1.1.................... moves to amend S.F. No. 2620; H.F. No. 3053, as follows:
1.2Delete everything after the enacting clause and insert:


1.6    Section 1. Minnesota Statutes 2016, section 3A.02, subdivision 4, is amended to read:
1.7    Subd. 4. Deferred annuities augmentation. (a) The deferred retirement allowance of
1.8any former legislator must be augmented as provided herein.
1.9    (b) The required reserves applicable to the deferred retirement allowance, determined
1.10as of the date the benefit begins to accrue using an appropriate mortality table and an interest
1.11assumption of six percent, must be augmented from the first of the month following the
1.12termination of active service, or July 1, 1973, whichever is later, to the first day of the month
1.13in which the allowance begins to accrue effective date of retirement, at the following annually
1.14compounded rate or rates, compounded annually:
1.15(1) five percent until January 1, 1981;
1.16(2) three percent from January 1, 1981, or from the first day of the month following the
1.17termination of active service, whichever is later, until January 1 of the year in which the
1.18former legislator attains age 55 or until January 1, 2012, whichever is earlier;
1.19(3) five percent from the period end date under clause (2) until the effective date of
1.20retirement or until January 1, 2012, whichever is earlier; and
1.21(4) two percent after December 31, 2011. from January 1, 2012, until December 31,
1.222018; and
1.23(5) after December 31, 2018, the deferred annuity must not be augmented.

1.24    Sec. 2. Minnesota Statutes 2016, section 352.116, subdivision 1a, is amended to read:
1.25    Subd. 1a. Actuarial reduction for early retirement. (a) This subdivision applies to a
1.26person who has become at least 55 years old and first became a covered employee after
1.27June 30, 1989, and to any other covered employee who has become at least 55 years old
1.28and whose annuity is higher when calculated under section 352.115, subdivision 3, paragraph
1.29(b), in conjunction with this subdivision than when calculated under section 352.115,
1.30subdivision 3 , paragraph (a), in conjunction with subdivision 1. A covered employee who
1.31retires before the normal retirement age shall be paid the normal retirement annuity provided
2.1in section 352.115, subdivisions 2 and 3, paragraph (b), reduced so that as described in
2.2paragraph (b) or (c), as applicable.
2.3(b) For covered employees who retire on or after July 1, 2019, the reduced annuity is
2.4the actuarial equivalent of the annuity that would be payable to the employee if the employee
2.5deferred receipt of the annuity until normal retirement age and the annuity amount were
2.6augmented at an the applicable annual rate of three percent, compounded annually, from
2.7the day the annuity begins to accrue until the normal retirement age. The applicable annual
2.8rate is the rate in effect on the employee's effective date of retirement and shall be considered
2.9as fixed for the employee for the period until the employee reaches normal retirement age.
2.10The applicable annual rates are the following:
2.11(1) until June 30, 2019, three percent if the employee became an employee before July
2.121, 2006, and 2.5 percent if the employee became an employee after June 30, 2006;
2.13(2) beginning July 1, 2019, through June 30, 2024, a rate that changes each month, on
2.14the first day of the month, starting with the rate in clause (1), as applicable to the employee,
2.15and reducing the rate to zero in equal monthly increments over the five-year period; and
2.16(3) after June 30, 2024, zero percent.
2.17After June 30, 2024, actuarial equivalent, for the purpose of determining the reduced
2.18annuity commencing before normal retirement age under this clause, shall not take into
2.19account any augmentation.
2.20(c) For covered employees who retire before July 1, 2019, the reduced annuity is the
2.21actuarial equivalent of the annuity that would be payable to the employee if the employee
2.22deferred receipt of the annuity until normal retirement age and the annuity amount were
2.23augmented at an annual rate of three percent, compounded annually, from the day the annuity
2.24begins to accrue until normal retirement age if the employee became an employee before
2.25July 1, 2006, and at an annual rate of 2.5 percent, compounded annually, from the day the
2.26annuity begins to accrue until the normal retirement age if the employee initially becomes
2.27became an employee after June 30, 2006.

2.28    Sec. 3. Minnesota Statutes 2016, section 352.22, subdivision 2, is amended to read:
2.29    Subd. 2. Amount of refund. Except as provided in subdivision 3, the refund payable
2.30to a person who ceased to be a state employee by reason of a termination of state service is
2.31an amount equal to employee accumulated contributions plus interest until the date on which
2.32the refund is paid, at the rate of following rates for the applicable period:
3.1(1) six percent per year compounded daily from the date that the contribution was made
3.2until June 30, 2011, or until the date on which the refund is paid, whichever is earlier, and
3.3at the rate of;
3.4(2) four percent per year compounded daily from the date that the contribution was made
3.5or from July 1, 2011, whichever is later, until the date on which the refund is paid. until
3.6June 30, 2018; and
3.7(3) three percent per year compounded daily from the date that the contribution was
3.8made or July 1, 2018, whichever is later.
3.9Included with the refund is any interest paid as part of repayment of a past refund, plus
3.10interest thereon from the date of repayment.

