Subdivision 1. Terms.
Unless the language or context clearly indicates that a different
meaning is intended, the terms defined in this section, for the purposes of this chapter, have
the meanings given them.
Subd. 2. State employee.
"State employee" means any employee or officer in the classified
and unclassified service of the state. The term also includes the special classes of persons listed in
subdivision 2a but excludes the special classes of persons listed in subdivision 2b.
Subd. 2a. Included employees.
(a) "State employee" includes:
(1) employees of the Minnesota Historical Society;
(2) employees of the State Horticultural Society;
(3) employees of the Disabled American Veterans, Department of Minnesota, Veterans of
Foreign Wars, Department of Minnesota, if employed before July 1, 1963;
(4) employees of the Minnesota Crop Improvement Association;
(5) employees of the adjutant general who are paid from federal funds and who are not
covered by any federal civilian employees retirement system;
(6) employees of the Minnesota State Colleges and Universities employed under the
university or college activities program;
(7) currently contributing employees covered by the system who are temporarily employed
by the legislature during a legislative session or any currently contributing employee employed
for any special service as defined in subdivision 2b, clause (8);
(8) employees of the Armory Building Commission;
(9) employees of the legislature appointed without a limit on the duration of their
employment and persons employed or designated by the legislature or by a legislative committee
or commission or other competent authority to conduct a special inquiry, investigation,
examination, or installation;
(10) trainees who are employed on a full-time established training program performing the
duties of the classified position for which they will be eligible to receive immediate appointment
at the completion of the training period;
(11) employees of the Minnesota Safety Council;
(12) any employees on authorized leave of absence from the Transit Operating Division of
the former Metropolitan Transit Commission who are employed by the labor organization which
is the exclusive bargaining agent representing employees of the Transit Operating Division;
(13) employees of the Metropolitan Council, Metropolitan Parks and Open Space
Commission, Metropolitan Sports Facilities Commission, Metropolitan Mosquito Control
Commission, or Metropolitan Radio Board unless excluded or covered by another public pension
fund or plan under section
473.415, subdivision 3
(14) judges of the Tax Court;
(15) personnel employed on June 30, 1992, by the University of Minnesota in the
management, operation, or maintenance of its heating plant facilities, whose employment transfers
to an employer assuming operation of the heating plant facilities, so long as the person is employed
at the University of Minnesota heating plant by that employer or by its successor organization;
(16) seasonal help in the classified service employed by the Department of Revenue; and
(17) persons employed by the Department of Commerce as a peace officer in the Insurance
Fraud Prevention Division under section
who have attained the mandatory retirement
age specified in section
43A.34, subdivision 4
(b) Employees specified in paragraph (a), clause (15), are included employees under
paragraph (a) if employer and employee contributions are made in a timely manner in the amounts
required by section
. Employee contributions must be deducted from salary. Employer
contributions are the sole obligation of the employer assuming operation of the University of
Minnesota heating plant facilities or any successor organizations to that employer.
Subd. 2b. Excluded employees.
