S0427A2

� 1.1�� .......... moves to amend S. F. No. 427, the delete

� 1.2� everything amendment, as follows:

� 1.3�� Page 167, after line 11, insert:

� 1.4�� "Sec. 3.� Minnesota Statutes 2004, section 69.77,

� 1.5� subdivision 4, is amended to read:

� 1.6�� Subd. 4.� RELIEF ASSOCIATION FINANCIAL REQUIREMENTS;

� 1.7� MINIMUM MUNICIPAL OBLIGATION. (a) The officers of the relief

� 1.8� association shall determine the financial requirements of the

� 1.9� relief association and minimum obligation of the municipality

� 1.10 for the following calendar year in accordance with the

� 1.11 requirements of this subdivision.� The financial requirements of

� 1.12 the relief association and the minimum obligation of the

� 1.13 municipality must be determined on or before the submission date

� 1.14 established by the municipality under subdivision 5.

� 1.15�� (b) The financial requirements of the relief association

� 1.16 for the following calendar year must be based on the most recent

� 1.17 actuarial valuation or survey of the special fund of the

� 1.18 association if more than one fund is maintained by the

� 1.19 association, or of the association, if only one fund is

� 1.20 maintained, prepared in accordance with sections 356.215,

� 1.21 subdivisions 4 to 15, and 356.216, as required under subdivision

� 1.22 10.� If an actuarial estimate is prepared by the actuary of the

� 1.23 relief association as part of obtaining a modification of the

� 1.24 benefit plan of the relief association and the modification is

� 2.1� implemented, the actuarial estimate must be used in calculating

� 2.2� the subsequent financial requirements of the relief association.

� 2.3�� (c) If the relief association has an unfunded actuarial

� 2.4� accrued liability as reported in the most recent actuarial

� 2.5� valuation or survey, the total of the amounts calculated under

� 2.6� clauses (1), (2), and (3), constitute the financial requirements

� 2.7� of the relief association for the following year.� If the relief

� 2.8� association does not have an unfunded actuarial accrued

� 2.9� liability as reported in the most recent actuarial valuation or

� 2.10 survey, the amount calculated under clauses (1) and (2)

� 2.11 constitute the financial requirements of the relief association

� 2.12 for the following year.� The financial requirement elements are:

� 2.13�� (1) the normal level cost requirement for the following

� 2.14 year, expressed as a dollar amount, which must be determined by

� 2.15 applying the normal level cost of the relief association as

� 2.16 reported in the actuarial valuation or survey and expressed as a

� 2.17 percentage of covered payroll to the estimated covered payroll

� 2.18 of the active membership of the relief association, including

� 2.19 any projected change in the active membership, for the following

� 2.20 year;

� 2.21�� (2) for the Bloomington Fire Department Relief Association,

� 2.22 the Fairmont Police Relief Association, and the Virginia Fire

� 2.23 Department Relief Association, to the dollar amount of normal

� 2.24 cost determined under clause (1) must be added an amount equal

� 2.25 to the dollar amount of the administrative expenses of the

� 2.26 special fund of the association if more than one fund is

� 2.27 maintained by the association, or of the association if only one

� 2.28 fund is maintained, for the most recent year, multiplied by the

� 2.29 factor of 1.035.� The administrative expenses are those

� 2.30 authorized under section 69.80.� No amount of administrative

� 2.31 expenses under this clause are to be included in the financial

� 2.32 requirements of the Minneapolis Firefighters Relief Association

� 2.33 or the Minneapolis Police Relief Association; and

� 2.34�� (3) to the dollar amount of normal cost and expenses

� 2.35 determined under clauses (1) and (2) must be added an amount

� 2.36 equal to the level annual dollar amount which is sufficient to

� 3.1� amortize the unfunded actuarial accrued liability by December

� 3.2� 31, 2010, for the Bloomington Fire Department Relief

� 3.3� Association, the Fairmont Police Relief Association, the

� 3.4� Minneapolis Firefighters Relief Association, and the Virginia

� 3.5� Fire Department Relief Association, and by December 31, 2020,

� 3.6� for the Minneapolis Police Relief Association, as determined

� 3.7� from the actuarial valuation or survey of the fund, using an

� 3.8� interest assumption set at the applicable rate specified in

� 3.9� section 356.215, subdivision 8.� The amortization date specified

� 3.10 in this clause applies to all local police or salaried

� 3.11 firefighters' relief associations and that date supersedes any

� 3.12 amortization date specified in any applicable special law.

