2007 Minnesota Statutes

356.214 ACTUARIAL VALUATION PREPARATION; JOINT RETENTION OF
CONSULTING ACTUARY.
    Subdivision 1. Joint retention. (a) The chief administrative officers of the Minnesota State
Retirement System, the Public Employees Retirement Association, the Teachers Retirement
Association, the Duluth Teachers Retirement Fund Association, the Minneapolis Employees
Retirement Fund, and the St. Paul Teachers Retirement Fund Association, jointly, on behalf of the
state, its employees, its taxpayers, and its various public pension plans, shall contract with an
established actuarial consulting firm to conduct annual actuarial valuations and related services
for the retirement plans named in paragraph (b). The principal from the actuarial consulting firm
on the contract must be an approved actuary under section 356.215, subdivision 1, paragraph (c).
Prior to becoming effective, the contract under this section is subject to a review and approval
by the Legislative Commission on Pensions and Retirement.
(b) The contract for actuarial services must include the preparation of actuarial valuations
and related actuarial work for the following retirement plans:
(1) the teachers retirement plan, Teachers Retirement Association;
(2) the general state employees retirement plan, Minnesota State Retirement System;
(3) the correctional employees retirement plan, Minnesota State Retirement System;
(4) the State Patrol retirement plan, Minnesota State Retirement System;
(5) the judges retirement plan, Minnesota State Retirement System;
(6) the Minneapolis employees retirement plan, Minneapolis Employees Retirement Fund;
(7) the public employees retirement plan, Public Employees Retirement Association;
(8) the public employees police and fire plan, Public Employees Retirement Association;
(9) the Duluth teachers retirement plan, Duluth Teachers Retirement Fund Association;
(10) the St. Paul teachers retirement plan, St. Paul Teachers Retirement Fund Association;
(11) the legislators retirement plan, Minnesota State Retirement System;
(12) the elective state officers retirement plan, Minnesota State Retirement System; and
(13) local government correctional service retirement plan, Public Employees Retirement
Association.
(c) The contract must require completion of the annual actuarial valuation calculations on a
fiscal year basis, with the contents of the actuarial valuation calculations as specified in section
356.215, and in conformity with the standards for actuarial work adopted by the Legislative
Commission on Pensions and Retirement.
The contract must require completion of annual experience data collection and processing
and a quadrennial published experience study for the plans listed in paragraph (b), clauses (1),
(2), and (7), as provided for in the standards for actuarial work adopted by the commission. The
experience data collection, processing, and analysis must evaluate the following:
(1) individual salary progression;
(2) the rate of return on investments based on the current asset value;
(3) payroll growth;
(4) mortality;
(5) retirement age;
(6) withdrawal; and
(7) disablement.
The contract must include provisions for the preparation of cost analyses by the jointly
retained actuary for proposed legislation that include changes in benefit provisions or funding
policies prior to their consideration by the Legislative Commission on Pensions and Retirement.
(d) The actuary retained by the joint retirement systems shall annually prepare a report to
the legislature, including a commentary on the actuarial valuation calculations for the plans
named in paragraph (b) and summarizing the results of the actuarial valuation calculations. The
actuary shall include with the report the actuary's recommendations to the legislature concerning
the appropriateness of the support rates to achieve proper funding of the retirement plans by the
required funding dates. The actuary shall, as part of the quadrennial experience study, include
recommendations to the legislature on the appropriateness of the actuarial valuation assumptions
required for evaluation in the study.
(e) If the actuarial gain and loss analysis in the actuarial valuation calculations indicates a
persistent pattern of sizable gains or losses, as directed by the joint retirement systems or as
requested by the chair of the Legislative Commission on Pensions and Retirement, the actuary
shall prepare a special experience study for a plan listed in paragraph (b), clause (3), (4), (5), (6),
(8), (9), (10), (11), (12), or (13), in the manner provided for in the standards for actuarial work
adopted by the commission.
(f) The term of the contract between the joint retirement systems and the actuary retained
may not exceed five years. The joint retirement system administrative officers shall establish
procedures for the consideration and selection of contract bidders and the requirements for the
contents of an actuarial services contract under this section. The procedures and requirements
must be submitted to the Legislative Commission on Pensions and Retirement for review and
comment prior to final approval by the joint administrators. The contract is subject to the
procurement procedures under chapter 16C. The consideration of bids and the selection of a
consulting actuarial firm by the chief administrative officers must occur at a meeting that is
open to the public and reasonable timely public notice of the date and the time of the meeting
and its subject matter must be given.
(g) The actuarial services contract may not limit the ability of the Minnesota legislature and
its standing committees and commissions to rely on the actuarial results of the work prepared
under the contract.
(h) The joint retirement systems shall designate one of the retirement system executive
directors as the actuarial services contract manager.
    Subd. 2. Allocation of actuarial costs. (a) The actuarial services contract manager shall
assess each retirement plan specified in subdivision 1, paragraph (b), its appropriate portion of the
total compensation paid to the actuary retained by the joint retirement systems for the actuarial
valuation calculations and quadrennial experience studies. The total assessment is 100 percent
of the amount of contract compensation for the actuarial consulting firm for actuarial valuation
calculations, including any public employees police and fire plan consolidation accounts of the
Public Employees Retirement Association established after March 1, 1999, annual experience
data collection and processing, and quadrennial experience studies.
The portion of the total assessment payable by each retirement system or pension plan must
be determined based on each plan's proportion of the actuarial services required, as determined
by the retained actuary, to complete the actuarial valuation calculations, annual experience data
collection and processing, and quadrennial experience studies for all plans.
The assessment must be made within 30 days following the end of the fiscal year and must
be reported to the chief administrative officers of the applicable retirement plans. The amount of
the assessment is appropriated from the retirement fund applicable to the retirement plan.
(b) The actuarial services contract manager shall assess each retirement plan or each interest
group which requested the preparation of a cost analysis for proposed legislation the cost of
the actuary retained by the joint retirement systems incurred in the cost analysis preparation.
With respect to interest groups, the actuarial services contract manager shall obtain a written
commitment for the payment of the assessment in advance of the cost analysis preparation
and may require an advance deposit or advance payment before authorizing the cost analysis
preparation. The retirement plan or the interest group shall pay the assessment within 30 days of
the date on which the assessment is billed. The amount of the assessment is appropriated from
the retirement fund applicable to the retirement plan for cost analyses requested by a retirement
plan or system.
(c) The actuarial services contract manager shall assess to the Legislative Commission on
Pensions and Retirement the cost of the actuarial cost analysis preparation for the proposed
legislation requested by the chair of the Legislative Commission on Pensions and Retirement or
by the commission executive director. The commission shall pay the assessment within 30 days
of the date on which the assessment is billed.
    Subd. 3. Reporting to commission. A copy of the actuarial valuations, experience studies,
and actuarial cost analyses prepared by the actuary retained by the joint retirement systems under
the contract provided for in this section must be filed with the executive director of the Legislative
Commission on Pensions and Retirement at the same time that the document is transmitted to the
actuarial services contract manager or to any other document recipient.
History: 2004 c 223 s 6; 2006 c 277 art 3 s 32