount would have been paid to the date of actual payment.  The 
 employer payment must be made within 30 days of the payment 
 under paragraph (b). 

    HIST: 1992 c 443 s 1; 1994 c 488 s 8 

     356.55 Prior service credit purchase payment amount 
  determination procedure. 

    Subdivision 1.    Application.  Unless the prior service 
 credit purchase authorization special law or general statute 
 provision explicitly specifies a different purchase payment 
 amount determination procedure, this section governs the 
 determination of the prior service credit purchase payment 
 amount of any prior service credit purchase.  The purchase 
 payment amount determination procedure must recognize any 
 service credit accrued to the purchaser in a pension plan listed 
 in section 356.30, subdivision 3.  Any service credit in a 
 Minnesota defined benefit public employee pension plan available 
 to be reinstated by the purchaser through the repayment of a 
 refund of member or employee contributions previously received 
 must be repaid in full before any purchase of prior service 
 credit payment is made under this section. 

    Subd. 2.    Determination.  (a) Unless the prior service 
 credit purchase minimum amount determined under paragraph (d) is 
 greater, the prior service credit purchase amount is the result 
 obtained by subtracting the amount determined under paragraph 
 (c) from the amount determined under paragraph (b). 

    (b) The present value of the unreduced single life 
 retirement annuity, with the purchase of the additional service 
 credit included, must be calculated as follows: 

    (1) the age at first eligibility for an unreduced single 
 life retirement annuity, including the purchase of the 
 additional service credit, must be determined; 

    (2) the length of total service credit, including the 
 period of the purchase of the additional service credit, at the 
 age determined under clause (1) must be determined; 

    (3) the highest five successive years average salary at the 
 age determined under clause (1), assuming five percent annual 
 compounding salary increases from the most current annual salary 
 amount at the age determined under clause (1), must be 
 determined; 

    (4) using the benefit accrual rate or rates applicable to 
 the prospective purchaser of the service credit based on the 
 prospective purchaser's actual date of entry into covered 
 service, the length of service determined under clause (2), and 
 the final average salary determined under clause (3), the annual 
 unreduced single life retirement annuity amount must be 
 determined; 

    (5) the actuarial present value of the projected annual 
 unreduced single life retirement annuity amount determined under 
 clause (4) at the age determined under clause (1), using the 
 same actuarial factor that the plan would use to determine 
 actuarial equivalence for optional annuity forms and related 
 purposes, must be determined; and 

    (6) the discounted value of the amount determined under 
 clause (5) to the date of the prospective purchase, using an 
 interest rate of 8.5 percent and no mortality probability 
 decrement, must be determined. 

    (c) The present value of the unreduced single life 
 retirement annuity, without the purchase of the additional 
 service credit included, must be calculated as follows:  

    (1) the age at first eligibility for an unreduced single 
 life retirement annuity, not including the purchase of 
 additional service credit, must be determined; 

    (2) the length of accrued service credit, without the 
 period of the purchase of the additional service credit, at the 
 age determined under clause (1), must be determined; 

    (3) the highest five successive years average salary at the 
 age determined under clause (1), assuming five percent annual 
 compounding salary increases from the most current annual salary 
 amount to the age determined under clause (1), must be 
 determined; 

    (4) using the benefit accrual rate or rates applicable to 
 the prospective purchaser of the service credit based on the 
 prospective purchaser's actual date of entry into covered 
 service the length of service credit determined under clause 
 (2), and the final average salary determined under clause (3), 
 the annual unreduced single life retirement annuity amount must 
 be determined; 

    (5) the actuarial present value of the projected annual 
 unreduced single life retirement annuity amount determined under 
 clause (4) at the age determined under clause (1), using the 
 same actuarial factor that the plan would use to determine 
 actuarial equivalence for optional annuity forms and related 
 purposes, must be determined; 

    (6) the discounted value of the amount determined under 
 clause (5) to the date of the prospective purchase, using an 
 interest rate of 8.5 percent and no mortality probability 
 decrement, must be determined; and 

    (7) the net value of the discounted value determined under 
 clause (6), must be determined by applying a service ratio, 
 where the numerator is the total length of credited service 
 determined under paragraph (b), clause (2), reduced by the 
 period of the additional service credit proposed to be 
 purchased, and where the denominator is the total length of 
 service credit determined under clause (2). 

    (d) The minimum prior service credit purchase amount is the 
 amount determined by multiplying the most current annual salary 
 of the prospective purchaser by the combined current employee, 
 employer, and any additional employer contribution rates for the 
 applicable pension plan and by multiplying that result by the 
 number of years of service or fractions of years of service of 
 the potential service credit purchase. 

    Subd. 3.    Source of determination.  The prior service 
 credit purchase amounts under subdivision 2 must be calculated 
 by the chief administrative officer of the public pension plan 
 using a prior service credit purchase amount determination 
 process that has been verified for accuracy and consistency 
 under this section by the commission-retained actuary.  That 
 verification must be in writing and must occur before the first 
 prior service credit purchase for the plan under this section is 
 accepted and every five years thereafter or whenever the 
 preretirement interest rate, postretirement interest rate, 
 payroll growth, or mortality actuarial assumption for the 
 applicable pension plan is modified under section 356.215, 
 whichever occurs first. 

    Subd. 4.    Prior service credit purchase processing fee. 
  A public pension plan may establish a fee to be charged to 
 the prospective purchaser for processing a prior service credit 
 purchase application and the prior service credit payment amount 
 calculation.  The fee must be established by the governing board 
 of the pension plan and must be uniform for comparable service 
 credit purchase situations or actuarial calculation requests.  
 The prior service credit purchase processing fee structure must 
 be published by the chief administrative officer of the 
 applicable retirement plan in the State Register. 

