LCPR05-307
1.1 M ............... moves to amend S.F. No. 1057; H.F. 1120,
1.2 as follows:
1.3 Delete everything after the enacting clause and insert:
1.4 "ARTICLE 1
1.5 VARIOUS RETIREMENT PLAN CONTRIBUTION
1.6 RATE INCREASES
1.7 Section 1. Minnesota Statutes 2004, section 352.04,
1.8 subdivision 2, is amended to read:
1.9 Subd. 2. EMPLOYEE CONTRIBUTIONS. The employee
1.10 contribution to the fund must be equal to 4.0 percent of
1.11 salary. Beginning on July 1, 2007, the employee contribution
1.12 must be equal to 4.25 percent of salary. Beginning on July 1,
1.13 2008, the employee contribution must be equal to 4.50 percent of
1.14 salary. Beginning on July 1, 2009, the employee contribution
1.15 must be equal to 4.75 percent of salary. Beginning on July 1,
1.16 2010, the employee contribution must be equal to 5.0 percent of
1.17 salary. These contributions must be made by deduction from
1.18 salary as provided in subdivision 4.
1.19 Sec. 2. Minnesota Statutes 2004, section 352.04,
1.20 subdivision 3, is amended to read:
1.21 Subd. 3. EMPLOYER CONTRIBUTIONS. The employer
1.22 contribution to the fund must be equal to 4.0 percent of
1.23 salary. Beginning on July 1, 2007, the employer contribution
1.24 must be equal to 4.25 percent of salary. Beginning on July 1,
1.25 2008, the employer contribution must be equal to 4.50 percent of
1.26 salary. Beginning on July 1, 2009, the employer contribution
1.27 must be equal to 4.75 percent of salary. Beginning on July 1,
1.28 2010, the employer contribution must be equal to 5.0 percent of
1.29 salary.
1.30 Sec. 3. Minnesota Statutes 2004, section 352.92,
1.31 subdivision 1, is amended to read:
1.32 Subdivision 1. EMPLOYEE CONTRIBUTIONS. Employee
1.33 contributions of covered correctional employees must be in an
1.34 amount equal to 5.69 a percent of salary. Beginning July 1,
1.35 2007, through June 30, 2008, the employee contribution must be
1.36 equal to 6.4 percent of salary. Beginning July 1, 2008, through
2.1 June 30, 2009, the employee contribution must be equal to 7.0
2.2 percent of salary. Beginning July 1, 2009, through June 30,
2.3 2010, the employee contribution must be equal to 7.7 percent of
2.4 salary. Beginning July 1, 2010, the ongoing employee
2.5 contribution must be equal to 8.6 percent of salary.
2.6 Sec. 4. Minnesota Statutes 2004, section 352.92,
2.7 subdivision 2, is amended to read:
2.8 Subd. 2. EMPLOYER CONTRIBUTIONS. The employer shall
2.9 contribute for covered correctional employees an amount equal to
2.10 7.98 a percent of salary. Beginning July 1, 2007, through June
2.11 30, 2008, the employer contribution must be equal to 9.1 percent
2.12 of salary. Beginning July 1, 2008, through June 30, 2009, the
2.13 employer contribution must be equal to 10.1 percent of salary.
2.14 Beginning July 1, 2009, through June 30, 2010, the employer
2.15 contribution must be equal to 11.1 percent of salary. Beginning
2.16 July 1, 2010, the ongoing employer contribution must be equal to
2.17 12.1 percent of salary.
2.18 Sec. 5. Minnesota Statutes 2004, section 352B.02,
2.19 subdivision 1a, is amended to read:
2.20 Subd. 1a. MEMBER CONTRIBUTIONS. Each member shall pay a
2.21 sum equal to 8.40 a percent of the member's salary, which shall
2.22 constitute the member contribution to the fund. Beginning July
2.23 1, 2007, through June 30, 2008, each member contribution shall
2.24 be equal to 9.1 percent of salary. Beginning July 1, 2008, the
2.25 ongoing member contribution amount shall be equal to 9.8 percent
2.26 of salary.
2.27 Sec. 6. Minnesota Statutes 2004, section 352B.02,
2.28 subdivision 1c, is amended to read:
2.29 Subd. 1c. EMPLOYER CONTRIBUTIONS. In addition to member
2.30 contributions, department heads shall pay a sum equal to 12.60 a
2.31 percent of the salary upon which deductions were made, which
2.32 shall constitute the employer contribution to the fund.
2.33 Beginning July 1, 2007, through June 30, 2008, the employer
2.34 contribution shall be equal to 13.6 percent of salary.
2.35 Beginning July 1, 2008, the ongoing employer contribution amount
2.36 shall be equal to 14.6 percent of salary. Department
3.1 contributions must be paid out of money appropriated to
3.2 departments for this purpose.
3.3 Sec. 7. Minnesota Statutes 2004, section 352D.04,
3.4 subdivision 2, is amended to read:
3.5 Subd. 2. CONTRIBUTION RATES. (a) The money used to
3.6 purchase shares under this section is the employee and employer
3.7 contributions provided in this subdivision.
3.8 (b) The employee contribution is an amount equal to the
3.9 employee contribution specified in section 352.04, subdivision 2
3.10 four percent of salary.
3.11 (c) The employer contribution is an amount equal to six
3.12 percent of salary.
3.13 (d) These contributions must be made in the manner provided
3.14 in section 352.04, subdivisions 4, 5, and 6.
3.15 (e) For members of the legislature, the contributions under
3.16 this subdivision also must be made on per diem payments received
3.17 during a regular or special legislative session, but may not be
3.18 made on per diem payments received outside of a regular or
3.19 special legislative session, on the additional compensation
3.20 attributable to a leadership position under section 3.099,
3.21 subdivision 3, living expense payments under section 3.101, or
3.22 special session living expense payments under section 3.103.
3.23 (f) For a judge who is a member of the unclassified plan
3.24 under section 352D.02, subdivision 1, paragraph (c), clause
3.25 (16), the employee contribution rate is eight percent of salary,
3.26 and there is no employer contribution.
3.27 Sec. 8. Minnesota Statutes 2004, section 353.27,
3.28 subdivision 2, is amended to read:
3.29 Subd. 2. EMPLOYEE CONTRIBUTION. (a) The employee
3.30 contribution is the following applicable percentage of the total
3.31 salary amount for a "basic member" and for a "coordinated
3.32 member":
3.33 Basic Coordinated
3.34 Program Program
3.35 Before January 1, 2002 8.75 4.75
3.36 Effective January 1, 2002
4.1 Effective before January 1, 2006 9.10 5.10
4.2 Effective January 1, 2006 9.10 5.50
4.3 Effective January 1, 2007 9.10 5.75
4.4 Effective January 1, 2008 9.10 6.00 plus any
4.5 contribution
4.6 rate adjustment
4.7 under
4.8 subdivision 3b
4.9 (b) These contributions must be made by deduction from
4.10 salary as defined in section 353.01, subdivision 10, in the
4.11 manner provided in subdivision 4. Where If any portion of a
4.12 member's salary is paid from other than public funds, such the
4.13 member's employee contribution must be based on the total salary
4.14 received by the member from all sources.
4.15 Sec. 9. Minnesota Statutes 2004, section 353.27,
4.16 subdivision 3, is amended to read:
4.17 Subd. 3. EMPLOYER CONTRIBUTION. (a) The employer
4.18 contribution is the following applicable percentage of the total
4.19 salary amount for "basic members" and for "coordinated members":
4.20 Basic Coordinated
4.21 Program Program
4.22 Before January 1, 2002 8.75 4.75
4.23 Effective January 1, 2002
4.24 Effective before January 1, 2006 9.10 5.10
4.25 Effective January 1, 2006 9.10 5.50
4.26 Effective January 1, 2007 9.10 5.75
4.27 Effective January 1, 2008 9.10 6.00 plus any
4.28 contribution
4.29 rate adjustment
4.30 under
4.31 subdivision 3b
4.32 (b) This contribution must be made from funds available to
4.33 the employing subdivision by the means and in the manner
4.34 provided in section 353.28.
4.35 Sec. 10. Minnesota Statutes 2004, section 353.27,
4.36 subdivision 3a, is amended to read:
5.1 Subd. 3a. ADDITIONAL EMPLOYER CONTRIBUTION. (a) An
5.2 additional employer contribution must be made equal to (1) 2.68
5.3 percent of the following applicable percentage of the total
5.4 salary of each amount for "basic member members"; and (2)
5.5 .43 percent of the total salary of each for "coordinated member.
5.6 members":
5.7 Basic Coordinated
5.8 Program Program
5.9 Effective before January 1, 2006 2.68 .43
5.10 Effective January 1, 2006 2.68 .50
5.11 Effective January 1, 2009 2.68 .75
5.12 Effective January 1, 2010 2.68 1.00
5.13 These contributions must be made from funds available to
5.14 the employing subdivision by the means and in the manner
5.15 provided in section 353.28.
5.16 (b) The coordinated program contribution rates set forth in
5.17 paragraph (a) effective for January 1, 2009, or January 1, 2010,
5.18 must not be implemented if, following receipt of the July 1,
5.19 2008, or July 1, 2009, annual actuarial valuation reports under
5.20 section 356.215, respectively, the actuarially required
5.21 contributions are equal to or less than the total rates under
5.22 this section in effect as of January 1, 2008.
5.23 (c) This subdivision is repealed once the actuarial value
5.24 of the assets of the plan equal or exceed the actuarial accrued
5.25 liability of the plan as determined by the actuary retained by
5.26 the Legislative Commission on Pensions and Retirement under
5.27 section 356.215. The repeal is effective on the first day of
5.28 the first full pay period occurring after March 31 of the
5.29 calendar year following the issuance of the actuarial valuation
5.30 upon which the repeal is based.
5.31 Sec. 11. Minnesota Statutes 2004, section 353.27, is
5.32 amended by adding a subdivision to read:
5.33 Subd. 3b. CHANGE IN EMPLOYEE AND EMPLOYER CONTRIBUTIONS
5.34 IN CERTAIN INSTANCES. (a) For purposes of this section, a
5.35 contribution sufficiency exists if the total of the employee
5.36 contribution under subdivision 2, the employer contribution
6.1 under subdivision 3, the additional employer contribution under
6.2 subdivision 3a, and any additional contribution previously
6.3 imposed under this subdivision exceeds the total of the normal
6.4 cost, the administrative expenses, and the amortization
6.5 contribution of the retirement plan as reported in the most
6.6 recent actuarial valuation of the retirement plan prepared by
6.7 the actuary retained under section 356.214 and prepared under
6.8 section 356.215 and the standards for actuarial work of the
6.9 Legislative Commission on Pensions and Retirement. For purposes
6.10 of this section, a contribution deficiency exists if the total
6.11 of the employee contributions under subdivision 2, the employer
6.12 contributions under subdivision 3, the additional employer
6.13 contribution under subdivision 3a, and any additional
6.14 contribution previously imposed under this subdivision is less
6.15 than the total of the normal cost, the administrative expenses,
6.16 and the amortization contribution of the retirement plan as
6.17 reported in the most recent actuarial valuation of the
6.18 retirement plan prepared by the actuary retained under section
6.19 356.214 and prepared under section 356.215 and the standards for
6.20 actuarial work of the Legislative Commission on Pensions and
6.21 Retirement.
6.22 (b) Employee and employer contributions under subdivisions
6.23 2 and 3 must be adjusted:
6.24 (1) if, after July 1, 2010, the regular actuarial
6.25 valuations of the general employees retirement plan of the
6.26 Public Employees Retirement Association under section 356.215
6.27 indicate that there is a contribution sufficiency under
6.28 paragraph (a) equal to or greater than 0.5 percent of covered
6.29 payroll for two consecutive years, the coordinated program
6.30 employee and employer contribution rates must be decreased as
6.31 determined under paragraph (c) to a level such that the
6.32 sufficiency equals no more than 0.25 percent of covered payroll
6.33 based on the most recent actuarial valuation; or
6.34 (2) if, after July 1, 2010, the regular actuarial
6.35 valuations of the general employees retirement plan of the
6.36 Public Employees Retirement Association under section 356.215
7.1 indicate that there is a deficiency equal to or greater than 0.5
7.2 percent of covered payroll for two consecutive years, the
7.3 coordinated program employee and employer contribution rates
7.4 must be increased as determined under paragraph (c) to a level
7.5 such that no deficiency exists based on the most recent
7.6 actuarial valuation.
7.7 (c) The contribution rate increase or decrease must be
7.8 determined by the executive director of the Public Employees
7.9 Retirement Association, must be reported to the chair and the
7.10 executive director of the Legislative Commission on Pensions and
7.11 Retirement on or before the next February 1, and, if the
7.12 Legislative Commission on Pensions and Retirement does not
7.13 recommend against the rate change or does not recommend a
7.14 modification in the rate change, is effective on the next July 1
7.15 following the determination by the executive director that a
7.16 contribution deficiency or sufficiency has existed for two
7.17 consecutive fiscal years based on the most recent actuarial
7.18 valuations under section 356.215. If the actuarially required
7.19 contribution exceeds or is less than the total support provided
7.20 by the combined employee and employer contribution rates by more
7.21 than 0.5 percent of covered payroll, the coordinated program
7.22 employee and employer contribution rates must be adjusted
7.23 incrementally over one or more years to a level such that there
7.24 remains a contribution sufficiency of no more than 0.25 percent
7.25 of covered payroll.
7.26 (d) No incremental adjustment may exceed 0.25 percent for
7.27 either the coordinated program employee and employer
7.28 contribution rates per year in which any adjustment is
7.29 implemented. A contribution rate adjustment under this
7.30 subdivision must not be made until at least two years have
7.31 passed since fully implementing a previous adjustment under this
7.32 subdivision.
7.33 Sec. 12. Minnesota Statutes 2004, section 353.65,
7.34 subdivision 2, is amended to read:
7.35 Subd. 2. EMPLOYEE CONTRIBUTION RATE. (a) The employee
7.36 contribution is an amount equal to 6.2 the percent of the total
8.1 salary of the member specified in paragraph (b). This
8.2 contribution must be made by deduction from salary in the manner
8.3 provided in subdivision 4. Where any portion of a member's
8.4 salary is paid from other than public funds, the member's
8.5 employee contribution is based on the total salary received from
8.6 all sources.
8.7 (b) For calendar year 2006, the employee contribution rate
8.8 is 7.0 percent. For calendar year 2007, the employee
8.9 contribution rate is 7.8 percent. For calendar year 2008, the
8.10 employee contribution rate is 8.6 percent. For calendar year
8.11 2009 and thereafter, the employee contribution rate is 9.4
8.12 percent.
8.13 Sec. 13. Minnesota Statutes 2004, section 353.65,
8.14 subdivision 3, is amended to read:
8.15 Subd. 3. EMPLOYER CONTRIBUTION RATE. (a) The employer
8.16 contribution shall be an amount equal to 9.3 the percent of the
8.17 total salary of every member as specified in paragraph (b).
8.18 This contribution shall be made from funds available to the
8.19 employing subdivision by the means and in the manner provided in
8.20 section 353.28.
8.21 (b) For calendar year 2006, the employer contribution rate
8.22 is 10.5 percent. For calendar year 2007, the employer
8.23 contribution rate is 11.7 percent. For calendar year 2008, the
8.24 employer contribution rate is 12.9 percent. For calendar year
8.25 2009 and thereafter, the employer contribution rate is 14.1
8.26 percent.
8.27 Sec. 14. EFFECTIVE DATE.
8.28 (a) Sections 1, 2, and 7 are effective on July 1, 2007.
8.29 (b) Sections 3 to 6 are effective on July 1, 2005.
8.30 (c) Sections 8 to 13 are effective on January 1, 2006.
8.31 ARTICLE 2
8.32 TEACHER RETIREMENT FUND AND
8.33 BENEFIT RESTRUCTURING
8.34 Section 1. 126C.458 LEVY FOR EARLY RETIREMENT COSTS.
8.35 Each year, a school district may levy for the additional
8.36 employer contributions required under section 354.42,
9.1 subdivision 3.
9.2 Sec. 2. 128D.18 FUNDING OF UNFUNDED PENSION
9.3 LIABILITIES.
9.4 Subdivision 1. FINANCING AUTHORITY. Notwithstanding any
9.5 other law to the contrary, Special School District No. 1,
9.6 Minneapolis, may finance all or a portion of the current and
9.7 future unfunded actuarial accrued liability of the former
9.8 Minneapolis Teachers Retirement Fund Association through the
9.9 issuance of pension obligation bonds under this section.
9.10 Subd. 2. USE OF PROCEEDS. The proceeds of the bonds
9.11 issued, less costs, must be paid to the State Board of
9.12 Investment to be deposited as a payment toward the funding of
9.13 the unfunded actuarial accrued liability of the former
9.14 Minneapolis Teachers Retirement Fund Association owed by Special
9.15 School District No. 1, Minneapolis, and must be credited as an
9.16 asset of the Teachers Retirement Association.
9.17 Subd. 3. APPROPRIATIONS. Notwithstanding any law to the
9.18 contrary, special direct state aid, matching aid, and other
9.19 contributions levied for the Teachers Retirement Association
9.20 under section 354A.12, subdivisions 3a and 3b, and amortization
9.21 or supplementary amortization state aid reallocated to the
9.22 Teachers Retirement Association under section 423A.02 are
9.23 pledged and appropriated to the payment of the bonds and must be
9.24 transferred to Special School District No. 1, Minneapolis, and
9.25 additional employer contributions levied by Special School
9.26 District No. 1, Minneapolis, under section 354A.12, subdivision
9.27 3b, shall be retained by the district to the extent required to
9.28 pay debt service on the bonds for the succeeding 12‑month period
9.29 or a longer period established pursuant to the resolution of the
9.30 district authorizing the bonds.
9.31 Subd. 4. NO ELECTION. No election of the voters of the
9.32 district shall be required to issue bonds authorized by this
9.33 section.
9.34 Subd. 5. TERMS AND SALE OF BONDS. The bonds issued
9.35 pursuant to this section shall bear interest at the rate or
9.36 rates and mature on the date or dates not more than 30 years
10.1 from the date of issue as the district shall determine by
10.2 resolution. Interest may be at a fixed or variable rate. The
10.3 bonds may be sold and issued on terms and in a manner that
10.4 Special School District No. 1, Minneapolis, determines is in its
10.5 best interests and in the best interests of the state.
10.6 Subd. 6. THIS SECTION PREVAILS. Notwithstanding any
10.7 other law to the contrary, this section shall apply to the
10.8 issuance and sale of the bonds and to the purposes for which the
10.9 bonds may be issued.
10.10 Subd. 7. STATE PLEDGE AGAINST IMPAIRMENT OF
10.11 CONTRACTS. The state pledges and agrees with the holders of
10.12 bonds issued under this section that the state will not limit or
10.13 alter the rights vested in Special School District No. 1,
10.14 Minneapolis, to fulfill the terms of any agreements made with
10.15 the bondholders or in any way impair the rights and remedies of
10.16 the holders until the bonds, together with interest on them,
10.17 with interest on any unpaid installments of interest, and all
10.18 costs and expenses in connection with any action or proceeding
10.19 by or on behalf of the bondholders, are fully met and
10.20 discharged. The district may include this pledge and agreement
10.21 of the state in any agreement with the holders of bonds issued
10.22 under this section.
10.23 Subd. 8. NOT NET DEBT. Bonds ended under this section
10.24 not in default shall not be deemed net debt under any law
10.25 limiting indebtedness.
10.26 Subd. 9. AID REDUCTION FOR REPAYMENT. If the amount
10.27 transferred by Special School District No. 1, Minneapolis, to
10.28 the paying agent for the bonds is insufficient to pay required
10.29 debt service, the paying agent shall notify the commissioner of
10.30 finance. The commissioner shall reduce any and all unrestricted
10.31 state aids generally available to the school district by the
10.32 amount of the deficiency and pay the amounts to the paying agent
10.33 for the bonds for the payment of debt service. If the state
10.34 aids are reduced pursuant to this subdivision, the district may
10.35 levy a tax in the amount of the reduction in state aid.
10.36 Notwithstanding any other law to the contrary, no election of
11.1 the voters of the district is required for the levy and the levy
11.2 is not subject to other levy limitations.
11.3 Sec. 3. 128D.181 AID REDEDICATION.
11.4 Notwithstanding any law to the contrary and subject to
11.5 section 2, special direct state aid previously paid to the
11.6 Minneapolis Teachers Retirement Fund Association under section
11.7 354A.12, subdivision 3a, must be paid to the Teachers Retirement
11.8 Association.
11.9 Sec. 4. Minnesota Statutes 2004, section 354.05,
11.10 subdivision 2, is amended to read:
11.11 Subd. 2. TEACHER. (a) "Teacher" means:
11.12 (1) a person who renders service as a teacher, supervisor,
11.13 principal, superintendent, librarian, nurse, counselor, social
11.14 worker, therapist, or psychologist in a public school of the
11.15 state located outside of the corporate limits of a city of the
11.16 first class the city of Duluth or the city of St. Paul, or in
11.17 any charter school, irrespective of the location of the school,
11.18 or in any charitable, penal, or correctional institutions of a
11.19 governmental subdivision, or who is engaged in educational
11.20 administration in connection with the state public school
11.21 system, but excluding the University of Minnesota, whether the
11.22 position be a public office or an employment, and not including
11.23 the members or officers of any general governing or managing
11.24 board or body;
11.25 (2) an employee of the Teachers Retirement Association;
11.26 (3) a person who renders teaching service on a part‑time
11.27 basis and who also renders other services for a single employing
11.28 unit. A person whose teaching service comprises at least 50
11.29 percent of the combined employment salary is a member of the
11.30 association for all services with the single employing unit. If
11.31 the person's teaching service comprises less than 50 percent of
11.32 the combined employment salary, the executive director must
11.33 determine whether all or none of the combined service is covered
11.34 by the association; or
11.35 (4) a person who is not covered by the plans established
11.36 under chapter 352D, 354A, or 354B and who is employed by the
12.1 Board of Trustees of the Minnesota State Colleges and
12.2 Universities system in an unclassified position as:
12.3 (i) a president, vice‑president, or dean;
12.4 (ii) a manager or a professional in an academic or an
12.5 academic support program other than specified in item (i);
12.6 (iii) an administrative or a service support faculty
12.7 position; or
12.8 (iv) a teacher or a research assistant.