3.11    Sec. 4. Minnesota Statutes 2016, section 352.22, is amended by adding a subdivision to
3.12read:
3.13    Subd. 2b. Refund repayment. Any person who has received a refund from the state
3.14employees retirement plan, and who is a member of any of the retirement plans specified
3.15in section 356.311, paragraph (b), may repay the refund with interest to the state employees
3.16retirement plan. If a refund is repaid to the plan and more than one refund has been received
3.17from the plan, all refunds must be repaid. Repayment must be made as provided in section
3.18352.23, and under terms and conditions consistent with that section as agreed upon with
3.19the director.

3.20    Sec. 5. Minnesota Statutes 2016, section 352.22, subdivision 3, is amended to read:
3.21    Subd. 3. Deferred annuity. (a) An employee who has at least three years of allowable
3.22service if employed before July 1, 2010, or who has at least five years of allowable service
3.23if employed after June 30, 2010, when termination occurs may elect to leave the accumulated
3.24contributions in the fund and thereby be entitled to a deferred retirement annuity. The annuity
3.25must be computed under the law in effect when state service terminated, on the basis of the
3.26allowable service credited to the person before the termination of service.
3.27(b) An employee on layoff or on leave of absence without pay, except a leave of absence
3.28for health reasons, and who does not return to state service must have an annuity, deferred
3.29annuity, or other benefit to which the employee may become entitled computed under the
3.30law in effect on the employee's last working day.
3.31(c) No application for a deferred annuity may be made more than 60 days before the
3.32time the former employee reaches the required age for entitlement to the payment of the
4.1annuity. The deferred annuity begins to accrue no earlier than 60 days before the date the
4.2application is filed in the office of the system, but not (1) before the date on which the
4.3employee reaches the required age for entitlement to the annuity nor (2) before the day
4.4following the termination of state service in a position which is not covered by the retirement
4.5system.
4.6(d) Application for the accumulated contributions left on deposit with the fund may be
4.7made at any time following the date of the termination of service.
4.8(e) Deferred annuities must be augmented as provided in section 352.72, subdivision 2
4.9subdivision 3a.

4.10    Sec. 6. Minnesota Statutes 2016, section 352.22, is amended by adding a subdivision to
4.11read:
4.12    Subd. 3a. Computation of deferred annuity. (a) The deferred annuity of any former
4.13state employee must be augmented from the first day of the month following termination
4.14of active service or July 1, 1971, whichever is later, to the effective date of retirement.
4.15(b) For a person who became a state employee before July 1, 2006, the annuity must be
4.16augmented at the following rate or rates, compounded annually:
4.17(1) five percent until January 1, 1981;
4.18(2) three percent thereafter until January 1 of the year following the year in which the
4.19former employee attains age 55 or January 1, 2012, whichever is earlier;
4.20(3) five percent from the January 1 next following the attainment of age 55 until
4.21December 31, 2011;
4.22(4) two percent from January 1, 2012, until December 31, 2018; and
4.23(5) after December 31, 2018, the deferred annuity must not be augmented.
4.24(c) For a person who became a state employee after June 30, 2006, the annuity must be
4.25augmented at the following rate or rates, compounded annually:
4.26(1) 2.5 percent until December 31, 2011;
4.27(2) two percent from January 1, 2012, until December 31, 2018; and
4.28(3) after December 31, 2018, the deferred annuity must not be augmented.
4.29(d) The retirement annuity or disability benefit of, or the survivor benefit payable on
4.30behalf of, a former state employee who terminated service before July 1, 1997, which is not
4.31first payable until after June 30, 1997, must be increased on an actuarial equivalent basis
5.1to reflect the change in the postretirement interest rate actuarial assumption under section
5.2356.215, subdivision 8 , from five percent to six percent under a calculation procedure and
5.3the tables adopted by the board and approved by the actuary retained under section 356.214.

5.4    Sec. 7. Minnesota Statutes 2016, section 352B.08, is amended by adding a subdivision to
5.5read:
5.6    Subd. 2b. Computation of deferred annuity. (a) The deferred annuity of any former
5.7member must be augmented from the first day of the month following the termination of
5.8active service, or July 1, 1971, whichever is later, to the effective date of retirement.
5.9(b) For a person who became an employee before July 1, 2006, the annuity must be
5.10augmented at the following rate or rates, compounded annually:
5.11(1) five percent until January 1, 1981;
5.12(2) three percent from January 1, 1981, until December 31, 2011;
5.13(3) two percent from January 1, 2012, until December 31, 2018; and
5.14(4) after December 31, 2018, the deferred annuity must not be augmented.
5.15(c) For a person who became an employee after June 30, 2006, the annuity must be
5.16augmented at the following rate or rates, compounded annually:
5.17(1) 2.5 percent until December 31, 2011;
5.18(2) two percent from January 1, 2012, until December 31, 2018; and
5.19(3) after December 31, 2018, the deferred annuity must not be augmented.
5.20(d) The mortality table and interest assumption used to compute the annuity must be
5.21those in effect when the member files application for annuity.