    Subd. 5.    Payment responsibility; employer option.  
 Unless the prior service credit purchase authorization special 
 law or general statute provision explicitly specifies otherwise, 
 the prior service credit purchase payment amount determined 
 under subdivision 2 is payable by the purchaser, but the former 
 employer of the purchaser or the current employer of the 
 purchaser may, at its discretion, pay all or a portion of the 
 purchase payment amount in excess of an amount equal to the 
 employee contribution rate or rates in effect during the prior 
 service period applied to the actual salary rates in effect 
 during the prior service period, plus annual compound interest 
 at the rate of 8.5 percent from the date on which the 
 contributions would have been made if made contemporaneous with 
 the service period to the date on which the payment is actually 
 made. 

    Subd. 6.    Report on prior service credit purchases.  
 (a) As part of the regular data reporting to the consulting 
 actuary retained by the legislative commission on pensions and 
 retirement annually, the chief administrative officer of each 
 public pension plan that has accepted a prior service credit 
 purchase payment under this section shall report for any 
 purchase, the purchaser, the purchaser's employer, the age of 
 the purchaser, the period of the purchase, the purchaser's 
 prepurchase accrued service credit, the purchaser's postpurchase 
 accrued service credit, the purchaser's prior service credit 
 payment, the prior service credit payment made by the 
 purchaser's employer, and the amount of the additional benefit 
 or annuity purchased. 

    (b) As a supplemental report to the regular annual 
 actuarial valuation for the applicable public pension plan 
 prepared by the consulting actuary retained by the legislative 
 commission on pensions and retirement, there must be a 
 comparison for each purchase showing the total prior service 
 credit payment received from all sources and the increased 
 public pension plan actuarial accrued liability resulting from 
 each purchase. 

    Subd. 7.    Expiration of purchase payment determination 
 procedure.  (a) This section expires and is repealed on July 
 1, 2001. 

    (b) Authority for any public pension plan to accept a prior 
 service credit payment calculated in a timely fashion under this 
 section expires on October 1, 2001. 

    HIST: 1998 c 390 art 4 s 1; 1999 c 222 art 16 s 14,15 

     356.551 Post-July 1, 2001, prior service credit purchase 
  payment amount determination procedure. 

    (a) Unless the prior service credit purchase authorization 
 special law or general statute provision explicitly specifies a 
 different purchase payment amount determination procedure, and 
 if section 356.55 has expired, this section governs the 
 determination of the prior service credit purchase payment 
 amount of any prior service credit purchase. 

    (b) The prior service credit purchase amount is an amount 
 equal to the actuarial present value, on the date of payment, as 
 calculated by the chief administrative officer of the pension 
 plan and reviewed by the actuary retained by the legislative 
 commission on pensions and retirement, of the amount of the 
 additional retirement annuity obtained by the acquisition of the 
 additional service credit in this section.  Calculation of this 
 amount must be made using the preretirement interest rate 
 applicable to the public pension plan specified in section 
 356.215, subdivision 4d, and the mortality table adopted for the 
 public pension plan.  The calculation must assume continuous 
 future service in the public pension plan until, and retirement 
 at, the age at which the minimum requirements of the fund for 
 normal retirement or retirement with an annuity unreduced for 
 retirement at an early age, including section 356.30, are met 
 with the additional service credit purchased.  The calculation 
 must also assume a full-time equivalent salary, or actual 
 salary, whichever is greater, and a future salary history that 
 includes annual salary increases at the applicable salary 
 increase rate for the plan specified in section 356.215, 
 subdivision 4d.  Payment must be made in one lump sum within one 
 year of the prior service credit authorization.  Payment of the 
 amount calculated under this section must be made by the 
 applicable eligible person.  However, the current employer or 
 the prior employer may, at its discretion, pay all or any 
 portion of the payment amount that exceeds an amount equal to 
 the employee contribution rates in effect during the period or 
 periods of prior service applied to the actual salary rates in 
 effect during the period or periods of prior service, plus 
 interest at the rate of 8.5 percent a year compounded annually 
 from the date on which the contributions would otherwise have 
 been made to the date on which the payment is made.  If the 
 employer agrees to payments under this paragraph, the purchaser 
 must make the employee payments required under this paragraph 
 within 290 days of the prior service credit authorization.  If 
 that employee payment is made, the employer payment under this 
 paragraph must be remitted to the chief administrative officer 
 of the public pension plan within 60 days of receipt by the 
 chief administrative officer of the employee payments specified 
 under this paragraph. 

    (c) The prospective purchaser must provide any relevant 
 documentation required by the chief administrative officer of 
 the public pension plan to determine eligibility for the prior 
 service credit under this section. 

    (d) Service credit for the purchase period must be granted 
 by the public pension plan to the purchaser upon receipt of the 
 purchase payment amount specified in paragraph (b). 

    HIST: 1998 c 390 art 4 s 2 

    356.60 Subdivision 1.  Repealed, 1982 c 578 art 1 s 
 19 

    Subd. 2. Repealed, 1982 c 578 art 1 s 19 

    Subd. 3. Repealed, 1982 c 578 art 1 s 19 

     356.61 Limitation on public employee retirement 
  annuities. 

    Notwithstanding any provision of law, bylaws, articles of 
 incorporation, retirement and disability allowance plan 
 agreements or retirement plan contracts to the contrary, no 
 person who has pension or retirement coverage by a public 
 pension plan is entitled to receive a monthly retirement annuity 
 or disability benefit which, at the time of commencement of the 
 retirement annuity or disability benefit, exceeds 1/12 of the 
 amount of the annual benefit permitted by the terms of section 
 415 of the Internal Revenue Code with respect to a participant 
 in a plan qualified under section 401(a) of the Internal Revenue 
 Code, as amended through December 31, 1982.  

    The benefit limitation is to be determined on the date the 
 benefit is initially payable or on the date the employee 
 terminated employment, if earlier.  The benefit limitation on 
 any date is the benefit limitation for the limitation year in 
 which the date occurs.  The limitations apply only to the annual 
 benefit which is derived from employer contributions.  Mandatory 
 and voluntary employee contributions, if any, are treated as a 
 separate defined contribution plan maintained by the employer 
 which is subject to the limitations placed on annual additions 
 to defined contribution plans.  

