1.1    .................... moves to amend H.F. No. 3421; S.F. No. 2969, as follows:
1.2Page 2, line 10, delete ":"
1.3Page 2, line 13, delete the new language and reinstate the stricken period
1.4Page 2, line 14, delete the new language and strike the old language
1.5Page 2, line 15, strike the old language
1.6Page 2, line 17, delete "item (i),"
1.7Page 4, delete lines 1 to 7
1.8Page 6, delete line 6
1.9Page 6, after line 15, insert:

1.10    "Sec. 5. Minnesota Statutes 2007 Supplement, section 422A.06, subdivision 8, is
1.11amended to read:
1.12    Subd. 8. Retirement benefit fund. (a) The retirement benefit fund consists of
1.13amounts held for payment of retirement allowances for members retired under this chapter,
1.14including any transfer amount payable under subdivision 3, paragraph (c).
1.15    (b) Unless subdivision 3, paragraph (c), applies, assets equal to the required
1.16reserves for retirement allowances under this chapter determined in accordance with the
1.17appropriate mortality table adopted by the board of trustees based on the experience of the
1.18fund as recommended by the actuary retained under section 356.214 must be transferred
1.19from the deposit accumulation fund to the retirement benefit fund as of the last business
1.20day of the month in which the retirement allowance begins. The income from investments
1.21of these assets must be allocated to this fund and any interest charge under subdivision
1.223, paragraph (c), must be credited to the fund. There must be paid from this fund the
1.23retirement annuities authorized by law. A required reserve calculation for the retirement
1.24benefit fund must be made by the actuary retained under section 356.214 and must be
1.25certified to the retirement board by the actuary retained under section 356.214.
1.26    (c) The retirement benefit fund must be governed by the applicable laws governing
1.27the accounting and audit procedures, investment, actuarial requirements, calculation and
2.1payment of postretirement benefit adjustments, discharge of any deficiency in the assets
2.2of the fund when compared to the actuarially determined required reserves, and other
2.3applicable operations and procedures regarding the Minnesota postretirement investment
2.4fund in effect on June 30, 1997, established under Minnesota Statutes 1996, section
2.511A.18, and any legal or administrative interpretations of those laws of the State Board
2.6of Investment, the legal advisor to the Board of Investment and the executive director of
2.7the State Board of Investment in effect on June 30, 1997. If a deferred yield adjustment
2.8account is established for the Minnesota postretirement investment fund before June 30,
2.91997, under Minnesota Statutes 1996, section 11A.18, subdivision 5, the retirement board
2.10shall also establish and maintain a deferred yield adjustment account within this fund.
2.11    (c) There is hereby established a deferred yield adjustment account which must be
2.12increased by the sale or disposition of any debt securities at less than book value and must
2.13be decreased by the sale or disposition of debt securities at more than book value. At the
2.14end of each fiscal year, a portion of the balance of this account must be offset against the
2.15investment income for that year. The annual portion of the balance to be offset must be
2.16proportional to the reciprocal of the average remaining life of the bonds sold, unless the
2.17amounts are offset by gains on the future sales of these securities. The amount of this
2.18account must be included in the recognized value of assets other than corporate stocks
2.19and all other equity investments. In any fiscal year in which the gains on the sales of debt
2.20securities exceed the discounts realized on the sales of such securities, the excess must
2.21be used to reduce the balance of the account. If the realized capital gains are sufficient
2.22to reduce the balance of the account to zero, any excess gains must be available for the
2.23calculation of postretirement adjustments.
2.24    (d) (1) Annually, following June 30, the board shall use the procedures in clauses
2.25(2), (3), and (4) to determine whether a postretirement adjustment is payable and to
2.26determine the amount of any postretirement adjustment.
2.27    (2) If the Consumer Price Index for urban wage earners and clerical workers all
2.28items index published by the Bureau of Labor Statistics of the United States Department
2.29of Labor increases from June 30 of the preceding year to June 30 of the current year, the
2.30board shall certify the percentage increase. The amount certified must not exceed the
2.31lesser of the difference between the preretirement interest assumption and postretirement
2.32interest assumption in section 356.215, subdivision 8, paragraph (a), or 3.5 percent.
