1998 Minnesota Statutes

     356.215 Actuarial valuations and experience studies. 

    Subdivision 1.    Definitions.  For the purposes of 
 sections 3.85 and 356.20 to 356.23, each of the following terms 
 have the meaning given: 

    (1) "Actuarial valuation" means a set of calculations 
 prepared by the actuary retained by the legislative commission 
 on pensions and retirement if so required under section 3.85, or 
 otherwise, by an approved actuary, to determine the normal cost 
 and the accrued actuarial liabilities of a benefit plan, 
 according to the entry age actuarial cost method and based upon 
 stated assumptions including, but not limited to rates of 
 interest, mortality, salary increase, disability, withdrawal, 
 and retirement and to determine the payment necessary to 
 amortize over a stated period any unfunded accrued actuarial 
 liability disclosed as a result of the actuarial valuation of 
 the benefit plan. 

    (2) "Approved actuary" means a person who is regularly 
 engaged in the business of providing actuarial services and who 
 has at least 15 years of service to major public employee 
 pension or retirement funds or who is a fellow in the society of 
 actuaries.  

    (3) "Entry age actuarial cost method" means an actuarial 
 cost method under which the actuarial present value of the 
 projected benefits of each individual currently covered by the 
 benefit plan and included in the actuarial valuation is 
 allocated on a level basis over the service of the individual if 
 the benefit plan is governed by section 69.773 or over the 
 earnings of the individual if the benefit plan is governed by 
 any other law between the entry age and the assumed exit age, 
 with the portion of this actuarial present value which is 
 allocated to the valuation year to be the normal cost and the 
 portion of this actuarial present value not provided for at the 
 valuation date by the actuarial present value of future normal 
 costs to be the actuarial accrued liability, with aggregation in 
 the calculation process to be the sum of the calculated result 
 for each covered individual and with recognition given to any 
 different benefit formulas which may apply to various periods of 
 service. 

    (4) "Experience study" means a report providing experience 
 data and an actuarial analysis of the adequacy of the actuarial 
 assumptions on which actuarial valuations are based. 

    (5) "Current assets" means the value of all assets at cost, 
 including realized capital gains or losses, plus one-third of 
 any unrealized capital gains or losses. 

    (6) "Unfunded actuarial accrued liability" means the total 
 current and expected future benefit obligations, reduced by the 
 sum of current assets and the present value of future normal 
 costs. 

    (7) "Pension benefit obligation" means the actuarial 
 present value of credited projected benefits, determined as the 
 actuarial present value of benefits estimated to be payable in 
 the future as a result of employee service attributing an equal 
 benefit amount, including the effect of projected salary 
 increases and any step rate benefit accrual rate differences, to 
 each year of credited and expected future employee service. 

    Subd. 2.    Requirements.  (a) It is the policy of the 
 legislature that it is necessary and appropriate to determine 
 annually the financial status of tax supported retirement and 
 pension plans for public employees.  To achieve this goal, the 
 legislative commission on pensions and retirement shall have 
 prepared by the actuary retained by the commission annual 
 actuarial valuations of the retirement plans enumerated in 
 section 3.85, subdivision 11, paragraph (b), quadrennial 
 experience studies of the retirement plans enumerated in section 
 3.85, subdivision 11, paragraph (b), clauses (1), (2), and (7), 
 and, two years after each set of quadrennial experience studies, 
 quadrennial projection valuations of at least one of the 
 retirement plans enumerated in section 3.85, subdivision 11, 
 paragraph (b), for which it determines that the analysis may be 
 beneficial.  The governing or managing board or administrative 
 officials of each public pension and retirement fund or plan 
 enumerated in section 356.20, subdivision 2, clauses (9), (10), 
 and (12), shall have prepared by an approved actuary annual 
 actuarial valuations of their respective funds as provided in 
 this section.  This requirement also applies to any fund that is 
 the successor to any organization enumerated in section 356.20, 
 subdivision 2, or to the governing or managing board or 
 administrative officials of any newly formed retirement fund or 
 association operating under the control or supervision of any 
 public employee group, governmental unit, or institution 
 receiving a portion of its support through legislative 
 appropriations, and any local police or fire fund coming within 
 the provisions of section 356.216. 

