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Chapter 354A

Section 354A.12

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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

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 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 the cities of Duluth and St.
Paul, including levies for any employer Social Security taxes for teachers covered by the Duluth
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

St. Paul Teachers Retirement

Fund Association
4.50 percent
(3) for any basic member of the St. Paul Teachers Retirement Fund Association, the
employing unit shall make a regular employer contribution to the respective retirement fund in an
amount equal to 8.00 percent of the salary of the basic member;
(4) for a basic member of the St. Paul Teachers Retirement Fund Association, the employing
unit shall make an additional employer contribution to the respective fund in an amount equal to
3.64 percent of the salary of the basic member;
(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

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 fiscal year after fiscal
year 2006, these payments to the first class city teachers retirement fund associations must be
$2,827,000 for St. Paul, $12,954,000 to the Teachers Retirement Association for the former
Minneapolis Teachers Retirement Fund Association, 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 Teachers Retirement Association. (a)
Special School District No. 1 must make an additional employer contribution to the Teachers
Retirement Fund Association. The city of Minneapolis must make a contribution to the Teachers
Retirement Association. This contribution must 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) $1,125,000 must be contributed by Special School District No. 1 and $1,125,000 must be
contributed by the city of Minneapolis to the Teachers Retirement Association under paragraph
(a), and the state shall pay to the Teachers Retirement Association $2,500,000 each fiscal year.
The superintendent of Special School District No. 1, the mayor of the city of Minneapolis,
and the executive director of the Teachers Retirement 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 Teachers Retirement 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 Teachers Retirement 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
, which must continue to be paid to the Teachers Retirement Association until 2037,
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 St. Paul
Teachers Retirement Fund Association terminate 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 under section 356.214, 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 under section 356.214.
(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 the St. Paul Teachers Retirement Fund Association is funded at the funding ratio
applicable to the Teachers Retirement Association when the provisions of paragraph (b) become
effective, then any state aid previously distributed to that association must be immediately
transferred to the Teachers Retirement Association.
    Subd. 3d. Supplemental administrative expense assessment. (a) The active and retired
membership 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 the St. Paul
Teachers Retirement Fund Association are those expenses for the fiscal year that:
(1) exceed, for the St. Paul Teachers Retirement Fund Association, $443,745 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 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 the St. Paul 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.
History: 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; 2006 c 271 art 3 s 47; 2006 c 277 art 3 s 18-24