12.9 (b) "Teacher" does not mean:
12.10 (1) a person who works for a school or institution as an
12.11 independent contractor as defined by the Internal Revenue
12.12 Service;
12.13 (2) a person who renders part‑time teaching service or who
12.14 is a customized trainer as defined by the Minnesota State
12.15 Colleges and Universities system if (i) the service is
12.16 incidental to the regular nonteaching occupation of the person;
12.17 and (ii) the employer stipulates annually in advance that the
12.18 part‑time teaching service or customized training service will
12.19 not exceed 300 hours in a fiscal year and retains the
12.20 stipulation in its records; and (iii) the part‑time teaching
12.21 service or customized training service actually does not exceed
12.22 300 hours in a fiscal year; or
12.23 (3) a person exempt from licensure under section 122A.30.
12.24 Sec. 5. Minnesota Statutes 2004, section 354.05,
12.25 subdivision 13, is amended to read:
12.26 Subd. 13. ALLOWABLE SERVICE. "Allowable service" means:
12.27 (1) Any service rendered by a teacher for which on or
12.28 before July 1, 1957, the teacher's account in the retirement
12.29 fund was credited by reason of employee contributions in the
12.30 form of salary deductions, payments in lieu of salary
12.31 deductions, or in any other manner authorized by Minnesota
12.32 Statutes 1953, sections 135.01 to 135.13, as amended by Laws
12.33 1955, chapters 361, 549, 550, 611, or
12.34 (2) Any service rendered by a teacher for which on or
12.35 before July 1, 1961, the teacher elected to obtain credit for
12.36 service by making payments to the fund pursuant to Minnesota
13.1 Statutes 1980, section 354.09 and section 354.51, or
13.2 (3) Any service rendered by a teacher after July 1, 1957,
13.3 for any calendar month when the member receives salary from
13.4 which deductions are made, deposited and credited in the fund,
13.5 or
13.6 (4) Any service rendered by a person after July 1, 1957,
13.7 for any calendar month where payments in lieu of salary
13.8 deductions are made, deposited and credited into the fund as
13.9 provided in Minnesota Statutes 1980, section 354.09, subdivision
13.10 4, and section 354.53, or
13.11 (5) Any service rendered by a teacher for which the teacher
13.12 elected to obtain credit for service by making payments to the
13.13 fund pursuant to Minnesota Statutes 1980, section 354.09,
13.14 subdivisions 1 and 4, sections 354.50, 354.51, Minnesota
13.15 Statutes 1957, section 135.41, subdivision 4, Minnesota Statutes
13.16 1971, section 354.09, subdivision 2, or Minnesota Statutes, 1973
13.17 Supplement, section 354.09, subdivision 3, or
13.18 (6) Both service during years of actual membership in the
13.19 course of which contributions were currently made and service in
13.20 years during which the teacher was not a member but for which
13.21 the teacher later elected to obtain credit by making payments to
13.22 the fund as permitted by any law then in effect, or
13.23 (7) Any service rendered where contributions were made and
13.24 no allowable service credit was established because of the
13.25 limitations contained in Minnesota Statutes 1957, section
13.26 135.09, subdivision 2, as determined by the ratio between the
13.27 amounts of money credited to the teacher's account in a fiscal
13.28 year and the maximum retirement contribution allowable for that
13.29 year, or
13.30 (8) MS 2002 (Expired)
13.31 (9) A period of time during which a teacher who is a state
13.32 employee was on strike without pay, not to exceed a period of
13.33 one year, if the teacher makes a payment in lieu of salary
13.34 deductions or makes a prior service credit purchase payment,
13.35 whichever applies. If the payment is made within 12 months, the
13.36 payment by the teacher must be an amount equal to the employee
14.1 and employer contribution rates set forth in section 354.42,
14.2 subdivisions 2 and 3, applied to the teacher's rate of salary in
14.3 effect on the conclusion of the strike for the period of the
14.4 strike without pay, plus compound interest at a monthly rate of
14.5 0.71 percent from the last day of the strike until the date of
14.6 payment. If the payment by the employee is not made within 12
14.7 months, the payment must be in an amount equal to the payment
14.8 amount determined under section 356.55 or 356.551, whichever
14.9 applies, or
14.10 (10) A period of service before July 1, 2005, that was
14.11 credited by the Minneapolis Teachers Retirement Fund Association
14.12 and that was rendered by a teacher as an employee of Special
14.13 School District No. 1, Minneapolis, or by an employee of the
14.14 Minneapolis Teachers Retirement Fund Association who was a
14.15 member of the Minneapolis Teachers Retirement Fund Association
14.16 by virtue of that employment, who has not begun receiving an
14.17 annuity or other retirement benefit from the former Minneapolis
14.18 Teachers Retirement Fund Association calculated in whole or in
14.19 part on that service before July 1, 2005, and who has not taken
14.20 a refund of member contributions related to that service unless
14.21 the refund is repaid under section 354.50, subdivision 4.
14.22 Sec. 6. Minnesota Statutes 2004, section 354.42,
14.23 subdivision 2, is amended to read:
14.24 Subd. 2. EMPLOYEE. (a) The employee contribution to the
14.25 fund is an amount equal to the following percentage of the
14.26 salary of a member:
14.27 (1) after July 1, 2005, for a teacher employed by Special
14.28 School District No. 1, Minneapolis, 5.5 percent if the teacher
14.29 is a coordinated member and 9.0 percent if the teacher is a
14.30 basic member;
14.31 (2) for every other teacher, 5.0 5.5 percent of if the
14.32 salary of every teacher is a coordinated member and 9.0 percent
14.33 of if the salary of every teacher is a basic member.
14.34 (b) This contribution must be made by deduction from
14.35 salary. Where any portion of a member's salary is paid from
14.36 other than public funds, the member's employee contribution must
15.1 be based on the entire salary received.
15.2 Sec. 7. Minnesota Statutes 2004, section 354.42,
15.3 subdivision 3, is amended to read:
15.4 Subd. 3. EMPLOYER. (a) The employer contribution to the
15.5 fund by Special School District No. 1, Minneapolis, is an amount
15.6 equal to 8.64 percent of the salary of each of its teachers who
15.7 is a coordinated member and 12.64 percent of the salary of each
15.8 of its teachers who is a basic member.
15.9 (b) The employer contribution to the fund for every other
15.10 employer is an amount equal to 5.0 5.5 percent of the salary of
15.11 each coordinated member and 9.0 percent of the salary of each
15.12 basic member.
15.13 (c) As payment toward the cost of the unfunded actuarial
15.14 accrued liability transferred to the Teachers Retirement
15.15 Association from the former Minneapolis Teachers Retirement Fund
15.16 Association, a supplemental contribution of ... percent of the
15.17 covered Special School District No. 1 teacher payroll must be
15.18 made each fiscal year through June 30, 2035. One‑third of the
15.19 dollar amount of this supplemental contribution must be paid
15.20 each by Special School District No. 1, Minneapolis, the city of
15.21 Minneapolis, and the state of Minnesota. On or before October
15.22 1, annually, the executive director of the Teachers Retirement
15.23 Association shall calculate the expected total dollar amount of
15.24 the supplemental contribution for the calendar year and shall
15.25 certify the portion payable by each governmental entity. The
15.26 amount is payable in full on or before the following June 1.
15.27 Sec. 8. Minnesota Statutes 2004, section 354.44,
15.28 subdivision 6, is amended to read:
15.29 Subd. 6. COMPUTATION OF FORMULA PROGRAM RETIREMENT
15.30 ANNUITY. (a) The formula retirement annuity must be computed in
15.31 accordance with the applicable provisions of the formulas stated
15.32 in paragraph (b) or (d) on the basis of each member's average
15.33 salary for the period of the member's formula service credit.
15.34 For all years of formula service credit, "average salary,"
15.35 for the purpose of determining the member's retirement annuity,
15.36 means the average salary upon which contributions were made and
16.1 upon which payments were made to increase the salary limitation
16.2 provided in Minnesota Statutes 1971, section 354.511, for the
16.3 highest five successive years of formula service credit
16.4 provided, however, that such "average salary" shall not include
16.5 any more than the equivalent of 60 monthly salary payments.
16.6 Average salary must be based upon all years of formula service
16.7 credit if this service credit is less than five years.
16.8 (b) This paragraph, in conjunction with paragraph (c),
16.9 applies to a person who first became a member of the association
16.10 or a member of a pension fund listed in section 356.30,
16.11 subdivision 3, before July 1, 1989, unless paragraph (d), in
16.12 conjunction with paragraph (e), produces a higher annuity
16.13 amount, in which case paragraph (d) applies. The average salary
16.14 as defined in paragraph (a), multiplied by the following
16.15 percentages per year of formula service credit shall determine
16.16 the amount of the annuity to which the member qualifying
16.17 therefor is entitled for service rendered prior to July 1, 2005:
16.18 Coordinated Member Basic Member
16.19 Each year of service the percent the percent
16.20 during first ten specified in specified in
16.21 section 356.315, section 356.315,
16.22 subdivision 1, subdivision 3,
16.23 per year per year
16.24 Each year of service the percent the percent
16.25 thereafter specified in specified in
16.26 section 356.315, section 356.315,
16.27 subdivision 2, subdivision 4,
16.28 per year per year
16.29 For service rendered on or after July 1, 2005, the average
16.30 salary as defined in paragraph (a), multiplied by the following
16.31 percentages per year of service credit shall determine the
16.32 amount of the annuity to which the member qualifying therefor is
16.33 entitled:
16.34 Coordinated Member Basic Member
16.35 Each year of service the percent the percent
16.36 during first ten specified in specified in
17.1 section 356.315, section 356.315,
17.2 subdivision 1a, subdivision 3,
17.3 per year per year
17.4 Coordinated Member Basic Member
17.5 Each year of service the percent the percent
17.6 after ten years of specified in specified in
17.7 service section 356.315, section 356.315,
17.8 subdivision 2a, subdivision 4,
17.9 per year per year
17.10 (c)(i) This paragraph applies only to a person who first
17.11 became a member of the association or a member of a pension fund
17.12 listed in section 356.30, subdivision 3, before July 1, 1989,
17.13 and whose annuity is higher when calculated under paragraph (b),
17.14 in conjunction with this paragraph than when calculated under
17.15 paragraph (d), in conjunction with paragraph (e).
17.16 (ii) Where any member retires prior to normal retirement
17.17 age under a formula annuity, the member shall be paid a
17.18 retirement annuity in an amount equal to the normal annuity
17.19 provided in paragraph (b) reduced by one‑quarter of one percent
17.20 for each month that the member is under normal retirement age at
17.21 the time of retirement except that for any member who has 30 or
17.22 more years of allowable service credit, the reduction shall be
17.23 applied only for each month that the member is under age 62.
17.24 (iii) Any member whose attained age plus credited allowable
17.25 service totals 90 years is entitled, upon application, to a
17.26 retirement annuity in an amount equal to the normal annuity
17.27 provided in paragraph (b), without any reduction by reason of
17.28 early retirement.
17.29 (d) This paragraph applies to a member who has become at
17.30 least 55 years old and first became a member of the association
17.31 after June 30, 1989, and to any other member who has become at
17.32 least 55 years old and whose annuity amount when calculated
17.33 under this paragraph and in conjunction with paragraph (e), is
17.34 higher than it is when calculated under paragraph (b), in
17.35 conjunction with paragraph (c). For a basic member, the average
17.36 salary, as defined in paragraph (a) multiplied by the percent
18.1 specified by section 356.315, subdivision 4, for each year of
18.2 service for a basic member and by the percent specified in
18.3 section 356.315, subdivision 2, for each year of service for a
18.4 coordinated member shall determine the amount of the retirement
18.5 annuity to which the basic member is entitled. For a
18.6 coordinated member, the average salary, as defined in clause (1)
18.7 multiplied by the percent specified in section 356.315,
18.8 subdivision 2, for each year of service rendered prior to July
18.9 1, 2005, and by the percent specified in section 356.315,
18.10 subdivision 2a, for each year of service rendered on or after
18.11 July 1, 2005, shall determine the amount of the retirement
18.12 annuity to which the coordinated member is entitled.
18.13 (e) This paragraph applies to a person who has become at
18.14 least 55 years old and first becomes a member of the association
18.15 after June 30, 1989, and to any other member who has become at
18.16 least 55 years old and whose annuity is higher when calculated
18.17 under paragraph (d) in conjunction with this paragraph than when
18.18 calculated under paragraph (b), in conjunction with paragraph
18.19 (c). An employee who retires under the formula annuity before
18.20 the normal retirement age shall be paid the normal annuity
18.21 provided in paragraph (d) reduced so that the reduced annuity is
18.22 the actuarial equivalent of the annuity that would be payable to
18.23 the employee if the employee deferred receipt of the annuity and
18.24 the annuity amount were augmented at an annual rate of three
18.25 percent compounded annually from the day the annuity begins to
18.26 accrue until the normal retirement age.
18.27 (f) No retirement annuity is payable to a former employee
18.28 with a salary that exceeds 95 percent of the governor's salary
18.29 unless and until the salary figures used in computing the
18.30 highest five successive years average salary under paragraph (a)
18.31 have been audited by the Teachers Retirement Association and
18.32 determined by the executive director to comply with the
18.33 requirements and limitations of section 354.05, subdivisions 35
18.34 and 35a.
18.35 Sec. 9. 354.70 CONSOLIDATION OF THE MINNEAPOLIS
18.36 TEACHERS RETIREMENT FUND ASSOCIATION.
19.1 Subdivision 1. MEMBERSHIP TRANSFER. All active,
19.2 inactive, and retired members of the Minneapolis Teachers
19.3 Retirement Fund Association are transferred to the Teachers
19.4 Retirement Association and are no longer members of the
19.5 Minneapolis Teachers Retirement Fund Association as of the
19.6 effective date of this section.
19.7 Subd. 2. TRA MEMBERSHIP. A person first hired as a
19.8 teacher by Special School District No. 1, Minneapolis, after the
19.9 effective date of this section and who is a teacher as defined
19.10 in section 354.05, subdivision 2, is a member of the Teachers
19.11 Retirement Association for the person's teaching service.
19.12 Subd. 3. SERVICE CREDIT AND LIABILITY TRANSFER. All
19.13 allowable service and salary credit of the members and other
19.14 individuals transferred under subdivision 1 as specified in the
19.15 records of the Minneapolis Teachers Retirement Fund Association
19.16 on the transfer date is allowable service credit under section
19.17 354.05, subdivision 13, formula service credit under section
19.18 354.05, subdivision 25, and salary credit under section 354.05,
19.19 subdivision 35, for the Teachers Retirement Association.
19.20 Subd. 4. TRANSFER OF RECORDS. On the effective date of
19.21 this section, the chief administrative officer of the
19.22 Minneapolis Teachers Retirement Fund Association shall effect a
19.23 transfer of all records and documents relating to the funds and
19.24 the benefit plans of the association to the executive director
19.25 of the Teachers Retirement Association. To the extent possible,
19.26 original copies of all records and documents must be
19.27 transferred. The chief administrative officer of the
19.28 Minneapolis Teachers Retirement Fund Association shall certify
19.29 the accuracy of all records and documents for which the transfer
19.30 of original copies was not possible.
19.31 Subd. 5. TRANSFER OF ASSETS. (a) On the effective date
19.32 of this section, the chief administrative officer of the
19.33 Minneapolis Teachers Retirement Fund Association shall transfer
19.34 to the Teachers Retirement Association the entire assets of the
19.35 Minneapolis Teachers Retirement Fund Association. The transfer
19.36 of the assets of the Minneapolis Teachers Retirement Fund
20.1 Association must include any accounts receivable that are
20.2 determined by the executive director of the State Board of
20.3 Investment as reasonably capable of being collected. Legal
20.4 title to account receivables that are determined by the
20.5 executive director of the State Board of Investment as not
20.6 reasonably capable of being collected transfers to Special
20.7 School District No. 1, Minneapolis, as of the date of the
20.8 determination of the executive director of the State Board of
20.9 Investment. If the account receivables transferred to Special
20.10 School District No. 1, Minneapolis, are subsequently recovered
20.11 by the school district, the superintendent of Special School
20.12 District No. 1, Minneapolis, shall transfer the recovered amount
20.13 to the executive director of the Teachers Retirement
20.14 Association, in cash, for deposit in the teachers retirement
20.15 fund, less the reasonable expenses of the school district
20.16 related to the recovery.
20.17 (b) As of the effective date of this section, subject to
20.18 the authority of the State Board of Investment, the board of
20.19 directors of the Teachers Retirement Association has legal title
20.20 to and management responsibility for any transferred assets
20.21 under this subdivision as trustees for any person having a
20.22 beneficial interest in the Minneapolis Teachers Retirement Fund
20.23 Association. The Teachers Retirement Association is the
20.24 successor in interest for all claims for and against the former
20.25 coordinated program of the Minneapolis Teachers Retirement Fund
20.26 Association with respect to the retirement fund association,
20.27 except a claim against the Minneapolis Teachers Retirement Fund
20.28 Association or any person connected with the fund association in
20.29 a fiduciary capacity, based on any act or acts by that person
20.30 which were not done in good faith and which constituted a breach
20.31 of the obligation of the person as a fiduciary. As the
20.32 successor in interest, the Teachers Retirement Association may
20.33 assert any applicable defense in any judicial proceeding which
20.34 the board of the Minneapolis Teachers Retirement Fund
20.35 Association would have otherwise been entitled to assert
20.36 relating to the coordinated program.
21.1 (c) From the assets of the Minneapolis Teachers Retirement
21.2 Fund Association transferred to the Teachers Retirement
21.3 Association, an amount equal to the percentage figure that
21.4 represents the ratio between the market value of the Minnesota
21.5 postretirement investment fund as of June 30, 2005, and the
21.6 required reserves of the Minnesota postretirement investment
21.7 fund as of June 30, 2005, applied to the present value of future
21.8 benefits payable to annuitants of the former Minneapolis
21.9 Teachers Retirement Fund Association as of June 30, 2005,
21.10 including any postretirement adjustment from the Minnesota
21.11 postretirement investment fund expected to be payable on January
21.12 1, 2006, must be transferred to the Minnesota postretirement
21.13 investment fund. The executive director of the State Board of
21.14 Investment shall estimate this ratio at the time of the
21.15 transfer. By January 1, 2006, after all necessary financial
21.16 information becomes available to determine the actual funded
21.17 ratio of the Minnesota postretirement investment fund, the
21.18 postretirement fund must refund to the Teachers Retirement
21.19 Association any excess assets or the Teachers Retirement
21.20 Association must contribute any deficiency to the Minnesota
21.21 postretirement investment fund with interest under section
21.22 11A.18, subdivision 6. The balance of the assets of the former
21.23 Minneapolis Teachers Retirement Fund Association after the
21.24 transfer to the Minnesota postretirement investment fund must be
21.25 credited to the Teachers Retirement Association.
21.26 If the assets transferred by the Minneapolis Teachers
21.27 Retirement Fund Association to the Teachers Retirement
21.28 Association are insufficient to meet its obligation to the
21.29 Minnesota postretirement investment fund, additional assets must
21.30 be transferred by the executive director of the Teachers
21.31 Retirement Association to meet the amount required.
21.32 Subd. 6. BENEFIT CALCULATION. (a) For every deferred,
21.33 inactive, disabled, and retired member of the Minneapolis
21.34 Teachers Retirement Fund Association transferred under
21.35 subdivision 1, and the survivors of these members, annuities or
21.36 benefits earned before the date of the transfer, other than
22.1 future postretirement adjustments, must be calculated and paid
22.2 by the Teachers Retirement Association under the laws, articles
22.3 of incorporation, and bylaws of the former Minneapolis Teachers
22.4 Retirement Fund Association that were in effect relative to the
22.5 person on the date of the person's termination of active service
22.6 covered by the former Minneapolis Teachers Retirement Fund
22.7 Association.
22.8 (b) Former Minneapolis Teachers Retirement Fund Association
22.9 members who retired before July 1, 2005, must receive
22.10 postretirement adjustments after January 1, 2006, only as
22.11 provided in section 11A.18. All other benefit recipients of the
22.12 former Minneapolis Teachers Retirement Fund Association must
22.13 receive postretirement adjustments after January 1, 2006, only
22.14 as provided in section 356.41.
