=LCPR04-105

LCPR04-105

1.1 A bill for an act

1.2 relating to retirement; various retirement plans;

1.3 modifying the responsibilities to provide actuarial

1.4 valuations and proposed legislative cost estimates;

1.5 amending Minnesota Statutes 2002, sections 352.03,

1.6 subdivision 6; 352B.02, subdivision 1e; 353.03,

1.7 subdivision 3; 354.06, subdivision 2a; 354A.021,

1.8 subdivision 7; 356.215, subdivisions 2 and 18; and

1.9 422A.06, subdivision 2; proposing coding for new law

1.10 in Minnesota Statutes, Chapter 356; repealing

1.11 Minnesota Statutes 2002, sections 3.85, subdivisions

1.12 11 and 12; and 356.217.

1.13 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.14 Section 1. Minnesota Statutes 2002, section 352.03,

1.15 subdivision 6, is amended to read:

1.16 Subd. 6. DUTIES AND POWERS OF EXECUTIVE DIRECTOR. The

1.17 management of the system is vested in the director, who is the

1.18 executive and administrative head of the system. The director

1.19 shall be advisor to the board on matters pertaining to the

1.20 system and shall also act as the secretary of the board. The

1.21 director shall:

1.22 (1) attend meetings of the board;

1.23 (2) prepare and recommend to the board appropriate rules to

1.24 carry out this chapter;

1.25 (3) establish and maintain an adequate system of records

1.26 and accounts following recognized accounting principles and

1.27 controls;

1.28 (4) designate an assistant director with the approval of

1.29 the board;

2.1 (5) appoint any employees, both permanent and temporary,

2.2 that are necessary to carry out the provisions of this chapter;

2.3 (6) organize the work of the system as the director deems

2.4 necessary to fulfill the functions of the system, and define the

2.5 duties of its employees and delegate to them any powers or

2.6 duties, subject to the control of the director and under

2.7 conditions the director may prescribe. Appointments to exercise

2.8 delegated power must be by written order and shall be filed with

2.9 the secretary of state;

2.10 (7) with the advice and consent of the board, contract for

2.11 the services of an approved actuary, professional management

2.12 services, and any other consulting services as necessary and fix

2.13 the compensation for those services. The contracts are not

2.14 subject to competitive bidding under chapter 16C. Any approved

2.15 actuary retained by the executive director shall function as the

2.16 actuarial advisor of the board and the executive director, and

2.17 may perform actuarial valuations and experience studies to

2.18 supplement those performed by the actuary retained ~~by the~~

2.19 ~~legislative commission on pensions and retirement~~ under section

2.20 6. Any supplemental actuarial valuations or experience studies

2.21 shall be filed with the executive director of the Legislative

2.22 Commission on Pensions and Retirement. Professional management

2.23 services may not be contracted for more often than once in six

2.24 years. Copies of professional management survey reports must be

2.25 transmitted to the secretary of the senate, the chief clerk of

2.26 the house of representatives, and the legislative reference

2.27 library as provided by section 3.195, and to the executive

2.28 director of the commission at the time as reports are furnished

2.29 to the board. Only management firms experienced in conducting

2.30 management surveys of federal, state, or local public retirement

2.31 systems are qualified to contract with the director;

2.32 (8) with the advice and consent of the board provide

2.33 in-service training for the employees of the system;

2.34 (9) make refunds of accumulated contributions to former

2.35 state employees and to the designated beneficiary, surviving

2.36 spouse, legal representative, or next of kin of deceased state

3.1 employees or deceased former state employees, as provided in

3.2 this chapter;

3.3 (10) determine the amount of the annuities and disability

3.4 benefits of employees covered by the system and authorize

3.5 payment of the annuities and benefits beginning as of the dates

3.6 on which the annuities and benefits begin to accrue, in

3.7 accordance with the provisions of this chapter;

3.8 (11) pay annuities, refunds, survivor benefits, salaries,

3.9 and necessary operating expenses of the system;

3.10 (12) certify funds available for investment to the State

3.11 Board of Investment;

3.12 (13) with the advice and approval of the board request the

3.13 State Board of Investment to sell securities when the director

3.14 determines that funds are needed for the system;

3.15 (14) prepare and submit to the board and the legislature an

3.16 annual financial report covering the operation of the system, as

3.17 required by section 356.20;

3.18 (15) prepare and submit biennial and annual budgets to the

3.19 board and with the approval of the board submit the budgets to

3.20 the Department of Finance; and

3.21 (16) with the approval of the board, perform other duties

3.22 required to administer the retirement and other provisions of

3.23 this chapter and to do its business.