    The maximum annual benefit for any limitation year is the 
 lesser of (1) or (2) below:  

    (1) A dollar limitation of $90,000, adjusted as of January 
 1 of each calendar year to the dollar limitation as determined 
 for that year by the commissioner of Internal Revenue.  The 
 amount determined for any year will apply to limitation years 
 ending with or within that calendar year.  

    (2) A compensation limitation of 100 percent of the average 
 of compensation paid or made available to the participant by the 
 employer during those three consecutive calendar years of 
 employment, or actual number of consecutive calendar years of 
 employment if employed less than three consecutive years, which 
 give the highest average.  Compensation means any compensation 
 which is includable in the employee's gross income, plus any 
 elective deferral as defined in section 402(g)(3) of the federal 
 Internal Revenue Code of 1986, as amended through May 15, 1999, 
 and any amount which was contributed or deferred by the employer 
 at the election of the employee and which is not includable in 
 the gross income of the employee by reason of section 125 or 457 
 of the federal Internal Revenue Code.  

    A benefit is deemed not to exceed the maximum benefit 
 limitation if: 

    (1) the retirement benefits payable under the plan and 
 under any other defined benefit plans of the employer do not 
 exceed the $10,000 limit set in section 415(b)(4) of the 
 Internal Revenue Code for the plan year, or for any prior plan 
 year, and 

    (2) the employer has not at any time maintained a defined 
 contribution plan in which the employee participated.  

    A public pension plan is any Minnesota public pension plan 
 or fund which provides pension or retirement coverage for public 
 employees other than volunteer firefighters, including any plan 
 or fund enumerated in sections 356.20, subdivision 2, or 356.30, 
 subdivision 3, any local police or firefighter's relief 
 association to which section 69.77 applies, or any retirement or 
 pension plan or fund, including a supplemental retirement plan 
 or fund, established, maintained or supported by any 
 governmental subdivision or public body whose revenues are 
 derived from taxation, fees, assessments or from other public 
 sources.  

    The figure for the monthly retirement annuity or disability 
 benefit to be used for the calculation of this limitation must 
 not include any reduction or adjustment required for retirement 
 prior to the normal retirement age or required for the election 
 of an optional annuity.  

    If the figure for the monthly retirement annuity or 
 disability benefit exceeds the limit contained in this section, 
 the annuity or benefit payable must be reduced appropriately.  

    The managing board of each public pension plan from which a 
 retirement annuity or disability benefit is payable shall, at 
 the time that the retirement annuity or disability benefit 
 commences, contact all other public pension plans to determine 
 whether or not the recipient of the retirement annuity or 
 disability benefit is also receiving or is entitled to receive a 
 retirement annuity or disability benefit from any other public 
 pension plan.  If a person is entitled to receive or is 
 receiving a retirement annuity or disability benefit from more 
 than one public pension plan, all retirement annuities or 
 disability benefits from all public pension plans must be 
 totaled in determining whether or not the limitation applies.  A 
 reduction in the amount of the retirement annuity or disability 
 benefit required under this section is made by the public 
 pension plan which provided retirement coverage for the most 
 recent period of service. 

    HIST: 1982 c 578 art 1 s 10; 1983 c 286 s 16; 1984 c 574 s 12; 
 1993 c 307 art 4 s 53; 1999 c 222 art 12 s 1 

     356.611 Limitation on public employee salaries for 
  pension purposes. 

    Subdivision 1.    State salary limitations.  (a) 
 Notwithstanding any provision of law, bylaws, articles of 
 incorporation, retirement and disability allowance plan 
 agreements, or retirement plan contracts to the contrary, the 
 covered salary for pension purposes for a plan participant of a 
 covered retirement fund under section 356.30, subdivision 3, may 
 not exceed 95 percent of the salary established for the governor 
 under section 15A.082 at the time the person received the salary.

    (b) This section does not apply to a salary paid: 

    (1) to the governor; 

    (2) to an employee of a political subdivision in a position 
 that is excluded from the limit as specified under section 
 43A.17, subdivision 9; or 

    (3) to a state employee in a position for which the 
 commissioner of employee relations has approved a salary rate 
 that exceeds 95 percent of the governor's salary. 

    (c) The limited covered salary determined under this 
 section must be used in determining employee and employer 
 contributions and in determining retirement annuities and other 
 benefits under the respective covered retirement fund and under 
 this chapter. 

    Subd. 2.    Federal compensation limits.  For members 
 first contributing to a pension plan covered under section 
 356.30, subdivision 3, on or after July 1, 1995, compensation in 
 excess of the limitation set forth in Internal Revenue Code 
 401(a)(17) shall not be included for contribution and benefit 
 computation purposes.  The compensation limit set forth in 
 Internal Revenue Code 401(a)(17) on June 30, 1993, shall apply 
 to members first contributing before July 1, 1995. 

    HIST: 1994 c 528 art 4 s 11; 1995 c 262 art 1 s 15 

     356.615 Limitation on use of public pension plan assets. 

    (a) Money held by or credited to a public pension plan as 
 assets, including employer and employee contributions, state 
 aid, appropriations from the state or a governmental 
 subdivision, and accrued earnings on investments, constitutes a 
 dedicated fund.  The dedicated fund may be used exclusively to 
 pay retirement annuities, service pensions, disability benefits, 
 survivor benefits, refunds of contributions, or other benefits 
 provided under the benefit plan document or documents governing 
 the public pension plan, and to pay reasonable administrative 
 expenses approved by the governing board of the public pension 
 plan or by another appropriate authority.  No assets of a public 
 pension plan may be loaned or transferred to the state or a 
 governmental subdivision or be used to amortize an unfunded 
 actuarial accrued liability in another public pension plan or 
 fund, whether or not the plan providing the assets consolidates 
 or has consolidated with the plan receiving the assets.  Nothing 
 in this section prohibits a public pension plan or the state 
 board of investment from investing the assets of a plan as 
 authorized by law, including the investment of the assets of 
 public pension plans by the state board of investment in a 
 commingled investment fund. 