"State employee" does not include:
(1) students employed by the University of Minnesota, or the state colleges and universities,
unless approved for coverage by the Board of Regents or the Board of Trustees of the Minnesota
State Colleges and Universities, as the case may be;
(2) employees who are eligible for membership in the state Teachers Retirement Association,
except employees of the Department of Education who have chosen or may choose to be covered
by the general state employees retirement plan of the Minnesota State Retirement System instead
of the Teachers Retirement Association;
(3) employees of the University of Minnesota who are excluded from coverage by action of
the Board of Regents;
(4) officers and enlisted personnel in the National Guard and the naval militia who are
assigned to permanent peacetime duty and who under federal law are or are required to be
members of a federal retirement system;
(5) election officers;
(6) persons who are engaged in public work for the state but who are employed by contractors
when the performance of the contract is authorized by the legislature or other competent authority;
(7) officers and employees of the senate, or of the house of representatives, or of a legislative
committee or commission who are temporarily employed;
(8) receivers, jurors, notaries public, and court employees who are not in the judicial branch
as defined in section
43A.02, subdivision 25
, except referees and adjusters employed by the
Department of Labor and Industry;
(9) patient and inmate help in state charitable, penal, and correctional institutions including
the Minnesota Veterans Home;
(10) persons who are employed for professional services where the service is incidental to
their regular professional duties and whose compensation is paid on a per diem basis;
(11) employees of the Sibley House Association;
(12) the members of any state board or commission who serve the state intermittently and
are paid on a per diem basis; the secretary, secretary-treasurer, and treasurer of those boards if
their compensation is $5,000 or less per year, or, if they are legally prohibited from serving more
than three years; and the board of managers of the State Agricultural Society and its treasurer
unless the treasurer is also its full-time secretary;
(13) state troopers;
(14) temporary employees of the Minnesota State Fair who are employed on or after July 1
for a period not to extend beyond October 15 of that year; and persons who are employed at any
time by the state fair administration for special events held on the fairgrounds;
(15) emergency employees who are in the classified service; except that if an emergency
employee, within the same pay period, becomes a provisional or probationary employee on
other than a temporary basis, the employee shall be considered a "state employee" retroactively
to the beginning of the pay period;
(16) persons who are described in section
352B.01, subdivision 2
, clauses (2) to (6);
(17) temporary employees in the classified service, and temporary employees in the
unclassified service who are appointed for a definite period of not more than six months and who
are employed less than six months in any one-year period;
(18) trainee employees, except those listed in subdivision 2a, clause (10);
(19) persons whose compensation is paid on a fee basis;
(20) state employees who are employed by the Board of Trustees of the Minnesota State
Colleges and Universities in unclassified positions enumerated in section
43A.08, subdivision 1
(21) state employees who in any year have credit for 12 months service as teachers in the
public schools of the state and as teachers are members of the Teachers Retirement Association or
a retirement system in St. Paul, Minneapolis, or Duluth;
(22) employees of the adjutant general who are employed on an unlimited intermittent or
temporary basis in the classified or unclassified service for the support of Army and Air National
Guard training facilities;
(23) chaplains and nuns who are excluded from coverage under the federal Old Age,
Survivors, Disability, and Health Insurance Program for the performance of service as specified
in United States Code, title 42, section 410(a)(8)(A), as amended, if no irrevocable election of
coverage has been made under section 3121(r) of the Internal Revenue Code of 1986, as amended
through December 31, 1992;
(24) examination monitors who are employed by departments, agencies, commissions, and
boards to conduct examinations required by law;
(25) persons who are appointed to serve as members of fact-finding commissions or
adjustment panels, arbitrators, or labor referees under chapter 179;
(26) temporary employees who are employed for limited periods under any state or federal
program for training or rehabilitation, including persons who are employed for limited periods
from areas of economic distress, but not including skilled and supervisory personnel and persons
having civil service status covered by the system;
(27) full-time students who are employed by the Minnesota Historical Society intermittently
during part of the year and full-time during the summer months;
(28) temporary employees who are appointed for not more than six months, of the
Metropolitan Council and of any of its statutory boards, if the board members are appointed by
the Metropolitan Council;
(29) persons who are employed in positions designated by the Department of Employee
Relations as student workers;
(30) members of trades who are employed by the successor to the Metropolitan Waste
Control Commission, who have trade union pension plan coverage under a collective bargaining
agreement, and who are first employed after June 1, 1977;
(31) persons who are employed in subsidized on-the-job training, work experience, or public
service employment as enrollees under the federal Comprehensive Employment and Training
Act after March 30, 1978, unless the person has as of the later of March 30, 1978, or the date
of employment sufficient service credit in the retirement system to meet the minimum vesting
requirements for a deferred annuity, or the employer agrees in writing on forms prescribed by
the director to make the required employer contributions, including any employer additional
contributions, on account of that person from revenue sources other than funds provided under
the federal Comprehensive Employment and Training Act, or the person agrees in writing
on forms prescribed by the director to make the required employer contribution in addition to
the required employee contribution;
(32) off-duty peace officers while employed by the Metropolitan Council;
(33) persons who are employed as full-time police officers by the Metropolitan Council and
as police officers are members of the public employees police and fire fund;
(34) persons who are employed as full-time firefighters by the Department of Military Affairs
and as firefighters are members of the public employees police and fire fund;
(35) foreign citizens with a work permit of less than three years, or an H-1b/JV visa valid for
less than three years of employment, unless notice of extension is supplied which allows them
to work for three or more years as of the date the extension is granted, in which case they are
eligible for coverage from the date extended; and
(36) persons who are employed by the Board of Trustees of the Minnesota State Colleges and
Universities and who elect to remain members of the Public Employees Retirement Association
or the Minneapolis Employees Retirement Fund, whichever applies, under section
Subd. 3. Head of department.
