2004 Minnesota Statutes

     354A.12 Contributions by employee and employer. 

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

      Association and Program              Percentage of

                                           Total Salary

 Duluth Teachers Retirement

   Association

           old law and new law

           coordinated programs              5.5 percent

 Minneapolis Teachers Retirement

   Association

           basic program                     8.5 percent

           coordinated program               5.5 percent

 St. Paul Teachers Retirement

   Association

           basic program                     8 percent

           coordinated program               5.5 percent

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

    Subd. 1a.    Obligation for omitted salary deductions.  
 If the full required contributions are not deducted from the 
 salary of a teacher, payment of the shortage in such deductions 
 is the sole obligation of the employing unit during the 
 three-year period following the end of the fiscal year in which 
 the shortage occurred.  The shortage is payable by the employing 
 unit upon notification of the shortage by the executive director 
 of the applicable retirement fund association.  The employing 
 unit shall also pay any employer contributions related to the 
 shortage.  The amount of the shortage in employee contributions 
 and associated employer contributions is payable with interest 
 at the preretirement interest assumption for the retirement fund 
 as specified in section 356.215, subdivision 8, stated as a 
 monthly rate from the date due until the date payment is 
 received in the office of the association, with a minimum 
 interest charge of $10.  If the shortage payment and interest is 
 not paid by the employing unit within 60 days of notification, 
 the executive director shall certify the amount of the shortage 
 payment and interest to the commissioner of finance, who shall 
 deduct the amount from any state aid or appropriation amount 
 applicable to the employing unit.  

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

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

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

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

      Duluth Teachers Retirement
      Fund Association                        4.50 percent
      Minneapolis Teachers Retirement
      Fund Association                        4.50 percent
      St. Paul Teachers Retirement
      Fund Association                        4.50 percent;

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

      Minneapolis Teachers Retirement

      Fund Association                        8.50 percent

      St. Paul Teachers Retirement

      Fund Association                        8.00 percent

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

      Minneapolis Teachers Retirement 

      Fund Association 

        July 1, 1993 - June 30, 1994          4.85 percent 

        July 1, 1994, and thereafter          3.64 percent

      St. Paul Teachers Retirement 

      Fund Association 

        July 1, 1993 - June 30, 1995          4.63 percent 

        July 1, 1995, and thereafter          3.64 percent

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

      Duluth Teachers Retirement

      Fund Association                        1.29 percent 

      Minneapolis Teachers Retirement

      Fund Association

        July 1, 1993 - June 30, 1994          0.50 percent 

        July 1, 1994, and thereafter          3.64 percent

      St. Paul Teachers Retirement 

      Fund Association 

        July 1, 1993 - June 30, 1994          0.50 percent 

        July 1, 1994 - June 30, 1995          1.50 percent 

        July 1, 1997, and thereafter          3.84 percent 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    (c) Supplemental administrative expenses other than 
 investment expenses of a first class city teacher retirement 
 fund association are those expenses for the fiscal year that: 

    (1) exceed, for the St. Paul Teachers Retirement Fund 
 Association $443,745, or for the Minneapolis Teacher Retirement 
 Fund Association $671,513, plus, in each case, an additional 
 amount derived by applying the percentage increase in the 
 Consumer Price Index for Urban Wage Earners and Clerical Workers 
 All Items Index published by the Bureau of Labor Statistics of 
 the United States Department of Labor since July 1, 2001, to the 
 applicable dollar amount; and 

    (2) exceed the amount computed by applying the most recent 
 percentage of pay administrative expense amount, other than 
 investment expenses, for the teachers retirement association 
 governed by chapter 354 to the covered payroll of the respective 
 teachers retirement fund association for the fiscal year. 

    (d) The board of trustees of each first class city teachers 
 retirement fund association shall allocate the total dollar 
 amount of supplemental administrative expenses other than 
 investment expenses determined under paragraph (c), clause (2), 
 among the various active and retired membership groups of the 
 teachers retirement fund association and shall assess the 
 various membership groups their respective share of the 
 supplemental administrative expenses other than investment 
 expenses, in amounts determined by the board of trustees.  The 
 supplemental administrative expense assessments must be paid by 
 the membership group in a manner determined by the board of 
 trustees of the respective teachers retirement association.  
 Supplemental administrative expenses payable by the active 
 members of the pension plan must be picked up by the employer in 
 accordance with section 356.62. 