    (b) A quadrennial projection valuation required under 
 paragraph (a) is intended to serve as an additional analytical 
 tool with which policy makers may assess the future funding 
 status of public plans through forecasting and testing various 
 potential outcomes over time if certain plan assumptions or 
 valuation methods were to be modified.  In consultation with the 
 executive director of the legislative commission on pensions and 
 retirement, the retirement fund directors, the state economist, 
 the state demographer, the commissioner of finance, and the 
 commissioner of employee relations, the actuary retained by the 
 legislative commission on pensions and retirement shall perform 
 the quadrennial projection valuations, testing future 
 implications for plan funding by modifying assumptions and 
 methods currently in place.  The commission-retained actuary 
 shall provide advice to the commission as to the periods over 
 which such projections should be made, the nature and scope of 
 the scenarios to be analyzed, and the measures of funding status 
 to be employed, and shall report the results of these analyses 
 in the same manner as for quadrennial experience studies. 

    Subd. 3.    Reports.  The actuarial valuations required 
 annually must be made as of the beginning of each fiscal year.  
 Two copies of the valuation must be delivered to the executive 
 director of the legislative commission on pensions and 
 retirement, to the commissioner of finance and to the 
 legislative reference library, not later than the first day of 
 the sixth month occurring after the end of the previous fiscal 
 year.  Two copies of a quadrennial experience study must be 
 filed with the executive director of the legislative commission 
 on pensions and retirement, with the commissioner of finance, 
 and with the legislative reference library, not later than the 
 first day of the 11th month occurring after the end of the last 
 fiscal year of the four-year period which the experience study 
 covers.  For actuarial valuations and experience studies 
 prepared at the direction of the legislative commission on 
 pensions and retirement, two copies of the document must be 
 delivered to the governing or managing board or administrative 
 officials of the applicable public pension and retirement fund 
 or plan. 

    Subd. 4.    Actuarial valuation; contents.  The 
 actuarial valuation must be made in conformity with the 
 requirements of the definition contained in subdivision 1 and 
 the most recent standards for actuarial work adopted by the 
 legislative commission on pensions and retirement.  The 
 actuarial valuation must measure all aspects of the benefit plan 
 of the fund in accordance with changes in benefit plans, if any, 
 and salaries reasonably anticipated to be in force during the 
 ensuing fiscal year.  The actuarial valuation must be prepared 
 in accordance with the entry age actuarial cost method. 

    The actuarial valuation required under this section must 
 include the information required in subdivisions 4a to 4k. 

    Subd. 4a.    Normal cost.  For a fund providing benefits 
 in whole or in part under a defined benefit plan, the actuarial 
 valuation must indicate the level normal cost of the benefits 
 provided by the laws governing the fund as of the date of the 
 valuation, calculated in accordance with the entry age actuarial 
 cost method.  The normal cost must be expressed as a level 
 percentage of the present value of future payrolls of the active 
 participants of the fund as of the date of the valuation. 

    Subd. 4b.    Accrued liability.  For a fund providing 
 benefits under a defined benefit plan, the actuarial valuation 
 must contain an exhibit indicating the actuarial accrued 
 liabilities of the fund.  This figure is the present value of 
 future benefits, reduced by the present value of future normal 
 costs, calculated in accordance with the entry age actuarial 
 cost method. 

    Subd. 4c.    Defined contribution accumulations.  For 
 each fund providing benefits under the money purchase or defined 
 contribution plan, the actuarial valuation shall contain an 
 exhibit indicating the member contributions accumulated at 
 interest, as apportioned to members accounts, to the date of the 
 valuation.  These accumulations shall be separately tabulated in 
 a manner which properly reflects any differences in money 
 purchase or defined contribution annuity rates which may apply. 

