2007 Minnesota Statutes

CHAPTER 422A. RETIREMENT ALLOWANCES, MINNEAPOLIS

422A.01 DEFINITIONS.
    Subdivision 1. Scope. For purposes of this chapter the terms defined in this section shall
have the following meanings.
    Subd. 2. City. "City" means the city of Minneapolis.
    Subd. 3. Retirement allowance. "Retirement allowance" means either a service allowance
to which an employee may be entitled who retires from the city service after having attained the
minimum established age for retirement or a "disability allowance" to which an employee may
be entitled who retires from the city service as a result of disability before having attained the
minimum age for retirement.
    Subd. 4. Annuity. "Annuity" means payments for life derived from contributions made
by an employee, as provided in this chapter.
    Subd. 4a. Average salary. (a) "Average salary" means the arithmetic average annual salary,
wages, or compensation of the member from the city for any five calendar years out of the last
ten calendar years of service, except as provided for in section 422A.16, which may include the
year in which the employee retires, as selected by the employee.
(b) A member with more than five calendar years of service, but less than ten calendar years,
may select any five calendar years of service to determine the average salary. A member with less
than five years of service with the city shall use all earnings to determine the average salary.
    Subd. 5. Pension. "Pension" means payments for life derived from credits allowed and
appropriations made by the city, as provided in this chapter.
    Subd. 6. Present worth or present value. "Present worth" or "present value" means that the
present amount of money if increased at the applicable postretirement or preretirement interest
rate assumption specified in section 356.215, subdivision 8, and based on the mortality table
adopted by the board of trustees based on the experience of the fund as recommended by the
actuary retained under section 356.214, and approved under section 356.215, subdivision 18, will
at retirement equal the actuarial accrued liability of the annuity already earned.
    Subd. 7. Actuarial equivalent. "Actuarial equivalent" means the condition of one annuity or
benefit having an equal present worth or present value as another annuity or benefit.
    Subd. 8. Established age. "Established age" means the minimum age for retirement on a
service allowance as specified by or pursuant to this chapter.
    Subd. 9. Public corporation. "Public corporation" includes Metropolitan Airports
Commission, Metropolitan Council and municipal employees retirement fund.
    Subd. 10. Unfunded actuarial accrued liability. "Unfunded actuarial accrued liability"
means the difference between the actuarial accrued liability to date and the corresponding assets
valued under section 356.215, subdivision 1, clause (6).
    Subd. 11. Employee. "Employee" means a person who is not exempted from the contributing
class under section 422A.09, subdivision 3, who was employed before July 1, 1979, by and paid,
in whole or in part, by the city or any of its boards, departments, or commissions, operated as a
department of city government or independently if financed in whole or in part by city funds,
including a person who was employed by a public corporation as herein defined, a person who
was employed before July 1, 1979, by Special School District No. 1, and who is not a member
of any other retirement system, and a person who was employed before July 1, 1973, by the
county of Hennepin, who was entitled by law to elect and has elected to retain membership in the
Minneapolis Employees Retirement Fund and who makes any required member contributions
to the fund and who remains so employed.
    Subd. 12. Dependent. "Dependent" means a spouse, child, or any person actually dependent
upon and receiving over 50 percent of support from such employee.
    Subd. 13. Postretirement investment fund annuity. "Postretirement investment fund
annuity" means all retirement and disability payments made by the fund under the terms of this
chapter as adjusted from time to time. This does not include payments, if any, from sources other
than participation in the Minnesota postretirement investment fund.
    Subd. 13a. Covered salary. (a) "Salary" is subject to the limitations of section 356.611.
    (b) "Salary" also includes the contributions to a supplemental retirement plan under section
356.24, subdivision 1, clause (8), (9), or (10), for an employee who is covered by a supplemental
retirement plan which requires that all plan contributions be made by the person's employer from
mandatory withholdings from the employee's wages.
    Subd. 14.[Repealed, 1981 c 224 s 276]
    Subd. 15.[Repealed, 1981 c 224 s 276]
    Subd. 16.[Repealed, 1981 c 224 s 276]
    Subd. 17. Firefighter. "Firefighter," for purposes of section 422A.151, means an employee
of the metropolitan airports commission who was employed by the commission before June 30,
1978, and whose employment duties include, at a minimum, full-time service as an employee
of a designated fire company who is engaged primarily in fire suppression and related duties, or
as a person who is in charge of a designated fire company or companies and who is engaged in
the hazards of fire fighting.
    Subd. 18. Licensed peace officer. "Licensed peace officer," for purposes of section
422A.151, means an employee of the Metropolitan Airports Commission who was employed
by the commission before June 30, 1978, and whose employment duties include, at a minimum,
full-time service as an officer whose primary job it is to enforce the law, who is licensed by the
Minnesota Board of Peace Officer Standards and Training under sections 626.84 to 626.863,
who is engaged in the hazards of protecting the safety and property of others, and who has the
power to arrest by warrant.
History: 1973 c 133 s 1; 1974 c 422 art 2 s 7; 1977 c 399 s 9-11; 1980 c 607 art 14 s 45
subd 2; 1981 c 224 s 179,274; 1986 c 444; 1987 c 259 s 61-63; 1992 c 596 s 4,5; 1994 c 628
art 3 s 33; 1997 c 7 art 1 s 138; 2002 c 392 art 11 s 52; 1Sp2005 c 8 art 1 s 24,25; art 3 s 8;
art 10 s 67,80; 2007 c 134 art 8 s 1
NOTE:The amendment to subdivision 13a by Laws 2007, chapter 134, article 8, section 1,
is effective the day after compliance if the city council of the city of Minneapolis and its chief
clerical officer timely complete their compliance with Minnesota Statutes, section 645.021,
subdivisions 2 and 3. Laws 2007, chapter 134, article 8, section 9.

422A.02 RETIREMENT BOARD; MEMBERS.
A retirement board of seven members is hereby constituted which shall consist of the
following:
(1) mayor, or a designee selected by the mayor;
(2) one member of the city council selected by the council; and
(3) five legally qualified voters to be chosen by the members of the retirement fund created by
this chapter at least two of whom shall be retired members. The members may form an association
for that purpose and the employing authorities are authorized to make payroll deductions for
the payment of dues to the association. The persons selected shall serve for staggered terms
of three years from the first of the next succeeding January after their election, and until their
successors are duly elected. The selection shall be made by the members of the association during
the first week of December of each year. Vacancies occurring by death, resignation, or removal of
representatives shall be filled by representatives chosen by the members of the association.
History: 1973 c 133 s 2; 1977 c 429 s 50; 1980 c 607 art 16 s 1; 1983 c 160 s 5; 1Sp2005
c 8 art 10 s 80

422A.03 MEETINGS; EMPLOYEES; RULES AND REGULATIONS.
    Subdivision 1. Meetings; employees. The retirement board shall meet on the third Tuesday
of each calendar month of each year and may adjourn from time to time. Special meetings may be
held upon the call of the president. The board shall, by a four-sevenths vote of all members of
the board, appoint an executive director, who shall have charge of the performance of the duties
required by the provisions of this chapter, and who shall appoint other necessary employees to
positions approved in advance by the board. If at the time of appointment as executive director the
appointee holds a position subject to the civil service rules and regulations of the city the appointee
shall be deemed to be on leave of absence from the civil service position during tenure as
executive director, and upon termination of service shall be returned to the appointee's permanent
civil service classification. If no vacancy is available in the appointee's permanent civil service
classified position, seniority shall prevail, and the person most recently certified to the position
shall be returned to the permanent civil service classification held prior to such certification.
    Subd. 2. Removal of executive director; classification of employees. The executive
director may be removed by a four-sevenths vote of all members of the board at a meeting called
for that purpose. Before exercising the power of removal, 15 days' written notice shall be given to
the executive director setting forth the cause for removal and stating the time and place where
the charges will be heard. The hearing shall be open to the public. Other employees under the
supervision of the board and employees appointed hereafter shall be subject to applicable civil
service laws and rules of the city unless the board determines that they should be unclassified.
The compensation of the executive director and the other employees under the supervision of the
board shall be fixed by the board.
    Subd. 3. Officers. At the regular meeting in January each year, the board shall elect from
among its members a president, a vice-president, and a secretary-treasurer, who shall hold office
for one year or until successors have been elected and qualified. The president, if present, shall
preside at all meetings. In the absence of the president the vice-president shall preside and have
all the powers of the president while acting as such. The recording secretary shall keep a record of
all proceedings of the board, which shall be open to public inspection. At least one of the officers
of the board shall be one of the representatives elected by the employees of the city to the board.
    Subd. 4. Rules. Subject to the limitations of law, the board shall from time to time establish
rules and regulations for the administration of the fund or funds created by this chapter and for the
transaction of its business. Roberts rules of order shall be the rules of order of the board except
as otherwise specifically adopted.
    Subd. 5. Powers of executive director. For the purpose of administration, except as
otherwise herein provided, the executive director, under the direction of the board, shall perform
any and all acts and make regulations as may be necessary and proper for the purpose of carrying
out the provisions of this chapter.
History: 1973 c 133 s 3; 1977 c 429 s 52; 1979 c 293 s 5,6; 1980 c 607 art 16 s 2-5,17 subd
3; 1983 c 160 s 6; 1986 c 444; 1991 c 206 s 3; 1Sp2005 c 8 art 10 s 80

422A.04 EXPENSES; REPORTS; RECORDS; POWERS.
    Subdivision 1. Requirements of board members. The members of the retirement board
shall serve without compensation but shall be reimbursed for any necessary expenditures and no
employee shall suffer loss of salary or wages through serving on the board. Every member of the
board shall take a similar oath of office as taken by employees of the city and such oath shall be
subscribed to by each member and filed with the clerk of the city.
    Subd. 2. Actuarial data. The board shall keep in convenient form any data necessary for the
preparation of the annual actuarial valuation of the fund created by this chapter. The actuarial
valuation of the fund shall be governed by the provisions of chapter 356.
    Subd. 3. Experience data and mortality tables. The board shall prepare and keep any
needful tables, records, and accounts required for carrying out the provisions of sections 422A.01
to 422A.25, including data showing the mortality and disability experience of the officers and
employees of the service and the date of withdrawal from service, and any other information that
may serve as a guide for future actuarial valuations and adjustments in the actuarial assumptions
for the retirement fund. Mortality tables shall be adopted and may be modified from time to time
by the board based on the experience of the fund as recommended by the actuary retained under
section 356.214 as a basis of calculation for retirement allowances, with any recommendation by
the actuary retained as a part of the permanent records of the board.
    Subd. 4. Other powers. The board shall perform such other functions as are required for
the execution of the provisions of this chapter. For the purposes of this chapter, the board shall
possess the powers and privileges of a corporation, and as such may sue and be sued, and shall
have the right to issue subpoenas and to compel the attendance of witnesses.
History: 1973 c 133 s 4; 1987 c 259 s 64,65; 1Sp2005 c 8 art 10 s 80; 2006 c 271 art 3 s 47