5.22    Sec. 8. Minnesota Statutes 2016, section 352D.085, subdivision 1, is amended to read:
5.23    Subdivision 1. Combined service. Except as provided in section 356.30, 356.302, or
5.24356.303 , service under the unclassified program for during which the employee has been
5.25credited with employee shares contributed to the program under section 352D.04, subdivision
5.262, may be used for the limited purpose of qualifying for benefits under sections 352.115,
5.27352.72, subdivision 1 , 352.113, 354.44, 354.45, 354.48, and 354.60 356.311. The service
5.28also may not be used to qualify for a disability benefit under section 352.113 or 354.48 if
5.29a participant was under the unclassified program at the time of the disability. Also, the years
6.1of service and salary paid while the participant was in the unclassified program may not be
6.2used in determining the amount of benefits.

6.3    Sec. 9. Minnesota Statutes 2016, section 490.121, subdivision 25, is amended to read:
6.4    Subd. 25. Tier I. "Tier I" is the benefit program of the retirement plan with a membership
6.5specified by section 490.1221, paragraph (b), and governed by sections 356.415, subdivisions
6.61 and subdivision 1f; and 490.121 to 490.133, except as modified in sections 490.121,
6.7subdivision 21f , paragraph (b); 490.1222; 490.123, subdivision 1a, paragraph (b); and
6.8490.124, subdivision 1, paragraphs (c) and (d).

6.9    Sec. 10. Minnesota Statutes 2016, section 490.121, subdivision 26, is amended to read:
6.10    Subd. 26. Tier II. "Tier II" is the benefit program of the retirement plan with a
6.11membership specified by section 490.1221, paragraph (c), and governed by sections 356.415,
6.12subdivisions 1 and subdivision 1f; 490.121 to 490.133, as modified in section 490.121,
6.13subdivision 21f , paragraph (b); 490.1222; 490.123, subdivision 1a, paragraph (b); and
6.14490.124, subdivision 1 , paragraphs (c) and (d).

6.15    Sec. 11. REPEALER.
6.16Minnesota Statutes 2016, sections 3A.12; 352.045; 352.72; and 352B.30, are repealed.

6.17    Sec. 12. EFFECTIVE DATE.
6.18Sections 1 to 11 are effective June 30, 2018.


6.22    Section 1. Minnesota Statutes 2016, section 353.30, subdivision 5, is amended to read:
6.23    Subd. 5. Actuarial reduction for early retirement. (a) This subdivision applies to a
6.24member who has become at least 55 years old and first became a public employee after
6.25June 30, 1989, and to any other member who has become at least 55 years old and whose
6.26annuity is higher when calculated under section 353.29, subdivision 3, paragraph (b), in
6.27conjunction with this subdivision than when calculated under section 353.29, subdivision
6.283 , paragraph (a), in conjunction with subdivision 1, 1a, 1b, or 1c. An employee who retires
6.29before normal retirement age shall be paid the retirement annuity provided in section 353.29,
7.1subdivision 3 , paragraph (b), reduced so that as described in paragraph (b) or (c), as
7.2applicable.
7.3(b) For members who begin to receive an annuity on or after July 1, 2019, the reduced
7.4annuity is the actuarial equivalent of the annuity that would be payable to the employee if
7.5the employee deferred receipt of the annuity until normal retirement age and the annuity
7.6amount were augmented at an the applicable annual rate of three percent, compounded
7.7annually, from the day the annuity begins to accrue starting date until the normal retirement
7.8age. The applicable annual rate is the rate in effect on the employee's effective date of
7.9retirement and shall be considered as fixed for the employee for the period until the employee
7.10reaches normal retirement age. The applicable annual rates are the following:
7.11(1) until June 30, 2019, three percent if the employee became an employee before July
7.121, 2006, and 2.5 percent if the employee became an employee after June 30, 2006;
7.13(2) beginning July 1, 2019, through June 30, 2024, a rate that changes each month, on
7.14the first day of the month, starting with the rate in clause (1), as applicable to the employee,
7.15and reducing the rate to zero in equal monthly increments over the five-year period; and
7.16(3) after June 30, 2024, zero percent.
7.17After June 30, 2024, actuarial equivalent, for the purpose of determining the reduced
7.18annuity commencing before normal retirement age under this paragraph, shall not take into
7.19account any augmentation.
7.20(c) For members who begin to receive an annuity before July 1, 2019, the reduced annuity
7.21is the actuarial equivalent of the annuity that would be payable to the employee if the
7.22employee deferred receipt of the annuity until normal retirement age and the annuity amount
7.23were augmented at an annual rate of three percent, compounded annually, from the annuity
7.24starting date until normal retirement age if the employee became an employee before July
7.251, 2006, and at 2.5 percent, compounded annually, from the day the annuity begins to accrue
7.26starting date until the normal retirement age if the employee initially becomes became an
7.27employee after June 30, 2006.