    Subd. 4d.    Interest and salary assumptions.  (a) The 
 actuarial valuation must use the applicable following 
 preretirement interest assumption and the applicable following 
 postretirement interest assumption: 

                                   preretirement   postretirement 

                                   interest rate   interest rate 

            plan                    assumption       assumption 

  general state employees 

    retirement plan                    8.5%             5.0% 

  correctional state employees 

    retirement plan                    8.5              5.0 

  state patrol retirement plan         8.5              5.0 

  legislators retirement plan          8.5              5.0 

  elective state officers

    retirement plan                    8.5              5.0 

  judges retirement plan               8.5              5.0 

  general public employees 

    retirement plan                    8.5              5.0 

  public employees police and fire 

    retirement plan                    8.5              5.0 

  local government correctional 

    service retirement plan            8.5              5.0 

  teachers retirement plan             8.5              5.0 

  Minneapolis employees 

    retirement plan                    6.0              5.0 

  Duluth teachers retirement plan      8.5              8.5 

  Minneapolis teachers retirement

    plan                               8.5              8.5 

  St. Paul teachers retirement 

    plan                               8.5              7.5 

  Minneapolis police relief 

    association                        6.0              6.0 

  other local police relief 

    associations                       5.0              5.0 

  Minneapolis fire department 

    relief association                 6.0              6.0 

  other local salaried firefighter 

    relief associations                5.0              5.0 

  local monthly benefit volunteer 

    firefighter relief associations    5.0              5.0 

    (b) The actuarial valuation must use the applicable 
 following single rate future salary increase assumption or the 
 applicable following graded rate future salary increase 
 assumption: 