22.15 Subd. 7. TERMINATION OF THE MINNEAPOLIS TEACHERS
22.16 RETIREMENT FUND ASSOCIATION. As of the effective date of this
22.17 section and upon the transfer of administration, records,
22.18 assets, and liabilities from the Minneapolis Teachers Retirement
22.19 Fund Association to the Teachers Retirement Association, the
22.20 Minneapolis Teachers Retirement Fund Association ceases to exist
22.21 as a Minnesota public pension plan.
22.22 Sec. 10. 354.75 MINNEAPOLIS EMPLOYEES RETIREMENT FUND
22.23 STATE AID REDEDICATED.
22.24 Subdivision 1. APPROPRIATION. The positive difference,
22.25 if any, between the actual state aid paid to the Minneapolis
22.26 Employees Retirement Fund under section 422A.101, subdivision 3,
22.27 and $8,065,000 annually is appropriated from the general fund to
22.28 the commissioner of finance for deposit in the Teachers
22.29 Retirement Association to offset all or a portion of the current
22.30 and future unfunded actuarial accrued liability of the
22.31 Minneapolis Teachers Retirement Fund Association.
22.32 Subd. 2. FINANCIAL REQUIREMENTS. The appropriation in
22.33 subdivision 1 is available to the extent that financial
22.34 requirements of the Minneapolis Employees Retirement Fund under
22.35 section 422A.101, subdivision 3, have been satisfied.
22.36 Sec. 11. Minnesota Statutes 2004, section 354A.011,
23.1 subdivision 15a, is amended to read:
23.2 Subd. 15a. NORMAL RETIREMENT AGE. "Normal retirement
23.3 age" means age 65 for a person who first became a member of the
23.4 coordinated program of the Minneapolis or St. Paul Teachers
23.5 Retirement Fund Association or the new law coordinated program
23.6 of the Duluth Teachers Retirement Fund Association or a member
23.7 of a pension fund listed in section 356.30, subdivision 3,
23.8 before July 1, 1989. For a person who first became a member of
23.9 the coordinated program of the Minneapolis or St. Paul Teachers
23.10 Retirement Fund Association or the new law coordinated program
23.11 of the Duluth Teachers Retirement Fund Association after June
23.12 30, 1989, normal retirement age means the higher of age 65 or
23.13 retirement age, as defined in United States Code, title 42,
23.14 section 416(l), as amended, but not to exceed age 66. For a
23.15 person who is a member of the basic program of the Minneapolis
23.16 or St. Paul Teachers Retirement Fund Association or the old law
23.17 coordinated program of the Duluth Teachers Retirement Fund
23.18 Association, normal retirement age means the age at which a
23.19 teacher becomes eligible for a normal retirement annuity
23.20 computed upon meeting the age and service requirements specified
23.21 in the applicable provisions of the articles of incorporation or
23.22 bylaws of the respective teachers retirement fund association.
23.23 Sec. 12. Minnesota Statutes 2004, section 354A.011,
23.24 subdivision 27, is amended to read:
23.25 Subd. 27. TEACHER. (a) "Teacher" means any person who
23.26 renders service for a public school district, other than a
23.27 charter school, located in the corporate limits of one of the
23.28 cities of the first class which was so classified on January 1,
23.29 1979 Duluth and St. Paul, as any of the following:
23.30 (1) a full‑time employee in a position for which a valid
23.31 license from the state Department of Education is required;
23.32 (2) an employee of the teachers retirement fund association
23.33 located in the city of the first class unless the employee has
23.34 exercised the option pursuant to Laws 1955, chapter 10, section
23.35 1, to retain membership in the Minneapolis Employees Retirement
23.36 Fund established pursuant to chapter 422A;
24.1 (3) a part‑time employee in a position for which a valid
24.2 license from the state Department of Education is required; or
24.3 (4) a part‑time employee in a position for which a valid
24.4 license from the state Department of Education is required who
24.5 also renders other nonteaching services for the school district,
24.6 unless the board of trustees of the teachers retirement fund
24.7 association determines that the combined employment is on the
24.8 whole so substantially dissimilar to teaching service that the
24.9 service may not be covered by the association.
24.10 (b) The term does not mean any person who renders service
24.11 in the school district as any of the following:
24.12 (1) an independent contractor or the employee of an
24.13 independent contractor;
24.14 (2) an employee who is a full‑time teacher covered by the
24.15 Teachers Retirement Association or by another teachers
24.16 retirement fund association established pursuant to this chapter
24.17 or chapter 354;
24.18 (3) an employee exempt from licensure pursuant to section
24.19 122A.30;
24.20 (4) an employee who is a teacher in a technical college
24.21 located in a city of the first class unless the person elects
24.22 coverage by the applicable first class city teacher retirement
24.23 fund association under section 354B.21, subdivision 2;
24.24 (5) a teacher employed by a charter school, irrespective of
24.25 the location of the school; or
24.26 (6) an employee who is a part‑time teacher in a technical
24.27 college in a city of the first class and who has elected
24.28 coverage by the applicable first class city teacher retirement
24.29 fund association under section 354B.21, subdivision 2, but (i)
24.30 the teaching service is incidental to the regular nonteaching
24.31 occupation of the person; (ii) the applicable technical college
24.32 stipulates annually in advance that the part‑time teaching
24.33 service will not exceed 300 hours in a fiscal year; and (iii)
24.34 the part‑time teaching actually does not exceed 300 hours in the
24.35 fiscal year to which the certification applies.
24.36 Sec. 13. Minnesota Statutes 2004, section 354A.021,
25.1 subdivision 1, is amended to read:
25.2 Subdivision 1. ESTABLISHMENT. There is established a
25.3 teachers retirement fund association in each of the cities of
25.4 the first class which were so classified on January 1,
25.5 1979 Duluth and St. Paul. The associations shall be known
25.6 respectively as the "Duluth Teachers Retirement Fund
25.7 Association," the "Minneapolis Teachers Retirement Fund
25.8 Association" and the "St. Paul Teachers Retirement Fund
25.9 Association." Each association shall be a continuation of the
25.10 teachers retirement fund association with the same corporate
25.11 name established pursuant to the authorization contained in Laws
25.12 1909, chapter 343, section 1.
25.13 Sec. 14. Minnesota Statutes 2004, section 354A.092, is
25.14 amended to read:
25.15 354A.092 SABBATICAL LEAVE.
25.16 Any teacher in the coordinated program of either the
25.17 Minneapolis Teachers Retirement Fund Association or the St.
25.18 Paul Teachers Retirement Fund Association or any teacher in the
25.19 new law coordinated program of the Duluth Teachers Retirement
25.20 Fund Association who is granted a sabbatical leave shall be
25.21 entitled to receive allowable service credit in the applicable
25.22 association for periods of sabbatical leave. To obtain the
25.23 service credit, the teacher on sabbatical leave shall make an
25.24 employee contribution to the applicable association. No teacher
25.25 shall be entitled to receive more than three years of allowable
25.26 service credit pursuant to this section for a period or periods
25.27 of sabbatical leave during any ten consecutive fiscal or
25.28 calendar years, whichever is the applicable plan year for the
25.29 teachers retirement fund association. If the teacher granted a
25.30 sabbatical leave makes the employee contribution for a period of
25.31 sabbatical leave pursuant to this section, the employing unit
25.32 shall make an employer contribution on behalf of the teacher to
25.33 the applicable association for that period of sabbatical leave
25.34 in the manner described in section 354A.12, subdivision 2a. The
25.35 employee and employer contributions shall be in an amount equal
25.36 to the employee and employer contribution rates in effect for
26.1 other active members of the association covered by the same
26.2 program applied to a salary figure equal to the teacher's actual
26.3 covered salary for the plan year immediately preceding the
26.4 sabbatical leave period. Payment of the employee contribution
26.5 authorized pursuant to this section shall be made by the teacher
26.6 on or before June 30 of year next following the year in which
26.7 the sabbatical leave terminated and shall be made without
26.8 interest. For sabbatical leaves taken after June 30, 1986, the
26.9 required employer contributions shall be paid by the employing
26.10 unit within 30 days after notification by the association of the
26.11 amount due. If the employee contributions for the sabbatical
26.12 leave period are less than an amount equal to the applicable
26.13 contribution rate applied to a salary figure equal to the
26.14 teacher's actual covered salary for the plan year immediately
26.15 preceding the sabbatical leave period, service credit shall be
26.16 prorated. The prorated service credit shall be determined by
26.17 the ratio between the amount of the actual payment which was
26.18 made and the full contribution amount payable pursuant to this
26.19 section.
26.20 Sec. 15. Minnesota Statutes 2004, section 354A.093,
26.21 subdivision 1, is amended to read:
26.22 Subdivision 1. ELIGIBILITY. Any teacher in the
26.23 coordinated program of either the Minneapolis Teachers
26.24 Retirement Fund Association or the St. Paul Teachers Retirement
26.25 Fund Association or any teacher in the new law coordinated
26.26 program of the Duluth Teachers Retirement Fund Association who
26.27 is absent from employment by reason of service in the uniformed
26.28 services as defined in United States Code, title 38, section
26.29 4303(13) and who returns to the employer providing active
26.30 teaching service upon discharge from uniformed service within
26.31 the time frames required under United States Code, title 38,
26.32 section 4312(e), may receive allowable service credit in the
26.33 applicable association for all or a portion of the period of
26.34 uniformed service, provided that the teacher did not separate
26.35 from uniformed service with a dishonorable or bad conduct
26.36 discharge or under other than honorable conditions.
27.1 Sec. 16. Minnesota Statutes 2004, section 354A.095, is
27.2 amended to read:
27.3 354A.095 PARENTAL AND MATERNITY LEAVE.
27.4 Basic or coordinated members of the St. Paul Teachers
27.5 Retirement Fund Association, the Minneapolis Teachers Retirement
27.6 Fund Association, and new coordinated members of the Duluth
27.7 Teachers Retirement Fund Association, who are granted parental
27.8 or maternity leave of absence by the employing authority, are
27.9 entitled to obtain service credit not to exceed one year for the
27.10 period of leave upon payment to the applicable fund by the end
27.11 of the fiscal year following the fiscal year in which the leave
27.12 of absence terminated. The amount of the payment must include
27.13 the total required employee and employer contributions for the
27.14 period of leave prescribed in section 354A.12. Payment must be
27.15 based on the member's average monthly salary rate upon return to
27.16 teaching service, and is payable without interest. Payment must
27.17 be accompanied by a certified or otherwise adequate copy of the
27.18 resolution or action of the employing authority granting or
27.19 approving the leave.
27.20 Sec. 17. Minnesota Statutes 2004, section 354A.096, is
27.21 amended to read:
27.22 354A.096 MEDICAL LEAVE.
27.23 Any teacher in the coordinated program of either the
27.24 Minneapolis Teachers Retirement Fund Association or the St. Paul
27.25 Teachers Retirement Fund Association or the new law coordinated
27.26 program of the Duluth Teachers Retirement Fund Association who
27.27 is on an authorized medical leave of absence and subsequently
27.28 returns to teaching service is entitled to receive allowable
27.29 service credit, not to exceed one year, for the period of leave,
27.30 upon making the prescribed payment to the fund. This payment
27.31 must include the required employee and employer contributions at
27.32 the rates specified in section 354A.12, subdivisions 1 and 2, as
27.33 applied to the member's average full‑time monthly salary rate on
27.34 the date the leave of absence commenced plus annual interest at
27.35 the rate of 8.5 percent per year from the end of the fiscal year
27.36 during which the leave terminates to the end of the month during
28.1 which payment is made. The member must pay the total amount
28.2 required unless the employing unit, at its option, pays the
28.3 employer contributions. The total amount required must be paid
28.4 by the end of the fiscal year following the fiscal year in which
28.5 the leave of absence terminated or before the member retires,
28.6 whichever is earlier. Payment must be accompanied by a copy of
28.7 the resolution or action of the employing authority granting the
28.8 leave and the employing authority, upon granting the leave, must
28.9 certify the leave to the association in a manner specified by
28.10 the executive director. A member may not receive more than one
28.11 year of allowable service credit during any fiscal year by
28.12 making payment under this section. A member may not receive
28.13 disability benefits under section 354A.36 and receive allowable
28.14 service credit under this section for the same period of time.
28.15 Sec. 18. Minnesota Statutes 2004, section 354A.12,
28.16 subdivision 1, is amended to read:
28.17 Subdivision 1. EMPLOYEE CONTRIBUTIONS. The contribution
28.18 required to be paid by each member of a teachers retirement fund
28.19 association shall not be less than the percentage of total
28.20 salary specified below for the applicable association and
28.21 program:
28.22 Association and Program Percentage of
28.23 Total Salary
28.24 Duluth Teachers Retirement
28.25 Association
28.26 old law and new law
28.27 coordinated programs 5.5 percent
28.28 Minneapolis Teachers Retirement
28.29 Association
28.30 basic program 8.5 percent
28.31 coordinated program 5.5 percent
28.32 St. Paul Teachers Retirement
28.33 Association
28.34 basic program 8 percent
28.35 coordinated program 5.5 percent
28.36 Contributions shall be made by deduction from salary and
29.1 must be remitted directly to the respective teachers retirement
29.2 fund association at least once each month.
29.3 Sec. 19. Minnesota Statutes 2004, section 354A.12,
29.4 subdivision 2, is amended to read:
29.5 Subd. 2. RETIREMENT CONTRIBUTION LEVY DISALLOWED. Except
29.6 as provided in subdivision 3b and in section 423A.02,
29.7 subdivision 3, with respect to the city of Minneapolis and
29.8 special school district No. 1 and in section 423A.02,
29.9 subdivision 3, with respect to independent school district No.
29.10 625, notwithstanding any law to the contrary, levies for
29.11 teachers retirement fund associations in the cities of the first
29.12 class Duluth and St. Paul, including levies for any employer
29.13 Social Security taxes for teachers covered by the Duluth
29.14 Teachers Retirement Fund Association or the Minneapolis Teachers
29.15 Retirement Fund Association or the St. Paul Teachers Retirement
29.16 Fund Association, are disallowed.
29.17 Sec. 20. Minnesota Statutes 2004, section 354A.12,
29.18 subdivision 2a, is amended to read:
29.19 Subd. 2a. EMPLOYER REGULAR AND ADDITIONAL CONTRIBUTION
29.20 RATES. (a) The employing units shall make the following
29.21 employer contributions to teachers retirement fund associations:
29.22 (1) for any coordinated member of a teachers retirement
29.23 fund association in a city of the first class, the employing
29.24 unit shall pay the employer Social Security taxes in accordance
29.25 with section 355.46, subdivision 3, clause (b);
29.26 (2) for any coordinated member of one of the following
29.27 teachers retirement fund associations in a city of the first
29.28 class, the employing unit shall make a regular employer
29.29 contribution to the respective retirement fund association in an
29.30 amount equal to the designated percentage of the salary of the
29.31 coordinated member as provided below:
29.32 Duluth Teachers Retirement
29.33 Fund Association 4.50 percent
29.34 Minneapolis Teachers Retirement
29.35 Fund Association 4.50 percent
29.36 St. Paul Teachers Retirement
30.1 Fund Association 4.50 percent;
30.2 (3) for any basic member of one of the following St. Paul
30.3 Teachers Retirement Fund associations in a city of the first
30.4 class Association, the employing unit shall make a regular
30.5 employer contribution to the respective retirement fund in an
30.6 amount equal to the designated percentage 8.00 percent of the
30.7 salary of the basic member as provided below:
30.8 Minneapolis Teachers Retirement
30.9 Fund Association 8.50 percent
30.10 St. Paul Teachers Retirement
30.11 Fund Association 8.00 percent;
30.12 (4) for a basic member of a the St. Paul Teachers
30.13 Retirement Fund Association in a city of the first class, the
30.14 employing unit shall make an additional employer contribution to
30.15 the respective fund in an amount equal to the designated
30.16 percentage 3.64 percent of the salary of the basic member, as
30.17 provided below:
30.18 Minneapolis Teachers Retirement
30.19 Fund Association
30.20 July 1, 1993 ‑ June 30, 1994 4.85 percent
30.21 July 1, 1994, and thereafter 3.64 percent
30.22 St. Paul Teachers Retirement
30.23 Fund Association
30.24 July 1, 1993 ‑ June 30, 1995 4.63 percent
30.25 July 1, 1995, and thereafter 3.64 percent;
30.26 (5) for a coordinated member of a teachers retirement fund
30.27 association in a city of the first class, the employing unit
30.28 shall make an additional employer contribution to the respective
30.29 fund in an amount equal to the applicable percentage of the
30.30 coordinated member's salary, as provided below:
30.31 Duluth Teachers Retirement
30.32 Fund Association 1.29 percent
30.33 Minneapolis Teachers Retirement
30.34 Fund Association
30.35 July 1, 1993 ‑ June 30, 1994 0.50 percent
30.36 July 1, 1994, and thereafter 3.64 percent
31.1 St. Paul Teachers Retirement
31.2 Fund Association
31.3 July 1, 1993 ‑ June 30, 1994 0.50 percent
31.4 July 1, 1994 ‑ June 30, 1995 1.50 percent
31.5 July 1, 1997, and thereafter 3.84 percent.
31.6 (b) The regular and additional employer contributions must
31.7 be remitted directly to the respective teachers retirement fund
31.8 association at least once each month. Delinquent amounts are
31.9 payable with interest under the procedure in subdivision 1a.
31.10 (c) Payments of regular and additional employer
31.11 contributions for school district or technical college employees
31.12 who are paid from normal operating funds must be made from the
31.13 appropriate fund of the district or technical college.
31.14 Sec. 21. Minnesota Statutes 2004, section 354A.12,
31.15 subdivision 3a, is amended to read:
31.16 Subd. 3a. SPECIAL DIRECT STATE AID TO FIRST CLASS CITY
31.17 TEACHERS RETIREMENT FUND ASSOCIATIONS. (a) In fiscal year 1998,
31.18 the state shall pay $4,827,000 to the St. Paul Teachers
31.19 Retirement Fund Association, $17,954,000 to the Minneapolis
31.20 Teachers Retirement Fund Association, and $486,000 to the Duluth
31.21 Teachers Retirement Fund Association. In each subsequent fiscal
31.22 year after fiscal year 2005, these payments to the first class
31.23 city teachers retirement fund associations must be $2,827,000
31.24 for St. Paul, $12,954,000 to the Teachers Retirement Association
31.25 for the former Minneapolis Teachers Retirement Fund Association,
31.26 and $486,000 for Duluth.
31.27 (b) The direct state aids under this subdivision are
31.28 payable October 1 annually. The commissioner of finance shall
31.29 pay the direct state aid. The amount required under this
31.30 subdivision is appropriated annually from the general fund to
31.31 the commissioner of finance.
31.32 Sec. 22. Minnesota Statutes 2004, section 354A.12,
31.33 subdivision 3b, is amended to read:
31.34 Subd. 3b. SPECIAL DIRECT STATE MATCHING AID TO THE
31.35 MINNEAPOLIS TEACHERS RETIREMENT FUND ASSOCIATION. (a) Special
31.36 School District No. 1 may must make an additional employer
32.1 contribution to the Minneapolis Teachers Retirement Fund
32.2 Association. The city of Minneapolis may must make a
32.3 contribution to the Minneapolis Teachers Retirement Fund
32.4 Association. This contribution may must be made by a levy of
32.5 the board of estimate and taxation of the city of Minneapolis
32.6 and the levy, if made, is classified as that of a special taxing
32.7 district for purposes of sections 275.065 and 276.04, and for
32.8 all other property tax purposes.
32.9 (b) For every $1,000 $1,125,000 must be contributed in
32.10 equal proportion by Special School District No. 1 and $1,125,000
32.11 must be contributed by the city of Minneapolis to
32.12 the Minneapolis Teachers Retirement Fund Association under
32.13 paragraph (a), and the state shall pay to the Minneapolis
32.14 Teachers Retirement Fund Association $1,000, but not to
32.15 exceed $2,500,000 in total in each fiscal year 1994. The
32.16 superintendent of Special School District No. 1, the mayor of
32.17 the city of Minneapolis, and the executive director of
32.18 the Minneapolis Teachers Retirement Fund Association shall
32.19 jointly certify to the commissioner of finance the total amount
32.20 that has been contributed by Special School District No. 1 and
32.21 by the city of Minneapolis to the Minneapolis Teachers
32.22 Retirement Fund Association. Any certification to the
32.23 commissioner of education must be made quarterly. If the total
32.24 certifications for a fiscal year exceed the maximum annual
32.25 direct state matching aid amount in any quarter, the amount of
32.26 direct state matching aid payable to the Minneapolis Teachers
32.27 Retirement Fund Association must be limited to the balance of
32.28 the maximum annual direct state matching aid amount available.
32.29 The amount required under this paragraph, subject to the maximum
32.30 direct state matching aid amount, is appropriated annually to
32.31 the commissioner of finance.
32.32 (c) The commissioner of finance may prescribe the form of
32.33 the certifications required under paragraph (b).
