1997 Minnesota Statutes

     3.85 Legislative commission on pensions and retirement. 

    Subdivision 1.    Creation.  The legislative commission 
 on pensions and retirement is created to study and investigate 
 public retirement systems. 

    Subd. 2.    Powers.  The commission shall make a 
 continuing study and investigation of retirement benefit plans 
 applicable to nonfederal government employees in this state.  
 The powers and duties of the commission include, but are not 
 limited to the following: 

    (a) studying retirement benefit plans applicable to 
 nonfederal government employees in Minnesota, including federal 
 plans available to the employees; 

    (b) making recommendations within the scope of its study, 
 including attention to financing of the various pension funds 
 and financing of accrued liabilities; 

    (c) considering all aspects of pension planning and 
 operation and making recommendations designed to establish and 
 maintain sound pension policy for all funds; 

    (d) filing a report at least biennially to each session of 
 the legislature; 

    (e) analyzing each item of proposed pension and retirement 
 legislation, including amendments to each, with particular 
 reference to analysis of their cost, actuarial soundness, and 
 adherence to sound pension policy, and reporting its findings to 
 the legislature; 

    (f) creating and maintaining a library for reference 
 concerning pension and retirement matters, including information 
 about laws and systems in other states; and 

    (g) studying, analyzing, and preparing reports in regard to 
 subjects certified to the commission for study.  

    Subd. 3.    Membership.  The commission consists of six 
 members of the senate appointed by the subcommittee on 
 committees of the committee on rules and administration and six 
 members of the house of representatives appointed by the 
 speaker.  Members shall be appointed at the commencement of each 
 regular session of the legislature for a two-year term beginning 
 January 16 of the first year of the regular session.  Vacancies 
 that occur while the legislature is in session shall be filled 
 like regular appointments.  If the legislature is not in 
 session, senate vacancies shall be filled by the last 
 subcommittee on committees of the senate committee on rules and 
 administration or other appointing authority designated by the 
 senate rules, and house vacancies shall be filled by the last 
 speaker of the house, or if the speaker is not available, by the 
 last chair of the house rules committee. 

    Subd. 4.    Office, meetings, officers.  The commission 
 shall maintain an office in the capitol group of buildings in 
 space which the commissioner of administration shall provide.  
 The commission shall hold meetings at the times and places it 
 may designate.  It shall select a chair, a vice-chair, and other 
 officers from its membership as it deems necessary. 

    Subd. 5.    Staff.  The commission may employ 
 professional and technical assistants as it deems necessary to 
 perform the duties prescribed in this section.  

    Subd. 6.    Assistance of other agencies.  The 
 commission may request information from any state officer or 
 agency or public pension fund or plan as defined in section 
 356.61, including a volunteer firefighters' relief association 
 to which sections 69.771 to 69.776 apply, to assist it to carry 
 out the terms of this section.  The officer, agency, or public 
 pension fund or plan shall promptly furnish any data requested.  

    Subd. 7. Repealed, 1996 c 310 s 1 

    Subd. 8.    Expenses, reimbursement.  The members of the 
 commission and its assistants shall be reimbursed for all 
 expenses actually and necessarily incurred in the performance of 
 their duties.  Reimbursement for expenses incurred shall be made 
 under the rules governing state employees.  

    Subd. 9.    Expenses and reports.  Expenses of the 
 commission shall be approved by the chair or another member as 
 the rules of the commission provide.  The expenses shall then be 
 paid like other state expenses.  A general summary or statement 
 of expenses incurred by the commission and paid shall be made to 
 the legislature by November 15 of each even-numbered year.  

    Subd. 10.    Standards for pension valuations and cost 
 estimates.  The commission shall adopt standards prescribing 
 specific detailed methods to calculate, evaluate, and display 
 current and proposed law liabilities, costs, and actuarial 
 equivalents of all public employee pension plans in Minnesota.  
 These standards shall be consistent with chapter 356 and be 
 updated annually.  

    Subd. 11.    Valuations and reports to legislature.  (a) 
 The commission shall contract with an established actuarial 
 consulting firm to conduct annual actuarial valuations for the 
 retirement plans named in paragraph (b).  The contract must 
 include provisions for performing cost analyses of proposals for 
 changes in benefit and funding policies.  

    (b) The contract for actuarial valuation must include the 
 following retirement plans:  

    (1) the teachers retirement plan, teachers retirement 
 association; 

    (2) the general state employees retirement plan, Minnesota 
 state retirement system; 

    (3) the correctional employees retirement plan, Minnesota 
 state retirement system; 

    (4) the state patrol retirement plan, Minnesota state 
 retirement system; 

    (5) the judges retirement plan, Minnesota state retirement 
 system; 

    (6) the Minneapolis employees retirement plan, Minneapolis 
 employees retirement fund; 

    (7) the public employees retirement plan, public employees 
 retirement association; 

    (8) the public employees police and fire plan, public 
 employees retirement association; 

    (9) the Duluth teachers retirement plan, Duluth teachers 
 retirement fund association; 

    (10) the Minneapolis teachers retirement plan, Minneapolis 
 teachers retirement fund association; 

    (11) the St. Paul teachers retirement plan, St. Paul 
 teachers retirement fund association; 

    (12) the legislators retirement plan, Minnesota state 
 retirement system; and 

    (13) the elective state officers retirement plan, Minnesota 
 state retirement system.  