    (1) single rate future salary increase assumption 

                                           future salary 

            plan                        increase assumption 

  legislators retirement plan                  5.0% 

  elective state officers retirement 

    plan                                       5.0 

  judges retirement plan                       5.0 

  Minneapolis employees retirement plan        4.0 

  Minneapolis police relief association        4.0 

  other local police relief associations       3.5 

  Minneapolis fire department relief 

    association                                4.0 

  other local salaried firefighter relief 

    associations                               3.5 

    (2) graded rate future salary increase assumption 

                                           future salary 

            plan                        increase assumption 

  general state employees retirement 

    plan                                   assumption A 

  correctional state employees 

    retirement plan                        assumption A 

  state patrol retirement plan             assumption A 

  general public employees retirement 

    plan                                   assumption B 

  public employees police and fire 

    fund retirement plan                   assumption C 

  local government correctional service 

    retirement plan                        assumption C 

  teachers retirement plan                 assumption D 

  Duluth teachers retirement plan          assumption E 

  Minneapolis teachers retirement plan     assumption F 

  St. Paul teachers retirement plan        assumption G 

  age    A      B      C      D      E      F      G 

  16  7.2500%  8.71% 11.50%  7.25%  8.00%  7.50%  7.25% 

  17  7.2500   8.71  11.50   7.25   8.00   7.50   7.25 

  18  7.2500   8.70  11.50   7.25   8.00   7.50   7.25 

  19  7.2500   8.70  11.50   7.25   8.00   7.50   7.25 

  20  7.2500   7.70  11.50   7.25   8.00   7.50   7.25 

  21  7.1454   7.70  11.50   7.25   8.00   7.50   7.25 

  22  7.1094   7.70  11.00   7.25   8.00   7.50   7.25 

  23  7.0725   7.70  10.50   7.20   7.90   7.40   7.25 

  24  7.0363   7.70  10.00   7.15   7.80   7.30   7.20 

  25  7.0000   7.60   9.50   7.10   7.70   7.20   7.15 

  26  7.0000   7.51   9.20   7.05   7.60   7.10   7.10 

  27  7.0000   7.39   8.90   7.00   7.50   7.00   7.05 

  28  7.0000   7.30   8.60   7.00   7.40   6.90   7.00 

  29  7.0000   7.20   8.30   7.00   7.30   6.80   6.95 

  30  7.0000   7.20   8.00   7.00   7.20   6.70   6.90 

  31  7.0000   7.10   7.80   7.00   7.10   6.60   6.85 

  32  7.0000   7.10   7.60   7.00   7.00   6.50   6.80 

  33  7.0000   7.00   7.40   7.00   6.90   6.40   6.75 

  34  7.0000   7.00   7.20   7.00   6.80   6.30   6.70 

  35  7.0000   6.90   7.00   7.00   6.70   6.20   6.65 

  36  6.9019   6.80   6.80   7.00   6.60   6.10   6.60 

  37  6.8074   6.70   6.60   7.00   6.50   6.00   6.55 

  38  6.7125   6.60   6.40   6.90   6.40   5.90   6.50 

  39  6.6054   6.50   6.20   6.80   6.30   5.80   6.40 

  40  6.5000   6.40   6.00   6.70   6.20   5.70   6.30 

  41  6.3540   6.30   5.90   6.60   6.10   5.60   6.20 

  42  6.2087   6.30   5.80   6.50   6.00   5.50   6.10 

  43  6.0622   6.30   5.70   6.35   5.90   5.45   6.00 

  44  5.9048   6.20   5.60   6.20   5.80   5.40   5.90 

  45  5.7500   6.20   5.50   6.05   5.70   5.35   5.80 

  46  5.6940   6.09   5.45   5.90   5.60   5.30   5.70 

  47  5.6375   6.00   5.40   5.75   5.50   5.25   5.65 

  48  5.5822   5.90   5.35   5.70   5.45   5.20   5.60 

  49  5.5405   5.80   5.30   5.65   5.40   5.15   5.55 

  50  5.5000   5.70   5.25   5.60   5.35   5.10   5.50 

  51  5.4384   5.70   5.25   5.55   5.30   5.05   5.45 

  52  5.3776   5.70   5.25   5.50   5.25   5.00   5.40 

  53  5.3167   5.70   5.25   5.45   5.25   5.00   5.35 

  54  5.2826   5.70   5.25   5.40   5.25   5.00   5.30 

  55  5.2500   5.70   5.25   5.35   5.25   5.00   5.25 

  56  5.2500   5.70   5.25   5.30   5.25   5.00   5.25 

  57  5.2500   5.70   5.25   5.25   5.25   5.00   5.25 

  58  5.2500   5.70   5.25   5.25   5.25   5.00   5.25 

  59  5.2500   5.70   5.25   5.25   5.25   5.00   5.25 

  60  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 

  61  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 

  62  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 

  63  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 

  64  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 

  65  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 

  66  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 

  67  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 

  68  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 

  69  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 

  70  5.2500   5.00   5.25   5.25   5.25   5.00   5.25 

    (c) The actuarial valuation must use the applicable 
 following payroll growth assumption for calculating the 
 amortization requirement for the unfunded actuarial accrued 
 liability where the amortization retirement is calculated as a 
 level percentage of an increasing payroll: 

                                              payroll growth

               plan                             assumption 

  general state employees retirement plan          5.00% 

  correctional state employees retirement plan     5.00 

  state patrol retirement plan                     5.00 

  legislators retirement plan                      5.00 

  elective state officers retirement plan          5.00 

  judges retirement plan                           5.00 

  general public employees retirement plan         6.00 

  public employees police and fire 

    retirement plan                                6.00 

  local government correctional service 

    retirement plan                                6.00 

  teachers retirement plan                         5.00 

  Duluth teachers retirement plan                  5.00 

  Minneapolis teachers retirement plan             5.00 

  St. Paul teachers retirement plan                5.00 

    Subd. 4e.    Other assumptions.  The actuarial valuation 
 must use assumptions concerning mortality, disability, 
 retirement, withdrawal, retirement age, and any other relevant 
 demographic or economic factor.  These must be set at levels 
 consistent with those determined in the most recent quadrennial 
 experience study completed under subdivision 5, if required, or 
 representative of the best estimate of future experience, if a 
 quadrennial experience study is not required.  The actuarial 
 valuation must contain an exhibit indicating any actuarial 
 assumptions used in preparing the valuation report. 