3.24 Sec. 2. Minnesota Statutes 2002, section 352B.02,

3.25 subdivision 1e, is amended to read:

3.26 Subd. 1e. AUDIT; ACTUARIAL VALUATION. The legislative

3.27 auditor shall audit the fund. Any actuarial valuation of the

3.28 fund required under section 356.215 ~~shall~~ must be prepared by

3.29 the actuary retained ~~by the Legislative Commission on Pensions~~

3.30 ~~and Retirement~~ under section 6. Any approved actuary retained

3.31 by the executive director under section 352.03, subdivision 6,

3.32 may perform actuarial valuations and experience studies to

3.33 supplement those performed by the commission-retained actuary.

3.34 Any supplemental actuarial valuation or experience studies shall

3.35 be filed with the executive director of the Legislative

3.36 Commission on Pensions and Retirement.

4.1 Sec. 3. Minnesota Statutes 2002, section 353.03,

4.2 subdivision 3a, is amended to read:

4.3 Subd. 3a. EXECUTIVE DIRECTOR. (a) APPOINTMENT. The

4.4 board shall appoint, with the advice and consent of the senate,

4.5 an executive director on the basis of education, experience in

4.6 the retirement field, and leadership ability. The executive

4.7 director shall have had at least five years' experience in an

4.8 executive level management position, which has included

4.9 responsibility for pensions, deferred compensation, or employee

4.10 benefits. The executive director serves at the pleasure of the

4.11 board. The salary of the executive director is as provided by

4.12 section 15A.0815.

4.13 (b) DUTIES. The management of the association is vested

4.14 in the executive director who shall be the executive and

4.15 administrative head of the association. The executive director

4.16 shall act as adviser to the board on all matters pertaining to

4.17 the association and shall also act as the secretary of the

4.18 board. The executive director shall:

4.19 (1) attend all meetings of the board;

4.20 (2) prepare and recommend to the board appropriate rules to

4.21 carry out the provisions of this chapter;

4.22 (3) establish and maintain an adequate system of records

4.23 and accounts following recognized accounting principles and

4.24 controls;

4.25 (4) designate, with the approval of the board, up to two

4.26 persons who shall serve in the unclassified service and whose

4.27 salary is set in accordance with section 43A.18, subdivision 3,

4.28 appoint a confidential secretary in the unclassified service,

4.29 and appoint employees to carry out this chapter, who are subject

4.30 to chapters 43A and 179A in the same manner as are executive

4.31 branch employees;

4.32 (5) organize the work of the association as the director

4.33 deems necessary to fulfill the functions of the association, and

4.34 define the duties of its employees and delegate to them any

4.35 powers or duties, subject to the control of, and under such

4.36 conditions as, the executive director may prescribe;

5.1 (6) with the approval of the board, contract for the

5.2 services of an approved actuary, professional management

5.3 services, and any other consulting services as necessary to

5.4 fulfill the purposes of this chapter. All contracts are subject

5.5 to chapter 16C. The commissioner of administration shall not

5.6 approve, and the association shall not enter into, any contract

5.7 to provide lobbying services or legislative advocacy of any

5.8 kind. Any approved actuary retained by the executive director

5.9 shall function as the actuarial advisor of the board and the

5.10 executive director and may perform actuarial valuations and

5.11 experience studies to supplement those performed by the actuary

5.12 retained ~~by the Legislative Commission on Pensions and~~

5.13 ~~Retirement~~ under section 6. Any supplemental actuarial

5.14 valuations or experience studies shall be filed with the

5.15 executive director of the Legislative Commission on Pensions and

5.16 Retirement. Copies of professional management survey reports

5.17 shall be transmitted to the secretary of the senate, the chief

5.18 clerk of the house of representatives, and the Legislative

5.19 Reference Library as provided by section 3.195, and to the

5.20 executive director of the commission at the same time as reports

5.21 are furnished to the board. Only management firms experienced

5.22 in conducting management surveys of federal, state, or local

5.23 public retirement systems shall be qualified to contract with

5.24 the director hereunder;