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

    (1) the total amount of administrative expenses of the St. 
 Paul Teachers Retirement Fund Association, the amount of the 
 investment expenses of the St. Paul Teachers Retirement Fund 
 Association, and the net remaining amount of administrative 
 expenses of the St. Paul Teachers Retirement Fund Association; 

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

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

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

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

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

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

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

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

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

    Subd. 5.    Reporting and remittance requirements.  (a) 
 Each employing unit shall provide to the appropriate teachers 
 retirement fund association the following member data regarding 
 all new or returning employees before the employee's first 
 payroll date in a format approved by the executive secretary or 
 director.  Data changes and the dates of those changes must be 
 reported to the association on an ongoing basis for the payroll 
 cycle in which they occur.  Data on the member includes: 

    (1) legal name, address, date of birth, association member 
 number, employer-assigned employee number, and Social Security 
 number; 

    (2) association status, including, but not limited to, 
 basic, coordinated, exempt annuitant, exempt technical college 
 teacher, or exempt independent contractor or consultant; 

    (3) employment status, including, but not limited to, full 
 time, part time, intermittent, substitute, or part-time 
 mobility; 

    (4) employment position, including, but not limited to, 
 teacher, superintendent, principal, administrator, or other; 

    (5) employment activity, including, but not limited to, 
 hire, termination, resumption of employment, disability, or 
 death; 

    (6) leaves of absence; and 

    (7) other information as may be required by the association.

    (b) Each employing unit shall provide the following data to 
 the appropriate association for each payroll cycle in a format 
 approved by the executive secretary or director: 

    (1) an association member number; 

    (2) employer-assigned employee number; 

    (3) Social Security number; 

    (4) amount of each salary deduction; 

    (5) amount of salary as defined in section 354A.011, 
 subdivision 24, from which each deduction was made; 

    (6) reason for payment; 

    (7) service credit; 

    (8) the beginning and ending dates of the payroll period 
 covered and the date of actual payment; 

    (9) fiscal year of salary earnings; 

    (10) total remittance amount including employee, employer, 
 and employer additional contributions; and 

    (11) other information as may be required by the 
 association. 

    (c) On or before August 1 each year, each employing unit 
 must report to the appropriate association giving an itemized 
 summary for the preceding 12 months of the total amount that was 
 withheld from the salaries of teachers for deductions and all 
 other information required by the association. 

    (d) An employing unit that does not comply with the 
 reporting requirements under this section shall pay a fine of $5 
 per calendar day until the association receives the required 
 member data. 

    (e) An employing unit shall remit all amounts that are due 
 to the association and shall furnish for each pay period an 
 itemized statement indicating the total amount that is due and 
 is transmitted with any other information required by the 
 association.  All amounts due and other employer obligations 
 that are not remitted within 30 days of notification by the 
 association must be certified by the director or secretary to 
 the commissioner of finance, who shall deduct the amount from 
 any state aid or appropriation amount applicable to the 
 employing unit and shall transmit the deducted amount to the 
 applicable association. 

    HIST: 1975 c 306 s 30; 1976 c 238 s 1; 1976 c 239 s 107; 1978 
 c 781 s 8; 1979 c 293 s 3; 1980 c 614 s 143; 1981 c 269 s 4; 
 1982 c 578 art 3 s 7; 1Sp1985 c 12 art 11 s 13; 1Sp1986 c 1 art 
 9 s 24; 1987 c 258 s 12; 1989 c 246 s 2; 1991 c 317 s 3; 1992 c 
 598 art 5 s 1; 1993 c 336 art 1 s 3-7; 1993 c 357 s 1-6; 1994 c 
 420 s 1; 1995 c 141 art 3 s 12; 1995 c 262 art 2 s 2; 1Sp1995 c 
 3 art 16 s 13; 1996 c 438 art 4 s 5,6; 1997 c 233 art 3 s 2-6; 
 1Sp2001 c 10 art 3 s 22; 2002 c 392 art 6 s 3; art 11 s 52; 2003 
 c 130 s 12