32.34 Sec. 23. Minnesota Statutes 2004, section 354A.12,
32.35 subdivision 3c, is amended to read:
32.36 Subd. 3c. TERMINATION OF SUPPLEMENTAL CONTRIBUTIONS AND
33.1 DIRECT MATCHING AND STATE AID. (a) The supplemental
33.2 contributions payable to the Minneapolis Teachers Retirement
33.3 Fund Association by special school district No. 1 and the city
33.4 of Minneapolis under section 423A.02, subdivision 3, or to the
33.5 St. Paul Teachers Retirement Fund Association by Independent
33.6 School District No. 625 under section 423A.02, subdivision 3, or
33.7 the direct state aids under subdivision 3a to the first class
33.8 city St. Paul Teachers Retirement associations, and the direct
33.9 matching and state aid under subdivision 3b to the Minneapolis
33.10 Teachers Retirement Fund Association terminate for the
33.11 respective fund at the end of the fiscal year in which the
33.12 accrued liability funding ratio for that fund, as determined in
33.13 the most recent actuarial report for that fund by the actuary
33.14 retained by the Legislative Commission on Pensions and
33.15 Retirement, equals or exceeds the accrued liability funding
33.16 ratio for the teachers retirement association, as determined in
33.17 the most recent actuarial report for the Teachers Retirement
33.18 Association by the actuary retained by the Legislative
33.19 Commission on Pensions and Retirement.
33.20 (b) If the state direct matching, state supplemental, or
33.21 state aid is terminated for a first class city teachers
33.22 retirement fund association under paragraph (a), it may not
33.23 again be received by that fund.
33.24 (c) If either the Minneapolis Teachers Retirement Fund
33.25 Association, the St. Paul Teachers Retirement Fund Association,
33.26 or the Duluth Teachers Retirement Fund Association remain is
33.27 funded at less than the funding ratio applicable to the teachers
33.28 retirement association when the provisions of paragraph (b)
33.29 become effective, then any state aid not previously distributed
33.30 to that association must be immediately transferred to the other
33.31 associations in proportion to the relative sizes of their
33.32 unfunded actuarial accrued liabilities Teachers Retirement
33.33 Association.
33.34 Sec. 24. Minnesota Statutes 2004, section 354A.12,
33.35 subdivision 3d, is amended to read:
33.36 Subd. 3d. SUPPLEMENTAL ADMINISTRATIVE EXPENSE
34.1 ASSESSMENT. (a) The active and retired membership of the
34.2 Minneapolis Teachers Retirement Fund Association and of the St.
34.3 Paul Teachers Retirement Fund Association is responsible for
34.4 defraying supplemental administrative expenses other than
34.5 investment expenses of the respective teacher retirement fund
34.6 association.
34.7 (b) Investment expenses of the teachers retirement fund
34.8 association are those expenses incurred by or on behalf of the
34.9 retirement fund in connection with the investment of the assets
34.10 of the retirement fund other than investment security
34.11 transaction costs. Other administrative expenses are all
34.12 expenses incurred by or on behalf of the retirement fund for all
34.13 other retirement fund functions other than the investment of
34.14 retirement fund assets. Investment and other administrative
34.15 expenses must be accounted for using generally accepted
34.16 accounting principles and in a manner consistent with the
34.17 comprehensive annual financial report of the teachers retirement
34.18 fund association for the immediately previous fiscal year under
34.19 section 356.20.
34.20 (c) Supplemental administrative expenses other than
34.21 investment expenses of a first class city teacher the St. Paul
34.22 Teachers Retirement Fund Association are those expenses for the
34.23 fiscal year that:
34.24 (1) exceed, for the St. Paul Teachers Retirement Fund
34.25 Association, $443,745, or for the Minneapolis Teacher Retirement
34.26 Fund Association $671,513, plus, in each case, an additional
34.27 amount derived by applying the percentage increase in the
34.28 Consumer Price Index for Urban Wage Earners and Clerical Workers
34.29 All Items Index published by the Bureau of Labor Statistics of
34.30 the United States Department of Labor since July 1, 2001, to the
34.31 applicable dollar amount; and
34.32 (2) exceed the amount computed by applying the most recent
34.33 percentage of pay administrative expense amount, other than
34.34 investment expenses, for the teachers retirement association
34.35 governed by chapter 354 to the covered payroll of the respective
34.36 teachers retirement fund association for the fiscal year.
35.1 (d) The board of trustees of each first class city the St.
35.2 Paul Teachers Retirement Fund Association shall allocate the
35.3 total dollar amount of supplemental administrative expenses
35.4 other than investment expenses determined under paragraph (c),
35.5 clause (2), among the various active and retired membership
35.6 groups of the teachers retirement fund association and shall
35.7 assess the various membership groups their respective share of
35.8 the supplemental administrative expenses other than investment
35.9 expenses, in amounts determined by the board of trustees. The
35.10 supplemental administrative expense assessments must be paid by
35.11 the membership group in a manner determined by the board of
35.12 trustees of the respective teachers retirement association.
35.13 Supplemental administrative expenses payable by the active
35.14 members of the pension plan must be picked up by the employer in
35.15 accordance with section 356.62.
35.16 (e) With respect to the St. Paul Teachers Retirement Fund
35.17 Association, the supplemental administrative expense assessment
35.18 must be fully disclosed to the various active and retired
35.19 membership groups of the teachers retirement fund association.
35.20 The chief administrative officer of the St. Paul Teachers
35.21 Retirement Fund Association shall prepare a supplemental
35.22 administrative expense assessment disclosure notice, which must
35.23 include the following:
35.24 (1) the total amount of administrative expenses of the St.
35.25 Paul Teachers Retirement Fund Association, the amount of the
35.26 investment expenses of the St. Paul Teachers Retirement Fund
35.27 Association, and the net remaining amount of administrative
35.28 expenses of the St. Paul Teachers Retirement Fund Association;
35.29 (2) the amount of administrative expenses for the St. Paul
35.30 Teachers Retirement Fund Association that would be equivalent to
35.31 the teachers retirement association noninvestment administrative
35.32 expense level described in paragraph (c);
35.33 (3) the total amount of supplemental administrative
35.34 expenses required for assessment calculated under paragraph (c);
35.35 (4) the portion of the total amount of the supplemental
35.36 administrative expense assessment allocated to each membership
36.1 group and the rationale for that allocation;
36.2 (5) the manner of collecting the supplemental
36.3 administrative expense assessment from each membership group,
36.4 the number of assessment payments required during the year, and
36.5 the amount of each payment or the procedure used to determine
36.6 each payment; and
36.7 (6) any other information that the chief administrative
36.8 officer determines is necessary to fairly portray the manner in
36.9 which the supplemental administrative expense assessment was
36.10 determined and allocated.
36.11 (f) The disclosure notice must be provided annually in the
36.12 annual report of the association.
36.13 (g) The supplemental administrative expense assessments
36.14 must be deposited in the applicable teachers retirement fund
36.15 upon receipt.
36.16 (h) Any omitted active membership group assessments that
36.17 remain undeducted and unpaid to the teachers retirement fund
36.18 association for 90 days must be paid by the respective school
36.19 district. The school district may recover any omitted active
36.20 membership group assessment amounts that it has previously
36.21 paid. The teachers retirement fund association shall deduct any
36.22 omitted retired membership group assessment amounts from the
36.23 benefits next payable after the discovery of the omitted amounts.
36.24 Sec. 25. Minnesota Statutes 2004, section 354A.30, is
36.25 amended to read:
36.26 354A.30 MINNEAPOLIS AND ST. PAUL TEACHERS RETIREMENT
36.27 FUND ASSOCIATIONS ASSOCIATION; COORDINATED PROGRAM.
36.28 There is established a coordinated program within the
36.29 Minneapolis Teachers Retirement Fund Association and a
36.30 coordinated program within the St. Paul Teachers Retirement Fund
36.31 Association to provide retirement coverage for teachers who are
36.32 covered by an agreement or modification made between the state
36.33 and the secretary of health, education and welfare making the
36.34 provisions of the federal Old Age, Survivors and Disability
36.35 Insurance Act applicable to certain teachers covered by the
36.36 teachers retirement fund association. The provisions governing
37.1 the coordinated program shall be sections 354A.31 to 354A.41 and
37.2 any other applicable provisions of this chapter.
37.3 Sec. 26. Minnesota Statutes 2004, section 354A.31,
37.4 subdivision 4, is amended to read:
37.5 Subd. 4. COMPUTATION OF THE NORMAL COORDINATED RETIREMENT
37.6 ANNUITY; MINNEAPOLIS AND ST. PAUL FUNDS. (a) This subdivision
37.7 applies to the coordinated programs program of the Minneapolis
37.8 Teachers Retirement Fund Association and the St. Paul Teachers
37.9 Retirement Fund Association.
37.10 (b) The normal coordinated retirement annuity shall be an
37.11 amount equal to a retiring coordinated member's average salary
37.12 multiplied by the retirement annuity formula percentage.
37.13 Average salary for purposes of this section shall mean an amount
37.14 equal to the average salary upon which contributions were made
37.15 for the highest five successive years of service credit, but
37.16 which shall not in any event include any more than the
37.17 equivalent of 60 monthly salary payments. Average salary must
37.18 be based upon all years of service credit if this service credit
37.19 is less than five years.
37.20 (c) This paragraph, in conjunction with subdivision 6,
37.21 applies to a person who first became a member or a member in a
37.22 pension fund listed in section 356.30, subdivision 3, before
37.23 July 1, 1989, unless paragraph (d), in conjunction with
37.24 subdivision 7, produces a higher annuity amount, in which case
37.25 paragraph (d) will apply. The retirement annuity formula
37.26 percentage for purposes of this paragraph is the percent
37.27 specified in section 356.315, subdivision 1, per year for each
37.28 year of coordinated service for the first ten years and the
37.29 percent specified in section 356.315, subdivision 2, for each
37.30 year of coordinated service thereafter.
37.31 (d) This paragraph applies to a person who has become at
37.32 least 55 years old and who first becomes a member after June 30,
37.33 1989, and to any other member who has become at least 55 years
37.34 old and whose annuity amount, when calculated under this
37.35 paragraph and in conjunction with subdivision 7 is higher than
37.36 it is when calculated under paragraph (c), in conjunction with
38.1 the provisions of subdivision 6. The retirement annuity formula
38.2 percentage for purposes of this paragraph is the percent
38.3 specified in section 356.315, subdivision 2, for each year of
38.4 coordinated service.
38.5 Sec. 27. Minnesota Statutes 2004, section 354A.32,
38.6 subdivision 1, is amended to read:
38.7 Subdivision 1. OPTIONAL FORMS GENERALLY. The boards
38.8 board of the Minneapolis and the St. Paul Teachers Retirement
38.9 Fund Associations Association shall each establish for the
38.10 coordinated program and the board of the Duluth Teachers
38.11 Retirement Fund Association shall establish for the new law
38.12 coordinated program an optional retirement annuity which shall
38.13 take the form of a joint and survivor annuity. Each board may
38.14 also in its discretion establish an optional annuity which shall
38.15 take the form of an annuity payable for a period certain and for
38.16 life thereafter. Each board shall also establish an optional
38.17 retirement annuity that guarantees payment of the balance of the
38.18 annuity recipient's accumulated deductions to a designated
38.19 beneficiary upon the death of the annuity recipient. Except as
38.20 provided in subdivision 1a, optional annuity forms shall be the
38.21 actuarial equivalent of the normal forms provided in section
38.22 354A.31. In establishing these optional annuity forms, the
38.23 board shall obtain the written recommendation of the
38.24 commission‑retained actuary. The recommendation shall be a part
38.25 of the permanent records of the board.
38.26 Sec. 28. Minnesota Statutes 2004, section 354A.39, is
38.27 amended to read:
38.28 354A.39 SERVICE IN OTHER PUBLIC RETIREMENT FUNDS;
38.29 ANNUITY.
38.30 Any person who has been a member of the Minnesota State
38.31 Retirement System, the Public Employees Retirement Association
38.32 including the Public Employees Retirement Association Police and
38.33 Fire Fund, the Teachers Retirement Association, the Minnesota
38.34 State Patrol Retirement Association, the legislators retirement
38.35 plan, the constitutional officers retirement plan, the
38.36 Minneapolis Employees Retirement Fund, the Duluth Teachers
39.1 Retirement Fund Association new law coordinated program, the
39.2 Minneapolis Teachers Retirement Fund Association coordinated
39.3 program, the St. Paul Teachers Retirement Fund Association
39.4 coordinated program, or any other public employee retirement
39.5 system in the state of Minnesota having a like provision but
39.6 excluding all other funds providing retirement benefits for
39.7 police officers or firefighters shall be entitled when qualified
39.8 to an annuity from each fund if the person's total allowable
39.9 service in all of the funds or in any two or more of the funds
39.10 totals three or more years, provided that no portion of the
39.11 allowable service upon which the retirement annuity from one
39.12 fund is based is used again in the computation for a retirement
39.13 annuity from another fund and provided further that the person
39.14 has not taken a refund from any of funds or associations since
39.15 the person's membership in the fund or association has
39.16 terminated. The annuity from each fund or association shall be
39.17 determined by the appropriate provisions of the law governing
39.18 each fund or association, except that the requirement that a
39.19 person must have at least three years of allowable service in
39.20 the respective fund or association shall not apply for the
39.21 purposes of this section, provided that the aggregate service in
39.22 two or more of these funds equals three or more years.
39.23 Sec. 29. Minnesota Statutes 2004, section 354A.40,
39.24 subdivision 1, is amended to read:
39.25 Subdivision 1. RETIREMENT ANNUITY. Any coordinated
39.26 member of either the Minneapolis Teachers Retirement Fund
39.27 Association or of the St. Paul Teachers Retirement Fund
39.28 Association who has credited service prior to July 1, 1978 shall
39.29 be entitled to receive a retirement annuity when otherwise
39.30 qualified, the calculation of which shall utilize the applicable
39.31 retirement annuity formula specified in articles of
39.32 incorporation and bylaws of the teachers retirement fund
39.33 association governing the basic program for that portion of
39.34 credited service which was served prior to July 1, 1978, and the
39.35 retirement annuity formula specified in section 354A.31 for the
39.36 remainder of the member's credited service, both applied to the
40.1 member's average salary as specified in section 354A.31,
40.2 subdivision 4. The formula percentages to be used in
40.3 calculating the coordinated portion of the retirement annuity or
40.4 coordinated service under this section shall recognize the
40.5 coordinated service as a continuation of any service prior to
40.6 July 1, 1978.
40.7 Sec. 30. Minnesota Statutes 2004, section 354A.41, is
40.8 amended to read:
40.9 354A.41 ADMINISTRATION OF COORDINATED PROGRAM.
40.10 Subdivision 1. ADMINISTRATIVE PROVISIONS. The provisions
40.11 of the articles of incorporation and bylaws of the Minneapolis
40.12 or the St. Paul Teachers Retirement Fund Association, whichever
40.13 is applicable, relating to the administration of the fund shall
40.14 govern the administration of the coordinated program and the
40.15 provisions of the articles of incorporation and bylaws of the
40.16 Duluth Teachers Retirement Fund Association relating to the
40.17 administration of the fund shall govern the administration of
40.18 the new law coordinated program in instances where the
40.19 administrative provisions are not inconsistent with the
40.20 provisions of sections 354A.31 to 354A.41, including but not
40.21 limited to provisions relating to the composition and function
40.22 of the board of trustees, the investment of assets of the
40.23 teachers retirement fund association, and the definition of the
40.24 plan year.
40.25 Subd. 2. ACTUARIAL VALUATIONS. In any actuarial
40.26 valuation of the Minneapolis Teachers Retirement Fund
40.27 Association, the St. Paul Teachers Retirement Fund Association,
40.28 or the Duluth Teachers Retirement Fund Association under section
40.29 356.215 prepared by the commission‑retained actuary or
40.30 supplemental actuarial valuation prepared by an approved actuary
40.31 retained by the teachers retirement fund association, there
40.32 shall be included a finding of the condition of the fund showing
40.33 separately the basic and coordinated programs or the old law
40.34 coordinated and new law coordinated programs, as appropriate.
40.35 The finding shall include the level normal cost and the
40.36 applicable employee and employer contribution rates for each
41.1 program.
41.2 Sec. 31. Minnesota Statutes 2004, section 356.20,
41.3 subdivision 2, is amended to read:
41.4 Subd. 2. COVERED PUBLIC PENSION PLANS AND FUNDS. This
41.5 section applies to the following public pension plans:
41.6 (1) the general state employees retirement plan of the
41.7 Minnesota State Retirement System;
41.8 (2) the general employees retirement plan of the Public
41.9 Employees Retirement Association;
41.10 (3) the Teachers Retirement Association;
41.11 (4) the State Patrol retirement plan;
41.12 (5) the Minneapolis Teachers Retirement Fund Association;
41.13 (6) the St. Paul Teachers Retirement Fund Association;
41.14 (7) (6) the Duluth Teachers Retirement Fund Association;
41.15 (8) (7) the Minneapolis Employees Retirement Fund;
41.16 (9) (8) the University of Minnesota faculty retirement
41.17 plan;
41.18 (10) (9) the University of Minnesota faculty supplemental
41.19 retirement plan;
41.20 (11) (10) the judges retirement fund;
41.21 (12) (11) a police or firefighter's relief association
41.22 specified or described in section 69.77, subdivision 1a, or
41.23 69.771, subdivision 1;
41.24 (13) (12) the public employees police and fire plan of the
41.25 Public Employees Retirement Association;
41.26 (14) (13) the correctional state employees retirement plan
41.27 of the Minnesota State Retirement System; and
41.28 (15) (14) the local government correctional service
41.29 retirement plan of the Public Employees Retirement Association.
41.30 Sec. 32. Minnesota Statutes 2004, section 356.214,
41.31 subdivision 1, is amended to read:
41.32 Subdivision 1. JOINT RETENTION. (a) The chief
41.33 administrative officers of the Minnesota State Retirement
41.34 System, the Public Employees Retirement Association, the
41.35 Teachers Retirement Association, the Duluth Teachers Retirement
41.36 Fund Association, the Minneapolis Teachers Retirement Fund
42.1 Association, the Minneapolis Employees Retirement Fund, and the
42.2 St. Paul Teachers Retirement Fund Association, jointly, on
42.3 behalf of the state, its employees, its taxpayers, and its
42.4 various public pension plans, shall contract with an established
42.5 actuarial consulting firm to conduct annual actuarial valuations
42.6 and related services for the retirement plans named in paragraph
42.7 (b). The principal from the actuarial consulting firm on the
42.8 contract must be an approved actuary under section 356.215,
42.9 subdivision 1, paragraph (c). Prior to becoming effective, the
42.10 contract under this section is subject to a review and approval
42.11 by the Legislative Commission on Pensions and Retirement.
42.12 (b) The contract for actuarial services must include the
42.13 preparation of actuarial valuations and related actuarial work
42.14 for the following retirement plans:
42.15 (1) the teachers retirement plan, Teachers Retirement
42.16 Association;
42.17 (2) the general state employees retirement plan, Minnesota
42.18 State Retirement System;
42.19 (3) the correctional employees retirement plan, Minnesota
42.20 State Retirement System;
42.21 (4) the State Patrol retirement plan, Minnesota State
42.22 Retirement System;
42.23 (5) the judges retirement plan, Minnesota State Retirement
42.24 System;
42.25 (6) the Minneapolis employees retirement plan, Minneapolis
42.26 Employees Retirement Fund;
42.27 (7) the public employees retirement plan, Public Employees
42.28 Retirement Association;
42.29 (8) the public employees police and fire plan, Public
42.30 Employees Retirement Association;
42.31 (9) the Duluth teachers retirement plan, Duluth Teachers
42.32 Retirement Fund Association;
42.33 (10) the Minneapolis teachers retirement plan, Minneapolis
42.34 Teachers Retirement Fund Association;
42.35 (11) the St. Paul teachers retirement plan, St. Paul
42.36 Teachers Retirement Fund Association;
43.1 (12) (11) the legislators retirement plan, Minnesota State
43.2 Retirement System;
43.3 (13) (12) the elective state officers retirement plan,
43.4 Minnesota State Retirement System; and
43.5 (14) (13) local government correctional service retirement
43.6 plan, Public Employees Retirement Association.
43.7 (c) The contract must require completion of the annual
43.8 actuarial valuation calculations on a fiscal year basis, with
43.9 the contents of the actuarial valuation calculations as
43.10 specified in section 356.215, and in conformity with the
43.11 standards for actuarial work adopted by the Legislative
43.12 Commission on Pensions and Retirement.
43.13 The contract must require completion of annual experience
43.14 data collection and processing and a quadrennial published
43.15 experience study for the plans listed in paragraph (b), clauses
43.16 (1), (2), and (7), as provided for in the standards for
43.17 actuarial work adopted by the commission. The experience data
43.18 collection, processing, and analysis must evaluate the following:
43.19 (1) individual salary progression;
43.20 (2) the rate of return on investments based on the current
43.21 asset value;
43.22 (3) payroll growth;
43.23 (4) mortality;
43.24 (5) retirement age;
43.25 (6) withdrawal; and
43.26 (7) disablement.
43.27 The contract must include provisions for the preparation of
43.28 cost analyses by the jointly retained actuary for proposed
43.29 legislation that include changes in benefit provisions or
43.30 funding policies prior to their consideration by the Legislative
43.31 Commission on Pensions and Retirement.
43.32 (d) The actuary retained by the joint retirement systems
43.33 shall annually prepare a report to the legislature, including a
43.34 commentary on the actuarial valuation calculations for the plans
43.35 named in paragraph (b) and summarizing the results of the
43.36 actuarial valuation calculations. The actuary shall include
44.1 with the report the actuary's recommendations to the legislature
44.2 concerning the appropriateness of the support rates to achieve
44.3 proper funding of the retirement plans by the required funding
44.4 dates. The actuary shall, as part of the quadrennial experience
44.5 study, include recommendations to the legislature on the
44.6 appropriateness of the actuarial valuation assumptions required
44.7 for evaluation in the study.