5.25 (7) with the approval of the board provide in-service

5.26 training for the employees of the association;

5.27 (8) make refunds of accumulated contributions to former

5.28 members and to the designated beneficiary, surviving spouse,

5.29 legal representative or next of kin of deceased members or

5.30 deceased former members, as provided in this chapter;

5.31 (9) determine the amount of the annuities and disability

5.32 benefits of members covered by the association and authorize

5.33 payment of the annuities and benefits beginning as of the dates

5.34 on which the annuities and benefits begin to accrue, in

5.35 accordance with the provisions of this chapter;

5.36 (10) pay annuities, refunds, survivor benefits, salaries,

6.1 and necessary operating expenses of the association;

6.2 (11) prepare and submit to the board and the legislature an

6.3 annual financial report covering the operation of the

6.4 association, as required by section 356.20;

6.5 (12) prepare and submit biennial and annual budgets to the

6.6 board for its approval and submit the approved budgets to the

6.7 department of finance for approval by the commissioner;

6.8 (13) reduce all or part of the accrued interest payable

6.9 under section 353.27, subdivisions 12, 12a, and 12b, or 353.28,

6.10 subdivision 5, upon receipt of proof by the association of an

6.11 unreasonable processing delay or other extenuating circumstances

6.12 of the employing unit. The executive director shall prescribe

6.13 and submit for approval by the board the conditions under which

6.14 such interest may be reduced; and

6.15 (14) with the approval of the board, perform such other

6.16 duties as may be required for the administration of the

6.17 association and the other provisions of this chapter and for the

6.18 transaction of its business.

6.19 Sec. 4. Minnesota Statutes 2002, section 354.06,

6.20 subdivision 2a, is amended to read:

6.21 Subd. 2a. DUTIES OF EXECUTIVE DIRECTOR. The management

6.22 of the association is vested in the executive director who shall

6.23 be the executive and administrative head of the association.

6.24 The executive director shall act as advisor to the board on all

6.25 matters pertaining to the association and shall also act as the

6.26 secretary of the board. The executive director shall:

6.27 (1) attend all meetings of the board;

6.28 (2) prepare and recommend to the board appropriate rules to

6.29 carry out the provisions of this chapter;

6.30 (3) establish and maintain an adequate system of records

6.31 and accounts following recognized accounting principles and

6.32 controls;

6.33 (4) designate an assistant executive director in the

6.34 unclassified service and two assistant executive directors in

6.35 the classified service with the approval of the board, and

6.36 appoint such employees, both permanent and temporary, as are

7.1 necessary to carry out the provisions of this chapter;

7.2 (5) organize the work of the association as the director

7.3 deems necessary to fulfill the functions of the association, and

7.4 define the duties of its employees and delegate to them any

7.5 powers or duties, subject to the director's control and under

7.6 such conditions as the director may prescribe;

7.7 (6) with the approval of the board, contract and set the

7.8 compensation for the services of an approved actuary,

7.9 professional management services, and any other consulting

7.10 services. These contracts are not subject to the competitive

7.11 bidding procedure prescribed by chapter 16C. An approved

7.12 actuary retained by the executive director shall function as the

7.13 actuarial advisor of the board and the executive director and

7.14 may perform actuarial valuations and experience studies to

7.15 supplement those performed by the actuary retained ~~by the~~

7.16 ~~legislative commission on pensions and retirement~~ under section

7.17 6. Any supplemental actuarial valuations or experience studies

7.18 shall be filed with the executive director of the Legislative

7.19 Commission on Pensions and Retirement. Copies of professional

7.20 management survey reports must be transmitted to the secretary

7.21 of the senate, the chief clerk of the house of representatives,

7.22 and the legislative reference library as provided by section

7.23 3.195, and to the executive director of the commission at the

7.24 same time as reports are furnished to the board. Only

7.25 management firms experienced in conducting management surveys of

7.26 federal, state, or local public retirement systems are qualified

7.27 to contract with the executive director;