    Subd. 4f.    Public sector accounting disclosure 
 information.  The actuarial valuation must contain those 
 actuarial calculations necessary to allow the retirement plan 
 administration or participating employing units to prepare the 
 pension-related portions of annual financial reporting that meet 
 generally accepted accounting principles for the public sector.  

    Subd. 4g.    Amortization contributions.  (a) In 
 addition to the exhibit indicating the level normal cost, the 
 actuarial valuation must contain an exhibit indicating the 
 additional annual contribution sufficient to amortize the 
 unfunded actuarial accrued liability.  For funds governed by 
 chapters 3A, 352, 352B, 352C, 353, 354, 354A, and 490, the 
 additional contribution must be calculated on a level percentage 
 of covered payroll basis by the established date for full 
 funding in effect when the valuation is prepared.  For funds 
 governed by chapter 3A, sections 352.90 through 352.951, 
 chapters 352B, 352C, sections 353.63 through 353.68, and 
 chapters 353C, 354A, and 490, the level percent additional 
 contribution must be calculated assuming annual payroll growth 
 of 6.5 percent.  For funds governed by sections 352.01 through 
 352.86 and chapter 354, the level percent additional 
 contribution must be calculated assuming an annual payroll 
 growth of five percent.  For the fund governed by sections 
 353.01 through 353.46, the level percent additional contribution 
 must be calculated assuming an annual payroll growth of six 
 percent.  For all other funds, the additional annual 
 contribution must be calculated on a level annual dollar amount 
 basis. 

    (b) For any fund other than the Minneapolis employees 
 retirement fund, after the first actuarial valuation date 
 occurring after June 1, 1989, if there has not been a change in 
 the actuarial assumptions used for calculating the actuarial 
 accrued liability of the fund, a change in the benefit plan 
 governing annuities and benefits payable from the fund, a change 
 in the actuarial cost method used in calculating the actuarial 
 accrued liability of all or a portion of the fund, or a 
 combination of the three, which change or changes by themselves 
 without inclusion of any other items of increase or decrease 
 produce a net increase in the unfunded actuarial accrued 
 liability of the fund, the established date for full funding for 
 the first actuarial valuation made after June 1, 1989, and each 
 successive actuarial valuation is the first actuarial valuation 
 date occurring after June 1, 2020.  

    (c) For any fund or plan other than the Minneapolis 
 employees retirement fund, after the first actuarial valuation 
 date occurring after June 1, 1989, if there has been a change in 
 any or all of the actuarial assumptions used for calculating the 
 actuarial accrued liability of the fund, a change in the benefit 
 plan governing annuities and benefits payable from the fund, a 
 change in the actuarial cost method used in calculating the 
 actuarial accrued liability of all or a portion of the fund, or 
 a combination of the three, and the change or changes, by 
 themselves and without inclusion of any other items of increase 
 or decrease, produce a net increase in the unfunded actuarial 
 accrued liability in the fund, the established date for full 
 funding must be determined using the following procedure:  

    (i) the unfunded actuarial accrued liability of the fund 
 must be determined in accordance with the plan provisions 
 governing annuities and retirement benefits and the actuarial 
 assumptions in effect before an applicable change; 

    (ii) the level annual dollar contribution or level 
 percentage, whichever is applicable, needed to amortize the 
 unfunded actuarial accrued liability amount determined under 
 item (i) by the established date for full funding in effect 
 before the change must be calculated using the interest 
 assumption specified in subdivision 4d in effect before the 
 change; 

    (iii) the unfunded actuarial accrued liability of the fund 
 must be determined in accordance with any new plan provisions 
 governing annuities and benefits payable from the fund and any 
 new actuarial assumptions and the remaining plan provisions 
 governing annuities and benefits payable from the fund and 
 actuarial assumptions in effect before the change; 