7.28    Sec. 2. Minnesota Statutes 2016, section 353.34, subdivision 2, is amended to read:
7.29    Subd. 2. Refund with interest. (a) Except as provided in subdivision 1, any person who
7.30ceases to be a public employee member is entitled to receive a refund in an amount equal
7.31to accumulated deductions with annual compound interest to the first day of the month in
7.32which the refund is processed.
7.33(b) Annual compound interest rates on a refund under paragraph (a) shall be as follows:
8.1(1) for a person who ceases to be a public employee before July 1, 2011, the refund
8.2interest is at the rate of six percent to June 30, 2011,;
8.3(2) four percent after June 30, 2011, to June 30, 2018; and at the rate of four
8.4(3) three percent after June 30, 2011. 2018.
8.5for a person who ceases to be a public employee after July 1, 2011, the refund interest
8.6is at the rate of four percent.
8.7(c) If a person repays a refund and subsequently applies for another refund, the repayment
8.8amount, including interest, is added to the fiscal year balance in which the repayment was
8.9made.
8.10(d) If the refund payable to a member is based on employee deductions that are
8.11determined to be invalid under section 353.27, subdivision 7, the interest payable on the
8.12invalid employee deductions is four percent.

8.13    Sec. 3. Minnesota Statutes 2016, section 353.34, subdivision 3, is amended to read:
8.14    Subd. 3. Deferred annuity; eligibility; computation. (a) A member who is vested
8.15under section 353.01, subdivision 47, when termination of public service or termination of
8.16membership occurs has the option of leaving the accumulated deductions in the fund and
8.17being entitled to a deferred retirement annuity commencing at normal retirement age or to
8.18a deferred early retirement annuity under section 353.30, subdivision 1a, 1b, 1c, or 5.
8.19(b) The deferred annuity must be computed under section 353.29, subdivision 3, on the
8.20basis of the law in effect on the date of termination of public service or termination of
8.21membership, whichever is earlier, and must be augmented as provided in section 353.71,
8.22subdivision 2 paragraph (c).
8.23(c) The deferred annuity of any former member must be augmented from the first day
8.24of the month following the termination of active service, or July 1, 1971, whichever is later,
8.25to the effective date of retirement.
8.26(d) For a person who became a public employee before July 1, 2006, and who has a
8.27termination of public service before January 1, 2012, the deferred annuity must be augmented
8.28at the following rate or rates, compounded annually:
8.29(1) five percent until January 1, 1981;
8.30(2) three percent from January 1, 1981, until January 1 of the year following the year in
8.31which the former member attains age 55 or December 31, 2011, whichever is earlier;
9.1(3) five percent from January 1 of the year following the year in which the former member
9.2attains age 55, or December 31, 2011, whichever is earlier;
9.3(4) one percent from January 1, 2012, until December 31, 2018; and
9.4(5) after December 31, 2018, the deferred annuity must not be augmented.
9.5(e) For a person who became a public employee after June 30, 2006, and who has a
9.6termination of public service before January 1, 2012, the deferred annuity must be augmented
9.7at the following rate or rates, compounded annually:
9.8(1) 2.5 percent until December 31, 2011;
9.9(2) one percent from January 1, 2012, until December 31, 2018; and
9.10(3) after December 31, 2018, the deferred annuity must not be augmented.
9.11(f) For a person who has a termination of public service after December 31, 2011, the
9.12deferred annuity must not be augmented.
9.13(g) The retirement annuity or disability benefit of, or the survivor benefit payable on
9.14behalf of, a former member who terminated service before July 1, 1997, or the survivor
9.15benefit payable on behalf of a basic or police and fire member who was receiving disability
9.16benefits before July 1, 1997, which is first payable after June 30, 1997, must be increased
9.17on an actuarial equivalent basis to reflect the change in the postretirement interest rate
9.18actuarial assumption under section 356.215, subdivision 8, from five percent to six percent
9.19under a calculation procedure and tables adopted by the board and approved by the actuary
9.20retained under section 356.214.
9.21(c) (h) A former member qualified to apply for a deferred retirement annuity may revoke
9.22this option at any time before the commencement of deferred annuity payments by making
9.23application for a refund. The person is entitled to a refund of accumulated member
9.24contributions within 30 days following date of receipt of the application by the executive
9.25director.

9.26    Sec. 4. REPEALER.
9.27Minnesota Statutes 2016, sections 353.27, subdivision 3b; and 353.71, are repealed.

9.28    Sec. 5. EFFECTIVE DATE.
9.29(a) Section 1 is effective for annuities with an annuity starting date that is on or after
9.30July 1, 2019, notwithstanding the member's date of termination of public service.
10.1(b) Sections 2 to 4 are effective June 30, 2018.


10.5    Section 1. Minnesota Statutes 2016, section 354.44, subdivision 6, is amended to read:
10.6    Subd. 6. Computation of formula program retirement annuity. (a) The formula
10.7retirement annuity must be computed in accordance with the applicable provisions of the
10.8formulas stated in paragraph (b) or (d) on the basis of each member's average salary under
10.9section 354.05, subdivision 13a, for the period of the member's formula service credit.
10.10    (b) This paragraph, in conjunction with paragraph (c), applies to a person who first
10.11became a member of the association or a member of a pension fund listed in section 356.30,
10.12subdivision 3 , before July 1, 1989, unless paragraph (d), in conjunction with paragraph (e),
10.13produces a higher annuity amount, in which case paragraph (d) applies. The average salary
10.14as defined in section 354.05, subdivision 13a, multiplied by the following percentages per
10.15year of formula service credit shall determine the amount of the annuity to which the member
10.16qualifying therefor is entitled for service rendered before July 1, 2006:

10.17		Period		Coordinated Member		Basic Member
10.18 10.19		Each year of service during first ten		1.2 percent per year		2.2 percent per year
10.20 10.21		Each year of service thereafter		1.7 percent per year		2.7 percent per year

10.22    For service rendered on or after July 1, 2006, by a member other than a member who
10.23was a member of the former Duluth Teachers Retirement Fund Association between January
10.241, 2006, and June 30, 2015, and for service rendered on or after July 1, 2013, by a member
10.25who was a member of the former Duluth Teachers Retirement Fund Association between
10.26January 1, 2013, and June 30, 2015, the average salary as defined in section 354.05,
10.27subdivision 13a, multiplied by the following percentages per year of service credit, determines
10.28the amount the annuity to which the member qualifying therefor is entitled:

10.29		Period		Coordinated Member		Basic Member
10.30 10.31		Each year of service during first ten		1.4 percent per year		2.2 percent per year
10.32 10.33		Each year of service after ten years of service		1.9 percent per year		2.7 percent per year

10.34    (c)(i)(1) This paragraph applies only to a person who first became a member of the
10.35association or a member of a pension fund listed in section 356.30, subdivision 3, before
11.1July 1, 1989, and whose annuity is higher when calculated under paragraph (b), in conjunction
11.2with this paragraph than when calculated under paragraph (d), in conjunction with paragraph
11.3(e).
11.4    (ii) (2) Where any member retires prior to normal retirement age under a formula annuity,
11.5the member shall be paid a retirement annuity in an amount equal to the normal annuity
11.6provided in paragraph (b) reduced by one-quarter of one percent for each month that the
11.7member is under normal retirement age at the time of retirement except that for any member
11.8who has 30 or more years of allowable service credit, the reduction shall be applied only
11.9for each month that the member is under age 62.
11.10    (iii) (3) Any member whose attained age plus credited allowable service totals 90 years
11.11is entitled, upon application, to a retirement annuity in an amount equal to the normal annuity
11.12provided in paragraph (b), without any reduction by reason of early retirement.
11.13    (d) This paragraph applies to a member who has become at least 55 years old and first
11.14became a member of the association after June 30, 1989, and to any other member who has
11.15become at least 55 years old and whose annuity amount when calculated under this paragraph
11.16and in conjunction with paragraph (e), is higher than it is when calculated under paragraph
11.17(b), in conjunction with paragraph (c).
11.18    (1) For a basic member, the average salary, as defined in section 354.05, subdivision
11.1913a , multiplied by 2.7 percent for each year of service for a basic member determines the
11.20amount of the retirement annuity to which the basic member is entitled. The annuity of a
11.21basic member who was a member of the former Minneapolis Teachers Retirement Fund
11.22Association as of June 30, 2006, must be determined according to the annuity formula under
11.23the articles of incorporation of the former Minneapolis Teachers Retirement Fund Association
11.24in effect as of that date.
11.25    (2) For a coordinated member, the average salary, as defined in section 354.05,
11.26subdivision 13a, multiplied by 1.7 percent for each year of service rendered before July 1,
11.272006, and by 1.9 percent for each year of service rendered on or after July 1, 2006, for a
11.28member other than a member who was a member of the former Duluth Teachers Retirement
11.29Fund Association between January 1, 2006, and June 30, 2015, and by 1.9 percent for each
11.30year of service rendered on or after July 1, 2013, for a member of the former Duluth Teachers
11.31Retirement Fund Association between January 1, 2013, and June 30, 2015, determines the
11.32amount of the retirement annuity to which the coordinated member is entitled.
11.33    (e) This paragraph applies to a person member who has become at least 55 years old
11.34and first becomes a member of the association after June 30, 1989, and to any other member
12.1who has become at least 55 years old and whose annuity is higher when calculated under
12.2paragraph (d) in conjunction with this paragraph than when calculated under paragraph (b),
12.3in conjunction with paragraph (c). An employee who retires under the formula annuity
12.4before the normal retirement age shall be paid the normal annuity provided in paragraph
12.5(d) reduced so that the reduced annuity is the actuarial equivalent of the annuity that would
12.6be payable to the employee if the employee deferred receipt of the annuity and the annuity
12.7amount were augmented at an annual rate of three percent compounded annually from the
12.8day the annuity begins to accrue until the normal retirement age if the employee became
12.9an employee before July 1, 2006, and at 2.5 percent compounded annually if the employee
12.10becomes an employee after June 30, 2006. Except in regards to section 354.46, this paragraph
12.11remains in effect until June 30, 2015.
12.12(f) After Until June 30, 2020 2019, this paragraph applies to a person member who has
12.13become at least 55 years old and first becomes a member of the association after June 30,
12.141989, and to any other member who has become at least 55 years old and whose annuity is
12.15higher when calculated under paragraph (d) in conjunction with this paragraph than when
12.16calculated under paragraph (b) in conjunction with paragraph (c). An employee who retires
12.17under the formula annuity before the normal retirement age is entitled to receive the normal
12.18annuity provided in paragraph (d), reduced as described in clause (1) or (2), as applicable.
12.19(1) For a person member who is at least age 62 or older and has at least 30 years of
12.20service, the annuity must shall be reduced by an early reduction factor of six percent per
12.21for each year of the annuity that the member's age of retirement precedes normal retirement