7.28 (7) with the approval of the board, provide in-service

7.29 training for the employees of the association;

7.30 (8) make refunds of accumulated contributions to former

7.31 members and to the designated beneficiary, surviving spouse,

7.32 legal representative, or next of kin of deceased members or

7.33 deceased former members, under this chapter;

7.34 (9) determine the amount of the annuities and disability

7.35 benefits of members covered by the association and authorize

7.36 payment of the annuities and benefits beginning as of the dates

8.1 on which the annuities and benefits begin to accrue, under this

8.2 chapter;

8.3 (10) pay annuities, refunds, survivor benefits, salaries,

8.4 and necessary operating expenses of the association;

8.5 (11) prepare and submit to the board and the legislature an

8.6 annual financial report covering the operation of the

8.7 association, as required by section 356.20;

8.8 (12) certify funds available for investment to the state

8.9 board of investment;

8.10 (13) with the advice and approval of the board, request the

8.11 State Board of Investment to sell securities on determining that

8.12 funds are needed for the purposes of the association;

8.13 (14) prepare and submit biennial and annual budgets to the

8.14 board and with the approval of the board submit those budgets to

8.15 the department of finance; and

8.16 (15) with the approval of the board, perform such other

8.17 duties as may be required for the administration of the

8.18 association and the other provisions of this chapter and for the

8.19 transaction of its business. The executive director may:

8.20 (i) reduce all or part of the accrued interest and fines

8.21 payable by an employing unit for reporting requirements under

8.22 section 354.52, based on an evaluation of any extenuating

8.23 circumstances of the employing unit;

8.24 (ii) assign association employees to conduct field audits

8.25 of an employing unit to ensure compliance with the provisions of

8.26 this chapter; and

8.27 (iii) recover overpayments, if not repaid to the

8.28 association, by suspending or reducing the payment of a

8.29 retirement annuity, refund, disability benefit, survivor

8.30 benefit, or optional annuity under this chapter until the

8.31 overpayment, plus interest, has been recovered.

8.32 Sec. 5. Minnesota Statutes 2002, section 354A.021,

8.33 subdivision 7, is amended to read:

8.34 Subd. 7. ACTUARIAL CONSULTANT. The board of trustees or

8.35 directors of each teachers retirement fund association may

8.36 contract for the services of an approved actuary and fix the

9.1 reasonable compensation for those services. Any approved

9.2 actuary retained by the board shall function as the actuarial

9.3 advisor to the board and may perform actuarial valuations and

9.4 experience studies to supplement those performed by the actuary

9.5 retained ~~by the Legislative Commission on Pensions and~~

9.6 ~~Retirement~~ under section 6. Any supplemental actuarial

9.7 valuations or experience studies ~~shall~~ must be filed with the

9.8 executive director of the Legislative Commission on Pensions and

9.9 Retirement.

9.10 Sec. 6. 356.214 ACTUARIAL VALUATION PREPARATION; JOINT

9.11 RETENTION OF CONSULTING ACTUARY.

9.12 Subdivision 1. JOINT RETENTION. (a) The chief

9.13 administrative officers of the Minnesota State Retirement

9.14 System, the Public Employees Retirement Association, the

9.15 Teachers Retirement Association, the Duluth Teachers Retirement

9.16 Fund Association, the Minneapolis Teachers Retirement Fund

9.17 Association, the Minneapolis Employees Retirement Fund, and the

9.18 St. Paul Teachers Retirement Fund Association, jointly, on

9.19 behalf of the state, its employees, its taxpayers, and its

9.20 various public pension plans, shall contract with an established

9.21 actuarial consulting firm to conduct annual actuarial valuations

9.22 and related services for the retirement plans named in paragraph

9.23 (b). The principal from the actuarial consulting firm on the

9.24 contract must be an approved actuary under section 356.215,

9.25 subdivision 1, paragraph (c). Prior to becoming effective, the

9.26 contract under this section is subject to a review and approval

9.27 by the Legislative Commission on Pensions and Retirement.