2.33    (3) In addition to any percentage increase certified under paragraph (b), the board
2.34shall use the following procedures to determine if a postretirement adjustment is payable
2.35under this paragraph:
3.1    (i) The state board shall determine the market value of the fund on June 30 of that
3.2year;
3.3    (ii) The amount of reserves required as of the current June 30 for the annuity or
3.4benefit payable to an annuitant and benefit recipient must be determined by the actuary
3.5retained under section 356.214. An annuitant or benefit recipient who has been receiving
3.6an annuity or benefit for at least 12 full months as of the current June 30 is eligible to
3.7receive a full postretirement adjustment. An annuitant or benefit recipient who has been
3.8receiving an annuity or benefit for at least one full month, but less than 12 full months as of
3.9the current June 30, is eligible to receive a partial postretirement adjustment. The amount
3.10of the reserves for those annuitants and benefit recipients who are eligible to receive a
3.11full postretirement benefit adjustment is known as "eligible reserves." The amount of
3.12the reserves for those annuitants and benefit recipients who are not eligible to receive a
3.13postretirement adjustment is known as "noneligible reserves." For an annuitant or benefit
3.14recipient who is eligible to receive a partial postretirement adjustment, additional "eligible
3.15reserves" is an amount that bears the same ratio to the total reserves required for the
3.16annuitant or benefit recipient as the number of full months of annuity or benefit receipt as
3.17of the current June 30 bears to 12 full months. The remainder of the annuitant's or benefit
3.18recipient's reserves are "noneligible reserves";
3.19    (iii) The board shall determine the percentage increase certified under clause (2)
3.20multiplied by the eligible required reserves, as adjusted for mortality gains and losses,
3.21determined under subclause (ii);
3.22    (iv) The board shall add the amount of reserves required for the annuities or benefits
3.23payable to annuitants and benefit recipients of the participating public pension plans or
3.24funds as of the current June 30 to the amount determined under subclause (iii);
3.25    (v) The board shall subtract the amount determined under subclause (iv) from the
3.26market value of the fund determined under subclause (i);
3.27    (vi) The board shall adjust the amount determined under subclause (v) by the
3.28cumulative current balance determined under subclause (viii) and any negative balance
3.29carried forward under subclause (ix);
3.30    (vii) A positive amount resulting from the calculations in subclauses (i) to (vi) is the
3.31excess market value. A negative amount is the negative balance;
3.32    (viii) The board shall allocate one-fifth of the excess market value or one-fifth of
3.33the negative balance to each of five consecutive years, beginning with the fiscal year
3.34ending the current June 30; and
3.35    (ix) To calculate the postretirement adjustment under this paragraph based on
3.36investment performance for a fiscal year, the board shall add together all excess market
4.1value allocated to that year and subtract from the sum all negative balances allocated to
4.2that year. If this calculation results in a negative number, the entire negative balance must
4.3be carried forward and allocated to the next year. If the resulting amount is positive, a
4.4postretirement adjustment is payable under this paragraph. The board shall express a
4.5positive amount as a percentage of the total eligible required reserves certified to the
4.6board under subclause (ii).
4.7    (4) The board shall determine the amount of any postretirement adjustment which
4.8is payable using the following procedure:
4.9    (i) The total "eligible" required reserves as of the first of January next following the
4.10end of the fiscal year for the annuitants and benefit recipients eligible to receive a full or
4.11partial postretirement adjustment as determined by subclause (ii) must be certified to the
4.12board by the actuary retained under section 356.214. The total "eligible" required reserves
4.13must be determined by the actuary retained under section 356.214 on the assumption that
4.14all annuitants and benefit recipients eligible to receive a full or partial postretirement
4.15adjustment will be alive on the January 1 in question; and
4.16    (ii) The board shall add the percentage certified under clause (2) to any positive
4.17percentage calculated under clause (3). The board shall not subtract from the percentage
4.18certified under paragraph (b) any negative amount calculated under clause (3). The sum
4.19of these percentages must be carried to five decimal places and must be certified as the
4.20full postretirement adjustment percentage.