� 3.13�� (d) The minimum obligation of the municipality is an amount

� 3.14 equal to the financial requirements of the relief association

� 3.15 reduced by the estimated amount of member contributions from

� 3.16 covered salary anticipated for the following calendar year and

� 3.17 the estimated amounts anticipated for the following calendar

� 3.18 year from the applicable state aid program established under

� 3.19 sections 69.011 to 69.051 receivable by the relief association

� 3.20 after any allocation made under section 69.031, subdivision 5,

� 3.21 paragraph (b), clause (2), or 423A.01, subdivision 2, clause

� 3.22 (6), from the local police and salaried firefighters' relief

� 3.23 association amortization aid program established under section

� 3.24 423A.02, subdivision 1, from the supplementary amortization

� 3.25 state‑aid program established under section 423A.02, subdivision

� 3.26 1a, and from the additional amortization state aid under section

� 3.27 423A.02, subdivision 1b.

� 3.28�� Sec. 4.� Minnesota Statutes 2004, section 356.216, is

� 3.29 amended to read:

� 3.30�� 356.216 CONTENTS OF ACTUARIAL VALUATIONS FOR LOCAL POLICE

� 3.31 AND FIRE FUNDS.

� 3.32�� (a) The provisions of section 356.215 that govern the

� 3.33 contents of actuarial valuations must apply to any local police

� 3.34 or fire pension fund or relief association required to make an

� 3.35 actuarial report under this section, except as follows:

� 3.36�� (1) in calculating normal cost and other requirements, if

� 4.1� required to be expressed as a level percentage of covered

� 4.2� payroll, the salaries used in computing covered payroll must be

� 4.3� the maximum rate of salary on which retirement and survivorship

� 4.4� credits and amounts of benefits are determined and from which

� 4.5� any member contributions are calculated and deducted;

� 4.6�� (2) in lieu of the amortization date specified in section

� 4.7� 356.215, subdivision 11, the appropriate amortization target

� 4.8� date specified in section 69.77, subdivision 4, or 69.773,

� 4.9� subdivision 4, clause (c), must be used in calculating any

� 4.10 required amortization contribution except that the amortization

� 4.11 date for the Minneapolis Police Relief Association is December

� 4.12 31, 2020;

� 4.13�� (3) in addition to the tabulation of active members and

� 4.14 annuitants provided for in section 356.215, subdivision 13, the

��4.15 member contributions for active members for the calendar year

� 4.16 and the prospective annual retirement annuities under the

� 4.17 benefit plan for active members must be reported;

� 4.18�� (4) actuarial valuations required under section 69.773,

� 4.19 subdivision 2, must be made at least every four years and

� 4.20 actuarial valuations required under section 69.77 shall be made

� 4.21 annually;

� 4.22�� (5) the actuarial balance sheet showing accrued assets

� 4.23 valued at market value if the actuarial valuation is required to

� 4.24 be prepared at least every four years or valued as current

� 4.25 assets under section 356.215, subdivision 1, clause (6), or

� 4.26 paragraph (b), whichever applies, if the actuarial valuation is

� 4.27 required to be prepared annually, actuarial accrued liabilities,

� 4.28 and the unfunded actuarial accrued liability must include the

� 4.29 following required reserves:

� 4.30�� (i) For active members

� 4.31�� 1.� Retirement benefits

� 4.32�� 2.� Disability benefits

� 4.33�� 3.� Refund liability due to death or withdrawal

� 4.34�� 4.� Survivors' benefits

� 4.35�� (ii) For deferred annuitants' benefits

� 4.36�� (iii) For former members without vested rights

� 5.1�� (iv) For annuitants

� 5.2�� 1.� Retirement annuities

� 5.3�� 2.� Disability annuities

� 5.4�� 3.� Surviving spouses' annuities

� 5.5�� 4.� Surviving children's annuities

� 5.6�� In addition to those required reserves, separate items must

� 5.7� be shown for additional benefits, if any, which may not be

� 5.8� appropriately included in the reserves listed above; and

� 5.9�� (6) actuarial valuations are due by the first day of the

� 5.10 seventh month after the end of the fiscal year which the

� 5.11 actuarial valuation covers.