    (b) A public pension plan for purposes of this section 
 means a pension plan or fund specified in section 356.20, 
 subdivision 2, or 356.30, subdivision 3, or a retirement or 
 pension plan or fund, including a supplemental retirement plan 
 or fund, established, maintained, or supported by a governmental 
 subdivision or public body whose revenues are derived from 
 taxation, fees, assessments, or other public sources. 

    HIST: 1987 c 296 s 32; 1987 c 372 art 6 s 1 

     356.62 Payment of employee contribution. 

    For purposes of any public pension plan, as defined in 
 section 356.61, each employer shall pick up the employee 
 contributions required pursuant to law or the pension plan for 
 all salary payable after December 31, 1982.  If the United 
 States Treasury department rules that pursuant to section 414(h) 
 of the Internal Revenue Code of 1986, as amended through 
 December 31, 1992, that these picked up contributions are not 
 includable in the employee's adjusted gross income until they 
 are distributed or made available, then these picked up 
 contributions shall be treated as employer contributions in 
 determining tax treatment pursuant to the Internal Revenue Code 
 of 1986, as amended through December 31, 1992, and the employer 
 shall discontinue withholding federal income taxes on the amount 
 of these contributions.  The employer shall pay these picked up 
 contributions from the same source of funds as is used to pay 
 the salary of the employee.  The employer shall pick up these 
 employee contributions by a reduction in the cash salary of the 
 employee. 

    Employee contributions that are picked up shall be treated 
 for all purposes of the public pension plan in the same manner 
 and to the same extent as employee contributions that were made 
 prior to the date on which the employee contributions pick up 
 began.  The amount of the employee contributions that are picked 
 up shall be included in the salary upon which retirement 
 coverage is credited and retirement and survivor's benefits are 
 determined.  For purposes of this section, "employee" means any 
 person covered by a public pension plan.  For purposes of this 
 section, "employee contributions" include any sums deducted from 
 the employee's salary or wages or otherwise paid in lieu 
 thereof, regardless of whether they are denominated 
 contributions by the public pension plan. 

    For any calendar year in which withholding has been reduced 
 pursuant to this section, the employing unit shall supply each 
 employee and the commissioner of revenue with an information 
 return indicating the amount of the employer's picked-up 
 contributions for the calendar year that were not subject to 
 withholding.  This return shall be provided to the employee not 
 later than January 31 of the succeeding calendar year.  The 
 commissioner of revenue shall prescribe the form of the return 
 and the provisions of section 289A.12 shall apply to the extent 
 not inconsistent with the provisions of this section. 

    HIST: 3Sp1982 c 1 art 2 s 7; 1983 c 148 s 6; 1983 c 216 art 1 
 s 85; 1990 c 480 art 1 s 46; 1993 c 375 art 8 s 14 

     356.65 Disposition of abandoned public pension fund 
  amounts. 

    Subdivision 1.    Definitions.  For purposes of this 
 section, unless the context clearly indicates otherwise, the 
 following terms shall have the meanings given to them:  

    (a) "Public pension fund" means any public pension plan as 
 defined in section 356.61 and any Minnesota volunteer 
 firefighters relief association which is established pursuant to 
 chapter 424A and governed pursuant to sections 69.771 to 69.776. 

    (b) "Unclaimed public pension fund amounts" means any 
 amounts representing accumulated member contributions, any 
 outstanding unpaid annuity, service pension or other retirement 
 benefit payments, including those made on warrants issued by the 
 commissioner of finance, which have been issued and delivered 
 for more than six months prior to the date of the end of the 
 fiscal year applicable to the public pension fund, and any 
 applicable interest to the credit of:  

    (1) an inactive or former member of a public pension fund 
 who is not entitled to a defined retirement annuity and who has 
 not applied for a refund of those amounts within five years 
 after the last member contribution was made; 

    (2) a deceased inactive or former member of a public 
 pension fund if no survivor is entitled to a survivor benefit 
 and no survivor, designated beneficiary or legal representative 
 of the estate has applied for a refund of those amounts within 
 five years after the date of death of the inactive or former 
 member. 

    Subd. 2.    Disposition of abandoned amounts.  Any 
 unclaimed public pension fund amounts existing in any public 
 pension fund shall be presumed abandoned, but shall not be 
 subject to the provisions of sections 345.31 to 345.60.  Unless 
 the benefit plan of the public pension fund specifically 
 provides for a different disposition of unclaimed or abandoned 
 funds or amounts, any unclaimed public pension fund amounts 
 shall cancel and shall be credited to the public pension fund.  
 If the unclaimed public pension fund amount exceeds $25 and the 
 inactive or former member again becomes a member of the public 
 pension fund or applies for a retirement annuity pursuant to 
 section 3A.12, 352.72, 352B.30, 352C.051, 353.71, 354.60, 
 356.30, or 422A.16, subdivision 8, whichever is applicable, the 
 canceled amount shall be restored to the credit of the person.  

    HIST: 1981 c 224 s 178; 1983 c 286 s 17; 1992 c 513 art 4 s 41 

  356.70 Repealed, 1997 c 233 art 1 s 78 

     356.71 Real estate investments. 

    Notwithstanding any law to the contrary, any public pension 
 plan whose assets are not invested by the state board of 
 investment may invest its funds in Minnesota situs nonfarm real 
 estate ownership interests or loans secured by mortgages or 
 deeds of trust if the investment is consistent with section 
 356A.04.  Except to the extent authorized in the case of the 
 Minneapolis employees retirement fund under section 422A.05, 
 subdivision 2c, paragraph (a), an investment otherwise 
 authorized by this section must also comply with the 
 requirements and limitations of section 11A.24, subdivision 6. 

    HIST: 1983 c 291 s 1; 1991 c 206 s 2 

     356.80 Provision of information in the event of marriage 
  dissolution. 

    Subdivision 1.    Information for a pending marriage 
 dissolution.  (a) Upon written request by a person with access 
 to the data under subdivision 3 who cites this statute, a public 
 or private pension plan administrator must provide the court and 
 the parties to a marriage dissolution action involving a plan 
 member or former plan member with information regarding pension 
 benefits or rights of the plan member or former plan member.  
 The pension plan shall provide this information upon request of 
 the court or a party to the action without requiring a signed 
 authorization from the plan member or former plan member. 