44.8 (e) If the actuarial gain and loss analysis in the
44.9 actuarial valuation calculations indicates a persistent pattern
44.10 of sizable gains or losses, as directed by the joint retirement
44.11 systems or as requested by the chair of the Legislative
44.12 Commission on Pensions and Retirement, the actuary shall prepare
44.13 a special experience study for a plan listed in paragraph (b),
44.14 clause (3), (4), (5), (6), (8), (9), (10), (11), (12), (13), or
44.15 (14) (13), in the manner provided for in the standards for
44.16 actuarial work adopted by the commission.
44.17 (f) The term of the contract between the joint retirement
44.18 systems and the actuary retained may not exceed five years. The
44.19 joint retirement system administrative officers shall establish
44.20 procedures for the consideration and selection of contract
44.21 bidders and the requirements for the contents of an actuarial
44.22 services contract under this section. The procedures and
44.23 requirements must be submitted to the Legislative Commission on
44.24 Pensions and Retirement for review and comment prior to final
44.25 approval by the joint administrators. The contract is subject
44.26 to the procurement procedures under chapter 16C. The
44.27 consideration of bids and the selection of a consulting
44.28 actuarial firm by the chief administrative officers must occur
44.29 at a meeting that is open to the public and reasonable timely
44.30 public notice of the date and the time of the meeting and its
44.31 subject matter must be given.
44.32 (g) The actuarial services contract may not limit the
44.33 ability of the Minnesota legislature and its standing committees
44.34 and commissions to rely on the actuarial results of the work
44.35 prepared under the contract.
44.36 (h) The joint retirement systems shall designate one of the
45.1 retirement system executive directors as the actuarial services
45.2 contract manager.
45.3 Sec. 33. Minnesota Statutes 2004, section 356.215,
45.4 subdivision 8, is amended to read:
45.5 Subd. 8. INTEREST AND SALARY ASSUMPTIONS. (a) The
45.6 actuarial valuation must use the applicable following
45.7 preretirement interest assumption and the applicable following
45.8 postretirement interest assumption:
45.9 preretirement postretirement
45.10 interest rate interest rate
45.11 plan assumption assumption
45.12 general state employees
45.13 retirement plan 8.5% 6.0%
45.14 correctional state employees
45.15 retirement plan 8.5 6.0
45.16 State Patrol retirement plan 8.5 6.0
45.17 legislators retirement plan 8.5 6.0
45.18 elective state officers
45.19 retirement plan 8.5 6.0
45.20 judges retirement plan 8.5 6.0
45.21 general public employees
45.22 retirement plan 8.5 6.0
45.23 public employees police and fire
45.24 retirement plan 8.5 6.0
45.25 local government correctional
45.26 service retirement plan 8.5 6.0
45.27 teachers retirement plan 8.5 6.0
45.28 Minneapolis employees
45.29 retirement plan 6.0 5.0
45.30 Duluth teachers retirement plan 8.5 8.5
45.31 Minneapolis teachers retirement
45.32 plan 8.5 8.5
45.33 St. Paul teachers retirement
45.34 plan 8.5 8.5
45.35 Minneapolis Police Relief
45.36 Association 6.0 6.0
45.37 Fairmont Police Relief
45.38 Association 5.0 5.0
45.39 Minneapolis Fire Department
45.40 Relief Association 6.0 6.0
45.41 Virginia Fire Department
45.42 Relief Association 5.0 5.0
45.43 local monthly benefit volunteer
45.44 firefighters relief associations 5.0 5.0
45.45 (b) The actuarial valuation must use the applicable
45.46 following single rate future salary increase assumption, the
45.47 applicable following modified single rate future salary increase
45.48 assumption, or the applicable following graded rate future
45.49 salary increase assumption:
45.50 (1) single rate future salary increase assumption
45.51 future salary
45.52 plan increase assumption
45.53 legislators retirement plan 5.0%
45.54 elective state officers retirement
45.55 plan 5.0
45.56 judges retirement plan 5.0
46.1 Minneapolis Police Relief Association 4.0
46.2 Fairmont Police Relief
46.3 Association 3.5
46.4 Minneapolis Fire Department Relief
46.5 Association 4.0
46.6 Virginia Fire Department
46.7 Relief Association 3.5
46.8 (2) modified single rate future salary increase assumption
46.9 future salary
46.10 plan increase assumption
46.11 Minneapolis employees the prior calendar year
46.12 retirement plan amount increased first by
46.13 1.0198 percent to prior
46.14 fiscal year date and
46.15 then increased by 4.0
46.16 percent annually for
46.17 each future year
46.18 (3) select and ultimate future salary increase assumption
46.19 or graded rate future salary increase assumption
46.20 future salary
46.21 plan increase assumption
46.22 general state employees select calculation and
46.23 retirement plan assumption A
46.24 correctional state employees
46.25 retirement plan assumption H G
46.26 State Patrol retirement plan assumption H G
46.27 general public employees select calculation and
46.28 retirement plan assumption B
46.29 public employees police and fire
46.30 fund retirement plan assumption C
46.31 local government correctional service
46.32 retirement plan assumption H G
46.33 teachers retirement plan assumption D
46.34 Duluth teachers retirement plan assumption E
46.35 Minneapolis teachers retirement plan assumption F
46.36 St. Paul teachers retirement plan assumption G F
46.37
46.38 The select calculation is:
46.39 during the ten‑year select period, a designated percent
46.40 is multiplied by the result of ten minus T, where T is
46.41 the number of completed years of service, and is added
46.42 to the applicable future salary increase assumption. The
46.43 designated percent is 0.2 percent for the correctional state
46.44 employees retirement plan, the State Patrol retirement
46.45 plan, the public employees police and fire plan, and the
46.46 local government correctional service plan; 0.3 percent
46.47 for the general state employees retirement plan, the
46.48 general public employees retirement plan, the teachers
46.49 retirement plan, the Duluth Teachers Retirement Fund
46.50 Association, and the St. Paul Teachers Retirement Fund
46.51 Association; and 0.4 percent for the Minneapolis Teachers
46.52 Retirement Fund Association.
46.53
46.54 The ultimate future salary increase assumption is:
46.55
46.56 age A B C D E F G F H G
46.57 16 6.95% 6.95% 11.50% 8.20% 8.00% 6.50% 6.90% 7.7500
46.58 17 6.90 6.90 11.50 8.15 8.00 6.50 6.90 7.7500
46.59 18 6.85 6.85 11.50 8.10 8.00 6.50 6.90 7.7500
46.60 19 6.80 6.80 11.50 8.05 8.00 6.50 6.90 7.7500
46.61 20 6.75 6.40 11.50 6.00 6.90 6.50 6.90 7.7500
46.62 21 6.75 6.40 11.50 6.00 6.90 6.50 6.90 7.1454
46.63 22 6.75 6.40 11.00 6.00 6.90 6.50 6.90 7.0725
46.64 23 6.75 6.40 10.50 6.00 6.85 6.50 6.85 7.0544
46.65 24 6.75 6.40 10.00 6.00 6.80 6.50 6.80 7.0363
46.66 25 6.75 6.40 9.50 6.00 6.75 6.50 6.75 7.0000
47.1 26 6.75 6.36 9.20 6.00 6.70 6.50 6.70 7.0000
47.2 27 6.75 6.32 8.90 6.00 6.65 6.50 6.65 7.0000
47.3 28 6.75 6.28 8.60 6.00 6.60 6.50 6.60 7.0000
47.4 29 6.75 6.24 8.30 6.00 6.55 6.50 6.55 7.0000
47.5 30 6.75 6.20 8.00 6.00 6.50 6.50 6.50 7.0000
47.6 31 6.75 6.16 7.80 6.00 6.45 6.50 6.45 7.0000
47.7 32 6.75 6.12 7.60 6.00 6.40 6.50 6.40 7.0000
47.8 33 6.75 6.08 7.40 6.00 6.35 6.50 6.35 7.0000
47.9 34 6.75 6.04 7.20 6.00 6.30 6.50 6.30 7.0000
47.10 35 6.75 6.00 7.00 6.00 6.25 6.50 6.25 7.0000
47.11 36 6.75 5.96 6.80 6.00 6.20 6.50 6.20 6.9019
47.12 37 6.75 5.92 6.60 6.00 6.15 6.50 6.15 6.8074
47.13 38 6.75 5.88 6.40 5.90 6.10 6.50 6.10 6.7125
47.14 39 6.75 5.84 6.20 5.80 6.05 6.50 6.05 6.6054
47.15 40 6.75 5.80 6.00 5.70 6.00 6.50 6.00 6.5000
47.16 41 6.75 5.76 5.90 5.60 5.90 6.50 5.95 6.3540
47.17 42 6.75 5.72 5.80 5.50 5.80 6.50 5.90 6.2087
47.18 43 6.65 5.68 5.70 5.40 5.70 6.50 5.85 6.0622
47.19 44 6.55 5.64 5.60 5.30 5.60 6.50 5.80 5.9048
47.20 45 6.45 5.60 5.50 5.20 5.50 6.50 5.75 5.7500
47.21 46 6.35 5.56 5.45 5.10 5.40 6.40 5.70 5.6940
47.22 47 6.25 5.52 5.40 5.00 5.30 6.30 5.65 5.6375
47.23 48 6.15 5.48 5.35 5.00 5.20 6.20 5.60 5.5822
47.24 49 6.05 5.44 5.30 5.00 5.10 6.10 5.55 5.5404
47.25 50 5.95 5.40 5.25 5.00 5.00 6.00 5.50 5.5000
47.26 51 5.85 5.36 5.25 5.00 5.00 5.90 5.45 5.4384
47.27 52 5.75 5.32 5.25 5.00 5.00 5.80 5.40 5.3776
47.28 53 5.65 5.28 5.25 5.00 5.00 5.70 5.35 5.3167
47.29 54 5.55 5.24 5.25 5.00 5.00 5.60 5.30 5.2826
47.30 55 5.45 5.20 5.25 5.00 5.00 5.50 5.25 5.2500
47.31 56 5.35 5.16 5.25 5.00 5.00 5.40 5.20 5.2500
47.32 57 5.25 5.12 5.25 5.00 5.00 5.30 5.15 5.2500
47.33 58 5.25 5.08 5.25 5.10 5.00 5.20 5.10 5.2500
47.34 59 5.25 5.04 5.25 5.20 5.00 5.10 5.05 5.2500
47.35 60 5.25 5.00 5.25 5.30 5.00 5.00 5.00 5.2500
47.36 61 5.25 5.00 5.25 5.40 5.00 5.00 5.00 5.2500
47.37 62 5.25 5.00 5.25 5.50 5.00 5.00 5.00 5.2500
47.38 63 5.25 5.00 5.25 5.60 5.00 5.00 5.00 5.2500
47.39 64 5.25 5.00 5.25 5.70 5.00 5.00 5.00 5.2500
47.40 65 5.25 5.00 5.25 5.70 5.00 5.00 5.00 5.2500
47.41 66 5.25 5.00 5.25 5.70 5.00 5.00 5.00 5.2500
47.42 67 5.25 5.00 5.25 5.70 5.00 5.00 5.00 5.2500
47.43 68 5.25 5.00 5.25 5.70 5.00 5.00 5.00 5.2500
47.44 69 5.25 5.00 5.25 5.70 5.00 5.00 5.00 5.2500
47.45 70 5.25 5.00 5.25 5.70 5.00 5.00 5.00 5.2500
47.46 71 5.25 5.00 5.70
47.47 (c) The actuarial valuation must use the applicable
47.48 following payroll growth assumption for calculating the
47.49 amortization requirement for the unfunded actuarial accrued
47.50 liability where the amortization retirement is calculated as a
47.51 level percentage of an increasing payroll:
47.52 payroll growth
47.53 plan assumption
47.54 general state employees retirement plan 5.00%
47.55 correctional state employees retirement plan 5.00
47.56 State Patrol retirement plan 5.00
47.57 legislators retirement plan 5.00
47.58 elective state officers retirement plan 5.00
47.59 judges retirement plan 5.00
47.60 general public employees retirement plan 6.00
47.61 public employees police and fire
47.62 retirement plan 6.00
47.63 local government correctional service
47.64 retirement plan 6.00
47.65 teachers retirement plan 5.00
48.1 Duluth teachers retirement plan 5.00
48.2 Minneapolis teachers retirement plan 5.00
48.3 St. Paul teachers retirement plan 5.00
48.4 Sec. 34. Minnesota Statutes 2004, section 356.30,
48.5 subdivision 3, is amended to read:
48.6 Subd. 3. COVERED PLANS. This section applies to the
48.7 following retirement plans:
48.8 (1) the general state employees retirement plan of the
48.9 Minnesota State Retirement System, established under chapter
48.10 352;
48.11 (2) the correctional state employees retirement plan of the
48.12 Minnesota State Retirement System, established under chapter
48.13 352;
48.14 (3) the unclassified employees retirement program,
48.15 established under chapter 352D;
48.16 (4) the State Patrol retirement plan, established under
48.17 chapter 352B;
48.18 (5) the legislators retirement plan, established under
48.19 chapter 3A;
48.20 (6) the elective state officers' retirement plan,
48.21 established under chapter 352C;
48.22 (7) the general employees retirement plan of the Public
48.23 Employees Retirement Association, established under chapter 353;
48.24 (8) the public employees police and fire retirement plan of
48.25 the Public Employees Retirement Association, established under
48.26 chapter 353;
48.27 (9) the local government correctional service retirement
48.28 plan of the Public Employees Retirement Association, established
48.29 under chapter 353E;
48.30 (10) the Teachers Retirement Association, established under
48.31 chapter 354;
48.32 (11) the Minneapolis Employees Retirement Fund, established
48.33 under chapter 422A;
48.34 (12) the Minneapolis Teachers Retirement Fund Association,
48.35 established under chapter 354A;
48.36 (13) the St. Paul Teachers Retirement Fund Association,
48.37 established under chapter 354A;
49.1 (14) (13) the Duluth Teachers Retirement Fund Association,
49.2 established under chapter 354A; and
49.3 (15) (14) the judges' retirement fund, established by
49.4 sections 490.121 to 490.132.
49.5 Sec. 35. Minnesota Statutes 2004, section 356.302,
49.6 subdivision 7, is amended to read:
49.7 Subd. 7. COVERED RETIREMENT PLANS. This section applies
49.8 to the following retirement plans:
49.9 (1) the general state employees retirement plan of the
49.10 Minnesota State Retirement System, established by chapter 352;
49.11 (2) the unclassified state employees retirement program of
49.12 the Minnesota State Retirement System, established by chapter
49.13 352D;
49.14 (3) the general employees retirement plan of the Public
49.15 Employees Retirement Association, established by chapter 353;
49.16 (4) the Teachers Retirement Association, established by
49.17 chapter 354;
49.18 (5) the Duluth Teachers Retirement Fund Association,
49.19 established by chapter 354A;
49.20 (6) the Minneapolis Teachers Retirement Fund Association,
49.21 established by chapter 354A;
49.22 (7) the St. Paul Teachers Retirement Fund Association,
49.23 established by chapter 354A;
49.24 (8) (7) the Minneapolis Employees Retirement Fund,
49.25 established by chapter 422A;
49.26 (9) (8) the state correctional employees retirement plan of
49.27 the Minnesota State Retirement System, established by chapter
49.28 352;
49.29 (10) (9) the State Patrol retirement plan, established by
49.30 chapter 352B;
49.31 (11) (10) the public employees police and fire plan of the
49.32 Public Employees Retirement Association, established by chapter
49.33 353;
49.34 (12) (11) the local government correctional service
49.35 retirement plan of the Public Employees Retirement Association,
49.36 established by chapter 353E; and
50.1 (13) (12) the judges' retirement plan, established by
50.2 sections 490.121 to 490.132.
50.3 Sec. 36. Minnesota Statutes 2004, section 356.303,
50.4 subdivision 4, is amended to read:
50.5 Subd. 4. COVERED RETIREMENT PLANS. This section applies
50.6 to the following retirement plans:
50.7 (1) the legislators retirement plan, established by chapter
50.8 3A;
50.9 (2) the general state employees retirement plan of the
50.10 Minnesota State Retirement System, established by chapter 352;
50.11 (3) the correctional state employees retirement plan of the
50.12 Minnesota State Retirement System, established by chapter 352;
50.13 (4) the State Patrol retirement plan, established by
50.14 chapter 352B;
50.15 (5) the elective state officers retirement plan,
50.16 established by chapter 352C;
50.17 (6) the unclassified state employees retirement program,
50.18 established by chapter 352D;
50.19 (7) the general employees retirement plan of the Public
50.20 Employees Retirement Association, established by chapter 353;
50.21 (8) the public employees police and fire plan of the Public
50.22 Employees Retirement Association, established by chapter 353;
50.23 (9) the local government correctional service retirement
50.24 plan of the Public Employees Retirement Association, established
50.25 by chapter 353E;
50.26 (10) the Teachers Retirement Association, established by
50.27 chapter 354;
50.28 (11) the Duluth Teachers Retirement Fund Association,
50.29 established by chapter 354A;
50.30 (12) the Minneapolis Teachers Retirement Fund Association,
50.31 established by chapter 354A;
50.32 (13) the St. Paul Teachers Retirement Fund Association,
50.33 established by chapter 354A;
50.34 (14) (13) the Minneapolis Employees Retirement Fund,
50.35 established by chapter 422A; and
50.36 (15) (14) the judges' retirement fund, established by
51.1 sections 490.121 to 490.132.
51.2 Sec. 37. Minnesota Statutes 2004, section 356.315, is
51.3 amended by adding a subdivision to read:
51.4 Subd. 1a. COORDINATED PLAN MEMBERS. The applicable
51.5 benefit accrual rate is 1.5 percent.
51.6 Sec. 38. Minnesota Statutes 2004, section 356.42,
51.7 subdivision 3, is amended to read:
51.8 Subd. 3. COVERED RETIREMENT PLANS. The postretirement
51.9 adjustment provided in this section applies to the following
51.10 retirement funds:
51.11 (1) the general employees retirement plans of the Public
51.12 Employees Retirement Association;
51.13 (2) the public employees police and fire plan of the Public
51.14 Employees Retirement Association;
51.15 (3) the teachers retirement association;
51.16 (4) the State Patrol retirement plan;
51.17 (5) the state employees retirement plan of the Minnesota
51.18 State Retirement System;
51.19 (6) the Minneapolis Teachers Retirement Fund Association
51.20 established under chapter 354A;
51.21 (7) the St. Paul Teachers Retirement Fund Association
51.22 established under chapter 354A; and
51.23 (8) (7) the Duluth Teachers Retirement Fund Association
51.24 established under chapter 354A.
51.25 Sec. 39. Minnesota Statutes 2004, section 356.465,
51.26 subdivision 3, is amended to read:
51.27 Subd. 3. COVERED RETIREMENT PLANS. The provisions of
51.28 this section apply to the following retirement plans:
51.29 (1) the general state employees retirement plan of the
51.30 Minnesota State Retirement System established under chapter 352;
51.31 (2) the correctional state employees retirement plan of the
51.32 Minnesota State Retirement System established under chapter 352;
51.33 (3) the State Patrol retirement plan established under
51.34 chapter 352B;
51.35 (4) the legislators retirement plan established under
51.36 chapter 3A;
52.1 (5) the judges retirement plan established under chapter
52.2 490;
52.3 (6) the general employees retirement plan of the Public
52.4 Employees Retirement Association established under chapter 353;
52.5 (7) the public employees police and fire plan of the Public
52.6 Employees Retirement Association established under chapter 353;
52.7 (8) the teachers retirement plan established under chapter
52.8 354;
52.9 (9) the Duluth Teachers Retirement Fund Association
52.10 established under chapter 354A;
52.11 (10) the St. Paul Teachers Retirement Fund Association
52.12 established under chapter 354A;
52.13 (11) the Minneapolis Teachers Retirement Fund Association
52.14 established under chapter 354A;
52.15 (12) the Minneapolis employees retirement plan established
52.16 under chapter 422A;
52.17 (13) (12) the Minneapolis Firefighters Relief Association
52.18 established under chapter 423C;
52.19 (14) (13) the Minneapolis Police Relief Association
52.20 established under chapter 423B; and
52.21 (15) (14) the local government correctional service
52.22 retirement plan of the Public Employees Retirement Association
52.23 established under chapter 353E.
52.24 Sec. 40. Minnesota Statutes 2004, section 423A.02,
52.25 subdivision 1b, is amended to read:
52.26 Subd. 1b. ADDITIONAL AMORTIZATION STATE AID. (a)
52.27 Annually, on October 1, the commissioner of revenue shall
52.28 allocate the additional amortization state aid transferred under
52.29 section 69.021, subdivision 11, to:
52.30 (1) all police or salaried firefighters relief associations
52.31 governed by and in full compliance with the requirements of
52.32 section 69.77, that had an unfunded actuarial accrued liability
52.33 in the actuarial valuation prepared under sections 356.215 and
52.34 356.216 as of the preceding December 31;
52.35 (2) all local police or salaried firefighter consolidation
52.36 accounts governed by chapter 353A that are certified by the
53.1 executive director of the public employees retirement
53.2 association as having for the current fiscal year an additional
53.3 municipal contribution amount under section 353A.09, subdivision
53.4 5, paragraph (b), and that have implemented section 353A.083,
53.5 subdivision 1, if the effective date of the consolidation
53.6 preceded May 24, 1993, and that have implemented section
53.7 353A.083, subdivision 2, if the effective date of the
53.8 consolidation preceded June 1, 1995; and
53.9 (3) the municipalities that are required to make an
53.10 additional municipal contribution under section 353.665,
53.11 subdivision 8, for the duration of the required additional
53.12 contribution.