"Head of department" means the head of any department,
institution, or branch of the state service that directly pays salaries out of its income or that
prepares, approves, and submits salary abstracts of its employees to the commissioner of finance.
Subd. 4. Accumulated contributions.
"Accumulated contributions" means the total,
exclusive of interest, of (1) the sums deducted from the salary of an employee, (2) the amount
of payments, including assessments, paid by the employee in lieu of salary deductions and all
other payments made under this chapter and credited to the employee's individual account in
the retirement fund.
Subd. 5. Retirement fund.
(a) "Retirement fund" means the general state employees
retirement fund created by section
352.04, subdivision 1
, with respect to the general state
employees retirement plan or the correctional state employees retirement fund created by section
352.911, subdivision 1
, with respect to the correctional state employees retirement plan.
(b) The retirement fund includes the aggregate of accumulated contributions of employees
covered by the applicable plan, and all other funds paid into the state treasury or received by the
director under this chapter, together with all income and profits from the money and interest on it,
including contributions on the part of the federal government, the state, and state departments.
Subd. 6.[Repealed, Ex1967 c 57 s 29
Subd. 7.[Repealed, 1993 c 307 art 7 s 1
Subd. 8.[Repealed, 1957 c 928 s 33
Subd. 9.[Repealed, 1957 c 928 s 33
Subd. 10.[Repealed, 1963 c 383 s 59
Subd. 11. Allowable service.
"Allowable service" means:
(1) Service by an employee for which on or before July 1, 1957, the employee was entitled
to allowable service credit on the records of the system by reason of employee contributions in
the form of salary deductions, payments in lieu of salary deductions, or in any other manner
authorized by Minnesota Statutes 1953, chapter 352, as amended by Laws 1955, chapter 239.
(2) Service by an employee for which on or before July 1, 1961, the employee chose to obtain
credit for service by making payments to the fund under Minnesota Statutes 1961, section
(3) Except as provided in clauses (8) and (9), service by an employee after July 1, 1957,
for any calendar month in which the employee is paid salary from which deductions are made,
deposited, and credited in the fund, including deductions made, deposited, and credited as
provided in section
(4) Except as provided in clauses (8) and (9), service by an employee after July 1, 1957, for
any calendar month for which payments in lieu of salary deductions are made, deposited, and
credited in the fund, as provided in section
and Minnesota Statutes 1957, section
For purposes of clauses (3) and (4), except as provided in clauses (8) and (9), any salary
paid for a fractional part of any calendar month, including the month of separation from state
service, is deemed the compensation for the entire calendar month.
(5) The period of absence from their duties by employees who are temporarily disabled
because of injuries incurred in the performance of duties and for which disability the state is
liable under the workers' compensation law until the date authorized by the director for the
commencement of payments of a total and permanent disability benefit from the retirement fund.
(6) Service covered by a refund repaid as provided in section
, except service rendered as an employee of the adjutant general for which the person has credit
with the federal civil service retirement system.