    (b) The information must include the pension benefits or 
 rights of the plan member or former plan member as of the first 
 day of the month following the date of the request, or as of the 
 end of the previous fiscal year for the plan, and as of the date 
 of valuation of marital assets under section 518.58, if the 
 person requesting the information specifies that date.  The 
 information must include the accrued service credit of the 
 person, the credited salary of the person for the most current 
 five-year period, a summary of the benefit plan, and any other 
 information relevant to the calculation of the present value of 
 the benefits or rights. 

    Subd. 2.    Information for an existing dissolution 
 decree.  If a marriage dissolution decree rendered by a court 
 of competent jurisdiction prior to August 1, 1987, provided a 
 procedure for the distribution of future pension plan payments, 
 upon request the applicable pension plan administrator shall 
 provide on a timely basis to the court and the parties to the 
 action the required information to implement that procedure 
 without requiring a signed authorization from the plan member or 
 former plan member. 

    Subd. 3.    Access to data.  Notwithstanding any 
 provision of chapter 13 to the contrary, an administrator may 
 release private or confidential data on individuals to the 
 court, the parties to a marriage dissolution, their attorneys, 
 and an actuary appointed under section 518.582, to the extent 
 necessary to comply with this section, but only if the 
 administrator has received a copy of the legal petition showing 
 that an action for marriage dissolution has commenced and a copy 
 of the affidavit of service showing that the petition has been 
 served on the responding party to the action. 

    HIST: 1987 c 157 s 8; 1988 c 668 s 6; 1989 c 319 art 2 s 25,26 

     356.81 Repayment of refunds. 

    Repayment of a refund and interest on that refund permitted 
 under laws governing any public pension plan in Minnesota may be 
 made with funds distributed from a plan qualified under the 
 federal Internal Revenue Code of 1986, as amended through 
 December 31, 1988, section 401(a) or an annuity qualified under 
 the federal Internal Revenue Code of 1986, section 403(a).  
 Repayment may also be made with funds distributed from an 
 individual retirement account used solely to receive a 
 nontaxable rollover from that type of a plan or annuity.  The 
 repaid refund must be separately accounted for as member 
 contributions not previously taxed.  Before accepting any 
 transfers to which this subdivision applies, the executive 
 director must require the member to provide written 
 documentation to demonstrate that the amounts to be transferred 
 are eligible for a tax-free rollover and qualify for that 
 treatment under the federal Internal Revenue Code of 1986.  

    HIST: 1989 c 319 art 2 s 27 

     356.82 Savings clause. 

    The intent of the legislature in sections 352.01, 
 subdivision 25; 353.01, subdivision 37; 354.05, subdivision 38; 
 and 354A.011, subdivision 15a is to create a normal retirement 
 age for persons first covered by those sections after the 
 effective date of those sections that is the same as the 
 retirement age in the federal Social Security law, including 
 future amendments to that law.  If a court determines that the 
 legislature may not incorporate by reference the future changes 
 in federal Social Security law, the legislature reserves the 
 right to amend the appropriate sections to make the normal 
 retirement conform to the retirement age in the federal Social 
 Security law.  No person first covered by any of those sections 
 after the effective date of those sections has a right to a 
 normal retirement age that is less than the retirement age in 
 the federal Social Security law. 

    HIST: 1989 c 319 art 13 s 95; 1992 c 464 art 1 s 43 

  356.85 Repealed, 1993 c 280 s 1 

     356.86 Postretirement adjustment; lump sum payments. 

    Subdivision 1.    Entitlement.  A person who is 
 receiving a retirement annuity, a disability benefit, or a 
 surviving spouse's annuity or benefit from a retirement fund 
 specified in subdivision 3, clauses (1) to (8), is entitled to 
 receive a postretirement adjustment from the applicable 
 retirement fund in the amount specified in subdivision 2, if the 
 annuity or benefit was computed under: 

    (1) the laws in effect before June 1, 1973, if the person 
 is receiving an annuity or benefit from the retirement fund 
 specified in subdivision 3, clause (4); or 

    (2) the laws in effect before July 1, 1973, if the person 
 is receiving an annuity or benefit from a retirement fund 
 specified in subdivision 3, clause (1), (2), (3), or (5); or 

    (3) the metropolitan transit commission-transit operating 
 division employees retirement fund plan document in effect on or 
 before December 31, 1977, if the person is receiving a 
 retirement annuity, a disability benefit, or a surviving 
 spouse's annuity or benefit from the retirement fund specified 
 in subdivision 3, clause (5); or 

    (4) the laws in effect before May 1, 1974, and before any 
 adjustment under Laws 1987, chapter 372, article 3, if the 
 person is receiving an annuity or benefit from the retirement 
 fund specified in subdivision 3, clause (6); or 

    (5) the laws in effect before January 1, 1970, if the 
 person is receiving an annuity or benefit from the retirement 
 fund specified in subdivision 3, clause (7); or 

    (6) the laws in effect before June 30, 1971, if the person 
 is receiving an annuity or benefit from the retirement fund 
 specified in subdivision 3, clause (8). 

    Subd. 2.    Amount of postretirement adjustment; payment. 
  (a) For any person receiving an annuity or benefit on 
 November 30, 1989, and entitled to receive a postretirement 
 adjustment under subdivision 1, the postretirement adjustment is 
 a lump sum payment calculated under paragraph (b) or (c). 

    (b) For coordinated plan annuity or benefit recipients, the 
 postretirement adjustment in 1989 is $25 for each full year of 
 allowable service credited to the person by the respective 
 retirement fund.  In 1990 and each following year, the 
 postretirement adjustment is the amount payable in the preceding 
 year increased by the same percentage applied to regular 
 annuities paid from the postretirement fund or, for the 
 retirement funds specified in subdivision 3, clauses (6), (7), 
 and (8), by the same percentage applied under the articles of 
 incorporation and bylaws of these funds. 