422A.05 TRUSTEE OF FUNDS.
    Subdivision 1. Power over funds. The members of the retirement board shall be the trustees
and custodians of the several funds created by this chapter and shall have exclusive control
and management of these funds, and power to invest them and to hold, purchase, sell, assign,
transfer, or dispose of any of the securities and investments in which any of the funds created
by this chapter shall have been invested as well as the proceeds of the investments, and of
the money belonging to these funds. The power to manage and invest the assets of the funds
must be exercised by the retirement board solely through professional investment or property
management firms that are independent of the retirement fund. No financial or property assets of
the funds may be managed, serviced, or invested internally or in-house at the retirement fund,
except that any investment held by a fund on February 1, 1993, that is not readily tradable on
an established securities exchange may continue to be managed directly by the retirement board
until the investment is converted to cash. The retirement board's functions under this section
consist primarily of establishing and effectuating investment policy and structure, managing the
investment process, monitoring and measuring the performance of the external independent
professional investment or property management firms, retaining or terminating agreements with
these firms, apportioning the assets of the funds to be managed among these firms, and making
financial decisions on issues if approvals have been specifically reserved by and to the board.
    Subd. 2.[Repealed, 1980 c 607 art 16 s 19]
    Subd. 2a. Fiduciary duty. (a) In the discharge of their respective duties, the members of the
board, the executive director, the board staff, and any person charged with the responsibility of
servicing assets of the funds pursuant to the standards set forth in this chapter shall act in good
faith and shall exercise that degree of judgment and care, under circumstances then prevailing,
which persons of prudence, discretion, and intelligence exercise in the management of their own
affairs, not for speculation, but for investment, considering the probable safety of their capital as
well as the probable income to be derived therefrom. In addition, the members of the board and
the chief administrative officer shall act in a manner consistent with chapter 356A.
(b) Individuals authorized by the board to manage or invest the assets of the funds must
act in a manner consistent with chapter 356A. In addition, these individuals must act in good
faith and exercise that degree of judgment, skill, diligence, and care, under the circumstances
then prevailing, that persons of prudence, discretion, and intelligence acting in a like capacity
and familiar with the activity would exercise.
    Subd. 2b. Conflicts of interest. No member of the board may participate in the deliberations
or the voting on any matter before the board which will or is likely to result in direct, measurable
personal gain to the member.
    Subd. 2c. Minneapolis Employees Retirement Fund investment authority. (a) For
investments made on or after July 1, 1991, the board shall invest funds only in investments
authorized by section 356A.06, subdivision 7.
    (b) However, in addition to real estate investments authorized under paragraph (a), the
board may also make loans to purchasers of Minnesota situs nonfarm residential real estate
that is owned by the Minneapolis Employees Retirement Fund. The loans must be secured by
mortgages or deeds of trust.
    (c) For investments made before July 1, 1991, the board may, but is not required to, comply
with paragraph (a). However, with respect to these investments, the board shall act in accordance
with subdivision 2a and chapter 356A.
    (d) The board may certify assets for investment by the State Board of Investment under
section 11A.17. Alternatively or in addition, the board may certify assets for investment by
the State Board of Investment in fixed income pools or in a separately managed account at the
discretion of the State Board of Investment as provided in section 11A.14.
    Subd. 2d. Account transfers. Notwithstanding any law to the contrary, the retirement board,
subject to the standards of subdivision 2a and chapter 356A, may transfer assets between accounts
established by section 422A.06.
    Subd. 2e. Standing; parties. In addition to other parties with claims under statute or the
common law, the state and a political subdivision that helps to finance a plan have standing to sue
on behalf of all taxpayers and the plan beneficiaries for an alleged breach of fiduciary duty. If
a suit is brought by the state or a political subdivision under this subdivision, no separate suit
regarding the same claims on behalf of taxpayers of the state or a political subdivision or of
beneficiaries may be allowed, and any suit then pending on behalf of taxpayers of the state or a
political subdivision or of beneficiaries must be dismissed unless the court determines that its
dismissal would prejudice or limit the rights or claims of the taxpayers or beneficiaries. Nothing
in this subdivision precludes suits by both the state and an affected political subdivision or suits
by the retirement board on behalf of one or more of the funds.
    Subd. 2f. Attorney fees. The court shall award reasonable attorney fees and costs of
litigation, in addition to damages and other relief, in a suit where a breach of fiduciary duty is
found under subdivision 2a or chapter 356A.
    Subd. 3.[Repealed, 1981 c 298 s 12]
    Subd. 4.[Repealed, 1980 c 607 art 16 s 19]
    Subd. 5. Payments; revolving fund. All payments from the funds created by this chapter
shall be signed by the treasurer, executive director, or other person appointed by the retirement
board, and no payment shall be made except by order of the board duly entered in the record
of its proceedings, except that the board may create a revolving fund in an amount as may be
necessary to be used for the purpose of withdrawals from the fund of excess contributions;
refunds to employees upon their separation from the service and for other purposes as may be
determined by the board. The revolving fund shall be periodically reimbursed as set forth herein.
It shall be subject to withdrawal upon check signed by the executive director, or other person
appointed by the board.
    Subd. 6. Special funds. The board may, in carrying out the provisions of this chapter,
establish special funds supplementing individual contributions by the employees and to receive,
invest, and disburse for such purpose all moneys in the form of donations, gifts, legacies,
bequests, or otherwise which may be contributed by private individuals or corporations or
organizations for the benefit of the city employees generally, or any special employee or class of
employees of the city.
    Subd. 7.[Repealed, 1983 c 286 s 26]
    Subd. 8. Health insurance. The retirement board may authorize the executive director or
the executive director's designee to:
(1) offer the beneficiaries of the fund the option of having their health insurance premiums
deducted automatically from their monthly benefit amounts and paid to a designated insurer; and
(2) provide beneficiaries information about available group health insurance plan options.
Beneficiaries who elect to avail themselves of this service are ultimately responsible for the
timely payment of premiums and the payment of premiums in the proper amount.
History: 1973 c 133 s 5; 1980 c 607 art 16 s 6-11; 1981 c 298 s 4; 1981 c 306 s 2; 1983 c
286 s 18,19; 1983 c 291 s 4; 1989 c 319 art 8 s 19,20; 1990 c 426 art 1 s 47; 1991 c 206 s 4;
1991 c 345 art 4 s 6,7; 1993 c 307 art 10 s 1,2; 1994 c 604 art 2 s 4; 1995 c 262 art 2 s 9;
1Sp2005 c 8 art 10 s 80; 2007 c 134 art 8 s 2
NOTE:The amendment to subdivision 2c by Laws 2007, chapter 134, article 8, section 2, is
effective retroactively from July 1, 2006, if the city council of the city of Minneapolis and its
chief clerical officer timely complete their compliance with Minnesota Statutes, section 645.021,
subdivisions 2 and 3. Laws 2007, chapter 134, article 8, section 9.

422A.06 RETIREMENT FUND.
    Subdivision 1. Creation; divisions of fund. For the purposes of this chapter, there is
established the Minneapolis Employees Retirement Fund. That retirement fund is subdivided into
(1) a deposit accumulation fund, (2) a survivor benefit fund, (3) a disability benefit fund, and (4) a
retirement benefit fund. The expense of the administration of the retirement fund must be paid
from the deposit accumulation fund, less the amount as the retirement board may charge against
income of the retirement benefit fund from investments as the cost of handling the investments of
the retirement benefit fund.
    Subd. 2. Actuarial valuation required. As of July 1 of each year, an actuarial valuation
of the retirement fund shall be prepared by the actuary retained by the joint retirement systems
under section 356.214 and filed in conformance with the provisions and requirements of sections
356.215 to 356.23. Experience studies shall be prepared at those times required by statute,
required by the standards for actuarial work adopted by the Legislative Commission on Pensions
and Retirement or ordered by the board.
The board may contract for the services of an approved actuary and fix the reasonable
compensation for those services. Any approved actuary retained by the board shall function as
the actuarial advisor to the board and may perform actuarial valuations and experience studies to
supplement those performed by the actuary retained by the joint retirement systems under section
356.214. Any supplemental actuarial valuations or experience studies must be filed with the
executive director of the Legislative Commission on Pensions and Retirement.
    Subd. 3. Deposit accumulation fund. (a) The deposit accumulation fund consists of the
assets held in the fund, including amounts contributed by or for employees, amounts contributed
by the city, amounts contributed by municipal activities supported in whole or in part by revenues
other than taxes and amounts contributed by any public corporation, amounts paid by the state,
and by income from investments.
    (b) There must be paid from the fund the amounts required to be transferred to the
retirement benefit fund, or the disability benefit fund, refunds of contributions, including the
death-while-active refund specified in section 422A.22, subdivision 4, postretirement increases in
retirement allowances granted under Laws 1965, chapter 688, or Laws 1969, chapter 859, and
expenses of the administration of the retirement fund which were not charged by the retirement
board against the income of the retirement benefit fund from investments as the cost of handling
the investments of the retirement benefit fund.
    (c) To the extent that the deposit accumulation fund has insufficient assets to transfer the
total value of the required reserves for retirement annuities to either the disability benefit fund
under subdivisions 5 and 7 or the retirement benefit fund under subdivisions 5 and 8 as required,
the deposit accumulation fund has a transfer amount payable on which an interest charge accrues.
The executive director must determine the interest charge for the period that the transfer amount
payable remains unpaid at an annual rate equal to five percent plus the percentage increase in
the amount of the annual Consumer Price Index for urban wage earners and clerical workers as
calculated by the Bureau of Labor Statistics of the United States Department of Labor from
the previous June 30. The interest charge must be reflected in the books of the Minneapolis
Employees Retirement Fund and assessed against the deposit accumulation fund based on the
average quarterly transfer amount payable balance outstanding. Any revenue received by the
deposit accumulation fund subsequent to unpaid transfers must be transferred from the deposit
accumulation fund to the disability benefit fund or to the retirement fund, whichever applies, and
must first be applied to any remaining interest charge and then must be applied to the principal
amount of transfer amount payable outstanding.
    Subd. 4. No participation in the Minnesota postretirement investment fund. The
Minneapolis Employees Retirement Fund shall not participate in the Minnesota postretirement
investment fund.
    Subd. 5. Transfer of reserves to retirement benefit fund; adjustments of annuities
and benefits. (a) Assets equal to the required reserves for retirement annuities as determined
in accordance with the appropriate mortality table adopted by the board of trustees based on
the experience of the fund as recommended by the actuary retained under section 356.214 and
using the postretirement interest assumption specified in section 356.215, subdivision 8, must be
transferred to the disability benefit fund as provided in subdivision 7, or the retirement benefit
fund, except for any amounts payable from the survivor benefit fund, as of date of retirement.
    (b) To the extent that the deposit accumulation fund has insufficient assets to cover a full
required transfer amount, the applicable fund must be credited with an interest-bearing transfer
amount payable.
    (c) Annuity payments must be adjusted in accordance with this chapter, except that no
minimum retirement payments described in this chapter must include any amounts payable
from the survivors' benefit fund or disability benefit fund and supplemented benefits specifically
financed by statute.
    (d) Increases in annuity payments under this section shall be made automatically unless
written notice on a form prescribed by the board is filed with the retirement board requesting that
the increase not be made.
    (e) Any additional annuity which began to accrue on July 1, 1973, or which began to accrue
on January 1, 1974, under Laws 1973, chapter 770, section 1, must be considered as part of
the base amount to be used in determining any postretirement adjustments payable under the
provisions of subdivision 8.
    Subd. 6. Survivor's benefit fund. The survivor's benefit fund consists of the amount held for
survivor benefits, increased by contributions for survivor benefits made by and for employees,
including contributions made by the employer, by any municipal activity supported in whole or in
part by revenue other than taxes or by any public corporation. A proportionate share of income
from investments must be allocated to this fund. Survivor benefits specified in section 422A.23
must be paid from this fund.
    Subd. 7. Disability benefit fund. (a) A disability benefit fund is established, containing the
required reserves for disability allowances under this chapter. A proportionate share of income
from investments must be allocated to this fund and any interest charge under subdivision 3,
paragraph (c), must be credited to the fund. The disability allowances payable under this chapter
must be paid from this fund.
    (b) In the event of the termination of any disability allowance for any reason other than the
death of the recipient, the balance of the required reserves for the disability allowance as of
the date of the termination must be transferred from the disability benefit fund to the deposit
accumulation fund.
    (c) At the end of each fiscal year, as part of the annual actuarial valuation, a determination
must be made of the required reserves for all disability allowances being paid from the disability
benefit fund. Any excess of assets over actuarial required reserves in the disability benefit fund
must be transferred to the deposit accumulation fund. Unless subdivision 3, paragraph (c), applies,
any excess of actuarial reserves over assets in the disability benefit fund must be funded by a
transfer of the appropriate amount of assets from the deposit accumulation fund.
    Subd. 8. Retirement benefit fund. (a) The retirement benefit fund consists of amounts held
for payment of retirement allowances for members retired under this chapter, including any
transfer amount payable under subdivision 3, paragraph (c).
    (b) Unless subdivision 3, paragraph (c), applies, assets equal to the required reserves for
retirement allowances under this chapter determined in accordance with the appropriate mortality
table adopted by the board of trustees based on the experience of the fund as recommended by the
actuary retained under section 356.214 must be transferred from the deposit accumulation fund
to the retirement benefit fund as of the last business day of the month in which the retirement
allowance begins. The income from investments of these assets must be allocated to this fund and
any interest charge under subdivision 3, paragraph (c), must be credited to the fund. There must
be paid from this fund the retirement annuities authorized by law. A required reserve calculation
for the retirement benefit fund must be made by the actuary retained under section 356.214 and
must be certified to the retirement board by the actuary retained under section 356.214.
    (c) The retirement benefit fund must be governed by the applicable laws governing the
accounting and audit procedures, investment, actuarial requirements, calculation and payment of
postretirement benefit adjustments, discharge of any deficiency in the assets of the fund when
compared to the actuarially determined required reserves, and other applicable operations and
procedures regarding the Minnesota postretirement investment fund in effect on June 30, 1997,
established under Minnesota Statutes 1996, section 11A.18, and any legal or administrative
interpretations of those laws of the State Board of Investment, the legal advisor to the Board of
Investment and the executive director of the State Board of Investment in effect on June 30, 1997.
If a deferred yield adjustment account is established for the Minnesota postretirement investment
fund before June 30, 1997, under Minnesota Statutes 1996, section 11A.18, subdivision 5, the
retirement board shall also establish and maintain a deferred yield adjustment account within
this fund.
    (d) Annually, following the calculation of any postretirement adjustment payable from the
retirement benefit fund, the board of trustees shall submit a report to the executive director of
the Legislative Commission on Pensions and Retirement and to the commissioner of finance
indicating the amount of any postretirement adjustment and the underlying calculations on which
that postretirement adjustment amount is based, including the amount of dividends, the amount of
interest, and the amount of net realized capital gains or losses utilized in the calculations.
    (e) With respect to a former contributing member who began receiving a retirement annuity
or disability benefit under section 422A.151, paragraph (a), clause (2), after June 30, 1997, or with
respect to a survivor of a former contributing member who began receiving a survivor benefit
under section 422A.151, paragraph (a), clause (2), after June 30, 1997, the reserves attributable
to the one percent lower amount of the cost-of-living adjustment payable to those annuity or
benefit recipients annually must be transferred back to the deposit accumulation fund to the credit
of the Metropolitan Airports Commission. The calculation of this annual reduced cost-of-living
adjustment reserve transfer must be reviewed by the actuary retained under section 356.214.
History: 1973 c 133 s 6; 1973 c 770 s 1; 1974 c 76 s 1-5; 1977 c 399 s 12; 1980 c 509 s 161;
1980 c 607 art 16 s 12-14; 1981 c 224 s 180-182; 1981 c 298 s 5-9; 1982 c 578 art 3 s 12-15;
1Sp1985 c 7 s 35; 1986 c 444; 1987 c 259 s 66-69; 1991 c 345 art 4 s 8,9; 1996 c 305 art 1 s 98;
1997 c 233 art 1 s 64; 1999 c 222 art 17 s 1,2; 2002 c 392 art 11 s 52; 2004 c 223 s 9; 1Sp2005
c 8 art 10 s 68; 2006 c 271 art 3 s 47; 2007 c 134 art 8 s 3-6
NOTE:The amendments to subdivisions 3, 5, 7, and 8 by Laws 2007, chapter 134, article
8, sections 3 to 6, are effective retroactively from July 1, 2006, if the city council of the city
of Minneapolis and its chief clerical officer timely complete their compliance with Minnesota
Statutes, section 645.021, subdivisions 2 and 3. Laws 2007, chapter 134, article 8, section 9.