53.13 (b) The commissioner shall allocate the state aid on the
53.14 basis of the proportional share of the relief association or
53.15 consolidation account of the total unfunded actuarial accrued
53.16 liability of all recipient relief associations and consolidation
53.17 accounts as of December 31, 1993, for relief associations, and
53.18 as of June 30, 1994, for consolidation accounts.
53.19 (c) Beginning October 1, 2000, and annually thereafter, the
53.20 commissioner shall allocate the state aid, including any state
53.21 aid in excess of the limitation in subdivision 4, on the
53.22 following basis:
53.23 (1) 64.5 percent to the municipalities to which section
53.24 353.665, subdivision 8, paragraph (b), or 353A.09, subdivision
53.25 5, paragraph (b), apply for distribution in accordance with
53.26 paragraph (b) and subject to the limitation in subdivision 4;
53.27 (2) 34.2 percent to the city of Minneapolis to fund any
53.28 unfunded actuarial accrued liability in the actuarial valuation
53.29 prepared under sections 356.215 and 356.216 as of the preceding
53.30 December 31 for the Minneapolis Police Relief Association or the
53.31 Minneapolis Fire Department Relief Association; and
53.32 (3) 1.3 percent to the city of Virginia to fund any
53.33 unfunded actuarial accrued liability in the actuarial valuation
53.34 prepared under sections 356.215 and 356.216 as of the preceding
53.35 December 31 for the Virginia Fire Department Relief Association.
53.36 If there is no unfunded actuarial accrued liability in both
54.1 the Minneapolis Police Relief Association and the Minneapolis
54.2 Fire Department Relief Association as disclosed in the most
54.3 recent actuarial valuations for the relief associations prepared
54.4 under sections 356.215 and 356.216, the commissioner shall
54.5 allocate that 34.2 percent of the aid as follows: 49 percent to
54.6 the Minneapolis Teachers Retirement Fund Association, 21 percent
54.7 to the St. Paul Teachers Retirement Fund Association, and 30
54.8 percent as additional funding to support minimum fire state aid
54.9 for volunteer firefighters relief associations. If there is no
54.10 unfunded actuarial accrued liability in the Virginia Fire
54.11 Department Relief Association as disclosed in the most recent
54.12 actuarial valuation for the relief association prepared under
54.13 sections 356.215 and 356.216, the commissioner shall allocate
54.14 that 1.3 percent of the aid as follows: 49 percent to the
54.15 Minneapolis Teachers Retirement Fund Association, 21 percent to
54.16 the St. Paul Teachers Retirement Fund Association, and 30
54.17 percent as additional funding to support minimum fire state aid
54.18 for volunteer firefighters relief associations. The allocation
54.19 must be made by the commissioner at the same time and under the
54.20 same procedures as specified in subdivision 3. With respect to
54.21 the Minneapolis Teachers Retirement Fund Association or the St.
54.22 Paul Teachers Retirement Fund Association, annually, beginning
54.23 on July 1, 2005, if the applicable teacher's association
54.24 five‑year average time‑weighted rate of investment return does
54.25 not equal or exceed the performance of a composite portfolio
54.26 assumed passively managed (indexed) invested ten percent in cash
54.27 equivalents, 60 percent in bonds and similar debt securities,
54.28 and 30 percent in domestic stock calculated using the formula
54.29 under section 11A.04, clause (11), the aid allocation to that
54.30 retirement fund under this section ceases until the five‑year
54.31 annual rate of investment return equals or exceeds the
54.32 performance of that composite portfolio.
54.33 (d) The amounts required under this subdivision are
54.34 annually appropriated to the commissioner of revenue.
54.35 Sec. 41. FULL FUNDING DATE.
54.36 Notwithstanding any other law to the contrary, for the
55.1 Teachers Retirement Association, the established date for full
55.2 funding is 2035.
55.3 Sec. 42. MTRFA EMPLOYEE JOB PREFERENCE.
55.4 An employee of the Minneapolis Teachers Retirement Fund
55.5 Association on the date of enactment has an employment
55.6 preference for subsequent employment by the Teachers Retirement
55.7 Association, the Minnesota State Retirement System, or the
55.8 Public Employees Retirement Association equivalent to the
55.9 preference provided to armed forces veterans under state law and
55.10 Department of Employee Relations practice.
55.11 Sec. 43. MTRFA ARTICLES AND BYLAWS; REPEAL;
55.12 APPLICABILITY.
55.13 (a) The articles of incorporation and bylaws of the
55.14 Minneapolis Teachers Retirement Fund Association are repealed
55.15 and have application only as provided in section 6, subdivision
55.16 6, and paragraph (b).
55.17 (b) The articles of incorporation and bylaws of the
55.18 Minneapolis Teachers Retirement Fund Association only apply to
55.19 members of the former Minneapolis Teachers Retirement Fund
55.20 Association with service credit in the plan on or before June
55.21 30, 2005, and apply solely for purposes of determining the
55.22 retirement annuity for or benefit on behalf of a member of the
55.23 basic program of that retirement plan.
55.24 (c) No annuity adjustment or increase under article 30 of
55.25 the articles of incorporation of the Minneapolis Teachers
55.26 Retirement Fund Association is applicable or payable after June
55.27 30, 2005.
55.28 Sec. 44. REPEALER.
55.29 Minnesota Statutes 2004, sections 354A.051; 354A.105;
55.30 354A.23, subdivision 1; and 354A.28, are repealed.
55.31 Sec. 45. EFFECTIVE DATE.
55.32 (a) Sections 1, 2, 3, 21, and 22 are effective on the day
55.33 following final enactment.
55.34 (b) Sections 4 to 20 and 23 to 44 are effective on the day
55.35 following final enactment.
55.36 ARTICLE 3
56.1 PRE‑1969 TEACHER SPECIAL POSTRETIREMENT
56.2 ADJUSTMENT
56.3 Section 1. 354.551 ADDITIONAL BENEFIT FOR CERTAIN
56.4 TEACHERS.
56.5 Subdivision 1. ADDITIONAL BENEFIT ENTITLEMENT. If there
56.6 is an appropriation for this purpose and to the extent of that
56.7 appropriation, eligible retired teachers as defined in
56.8 subdivision 2 are entitled to receive the additional benefit
56.9 amount determined under subdivision 3 unless the applicable
56.10 person files a written notification with the executive director
56.11 of the Teachers Retirement Association that the additional
56.12 benefit not be paid.
56.13 Subd. 2. ELIGIBILITY. An eligible person for purposes of
56.14 this section is a person who:
56.15 (1) was a teacher as defined in section 354.05, subdivision
56.16 2;
56.17 (2) rendered teaching service as defined in section 354.05,
56.18 subdivision 3, either during the 1968‑1969 school year, but was
56.19 not covered by the improved money purchase program savings
56.20 clause in section 354.55, subdivision 17, or before the
56.21 1968‑1969 school year, did not take a refund of member
56.22 contributions upon the termination of teacher service, and was
56.23 eligible to make an election under Minnesota Statutes 1971,
56.24 section 354.55, subdivision 8.
56.25 Subd. 3. DETERMINATION OF ADDITIONAL BENEFIT AMOUNT. (a)
56.26 By July 1, annually, the executive director of the Teachers
56.27 Retirement Association shall determine which retired teachers
56.28 are eligible to receive an additional benefit amount under this
56.29 section and the amount of each person's additional benefit
56.30 amount.
56.31 If the applicable appropriation permits, as determined by
56.32 the executive director of the Teachers Retirement Association,
56.33 the increase amount is 45 percent of the difference, if a
56.34 positive number, obtained by subtracting the single life annuity
56.35 amount initially payable upon retirement under section 354.44,
56.36 subdivision 6, from a comparable single life annuity amount
57.1 computed as of the same date under section 354.44, subdivision
57.2 2. If the applicable appropriation does not permit the full
57.3 postretirement adjustment payment amount as determined by the
57.4 executive director of the Teachers Retirement Association, the
57.5 increase amount is that portion of the full increase amount that
57.6 bears the same relationship to the full increase amount that the
57.7 appropriation bears to the full required funding for the full
57.8 increase amount.
57.9 (b) The additional retirement benefit is payable beginning
57.10 July 1, 2005, for persons who were receiving a retirement
57.11 annuity on June 1, 2005, or with the initial retirement annuity
57.12 payment for persons who were active, deferred, or inactive
57.13 members on June 1, 2005.
57.14 Subd. 4. DURATION OF ADDITIONAL BENEFIT. If the
57.15 appropriations permit, the additional benefit amount is payable
57.16 for life or for the duration of the selected optional annuity
57.17 form, whichever applies.
57.18 Subd. 5. NO PAYMENT TO ESTATE; NO RETROACTIVITY. (a)
57.19 Nothing in this section authorizes the payment of an additional
57.20 benefit amount under this section to an estate or to a survivor
57.21 or beneficiary other than under an optional annuity form.
57.22 (b) Nothing in this section authorizes the payment of an
57.23 additional benefit amount for any period before July 1, 2005.
57.24 (c) Nothing in this section authorizes the payment of an
57.25 additional benefit amount to a person who was or is entitled to
57.26 have their retirement annuity calculated under section 354.44,
57.27 subdivision 2.
57.28 Sec. 2. APPROPRIATION.
57.29 There is appropriated from the general fund to the
57.30 executive director of the Teachers Retirement Association for
57.31 the purposes of the special postretirement adjustment under
57.32 section 1 $11,000,000 for the year ending June 30, 2006, and
57.33 $11,000,000 for the year ending June 30, 2007.
57.34 Sec. 3. EFFECTIVE DATE.
57.35 Sections 1 and 2 are effective on July 1, 2005.
57.36 ARTICLE 4
58.1 PENSION DEFAULT INSURANCE POOL
58.2 Sec. 1. Minnesota Statutes 2004, section 352.04,
58.3 subdivision 12, is amended to read:
58.4 Subd. 12. FUND DISBURSEMENT RESTRICTED. (a) The state
58.5 employees retirement fund and the participation in the Minnesota
58.6 postretirement investment fund must be disbursed only for the
58.7 purposes provided by law.
58.8 (b) The expenses of the system, the pension default
58.9 insurance pool charge under section 356.95, and any benefits
58.10 provided by law, other than benefits payable from the Minnesota
58.11 postretirement investment fund, must be paid from the state
58.12 employees retirement fund.
58.13 (c) The retirement allowances, retirement annuities, and
58.14 disability benefits, as well as refunds of any sum remaining to
58.15 the credit of a deceased retired employee or a disabled employee
58.16 must be paid only from the state employees retirement fund after
58.17 the needs have been certified and the amounts withdrawn from the
58.18 participation in the Minnesota postretirement investment fund
58.19 under section 11A.18.
58.20 (d) The amounts necessary to make the payments from the
58.21 state employees retirement fund and the participation in the
58.22 Minnesota postretirement investment fund are annually
58.23 appropriated from these funds for those purposes.
58.24 Sec. 2. Minnesota Statutes 2004, section 352.911,
58.25 subdivision 5, is amended to read:
58.26 Subd. 5. FUND DISBURSEMENT RESTRICTED. (a) The
58.27 correctional employees retirement fund and its share of
58.28 participation in the Minnesota postretirement investment fund
58.29 shall be disbursed only for the purposes provided for in the
58.30 applicable provisions in this chapter.
58.31 (b) The proportional share of the expenses of the system,
58.32 the pension default insurance pool charge under section 356.95,
58.33 and any benefits provided in sections 352.90 to 352.951, other
58.34 than benefits payable from the Minnesota postretirement
58.35 investment fund, shall be paid from the correctional employees
58.36 retirement fund.
59.1 (c) The retirement allowances, retirement annuities, the
59.2 disability benefits, the survivorship benefits, and any refunds
59.3 of accumulated deductions shall be paid only from the
59.4 correctional employees retirement fund after those needs have
59.5 been certified by the executive director and the amounts
59.6 withdrawn from the share of participation in the Minnesota
59.7 postretirement fund under section 11A.18.
59.8 (d) The amounts necessary to make the payments from the
59.9 correctional employees retirement fund and the participation in
59.10 the Minnesota postretirement investment fund are annually
59.11 appropriated from those funds for those purposes.
59.12 Sec. 3. Minnesota Statutes 2004, section 352B.02,
59.13 subdivision 1d, is amended to read:
59.14 Subd. 1d. FUND REVENUE AND EXPENSES. The amounts
59.15 provided for in this section must be credited to the State
59.16 Patrol retirement fund. All money received must be deposited by
59.17 the commissioner of finance in the State Patrol retirement
59.18 fund. The fund must be used to pay the administrative expenses
59.19 of the retirement fund, the pension default insurance pool
59.20 charge under section 356.95, and the benefits and annuities
59.21 provided in this chapter. Appropriate amounts shall be
59.22 transferred to or withdrawn from the Minnesota postretirement
59.23 investment fund as provided in section 352B.26.
59.24 Sec. 4. Minnesota Statutes 2004, section 352D.09,
59.25 subdivision 7, is amended to read:
59.26 Subd. 7. ADMINISTRATIVE FEES. The board of directors
59.27 shall establish a budget and charge participants a fee to pay
59.28 the administrative expenses of the unclassified program and the
59.29 pension default insurance pool charge under section 356.95.
59.30 Fees cannot be charged on contributions and investment returns
59.31 attributable to contributions made before July 1, 1992. Annual
59.32 total fees charged for plan administration cannot exceed 10/100
59.33 of one percent of the contributions and investment returns
59.34 attributable to contributions made on or after July 1, 1992.
59.35 Sec. 5. Minnesota Statutes 2004, section 353.27,
59.36 subdivision 1, is amended to read:
60.1 Subdivision 1. INCOME; DISBURSEMENTS. There is a special
60.2 fund known as the "public employees retirement fund," the
60.3 "retirement fund," or the "fund," which shall include all the
60.4 assets of the association. This fund shall be credited with all
60.5 contributions, all interest and all other income authorized by
60.6 law. From this fund there is appropriated the payments
60.7 authorized by this chapter in the amounts and at such time
60.8 provided herein, including the expenses of administering the
60.9 fund, including the pension default insurance pool charge under
60.10 section 356.95, and including the proper share of the Minnesota
60.11 postretirement investment fund.
60.12 Sec. 6. Minnesota Statutes 2004, section 353.65,
60.13 subdivision 6, is amended to read:
60.14 Subd. 6. FUND. All contributions other than the excess
60.15 contribution established by section 69.031, subdivision 5,
60.16 paragraphs (2), clauses (b) and (c), and (3) shall be credited
60.17 to the fund and all interest and other income of the fund shall
60.18 be credited to said fund. The retirement fund shall be
60.19 disbursed only for the purposes herein provided. The expenses
60.20 of said fund, the pension default insurance pool charge, and the
60.21 annuities herein provided upon retirement shall be paid from
60.22 said fund.
60.23 Sec. 7. Minnesota Statutes 2004, section 353E.01,
60.24 subdivision 5, is amended to read:
60.25 Subd. 5. FUND DISBURSEMENT RESTRICTED. (a) The public
60.26 employees local government correctional service retirement fund
60.27 and its share of participation in the Minnesota postretirement
60.28 investment fund may be disbursed only for the purposes provided
60.29 for in this chapter.
60.30 (b) The proportional share of the necessary and reasonable
60.31 administrative expenses of the association, the pension default
60.32 insurance pool charge under section 356.95, and any benefits
60.33 provided in this chapter, other than benefits payable from the
60.34 Minnesota postretirement investment fund, must be paid from the
60.35 public employees local government correctional service
60.36 retirement fund. Retirement annuities, disability benefits,
61.1 survivorship benefits, and any refunds of accumulated deductions
61.2 may be paid only from the correctional service retirement fund
61.3 after those needs have been certified by the executive director
61.4 and any applicable amounts withdrawn from the share of
61.5 participation in the Minnesota postretirement fund under section
61.6 11A.18.
61.7 (c) The amounts necessary to make the payments from the
61.8 public employees local government correctional service
61.9 retirement fund and its participation in the Minnesota
61.10 postretirement investment fund are annually appropriated from
61.11 those funds for those purposes.
61.12 Sec. 8. Minnesota Statutes 2004, section 354.42, is
61.13 amended by adding a subdivision to read:
61.14 Subd. 8. PENSION DEFAULT CHARGE. The pension default
61.15 insurance pool charge under section 356.95 must be paid from the
61.16 Teachers Retirement Association.
61.17 Sec. 9. Minnesota Statutes 2004, section 354A.021,
61.18 subdivision 4, is amended to read:
61.19 Subd. 4. FUND DISBURSEMENT RESTRICTED. The assets of the
61.20 special retirement fund shall be disbursed only for the purposes
61.21 provided for in this chapter, the articles of incorporation or
61.22 bylaws in effect as of March 31, 1975, and the articles of
61.23 incorporation or bylaws adopted subsequent to March 31, 1975 in
61.24 accordance with the provisions of section 354A.12. The pension
61.25 default insurance pool charge under section 356.95 and all
61.26 appropriate expenses of and any authorized benefits provided by
61.27 the teachers retirement fund association shall be paid from the
61.28 special retirement fund. Amounts necessary to make payments
61.29 from the special retirement fund of a teachers retirement fund
61.30 association are hereby appropriated.
61.31 Sec 10. 356.95 PENSION DEFAULT INSURANCE POOL.
61.32 Subdivision 1. DEFAULT INSURANCE; LEGISLATIVE
61.33 FINDINGS. The legislature finds that some Minnesota public
61.34 pension plans have periodic funding difficulties and could
61.35 default on the payment of retirement benefits in the future.
61.36 The legislature further finds that a potential default may occur
62.1 at a time when timely corrective legislative responses may not
62.2 be possible, causing significant potential economic harm to
62.3 affected benefit recipients. To provide emergency funding
62.4 resources for a Minnesota public pension plan facing a default
62.5 in the payment of retirement benefits, the legislature is
62.6 establishing an insurance pool to have resources for a temporary
62.7 remedy for a defaulting pension plan.
62.8 Subd. 2. DEFAULT INSURANCE CHARGE. (a) In fiscal year
62.9 2006, the pension default insurance charge is $0.10 per month
62.10 per active member and benefit recipient of a covered retirement
62.11 plan.
62.12 (b) The pension default insurance charge must be reassessed
62.13 by the commissioner of finance, who shall revise the charge
62.14 upward or downward based on an assessment of the potential risk
62.15 of a future retirement plan default. The consulting actuary
62.16 retained under section 356.214 shall provide an assessment of
62.17 the relative probability of future retirement plan defaults as
62.18 part of the actuarial valuation reports performed annually.
62.19 Subd. 3. RECEIPT OF CHARGES; INVESTMENT. The pension
62.20 default insurance charge is payable to the commissioner of
62.21 finance for deposit in a special pension default insurance pool
62.22 fund in the state treasury. The special default insurance pool
62.23 fund must be invested by the State Board of Investment in
62.24 investments authorized under section 11A.24.
62.25 Subd. 4. DISBURSEMENTS. (a) The chief administrative
62.26 officer of a covered retirement plan facing imminent default in
62.27 the payment of retirement annuities and benefits is authorized
62.28 to apply to the commissioner of finance for the transfer of
62.29 assets to forestall the default.
62.30 (b) If the commissioner of finance finds that a covered
62.31 retirement plan is facing an imminent default, the commissioner
62.32 may transfer the necessary amount of assets to avert the
62.33 expected default from the pension default insurance pool.
62.34 Subd. 5. COVERED RETIREMENT PLANS. The retirement plans
62.35 covered by the pension default insurance pool are:
62.36 (1) the general state employees retirement plan of the
63.1 Minnesota State Retirement System, established under chapter
63.2 352;
63.3 (2) the correctional state employees retirement plan of the
63.4 Minnesota State Retirement System, established under chapter
63.5 352;
63.6 (3) the unclassified employees retirement program,
63.7 established under chapter 352D;
63.8 (4) the State Patrol retirement plan, established under
63.9 chapter 352B;
63.10 (5) the legislators retirement plan, established under
63.11 chapter 3A;
63.12 (6) the elective state officers' retirement plan,
63.13 established under chapter 352C;
63.14 (7) the general employees retirement plan of the Public
63.15 Employees Retirement Association, established under chapter 353;
63.16 (8) the public employees police and fire retirement plan of
63.17 the Public Employees Retirement Association, established under
63.18 chapter 353;
63.19 (9) the local government correctional service retirement
63.20 plan of the Public Employees Retirement Association, established
63.21 under chapter 353E;
63.22 (10) the Teachers Retirement Association, established under
63.23 chapter 354;
63.24 (11) the Minneapolis Employees Retirement Fund, established
63.25 under chapter 422A;
63.26 (12) the Minneapolis Teachers Retirement Fund Association,
63.27 established under chapter 354A;
63.28 (13) the St. Paul Teachers Retirement Fund Association,
63.29 established under chapter 354A;
63.30 (14) the Duluth Teachers Retirement Fund Association,
63.31 established under chapter 354A; and
63.32 (15) the judges' retirement fund, established by sections
63.33 490.121 to 490.132.
63.34 Sec. 11. EFFECTIVE DATE.
63.35 Sections 1 to 10 are effective on the day following final
63.36 enactment.