    (c) For basic plan annuity or benefit recipients, the 
 postretirement adjustment in 1989 is the greater of: 

    (1) $25 for each full year of allowable service credited to 
 the person by the respective retirement fund; or 

    (2) the difference between: 

    (i) the product of $400 times the number of full years of 
 allowable service credited to the person by the respective 
 retirement fund; and 

    (ii) the sum of the benefits payable to the person from any 
 Minnesota public employee pension plan, and cash benefits 
 payable to the person from the Social Security Administration. 

    In 1990 and each following year, each eligible basic plan 
 annuity or benefit recipient shall receive the amount received 
 in the preceding year increased by the same percentage applied 
 to regular annuities paid from the postretirement fund or, for 
 the retirement funds specified in subdivision 3, clauses (6), 
 (7), and (8), by the same percentage applied under the articles 
 of incorporation and bylaws of these funds. 

    (d) The postretirement adjustment provided for in this 
 section is payable for those persons receiving an annuity or 
 benefit on November 30, 1989, on December 1, 1989.  In 
 subsequent years, the adjustment must be paid on December 1 to 
 those persons receiving an annuity or benefit on the preceding 
 November 30.  A person who is eligible may elect to participate 
 in an optional annuity or benefit receipt schedule under 
 subdivision 4.  This section does not authorize the payment of a 
 postretirement adjustment to an estate if the annuity or benefit 
 recipient dies before the November 30 eligibility date.  The 
 postretirement adjustment provided for in this section must be 
 paid automatically unless the intended recipient files a written 
 notice with the retirement fund requesting that the 
 postretirement adjustment not be paid or returns the amount of 
 adjustment to the retirement fund.  Written notice of the waiver 
 of the postretirement adjustment is irrevocable for the year 
 during which it was made. 

    Subd. 3.    Covered retirement funds.  The 
 postretirement adjustment provided in this section applies to 
 the following retirement funds: 

    (1) public employees retirement fund; 

    (2) public employees police and fire fund; 

    (3) teachers retirement association; 

    (4) state patrol retirement fund; 

    (5) state employees retirement fund of the Minnesota state 
 retirement system; 

    (6) Minneapolis teachers retirement fund association 
 established under chapter 354A; 

    (7) St. Paul teachers retirement fund association, 
 established under chapter 354A; and 

    (8) Duluth teachers retirement fund association established 
 under chapter 354A. 

    Subd. 4.    Optional postretirement adjustment payment 
 schedule.  Basic plan annuity or benefit recipients receiving 
 adjustments under subdivision 2, paragraph (c), clause (2), and 
 whose adjustment exceeds 20 percent of their Minnesota plan 
 annuity or benefit may elect to have the amount of the 
 adjustment paid in equal monthly amounts instead of receiving a 
 lump sum payment on December 1, 1989.  Selection of this 
 optional payment schedule must be made by the recipient in 
 writing on forms prepared by the retirement association.  This 
 optional payment schedule may be revoked by the recipient in 
 writing prior to the November 1 preceding the December 1 lump 
 sum distribution.  Upon the death of the annuity or benefit 
 recipient, any remaining unpaid monthly amounts shall be paid to 
 the surviving spouse, or if no spouse survives, to the annuity 
 or benefit recipient's beneficiary or estate. 

    Subd. 5.    Social security information.  To be eligible 
 for a postretirement adjustment calculated under subdivision 2, 
 paragraph (c), clause (2), a person must authorize the Social 
 Security Administration to release to the retirement association 
 information on the person's social security cash benefits.  This 
 authorization must be received by the retirement association 
 before the December 1, 1989, payment date. 

    Subd. 6.    Report.  By September 30, 1990, the 
 retirement funds listed in subdivision 3 shall report to the 
 legislature and the commissioner of finance on the number of 
 annuity and benefit recipients eligible for each type of 
 adjustment established in subdivision 2, the annual cost of each 
 type of adjustment, and the estimated actuarial liability 
 associated with each. 

    HIST: 1989 c 319 art 15 s 1; 1990 c 570 art 12 s 59-62; 1991 c 
 341 s 45,46; 1995 c 141 art 3 s 20; 1996 c 305 art 1 s 95 

     356.865 Supplemental benefit; lump sum payments; 
  Minneapolis employees retirement fund. 

    Subdivision 1.    Entitlement.  Any person who is 
 receiving either an annuity that was computed under the laws in 
 effect before March 5, 1974, or a "$2 bill and annuity" annuity 
 from the Minneapolis employees retirement fund is entitled to 
 receive a supplemental benefit lump sum payment from the 
 retirement fund in the amount specified in subdivision 2.  

    Subd. 2.    Amount of payment.  (a) For any person 
 receiving an annuity or benefit on November 30, 1991, and 
 entitled to receive a supplemental benefit lump sum payment 
 under subdivision 1, the payment is $28 for each full year of 
 allowable service credited to the person by the retirement fund. 

    In 1992 and each following year, each eligible benefit 
 recipient shall receive the amount received in the preceding 
 year increased by the same percentage applied on the most recent 
 January 1 to regular annuities paid from the Minneapolis 
 employees retirement fund. 

    (b) The payment provided for in this section is payable on 
 December 1, 1991, to those persons receiving an annuity or 
 benefit on November 30, 1991.  In subsequent years, the payment 
 must be made on December 1 to those persons receiving an annuity 
 or benefit on the preceding November 30.  This section does not 
 authorize payment to an estate if the annuity or benefit 
 recipient dies before the November 30 eligibility date.  The 
 payment provided for in this section must be paid automatically 
 unless the intended recipient files a written notice with the 
 retirement fund requesting that it not be paid. 