12.22age. The resulting reduced annuity shall be further adjusted to take into account the increase
12.23in the monthly amount that would be payable to the employee if the employee have occurred
12.24had the member retired early and deferred receipt of the annuity until normal retirement
12.25age and the annuity amount were was augmented at an annual rate of three percent
12.26compounded annually from the day the annuity begins to accrue until the normal retirement
12.27age if the employee became an employee before July 1, 2006, and during the deferral period
12.28at 2.5 percent compounded annually, if the employee became an employee member
12.29commenced employment after June 30, 2006, or at three percent, if the member commenced
12.30employment before July 1, 2006, compounded annually.
12.31(2) For a person member who is has not at least attained age 62 or older and does not
12.32have at least or has fewer than 30 years of service, the annuity would shall be reduced for
12.33each year that the member's age of retirement precedes the normal retirement age by an the
12.34following early reduction factor of factors:
13.1(i) for the period during which the member is age 55 through age 59, the factor is four
13.2percent per year for ages 55 through 59; and
13.3(ii) for the period during which the member is age 60 but not yet normal retirement age,
13.4the factor is seven percent per year of the annuity that would be payable to the employee if
13.5the employee.
13.6The resulting reduced annuity shall be further adjusted to take into account the increase
13.7in the monthly amount that would have occurred had the member retired early and deferred
13.8receipt of the annuity until normal retirement age and the annuity amount were was
13.9augmented at an annual rate of three percent compounded annually from the day the annuity
13.10begins to accrue until the normal retirement age if the employee became an employee before
13.11July 1, 2006, and during the deferral period at 2.5 percent compounded annually, if the
13.12employee became an employee member commenced employment after June 30, 2006, or
13.13at three percent, if the member commenced employment before July 1, 2006, compounded
13.14annually.
13.15(g) For members who retire on or after July 1, 2019, this paragraph applies to a person
13.16who has become at least 55 years old and first becomes a member of the association after
13.17June 30, 1989, and to any other member who has become at least 55 years old and whose
13.18annuity is higher when calculated under paragraph (d) in conjunction with this paragraph
13.19than when calculated under paragraph (b) in conjunction with paragraph (c). An employee
13.20who retires under the formula annuity before the normal retirement age is entitled to receive
13.21the normal annuity provided in paragraph (d), reduced as described in clause (1) or (2), as
13.22applicable.
13.23(1) For a member who is at least age 62 and has at least 30 years of service, the annuity
13.24shall be reduced by an early reduction factor of six percent for each year that the member's
13.25age of retirement precedes the normal retirement age. The resulting reduced annuity shall
13.26be further adjusted to take into account the increase in the monthly amount that would have
13.27occurred had the member retired early and deferred receipt of the annuity until normal
13.28retirement age and the annuity was augmented during the deferral period at 2.5 percent, if
13.29the member commenced employment after June 30, 2006, or at three percent, if the member
13.30commenced employment before July 1, 2006, compounded annually.
13.31(2) For a member who has not attained age 62 or has fewer than 30 years of service, the
13.32annuity shall be reduced for each year that the member's age of retirement precedes normal
13.33retirement age by the following early reduction factors:
14.1(i) for the period during which the member is age 55 through age 59, the factor is four
14.2percent; and
14.3(ii) for the period during which the member is age 60 but not yet normal retirement age,
14.4the factor is seven percent.
14.5The resulting annuity shall be further adjusted to take into account the increase in the
14.6monthly amount that would have occurred had the member retired early and deferred receipt
14.7of the annuity until normal retirement age and the annuity was augmented during the deferral
14.8period at the applicable annual rate, compounded annually. The applicable annual rate is
14.9the rate in effect for the month that includes the member's effective date of retirement and
14.10shall be considered as fixed for the member for the period until the member reaches normal
14.11retirement age. The applicable annual rate for June 2019 is 2.5 percent, if the member
14.12commenced employment after June 30, 2006, or three percent, if the member commenced
14.13employment before July 1, 2006, compounded annually, and decreases each month beginning
14.14July 2019 in equal monthly increments over the five-year period that begins July 1, 2019,
14.15and ends June 30, 2024, to zero percent effective for July 2024 and thereafter.
14.16After June 30, 2024, the reduced annuity commencing before normal retirement age
14.17under this clause shall not take into account any augmentation.
14.18(h) After June 30, 2015, and before July 1, 2020 2019, for a person who would have a
14.19reduced retirement annuity under either paragraph (e) or (f) if they were applicable, the
14.20employee is entitled to receive a reduced annuity which must be calculated using a blended
14.21reduction factor augmented monthly by 1/60 of the difference between the reduction required
14.22under paragraph (e) and the reduction required under paragraph (f).
14.23    (h) (i) No retirement annuity is payable to a former employee with a salary that exceeds
14.2495 percent of the governor's salary unless and until the salary figures used in computing the
14.25highest five successive years average salary under paragraph (a) have been audited by the
14.26Teachers Retirement Association and determined by the executive director to comply with
14.27the requirements and limitations of section 354.05, subdivisions 35 and 35a.