422A.07 [Repealed, 1980 c 607 art 16 s 19]

422A.08 FINANCING OF CITY'S CONTRIBUTION.
    Subdivision 1. Financing. All income, interest and dividends derived from deposits and
investments authorized by this chapter shall be placed to the credit of the retirement fund.
    Subd. 2.[Repealed, 1981 c 224 s 276]
    Subd. 3.[Repealed, 1981 c 224 s 276]
    Subd. 4.[Repealed, 1981 c 224 s 276]
    Subd. 5. Service credit purchase. Any contributor who prior to entering the service of the
city was an employee of a public corporation, is authorized, using the procedure in subdivision
5a, to purchase allowable service credit in the retirement fund for employment by the public
corporation in the same manner as though the service had been rendered to the city, providing that
the individual has not received service credit and is not eligible to receive service credit for this
period under any other plan or fund listed in section 356.30, subdivision 3. Before receiving credit
for service rendered to a public corporation as herein set forth, the contributing employee shall
make application therefor in writing to the retirement board, and shall contribute to the retirement
fund the amount specified in subdivision 5a.
    Subd. 5a. Purchase payment amount. (a) To purchase credit for prior service under this
section, there must be paid to the Minneapolis Employees Retirement Fund an amount equal to
the present value, on the date of payment, of the amount of the additional retirement annuity
obtained by the purchase of the additional service credit. Calculation of this amount must be
made using the applicable preretirement interest rate for the association specified in section
356.215, subdivision 8, and the mortality table adopted for the fund. The calculation must assume
continuous future service in the fund until, and retirement at, the age at which the minimum
requirements of the fund for normal retirement or retirement with an annuity unreduced for
retirement at an early age, including section 356.30, are met with the additional service credit
purchased. The calculation must also assume a future salary history that includes annual salary
increases at the applicable salary increase rate for the fund or association specified in section
356.215, subdivision 8. The member must establish in the records of the fund proof of the service
for which the purchase of prior service is requested. The manner of the proof of service must be in
accordance with procedures prescribed by the executive director.
(b) Payment must be made in one lump sum.
(c) Payment of the amount calculated under this subdivision must be made by the member.
However, the current or former governmental subdivision employer of the member may, at its
discretion, pay all or any portion of the payment amount that exceeds an amount equal to the
employee contribution rates in effect during the period or periods of prior service applied to the
actual salary rates in effect during the period or periods of prior service, plus interest at the rate
of six percent a year compounded annually from the date on which the contributions would
otherwise have been made to the date on which the payment is made.
    Subd. 6.[Repealed, 1981 c 224 s 276]
History: 1973 c 133 s 8; 1973 c 770 s 2; 1974 c 73 s 2; 1977 c 399 s 13,14; 1979 c 293 s 7;
1980 c 607 art 16 s 15; 1981 c 224 s 183,184; 1993 c 307 art 10 s 3,4; 2002 c 392 art 11 s 52

422A.081 [Repealed, 1981 c 224 s 276]

422A.09 CLASSIFICATION OF EMPLOYEES.
    Subdivision 1. Two classes. Employees of the city shall be divided into a contributing
class and an exempt class.
    Subd. 2. Contributing class. The contributing class shall consist of all employees not
included in the exempt class, who become prospective beneficiaries of the fund created by this
chapter.
A member of the contributing class who is granted a leave of absence without pay by the
member's employer to serve as an employee or agent of a labor union representing members of the
contributing class may continue as a member of the contributing class during the period of such
leave of absence by depositing each month with the fund the amount of the contribution of the
employee as required by this chapter which amount shall be the normal employee contribution.
The contributions referred to in this subdivision shall be based on the salary for the position
or its equivalent held by the member immediately prior to such leave of absence subject to any
adjustment thereof during the period of such leave.
    Subd. 3. Exempt class. The exempt class shall consist of:
(1) Employees who are members of any other organization or association of the city on
behalf of which a tax is levied by the city for the purpose of paying retirement allowances to
disabled or superannuated employees.
(2) Persons filling elective position; provided that any elective officer holding an elective
city office, except a judge of municipal court, shall, upon written application to the retirement
board, be entitled to become a member of the contributing class of the fund, and after becoming a
contributor to the fund be entitled to all benefits conferred upon employees of the contributing
class except retirement on a service allowance, which shall be granted only upon completion of
ten or more years of service and attaining at least age 60.
All retirement allowances shall be computed and determined as provided herein, except that
in determining the number of years of service, credit shall be given for time served as an elective
officer or employee, or member of an executive board or commission or any combination thereof.
Persons who have served in elective positions which qualified them for membership in the fund
prior to July 1, 1967, and who immediately thereafter hold elective office, first being appointed
to that elective office in Hennepin County, may retain or resume membership in the fund as an
elective officer of the county. The county shall collect and pay to the retirement fund the employee
contribution as required under section 422A.10. The employer contribution on behalf of the
elected officer must be paid by the county. Before receiving a retirement allowance, or any other
benefit, any person who claims credit for service under this section shall contribute to the fund
an amount equal to the amount of contributions to the fund which the person would have made
had the person been a contributor to the fund since the date the person first became eligible for
membership in the fund, under section 422A.10, plus six percent compound interest.
(3) Persons serving without pay.
(4) Persons employed on a temporary basis, as doorkeepers, ticket takers, and attendants at
the municipal auditorium, park recreation facilities, or like activities, employed less than 1000
hours, or its equivalent if employed on any other basis than an hourly basis, in any calendar year
from January 1 to December 31, inclusive, provided that employees who were contributing
members of the fund on July 1, 1959 shall not be affected by the exclusions in this section.
(5) A person who is exempted from the contributing class by Minnesota Statutes 1974,
section 422A.09, subdivision 3, clauses (4) and (5), but who is employed by and paid, in whole or
in part, by the city or any of its boards, departments, or commissions, operated as a department of
the city government or independently, if financed in whole or in part by city funds, including any
person employed by a public corporation, and including any person employed by Special School
District No. 1, each of whom is not a member of any other retirement system, who later becomes a
contributing member of the fund may elect to qualify at that time for credit by paying into the fund
an amount equal to the amount of contributions to the fund which the person would have made
had the person been a contributor to the fund since the date the person first qualified as an exempt
member of the contributing class, under section 422A.10, plus six percent compound interest.
    Subd. 4. City coordinator; assistant city coordinator. The exempt class shall also consist
of persons filling the positions of Minneapolis city coordinator and assistant city coordinator,
provided that any such person shall, upon written application to the retirement board, be entitled
to become a member of the contributing class of the fund, and after becoming a contributor to the
fund be entitled to all benefits conferred upon employees of the contributing class. If a person
filling the position of city coordinator or assistant city coordinator does not elect to become a
member of the contributing class, the city of Minneapolis may pay to such person, in addition to
the salary allowed under any limitations imposed upon salaries by any law, an amount equal to
what would be the employer's contribution for normal costs to the retirement fund if the employee
was a member of the contributing class, provided that such employee agrees that the additional
salary shall be deposited by the city in a deferred compensation program.
History: 1973 c 133 s 9; 1973 c 770 s 3; 1974 c 76 s 6,7; 1976 c 130 s 2; 1977 c 399 s 15;
1977 c 452 s 34; 1978 c 562 s 11; 1978 c 649 s 5; 1978 c 720 s 12; 1979 c 50 s 55; 1980 c 607
art 16 s 16,17 subd 2; 1981 c 224 s 185; 1986 c 444; 1987 c 284 art 2 s 7; 1991 c 206 s 5;
1995 c 262 art 2 s 10; 1Sp2005 c 8 art 10 s 80

422A.091 [Repealed, 1981 c 224 s 276]