� 5.12�� (b) For the Minneapolis Firefighters Relief Association or

� 5.13 the Minneapolis Police Relief Association, the following

� 5.14 provisions additionally apply:

� 5.15�� (1) in calculating the actuarial balance sheet, unfunded

� 5.16 actuarial accrued liability, and amortization contribution of

� 5.17 the relief association, "current assets" means the value of all

� 5.18 assets at cost, including realized capital gains and losses,

� 5.19 plus or minus, whichever applies, the average value of total

� 5.20 unrealized capital gains or losses for the most recent

� 5.21 three‑year period ending with the end of the plan year

� 5.22 immediately preceding the actuarial valuation report

� 5.23 transmission date; and

� 5.24�� (2) in calculating the applicable portions of the actuarial

� 5.25 valuation, an annual preretirement interest assumption of six

� 5.26 percent, an annual postretirement interest assumption of six

� 5.27 percent, and an annual salary increase assumption of four

� 5.28 percent must be used.

� 5.29�� Sec. 5.� Minnesota Statutes 2004, section 423B.01,

� 5.30 subdivision 12, is amended to read:

� 5.31�� Subd. 12.� EXCESS INVESTMENT INCOME. "Excess investment

� 5.32 income" means the amount, if any, by which the average time

� 5.33 weighted total rate of return earned by the fund in the most

� 5.34 recent prior ~~five~~ two fiscal years has exceeded the actual

� 5.35 average percentage increase in the current monthly salary of a

� 5.36 first grade patrol officer in the most recent prior ~~five~~ two

� 6.1� fiscal years plus two percent, and must be expressed as a dollar

� 6.2� amount.� The amount may not exceed one percent of the total

� 6.3 �assets of the fund, except when the actuarial value of assets of

� 6.4� the fund according to the most recent annual actuarial valuation

� 6.5� prepared in accordance with sections 356.215 and 356.216 is

� 6.6� greater than 102 percent of its actuarial accrued liabilities,

� 6.7� in which case the amount must not exceed 1‑1/2 percent of the

� 6.8� total assets of the fund, and does not exist unless the yearly

� 6.9� average percentage increase of the time weighted total rate of

� 6.10 return of the fund for the previous ~~five~~ two years exceeds by

� 6.11 two percent the yearly average percentage increase in monthly

� 6.12 salary of a first grade patrol officer during the previous ~~five~~

� 6.13 two calendar years.

� 6.14�� Sec. 6.� Minnesota Statutes 2004, section 423B.09,

� 6.15 subdivision 1, is amended to read:

� 6.16�� Subdivision 1.� MINNEAPOLIS POLICE; PERSONS ENTITLED TO

� 6.17 RECEIVE PENSIONS. The association shall grant pensions payable

� 6.18 from the police pension fund in monthly installments to persons

� 6.19 entitled to pensions in the manner and for the following

� 6.20 purposes.