64.1 ARTICLE 5
64.2 DEFERRED ANNUITIES AUGMENTATION
64.3 Section 1. Minnesota Statutes 2004, section 352.116,
64.4 subdivision 1a, is amended to read:
64.5 Subd. 1a. ACTUARIAL REDUCTION FOR EARLY RETIREMENT. This
64.6 subdivision applies to a person who has become at least 55 years
64.7 old and first became a covered employee after June 30, 1989, and
64.8 to any other covered employee who has become at least 55 years
64.9 old and whose annuity is higher when calculated under section
64.10 352.115, subdivision 3, paragraph (b), in conjunction with this
64.11 subdivision than when calculated under section 352.115,
64.12 subdivision 3, paragraph (a), in conjunction with subdivision 1.
64.13 A covered employee who retires before the normal retirement age
64.14 shall be paid the normal retirement annuity provided in section
64.15 352.115, subdivisions 2 and 3, paragraph (b), reduced so that
64.16 the reduced annuity is the actuarial equivalent of the annuity
64.17 that would be payable to the employee if the employee deferred
64.18 receipt of the annuity and the annuity amount were augmented at
64.19 an annual rate of three percent compounded annually from the day
64.20 the annuity begins to accrue until the normal retirement age, if
64.21 the employee became an employee before July 1, 2005, and is the
64.22 actuarial equivalent of this annuity that would be payable to
64.23 the employee if the employee deferred receipt of the annuity if
64.24 the employee initially became an employee after June 30, 2005.
64.25 Sec. 2. Minnesota Statutes 2004, section 352.72,
64.26 subdivision 2, is amended to read:
64.27 Subd. 2. COMPUTATION OF DEFERRED ANNUITY. (a) The
64.28 deferred annuity, if any, accruing under subdivision 1, or
64.29 section 352.22, subdivision 3, must be computed as provided in
64.30 section 352.22, subdivision 3, on the basis of allowable service
64.31 before termination of state service and augmented as provided
64.32 herein.
64.33 (b) If the employee became an employee before July 1, 2005,
64.34 the required reserves applicable to a deferred annuity or to an
64.35 annuity for which a former employee was eligible but had not
64.36 applied or to any deferred segment of an annuity must be
65.1 determined as of the date the benefit begins to accrue and
65.2 augmented by interest compounded annually from the first day of
65.3 the month following the month in which the employee ceased to be
65.4 a state employee, or July 1, 1971, whichever is later, to the
65.5 first day of the month in which the annuity begins to accrue.
65.6 The rates of interest used for this purpose must be five percent
65.7 compounded annually until January 1, 1981, and three percent
65.8 compounded annually thereafter until January 1 of the year
65.9 following the year in which the former employee attains age 55.
65.10 From that date to the effective date of retirement, the rate is
65.11 five percent compounded annually. If a person has more than one
65.12 period of uninterrupted service, the required reserves related
65.13 to each period must be augmented by interest under this
65.14 subdivision. The sum of the augmented required reserves so
65.15 determined is the present value of the annuity. "Uninterrupted
65.16 service" for the purpose of this subdivision means periods of
65.17 covered employment during which the employee has not been
65.18 separated from state service for more than two years. If a
65.19 person repays a refund, the service restored by the repayment
65.20 must be considered continuous with the next period of service
65.21 for which the employee has credit with this system. The formula
65.22 percentages used for each period of uninterrupted service must
65.23 be those applicable to a new employee. The mortality table and
65.24 interest assumption used to compute the annuity must be those in
65.25 effect when the employee files application for annuity. This
65.26 section does not reduce the annuity otherwise payable under this
65.27 chapter.
65.28 (c) If the employee initially became an employee after June
65.29 30, 2005, no augmentation is payable on a deferred annuity.
65.30 (b) (d) The retirement annuity or disability benefit of, or
65.31 the survivor benefit payable on behalf of, a former state
65.32 employee who terminated service before July 1, 1997, which is
65.33 not first payable until after June 30, 1997, must be increased
65.34 on an actuarial equivalent basis to reflect the change in the
65.35 postretirement interest rate actuarial assumption under section
65.36 356.215, subdivision 8, from five percent to six percent under a
66.1 calculation procedure and the tables adopted by the board and
66.2 approved by the actuary retained by the Legislative Commission
66.3 on Pensions and Retirement.
66.4 Sec. 3. Minnesota Statutes 2004, section 352B.30,
66.5 subdivision 2, is amended to read:
66.6 Subd. 2. COMPUTATION OF DEFERRED ANNUITY. (a) Deferred
66.7 annuities must be computed according to this chapter on the
66.8 basis of allowable service before termination of service and
66.9 augmented as provided in this chapter.
66.10 (b) If the member became a member before July 1, 2005, the
66.11 required reserves applicable to a deferred annuity must be
66.12 augmented by interest compounded annually from the first day of
66.13 the month following the month in which the member terminated
66.14 service, or July 1, 1971, whichever is later, to the first day
66.15 of the month in which the annuity begins to accrue. The rates
66.16 of interest used for this purpose shall be five percent per year
66.17 compounded annually until January 1, 1981, and after that date
66.18 three percent per year compounded annually. The mortality table
66.19 and interest assumption used to compute the annuity shall be
66.20 those in effect when the member files application for annuity.
66.21 (c) If the member initially became a member after June 30,
66.22 2005, no augmentation is payable on a deferred annuity.
66.23 Sec. 4. Minnesota Statutes 2004, section 353.30,
66.24 subdivision 5, is amended to read:
66.25 Subd. 5. ACTUARIAL REDUCTION FOR EARLY RETIREMENT. This
66.26 subdivision applies to a member who has become at least 55 years
66.27 old and first became a public employee after June 30, 1989, and
66.28 to any other member who has become at least 55 years old and
66.29 whose annuity is higher when calculated under section 353.29,
66.30 subdivision 3, paragraph (b), in conjunction with this
66.31 subdivision than when calculated under section 353.29,
66.32 subdivision 3, paragraph (a), in conjunction with subdivision 1,
66.33 1a, 1b, or 1c. An employee who retires before normal retirement
66.34 age shall be paid the retirement annuity provided in section
66.35 353.29, subdivision 3, paragraph (b), reduced so that the
66.36 reduced annuity is the actuarial equivalent of the annuity that
67.1 would be payable to the employee if the employee deferred
67.2 receipt of the annuity and the annuity amount were augmented at
67.3 an annual rate of three percent compounded annually from the day
67.4 the annuity begins to accrue until the normal retirement age if
67.5 the member became a member before July 1, 2005, and is the
67.6 actuarial equivalent of the annuity that would be payable to the
67.7 member if the member deferred receipt of the annuity if the
67.8 member initially became a member after June 30, 2005.
67.9 Sec. 5. Minnesota Statutes 2004, section 353.71,
67.10 subdivision 2, is amended to read:
67.11 Subd. 2. DEFERRED ANNUITY COMPUTATION; AUGMENTATION. (a)
67.12 The deferred annuity accruing under subdivision 1, or under
67.13 sections 353.34, subdivision 3, and 353.68, subdivision 4, must
67.14 be computed on the basis of allowable service prior to the
67.15 termination of public service and augmented as provided in this
67.16 paragraph.
67.17 (b) The required reserves applicable to a deferred annuity,
67.18 or to any deferred segment of an annuity must be determined as
67.19 of the first day of the month following the month in which the
67.20 former member ceased to be a public employee, or July 1, 1971,
67.21 whichever is later. If the member became a member before July
67.22 1, 2005, these required reserves must be augmented at the rate
67.23 of five percent annually compounded annually until January 1,
67.24 1981, and at the rate of three percent thereafter until January
67.25 1 of the year following the year in which the former member
67.26 attains age 55. From that date to the effective date of
67.27 retirement, the rate is five percent compounded annually. If a
67.28 person has more than one period of uninterrupted service, the
67.29 required reserves related to each period must be augmented as
67.30 specified in this paragraph. The sum of the augmented required
67.31 reserves is the present value of the annuity. Uninterrupted
67.32 service for the purpose of this subdivision means periods of
67.33 covered employment during which the employee has not been
67.34 separated from public service for more than two years. If a
67.35 person repays a refund, the restored service must be considered
67.36 as continuous with the next period of service for which the
68.1 employee has credit with this association. This section must not
68.2 reduce the annuity otherwise payable under this chapter. This
68.3 paragraph applies to individuals who become deferred annuitants
68.4 on or after July 1, 1971. For a member who became a deferred
68.5 annuitant before July 1, 1971, the paragraph applies from July
68.6 1, 1971, if the former active member applies for an annuity
68.7 after July 1, 1973.
68.8 (c) If the member initially became a member after June 30,
68.9 2005, no augmentation is payable on a deferred annuity.
68.10 (b) (d) The retirement annuity or disability benefit of, or
68.11 the survivor benefit payable on behalf of, a former member who
68.12 terminated service before July 1, 1997, or the survivor benefit
68.13 payable on behalf of a basic or police and fire member who was
68.14 receiving disability benefits before July 1, 1997, which is
68.15 first payable after June 30, 1997, must be increased on an
68.16 actuarial equivalent basis to reflect the change in the
68.17 postretirement interest rate actuarial assumption under section
68.18 356.215, subdivision 8, from five percent to six percent under a
68.19 calculation procedure and tables adopted by the board and
68.20 approved by the actuary retained by the Legislative Commission
68.21 on Pensions and Retirement.
68.22 Sec. 6. Minnesota Statutes 2004, section 353E.05, is
68.23 amended to read:
68.24 353E.05 AUGMENTATION IN CERTAIN CASES.
68.25 Unless prior service has been transferred or unless a
68.26 combined service annuity under section 356.30 has been elected,
68.27 an employee who becomes a local government correctional employee
68.28 after being a member of the Public Employees Retirement
68.29 Association or the public employees police and fire fund is
68.30 covered under section 353.71, subdivision 2, with respect to
68.31 that prior service. An employee who became an employee before
68.32 July 1, 2005, and who becomes a member of the Public Employees
68.33 Retirement Association or the public employees police and fire
68.34 plan after being a local government correctional employee is
68.35 also covered under section 353.71, subdivision 2, with respect
68.36 to that prior service, unless calculated under section 356.30.
69.1 Sec. 7. Minnesota Statutes 2004, section 354.44,
69.2 subdivision 6, is amended to read:
69.3 Subd. 6. COMPUTATION OF FORMULA PROGRAM RETIREMENT
69.4 ANNUITY. (a) The formula retirement annuity must be computed in
69.5 accordance with the applicable provisions of the formulas stated
69.6 in paragraph (b) or (d) on the basis of each member's average
69.7 salary for the period of the member's formula service credit.
69.8 For all years of formula service credit, "average salary,"
69.9 for the purpose of determining the member's retirement annuity,
69.10 means the average salary upon which contributions were made and
69.11 upon which payments were made to increase the salary limitation
69.12 provided in Minnesota Statutes 1971, section 354.511, for the
69.13 highest five successive years of formula service credit
69.14 provided, however, that such "average salary" shall not include
69.15 any more than the equivalent of 60 monthly salary payments.
69.16 Average salary must be based upon all years of formula service
69.17 credit if this service credit is less than five years.
69.18 (b) This paragraph, in conjunction with paragraph (c),
69.19 applies to a person who first became a member of the association
69.20 or a member of a pension fund listed in section 356.30,
69.21 subdivision 3, before July 1, 1989, unless paragraph (d), in
69.22 conjunction with paragraph (e), produces a higher annuity
69.23 amount, in which case paragraph (d) applies. The average salary
69.24 as defined in paragraph (a), multiplied by the following
69.25 percentages per year of formula service credit shall determine
69.26 the amount of the annuity to which the member qualifying
69.27 therefor is entitled:
69.28 Coordinated Member Basic Member
69.29 Each year of service the percent the percent
69.30 during first ten specified in specified in
69.31 section 356.315, section 356.315,
69.32 subdivision 1, subdivision 3,
69.33 per year per year
69.34 Each year of service the percent the percent
69.35 thereafter specified in specified in
69.36 section 356.315, section 356.315,
70.1 subdivision 2, subdivision 4,
70.2 per year per year
70.3 (c)(i) This paragraph applies only to a person who first
70.4 became a member of the association or a member of a pension fund
70.5 listed in section 356.30, subdivision 3, before July 1, 1989,
70.6 and whose annuity is higher when calculated under paragraph (b),
70.7 in conjunction with this paragraph than when calculated under
70.8 paragraph (d), in conjunction with paragraph (e).
70.9 (ii) Where any member retires prior to normal retirement
70.10 age under a formula annuity, the member shall be paid a
70.11 retirement annuity in an amount equal to the normal annuity
70.12 provided in paragraph (b) reduced by one‑quarter of one percent
70.13 for each month that the member is under normal retirement age at
70.14 the time of retirement except that for any member who has 30 or
70.15 more years of allowable service credit, the reduction shall be
70.16 applied only for each month that the member is under age 62.
70.17 (iii) Any member whose attained age plus credited allowable
70.18 service totals 90 years is entitled, upon application, to a
70.19 retirement annuity in an amount equal to the normal annuity
70.20 provided in paragraph (b), without any reduction by reason of
70.21 early retirement.
70.22 (d) This paragraph applies to a member who has become at
70.23 least 55 years old and first became a member of the association
70.24 after June 30, 1989, and to any other member who has become at
70.25 least 55 years old and whose annuity amount when calculated
70.26 under this paragraph and in conjunction with paragraph (e), is
70.27 higher than it is when calculated under paragraph (b), in
70.28 conjunction with paragraph (c). The average salary, as defined
70.29 in paragraph (a) multiplied by the percent specified by section
70.30 356.315, subdivision 4, for each year of service for a basic
70.31 member and by the percent specified in section 356.315,
70.32 subdivision 2, for each year of service for a coordinated member
70.33 shall determine the amount of the retirement annuity to which
70.34 the member is entitled.
70.35 (e) This paragraph applies to a person who has become at
70.36 least 55 years old and first becomes a member of the association
71.1 after June 30, 1989, and to any other member who has become at
71.2 least 55 years old and whose annuity is higher when calculated
71.3 under paragraph (d) in conjunction with this paragraph than when
71.4 calculated under paragraph (b), in conjunction with paragraph
71.5 (c). An employee who retires under the formula annuity before
71.6 the normal retirement age shall be paid the normal annuity
71.7 provided in paragraph (d) reduced so that the reduced annuity is
71.8 the actuarial equivalent of the annuity that would be payable to
71.9 the employee if the employee deferred receipt of the annuity and
71.10 the annuity amount were augmented at an annual rate of three
71.11 percent compounded annually from the day the annuity begins to
71.12 accrue until the normal retirement age if the employee became an
71.13 employee before July 1, 2005, and is the actuarial equivalent of
71.14 the annuity that would be payable to the employee if the
71.15 employee initially became a member after June 30, 2005.
71.16 (f) No retirement annuity is payable to a former employee
71.17 with a salary that exceeds 95 percent of the governor's salary
71.18 unless and until the salary figures used in computing the
71.19 highest five successive years average salary under paragraph (a)
71.20 have been audited by the Teachers Retirement Association and
71.21 determined by the executive director to comply with the
71.22 requirements and limitations of section 354.05, subdivisions 35
71.23 and 35a.
71.24 Sec. 8. Minnesota Statutes 2004, section 354.55,
71.25 subdivision 11, is amended to read:
71.26 Subd. 11. DEFERRED ANNUITY; AUGMENTATION. (a) Any person
71.27 covered under section 354.44, subdivision 6, who ceases to
71.28 render teaching service, may leave the person's accumulated
71.29 deductions in the fund for the purpose of receiving a deferred
71.30 annuity at retirement. Eligibility for an annuity under this
71.31 subdivision is governed pursuant to section 354.44, subdivision
71.32 1, or 354.60.
71.33 (b) The amount of the deferred retirement annuity is
71.34 determined by section 354.44, subdivision 6, and augmented as
71.35 provided in this subdivision. The required reserves related to
71.36 that portion of the annuity which had accrued when the member
72.1 ceased to render teaching service must be augmented by interest
72.2 compounded annually from the first day of the month following
72.3 the month during which the member ceased to render teaching
72.4 service to the effective date of retirement. There shall be no
72.5 augmentation if this period is less than three months or if this
72.6 period commences prior to July 1, 1971. If the member became a
72.7 member before July 1, 2005, the rates of interest used for this
72.8 purpose must be five percent compounded annually commencing July
72.9 1, 1971, until January 1, 1981, and three percent compounded
72.10 annually thereafter until January 1 of the year following the
72.11 year in which the former member attains age 55. From that date
72.12 to the effective date of retirement, the rate is five percent
72.13 compounded annually. If a person has more than one period of
72.14 uninterrupted service, a separate average salary determined
72.15 under section 354.44, subdivision 6, must be used for each
72.16 period and the required reserves related to each period must be
72.17 augmented by interest pursuant to this subdivision. The sum of
72.18 the augmented required reserves so determined shall be the basis
72.19 for purchasing the deferred annuity. If a person repays a
72.20 refund, the service restored by the repayment must be considered
72.21 as continuous with the next period of service for which the
72.22 person has credit with this fund. If a person does not render
72.23 teaching service in any one fiscal year or more consecutive
72.24 fiscal years and then resumes teaching service, the formula
72.25 percentages used from the date of the resumption of teaching
72.26 service must be those applicable to new members. The mortality
72.27 table and interest assumption used to compute the annuity must
72.28 be the applicable mortality table established by the board under
72.29 section 354.07, subdivision 1, and the interest rate assumption
72.30 under section 356.215 in effect when the member retires. A
72.31 period of uninterrupted service for the purposes of this
72.32 subdivision means a period of covered teaching service during
72.33 which the member has not been separated from active service for
72.34 more than one fiscal year.
72.35 (c) In no case shall the annuity payable under this
72.36 subdivision be less than the amount of annuity payable pursuant
73.1 to section 354.44, subdivision 6. If the member initially
73.2 became a member after June 30, 2005, no augmentation is payable
73.3 on a deferred annuity.
73.4 (d) The requirements and provisions for retirement before
73.5 normal retirement age contained in section 354.44, subdivision
73.6 6, clause (3) or (5), shall also apply to an employee fulfilling
73.7 the requirements with a combination of service as provided in
73.8 section 354.60.
73.9 (e) The augmentation provided by this subdivision applies
73.10 to the benefit provided in section 354.46, subdivision 2.
73.11 (f) The augmentation provided by this subdivision shall not
73.12 apply to any period in which a person is on an approved leave of
73.13 absence from an employer unit covered by the provisions of this
73.14 chapter.
73.15 (g) The retirement annuity or disability benefit of, or the
73.16 survivor benefit payable on behalf of, a former teacher who
73.17 terminated service before July 1, 1997, which is not first
73.18 payable until after June 30, 1997, must be increased on an
73.19 actuarial equivalent basis to reflect the change in the
73.20 postretirement interest rate actuarial assumption under section
73.21 356.215, subdivision 8, from five percent to six percent under a
73.22 calculation procedure and tables adopted by the board as
73.23 recommended by an approved actuary and approved by the actuary
73.24 retained by the Legislative Commission on Pensions and
73.25 Retirement.
73.26 Sec. 9. Minnesota Statutes 2004, section 354A.31,
73.27 subdivision 7, is amended to read:
73.28 Subd. 7. ACTUARIAL REDUCTION FOR EARLY RETIREMENT. This
73.29 subdivision applies to a person who has become at least 55 years
73.30 old and first becomes a coordinated member after June 30, 1989,
73.31 and to any other coordinated member who has become at least 55
73.32 years old and whose annuity is higher when calculated using the
73.33 retirement annuity formula percentage in subdivision 4,
73.34 paragraph (d), and subdivision 4a, paragraph (d), in conjunction
73.35 with this subdivision than when calculated under subdivision 4,
73.36 paragraph (c), or subdivision 4a, paragraph (c), in conjunction
74.1 with subdivision 6. A coordinated member who retires before the
74.2 full benefit age shall be paid the retirement annuity calculated
74.3 using the retirement annuity formula percentage in subdivision
74.4 4, paragraph (d), or subdivision 4a, paragraph (d), reduced so
74.5 that the reduced annuity is the actuarial equivalent of the
74.6 annuity that would be payable to the member if the member
74.7 deferred receipt of the annuity and the annuity amount were
74.8 augmented at an annual rate of three percent compounded annually
74.9 from the day the annuity begins to accrue until the normal
74.10 retirement age if the member became a member before July 1,
74.11 2005, and is the actuarial equivalent of the annuity that would
74.12 be payable to the member if the member initially became a member
74.13 after June 30, 2005.
74.14 Sec. 10. Minnesota Statutes 2004, section 354A.37,
74.15 subdivision 2, is amended to read:
74.16 Subd. 2. ELIGIBILITY FOR DEFERRED RETIREMENT ANNUITY.
74.17 (a) Any coordinated member who ceases to render teaching
74.18 services for the school district in which the teachers
74.19 retirement fund association is located, with sufficient
74.20 allowable service credit to meet the minimum service
74.21 requirements specified in section 354A.31, subdivision 1, shall
74.22 be entitled to a deferred retirement annuity in lieu of a refund
74.23 pursuant to subdivision 1. The deferred retirement annuity
74.24 shall be computed pursuant to section 354A.31 and shall be
74.25 augmented as provided in this subdivision. The deferred annuity
74.26 shall commence upon application after the person on deferred
74.27 status attains at least the minimum age specified in section
74.28 354A.31, subdivision 1.