9.28 (b) The contract for actuarial services must include the

9.29 preparation of actuarial valuations and related actuarial work

9.30 for the following retirement plans:

9.31 (1) the teachers retirement plan, Teachers Retirement

9.32 Association;

9.33 (2) the general state employees retirement plan, Minnesota

9.34 State Retirement System;

9.35 (3) the correctional employees retirement plan, Minnesota

9.36 State Retirement System;

10.1 (4) the State Patrol retirement plan, Minnesota State

10.2 Retirement System;

10.3 (5) the judges retirement plan, Minnesota State Retirement

10.4 System;

10.5 (6) the Minneapolis employees retirement plan, Minneapolis

10.6 Employees Retirement Fund;

10.7 (7) the public employees retirement plan, Public Employees

10.8 Retirement Association;

10.9 (8) the public employees police and fire plan, Public

10.10 Employees Retirement Association;

10.11 (9) the Duluth teachers retirement plan, Duluth Teachers

10.12 Retirement Fund Association;

10.13 (10) the Minneapolis teachers retirement plan, Minneapolis

10.14 Teachers Retirement Fund Association;

10.15 (11) the St. Paul teachers retirement plan, St. Paul

10.16 Teachers Retirement Fund Association;

10.17 (12) the legislators retirement plan, Minnesota State

10.18 Retirement System;

10.19 (13) the elective state officers retirement plan, Minnesota

10.20 State Retirement System; and

10.21 (14) local government correctional service retirement plan,

10.22 Public Employees Retirement Association.

10.23 (c) The contract must require completion of the annual

10.24 actuarial valuation calculations on a fiscal year basis, with

10.25 the contents of the actuarial valuation calculations as

10.26 specified in section 356.215, and in conformity with the

10.27 standards for actuarial work adopted by the Legislative

10.28 Commission on Pensions and Retirement.

10.29 The contract must require completion of annual experience

10.30 data collection and processing and a quadrennial published

10.31 experience study for the plans listed in paragraph (b), clauses

10.32 (1), (2), and (7), as provided for in the standards for

10.33 actuarial work adopted by the commission. The experience data

10.34 collection, processing, and analysis must evaluate the following:

10.35 (1) individual salary progression;

10.36 (2) the rate of return on investments based on the current

11.1 asset value;

11.2 (3) payroll growth;

11.3 (4) mortality;

11.4 (5) retirement age;

11.5 (6) withdrawal; and

11.6 (7) disablement.

11.7 The contract must include provisions for the preparation of

11.8 cost analyses by the jointly retained actuary for proposed

11.9 legislation that include changes in benefit provisions or

11.10 funding policies prior to their consideration by the Legislative

11.11 Commission on Pensions and Retirement.

11.12 (d) The actuary retained by the joint retirement systems

11.13 shall annually prepare a report to the legislature, including a

11.14 commentary on the actuarial valuation calculations for the plans

11.15 named in paragraph (b) and summarizing the results of the

11.16 actuarial valuation calculations. The actuary shall include

11.17 with the report the actuary's recommendations to the legislature

11.18 concerning the appropriateness of the support rates to achieve

11.19 proper funding of the retirement plans by the required funding

11.20 dates. The actuary shall, as part of the quadrennial experience

11.21 study, include recommendations to the legislature on the

11.22 appropriateness of the actuarial valuation assumptions required

11.23 for evaluation in the study.

11.24 (e) If the actuarial gain and loss analysis in the

11.25 actuarial valuation calculations indicates a persistent pattern

11.26 of sizable gains or losses, as directed by the joint retirement

11.27 systems or as requested by the chair of the Legislative

11.28 Commission on Pensions and Retirement, the actuary shall prepare

11.29 a special experience study for a plan listed in paragraph (b),

11.30 clause (3), (4), (5), (6), (8), (9), (10), (11), (12), (13), or

11.31 (14), in the manner provided for in the standards for actuarial

11.32 work adopted by the commission.

