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    Subdivision 1. Management; composition; election. (a) The management of the public
employees retirement fund is vested in an 11-member board of trustees consisting of ten members
and the state auditor. The state auditor may designate a deputy auditor with expertise in pension
matters as the auditor's representative on the board. The governor shall appoint five trustees to
four-year terms, one of whom shall be designated to represent school boards, one to represent
cities, one to represent counties, one who is a retired annuitant, and one who is a public member
knowledgeable in pension matters. The membership of the association, including recipients of
retirement annuities and disability and survivor benefits, shall elect five trustees for terms of four
years, one of whom must be a member of the police and fire fund and one of whom must be a
former member who met the definition of public employee under section 353.01, subdivisions 2
and 2a
, for at least five years prior to terminating membership or a member who receives a
disability benefit. Terms expire on January 31 of the fourth year, and positions are vacant until
newly elected members are seated. Except as provided in this subdivision, trustees elected by the
membership of the association must be public employees and members of the association.
(b) For seven days beginning October 1 of each year preceding a year in which an election is
held, the association shall accept at its office filings in person or by mail of candidates for the
board of trustees. A candidate shall submit at the time of filing a nominating petition signed by
25 or more members of the association. No name may be withdrawn from nomination by the
nominee after October 15. At the request of a candidate for an elected position on the board of
trustees, the board shall mail a statement of up to 300 words prepared by the candidate to all
persons eligible to vote in the election of the candidate. The board may adopt policies, subject to
review and approval by the secretary of state under paragraph (e), to govern the form and length
of these statements, timing of mailings, and deadlines for submitting materials to be mailed. The
secretary of state shall resolve disputes between the board and a candidate concerning application
of these policies to a particular statement.
(c) By January 10 of each year in which elections are to be held, the board shall distribute
by mail to the members ballots listing the candidates. No member may vote for more than
one candidate for each board position to be filled. A ballot indicating a vote for more than
one person for any position is void. No special marking may be used on the ballot to indicate
incumbents. Ballots mailed to the association must be postmarked no later than January 31. The
ballot envelopes must be so designated and the ballots must be counted in a manner that ensures
that each vote is secret.
(d) A candidate who receives contributions or makes expenditures in excess of $100, or
has given implicit or explicit consent for any other person to receive contributions or make
expenditures in excess of $100 for the purpose of bringing about the candidate's election, shall file
a report with the campaign finance and public disclosure board disclosing the source and amount
of all contributions to the candidate's campaign. The campaign finance and public disclosure
board shall prescribe forms governing these disclosures. Expenditures and contributions have
the meaning defined in section 10A.01. These terms do not include the mailing made by the
association board on behalf of the candidate. A candidate shall file a report within 30 days
from the day that the results of the election are announced. The Campaign Finance and Public
Disclosure Board shall maintain these reports and make them available for public inspection in
the same manner as the board maintains and makes available other reports filed with it.
(e) The secretary of state shall review and approve the procedures defined by the board
of trustees for conducting the elections specified in this subdivision, including board policies
adopted under paragraph (b).
(f) The board of trustees and the executive director shall undertake their activities consistent
with chapter 356A.
    Subd. 1a. Vacancy, how filled. Any vacancy on the board caused by death, resignation, or
removal of any trustee, or occurring because an elected trustee ceases to be a public employee
and an active member of the association, must be filled by the board for trustees elected by
members, and by the governor for other trustees, for the unexpired portion of the term in which
the vacancy occurs. The board shall adopt policies and procedures governing how the vacancy
of an elected trustee is to be filled.
    Subd. 2. No compensation expenses. The members of the board of trustees shall serve
without compensation, but shall be reimbursed out of the retirement fund for expenses actually
and necessarily paid or incurred in the performance of their duties. Members of the board of
trustees shall suffer no loss of compensation from a public employer by reason of service on or
for the board or on any authorized committee thereof.