(7) Service before July 1, 1978, by an employee of the transit operating division of the
Metropolitan Transit Commission or by an employee on an authorized leave of absence from
the Transit Operating Division of the Metropolitan Transit Commission who is employed by
the labor organization which is the exclusive bargaining agent representing employees of the
Transit Operating Division, which was credited by the Metropolitan Transit Commission-Transit
Operating Division employees retirement fund or any of its predecessor plans or funds as past,
intermediate, future, continuous, or allowable service as defined in the Metropolitan Transit
Commission-Transit Operating Division employees retirement fund plan document in effect on
December 31, 1977.
(8) Service after July 1, 1983, by an employee who is employed on a part-time basis for less
than 50 percent of full time, for which the employee is paid salary from which deductions are
made, deposited, and credited in the fund, including deductions made, deposited, and credited
as provided in section
or for which payments in lieu of salary deductions are made,
deposited, and credited in the fund as provided in section
shall be credited on a fractional
basis either by pay period, monthly, or annually based on the relationship that the percentage of
salary earned bears to a full-time salary, with any salary paid for the fractional service credited on
the basis of the rate of salary applicable for a full-time pay period, month, or a full-time year.
For periods of part-time service that is duplicated service credit, section
356.30, subdivision 1
clauses (i) and (j), govern.
Allowable service determined and credited on a fractional basis shall be used in calculating
the amount of benefits payable, but service as determined on a fractional basis must not be used in
determining the length of service required for eligibility for benefits.
(9) Any period of authorized leave of absence without pay that does not exceed one year and
for which the employee obtained credit by payment to the fund in lieu of salary deductions. To
obtain credit, the employee shall pay an amount equal to the employee and employer contribution
rate in section
352.04, subdivisions 2 and 3
, multiplied by the employee's hourly rate of salary
on the date of return from leave of absence and by the days and months of the leave of absence
without pay for which the employee wants allowable service credit. The employing department,
at its option, may pay the employer amount on behalf of its employees. Payments made under this
clause must include interest at an annual rate of 8.5 percent compounded annually from the date
of termination of the leave of absence to the date payment is made unless payment is completed
within one year of the return from leave of absence.
(10) MS 2002 [Expired]
(11) [Expired, 2002 c 392 art 2 s 4
Subd. 12. Actuarial equivalent.
"Actuarial equivalent" means the condition of one annuity
or benefit having an equal actuarial present value as another annuity or benefit, determined as of a
given date at a specified age with each actuarial present value based on the appropriate mortality
table adopted by the board of directors based on the experience of the fund as recommended by
the actuary retained under section
, and approved under section
, and using the applicable preretirement or postretirement interest rate assumption specified
356.215, subdivision 8
Subd. 13. Salary.
(a) Subject to the limitations of section
, "salary" means wages, or
other periodic compensation, paid to an employee before deductions for deferred compensation,
supplemental retirement plans, or other voluntary salary reduction programs.
(b) "Salary" does not include:
(1) lump sum sick leave payments;
(2) severance payments;
(3) lump sum annual leave payments and overtime payments made at the time of separation
from state service;
(4) payments in lieu of any employer-paid group insurance coverage, including the difference
between single and family rates that may be paid to an employee with single coverage;
(5) payments made as an employer-paid fringe benefit;
(6) workers' compensation payments;
(7) employer contributions to a deferred compensation or tax sheltered annuity program; and
(8) amounts contributed under a benevolent vacation and sick leave donation program.
(c) Amounts provided to an employee by the employer through a grievance proceeding or a
legal settlement are salary only if the settlement is reviewed by the executive director and the
amounts are determined by the executive director to be consistent with paragraph (a) and prior
Subd. 13a. Reduced salary during period of workers' compensation.
An employee on
leave of absence receiving temporary workers' compensation payments and a reduced salary or no
salary from the employer who is entitled to allowable service credit for the period of absence,
may make payment to the fund for the difference between salary received, if any, and the salary
the employee would normally receive if not on leave of absence during the period. The employee
shall pay an amount equal to the employee and employer contribution rate under section
subdivisions 2 and 3
, on the differential salary amount for the period of the leave of absence.