422A.10 SALARY DEDUCTIONS.
    Subdivision 1. Member contribution; deductions. (a) There must be deducted and withheld
from the basic salary, pay or compensation of each employee in the contributing class an amount
equal to 9-1/4 percent of such salary, pay or compensation, except as hereinafter provided.
(b) The retirement board may increase the percentage rate of contribution to the retirement
fund of any employee or employees for the purpose of establishing and maintaining on an
actuarial basis a plan of insurance, survivors' benefits, or other type of benefit or benefits, the
cost of which must be paid out of such extra percentage so authorized and deducted from the
employee's compensation, except as hereinafter provided. Any plan or plans so established and
placed in operation may be amended from time to time, or may be abandoned, but if abandoned,
any surplus remaining from the operation of a plan must be the property of the fund, and must be
credited to the reserve for loss in investment account.
    Subd. 2. Mandatory member contributions. Every employee to whom this chapter applies
is deemed to consent and agree to the deductions made and provided for herein, and payment with
such reductions, for service, are a full and complete discharge and acquittance of all claims and
demands for all services rendered by such person during the period covered by such payment;
except the person's claim to the benefits to which the person may be entitled under the provisions
of this chapter.
    Subd. 3. Option to increase contributions. Subject to such terms and conditions and to
such rules and regulations as the retirement board may adopt, any contributor from time to time
may increase or decrease the contributor's rate of contribution to the retirement fund, but in no
event shall the contribution be less than the minimum contribution specified in the provisions
of this chapter.
History: 1973 c 133 s 10; 1974 c 73 s 2; 1979 c 293 s 8; 1979 c 303 art 6 s 8; 1986 c
444; 1Sp2005 c 8 art 10 s 69,70,80

422A.101 PREPARATION OF FINANCIAL REQUIREMENTS OF FUND; EMPLOYER
CONTRIBUTIONS.
    Subdivision 1. Financial requirements of fund. Prior to July 31 annually, the retirement
board, in consultation with the actuary retained under section 356.214, shall prepare an itemized
statement of the financial requirements of the fund for the succeeding fiscal year. A copy of the
statement shall be submitted to the city council, the board of estimate and taxation of the city, the
managing board or chief administrative officer of each city owned public utility, improvement
project or municipal activity supported in whole or in part by revenues other than real estate taxes,
public corporation, or unit of metropolitan government employing members of the fund, the board
of Special School District No. 1, and the state commissioner of finance prior to July 31 annually.
The statement shall be itemized and shall include the following:
(1) an estimate of the administrative expenses of the fund for the following year, including
the amount necessary to amortize through June 30, 2020, the annual costs that are determined by
the retirement board to be related to investment activities of the deposit accumulation fund other
than actual investment transaction amounts;
(2) an estimate of the normal cost of the fund expressed as a dollar amount, which shall be
determined by applying the normal cost of the fund as reported in the most recent actuarial
valuation prepared by the actuary retained under section 356.214 and expressed as a percentage
of covered payroll to the estimated total covered payroll of all employees covered by the fund
for the following year;
(3) an estimate of the contribution required to amortize on a level annual dollar basis the
unfunded actuarial accrued liability of the fund by June 30, 2020, using an interest rate of six
percent compounded annually as reported in the most recent actuarial valuation, prepared by
the actuary retained under section 356.214 expressed as a dollar amount. In determining the
amount of the unfunded actuarial accrued liability of the fund, all assets other than the assets of
the retirement benefit fund shall be valued as current assets as defined under section 356.215,
subdivision 1 , clause (6), and the assets of the retirement benefit fund shall be valued equal to the
actuarially determined required reserves for benefits payable from that fund;
(4) the amount of any deficiency in the actual amount of any employer contribution provided
for in this section when compared to the required contribution amount certified for the previous
year, plus interest on the amount at the rate of six percent per annum.
    Subd. 1a. City contributions. Prior to August 31 of each year, the retirement board shall
prepare an itemized statement of the financial requirements of the fund payable by the city for the
succeeding fiscal year, and a copy of the statement shall be submitted to the board of estimate
and taxation and to the city council by September 15. The financial requirements of the fund
payable by the city shall be calculated as follows:
(a) a regular employer contribution of an amount equal to the percentage rounded to the
nearest two decimal places of the salaries and wages of all employees covered by the retirement
fund which equals the difference between the level normal cost plus administrative cost as
reported in the annual actuarial valuation prepared by the actuary retained under section 356.214
and the employee contributions provided for in section 422A.10 less any amounts contributed
toward the payment of the balance of the normal cost not paid by employee contributions by any
city owned public utility, improvement project, other municipal activities supported in whole or
in part by revenues other than real estate taxes, any public corporation, any employing unit of
metropolitan government, or by Special School District No. 1 pursuant to subdivision 2;
(b) an additional employer contribution of an amount equal to the percent specified in section
353.27, subdivision 3a, clause (a), multiplied by the salaries and wages of all employees covered
by the retirement fund less any amounts contributed toward amortization of the unfunded actuarial
accrued liability by June 30, 2020, attributable to their respective covered employees by any city
owned public utility, improvement project, other municipal activities supported in whole or in
part by revenues other than real estate taxes, any public corporation, any employing unit of
metropolitan government, or by Special School District No. 1 pursuant to subdivision 2; and
(c) a proportional share of an additional employer amortization contribution of an amount
equal to $3,900,000 annually until June 30, 2020, based upon the share of the fund's unfunded
actuarial accrued liability attributed to the city as disclosed in the annual actuarial valuation
prepared by the actuary retained under section 356.214.
The city council shall, in addition to other taxes levied by the city, annually levy a tax equal
to the amount of the financial requirements of the fund which are payable by the city. The tax,
when levied, shall be extended upon the county lists and shall be collected and enforced in the
same manner as other taxes levied by the city. If the city does not levy a tax sufficient to meet the
requirements of this subdivision, the retirement board shall submit the tax levy statement directly
to the county auditor, who shall levy the tax. The tax, when levied, shall be extended upon the
county lists and shall be collected and paid into the city treasury to the credit of the retirement
fund. Any amount to the credit of the retirement fund shall constitute a special fund and shall be
used only for the payment of obligations authorized pursuant to this chapter.
    Subd. 2. Contributions by or for city-owned public utilities, improvements, or municipal
activities. Contributions by or for any city-owned public utility, improvement project, and other
municipal activities supported in whole or in part by revenues other than real estate taxes, any
public corporation, any employing unit of metropolitan government, Special School District No.
1, or Hennepin County, on account of any employee covered by the fund, shall be calculated
as follows:
(a) a regular employer contribution of an amount equal to the percentage rounded to the
nearest two decimal places of the salaries and wages of all employees of the employing unit
covered by the retirement fund which equals the difference between the level normal cost plus
administrative cost reported in the annual actuarial valuation prepared by the actuary retained
under section 356.214 and the employee contributions provided for in section 422A.10;
(b) an additional employer contribution of an amount equal to the percent specified in section
353.27, subdivision 3a, clause (a), multiplied by the salaries and wages of all employees of the
employing unit covered by the retirement fund;
(c) a proportional share of an additional employer amortization contribution of an amount
equal to $3,900,000 annually until June 30, 2020, based upon the share of the fund's unfunded
actuarial accrued liability attributed to the employer as disclosed in the annual actuarial valuation
prepared by the actuary retained under section 356.214.
The city council or any board or commission may, by proper action, provide for the inclusion
of the cost of the retirement contributions for employees of any city-owned public utility or for
persons employed in any improvement project or other municipal activity supported in whole or in
part by revenues other than taxes who are covered by the retirement fund in the cost of operating
the utility, improvement project, or municipal activity. The cost of retirement contributions for
these employees shall be determined by the retirement board and the respective governing bodies
having jurisdiction over the financing of these operating costs.
The cost of the employer contributions on behalf of employees of Special School District
No. 1 who are covered by the retirement fund shall be the obligation of the school district.
Contributions by the school district to the retirement fund or any other public pension or
retirement fund of which its employees are members must be remitted to the fund each month. An
amount due and not transmitted begins to accrue interest at the rate of six percent compounded
annually 15 days after the date due. The retirement board shall prepare an itemized statement of
the financial requirements of the fund payable by the school district, which shall be submitted
prior to September 15. Contributions by the school district shall be made at times designated by
the retirement board. The school district may levy for its contribution to the retirement fund only
to the extent permitted pursuant to section 126C.41, subdivision 3.
The cost of the employer contributions on behalf of elective officers or other employees
of Hennepin County who are covered by the retirement fund pursuant to section 422A.09,
subdivision 3 , clause (2), 422A.22, subdivision 2, or 488A.115, or Laws 1973, chapter 380,
section 3, Laws 1975, chapter 402, section 2, or any other applicable law shall be the obligation
of Hennepin County. The retirement board shall prepare an itemized statement of the financial
requirements of the fund payable by Hennepin County, which shall be submitted prior to
September 15. Contributions by Hennepin County shall be made at times designated by the
retirement board. Hennepin County may levy for its contribution to the retirement fund.
    Subd. 2a. Contributions by Metropolitan Airports Commission and Metropolitan
Council. The Metropolitan Airports Commission and the Metropolitan Council shall pay to the
Minneapolis Employees Retirement Fund annually in installments as specified in subdivision 3
the share of the additional support rate required for full amortization of the unfunded actuarial
accrued liabilities by June 30, 2020, that is attributable to employees of the airports commission
or former Metropolitan Waste Control Commission who are members of the fund. The amount
of the payment shall be determined as if the airport commission and Metropolitan Council's
employer contributions determined under subdivision 2 had also included a proportionate share
of a $1,000,000 annual employer amortization contribution. The amount of this $1,000,000
annual employer amortization contribution that would have been allocated to the commission or
council would have been based on the share of the fund's unfunded actuarial accrued liability
attributed to the commission or council compared to the total unfunded actuarial accrued liability
attributed to all employers under subdivisions 1a and 2. The determinations required under this
subdivision must be based on the most recent actuarial valuation prepared by the actuary retained
under section 356.214.
    Subd. 3. State contributions. (a) Subject to the limitation set forth in paragraph (c), the
state shall pay to the Minneapolis Employees Retirement Fund annually an amount equal to
the amount calculated under paragraph (b).
    (b) The payment amount is an amount equal to the financial requirements of the Minneapolis
Employees Retirement Fund reported in the actuarial valuation of the fund prepared by the
actuary retained under section 356.214 consistent with section 356.215 for the most recent year
but based on a target date for full amortization of the unfunded actuarial accrued liabilities by
June 30, 2020, less the amount of employee contributions required under section 422A.10, and
the amount of employer contributions required under subdivisions 1a, 2, and 2a. Payments shall
be made September 15 annually.
    (c) The annual state contribution under this subdivision may not exceed $9,000,000, plus the
cost of the annual supplemental benefit determined under section 356.43.
    (d) If the amount determined under paragraph (b) exceeds $9,000,000, the excess must be
allocated to and paid to the fund by the employers identified in subdivisions 1a and 2, other than
units of metropolitan government. Each employer's share of the excess is proportionate to the
employer's share of the fund's unfunded actuarial accrued liability as disclosed in the annual
actuarial valuation prepared by the actuary retained under section 356.214 compared to the total
unfunded actuarial accrued liability attributed to all employers identified in subdivisions 1a and 2,
other than units of metropolitan government. Payments must be made in equal installments as
set forth in paragraph (b).
    Subd. 4. Additional employer contribution in certain instances. (a) If a participating
employing unit, other than the state, has a negative asset balance in the deposit accumulation fund,
the executive director shall bill the employing unit for the amount of the deficiency. Any amount
billed must include six percent interest, compounded annually, for any year or portion of a year
from the billing date until the date of payment.
(b) If assets in the deposit accumulation fund are insufficient to make a transfer to the
retirement benefit fund, the city of Minneapolis shall pay the amount of that insufficiency to the
retirement benefit fund within three days of certification of the insufficiency by the executive
director of the fund. The city of Minneapolis may bill any other participating employing unit
other than the state for its proportion of the amount paid. Any amount billed by the city under this
paragraph must include interest as specified in paragraph (a).
History: 1979 c 303 art 6 s 9; 1980 c 614 s 148; 1981 c 224 s 186; 1981 c 298 s 11;
1Sp1981 c 1 art 10 s 22; 1985 c 248 s 58; 1Sp1985 c 13 s 331,332; 1987 c 259 s 70; 1988
c 718 art 7 s 56; 1989 c 329 art 9 s 28; 1991 c 130 s 37; 1991 c 345 art 4 s 10; 1992 c 480 s
1; 1992 c 499 art 12 s 29; 1993 c 307 art 10 s 5; 1994 c 628 art 3 s 34; 1997 c 202 art 2 s 48;
1998 c 397 art 11 s 3; 1999 c 222 art 17 s 3; 2000 c 488 art 12 s 18; 2002 c 392 art 11 s 52;
2006 c 271 art 3 s 47; 2007 c 134 art 8 s 7
NOTE:The amendment to subdivision 3 by Laws 2007, chapter 134, article 8, section 7, is
effective retroactively from July 1, 2006, if the city council of the city of Minneapolis and its
chief clerical officer timely complete their compliance with Minnesota Statutes, section 645.021,
subdivisions 2 and 3. Laws 2007, chapter 134, article 8, section 9.