� 6.21�� (a) ~~When the actuarial value of assets of the fund~~

� 6.22 ~~according to the most recent annual actuarial valuation~~

� 6.23 ~~performed in accordance with sections 356.215 and 356.216 is~~

� 6.24 ~~less than 90 percent of the actuarial accrued liabilities, an~~

� 6.25 ~~active member or a deferred pensioner who has performed duty as~~

� 6.26 ~~a member of the police department of the city for five years or~~

� 6.27 ~~more, upon written application after retiring from duty and~~

� 6.28 ~~reaching at least age 50, is entitled to be paid monthly for~~

� 6.29 ~~life a service pension equal to eight units.� For full years of~~

� 6.30 ~~service beyond five years, the service pension increases by 1.6~~

� 6.31 ~~units for each full year, to a maximum of 40 units.� When the~~

� 6.32 ~~actuarial value of assets of the fund according to the most~~

� 6.33 ~~recent annual actuarial valuation prepared in accordance with~~

� 6.34 ~~sections 356.215 and 356.216 is greater than 90 percent of~~

� 6.35 ~~actuarial accrued liabilities,~~ Active members, deferred members,

� 6.36 and service pensioners are entitled to a service pension

� 7.1� according to the following schedule:

� 7.2�� 5 years�� 8.0 units

� 7.3�� 6 years�� 9.6 units

� 7.4�� 7 years�� 11.2 units

� 7.5�� 8 years�� 12.8 units

� 7.6�� 9 years�� 14.4 units

� 7.7�� 10 years�� 16.0 units

� 7.8�� 11 years�� 17.6 units

� 7.9�� 12 years�� 19.2 units

� 7.10�� 13 years�� 20.8 units

� 7.11�� 14 years�� 22.4 units

� 7.12�� 15 years�� 24.0 units

� 7.13�� 16 years�� 25.6 units

� 7.14�� 17 years�� 27.2 units

� 7.15�� 18 years�� 28.8 units

� 7.16�� 19 years�� 30.4 units

� 7.17�� 20 years�� ~~34.0~~ 35.0 units

� 7.18�� 21 years�� ~~35.6~~ 36.6 units

� 7.19�� 22 years�� ~~37.2~~ 38.2 units

� 7.20�� 23 years�� ~~38.8~~ 39.8 units

� 7.21�� 24 years�� ~~40.4~~ 41.4 units

� 7.22�� 25 years�� ~~42.0~~ 43.0 units

� 7.23�� Fractional years of service may not be used in computing

� 7.24 pensions.

� 7.25�� (b) An active member who after five years' service but less

� 7.26 than 20 years' service with the police department of the city,

� 7.27 becomes superannuated so as to be permanently unable to perform

� 7.28 the person's assigned duties, is entitled to be paid monthly for

� 7.29 life a superannuation pension equal to four units for five years

� 7.30 of service and an additional two units for each full year of

� 7.31 service over five years and less than 20 years.

� 7.32�� (c) An active member who is not eligible for a service

� 7.33 pension and who, while a member of the police department of the

� 7.34 city, becomes diseased or sustains an injury while in the

� 7.35 service that permanently unfits the member for the performance

� 7.36 of police duties is entitled to be paid monthly for life a

� 8.1� pension equal to 34 units while so disabled.

� 8.2�� Sec. 7.� Minnesota Statutes 2004, section 423B.09, is

� 8.3� amended by adding a subdivision to read:

� 8.4�� Subd. 7.� ADDITIONAL UNIT. The additional unit provided

� 8.5� to members by subdivision 1 must also be provided to members who

� 8.6� selected a joint annuity option under subdivision 6 and must be

� 8.7� in an amount that is actuarially equivalent to the service

� 8.8� pension and the automatic survivor coverage for that additional

� 8.9� unit.

� 8.10�� Sec. 8.� Minnesota Statutes 2004, section 423B.10,

� 8.11 subdivision 1, is amended to read:

� 8.12�� Subdivision 1.� ENTITLEMENT; BENEFIT AMOUNT. (a) The

� 8.13 surviving spouse of a deceased service pensioner, disability

� 8.14 pensioner, deferred pensioner, superannuation pensioner, or

� 8.15 active member, who was the legally married spouse of the

� 8.16 decedent, residing with the decedent, and who was married while

� 8.17 or before the time the decedent was on the payroll of the police

� 8.18 department, and who, if the deceased member was a service or

� 8.19 deferred pensioner, was legally married to the member for a

� 8.20 period of at least one year before retirement from the police

� 8.21 department, is entitled to a surviving spouse benefit.� The

� 8.22 surviving spouse benefit is equal to 22 23 units per month if

� 8.23 the person is the surviving spouse of a deceased active member

� 8.24 or disabilitant.� The surviving spouse benefit is equal to six

� 8.25 units per month, plus an additional one unit for each year of

� 8.26 service to the credit of the decedent in excess of five years,

� 8.27 to a maximum of 22 23 units per month, if the person is the

� 8.28 surviving spouse of a deceased service pensioner, deferred

� 8.29 pensioner, or superannuation pensioner.� The surviving spouse

� 8.30 benefit is payable for the life of the surviving spouse.

