2002 Minnesota Statutes

     354.51 Payments to receive credit for prior service; 
  shortages in member deductions. 

    Subdivision 1.    Eligibility to make payments.  No 
 member shall be entitled to make payments in lieu of salary 
 deductions to the retirement board to receive credit for any 
 period of service prior to that date for which employee 
 contributions were not deducted from the member's salary, except 
 as provided in subdivision 4, or section 354.50 or 354.53.  

    Subd. 2.  Repealed, 1974 c 289 s 59 

    Subd. 3.  Repealed, 1974 c 289 s 59 

    Subd. 4.    Other state or school teaching service; 
 purchase of credit.  Any teacher who has rendered teaching 
 service prior to June 30, 1953, in another state, or in a state 
 public school which is not an employing unit with employees for 
 whom retirement coverage is provided pursuant to this chapter, 
 or for the University of Minnesota, who was a member of the fund 
 prior to or after the uncredited teaching service, who is not 
 entitled to any benefits from any other retirement system based 
 on the uncredited teaching service, who has credit for at least 
 15 years of service as a member of the retirement fund with at 
 least five years of service occurring subsequent to the period 
 of uncredited teaching service, who became a member of the 
 retirement fund prior to June 30, 1957, and who has not accepted 
 a refund of accumulated member contributions or deductions and 
 resumed teaching service covered by the retirement fund after 
 July 1, 1957, shall be entitled to obtain service credit for the 
 period of uncredited teaching service.  To obtain service 
 credit, a teacher shall make a payment equal to six percent of 
 the average annual salary of the teacher for the five year 
 period occurring immediately prior to the completion of the 
 minimum service requirement or July 1, 1951, whichever is later, 
 multiplied for the number of years of the period of uncredited 
 teaching service, but not to exceed $175 annually for any period 
 of uncredited teaching service occurring prior to July 1, 1953, 
 or $216 annually for any period of uncredited teaching service 
 occurring subsequent to June 30, 1953.  The payment made by the 
 teacher shall be accompanied by a matching payment representing 
 the employer contribution.  This matching employer contribution 
 payment is to be made by the agency which formerly employed the 
 teacher, except that, at its discretion, the payment may be made 
 by the current employer of the teacher.  The payments shall 
 include interest at an annual rate of 8.5 percent compounded 
 annually from the end of the year of uncredited service to the 
 date on which payment is first made.  Payment shall be made in a 
 single payment unless the executive director authorizes 
 installment payments.  If the payment made is less than the full 
 required payment, including interest, the formula service credit 
 granted shall be adjusted in accordance with section 354.05, 
 subdivision 25, clause (3).  Any school district or institution 
 which employs a teacher who makes a payment pursuant to this 
 subdivision is authorized to make any required payments 
 representing employer contributions and interest and the 
 required amounts are hereby appropriated from any funds 
 available to the school district or institution.  Any payments 
 made pursuant to this subdivision shall be considered 
 accumulations made after July 1, 1957 for purposes of computing 
 an annuity pursuant to section 354.44, subdivision 2.  All 
 payments shall be made to the executive director prior to July 
 1, 1973 or within one year after the completion of the minimum 
 state teaching service requirements whichever is later. 

    Subd. 5.    Payment of shortages.  In the event that 
 full required member contributions are not deducted from the 
 salary of a teacher, payment shall be made as follows:  

    (a) Payment of shortages in member deductions on salary 
 earned after June 30, 1957, and prior to July 1, 1981, may be 
 made any time prior to retirement.  Payment shall include 
 interest at an annual rate of 8.5 percent compounded annually 
 from the end of the fiscal year in which the shortage occurred 
 to the end of the month in which payment is made and the 
 interest shall be credited to the fund.  If payment of a 
 shortage in deductions is not made, the formula service credit 
 of the member shall be prorated pursuant to section 354.05, 
 subdivision 25, clause (3). 

    (b) Payment of shortages in member deductions on salary 
 earned after June 30, 1981, shall be the sole obligation of the 
 employing unit and shall be payable by the employing unit upon 
 notification by the executive director of the shortage with 
 interest at an annual rate of 8.5 percent compounded annually 
 from the end of the fiscal year in which the shortage occurred 
 to the end of the month in which payment is made and the 
 interest shall be credited to the fund.  Effective July 1, 1986, 
 the employing unit shall also pay the employer contributions as 
 specified in section 354.42, subdivisions 3 and 5 for such 
 shortages.  If the shortage payment is not paid by the employing 
 unit within 60 days of notification, the executive director 
 shall certify the amount of the shortage payment to the 
 applicable county auditor, who shall spread a levy in the amount 
 of the shortage payment over the taxable property of the taxing 
 district of the employing unit if the employing unit is 
 supported by property taxes, or to the commissioner of finance, 
 who shall deduct the amount from any state aid or appropriation 
 amount applicable to the employing unit if the employing unit is 
 not supported by property taxes.  

    (c) Payment may not be made for shortages in member 
 deductions on salary earned prior to July 1, 1957. 

    HIST: Ex1957 c 16 s 13; Ex1959 c 50 s 18,19; 1969 c 485 s 26; 
 1971 c 40 s 25,26; 1974 c 289 s 42; 1981 c 160 s 11; 1981 c 224 
 s 116-118; 1982 c 578 art 3 s 19; 1Sp1985 c 12 art 11 s 7; 1986 
 c 444; 1987 c 284 art 6 s 9; 1992 c 598 art 3 s 4,5