4.21    (e) The board shall determine the amount of the postretirement adjustment payable
4.22to each eligible annuitant and benefit recipient. The dollar amount of the postretirement
4.23adjustment must be calculated by applying the certified postretirement adjustment
4.24percentage to the amount of the monthly annuity or benefit payable to each eligible
4.25annuitant or benefit recipient eligible for a full adjustment.
4.26    The dollar amount of the partial postretirement adjustment payable to each annuitant
4.27or benefit recipient eligible for a partial adjustment must be calculated by first determining
4.28a partial percentage amount that bears the same ratio to the certified full adjustment
4.29percentage amount as the number of full months of annuity or benefit receipt as of the
4.30current June 30 bears to 12 full months. The partial percentage amount determined
4.31must then be applied to the amount of the monthly annuity or benefit payable to each
4.32annuitant or benefit recipient eligible to receive a partial postretirement adjustment. The
4.33postretirement adjustments are payable on January 1 following the calculations required
4.34under this section and must thereafter be included in the monthly annuity or benefit paid to
4.35the recipient. Any adjustments under this section must be paid automatically unless the
5.1intended recipient files a written notice with the applicable participating public pension
5.2fund or plan requesting that the adjustment not be paid.
5.3    (f) As of June 30 annually, the actuary retained under section 356.214 shall calculate
5.4the amount of required reserves representing any mortality gains and any mortality losses
5.5incurred during the fiscal year and report the results of those calculations to the plan.
5.6The actuary shall report separately the amount of the reserves for annuitants and benefit
5.7recipients who are eligible for a postretirement benefit adjustment and the amount of
5.8reserves for annuitants and benefit recipients who are not eligible for a postretirement
5.9benefit adjustment. If the net amount of required reserves represents a mortality gain,
5.10the board shall sell sufficient securities or transfer sufficient available cash to equal the
5.11amount. If the amount of required reserves represents a mortality loss, the plan shall
5.12transfer an amount equal to the amount of the net mortality loss. The amount of the
5.13transfers must be determined before any postretirement benefit adjustments have been
5.14made. All transfers resulting from mortality adjustments must be completed annually
5.15by December 31 for the preceding June 30. Interest is payable on any transfers after
5.16December 31 based upon the preretirement interest assumption for the participating plan
5.17or fund as specified in section 356.215, subdivision 8, stated as a monthly rate. Book
5.18values of the assets of the fund must be determined only after all adjustments for mortality
5.19gains and losses for the fiscal year have been made.
5.20    (g) All money necessary to meet the requirements of the certification of withdrawals
5.21and all money necessary to pay postretirement adjustments under this section are hereby
5.22and from time to time appropriated from the postretirement investment fund to the board.
5.23    (d) (h) Annually, following the calculation of any postretirement adjustment
5.24payable from the retirement benefit fund, the board of trustees shall submit a report to
5.25the executive director of the Legislative Commission on Pensions and Retirement and
5.26to the commissioner of finance indicating the amount of any postretirement adjustment
5.27and the underlying calculations on which that postretirement adjustment amount is based,
5.28including the amount of dividends, the amount of interest, and the amount of net realized
5.29capital gains or losses utilized in the calculations.
5.30    (e) (i) With respect to a former contributing member who began receiving a
5.31retirement annuity or disability benefit under section 422A.151, paragraph (a), clause (2),
5.32after June 30, 1997, or with respect to a survivor of a former contributing member who
5.33began receiving a survivor benefit under section 422A.151, paragraph (a), clause (2),
5.34after June 30, 1997, the reserves attributable to the one percent lower amount of the
5.35cost-of-living adjustment payable to those annuity or benefit recipients annually must
5.36be transferred back to the deposit accumulation fund to the credit of the Metropolitan
6.1Airports Commission. The calculation of this annual reduced cost-of-living adjustment
6.2reserve transfer must be reviewed by the actuary retained under section 356.214."
6.3Renumber the sections in sequence and correct the internal references
6.4Amend the title accordingly