    Subd. 2a.[Repealed, 1977 c 429 s 65]
    Subd. 2b. Board legal authority. The board is authorized to take legal action when
necessary to effectively administer the various retirement plans administered by the association,
consistent with applicable articles of incorporation, bylaws, law, and rules, as applicable, and
including, but not limited to, the recapture of overpaid annuities, benefits, or refunds, and the
correction of omitted or deficient deductions.
    Subd. 3. Duties and powers of the board. (a) The board shall:
    (1) elect a president and vice-president;
    (2) approve the staffing complement, as recommended by the executive director, necessary
to administer the fund;
     (3) adopt bylaws for its own government and for the management of the fund consistent with
the laws of the state and may modify them at pleasure;
    (4) adopt, alter, and enforce reasonable rules consistent with the laws of the state and the
terms of the applicable benefit plans for the administration and management of the fund, for the
payment and collection of payments from members and for the payment of withdrawals and
benefits, and that are necessary in order to comply with the applicable federal Internal Revenue
Service and Department of Labor requirements;
    (5) pass upon and allow or disallow all applications for membership in the fund and allow or
disallow claims for withdrawals, pensions, or benefits payable from the fund;
    (6) adopt an appropriate mortality table based on experience of the fund as recommended by
the association actuary and approved under section 356.215, subdivision 18, with interest set at
the rate specified in section 356.215, subdivision 8;
    (7) provide for the payment out of the fund of the cost of administering this chapter, of all
necessary expenses for the administration of the fund and of all claims for withdrawals, pensions,
or benefits allowed; and
    (8) approve or disapprove all recommendations and actions of the executive director made
subject to its approval or disapproval by subdivision 3a.
    (b) In passing upon all applications and claims, the board may summon, swear, hear, and
examine witnesses and, in the case of claims for disability benefits, may require the claimant to
submit to a medical examination by a physician of the board's choice, at the expense of the fund,
as a condition precedent to the passing on the claim, and, in the case of all applications and
claims, may conduct investigations necessary to determine their validity and merit.
    (c) The board may continue to authorize the sale of life insurance to members under the
insurance program in effect on January 1, 1985, but must not change that program without the
approval of the commissioner of finance. The association shall not receive any financial benefit
from the life insurance program beyond the amount necessary to reimburse the association for
costs incurred in administering the program. The association shall not engage directly or indirectly
in any other activity involving the sale or promotion of goods or services, or both, whether to
members or nonmembers.
    (d) The board shall establish procedures governing reimbursement of expenses to board
members. These procedures must define the types of activities and expenses that qualify for
reimbursement, must provide that all out-of-state travel be authorized by the board, and must
provide for the independent verification of claims for expense reimbursement. The procedures
must comply with the applicable rules and policies of the Department of Finance, the Department
of Administration, and the Department of Employee Relations.
    (e) The board may purchase fiduciary liability insurance and official bonds for the officers
and members of the board of trustees and employees of the association and may purchase
property insurance or may establish a self-insurance risk reserve including, but not limited to, data
processing insurance and "extra-expense" coverage.
    Subd. 3a. Executive director. (a) Appointment. The board shall appoint an executive
director on the basis of education, experience in the retirement field, and leadership ability. The
executive director must have had at least five years' experience in an executive level management
position, which has included responsibility for pensions, deferred compensation, or employee
benefits. The executive director serves at the pleasure of the board. The salary of the executive
director is as provided by section 15A.0815.