    (iv) the level annual dollar contribution or level 
 percentage, whichever is applicable, needed to amortize the 
 difference between the unfunded actuarial accrued liability 
 amount calculated under item (i) and the unfunded actuarial 
 accrued liability amount calculated under item (iii) over a 
 period of 30 years from the end of the plan year in which the 
 applicable change is effective must be calculated using the 
 applicable interest assumption specified in subdivision 4d in 
 effect after any applicable change; 

    (v) the level annual dollar or level percentage 
 amortization contribution under item (iv) must be added to the 
 level annual dollar amortization contribution or level 
 percentage calculated under item (ii); 

    (vi) the period in which the unfunded actuarial accrued 
 liability amount determined in item (iii) is amortized by the 
 total level annual dollar or level percentage amortization 
 contribution computed under item (v) must be calculated using 
 the interest assumption specified in subdivision 4d in effect 
 after any applicable change, rounded to the nearest integral 
 number of years, but not to exceed 30 years from the end of the 
 plan year in which the determination of the established date for 
 full funding using the procedure set forth in this clause is 
 made and not to be less than the period of years beginning in 
 the plan year in which the determination of the established date 
 for full funding using the procedure set forth in this clause is 
 made and ending by the date for full funding in effect before 
 the change; and 

    (vii) the period determined under item (vi) must be added 
 to the date as of which the actuarial valuation was prepared and 
 the date obtained is the new established date for full funding.  

    (d) For the Minneapolis employees retirement fund, the 
 established date for full funding is June 30, 2020. 

    (e) For the public employees retirement association police 
 and fire plan, the correctional employees retirement plan of the 
 Minnesota state retirement system, and the state patrol 
 retirement plan, an excess of valuation assets over actuarial 
 accrued liability must be amortized in the same manner over the 
 same period as an unfunded actuarial accrued liability but must 
 serve to reduce the required contribution instead of increasing 
 it. 

    Subd. 4h.    Actuarial gains and losses.  The actuarial 
 valuation must contain an exhibit consisting of an analysis by 
 the actuary explaining the net increase or decrease in the 
 unfunded actuarial accrued liability since the last valuation.  
 The explanation must subdivide the net increase or decrease in 
 the unfunded actuarial accrued liability into at least the 
 following parts: 

    (a) increases or decreases in the unfunded actuarial 
 accrued liability because of changes in benefits; 

    (b) increases and decreases in the unfunded actuarial 
 accrued liability because of changes in actuarial assumptions; 

    (c) increases or decreases in the unfunded actuarial 
 accrued liability attributable to actuarial gains or losses 
 resulting from any experience deviations from the assumptions on 
 which the valuation is based, as follows: 

    (i) actual investment earnings; 

    (ii) actual postretirement mortality rates; 

    (iii) actual salary increase rates; and 

    (iv) the remainder of the increase or decrease not 
 attributable to any separate source; 

    (d) increases or decreases in unfunded actuarial accrued 
 liability because of other reasons, including the effect of any 
 amortization contribution paid or additional amortization 
 contribution previously calculated but unpaid; and 

    (e) increases or decreases in unfunded actuarial accrued 
 liability because of changes in eligibility requirements or 
 groups included in the membership of the fund. 

    Subd. 4i.    Membership tabulation.  The actuarial 
 valuation must contain a tabulation of active membership and 
 annuitants in the fund.  If the membership of a fund is under 
 more than one general benefit program, a separate tabulation 
 must be made for each general benefit program.  The tabulations 
 must be prepared by the administration of the pension fund and 
 must contain the following information: 

 (1) Active members                               Number 
      As of last valuation date
                New entrants
            Total 
      Separations from active service
      Refund of contributions
      Separation with deferred annuity
      Separation with neither refund
           nor deferred annuity
      Disability
      Death
      Retirement with service annuity

      Total separations
      As of current valuation date                            
 (2) Annuitants                                   Number          
      As of last valuation date
      New entrants
      Total
      Terminations
      Deaths
      Other

      Total terminations
      As of current valuation date

    The tabulation required under clause (2) must be made 
 separately for each of the following classes of benefit 
 recipients: 

    (1) service retirement annuitants; 

    (2) disability benefit recipients; 

    (3) survivor benefit recipients; and 

    (4) deferred annuitants. 