422A.11 MILITARY SERVICE.
    Subdivision 1. Service credit. Any employee who engages in or has engaged in active
service in time of war or other emergency declared by proper authority, in any of the military or
naval forces of the state or of the United States, and returns to the employment of the city within 90
days following release from military or naval service, shall receive credit for the period of military
service as provided in this section as though actually employed by the city, provided the employee
was a member of the contributing class of the retirement fund at the time of entrance into military
service, or was a member of the exempt class at the time of entrance into military service prior to
December 31, 1945, or qualifies as a member of the exempt class as specified in section 422A.09,
subdivision 3 , clause (5), notwithstanding the provisions of the Veterans Preference Act or any
other law, rule or bylaw providing for credit for military service for pension purposes. Employees
on leave of absence or layoff at time of entrance into military service as herein provided shall be
considered employees for the purpose of this chapter. Credit shall be granted for military service
rendered, provided that credit for military service shall not exceed six calendar years.
    Subd. 2. Credit after refund. Any employee who was a member of the contributing class of
the fund at the time of entrance into military service and who resigned from the service of the city
and received a refund of the employee's personal contribution to the fund and who is reemployed
by the city and again becomes a contributing member of the fund shall receive credit for military
service as provided by this section upon repaying to the fund the amount of the refund plus interest
thereon at six percent compounded annually until fully paid and the further payment to the fund
without interest of the amount the contribution would have totaled had the employee continued as
a contributing member of the fund during the period of military service. No contribution shall be
made by the city to the credit of an employee's account for the period of such military service.
    Subd. 3. Calculation of credit. The retirement board shall determine and compute the
amount of the contributions which said employee would have made to such fund if employment
had not been interrupted by military service. The amount so determined and computed shall
constitute an obligation of and be paid by the city or public corporation, and shall be credited
to the contribution account of such employee. In determining the amount of contributions that
the employee would have made if the employee had not entered military service, consideration
shall be given to the employment service of employees who did not enter military service with
like classification, seniority rights, length of service, and other factors determining probable
time of employment.
    Subd. 4. Separation from service. In the event that such employee becomes separated from
the service, except by retirement or death, prior to the expiration of five years subsequent to
the date on which the employee was reinstated as an employee, such contribution may not be
withdrawn by said employee, but shall be canceled and credited to the reserve for annuities
account of this fund. If an employee returns to the service after being separated as provided
herein, credit shall be granted upon payment of the separation refund required by section 422A.22.
In determining the five year period, there shall be included only time of actual employment.
History: 1973 c 133 s 11; 1974 c 76 s 8; 1980 c 509 s 162; 1980 c 607 art 16 s 17 subd 2;
1981 c 224 s 187; 1986 c 444

422A.12 CREDITS; INDIVIDUAL RECORD.
    Subdivision 1. Salary deductions. The city comptroller or other person having supervision
of the payment of salaries to employees shall cause the deductions to be withheld from all
specific appropriations for the particular salaries or compensation from which the deductions are
made and from all allotments out of lump sum appropriations for payments of such salaries or
compensation for each fiscal year; and a record of these sums shall be entered to the credit of the
various employees from whose salaries deductions have been made.
    Subd. 2. Credits. At the close of each fiscal year there shall be credited within the deposit
accumulation fund to accounts representing contributions by the municipality and to accounts
representing the accumulated amount of each contributing employee in proportion to the
average quarterly balance in each such account during said fiscal year the amount of income
from investments earned on the accumulated funds in possession of the board, after having
deducted from the total of such income (1) the amounts otherwise required as interest for various
allowances or purposes specified in this chapter and (2) an amount to be set aside to liquidate
actual or to amortize prospective losses on investments in the accumulation account. The net
balance of the investment earnings to be so distributed shall be distributed at the greatest multiple
of one-tenth of one percent up to and including a maximum of the interest assumption rate
provided for in section 422A.06, subdivision 5 of all such accounts. Any undistributed excess
earnings or losses determined to be earnings or losses attributable to the employers' contributions
shall be distributed or charged to the employers' reserve accounts in proportion to the employers'
average quarterly balances. Any undistributed excess earnings or losses determined to be earnings
or losses attributable to the employees' contributions shall be distributed or charged to the
employers' reserve accounts in proportion to the number of covered employees employed by each
employer. If income from investments is insufficient to enable the crediting of the maximum
interest amount to the employee and employer accounts, the maximum interest will first be
credited to the employee accounts. If income is insufficient to cover the amounts credited to the
employee accounts, the insufficiency attributable to each employer group of employees' accounts
will be made up by a charge against the reserve account of that employer. The amount that shall
be set aside annually to liquidate losses on investments shall be such amount as the board may
deem necessary for such purpose but not in excess of one mill on the dollar of the gross amount
received as income on the cash and investments in the fund.
History: 1973 c 133 s 12; 1974 c 76 s 9; 1992 c 480 s 2; 1Sp2005 c 8 art 10 s 80

422A.13 RETIREMENT ALLOWANCES; WHEN PAID.
    Subdivision 1. Allowance. Any person who shall have been employed by the city and who
shall have fulfilled the conditions in this chapter specified shall be entitled to receive a retirement
allowance, as set forth in this chapter.
    Subd. 2. Retirement age. Subject to the limitations in this chapter, an employee in the
contributing class who was employed by the city for ten or more years and attains the established
age for retirement, or was employed by the city for 30 or more years, as determined by the
retirement board, may retire.
History: 1973 c 133 s 13; 1976 c 130 s 3; 1978 c 649 s 6; 1991 c 206 s 6; 1Sp2005 c 8
art 10 s 80

422A.14 APPLICATION; APPROVAL.
    Subdivision 1. Application for allowance. No disability benefit or retirement allowance
shall be granted to any employee who may become eligible for retirement as provided in this
chapter until the employee, or one authorized to act in the employee's behalf, shall have filed with
the retirement board, in such form as may be prescribed by the board, an application for such
allowance. No installment of any such allowance shall be paid for any period prior to the effective
date of retirement or the date of application, whichever occurs later.
    Subd. 2.[Repealed, 1992 c 480 s 6]
History: 1973 c 133 s 14; 1986 c 444; 1992 c 480 s 3; 1Sp2005 c 8 art 10 s 80

422A.15 SERVICE ALLOWANCE; CONTRIBUTING EMPLOYEES.
    Subdivision 1. Formula pension and annuity. Except as otherwise provided in subdivision
3, each contributing member who, at the time of retirement, fulfills the conditions necessary to
enable the member to retire is entitled to receive a "formula pension and annuity" equal to two
percent for each year of allowable service for the first ten years and thereafter 2.5 percent per
year of allowable service of the average salary, multiplied by the years of service credited by the
retirement fund. The formula pension and annuity must be computed on the single life plan but
subject to the option selections provided for in section 422A.17.
In order to be entitled to the formula pension and annuity herein provided for, the retiring
employee at the time of cessation of employment and of actual retirement must have attained the
age of 60 years or have been employed by the city not less than 30 years, or meet the qualifications
provided for in section 422A.16, and in addition thereto have contributed to the retirement fund
at the percentage rate prescribed by the retirement law applicable when the salary, wages or
compensation was paid on all salaries, wages, or compensation received from the city or from an
applicable employing unit. The years of service to be applied in the formula pension and annuity
must be found and determined by the retirement board, except that no credit may be allowed for
any year in which a back charge is owing at time of retirement and the earnings from any year in
which a back charge is owing may not be used in determining the average salary.
    Subd. 2. Withdrawal of voluntary contributions. Voluntary additions to the employee's
deposits made by the employee under section 422A.10 may be withdrawn by the retiring employee
or, with the approval of the retirement board, applied to the purchase of an additional annuity
computed and determined under a procedure specified by the actuary retained under section
356.214 utilizing the appropriate mortality table established by the board of trustees based on the
experience of the fund as recommended by the actuary retained under section 356.214 and using
the applicable postretirement interest rate assumption specified in section 356.215, subdivision 8.
    Subd. 3. Optional defined contribution annuity. In lieu of the formula pension and annuity,
a person who was a contributing member on April 28, 1973, who is eligible to retire and who
ceases to be employed and who qualifies for retirement shall have the option of electing to receive
a retirement allowance known as "the $2 bill and annuity."
If a member of the contributing class makes the election provided for in this section, the
member shall receive a minimum pension of $2 per month for each year of service. The pension
shall be the actuarial equivalent of the accumulated amounts of the annual installments as may
be fixed and designated by law throughout the period of service of the retiring employee, not to
exceed 25 years, accumulated to the date of retirement at six percent compound interest, and such
extra credit to be provided by the city as will produce the minimum pension of $2 per month for
each year of service. The pension shall be in addition to the annuity. The annuity shall be in the
actuarial equivalent of the net accumulated contributions to the credit of the retiring employee,
calculated at the date of retirement. For the purposes of this chapter, the "service allowance" for
members of the contributing class shall consist of an "annuity" and a "pension."
The pension provided for herein shall be the actuarial equivalent of the accumulated annual
installments of $2 per month for each year of service. The sum of $2 shall be computed as a single
life annuity and subject to the option selections provided for in section 422A.17. The pension and
annuity provided for in this subdivision shall be first paid from the contributing member's own
contributions and normal earned credits, plus interest, until those credits are exhausted.
The retirement allowance provided under this subdivision or any optional annuity form of
the retirement allowance shall be computed and determined under a procedure specified by the
actuary retained under section 356.214 utilizing the appropriate mortality table established by the
board of trustees based on the experience of the fund as recommended by the actuary retained
under section 356.214 and using the applicable postretirement interest rate assumption specified
in section 356.215, subdivision 8.
    Subd. 4. Service. Except as otherwise provided in this chapter, the service of each
contributing member shall be calculated from the date of original appointment. Said service
shall include periods of service at different times and service for one or more departments,
branches or independent boards of the city. In computing length of service of contributing
employees for the purpose of this chapter , periods of separations from the service shall not be
included, provided, that any contributing employee who heretofore or hereafter shall serve as a
duly elected member of the Minnesota state legislature and who at the time of entrance into the
service herein outlined was a contributing member of the retirement fund, shall receive credit
for the time spent in such service as though actually employed by such city. In order to receive
credit as herein outlined, such employee shall contribute to the retirement fund the amount that
would have been contributed by the employee if actually employed by the city. The amount of
salary, wages or compensation received by the employee immediately prior to entering the service
herein set forth, shall be the dollar amount used in determining the contributions to be made to the
retirement fund, and also the amount to be used in determining the arithmetical average annual
compensation otherwise provided for in this chapter .
    Subd. 5. Payment. All retirement allowances as herein provided shall be paid in monthly
installments and checks shall be issued and mailed to the last known address of each beneficiary
by the first business day of the month succeeding the month in which the allowance is authorized.
Where a beneficiary is under legal guardianship, monthly installments may be paid to the guardian.
History: 1973 c 133 s 15; 1973 c 770 s 4-6; 1974 c 73 s 3; 1980 c 607 art 16 s 17 subd
2; 1981 c 224 s 188; 1986 c 444; 1987 c 259 s 71,72; 2002 c 392 art 11 s 52; 1Sp2005 c 8
art 1 s 26; art 10 s 80; 2006 c 271 art 3 s 47