11.33 (f) The term of the contract between the joint retirement

11.34 systems and the actuary retained may not exceed five years. The

11.35 joint retirement system administrative officers shall establish

11.36 procedures for the consideration and selection of contract

12.1 bidders and the requirements for the contents of an actuarial

12.2 services contract under this section. The procedures and

12.3 requirements must be submitted to the Legislative Commission on

12.4 Pensions and Retirement for review and comment prior to final

12.5 approval by the joint administrators. The contract is subject

12.6 to the procurement procedures under chapter 16C. The

12.7 consideration of bids and the selection of a consulting

12.8 actuarial firm by the chief administrative officers must occur

12.9 at a meeting that is open to the public and reasonable timely

12.10 public notice of the date and the time of the meeting and its

12.11 subject matter must be given.

12.12 (g) The actuarial services contract may not limit the

12.13 ability of the Minnesota legislature and its standing committees

12.14 and commissions to rely on the actuarial results of the work

12.15 prepared under the contract.

12.16 (h) The joint retirement systems shall designate one of the

12.17 retirement system executive directors as the actuarial services

12.18 contract manager.

12.19 Subd. 2. ALLOCATION OF ACTUARIAL COSTS. (a) The

12.20 actuarial services contract manager shall assess each retirement

12.21 plan specified in subdivision 1, paragraph (b), its appropriate

12.22 portion of the total compensation paid to the actuary retained

12.23 by the joint retirement systems for the actuarial valuation

12.24 calculations and quadrennial experience studies. The total

12.25 assessment is 100 percent of the amount of contract compensation

12.26 for the actuarial consulting firm for actuarial valuation

12.27 calculations, including any public employees police and fire

12.28 plan consolidation accounts of the Public Employees Retirement

12.29 Association established after March 1, 1999, annual experience

12.30 data collection and processing, and quadrennial experience

12.31 studies.

12.32 The portion of the total assessment payable by each

12.33 retirement system or pension plan must be determined based on

12.34 each plan's proportion of the actuarial services required, as

12.35 determined by the retained actuary, to complete the actuarial

12.36 valuation calculations, annual experience data collection and

13.1 processing, and quadrennial experience studies for all plans.

13.2 The assessment must be made within 30 days following the

13.3 end of the fiscal year and must be reported to the chief

13.4 administrative officers of the applicable retirement plans. The

13.5 amount of the assessment is appropriated from the retirement

13.6 fund applicable to the retirement plan.

13.7 (b) The actuarial services contract manager shall assess

13.8 each retirement plan or each interest group which requested the

13.9 preparation of a cost analysis for proposed legislation the cost

13.10 of the actuary retained by the joint retirement systems incurred

13.11 in the cost analysis preparation. With respect to interest

13.12 groups, the actuarial services contract manager shall obtain a

13.13 written commitment for the payment of the assessment in advance

13.14 of the cost analysis preparation and may require an advance

13.15 deposit or advance payment before authorizing the cost analysis

13.16 preparation. The retirement plan or the interest group shall

13.17 pay the assessment within 30 days of the date on which the

13.18 assessment is billed. The amount of the assessment is

13.19 appropriated from the retirement fund applicable to the

13.20 retirement plan for cost analyses requested by a retirement plan

13.21 or system.

13.22 (c) The actuarial services contract manager shall assess to

13.23 the Legislative Commission on Pensions and Retirement the cost

13.24 of the actuarial cost analysis preparation for the proposed

13.25 legislation requested by the chair of the Legislative Commission

13.26 on Pensions and Retirement or by the commission executive

13.27 director. The commission shall pay the assessment within 30

13.28 days of the date on which the assessment is billed.

13.29 Subd. 3. REPORTING TO THE COMMISSION. A copy of the

13.30 actuarial valuations, experience studies, and actuarial cost

13.31 analyses prepared by the actuary retained by the joint

13.32 retirement systems under the contract provided for in this

13.33 section must be filed with the executive director of the

13.34 Legislative Commission on Pensions and Retirement at the same

13.35 time that the document is transmitted to the actuarial services

13.36 contract manager or to any other document recipient.