    Subd. 4j.    Administrative expenses.  The actuarial 
 valuation must indicate the administrative expenses of the fund, 
 expressed both in dollars and as a percentage of covered payroll.
 Administrative expenses are costs incurred by the retirement 
 plans excluding investment expenses.  Investment expenses 
 include all expenses incurred for the retention of professional 
 external investment managers and professional investment 
 consultants, custodian bank fees, investment transaction costs, 
 and the costs incurred by the retirement plans to manage 
 investment portfolios or assets internally.  Investment expenses 
 must be deducted from investment return in the actuarial 
 valuation, and not included in administrative expenses when 
 calculating the allowance for expenses. 

    Subd. 4k.    Plan summary.  The actuarial valuation must 
 contain a summary of the principal provisions of the plan upon 
 which the valuation is based. 

    Subd. 5.    Quadrennial experience study; contents.  A 
 quadrennial experience study, if required, must contain an 
 actuarial analysis of the experience of the fund and a 
 comparison of the experience with the actuarial assumptions on 
 which the most recent actuarial valuation of the retirement fund 
 was based. 

    Subd. 6.    Actuarial services by approved actuaries.  
 (a) The actuarial valuation or quadrennial experience study must 
 be made and any actuarial consulting services for a retirement 
 fund or plan must be provided by an approved actuary.  The 
 actuarial valuation or quadrennial experience study must include 
 a declaration that it has been prepared according to sections 
 356.20 to 356.23 and the most recent standards for actuarial 
 work adopted by the legislative commission on pensions and 
 retirement.  

    (b) Actuarial valuations, or experience studies prepared by 
 an actuary retained by a retirement fund or plan must be 
 submitted to the legislative commission on pensions and 
 retirement within ten days of the submission of the document to 
 the retirement fund or plan. 

    Subd. 7.    Establishment of actuarial assumptions.  
 Actuarial assumptions used for actuarial valuations under this 
 section that are other than those set forth in this section may 
 be changed only with the approval of the legislative commission 
 on pensions and retirement.  A change in the applicable 
 actuarial assumptions may be proposed by the governing board of 
 the applicable pension fund or relief association, by the 
 actuary retained by the legislative commission on pensions and 
 retirement, by the actuarial advisor to a pension fund governed 
 by chapter 352, 353, 354, or 354A, or by the actuary retained by 
 a local police or firefighters relief association governed by 
 sections 69.77 or 69.771 to 69.776, if one is retained. 

    HIST: 1975 c 192 s 3; 1978 c 563 s 9,10; 1979 c 184 s 1; 1981 
 c 224 s 169; 1984 c 564 s 43; 1Sp1985 c 7 s 27; 1986 c 359 s 26; 
 1986 c 458 s 20; 1987 c 259 s 55; 1989 c 319 art 13 s 90,91; 
 1991 c 199 art 2 s 24; 1991 c 269 art 3 s 3-19; 1991 c 345 art 4 
 s 3,4; 1993 c 336 art 4 s 1; 1993 c 352 s 7; 1995 c 141 art 3 s 
 14,15; 1997 c 233 art 1 s 57,59; 1997 c 241 art 4 s 1; 1998 c 
 390 art 8 s 2 

*   NOTE:  Subdivision 4d was also amended by Laws 1997, 
*chapter 233, article 1, section 58, to read as follows: 

*   "Subd. 4d.    Interest and salary assumptions.  (a) For 
*funds governed by chapter 352B, and by sections 352.90 through 
*352.951 and 353.63 through 353.68, the actuarial valuation must 
*use a preretirement interest assumption of 8.5 percent, a 
*postretirement interest assumption of six percent, and a future 
*salary increase assumption of 6.5 percent. 