422A.151 ALTERNATIVE CALCULATION OF ANNUITY.
(a) In the case of a contributing member of the Minneapolis Employees Retirement Fund who
is employed as a licensed peace officer or firefighter with the Metropolitan Airports Commission
and who retires, becomes disabled within the meaning of section 422A.18, or dies, the retirement,
disability, or survivor allowance is equal to the higher of the following:
(1) the retirement, disability, or survivor allowance calculated for the person under the
applicable provisions of the Minneapolis Employees Retirement Fund; or
(2) the retirement, disability, or survivor benefit that the person would be entitled to upon
meeting the applicable age and allowable service requirements of section 353.651, 353.656, or
353.657 if all employment as a licensed peace officer or firefighter with the Metropolitan Airports
Commission had been allowable service under the Public Employees Retirement Association
police and fire fund, instead of being covered by the Minneapolis Employees Retirement Fund.
In computing the alternative benefit under section 353.651, 353.656, or 353.657, the applicable
definitions and related provisions of chapter 353 must be used.
A firefighter or licensed peace officer terminating employment by the Metropolitan Airports
Commission after June 30, 1997, or the survivor of a deceased firefighter or licensed peace officer
terminating employment by the Metropolitan Airports Commission after June 30, 1997, under
section 353.651, 353.656, or 353.657, shall receive a one percent lower cost-of-living adjustment
than otherwise payable under section 422A.06, subdivision 5. If the cost-of-living adjustment
payable under section 422A.06, subdivision 5, is less than one percent, the firefighter or licensed
peace officer who retired after June 30, 1997, must not have a reduction in the previously received
annuity or benefit amount, but future cost-of-living adjustments must be modified equal to the
percentage the benefit would have been reduced below the person's current annuity or benefit
amount to reflect the one percent lower cost-of-living adjustment under section 422A.06,
subdivision 5 .
(b) If a contributing member under paragraph (a) has periods of coverage by the Minneapolis
Employees Retirement Fund that include service other than employment as a licensed peace
officer or firefighter as well as employment as a licensed peace officer or firefighter, the calculation
of the benefit under paragraph (a), clause (2), may only utilize service as a licensed peace officer
or firefighter employed by the Metropolitan Airports Commission.
History: 1992 c 596 s 6; 1997 c 233 art 1 s 65

422A.155 DETERMINATION OF SERVICE CREDIT.
(a) Notwithstanding the provisions of section 422A.15, subdivision 1, no employee of the
contributing class of the Minneapolis Employees Retirement Fund shall be entitled to receive a
year of service credit during the employee's final year of service unless the employee is employed
and has received compensation from the city of Minneapolis or other applicable employing unit
during each of the calendar months making up the year for which the employee would usually be
employed. Any employee of the contributing class who is employed and receives compensation
in fewer than the usual number of calendar months during the final year of service shall receive
credit for that portion of a year that the employee's completed months of employment and receipt
of compensation bears to the usual number of months which the employee would usually be
employed.
(b) [Expired]
History: 1979 c 293 s 9; 1981 c 298 s 11; 1Sp2001 c 10 art 6 s 18,21; 2002 c 392 art 7 s
3; 1Sp2003 c 12 art 6 s 5

422A.156 LIMITATION ON CERTAIN BENEFIT PAYMENTS.
From and after February 8, 1980, nothing contained in section 422A.09, subdivision 3,
clause (2) shall be construed as allowing payment of a retirement allowance or other retirement
benefits other than a disability allowance pursuant to section 422A.18 if otherwise eligible to any
former, present or future elective officer of the city of Minneapolis who has not attained the age of
at least 60 years unless the elective officer has received credit for at least 30 years of services and
retires pursuant to section 422A.15, subdivision 1.
History: 1980 c 342 s 22

422A.16 RETIREMENT ALLOWANCE; DEFERRED COMPENSATION.
    Subdivision 1. Contribution. Any member of the contributing class who becomes
permanently separated from the service of the city after three or more years of service to the
city may, by an instrument in writing filed with the retirement board within 30 days after such
separation becomes permanent, elect to allow the member's contributions to the fund to the date
of separation to remain on deposit in the fund.
    Subd. 2. Deferred defined contribution annuity. A person who is a member of the
contributing class on April 28, 1973, and who makes the election provided for in this subdivision
and in subdivision 1, may, upon attaining the age of 55 years, but before attaining the age of 65
years, or someone acting in the member's behalf, may make application to receive the retirement
allowance provided for in section 422A.15, subdivision 3, or an optional retirement allowance
in the manner provided for by section 422A.17. The retirement allowance shall be the actuarial
equivalent of the city's contribution and the member's deposit, as they were on the date the
separation becomes permanent, plus interest, as provided for in section 422A.12.
The retirement allowance provided under this subdivision or any optional annuity form of
the retirement allowance shall be computed and determined under a procedure specified by the
actuary retained under section 356.214 utilizing the appropriate mortality table established by the
board of trustees based on the experience of the fund as recommended by the actuary retained
under section 356.214 and using the applicable postretirement interest rate assumption specified
in section 356.215, subdivision 8.
    Subd. 3. Payments to beneficiaries. If such contributing member dies without having made
the election provided for herein, the net accumulated amount of deductions from the member's
salary, pay or compensation plus interest to the member's credit on date of death must be paid to
such person, or persons, as the member shall have nominated by written designation filed with
the retirement board, in such form as the retirement board shall require. If the employee fails
to make a designation, or if the person or persons designated by the employee is not living to
receive payment, the net accumulated amount of deductions from the employee's salary, pay, or
compensation, plus interest to the credit of such employee on date of death must be paid to the
employee's estate. The net accumulated city deposits must be paid to a beneficiary designated
by such contributing member in such form as the retirement board shall require, who shall be
the surviving spouse, or surviving child, or children of such member. If there is no surviving
spouse, or surviving child or children, deposits must be paid to a person actually dependent on
and receiving principal support from such member or surviving mother or father, or surviving
brother or sister, or surviving children of the deceased brother or sister of such member.
If the beneficiary designated by the member is not one of the class of persons named in
the preceding paragraph, such benefit from the accumulations of city deposits shall be paid in
the following order: (1) to the surviving spouse, the whole thereof; (2) if there be no surviving
spouse, to the surviving children, share and share alike; (3) if there be no surviving spouse or
child, or children, to the dependent or dependents of the member, share and share alike; (4) if
there be no surviving spouse, child, or children, or dependents, to the surviving mother and father,
share and share alike; (5) if there be no surviving mother and father, to the surviving brothers and
sisters of the member, in equal shares; (6) and if there be no surviving brothers and sisters, to
the surviving children of the deceased brothers and sisters of the member, in equal shares; (7)
and if there be no person named in this paragraph who survives the member, the accumulation
of city deposits must be canceled.
    Subd. 3a.[Repealed, 1999 c 222 art 17 s 9]
    Subd. 4. Retirement allowance. A contributing member may, after electing to receive a
retirement allowance as provided herein, make application to withdraw the member's deposit
before reaching the age of 60 years, at which time that portion contributed by the city shall be
canceled.
    Subd. 5. Withdrawal before retirement. If such deposit is withdrawn before retirement, the
retirement rights shall be forfeited unless such employee returns to the service of the city and again
becomes a contributing member to the fund and redeposits the amount withdrawn, plus six percent
compound interest from date of withdrawal to date of reinstatement to the service of the city.
    Subd. 6. Disability allowance. If a contributing member, after becoming permanently
separated from the service of the city and after electing to receive a retirement allowance as
provided herein, becomes totally and permanently disabled for any cause before reaching the age
of 60 years, the member shall be entitled to receive such disability allowance upon application to
the retirement board and certified by the medical board provided in this chapter. Such disability
allowance shall be the actuarial equivalent of the total credit to the member's account on the date
application for such retirement allowance is made.
    Subd. 7. Election for funds to remain on deposit. Any member of the contributing class
who becomes permanently separated from the service of the city after ten or more years of service
for such city, and who is under the age of 60 years, may, by an instrument in writing, filed with
the retirement board within 30 days after such separation becomes permanent, elect to allow
the member's contributions to such fund to the date of separation to remain on deposit in such
fund, and in such event the member shall be entitled to receive a retirement allowance at age 60
or later, but before age 65, provided the member, or someone acting in the member's behalf if
the member be incompetent, make written application for the retirement allowance provided for
in section 422A.15, subdivision 1, in the same manner provided for in section 422A.17. The
provisions of subdivisions 3, 4, 5 and 6 shall also apply to any member qualifying for benefits
under this subdivision.
    Subd. 8. Service in more than one fund. Any person who was a member of the Minneapolis
Employees Retirement Fund and also a member of a plan administered by the director of the
Minnesota State Retirement System having a like provision or a member of the Public Employees
Retirement Association or the Teachers Retirement Association, or any other public employee
retirement system in the state of Minnesota having a like provision but excluding all other funds
providing benefits for police officers or firefighters shall be entitled when qualified to an annuity
from each fund if the person's total allowable service in any two or more of these funds totals
ten or more years, provided that no portion of the allowable service upon which the retirement
annuity from one fund is based is again used in the computation for benefits from another fund
and provided further that any refundment received from the Minneapolis Employees Retirement
Fund has been repaid to that fund. The annuity from each fund shall be determined by the
appropriate provisions of that fund except the provision requiring at least ten years allowable
service in the respective system or association shall not apply for the purposes of this section
provided the combined service in two or more of these funds equal ten or more years.
    Subd. 9. Incompetency or death of member. Any member of the contributing class who
becomes permanently separated from the service of the city under subdivision 8, may, by an
instrument in writing, filed with the municipal employees retirement board within 30 days after
the separation becomes permanent, elect to allow the member contributions to the fund to the date
of separation to remain on deposit in the fund, and in the event the member is entitled to receive a
retirement allowance at age 65, provided the member, or someone acting in the member's behalf if
the member be incompetent, must make a written application for the retirement allowance in the
same manner provided for in section 422A.17 and in accordance with the provisions of section
422A.15, subdivision 1, except for determining average salary.
If the contributing member dies before reaching the age of 65 years, or having attained the
age of 65 years without having made the election provided for herein, the net accumulated amount
of deductions from the member's salary, pay or compensation, plus interest, to the member's
credit on date of death is payable to the person or persons as have been nominated by written
designation filed with the retirement board, in the form that the retirement board requires.
If the employee fails to make a designation, or if the person or persons designated by the
employee predeceases the employee, the net accumulated credit to the employee's account on date
of death is payable to the employee's estate.
The provisions of subdivisions 4, 5, and 6 also apply to any member qualifying for benefits
under this subdivision, except for purposes of this subdivision the age referred to in subdivision 4
is 65 years.
    Subd. 10. Deferred allowance augmentation. Deferred allowances granted under this
section shall be calculated as of the date of separation and shall be increased by the interest rate of
five percent per year until January 1, 1981, and thereafter by the interest rate of three percent per
year, compounded annually.
History: 1973 c 133 s 16; 1973 c 770 s 7-11; 1974 c 76 s 10,11; 1975 c 152 s 1; 1977 c 399 s
16; 1977 c 429 s 63; 1978 c 796 s 45; 1980 c 607 art 16 s 17 subd 2; 1981 c 224 s 189; 1981 c
298 s 11; 1986 c 444; 1987 c 259 s 73-75; 1991 c 206 s 7,8; 2002 c 392 art 11 s 52; 1Sp2005 c 8
art 1 s 27; art 10 s 80; 2006 c 271 art 3 s 47

