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Minnesota Legislature

Office of the Revisor of Statutes

353A.05 ACTIONS PRELIMINARY TO CONSOLIDATION FINALIZATION.
    Subdivision 1. Commission actions. Upon initiation of consolidation as provided in section
353A.04, the executive director of the commission shall direct the actuary retained under section
356.214 to undertake the preparation of the actuarial calculations necessary to complete the
consolidation.
These actuarial calculations shall include for each active member, each deferred former
member, each retired member, and each current beneficiary the computation of the present value
of future benefits, the future normal costs, if any, and the actuarial accrued liability on the basis of
the existing relief association benefit plan and on the basis of the public employees police and fire
fund benefit plan. These actuarial calculations shall also include for the total active, deferred,
retired, and benefit recipient membership the sum of the present value of future benefits, the
future normal costs, if any, and the actuarial accrued liability on the basis of the existing relief
association benefit plan, on the basis of the public employees police and fire fund benefit plan,
and on the basis of the benefit plan which produced the largest present value of future benefits
for each person. The actuarial calculations shall be prepared using the entry age actuarial cost
method for all components of the benefit plan and using the actuarial assumptions applicable to
the fund for the most recent actuarial valuation prepared under section 356.215, except that
the actuarial calculations on the basis of the existing relief association benefit plan shall be
prepared using an interest rate actuarial assumption during the postretirement period which
is in the same amount as the interest rate actuarial assumption applicable to the preretirement
period. The actuarial calculations shall include the computation of the present value of the initial
postretirement adjustment anticipated by the executive director of the state board as payable
after the effective date of the consolidation from the Minnesota postretirement investment fund
under section 11A.18.
The chief administrative officer of the relief association shall, upon request, provide in a
timely manner to the executive director of the commission and to the actuary retained under
section 356.214 the most current available information or documents, whichever applies,
regarding the demographics of the active, deferred, retired, and benefit recipient membership of
the relief association, the financial condition of the relief association, and the existing benefit
plan of the relief association.
Upon completion of the actuarial calculations required by this subdivision, the actuary
retained under section 356.214 shall issue a report in the form of an appropriate summary of the
actuarial calculations and shall provide a copy of that report to the executive director of the
commission, the executive director of the Public Employees Retirement Association, the chief
administrative officer of the relief association, the chief administrative officer of the municipality
in which the relief association is located, and the state auditor.
    Subd. 2. State board actions. Upon approval of consolidation by the membership as
provided in section 353A.04, the executive director of the state board shall review the existing
investment portfolio of the relief association for compliance with the requirements and limitations
set forth in sections 11A.09, 11A.14, 11A.18, 11A.23, and 11A.24 and for appropriateness for
retention in the light of the established investment objectives of the state board. The executive
director of the state board, using any reporting service retained by the state board, shall determine
the approximate market value of the existing assets of the relief association upon the effective
date of consolidation and the transfer of assets from the relief association to the individual relief
association consolidation accounts at market value.
The state board may require that the relief association liquidate any investment security or
other item of value which is determined to be ineligible or inappropriate for retention by the state
board. The liquidation shall occur before the effective date of consolidation and transfer of assets.
If requested to do so by the chief administrative officer of the relief association or of the
municipality, the state board shall provide advice on the means and procedures available to
liquidate investment securities and other assets determined to be ineligible or inappropriate.
    Subd. 3. Association actions. Upon receipt of the report of actuarial calculations under
subdivision 1 and notice from the state board of the completion of the preliminary actions under
subdivision 2, the association shall notify the chief administrative officer of the municipality and
the chief administrative officer of the relief association of the completion of the preliminary
actions.
History: 1987 c 296 s 12; 1992 c 432 art 2 s 28; 1999 c 99 s 17; 2006 c 271 art 3 s 47