� 8.31�� (b) A surviving child of a deceased service pensioner,

� 8.32 disability pensioner, deferred pensioner, superannuation

� 8.33 pensioner, or active member, who was living while the decedent

� 8.34 was an active member of the police department or was born within

� 8.35 nine months after the decedent terminated active service in the

� 8.36 police department, is entitled to a surviving child benefit.�

� 9.1� The surviving child benefit is equal to eight units per month if

� 9.2� the person is the surviving child of a deceased active member or

� 9.3� disabilitant.� The surviving child benefit is equal to two units

� 9.4� per month, plus an additional four‑tenths of one unit per month

� 9.5� for each year of service to the credit of the decedent in excess

� 9.6� of five years, to a maximum of eight units, if the person is the

� 9.7� surviving child of a deceased service pensioner, deferred

� 9.8� pensioner, or superannuation pensioner.� The surviving child

� 9.9� benefit is payable until the person attains age 18, or, if in

� 9.10 full‑time attendance during the normal school year, in a school

� 9.11 approved by the board of directors, until the person receives a

� 9.12 bachelor's degree or attains the age of 22 years, whichever

� 9.13 occurs first.� In the event of the death of both parents leaving

� 9.14 a surviving child or children entitled to a surviving child

� 9.15 benefit as determined in this paragraph, the surviving child is,

� 9.16 or the surviving children are, entitled to a surviving child

� 9.17 benefit in such sums as determined by the board of directors to

� 9.18 be necessary for the care and education of such surviving child

� 9.19 or children, but not to exceed the family maximum benefit per

� 9.20 month, to the children of any one family.�

� 9.21�� (c) The surviving spouse and surviving child benefits are

� 9.22 subject to a family maximum benefit.� The family maximum benefit

� 9.23 is 41 units per month.

� 9.24�� (d) A surviving spouse who is otherwise not qualified may

� 9.25 receive a benefit if the surviving spouse was married to the

� 9.26 decedent for a period of five years and was residing with the

� 9.27 decedent at the time of death.� The surviving spouse benefit is

� 9.28 the same as that provided in paragraph (a), except that if the

� 9.29 surviving spouse is younger than the decedent, the surviving

� 9.30 spouse benefit must be actuarially equivalent to a surviving

� 9.31 spouse benefit that would have been paid to the member's spouse

� 9.32 had the member been married to a person of the same age or a

� 9.33 greater age than the member's age before retirement.

� 9.34�� Sec. 9.� Minnesota Statutes 2004, section 423B.15,

� 9.35 subdivision 3, is amended to read:

� 9.36�� Subd. 3.� AMOUNT OF ANNUAL POSTRETIREMENT PAYMENT. The

�10.1� amount determined under subdivision 2 must be applied in

�10.2� accordance with this subdivision.� When the actuarial value of

�10.3� assets of the fund according to the most recent annual actuarial

�10.4� valuation prepared in accordance with sections 356.215 and

�10.5� 356.216 is less than 102 percent of its total actuarial

�10.6� liabilities, the relief association shall apply the first

�10.7� one‑half of excess investment income to the payment of an annual

�10.8� postretirement payment as specified in this subdivision and the

�10.9� second one‑half of excess investment income up to one‑half of

�10.10 one percent of the assets of the fund must be applied to reduce

�10.11 the state amortization state aid or supplementary amortization

�10.12 state aid payments otherwise due to the relief association under

�10.13 section 423A.02 for the current calendar year.� When the

�10.14 actuarial value of assets of the fund according to the most

�10.15 recent annual actuarial valuation prepared in accordance with

�10.16 sections 356.215 and 356.216 is less than 102 percent funded and

�10.17 other conditions are met, the relief association shall pay an

�10.18 annual postretirement payment to all eligible members in an

�10.19 amount not to exceed one‑half of one percent of the assets of

�10.20 the fund.� When the actuarial value of assets of the fund

�10.21 according to the most recent annual actuarial valuation prepared

�10.22 in accordance with sections 356.215 and 356.216 is greater than

�10.23 102 percent of its actuarial accrued liabilities, the relief

�10.24 association shall pay an annual postretirement payment to all

�10.25 eligible members in an amount not to exceed 1‑1/2 percent of the

�10.26 assets of the fund.� Payment of the annual postretirement

�10.27 payment must be in a lump sum amount on June 1 following the

�10.28 determination date in any year.� Payment of the annual

�10.29 postretirement payment may be made only if the average time

�10.30 weighted total rate of return for the most recent prior ~~five~~ two

�10.31 years exceeds by two percent the actual average percentage

�10.32 increase in the current monthly salary of a top grade patrol

�10.33 officer in the most recent prior ~~five~~ two fiscal years.� The

�10.34 total amount of all payments to members may not exceed the

�10.35 amount determined under this subdivision.� Payment to each

�10.36 eligible member must be calculated by dividing the total number

�11.1� of pension units to which eligible members are entitled into the

�11.2� excess investment income available for distribution to members,

�11.3� and then multiplying that result by the number of units to which

�11.4� each eligible member is entitled to determine each eligible

�11.5� member's annual postretirement payment.� When the actuarial

�11.6� value of assets of the fund according to the most recent annual

�11.7� actuarial valuation prepared in accordance with sections 356.215

�11.8� and 356.216 is less than 102 percent of its actuarial accrued

�11.9� liabilities, payment to each eligible member may not exceed an

�11.10 amount equal to the total monthly benefit that the eligible

�11.11 member was entitled to in the prior year under the terms of the

�11.12 benefit plan of the relief association or each eligible member's

�11.13 proportionate share of the excess investment income, whichever

�11.14 is less.� When the actuarial value of assets of the fund

�11.15 according to the most recent annual actuarial valuation prepared

�11.16 in accordance with sections 356.215 and 356.216 is greater than

�11.17 102 percent of its actuarial accrued liabilities, payment to

�11.18 each eligible member must not exceed the member's proportionate

�11.19 share of 1‑1/2 percent of the assets of the fund.

�11.20�� A person who received a pension or benefit for the entire

�11.21 12 months before the determination date is eligible for a full

�11.22 annual postretirement payment.� A person who received a pension

�11.23 or benefit for less than 12 months before the determination date

�11.24 is eligible for a prorated annual postretirement payment.

�11.25�� Sec. 10.� NO REDUCTION OF BENEFITS.

�11.26�� Once a pension benefit is properly paid in accordance with

�11.27 the laws governing the Minneapolis Police Relief Association to

�11.28 any member, the dollar amount of the pension a member received

�11.29 shall not be reduced if the city of Minneapolis and the

�11.30 collective bargaining agent representing active police officers

�11.31 enter into or are required to abide by an agreement that would

�11.32 otherwise require the association to reduce the dollar amount of

�11.33 a pension that had properly been paid to any member."

�11.34�� Page 170, after line 4, insert:

�11.35�� "(b) Sections 3 to 10 are not severable and are effective

�11.36 on the day after the date of the approval by the city council of

�12.1� the city of Minneapolis and the timely completion by the chief

�12.2� clerical officer of the city of Minneapolis of compliance with

�12.3� Minnesota Statutes, section 645.021, subdivisions 2 and 3."

�12.4�� Re‑letter subsequent paragraphs in article 13, section 6,

�12.5� and change internal cross‑references in that section

�12.6�� Renumber the sections in sequence

�12.7�� Correct internal references

�12.8�� Amend the title accordingly