422A.17 RETIREMENT ALLOWANCE; OPTIONS.
At retirement, any employee who is eligible to receive a service allowance may elect to
receive benefits in a retirement allowance payable throughout life or may on retirement elect to
receive the actuarial equivalent at that time of annuity, pension, or retirement allowance in a
lesser annuity, or a lesser pension, or a lesser retirement allowance, payable throughout life, with
the provisions that:
Option I. If the benefit recipient dies before receiving in payments an amount equal to
the present value of the benefit recipient's annuity, pension, or retirement allowance, as of the
date of the benefit recipient's retirement, the balance shall be paid to the benefit recipient's legal
representatives or to such person as the benefit recipient shall nominate by written designation
duly acknowledged and filed with the retirement board as of the date of retirement, or
Option II. Upon the death of the benefit recipient, the benefit recipient's annuity, pension,
or retirement allowance shall be continued throughout the life of and paid to the person as the
benefit recipient shall nominate by written designation duly acknowledged and filed with the
retirement board as of the date of retirement, or
Option III. Upon death of the benefit recipient, one-half of the benefit recipient's annuity,
pension, or retirement allowance shall be continued throughout the life of and paid to the person
as the benefit recipient shall nominate by written designation duly acknowledged and filed with
the retirement board as of the date of retirement, or
Option IV. Other optional retirement allowance forms, including a joint and survivor option
under which the benefit recipient receives a normal single-life annuity if the designated optional
annuity beneficiary dies before the benefit recipient, shall be paid to the benefit recipient or
other person or persons the benefit recipient nominates, provided that the optional annuity is of
equivalent actuarial value to the applicable single life annuity calculated under section 422A.15
and is approved by the retirement board.
Any optional retirement allowance shall be computed and determined under a procedure
specified by the actuary retained under section 356.214 utilizing the appropriate mortality table
established by the board of trustees based on the experience of the fund as recommended by the
actuary retained under section 356.214 and using the applicable postretirement interest rate
assumption specified in section 356.215, subdivision 8.
In adopting optional annuity forms, the board of trustees shall obtain the written
recommendation of the actuary retained under section 356.214. The recommendations shall be a
part of the permanent records of the board of trustees.
History: 1973 c 133 s 17; 1980 c 607 art 16 s 17 subd 3; 1986 c 444; 1987 c 259 s 76; 1991
c 345 art 4 s 11; 1992 c 480 s 4; 2002 c 392 art 11 s 52; 2006 c 271 art 3 s 47

422A.18 DISABILITY ALLOWANCES.
    Subdivision 1. Expert examination. (a) Upon the application of the head of the department
in which a contributing employee is employed, or upon the application of the contributing
employee or of one acting in the employee's behalf, the retirement board shall place the
contributor on disability and pay the person a disability allowance under this section if the
medical board, after an expert examination of the contributor made at the place of residence of
the contributor or at a place mutually agreed upon, shall certify to the retirement board that the
contributor is physically or mentally incapacitated for the performance of further service to the
city and recommend that the contributor be placed on disability.
(b) The medical board shall consist of the city physician, a physician, chiropractor, or
licensed psychologist to be selected by the retirement board, and a physician, chiropractor, or
licensed psychologist to be selected by the employee.
(c) Disability of an employee resulting from injury or illness received in the performance of
the duties of the city service shall be defined as duty disability.
(d) Disability incurred as a result of injury or illness not connected with the performance of
such service shall be defined as nonduty disability. In order to be entitled to a retirement allowance
for a nonduty disability, an employee shall have rendered five or more years of service to the city.
    Subd. 2. Disability allowance amount. (a) The amount of disability allowance under this
section shall be the amount of service allowance to which the employee would be entitled under
section 422A.15, notwithstanding the age requirements expressed therein; or the lesser of the
following amounts: 50 percent of the final average compensation, or an amount equal to two
percent of final average compensation for each year of allowable service for the first ten years,
and thereafter 2.5 percent of final average compensation per year of allowable service, including
in the latter assumed service between the date the disability occurred and the 60th birthday of
the employee.
(b) Annuities payable under this section shall be adjusted at the same time and rate as
retirement annuities in the retirement benefit fund.
    Subd. 3. Payment. Payment of any disability allowance authorized by sections 422A.01
to 422A.25, shall commence three months after date of application provided that the applicant
has not been restored to duty. Such payment shall be retroactive to date of application and shall
continue throughout the full period of the disability subject to the same optional selections as
are provided for service allowances; provided that when a disability beneficiary shall have
attained the minimum age for retirement on a service allowance the disability allowance shall be
discontinued only as provided by the terms of the option selected. Any employee eligible for a
disability allowance who is also entitled to an allowance under a workers' compensation act and/or
resumes a gainful occupation shall be entitled to receive during the period of such compensation
only that portion of the retirement allowance provided by this chapter which when added to such
additional compensation does not exceed the salary of the employee at the time of disability.
    Subd. 4. Additional medical examinations. (a) Once each year, the retirement board may
require any disability beneficiary while still under the established age for retirement to undergo an
expert examination by one or more physicians, one or more chiropractors, or one or more licensed
psychologists designated by the retirement board. The examination must be made at the place of
residence of the beneficiary or other place mutually agreed upon.
(b) If the medical board certifies to the retirement board that the disability beneficiary is
no longer physically or mentally incapacitated for the performance of duty, the beneficiary's
allowance must be discontinued and the head of the department in which the beneficiary was
employed at the time of retirement shall, upon notification by the retirement board of the report of
the medical board, reemploy the beneficiary at a rate of salary not less than the amount of the
disability allowance.
(c) After the expiration of five years subsequent to the retirement of the beneficiary,
the restoration to duty, notwithstanding the recommendation of the medical board, is optional
with the head of the department. If any disability beneficiary, while under the established age
for retirement, refuses to submit to at least one expert examination in any year by one or more
physicians, one or more chiropractors, or one or more licensed psychologists designated by the
medical board, the allowance must be discontinued until the withdrawal of such refusal, and
should such refusal continue for one year, all the beneficiary's rights in and to any retirement or
disability allowance are forfeited.
    Subd. 5. Return to active service. Upon application of any beneficiary under the established
age for retirement drawing a pension or a disability allowance under the provisions of this chapter,
approved by the retirement board, the beneficiary may be restored to active service by the head
of the department in which the beneficiary was employed at the time of disability. Upon the
restoration of a beneficiary to active service the disability allowance shall cease.
    Subd. 6.[Repealed, 1975 c 152 s 4]
    Subd. 7. Rules. The board shall establish rules and regulations for the determination of
earnings for purposes of this section.
History: 1973 c 133 s 18; 1973 c 770 s 12; 1974 c 74 s 1,2; 1974 c 76 s 12; 1975 c 152 s 2;
1975 c 359 s 23; 1977 c 399 s 17; 1980 c 607 art 14 s 45 subd 2; s 46; 1984 c 574 s 13; 1986 c
444; 1999 c 222 art 17 s 4; 2004 c 267 art 8 s 34,35; 1Sp2005 c 8 art 10 s 80

422A.19 RETIREMENT; CREDIT FOR SERVICE UNDER DISABILITY.
Where the city pays a disability allowance to any employee under any provisions of this
chapter and which provisions require the performance of services for any specified period
immediately preceding the time of retirement to entitle an employee to a retirement allowance,
the time during which any such person has heretofore received a disability allowance within such
specified period immediately preceding retirement, by reason of any disability arising from an
accident occurring in the course of employment, shall be credited as service with the same force
and effect as if the employee had actually performed service during such time.
History: 1973 c 133 s 19; 1986 c 444; 1Sp2005 c 8 art 10 s 80

422A.20 DEATH BENEFITS; DISTRIBUTION.
    Subdivision 1. Death benefits. In all cases where the retirement board of the city pursuant
to this chapter is required to refund the net accumulated credits of any contributing employee
standing to the employee's credit on date of death, or to refund the balance remaining to the credit
of a retired employee on the date of death, who has retired under the Option I plan of retirement,
the retirement board shall, at the written request of such employee filed with the retirement
board prior to death, or at the written request of a beneficiary filed with the retirement board
after the employee's death, provide for the payment of such credits or balances or any portion
thereof in monthly installments until such credits or balances are exhausted; provided that such
beneficiary shall be of the class of persons permitted to receive a sum or sums standing to the
credit of the employee at the time of death.
    Subd. 2. Interest. The retirement board shall provide for the payment of annual interest on
the credits or balances remaining on deposit at the same rate that is paid to contributing employees
on accumulated salary deductions.
    Subd. 3. Applicability. Nothing in this section shall be construed to alter the method of
determining the persons entitled to receive such refunds or the amount to be paid.
History: 1973 c 133 s 20; 1986 c 444; 1Sp2005 c 8 art 10 s 80

422A.21 RETIREMENT ALLOWANCES INCREASED.
    Subdivision 1. Increases. The retirement board shall increase the retirement allowances
hereafter paid of those employees who have retired or shall retire under the "$2 bill and annuity"
after January 1, 1973, by three 25 percent increases computed separately, each increase not
to exceed $300 per annum.
    Subd. 2. Applicability. Nothing in this section shall be construed to alter the method of
computing and determining the amount of the retirement allowance as provided in this chapter,
except the amount provided in subdivision 1 shall be paid in addition to any allowance authorized
in this chapter.
History: 1973 c 133 s 21; 1973 c 770 s 13; 1Sp2005 c 8 art 10 s 80

422A.22 REFUNDS.
    Subdivision 1. Retention; transfer. (a) If an employee to whom this chapter applies becomes
absolutely separated from active service before attaining the minimum retirement age established
in section 422A.13, the employee is entitled to a refund of the net accumulated amount of
deduction from salary, pay, or compensation, made for the purpose of accumulating a fund from
which to pay retirement allowances, with interest at the annual compound rate of six percent.
(b) Any contributing employee who separates from a department, board or commission of
the city whose employees are covered by a fund organized under this chapter, and becomes an
employee of a department or board of the same city, whose employees are covered by a retirement
fund or relief association by whatever name known, organized under any other law and supported
in whole or in part by taxes on the same city, has the option of:
(1) retaining their membership in the fund organized under this chapter, regardless of the
provisions of any law, rule, bylaw or other action requiring membership in any other retirement
fund or relief association however organized; or
(2) transferring to the fund or association covering the employees of the department or board
to which they are transferring, providing they are eligible for membership therein.
(c) Any contributing employee who elects to transfer to another fund or association as
provided in paragraph (b), clause (2), must make such election within one year from the date of
separation from the city service covered by this fund. If the contributing employee elects to
transfer to another fund, the employee is entitled to a refund of the net accumulated contributions
made by such employee to the fund organized under this chapter with interest at the annual
compound rate of six percent.
    Subd. 2.[Repealed, 1Sp2005 c 8 art 10 s 81]
    Subd. 3. Limitation on eligibility. No employee of the city is eligible to be a member of,
or receive benefits from, more than one retirement plan or fund of the city for the same period
of service.
    Subd. 4. Death-while-active refund. (a) Upon the death of an active member before the
employee's termination of active service, the beneficiary or beneficiaries designated by the
member on a form specified by the executive director and filed with the retirement board are
entitled to receive the net accumulated employee deductions from salary, pay, or compensation,
including interest under subdivision 1, paragraph (a), compounded annually to the date of the
member's death. The amount must not include any contributions made by the employee or on
the employee's behalf, or any interest or investment earnings on those contributions, which were
allocated to the survivor benefit fund under section 422A.06, subdivision 6.
(b) If the employee fails to make a designation, or if the beneficiary or beneficiaries
designated by the employee predeceases the employee, the deceased employee's estate is entitled
to the benefit specified in paragraph (a).
(c) A benefit payable under this subdivision is in addition to any applicable survivor benefit
under section 422A.23.
    Subd. 5.[Repealed, 1Sp2005 c 8 art 10 s 81]
    Subd. 6. Refund; Minneapolis Employees Retirement Fund. A person who has received
a refund from the Minneapolis Employees Retirement Fund, and who is a member of a public
retirement system included in section 422A.16, subdivision 8, may repay such refund with interest
at a compound annual rate of 8.5 percent to the Minneapolis Employees Retirement Fund. If a
refund is repaid to the fund and if more than one refund has been received from the fund, all
refunds must be repaid. Repayment must be made as provided in this chapter.
History: 1973 c 133 s 22; 1973 c 770 s 14; 1981 c 224 s 190; 1986 c 444; 1999 c 222 art 17
s 5,6; 1Sp2005 c 8 art 10 s 71-74