The employing department, at its option, may pay the employer amount on behalf of its
employees. Payment made under this subdivision must include interest at the rate of 8.5 percent
per year, and must be completed within one year of the return from leave of absence.
Subd. 14.[Repealed, 1963 c 383 s 59
Subd. 14a. Average salary.
(a) "Average salary" means the average of the highest five
successive years of salary upon which the employee has made contributions to the retirement
fund by payroll deductions. Average salary must be based upon all allowable service if this
service is less than five years.
(b) "Average salary" does not include the payment of accrued unused annual leave or
overtime paid at time of final separation from state service if paid in a lump sum nor does it
include the reduced salary, if any, paid during the period the employee is entitled to workers'
compensation benefit payments for temporary disability.
(c) For an employee covered by the correctional state employees retirement plan, "average
salary" means the average of the monthly salary during the employee's highest five successive
years of salary as an employee covered by the general state employees retirement plan, or the
correctional state employees retirement plan, or by a combination of the two. If the total of the
covered service is less than five years, the determination of average salary must be based on
all allowable service.
Subd. 15. Approved actuary.
"Approved actuary" means any actuary who is either a fellow
of the society of actuaries or who has at least 15 years of service to major public employee funds,
or any firm retaining an approved actuary on its staff.
Subd. 16. Year of allowable service.
"Year of allowable service" means any 12 calendar
months not necessarily consecutive in which an employee is entitled to allowable service credit. It
also means 12 months credit each calendar year for teachers in the state universities and state
institutions who may or may not receive compensation in every month in the calendar year.
Subd. 17. Total and permanent disability.
"Total and permanent disability" means the
inability to engage in any substantial gainful activity by reason of any medically determinable
physical or mental impairment that has existed or is expected to continue for a period of at least
Subd. 18. "Annuity" and "benefit" synonymous.
The words "annuity" and "benefit,"
wherever they appear in this chapter, are synonymous.
Subd. 19. Retirement.
"Retirement" means the time after a state employee is entitled to an
accrued annuity, as defined in subdivision 21, payable under an application for annuity filed in the
office of the system as provided in section
352.115, subdivision 8
or, in the case of an employee
who has received a disability benefit, when that employee reaches normal retirement age.
Subd. 20. Retired employee.
"Retired employee" means an employee who has retirement
status as defined in subdivision 19.
Subd. 21. Accrued annuities.
(a) In this chapter and chapters 3A, 352B, 352C, and 490,
"accrued annuity" means an annuity that had become payable to a retired employee in the
lifetime of the employee.
(b) An annuity or benefit authorized as provided in this chapter and chapters 3A, 352B,
352C, and 490 becomes payable on the first day of each calendar month for that calendar month
and must be paid on the first day of each calendar month.
(c) Notwithstanding any provision to the contrary in this chapter and chapters 3A, 352B,
352C, and 490, benefit payment authorized as "payable for life" is payable for the entire month in
which death occurs, and the benefit payment for the month of death is payable to the surviving
spouse or other beneficiary only if the annuitant dies before negotiating the benefit check.
Subd. 22. Disabled employee.
"Disabled employee" means an employee who is totally and
permanently disabled as defined in subdivision 17, and who as a result of the disability is entitled
to receive a disability benefit as provided in section
Subd. 23. Coverage or covered by the system.
"Coverage" or "covered by the system"
means that a state employee who serves the state of Minnesota and makes the required employee
contributions to the retirement fund is, by reason of these contributions, entitled to either (1) a
retirement annuity, or (2) a disability benefit, or (3) a refund of accumulated contributions, as
provided in this chapter.
Subd. 24. System.
"System" means the Minnesota State Retirement System.
Subd. 25. Normal retirement age.
"Normal retirement age" means age 65 for a person
who first became a covered employee or a member of a pension fund listed in section
, before July 1, 1989. For a person who first becomes a covered employee after June
30, 1989, normal retirement age means the higher of age 65 or "retirement age," as defined in
United States Code, title 42, section 416(l), as amended, but not to exceed age 66.