    Subd. 3.    State appropriation.  Payments under this 
 section are the responsibility of the Minneapolis employees 
 retirement fund.  A separate state aid is provided toward the 
 level dollar amortized cost of the payments.  For state fiscal 
 years 1992 to 2001 inclusive, there is appropriated annually 
 $550,000 from the general fund to the commissioner of finance to 
 be added, in quarterly installments, to the annual state 
 contribution amount determined under section 422A.101, 
 subdivision 3.  After fiscal year 2001, any difference between 
 the cumulative benefit amounts actually paid under this section 
 after fiscal year 1991 and the amounts paid to the retirement 
 fund by the state under this subdivision plus investment 
 earnings on the aid shall be included by the retirement fund 
 board and the actuary retained by the legislative commission on 
 pensions and retirement in determining financial requirements of 
 the fund and contributions under section 422A.101. 

    HIST: 1991 c 345 art 4 s 5; 1995 c 262 art 2 s 8; 1996 c 305 
 art 1 s 96; 1997 c 202 art 2 s 46 

     356.87 Health insurance withholding. 

    Upon authorization of a person entitled to receive a 
 retirement annuity, disability benefit or survivor benefit, the 
 executive director of a public pension fund listed in section 
 356.20, subdivision 2, shall withhold health insurance premium 
 amounts from the retirement annuity, disability benefit or 
 survivor benefit, and pay the premium amounts to the public 
 employees insurance program.  The public employees insurance 
 program shall reimburse a public pension fund for the 
 administrative expense of withholding the premium amounts and 
 shall assume liability for the failure of a public pension fund 
 to properly withhold the premium amounts. 

    HIST: 1990 c 589 art 2 s 2; 1991 c 340 s 32; 1991 c 341 s 47; 
 1994 c 465 art 3 s 55; 1995 c 248 art 10 s 17 

     356.88 Public pension administration legislation. 

    Subdivision 1.    Due dates.  (a) Proposed 
 administrative legislation recommended by or on behalf of the 
 Minnesota state retirement system, the public employees 
 retirement association, the teachers retirement association, the 
 Minneapolis employees retirement fund, or a first class city 
 teachers retirement fund association must be presented to the 
 legislative commission on pensions and retirement, the 
 governmental operations and reform committee of the senate, and 
 the governmental operations and gaming committee of the house of 
 representatives on or before October 1 of each year in order for 
 the proposed administrative legislation to be acted upon during 
 the upcoming legislative session.  The executive director or the 
 deputy executive director of the legislative commission on 
 pensions and retirement shall provide written comments on the 
 proposed provisions to the public pension plans by November 15 
 of each year. 

    (b) Proposed administrative legislation recommended by or 
 on behalf of a public employee pension plan or system under 
 paragraph (a) must address provisions: 

    (1) authorizing allowable service credit for leaves of 
 absence and related circumstances; 

    (2) governing offsets or deductions from the amount of 
 disability benefits; 

    (3) authorizing the purchase of allowable service credit 
 for prior uncredited periods; 

    (4) governing subsequent employment earnings by reemployed 
 annuitants; and 

    (5) authorizing retroactive effect for retirement annuity 
 or benefit applications. 

    (c) Where possible and desirable, taking into account the 
 differences among the public pension plans in existing law and 
 the unique characteristics of the individual public pension fund 
 memberships, uniform provisions relating to paragraph (b) for 
 all applicable public pension plans must be presented for 
 consideration during the legislative session.  Supporting 
 documentation setting forth the policy rationale for each set of 
 uniform provisions must accompany the proposed administrative 
 legislation. 

    Subd. 2. Repealed, 1997 c 233 art 1 s 78 

    HIST: 1994 c 528 art 1 s 13 

     356.89 Public pension facilities. 

    Subdivision 1.    Definitions.  (a) The definitions in 
 this subdivision apply to this section. 

    (b) "Boards" mean the board of directors of the Minnesota 
 state retirement system, the board of trustees of the public 
 employees retirement association, and the board of trustees of 
 the teachers retirement association. 

    (c) "Commissioner" means the commissioner of administration.

    Subd. 2.    Building; related facilities.  (a) The 
 commissioner of administration may provide a building and 
 related facilities to be jointly occupied by the board of 
 directors of the Minnesota state retirement system, the board of 
 trustees of the public employees retirement association, and the 
 board of trustees of the teachers retirement association for the 
 administration of their public pension systems.  

    (b) Design of the facilities is not subject to section 
 16B.33.  The competitive acquisition process set forth in 
 chapter 16C does not apply if the process set forth in 
 subdivision 3 is followed.  

    (c) The boards and the commissioner must submit the plans 
 for a public pension facility under this section to the chair of 
 the house ways and means committee and to the chair of the 
 senate state government finance committee for their approval 
 before the plans are implemented.  

    Subd. 3.    Contracting procedures.  (a) The 
 commissioner may enter into a contract for facilities with a 
 contractor to furnish the architectural, engineering, and 
 related services as well as the labor, materials, supplies, 
 equipment, and related construction services on the basis of a 
 request for qualifications and competitive responses received 
 through a request for proposals process that must include the 
 items listed in paragraphs (b) to (i). 

    (b) Before issuing a request for qualifications and a 
 request for proposals, the commissioner, with the assistance of 
 the boards, shall prepare performance criteria and 
 specifications that include: 

    (1) a general floor plan or layout indicating the general 
 dimensions of the public building and space requirements; 

    (2) design criteria for the exterior and site area; 

    (3) performance specifications for all building systems and 
 components to ensure quality and cost efficiencies; 

    (4) conceptual floor plans for systems space; 

    (5) preferred types of interior finishes, styles of 
 windows, lighting and outlets, doors, and features such as 
 built-in counters and telephone wiring; 

    (6) mechanical and electrical requirements; 

    (7) special interior features required; and 

    (8) a completion schedule. 

    (c) The commissioner shall first solicit statements of 
 qualifications from eligible contractors and select more than 
 one qualified contractor based upon experience, technical 
 competence, past performance, capability to perform, and other 
 appropriate facts.  Contractors selected under this process must 
 be, employ, or have as a partner, member, coventurer, or 
 subcontractor, persons licensed and registered under chapter 326 
 to provide the services required to design and complete the 
 project.  The commissioner does not have to select any of the 
 respondents if none reasonably fulfill the criteria set forth in 
 this paragraph. 