422A.221 [Repealed, 1Sp2005 c 8 art 10 s 81]

422A.23 SURVIVOR BENEFITS.
    Subdivision 1. Payment of city installment accumulated amount. (a) If an active or
deferred member dies with ten or more years of service credit, except as noted in paragraph (d),
the individual specified in paragraph (b) is eligible to receive the benefit specified in paragraph (c).
(b) An individual eligible for the benefit specified in paragraph (c) is a beneficiary designated
by the member on a form specified by the executive director. If the member failed to designate
a beneficiary, or if the beneficiary or beneficiaries designated by the employee predecease the
employee, the benefit in paragraph (c) is payable to the deceased employee's estate.
(c) The benefit is a lump-sum payment of the present value of the city's or other contributing
employer's annual installments of $60 to the credit of the member.
(d) No benefit is payable under this subdivision if a monthly survivor benefit is paid on
behalf of the deceased employee under another subdivision of this section.
    Subd. 2. Short-service survivor benefit. (a) If an active member dies prior to termination of
service with at least 18 months but less than 20 years of service credit, the surviving spouse or
surviving child or children is eligible to receive the survivor benefit specified in paragraph (b) or
(c), as applicable. Payment of a benefit for any surviving child under the age of 18 years shall be
made to the surviving parent, or if there be none, to the legal guardian of the surviving child.
(b) If the surviving spouse or surviving child benefit commenced before July 1, 1983, the
surviving spouse benefit is increased from $500 per month to $750 per month and the surviving
child benefit is $225 per month, beginning with the first monthly payment payable after May 28,
1998. The sum of surviving spouse and surviving child benefits payable under this paragraph
shall not exceed $900 per month. The increased cost resulting from the benefit increases under
this paragraph must be allocated to each employing unit listed in section 422A.101, subdivisions
1a, 2, and 2a , on the basis of the additional accrued liability resulting from increased benefits paid
to the survivors of employees from that unit.
(c) If the surviving spouse or surviving child benefit commences after June 30, 1983, the
surviving spouse benefit is 30 percent of the member's average salary in effect over the last six
months of allowable service preceding the month in which death occurs. The surviving child
benefit is ten percent of the member's average salary in effect over the last six months of allowable
service preceding the month in which death occurs. The sum of surviving spouse and surviving
child benefits payable under this paragraph shall not exceed 50 percent of the member's average
salary in effect over the last six months of allowable service.
(d) Any surviving child benefit or surviving spouse benefit computed under paragraph (c)
and in effect for the month immediately prior to May 28, 1998, is increased by 15 percent as of
the first payment on or after May 28, 1998.
(e) Surviving child benefits under this subdivision terminate when the child no longer meets
the definition of surviving child.
    Subd. 3.[Repealed, 1983 c 286 s 26]
    Subd. 4.[Repealed, 1976 c 279 s 4]
    Subd. 5. Administration. Benefits provided in this section following the death of an active
employee or deferred member, as applicable, commence on the first day of the month following
the month in which the active employee or deferred member dies and shall end with the last day
of the month preceding the month in which eligibility ceases. Information deemed necessary by
the executive director to determine eligibility for the benefits provided by this section must be
submitted. Failure to furnish any required information shall be sufficient grounds for denial or
discontinuance of benefits. A determination made by the executive director may be appealed
to the retirement board, whose determination is final. If the surviving spouse of the deceased
active employee or deferred member becomes entitled to a retirement allowance by reason of
membership in this fund, the surviving spouse is authorized to receive the retirement allowance
in addition to all applicable surviving spouse benefits to which the surviving spouse is entitled
as specified in this section and section 422A.22, subdivision 4, if applicable. The cost of all
benefits provided in this section is an obligation of the members and of the city, any of its boards,
departments, commissions or public corporations or other applicable employing units.
    Subd. 6. Survivor benefit employee contribution. The retirement board shall create a
reserve account for survivor's benefits from which shall be paid on an actuarial basis all survivor
benefits due and payable. At the end of each fiscal year, as part of the annual actuarial valuation of
the fund prepared by the actuary retained under section 356.214, a determination of the normal
cost of the benefits payable from the survivor's benefit account shall be made and the board shall
reduce or increase the employee contribution rate if and when it is determined based on the annual
actuarial valuation that the member contribution rate is in excess of or is less than the amount
necessary to pay for 50 percent of the calculated normal cost of the survivor benefits provided
in this section.
    Subd. 7. Long-service active and deferred member survivor coverage. (a) If the active
or deferred member dies with 20 or more years of service credit, a beneficiary as defined in
paragraph (b) is eligible to receive the benefit specified in paragraph (c).
(b) The beneficiary eligible for a benefit under paragraph (c) is the surviving spouse of the
deceased employee. If there is no surviving spouse, the beneficiary may be a dependent surviving
child of the member or dependent parent designated by the employee on a form prescribed by
the executive director.
(c) The benefit payable to the beneficiary designated in paragraph (b) is a monthly allowance
for life. The monthly allowance is the actuarial equivalent of a single life service allowance
specified in section 422A.15, subdivision 1, which would have been payable to the employee on
the date of death, notwithstanding the age requirement stated in section 422A.15, subdivision 1.
For purposes of this section, the amount of any excess contributions or voluntary additions by the
member shall not be included in the calculations in determining the monthly allowance.
(d) For benefits payable under this subdivision following the death of a deferred member, the
benefit must be calculated as of the date of termination from service and increased by five percent
per year until January 1, 1981, and by three percent per year thereafter, compounded annually.
    Subd. 8. Surviving child; dependent definition. For purposes of subdivision 2, a surviving
child is an unmarried child of the deceased member under the age of 18, or under the age of 22 if
a full-time student at an accredited school, college, or university. For purposes of subdivision 7, a
dependent surviving child or dependent parent must meet the definition of dependent, as defined
in section 422A.01, subdivision 12, at the time of the active or deferred member's death.
    Subd. 9. Lump-sum death benefit. If no monthly survivor benefit is payable under
subdivision 2 or 7, there shall be paid from the survivor benefit account to a beneficiary designated
by the employee on a form prescribed by the executive director a lump-sum death benefit of $750
if death occurs prior to the end of the employee's tenth year of service credit or of $1,500 if the
employee had ten or more years of service credit. Any benefit under this subdivision may be paid
in addition to a benefit payable under subdivision 1.
    Subd. 10. Benefit increases. Annuities payable under this section must be adjusted at the
same time and rate as retirement annuities in the retirement benefit fund.
    Subd. 11. Effect of spouse remarriage. A monthly survivor benefit must not be discontinued
or terminated due to a surviving spouse's remarriage.
    Subd. 12. Determination of annuity. The survivor annuities payable under this section
must be computed and determined under a procedure specified by the actuary retained under
section 356.214 utilizing the appropriate mortality table based on the experience of the fund as
recommended by that actuary and approved by the Legislative Commission on Pensions and
Retirement and using the applicable postretirement interest rate assumption specified in section
356.215, subdivision 8.
History: 1973 c 133 s 23; 1973 c 770 s 15; 1974 c 75 s 1-3; 1974 c 76 s 13; 1974 c 232 s 1;
1976 c 279 s 1,2; 1977 c 399 s 18,19; 1980 c 607 art 14 s 45 subd 2; s 46; 1981 c 224 s 191; 1983
c 286 s 20; 1986 c 444; 1987 c 259 s 77,78; 1991 c 345 art 4 s 12; 1992 c 480 s 5; 1998 c 390 art
2 s 16; 1999 c 222 art 17 s 7; 2002 c 392 art 11 s 52; 2006 c 271 art 3 s 47

422A.231 COST ALLOCATION.
(a) Notwithstanding any law to the contrary, all current and future contribution requirements
due to this article are payable by the participating contributing employing units other than the
state of Minnesota.
(b) In each actuarial valuation of the retirement fund, the actuary retained under section
356.214 shall include an exhibit on the impact of the benefit increases contained in this article on
the survivor benefit fund. The actuary shall calculate the expected change in the present value of
the future benefits payable from the survivor benefit fund attributable to this article, using the
actuarial method and assumptions applicable to the Minneapolis Employees Retirement Fund,
from the prior actuarial valuation and shall compare that result with the actual change in the
present value of future benefits payable from the survivor benefit fund attributable to this article
from the prior actuarial valuation.
(c) The executive director shall assess each participating employer, other than the state of
Minnesota, its proportional share of the net increase amount calculated under paragraph (b). The
assessment must be made on the first business day of the following February, plus compound
interest at an annual rate of six percent on the amount from the actuarial valuation date to the
date of payment.
History: 1999 c 222 art 17 s 8; 1Sp2005 c 8 art 10 s 75

422A.24 ALLOWANCES NOT ASSIGNABLE OR SUBJECT TO PROCESS.
The provisions of section 356.401 apply to the Minneapolis employees retirement plan.
History: 1973 c 133 s 24; 1981 c 224 s 192; 1984 c 547 s 9; 1987 c 157 s 9; 1997 c 203
art 6 s 92; 1Sp2005 c 8 art 10 s 76

422A.25 CONTINUING APPROPRIATION, RIGHTS NOT IMPAIRED.
All money necessary to meet all transfers from account to account, from fund to fund, and
from fund to beneficiaries and annuitants provided in this chapter, are hereby annually and from
time to time appropriated. Nothing contained in this chapter shall be construed as diminishing,
limiting or modifying any vested right of an employee, annuitant or beneficiary to a retirement
allowance, annuity or pension acquired under the law existing prior to May 1, 1975.
History: 1973 c 133 s 26; 1975 c 152 s 3; 1Sp2005 c 8 art 10 s 80

422A.26 COVERAGE BY THE PUBLIC EMPLOYEES RETIREMENT ASSOCIATION.
Notwithstanding section 422A.09, or any other law to the contrary, any person whose
employment by, or assumption of a position as an appointed or elected officer of, the city of
Minneapolis, any of the boards, departments, or commissions operated as a department of the city
of Minneapolis or independently if financed in whole or in part by funds of the city of Minneapolis,
the Metropolitan Airports Commission, the Minneapolis Employees Retirement Fund, or Special
School District Number 1 if the person is not a member of the Minneapolis Teachers Retirement
Fund Association by virtue of that employment or position, initially commences on or after July
1, 1979 shall be a member of the Public Employees Retirement Association unless excluded from
membership pursuant to section 353.01, subdivision 2b. In no event shall there be any new
members of the contributing class of the Minneapolis employees fund on or after July 1, 1979.
History: 1979 c 303 art 6 s 10; 1981 c 224 s 193; 1981 c 298 s 11

422A.30 [Repealed, 1981 c 224 s 276]

422A.31 [Repealed, 1981 c 224 s 276]

422A.32 [Repealed, 1981 c 224 s 276]

422A.33 [Repealed, 1981 c 224 s 276]

422A.34 [Repealed, 1981 c 224 s 276]

422A.35 [Repealed, 1981 c 224 s 276]

422A.39 [Repealed, 1981 c 224 s 276]