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Minnesota Legislature

Office of the Revisor of Statutes

Chapter 354

Section 354.42

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354.42 CONTRIBUTIONS BY EMPLOYER AND EMPLOYEE.
    Subdivision 1.[Repealed, 1974 c 289 s 59]
    Subd. 1a. Teachers retirement fund. (a) Within the Teachers Retirement Association and
the state treasury is created a special retirement fund, which must include all the assets of the
Teachers Retirement Association and all revenue of the association. The fund is the continuation
of the fund established under Laws 1931, chapter 406, section 2, notwithstanding the repeal of
Minnesota Statutes 1973, section 354.42, subdivision 1, by Laws 1974, chapter 289, section 59.
(b) The teachers retirement fund must be credited with all employee and employer
contributions, all investment revenue and gains, and all other income authorized by law.
(c) From the teachers retirement fund is appropriated the payments of annuities and benefits
authorized by this chapter, the transfers to the Minnesota postretirement investment fund, and the
reasonable and necessary expenses of administering the fund and the association.
    Subd. 2. Employee. (a) The employee contribution to the fund is an amount equal to the
following percentage of the salary of a member:
(1) after July 1, 2006, for a teacher employed by Special School District No. 1, Minneapolis,
5.5 percent if the teacher is a coordinated member, and 9.0 percent if the teacher is a basic member;
(2) for every other teacher, after July 1, 2006, 5.5 percent if the teacher is a coordinated
member and 9.0 percent if the teacher is a basic member.
(b) This contribution must be made by deduction from salary. Where any portion of a
member's salary is paid from other than public funds, the member's employee contribution must
be based on the entire salary received.
    Subd. 3. Employer. (a) The regular employer contribution to the fund by Special School
District No. 1, Minneapolis, after July 1, 2006, and before July 1, 2007, is an amount equal to 5.0
percent of the salary of each of its teachers who is a coordinated member and 9.0 percent of the
salary of each of its teachers who is a basic member. After July 1, 2007, the regular employer
contribution to the fund by Special School District No. 1, Minneapolis, is an amount equal to 5.5
percent of salary of each coordinated member and 9.5 percent of salary of each basic member.
The additional employer contribution to the fund by Special School District No. 1, Minneapolis,
after July 1, 2006, is an amount equal to 3.64 percent of the salary of each teacher who is a
coordinated member or is a basic member.
(b) The employer contribution to the fund for every other employer is an amount equal to
5.0 percent of the salary of each coordinated member and 9.0 percent of the salary of each basic
member before July 1, 2007, and 5.5 percent of the salary of each coordinated member and 9.5
percent of the salary of each basic member after June 30, 2007.
    Subd. 4.[Repealed, 1969 c 485 s 40]
    Subd. 5.[Repealed, 1997 c 233 art 1 s 50]
    Subd. 6.[Repealed, 1974 c 289 s 59]
    Subd. 7. Erroneous salary deductions or direct payments. (a) Deductions taken from the
salary of an employee for the retirement fund in error must be refunded to the employee upon
the discovery of the error and after the verification of the error by the employing unit making
the deduction. The corresponding employer contribution and additional employer contribution
amounts attributable to the erroneous salary deduction must be refunded to the employing unit.
(b) If salary deductions and employer contributions were erroneously transmitted to the
retirement fund and should have been transmitted to another Minnesota public pension plan,
the executive director must transfer these salary deductions and employer contributions to the
appropriate public pension fund without interest. For purposes of this paragraph, a Minnesota
public pension plan means a plan specified in section 356.30, subdivision 3, or the plan governed
by chapter 354B.
(c) A potential transfer under paragraph (b) that would cause the plan to fail to be a qualified
plan under section 401(a) of the Internal Revenue Code, as amended, must not be made by the
executive director. Within 30 days after being notified by the Teachers Retirement Association
of an unmade potential transfer under this paragraph, the employer of the affected person must
transmit an amount representing the applicable salary deductions and employer contributions,
without interest, to the retirement fund of the appropriate Minnesota public pension plan fund.
The retirement association must provide a credit for the amount of the erroneous salary deductions
and employer contributions against future contributions from the employer.
(d) If a salary warrant or check from which a deduction for the retirement fund was taken has
been canceled or the amount of the warrant or if a check has been returned to the funds of the
employing unit making the payment, a refund of the amount deducted, or any portion of it that is
required to adjust the salary deductions, must be made to the employing unit.
(e) Erroneous direct payments of member-paid contributions or erroneous salary deductions
that were not refunded during the regular payroll cycle processing must be refunded to the
member, plus interest computed using the rate and method specified in section 354.49, subdivision
2
.
(f) Any refund under this subdivision that would cause the plan to fail to be a qualified
plan under section 401(a) of the Internal Revenue Code, as amended, may not be refunded and
instead must be credited against future contributions payable by the employer. The employer is
responsible for refunding to the applicable employee any amount that was erroneously deducted
from the salary of the employee, with interest as specified in paragraph (e).
History: Ex1957 c 16 s 4; Ex1959 c 50 s 30; 1965 c 821 s 8-10; 1967 c 834 s 4-6; 1969
c 485 s 13-16; 1973 c 270 s 9; 1973 c 728 s 14-16; 1974 c 289 s 20,21; 1977 c 313 s 1; 1978
c 781 s 3; 1979 c 293 s 1,2; 1984 c 564 s 29; 1987 c 259 s 34; 1989 c 319 art 2 s 12; 1990 c
570 art 12 s 29,30; 1990 c 591 art 2 s 5; 1994 c 508 art 1 s 4; 1994 c 524 s 1; 1994 c 528 art
3 s 15,16; 1995 c 141 art 3 s 20; 1997 c 233 art 1 s 48-50; 2004 c 267 art 5 s 1; 1Sp2005 c 8
art 10 s 59; 2006 c 277 art 3 s 6,7