14.28    Sec. 2. Minnesota Statutes 2016, section 354.49, subdivision 2, is amended to read:
14.29    Subd. 2. Calculation. (a) Except as provided in section 354.44, subdivision 1, any person
14.30who ceases to be a member by reason of termination of teaching service, is entitled to receive
14.31a refund in an amount equal to the accumulated deductions credited to the account plus
14.32interest compounded annually using the following interest rates:
14.33(1) before July 1, 1957, no interest accrues;
15.1(2) July 1, 1957, to June 30, 2011, six percent; and
15.2(3) after June 30 July 1, 2011, to June 30, 2018, four percent; and
15.3(4) after June 30, 2018, three percent.
15.4For the purpose of this subdivision, interest must be computed on fiscal year end balances
15.5to the first day of the month in which the refund is issued.
15.6(b) If the person has received permanent disability payments under section 354.48, the
15.7refund amount must be reduced by the amount of those payments.

15.8    Sec. 3. Minnesota Statutes 2016, section 354.55, subdivision 11, is amended to read:
15.9    Subd. 11. Deferred annuity; augmentation. (a) Any person covered under section
15.10354.44, subdivision 6 , who ceases to render teaching service, may leave the person's
15.11accumulated deductions in the fund for the purpose of receiving a deferred annuity at
15.12retirement.
15.13(b) The amount of the deferred retirement annuity is determined by section 354.44,
15.14subdivision 6 , and of any former member must be augmented as provided in this subdivision.
15.15The required reserves for the annuity which had accrued when the member ceased to render
15.16teaching service must be augmented, as further specified in this subdivision, by the applicable
15.17interest rate compounded annually from the first day of the month following the month
15.18during which the member ceased to render teaching termination of active service to the
15.19effective date of retirement.
15.20(c) No augmentation is not creditable if the deferral period is less than three months or
15.21if deferral commenced before July 1, 1971.
15.22(d) For persons who became covered employees before July 1, 2006, with a deferral
15.23period commencing after June 30, 1971, the annuity must be augmented as follows at the
15.24following rate or rates, compounded annually:
15.25(1) five percent interest compounded annually until January 1, 1981;
15.26(2) three percent interest compounded annually from January 1, 1981, until January 1
15.27of the year following the year in which the deferred annuitant attains age 55 or June 30,
15.282012, whichever is earlier;
15.29(3) five percent interest compounded annually from the date established in clause (2) to
15.30the effective date of retirement or until June 30, 2012, whichever is earlier; and
16.1(4) two percent interest compounded annually after June 30, 2012 from July 1, 2012,
16.2until June 30, 2019; and
16.3(5) after June 30, 2019, the deferred annuity must not be augmented.
16.4(e) For persons who become covered employees after June 30, 2006, the interest rate
16.5used to augment the deferred annuity is must be augmented at the following rate or rates,
16.6compounded annually:
16.7(1) 2.5 percent interest compounded annually until June 30, 2012, or until the effective
16.8date of retirement, whichever is earlier, and;
16.9(2) two percent interest compounded annually after June 30 from July 1, 2012, until
16.10June 30, 2019; and
16.11(3) after June 30, 2019, the deferred annuity must not be augmented.
16.12(f) If a person has more than one period of uninterrupted service, a separate average
16.13salary determined under section 354.44, subdivision 6, must be used for each period and
16.14the required reserves related to each period must be augmented as specified in this
16.15subdivision. The sum of the augmented required reserves is the present value of the annuity.
16.16For the purposes of this subdivision, "period of uninterrupted service" means a period of
16.17covered teaching service during which the member has not been separated from active
16.18service for more than one fiscal year.
16.19(g) If a person repays a refund, the service restored by the repayment must be considered
16.20as continuous with the next period of service for which the person has allowable service
16.21credit in the Teachers Retirement Association.
16.22(h) If a person does not render teaching service in any one fiscal year or more consecutive
16.23fiscal years and then resumes teaching service, the formula percentages used from the date
16.24of the resumption of teaching service must be those applicable to new members.
16.25(i) The mortality table and interest rate actuarial assumption used to compute the annuity
16.26must be the applicable mortality table established by the board under section 354.07,
16.27subdivision 1 , and the interest rate actuarial assumption under section 356.215 in effect
16.28when the member retires.
16.29(j) (f) In no case may the annuity payable under this subdivision be less than the amount
16.30of annuity payable under section 354.44, subdivision 6.
17.1(k) (g) The requirements and provisions for retirement before normal retirement age
17.2contained in section 354.44, subdivision 6, also apply to an employee fulfilling the
17.3requirements with a combination of service as provided in section 354.60 356.311.
17.4(l) (h) The augmentation provided by this subdivision applies to the benefit provided in
17.5section 354.46, subdivision 2.
17.6(m) (i) The augmentation provided by this subdivision does not apply to any period in
17.7which a person is on an approved leave of absence from an employer unit covered by the
17.8provisions of this chapter.
17.9(n) (j) The retirement annuity or disability benefit of, or the survivor benefit payable on
17.10behalf of, a former teacher who terminated service before July 1, 1997, which is not first
17.11payable until after June 30, 1997, must be increased on an actuarial equivalent basis to
17.12reflect the change in the postretirement interest rate actuarial assumption under section
17.13356.215, subdivision 8 , from five percent to six percent under a calculation procedure and
17.14tables adopted by the board as recommended by an approved actuary and approved by the
17.15actuary retained under section 356.214.

