2005 Minnesota Statutes

     356.214 Actuarial valuation preparation; joint retention 
  of consulting actuary. 

    Subdivision 1.    Joint retention.  (a) The chief 
 administrative officers of the Minnesota State Retirement 
 System, the Public Employees Retirement Association, the 
 Teachers Retirement Association, the Duluth Teachers Retirement 
 Fund Association, the Minneapolis Teachers Retirement Fund 
 Association, the Minneapolis Employees Retirement Fund, and the 
 St. Paul Teachers Retirement Fund Association, jointly, on 
 behalf of the state, its employees, its taxpayers, and its 
 various public pension plans, shall contract with an established 
 actuarial consulting firm to conduct annual actuarial valuations 
 and related services for the retirement plans named in paragraph 
 (b).  The principal from the actuarial consulting firm on the 
 contract must be an approved actuary under section 356.215, 
 subdivision 1, paragraph (c).  Prior to becoming effective, the 
 contract under this section is subject to a review and approval 
 by the Legislative Commission on Pensions and Retirement. 

    (b) The contract for actuarial services must include the 
 preparation of actuarial valuations and related actuarial work 
 for the following retirement plans:  

    (1) the teachers retirement plan, Teachers Retirement 
 Association; 

    (2) the general state employees retirement plan, Minnesota 
 State Retirement System; 

    (3) the correctional employees retirement plan, Minnesota 
 State Retirement System; 

    (4) the State Patrol retirement plan, Minnesota State 
 Retirement System; 

    (5) the judges retirement plan, Minnesota State Retirement 
 System; 

    (6) the Minneapolis employees retirement plan, Minneapolis 
 Employees Retirement Fund; 

    (7) the public employees retirement plan, Public Employees 
 Retirement Association; 

    (8) the public employees police and fire plan, Public 
 Employees Retirement Association; 

    (9) the Duluth teachers retirement plan, Duluth Teachers 
 Retirement Fund Association; 

    (10) the 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; 

    (13) the elective state officers retirement plan, Minnesota 
 State Retirement System; and 

    (14) local government correctional service retirement plan, 
 Public Employees Retirement Association.  

    (c) The contract must require completion of the annual 
 actuarial valuation calculations on a fiscal year basis, with 
 the contents of the actuarial valuation calculations as 
 specified in section 356.215, and in conformity with the 
 standards for actuarial work adopted by the Legislative 
 Commission on Pensions and Retirement.  

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

    (1) individual salary progression; 

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

    (3) payroll growth; 

    (4) mortality; 

    (5) retirement age; 

    (6) withdrawal; and 

    (7) disablement.  

    The contract must include provisions for the preparation of 
 cost analyses by the jointly retained actuary for proposed 
 legislation that include changes in benefit provisions or 
 funding policies prior to their consideration by the Legislative 
 Commission on Pensions and Retirement. 

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

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

    (f) The term of the contract between the joint retirement 
 systems and the actuary retained may not exceed five years.  The 
 joint retirement system administrative officers shall establish 
 procedures for the consideration and selection of contract 
 bidders and the requirements for the contents of an actuarial 
 services contract under this section.  The procedures and 
 requirements must be submitted to the Legislative Commission on 
 Pensions and Retirement for review and comment prior to final 
 approval by the joint administrators.  The contract is subject 
 to the procurement procedures under chapter 16C.  The 
 consideration of bids and the selection of a consulting 
 actuarial firm by the chief administrative officers must occur 
 at a meeting that is open to the public and reasonable timely 
 public notice of the date and the time of the meeting and its 
 subject matter must be given. 

    (g) The actuarial services contract may not limit the 
 ability of the Minnesota legislature and its standing committees 
 and commissions to rely on the actuarial results of the work 
 prepared under the contract. 

    (h) The joint retirement systems shall designate one of the 
 retirement system executive directors as the actuarial services 
 contract manager. 

    Subd. 2.    Allocation of actuarial costs.  (a) The 
 actuarial services contract manager shall assess each retirement 
 plan specified in subdivision 1, paragraph (b), its appropriate 
 portion of the total compensation paid to the actuary retained 
 by the joint retirement systems for the actuarial valuation 
 calculations and quadrennial experience studies.  The total 
 assessment is 100 percent of the amount of contract compensation 
 for the actuarial consulting firm for actuarial valuation 
 calculations, including any public employees police and fire 
 plan consolidation accounts of the Public Employees Retirement 
 Association established after March 1, 1999, annual experience 
 data collection and processing, and quadrennial experience 
 studies.  

    The portion of the total assessment payable by each 
 retirement system or pension plan must be determined based on 
 each plan's proportion of the actuarial services required, as 
 determined by the retained actuary, to complete the actuarial 
 valuation calculations, annual experience data collection and 
 processing, and quadrennial experience studies for all plans.  

    The assessment must be made within 30 days following the 
 end of the fiscal year and must be reported to the chief 
 administrative officers of the applicable retirement plans.  The 
 amount of the assessment is appropriated from the retirement 
 fund applicable to the retirement plan. 

    (b) The actuarial services contract manager shall assess 
 each retirement plan or each interest group which requested the 
 preparation of a cost analysis for proposed legislation the cost 
 of the actuary retained by the joint retirement systems incurred 
 in the cost analysis preparation.  With respect to interest 
 groups, the actuarial services contract manager shall obtain a 
 written commitment for the payment of the assessment in advance 
 of the cost analysis preparation and may require an advance 
 deposit or advance payment before authorizing the cost analysis 
 preparation.  The retirement plan or the interest group shall 
 pay the assessment within 30 days of the date on which the 
 assessment is billed.  The amount of the assessment is 
 appropriated from the retirement fund applicable to the 
 retirement plan for cost analyses requested by a retirement plan 
 or system. 

    (c) The actuarial services contract manager shall assess to 
 the Legislative Commission on Pensions and Retirement the cost 
 of the actuarial cost analysis preparation for the proposed 
 legislation requested by the chair of the Legislative Commission 
 on Pensions and Retirement or by the commission executive 
 director.  The commission shall pay the assessment within 30 
 days of the date on which the assessment is billed. 

    Subd. 3.    Reporting to commission.  A copy of the 
 actuarial valuations, experience studies, and actuarial cost 
 analyses prepared by the actuary retained by the joint 
 retirement systems under the contract provided for in this 
 section must be filed with the executive director of the 
 Legislative Commission on Pensions and Retirement at the same 
 time that the document is transmitted to the actuarial services 
 contract manager or to any other document recipient. 

    HIST: 2004 c 223 s 6