    (c) The contract must specify completion of annual 
 actuarial valuation calculations on a fiscal year basis with 
 their contents as specified in section 356.215, and the 
 standards for actuarial work adopted by the commission.  

    The contract must specify completion of annual experience 
 data collection and processing and a quadrennial published 
 experience study for the plans listed in paragraph (b), clauses 
 (1), (2), and (7), as provided for in the standards for 
 actuarial work adopted by the commission.  The experience data 
 collection, processing, and analysis must evaluate the following:

    (1) individual salary progression; 

    (2) rate of return on investments based on current asset 
 value; 

    (3) payroll growth; 

    (4) mortality; 

    (5) retirement age; 

    (6) withdrawal; and 

    (7) disablement.  

    (d) The actuary retained by the commission shall annually 
 prepare a report to the legislature, including the commentary on 
 the actuarial valuation calculations for the plans named in 
 paragraph (b) and summarizing the results of the actuarial 
 valuation calculations.  The commission-retained actuary shall 
 include with the report the actuary's recommendations concerning 
 the appropriateness of the support rates to achieve proper 
 funding of the retirement funds by the required funding dates.  
 The commission-retained actuary shall, as part of the 
 quadrennial published experience study, include recommendations 
 to the legislature on the appropriateness of the actuarial 
 valuation assumptions required for evaluation in the study.  

    (e) If the actuarial gain and loss analysis in the 
 actuarial valuation calculations indicates a persistent pattern 
 of sizable gains or losses, as directed by the commission, the 
 actuary retained by the commission shall prepare a special 
 experience study for a plan listed in paragraph (b), clause (3), 
 (4), (5), (6), (8), (9), (10), (11), (12), or (13), in the 
 manner provided for in the standards for actuarial work adopted 
 by the commission. 

    (f) The term of the contract between the commission and the 
 actuary retained by the commission is two years, plus not to 
 exceed two one-year extensions before competitive bidding.  The 
 contract is subject to competitive bidding procedures as 
 specified by the commission. 

    Subd. 12.    Allocation of actuarial cost.  (a) The 
 commission shall assess each retirement plan specified in 
 subdivision 11, paragraph (b), the compensation paid to the 
 actuary retained by the commission for the actuarial valuation 
 calculations, quadrennial projection valuations, and quadrennial 
 experience studies.  The assessment is 100 percent of the amount 
 of contract compensation for the actuarial consulting firm 
 retained by the commission for actuarial valuation calculations, 
 including the public employees police and fire plan 
 consolidation accounts of the public employees retirement 
 association, annual experience data collection and processing, 
 and quadrennial experience studies.  

    The portion of the total assessment payable by each 
 retirement system or pension plan must be determined as follows: 

    (1) Each pension plan specified in subdivision 11, 
 paragraph (b), clauses (1) to (13), must pay the following 
 indexed amount based on its total active, deferred, inactive, 
 and benefit recipient membership: 

        up to 2,000 members, inclusive         $2.55 per member 

        2,001 through 10,000 members           $1.13 per member 

        over 10,000 members                    $0.11 per member  

    The amount specified is applicable for the assessment of 
 the July 1, 1991, to June 30, 1992, fiscal year actuarial 
 compensation amounts.  For the July 1, 1992, to June 30, 1993, 
 fiscal year and subsequent fiscal year actuarial compensation 
 amounts, the amount specified must be increased at the same 
 percentage increase rate as the implicit price deflator for 
 state and local government purchases of goods and services for 
 the 12-month period ending with the first quarter of the 
 calendar year following the completion date for the actuarial 
 valuation calculations, as published by the federal Department 
 of Commerce, and rounded upward to the nearest full cent. 

    (2) The total per-member portion of the allocation must be 
 determined, and that total per-member amount must be subtracted 
 from the total amount for allocation.  Of the remainder dollar 
 amount, the following per-retirement system and per-pension plan 
 charges must be determined and the charges must be paid by the 
 system or plan: 

    (i) 37.87 percent is the total additional per-retirement 
 system charge, of which one-seventh must be paid by each 
 retirement system specified in subdivision 11, paragraph (b), 
 clauses (1), (2), (6), (7), (9), (10), and (11). 

    (ii) 62.13 percent is the total additional per-pension plan 
 charge, of which one-thirteenth must be paid by each pension 
 plan specified in subdivision 11, paragraph (b), clauses (1) to 
 (13).  

    (b) The assessment must be made following the completion of 
 the actuarial valuation calculations and the experience 
 analysis.  The amount of the assessment is appropriated from the 
 retirement fund applicable to the retirement plan.  Receipts 
 from assessments must be deposited in the state treasury and 
 credited to the general fund. 

    HIST: 1967 c 549 s 1-6; 1969 c 399 s 1; 1971 c 818 s 1,2; 1974 
 c 406 s 53; 1975 c 271 s 6; 1981 c 224 s 1; 1984 c 564 s 1,2; 
 1Sp1985 c 7 s 1,2,35; 1Sp1985 c 13 s 65; 1986 c 359 s 1; 1986 c 
 444; 1987 c 259 s 1; 1987 c 404 s 62; 1988 c 469 art 1 s 1; 1991 
 c 269 art 3 s 1; 1995 c 248 art 2 s 3; 1995 c 254 art 1 s 36; 
 1997 c 202 art 2 s 5; 1997 c 233 art 1 s 1,2