74.29 (b) If the coordinated member became a member before July
74.30 1, 2005, the monthly annuity amount that had accrued when the
74.31 member ceased to render teaching service must be augmented from
74.32 the first day of the month following the month during which the
74.33 member ceased to render teaching service to the effective date
74.34 of retirement. There is no augmentation if this period is less
74.35 than three months. The rate of augmentation is three percent
74.36 compounded annually until January 1 of the year following the
75.1 year in which the former member attains age 55, and five percent
75.2 compounded annually after that date to the effective date of
75.3 retirement. If a person has more than one period of
75.4 uninterrupted service, a separate average salary determined
75.5 under section 354A.31 must be used for each period, and the
75.6 monthly annuity amount related to each period must be augmented
75.7 as provided in this subdivision. The sum of the augmented
75.8 monthly annuity amounts determines the total deferred annuity
75.9 payable. If a person repays a refund, the service restored by
75.10 the repayment must be considered as continuous with the next
75.11 period of service for which the person has credit with the
75.12 fund. If a person does not render teaching services in any one
75.13 fiscal year or more consecutive fiscal years and then resumes
75.14 teaching service, the formula percentages used from the date of
75.15 resumption of teaching service are those applicable to new
75.16 members. The mortality table and interest assumption used to
75.17 compute the annuity are the table established by the fund to
75.18 compute other annuities, and the interest assumption under
75.19 section 356.215 in effect when the member retires. A period of
75.20 uninterrupted service for the purpose of this subdivision means
75.21 a period of covered teaching service during which the member has
75.22 not been separated from active service for more than one fiscal
75.23 year. The augmentation provided by this subdivision applies to
75.24 the benefit provided in section 354A.35, subdivision 2. The
75.25 augmentation provided by this subdivision does not apply to any
75.26 period in which a person is on an approved leave of absence from
75.27 an employer unit.
75.28 (c) If the coordinated member initially became a member
75.29 after June 30, 2005, no augmentation is payable on a deferred
75.30 annuity.
75.31 Sec. 11. Minnesota Statutes 2004, section 356.30,
75.32 subdivision 1, is amended to read:
75.33 Subdivision 1. ELIGIBILITY; COMPUTATION OF ANNUITY. (a)
75.34 Notwithstanding any provisions of the laws governing the
75.35 retirement plans enumerated in subdivision 3, a person who has
75.36 met the qualifications of paragraph (b) may elect to receive a
76.1 retirement annuity from each enumerated retirement plan in which
76.2 the person has at least one‑half year of allowable service,
76.3 based on the allowable service in each plan, subject to the
76.4 provisions of paragraph (c).
76.5 (b) A person may receive, upon retirement, a retirement
76.6 annuity from each enumerated retirement plan in which the person
76.7 has at least one‑half year of allowable service, and, if the
76.8 person was a member of a covered retirement plan on or before
76.9 July 1, 2005, augmentation of a deferred annuity calculated
76.10 under the laws governing each public pension plan or fund named
76.11 in subdivision 3, from the date the person terminated all public
76.12 service if:
76.13 (1) the person has allowable service totaling an amount
76.14 that allows the person to receive an annuity in any two or more
76.15 of the enumerated plans; and
76.16 (2) the person has not begun to receive an annuity from any
76.17 enumerated plan or the person has made application for benefits
76.18 from each applicable plan and the effective dates of the
76.19 retirement annuity with each plan under which the person chooses
76.20 to receive an annuity are within a one‑year period.
76.21 (c) The retirement annuity from each plan must be based
76.22 upon the allowable service, accrual rates, and average salary in
76.23 the applicable plan except as further specified or modified in
76.24 the following clauses:
76.25 (1) the laws governing annuities must be the law in effect
76.26 on the date of termination from the last period of public
76.27 service under a covered retirement plan with which the person
76.28 earned a minimum of one‑half year of allowable service credit
76.29 during that employment;
76.30 (2) the "average salary" on which the annuity from each
76.31 covered plan in which the employee has credit in a formula plan
76.32 must be based on the employee's highest five successive years of
76.33 covered salary during the entire service in covered plans;
76.34 (3) the accrual rates to be used by each plan must be those
76.35 percentages prescribed by each plan's formula as continued for
76.36 the respective years of allowable service from one plan to the
77.1 next, recognizing all previous allowable service with the other
77.2 covered plans;
77.3 (4) the allowable service in all the plans must be combined
77.4 in determining eligibility for and the application of each
77.5 plan's provisions in respect to reduction in the annuity amount
77.6 for retirement prior to normal retirement age; and
77.7 (5) the annuity amount payable for any allowable service
77.8 under a nonformula plan of a covered plan must not be affected,
77.9 but such service and covered salary must be used in the above
77.10 calculation.
77.11 (d) This section does not apply to any person whose final
77.12 termination from the last public service under a covered plan
77.13 was before May 1, 1975.
77.14 (e) For the purpose of computing annuities under this
77.15 section, the accrual rates used by any covered plan, except the
77.16 public employees police and fire plan, the judges' retirement
77.17 fund, and the State Patrol retirement plan, must not exceed the
77.18 percent specified in section 356.315, subdivision 4, per year of
77.19 service for any year of service or fraction thereof. The
77.20 formula percentage used by the judges' retirement fund must not
77.21 exceed the percentage rate specified in section 356.315,
77.22 subdivision 8, per year of service for any year of service or
77.23 fraction thereof. The accrual rate used by the public employees
77.24 police and fire plan and the State Patrol retirement plan must
77.25 not exceed the percentage rate specified in section 356.315,
77.26 subdivision 6, per year of service for any year of service or
77.27 fraction thereof. The accrual rate or rates used by the
77.28 legislators retirement plan and the elective state officers
77.29 retirement plan must not exceed 2.5 percent, but this limit does
77.30 not apply to the adjustment provided under section 3A.02,
77.31 subdivision 1, paragraph (c), or 352C.031, paragraph (b).
77.32 (f) Any period of time for which a person has credit in
77.33 more than one of the covered plans must be used only once for
77.34 the purpose of determining total allowable service.
77.35 (g) If the period of duplicated service credit is more than
77.36 one‑half year, or the person has credit for more than one‑half
78.1 year, with each of the plans, each plan must apply its formula
78.2 to a prorated service credit for the period of duplicated
78.3 service based on a fraction of the salary on which deductions
78.4 were paid to that fund for the period divided by the total
78.5 salary on which deductions were paid to all plans for the period.
78.6 (h) If the period of duplicated service credit is less than
78.7 one‑half year, or when added to other service credit with that
78.8 plan is less than one‑half year, the service credit must be
78.9 ignored and a refund of contributions made to the person in
78.10 accord with that plan's refund provisions.
78.11 Sec. 12. EFFECTIVE DATE.
78.12 Sections 1 to 11 are effective on July 1, 2005.
78.13 ARTICLE 6
78.14 MAXIMUM RETIREMENT PLAN
78.15 COVERED SALARY
78.16 Section 1. Minnesota Statutes 2004, section 356.611,
78.17 subdivision 1, is amended to read:
78.18 Subdivision 1. STATE SALARY LIMITATIONS. (a)
78.19 Notwithstanding any provision of law, bylaws, articles of
78.20 incorporation, retirement and disability allowance plan
78.21 agreements, or retirement plan contracts to the contrary, the
78.22 covered salary for pension purposes for a plan participant of a
78.23 covered retirement fund enumerated in section 356.30,
78.24 subdivision 3, may not exceed 95 110 percent of the salary
78.25 established for the governor under section 15A.082 at the time
78.26 the person received the salary.
78.27 (b) This section does not apply to a salary paid:
78.28 (1) to the governor or to a judge;
78.29 (2) to an employee of a political subdivision in a
78.30 position that is excluded from the limit as specified under
78.31 section 43A.17, subdivision 9;
78.32 (3) to a state employee as defined under section 43A.02,
78.33 subdivision 21;
78.34 (4) to an employee of Gillette Hospital who is covered by
78.35 the general state employees retirement plan of the Minnesota
78.36 State Retirement System;
79.1 (5) to an employee of the Minnesota Crop Improvement
79.2 Council; or
79.3 (6) to an employee of the Minnesota Historical Society; or
79.4 (7) to an employee of the Southern Minnesota Municipal
79.5 Power Association.
79.6 (c) The limited covered salary determined under this
79.7 section must be used in determining employee and employer
79.8 contributions and in determining retirement annuities and other
79.9 benefits under the respective covered retirement fund and under
79.10 this chapter.
79.11 Sec. 2. EFFECTIVE DATE.
79.12 Section 1 is effective on July 1, 2005.
79.13 ARTICLE 7
79.14 EARLY RETIREMENT INCENTIVES
79.15 Section 1. EARLY RETIREMENT INCENTIVE.
79.16 Subdivision 1. ELIGIBILITY. An appointing authority in
79.17 the executive or legislative branch of state government or the
79.18 Board of Public Defense or any school district may offer the
79.19 early retirement incentive in this section to an employee who:
79.20 (1) has at least five years of allowable service in one or
79.21 more of the funds listed in Minnesota Statutes, section 356.30,
79.22 subdivision 3, or has at least five years of coverage by the
79.23 individual retirement account plan governed by Minnesota
79.24 Statutes, chapter 354b, and upon retirement is immediately
79.25 eligible for a retirement annuity or benefit from one or more of
79.26 these funds; and
79.27 (2) terminates state or teaching service after the
79.28 effective date of this section and before September 1, 2005.
79.29 Subd. 2. INCENTIVE. (a) For an employee eligible under
79.30 subdivision 1, the employer may provide an amount up to $17,000,
79.31 to be used:
79.32 (1) for an employee who terminates state service after the
79.33 effective date of this section and on or before July 15, 2005,
79.34 for deposit in the employee's account in the health care savings
79.35 plan established by Minnesota Statutes, section 352.98; or
79.36 (2) for an employee who terminates state service after July
80.1 15, 2005, and before September 1, 2005:
80.2 (i) notwithstanding Minnesota Statutes, section 352.01,
80.3 subdivision 11, or 354.05, subdivision 13, whichever applies,
80.4 for purchase of service credit for unperformed service
80.5 sufficient to enable the employee to retire under Minnesota
80.6 Statutes, section 352.116, subdivision 1, paragraph (b); 353.30;
80.7 or 354.44, subdivision 6, paragraph (b), whichever applies; or
80.8 (ii) for purchase of a lifetime annuity or annuity for a
80.9 specific number of years from the state unclassified retirement
80.10 program to provide additional benefits under Minnesota Statutes,
80.11 section 352D.06, subdivision 1.
80.12 (b) An employee is eligible for the payment under paragraph
80.13 (a), clause (2), item (i), if the employee uses money from a
80.14 deferred compensation account that, combined with the payment
80.15 under paragraph (a), clause (2), item (i), would be sufficient
80.16 to purchase enough service credit to qualify for retirement
80.17 under Minnesota Statutes, section 352.116, subdivision 1,
80.18 paragraph (b); 353.30, subdivision 1a; or 354.44, subdivision 6,
80.19 paragraph (b), whichever applies.
80.20 Subd. 3. DESIGNATION OF POSITIONS; EMPLOYER
80.21 DISCRETION. Before offering an incentive under this section, an
80.22 appointing authority must designate the job classifications or
80.23 positions within job classifications that qualify for the
80.24 incentive. The appointing authority may modify this designation
80.25 at any time. Designation of positions eligible for the
80.26 incentive under this section, participation of individual
80.27 employees, and the amount of the payment under this section are
80.28 at the sole discretion of the appointing authority. Unilateral
80.29 implementation of this section by the employer is not an unfair
80.30 labor practice under Minnesota Statutes, chapter 179A.
80.31 Sec. 2. POSTRETIREMENT EMPLOYMENT.
80.32 (a) This section applies to a state employee who:
80.33 (1) on the effective date of this section is regularly
80.34 scheduled to work 1,044 or more hours a year in a position
80.35 covered by the Minnesota state retirement system general
80.36 employees retirement plan, correctional plan, or unclassified
81.1 plan;
81.2 (2) enters into an agreement with the appointing authority
81.3 to work a reduced schedule that is both (i) a reduction of at
81.4 least 25 percent from the number of regularly scheduled work
81.5 hours; and (ii) 1,044 hours or less in the covered position; and
81.6 (3) at the time of entering into the agreement under clause
81.7 (2), meets the age and service requirements necessary to receive
81.8 an unreduced retirement benefit from the plan.
81.9 (b) Notwithstanding any law to the contrary, for service
81.10 under an agreement entered into under paragraph (a), an employee:
81.11 (1) may receive a retirement annuity from the plan without
81.12 separating from state service; and
81.13 (2) is not subject to the cessation of annuity provisions
81.14 in Minnesota Statutes, section 352.115, subdivision 10.
81.15 (c) The amount of hours worked, the work schedule, and the
81.16 duration of the phased retirement employment must be mutually
81.17 agreed to by the employee and the appointing authority. The
81.18 appointing authority may not require a person to waive any
81.19 rights under a collective bargaining agreement as a condition of
81.20 participation under this section. The appointing authority has
81.21 sole discretion to determine if and the extent to which phased
81.22 retirement under this section is available to an employee. Upon
81.23 expiration of an agreement entered into under this section, the
81.24 appointing authority must restore the position to its status
81.25 prior to the agreement.
81.26 (d) Notwithstanding any law to the contrary, a person may
81.27 not earn service credit in the Minnesota state retirement system
81.28 for employment covered under this section, and employer
81.29 contributions and payroll deductions for the retirement fund
81.30 must not be made based on earnings of a person working under
81.31 this section. No change shall be made to a monthly annuity or
81.32 retirement allowance based on employment under this section.
81.33 (e) A person who works under this section is a member of
81.34 the appropriate bargaining unit; is covered by the appropriate
81.35 collective bargaining contract or compensation plan; and is
81.36 eligible for health care coverage as provided in the collective
82.1 bargaining contract or compensation plan.
82.2 (f) An agreement under this section may apply only to work
82.3 through June 30, 2007.
82.4 Sec. 3. VOLUNTARY HOUR REDUCTION PLAN.
82.5 (a) This section applies to a state employee who:
82.6 (1) on the effective date of this section is regularly
82.7 scheduled to work 1,044 or more hours a year in a position
82.8 covered by a pension plan administered by the Minnesota state
82.9 retirement system; and
82.10 (2) enters into an agreement with the appointing authority
82.11 to work a reduced schedule of 1,044 hours or less in the covered
82.12 position.
82.13 (b) Notwithstanding any law to the contrary, for service
82.14 under an agreement entered into under paragraph (a),
82.15 contributions may be made to the applicable plan of the
82.16 Minnesota state retirement system as if the employee had not
82.17 reduced hours. The employee must pay the additional employee
82.18 contributions and the employer must pay the additional employer
82.19 contributions necessary to bring the service credit and salary
82.20 up to the level prior to the voluntary reduction in hours.
82.21 Contributions must be made in a time and manner prescribed by
82.22 the executive director of the Minnesota state retirement system.
82.23 (c) The amount of hours worked, the work schedule, and the
82.24 duration of the voluntary hour reduction must be mutually agreed
82.25 to by the employee and the appointing authority. The appointing
82.26 authority may not require a person to waive any rights under a
82.27 collective bargaining agreement as a condition of participation
82.28 under this section. The appointing authority has sole
82.29 discretion to determine if and the extent to which voluntary
82.30 hour reduction under this section is available to an employee.
82.31 (d) A person who works under this section is a member of
82.32 the appropriate bargaining unit; is covered by the appropriate
82.33 collective bargaining contract or compensation plan; and is
82.34 eligible for health care coverage as provided in the collective
82.35 bargaining contract or compensation plan.
82.36 (e) An agreement under this section may apply only to work
83.1 through June 30, 2007.
83.2 Sec. 4. VOLUNTARY UNPAID LEAVE OF ABSENCE.
83.3 Appointing authorities in state government may allow each
83.4 employee to take unpaid leaves of absence for up to 1,044 hours
83.5 between June 1, 2005, and June 30, 2007. Each appointing
83.6 authority approving such a leave shall allow the employee to
83.7 continue accruing vacation and sick leave, be eligible for paid
83.8 holidays and insurance benefits, accrue seniority, and accrue
83.9 service credit and credited salary in the state retirement plans
83.10 as if the employee had actually been employed during the time of
83.11 leave. An employee covered by the unclassified plan may
83.12 voluntarily make both the employee and employer contributions to
83.13 the unclassified plan during the leave of absence. For
83.14 employees covered by another retirement plan administered by the
83.15 Minnesota State Retirement System, the employee must pay the
83.16 additional employee contributions and the employer must pay the
83.17 additional employer contributions necessary to bring the service
83.18 credit and salary credit up to the level prior to the voluntary
83.19 reduction in hours. Contributions must be made at a time and in
83.20 a manner prescribed by the executive director of the Minnesota
83.21 State Retirement System. If the leave of absence is for one
83.22 full pay period or longer, any holiday pay shall be included in
83.23 the first payroll warrant after return from the leave of
83.24 absence. The appointing authority shall attempt to grant
83.25 requests for the unpaid leaves of absence consistent with the
83.26 need to continue efficient operation of the agency. However,
83.27 each appointing authority shall retain discretion to grant or
83.28 refuse to grant requests for leaves of absence and to schedule
83.29 and cancel leaves, subject to the applicable provisions of
83.30 collective bargaining agreements and compensation plans.
83.31 Sec. 5. RELATIONSHIP OF SECTIONS.
83.32 (a) An employee covered by a phased retirement agreement
83.33 under section 2 may not be covered by the voluntary hour
83.34 reduction provisions of section 3 or by a voluntary unpaid leave
83.35 of absence agreement under section 4 during the same time period
83.36 or any later time period.
84.1 (b) An employee covered by the voluntary hour reduction
84.2 provisions of section 3:
84.3 (1) may not be covered by a phased retirement agreement
84.4 under section 2 during the same time period, but may be covered
84.5 by a phased retirement agreement under section 2 during a later
84.6 time period; and
84.7 (2) may be covered by the voluntary leave of absence
84.8 provision of section 4 during an earlier or later time period.
84.9 (c) An employee may receive the early retirement incentive
84.10 in section 1 after being covered under section 2, 3, or 4. An
84.11 employee who receives an incentive under section 1 may not later
84.12 be covered by section 2, 3, or 4.
84.13 Sec. 6. EFFECTIVE DATE.
84.14 Sections 1 to 5 are effective the day following final
84.15 enactment.
84.16 ARTICLE 8
84.17 APPROPRIATION
84.18 Section 1. APPROPRIATION.
84.19 There is appropriated from the general fund to the
84.20 commissioner of finance for the purposes of offsetting the
84.21 impact of the changes in article .., sections .. to .., $.......
84.22 for the year ending June 30, 2006, and $...... for the year
84.23 ending June 30, 2007.
84.24 Sec. 2. EFFECTIVE DATE.
84.25 Section 1 is effective on July 1, 2005."
84.26 Delete the title and insert:
84.27 "A bill for an act
84.28 relating to retirement; statewide and major local
84.29 retirement plans; providing for various member and
84.30 employer contribution rate increases; restructuring
84.31 the statewide Teachers Retirement Association fund and
84.32 benefit plan; providing a special postretirement
84.33 adjustment to certain pre‑1969 teachers; changing
84.34 deferred annuities augmentation for new retirement
84.35 plan members; creating a public pension plan default
84.36 insurance pool; increasing the maximum retirement plan
84.37 covered salary figure; providing certain early
84.38 retirement incentives; appropriating money; amending
84.39 Minnesota Statutes 2004, sections 352.04, subdivisions
84.40 2, 3, 12; 352.116, subdivision 1a; 352.72, subdivision
84.41 2; 352.911, subdivision 5; 352.92, subdivisions 1, 2;
84.42 352B.02, subdivisions 1a, 1c, 1d; 352B.30, subdivision
84.43 2; 352D.04, subdivision 2; 352D.09, subdivision 7;
84.44 353.27, subdivisions 1, 2, 3, 3a, by adding a
85.1 subdivision; 353.30, subdivision 5; 353.65,
85.2 subdivisions 2, 3, 6; 353.71, subdivision 2; 353E.01,
85.3 subdivision 5; 353E.05; 354.05, subdivisions 2, 13;
85.4 354.42, subdivisions 2, 3, by adding a subdivision;
85.5 354.44, subdivisions 6, 6; 354.55, subdivision 11;
85.6 354A.011, subdivisions 15a, 27; 354A.021, subdivisions
85.7 1, 4; 354A.092; 354A.093, subdivision 1; 354A.095;
85.8 354A.096; 354A.12, subdivisions 1, 2, 2a, 3a, 3b, 3c,
85.9 3d; 354A.30; 354A.31, subdivisions 4, 7; 354A.32,
85.10 subdivision 1; 354A.37, subdivision 2; 354A.39;
85.11 354A.40, subdivision 1; 354A.41; 356.20, subdivision
85.12 2; 356.214, subdivision 1; 356.215, subdivision 8;
85.13 356.30, subdivisions 1, 3; 356.302, subdivision 7;
85.14 356.303, subdivision 4; 356.315, by adding a
85.15 subdivision; 356.42, subdivision 3; 356.465,
85.16 subdivision 3; 356.611, subdivision 1; 423A.02,
85.17 subdivision 1b; proposing coding for new law in/as
85.18 Minnesota Statutes, chapters 126C; 128D; 354; 356;
85.19 repealing Minnesota Statutes 2004, sections 354A.051;
85.20 354A.105; 354A.23, subdivision 1; 354A.28."