*   (b) For funds governed by chapter 354A, the actuarial 
*valuation must use preretirement and postretirement assumptions 
*of 8.5 percent and a future salary increase assumption of 6.5 
*percent, but the actuarial valuation must reflect the payment of 
*postretirement adjustments to retirees, based on the methods 
*specified in the bylaws of the fund as approved by the 
*legislature.  For a fund governed by chapter 422A, the actuarial 
*valuation shall use a preretirement interest assumption of six 
*percent, a postretirement interest assumption of five percent, 
*and an assumption that in each future year the salary on which a 
*retirement or other benefit is based is 1.04 multiplied by the 
*salary for the preceding year.  

*   (c) For all other funds not specified in paragraph (a), 
*(b), (d), or (e), the actuarial valuation must use a 
*preretirement interest assumption of five percent, a 
*postretirement interest assumption of five percent, and a future 
*salary increase assumption of 3.5 percent. 

*   (d) For funds governed by chapters 3A, 352C, and 490, the 
*actuarial valuation must use a preretirement interest assumption 
*of 8.5 percent, a postretirement interest assumption of six 
*percent, and a future salary increase assumption of 6.5 percent 
*in each future year in which the salary amount payable is not 
*determinable from section 3.099, 15A.081, subdivision 6, or 
*15A.083, subdivision 1, whichever applies, or from applicable 
*compensation council recommendations under section 15A.082. 

*   (e) For funds governed by sections 352.01 through 352.86, 
*353.01 through 353.46, and chapter 354, the actuarial valuation 
*must use a preretirement interest assumption of 8.5, a 
*postretirement interest assumption of six percent, and a graded 
*rate future salary increase assumption as follows: 

         General state   General public   

           employees       employees         Teachers  

          retirement      retirement        retirement 

  Age        plan            plan              plan 

  16        7.2500%         8.71%              7.25%

  17        7.2500          8.71               7.25 

  18        7.2500          8.70               7.25 

  19        7.2500          8.70               7.25 

  20        7.2500          7.70               7.25 

  21        7.1454          7.70               7.25 

  22        7.1094          7.70               7.25 

  23        7.0725          7.70               7.20 

  24        7.0363          7.70               7.15 

  25        7.0000          7.60               7.10 

  26        7.0000          7.51               7.05 

  27        7.0000          7.39               7.00 

  28        7.0000          7.30               7.00 

  29        7.0000          7.20               7.00 

  30        7.0000          7.20               7.00 

  31        7.0000          7.10               7.00 

  32        7.0000          7.10               7.00 

  33        7.0000          7.00               7.00 

  34        7.0000          7.00               7.00 

  35        7.0000          6.90               7.00 

  36        6.9019          6.80               7.00 

  37        6.8074          6.70               7.00 

  38        6.7125          6.60               6.90 

  39        6.6054          6.50               6.80 

  40        6.5000          6.40               6.70 

  41        6.3540          6.30               6.60 

  42        6.2087          6.30               6.50 

  43        6.0622          6.30               6.35 

  44        5.9048          6.20               6.20 

  45        5.7500          6.20               6.05 

  46        5.6940          6.09               5.90 

  47        5.6375          6.00               5.75 

  48        5.5822          5.90               5.70 

  49        5.5405          5.80               5.65 

  50        5.5000          5.70               5.60 

  51        5.4384          5.70               5.55 

  52        5.3776          5.70               5.50 

  53        5.3167          5.70               5.45 

  54        5.2826          5.70               5.40 

  55        5.2500          5.70               5.35 

  56        5.2500          5.70               5.30 

  57        5.2500          5.70               5.25 

  58        5.2500          5.70               5.25 

  59        5.2500          5.70               5.25 

  60        5.2500          5.00               5.25 

  61        5.2500          5.00               5.25 

  62        5.2500          5.00               5.25 

  63        5.2500          5.00               5.25 

  64        5.2500          5.00               5.25 

  65        5.2500          5.00               5.25 

  66        5.2500          5.00               5.25 

  67        5.2500          5.00               5.25 

  68        5.2500          5.00               5.25 

  69        5.2500          5.00               5.25 

  70        5.2500          5.00               5.25"