    (d) The contractors selected shall be asked to respond to a 
 request for proposals.  Responses must include site plans, 
 design concept, elevation, statement of material to be used, 
 floor layouts, a detailed development budget, and a total cost 
 to complete the project.  The proposal must indicate that the 
 contractor obtained at least two proposals from subcontractors 
 for each item of work and must set forth how the subcontractors 
 were selected.  The commissioner, with the assistance of the 
 boards, shall evaluate the proposals based upon design, cost, 
 quality, aesthetics, and the best overall value to the state 
 pension funds.  The commissioner need not select any of the 
 proposals submitted and reserves the right to reject any and all 
 proposals, and may terminate the process or revise the request 
 for proposals and solicit new proposals if the commissioner 
 determines that the best interests of the pension funds would be 
 better served by doing so.  Proposals submitted are nonpublic 
 data until the contract is awarded. 

    (e) The contractor selected must comply with sections 
 574.26 to 574.261.  Before executing a final contract, the 
 contractor selected shall certify a firm construction price and 
 completion date. 

    (f) The commissioner may consider building sites in the 
 city of St. Paul and surrounding suburbs. 

    (g) Any land, building, or facility leased, constructed, or 
 acquired and any leasehold interest acquired under this section 
 must be held by the state in trust for the three retirement 
 systems as tenants in common.  Each retirement system fund must 
 consider its interest as a fixed asset of its pension fund in 
 accordance with governmental accounting standards. 

    (h) The commissioner may lease to another governmental 
 subdivision any portion of the funds' building and lands that is 
 not required for their direct use upon terms and conditions they 
 deem to be in the best interest of the pension funds.  Any 
 income accruing from the rentals must be separately accounted 
 for and utilized to offset ongoing administrative expenses and 
 any excess must be carried forward for future administrative 
 expenses.  The commissioner may also enter into lease agreements 
 for the establishment of satellite offices should the boards 
 find them to be necessary in order to assure their members 
 reasonable access to their services.  The commissioner may lease 
 under section 16B.24 any portion of the facilities not required 
 for the direct use of the boards. 

    (i) The boards shall formulate and adopt a written working 
 agreement that sets forth the nature of each retirement system's 
 ownership interest, the duties and obligations of each system 
 toward the construction, operation, and maintenance costs of its 
 facilities, and identifies one retirement fund to serve as 
 manager for operating and maintenance purposes.  The boards may 
 contract with independent third parties for maintenance-related 
 activities, services, and supplies, and may use the services of 
 the department of administration where economically feasible to 
 do so.  If the boards cannot agree or resolve a dispute about 
 operations or maintenance of the facilities, they may request 
 the commissioner of administration to appoint a representative 
 from the department's real estate management division to serve 
 as arbitrator of the dispute with authority to issue a written 
 resolution of the dispute. 

    Subd. 4.    Revenue bonds.  The commissioner of finance, 
 on request of the governor, may sell and issue revenue bonds in 
 an aggregate principal amount up to $38,000,000 to achieve the 
 purposes described in subdivisions 1 and 2, plus the amount 
 needed to pay issuance costs and interest costs and to establish 
 necessary reserves to secure the bonds.  The commissioner of 
 finance may issue bonds for the purpose of refunding bonds 
 issued under this subdivision.  The bonds may be sold and issued 
 on terms and in a manner the commissioner of finance determines 
 to be in the best interests of the state.  The proceeds of the 
 bonds must be credited to a bond proceeds account in the pension 
 building fund, which the commissioner of finance must create in 
 the state treasury. 

    Subd. 5.    Security.  The boards may pledge any or all 
 assets of the boards as security for the bonds.  The bonds and 
 the interest on them must be paid solely from and secured by all 
 assets of the boards pledged and appropriated for these purposes 
 to the debt service fund created in subdivision 6 and any 
 investment income thereon and any reserve established for this 
 purpose.  The bonds are not public debt, and the full faith, 
 credit, and taxing powers of the state are not pledged for their 
 payment.  The bonds and the interest on them must not be paid, 
 directly or indirectly, in whole or in part, from a tax of 
 statewide application on any class of property, income, 
 transaction, or privilege. 

    Subd. 6.    Debt service fund.  There is established in 
 the state treasury a separate and special pension building debt 
 service fund.  Money in the funds managed by the boards is 
 appropriated to the boards for transfer to the pension building 
 debt service fund.  Money appropriated and transferred to the 
 fund and investment income thereon on hand or required to be 
 transferred to the fund must be used and is irrevocably 
 appropriated to pay when due the principal of and interest on 
 the bonds authorized in subdivision 4.  

    Subd. 7.    Covenants; agreements.  The commissioner of 
 finance may, for and on behalf of the state, enter into 
 covenants and agreements not inconsistent with subdivisions 1 to 
 6 as may be necessary or desirable to facilitate the sale and 
 issuance of the bonds on terms favorable to the state, 
 including, but not limited to, covenants and agreements relating 
 to the payment of and security for the bonds, tax exemption, and 
 disclosure of information required by federal and state 
 securities laws.  The covenants and agreements of the 
 commissioner of finance constitute an enforceable contract of 
 the state and the state pledges and agrees with the holders of 
 any bonds that the state will not limit or alter the rights 
 vested in the commissioner of finance to fulfill the terms of 
 the covenants or agreements made with the holders of the bonds, 
 or in any way impair the rights and remedies of the holders 
 until the bonds, together with the interest thereon, with 
 interest on any unpaid installments of interest, and all costs 
 and expenses in connection with any action or proceeding by or 
 on behalf of the holders, are fully met and discharged.  The 
 commissioner of finance may include this pledge and agreement of 
 the state in any covenant or agreement with the holders of the 
 bonds.  Sections 16A.672 and 16A.675 apply to the bonds. 

    HIST: 1999 c 222 art 22 s 3