Subd. 26. Dependent child.
"Dependent child" means a biological or adopted child of a
deceased employee who has not reached the age of 20 and is dependent upon the employee for
more than one-half of the child's support at the time of the employee's death. It also means a child
of the member conceived during the member's lifetime and born after the member's death.
History: (254-1) 1929 c 191 s 1; 1931 c 351 s 1; 1933 c 326 s 1; 1935 c 238 s 1; 1939 c 432
s 1; 1941 c 391 s 1; 1943 c 622 s 1; 1945 c 38 s 1; 1945 c 284 s 1,2; 1947 c 631 s 2-6; 1949 c 644
s 2,3; 1951 c 441 s 2-8; 1953 c 320 s 1; 1955 c 239 s 1-3; 1957 c 576 s 1,2; 1957 c 928 s 1-6,34;
Ex1959 c 6 s 1-3; 1961 c 560 s 31; Ex1961 c 67 s 1,2; 1963 c 383 s 1-8; 1965 c 230 s 1,2; 1965 c
590 s 1; 1965 c 698 s 3; 1967 c 148 s 2; Ex1967 c 1 s 6; Ex1967 c 57 s 1-7; 1969 c 6 s 45; 1971 c
12 s 1,2; 1973 c 178 s 20; 1973 c 221 s 1,2; 1973 c 349 s 2; 1973 c 492 s 14; 1973 c 507 s 45;
1973 c 582 s 3; 1975 c 271 s 6; 1975 c 321 s 2; 1975 c 359 s 23; 1975 c 368 s 13; 1976 c 134 s
78; 1976 c 329 s 2; 1977 c 98 s 1; 1977 c 388 s 1; 1978 c 538 s 1,2; 1978 c 672 s 11,12; 1978 c
720 s 3; 1980 c 342 s 1,2; 1980 c 614 s 135; 1980 c 617 s 47; 1981 c 37 s 2; 1981 c 224 s 41-44;
1983 c 128 s 1-3; 1983 c 247 s 137; 1983 c 286 s 3; 1984 c 654 art 3 s 100; 1985 c 248 s 54;
1Sp1985 c 7 s 4; 1Sp1985 c 13 s 317; 1986 c 444; 1987 c 83 s 1; 1987 c 229 art 6 s 1; art 11 s 1;
1987 c 259 s 12; 1987 c 372 art 1 s 2; 1987 c 384 art 2 s 1; 1989 c 209 art 2 s 35; 1989 c 319 art
1 s 2; art 13 s 1,2; 1989 c 335 art 3 s 4; 1990 c 426 art 1 s 41; 1990 c 570 art 1 s 2; art 10 s 1;
art 12 s 2; 1992 c 432 art 1 s 1; 1992 c 598 art 1 s 2; 1993 c 307 art 1 s 3,4; art 3 s 1; 1993 c
336 art 6 s 1; 1993 c 375 art 8 s 14; 1994 c 528 art 1 s 2,3; 1994 c 572 s 4; 1994 c 628 art 3 s
26,27; 1995 c 54 s 26; 1995 c 186 s 70; 1995 c 195 art 2 s 1; 1995 c 212 art 4 s 64; 1995 c 262
art 1 s 3; 1Sp1995 c 3 art 16 s 13; 1997 c 183 art 3 s 38; 1997 c 233 art 1 s 16; 1997 c 241 art
8 s 3,4; 2000 c 457 s 6; 1Sp2001 c 10 art 3 s 4,5; art 6 s 1,21; art 8 s 1; 2002 c 392 art 2 s 1;
art 11 s 52; 2003 c 112 art 2 s 50; 2003 c 130 s 12; 1Sp2003 c 12 art 6 s 5; 2004 c 267 art 2 s
1; 1Sp2005 c 8 art 1 s 1,2; art 3 s 1; art 4 s 2; art 10 s 7-10