14.1 Sec. 7. Minnesota Statutes 2002, section 356.215,

14.2 subdivision 2, is amended to read:

14.3 Subd. 2. REQUIREMENTS. (a) It is the policy of the

14.4 legislature that it is necessary and appropriate to determine

14.5 annually the financial status of tax supported retirement and

14.6 pension plans for public employees. To achieve this goal:

14.7 (1) the ~~Legislative Commission on Pensions and Retirement~~

14.8 ~~shall have prepared by the~~ actuary retained ~~by the commission~~

14.9 under section 6 shall prepare annual actuarial valuations of the

14.10 retirement plans enumerated in section ~~3.85~~ 6, subdivision 11 1,

14.11 paragraph (b), and quadrennial experience studies of the

14.12 retirement plans enumerated in section ~~3.85~~ 6, subdivision 11 1,

14.13 paragraph (b), clauses (1), (2), and (7); and

14.14 (2) the commissioner of finance may have prepared by the

14.15 actuary retained by the commission, two years after each set of

14.16 quadrennial experience studies, quadrennial projection

14.17 valuations of at least one of the retirement plans enumerated in

14.18 section ~~3.85~~ 6, subdivision 11 1, paragraph (b), for which the

14.19 commissioner determines that the analysis may be beneficial.

14.20 (b) The governing or managing board or administrative

14.21 officials of each public pension and retirement fund or plan

14.22 enumerated in section 356.20, subdivision 2, clauses (9), (10),

14.23 and (12), shall have prepared by an approved actuary annual

14.24 actuarial valuations of their respective funds as provided in

14.25 this section. This requirement also applies to any fund or plan

14.26 that is the successor to any organization enumerated in section

14.27 356.20, subdivision 2, or to the governing or managing board or

14.28 administrative officials of any newly formed retirement fund,

14.29 plan, or association operating under the control or supervision

14.30 of any public employee group, governmental unit, or institution

14.31 receiving a portion of its support through legislative

14.32 appropriations, and any local police or fire fund to which

14.33 section 356.216 applies.

14.34 Sec. 8. Minnesota Statutes 2002, section 356.215,

14.35 subdivision 18, is amended to read:

14.36 Subd. 18. ESTABLISHMENT OF ACTUARIAL ASSUMPTIONS. (a)

15.1 The actuarial assumptions used for the preparation of actuarial

15.2 valuations under this section that are other than those set

15.3 forth in this section may be changed only with the approval of

15.4 the Legislative Commission on Pensions and Retirement.

15.5 (b) A change in the applicable actuarial assumptions may be

15.6 proposed by the governing board of the applicable pension fund

15.7 or relief association, by the actuary retained by the

15.8 ~~Legislative Commission on Pensions and Retirement~~ joint

15.9 retirement systems under section 6, by the actuarial advisor to

15.10 a pension fund governed by chapter 352, 353, 354, or 354A, or by

15.11 the actuary retained by a local police or firefighters relief

15.12 association governed by sections 69.77 or 69.771 to 69.776, if

15.13 one is retained.

15.14 Sec. 9. Minnesota Statutes 2002, section 422A.06,

15.15 subdivision 2, is amended to read:

15.16 Subd. 2. ACTUARIAL VALUATION REQUIRED. As of July 1 of

15.17 each year, an actuarial valuation of the retirement fund shall

15.18 be prepared by the ~~commission-retained~~ actuary retained by the

15.19 joint retirement systems under section 6 and filed in

15.20 conformance with the provisions and requirements of sections

15.21 356.215 to 356.23. Experience studies shall be prepared at

15.22 those times required by statute, required by the standards for

15.23 actuarial work adopted by the Legislative Commission on Pensions

15.24 and Retirement or ordered by the board.

15.25 The board may contract for the services of an approved

15.26 actuary and fix the reasonable compensation for those services.

15.27 Any approved actuary retained by the board shall function as the

15.28 actuarial advisor to the board and may perform actuarial

15.29 valuations and experience studies to supplement those performed

15.30 by the actuary retained by the ~~Legislative Commission on~~

15.31 ~~Pensions and Retirement~~ joint retirement systems under section 6.

15.32 Any supplemental actuarial valuations or experience studies

15.33 ~~shall~~ must be filed with the executive director of the

15.34 Legislative Commission on Pensions and Retirement.

15.35 Sec. 10. REPEALER.

15.36 Minnesota Statutes 2002, sections 3.85, subdivisions 11 and

16.1 12; and 356.217 are repealed.

16.2 Sec. 11. EFFECTIVE DATE.

16.3 Sections 1 to 10 are effective on the day following final

16.4 enactment.