    (b) Duties. The management of the association is vested in the executive director who
shall be the executive and administrative head of the association. The executive director shall
act as adviser to the board on all matters pertaining to the association and shall also act as the
secretary of the board. The executive director shall:
    (1) attend all meetings of the board;
    (2) prepare and recommend to the board appropriate rules to carry out the provisions
of this chapter;
    (3) establish and maintain an adequate system of records and accounts following recognized
accounting principles and controls;
    (4) designate, with the approval of the board, up to two persons who may serve in the
unclassified service and whose salaries are set in accordance with section 43A.18, subdivision 3,
appoint a confidential secretary in the unclassified service, and appoint employees to carry out
this chapter, who are subject to chapters 43A and 179A in the same manner as are executive
branch employees;
    (5) organize the work of the association as the director deems necessary to fulfill the
functions of the association, and define the duties of its employees and delegate to them any
powers or duties, subject to the control of, and under such conditions as, the executive director
may prescribe;
    (6) with the approval of the board, contract for the services of an approved actuary,
professional management services, and any other consulting services as necessary to fulfill
the purposes of this chapter. All contracts are subject to chapter 16C. The commissioner of
administration shall not approve, and the association shall not enter into, any contract to provide
lobbying services or legislative advocacy of any kind. Any approved actuary retained by the
executive director shall function as the actuarial advisor of the board and the executive director
and may perform actuarial valuations and experience studies to supplement those performed by
the actuary retained under section 356.214. Any supplemental actuarial valuations or experience
studies shall be filed with the executive director of the Legislative Commission on Pensions
and Retirement. Copies of professional management survey reports shall be transmitted to
the secretary of the senate, the chief clerk of the house of representatives, and the Legislative
Reference Library as provided by section 3.195, and to the executive director of the commission
at the same time as reports are furnished to the board. Only management firms experienced in
conducting management surveys of federal, state, or local public retirement systems shall be
qualified to contract with the director hereunder;
    (7) with the approval of the board provide in-service training for the employees of the
    (8) make refunds of accumulated contributions to former members and to the designated
beneficiary, surviving spouse, legal representative or next of kin of deceased members or deceased
former members, as provided in this chapter;
    (9) determine the amount of the annuities and disability benefits of members covered by the
association and authorize payment of the annuities and benefits beginning as of the dates on which
the annuities and benefits begin to accrue, in accordance with the provisions of this chapter;
    (10) pay annuities, refunds, survivor benefits, salaries, and necessary operating expenses of
the association;
    (11) prepare and submit to the board and the legislature an annual financial report covering
the operation of the association, as required by section 356.20;
    (12) prepare and submit biennial and annual budgets to the board for its approval and submit
the approved budgets to the Department of Finance for approval by the commissioner;
    (13) reduce all or part of the accrued interest payable under section 353.27, subdivisions
12, 12a, and 12b
, or 353.28, subdivision 5, upon receipt of proof by the association of an
unreasonable processing delay or other extenuating circumstances of the employing unit. The
executive director shall prescribe and submit for approval by the board the conditions under which
such interest may be reduced; and
    (14) with the approval of the board, perform such other duties as may be required for the
administration of the association and the other provisions of this chapter and for the transaction
of its business.
    Subd. 4. Offices. The commissioner of administration shall make provision for suitable
office space in the public pension fund facilities created under section 356B.10.
    Subd. 5. Application of laws. Laws applicable to state agencies and agencies with statewide
jurisdiction shall apply to the association.
History: (254-25) 1931 c 307 s 3; 1949 c 84 s 2; 1951 c 22 s 16; 1959 c 650 s 8,58; 1963 c
641 s 13; 1967 c 641 s 1; 1969 c 940 s 3; 1971 c 106 s 10,11; 1973 c 753 s 19,20; 1974 c 229 s
9; 1975 c 102 s 5-8; 1976 c 329 s 17,18; 1977 c 429 s 18; 1978 c 796 s 28; 1979 c 216 s 6,7;
1981 c 180 s 2-4; 1981 c 224 s 79; 1984 c 462 s 27; 1985 c 11 s 5-10; 1986 c 444; 1987 c 259
s 26; 1987 c 284 art 5 s 3; 1988 c 709 art 5 s 9; 1989 c 319 art 8 s 16; 1991 c 341 s 7; 1994
c 528 art 2 s 6,7; 1997 c 202 art 2 s 63; 2Sp1997 c 3 s 18; 1998 c 386 art 2 s 87; 1999 c 99 s
16; 1999 c 222 art 22 s 2; 2002 c 392 art 11 s 52; 2004 c 223 s 3; 2006 c 271 art 3 s 13-15;
2007 c 134 art 2 s 19-21; art 6 s 1

Official Publication of the State of Minnesota
Revisor of Statutes