17.16    Sec. 4. REPEALER.
17.17Minnesota Statutes 2016, sections 354.42, subdivisions 4a, 4b, 4c, and 4d; and 354.60,
17.18are repealed.

17.19    Sec. 5. EFFECTIVE DATE.
17.20Sections 1 to 4 are effective June 30, 2018.


17.24    Section 1. Minnesota Statutes 2016, section 354A.011, subdivision 3a, is amended to read:
17.25    Subd. 3a. Actuarial equivalent. "Actuarial equivalent" means the condition of one
17.26annuity or benefit having an equal actuarial present value as another annuity or benefit,
17.27determined as of a given date with each actuarial present value based on the appropriate
17.28mortality table adopted by the appropriate board of trustees based on the experience of that
17.29retirement fund association as recommended by the actuary retained under section 356.214,
17.30and approved under section 356.215, subdivision 18, and using the applicable preretirement
18.1or postretirement interest rate investment return assumption specified in section 356.215,
18.2subdivision 8 .

18.3    Sec. 2. Minnesota Statutes 2016, section 354A.29, subdivision 7, is amended to read:
18.4    Subd. 7. Eligibility for payment of Postretirement adjustments. (a) Annually, after
18.5June 30, the board of trustees of the St. Paul Teachers Retirement Fund Association must
18.6determine the amount of any postretirement adjustment using the procedures in this
18.7subdivision and subdivision 8 or 9, whichever is applicable.
18.8(b) On January 1 (a) Except as set forth in paragraph (c), each person who has been
18.9receiving an annuity or benefit under the articles of incorporation, the bylaws, or this chapter,
18.10whose effective date of benefit commencement occurred on or before July 1 of the calendar
18.11year immediately before the adjustment, is eligible to receive a an annual postretirement
18.12increase as specified in subdivision 8 or 9. adjustment, effective as of each January 1, as
18.13follows:
18.14(1) there shall be no postretirement adjustment on January 1, 2019, and January 1, 2020;
18.15and
18.16(2) the postretirement adjustment shall be one percent on January 1, 2021, and each
18.17January 1 thereafter.
18.18(b) A postretirement adjustment is to be applied as a permanent increase to the regular
18.19payment of each eligible member on January 1. For any eligible member whose effective
18.20date of benefit commencement occurred after January 1 of the immediately preceding
18.21calendar year, the amount of the postretirement adjustment must be reduced by 50 percent.
18.22(c) Each person who retires on or after July 1, 2024, is entitled to an annual postretirement
18.23adjustment, effective as of each January 1, beginning with the year following the year in
18.24which the member attains normal retirement age.
18.25(d) Paragraph (c) does not apply to members who retire under section 354A.31,
18.26subdivision 6, paragraph (b), or who retire when the member is at least age 62 and has at
18.27least 30 years of service under section 354A.31, subdivision 7.

18.28    Sec. 3. Minnesota Statutes 2016, section 354A.31, subdivision 7, is amended to read:
18.29    Subd. 7. Reduction for early retirement. (a) This subdivision applies to a person who
18.30has become at least 55 years old and first becomes a coordinated member after June 30,
18.311989, and to any other coordinated member who has become at least 55 years old and whose
18.32annuity is higher when calculated using the retirement annuity formula percentage in
19.1subdivision 4, paragraph (d), or subdivision 4a, paragraph (d), as applicable, in conjunction
19.2with this subdivision than when calculated under subdivision 4, paragraph (c), or subdivision
19.34a, paragraph (c), in conjunction with subdivision 6. An employee who retires under the
19.4formula annuity before the normal retirement age shall be paid the normal annuity reduced
19.5as described in paragraph (b) if the person retires on or after July 1, 2019, or in paragraph
19.6(c) if the person retires before July 1, 2019, as applicable.
19.7(b) A coordinated member who retires before the normal retirement age and on or after
19.8July 1, 2019, is entitled to receive a retirement annuity calculated using the retirement
19.9annuity formula percentage in subdivision 4, paragraph (d), or subdivision 4a, paragraph
19.10(d), whichever applies, reduced as described in clause (1) or (2), as applicable.
19.11(1) If the member retires when the member is younger than age 62 or with fewer than
19.1230 years of service, the annuity must be reduced by an early reduction factor for each year
19.13that the member's age of retirement precedes normal retirement age. The early reduction
19.14factors are four percent per year for ages 55 through 59 and seven percent per year for ages
19.1560 through normal retirement age. The resulting annuity must be further adjusted to take
19.16into account augmentation as if the employee had deferred receipt of the annuity until normal
19.17retirement age and the annuity were augmented at the applicable annual rate, compounded
19.18annually, from the day the annuity begins to accrue until normal retirement age. The
19.19applicable annual rate is the rate in effect on the employee's effective date of retirement and
19.20shall be considered as fixed for the employee. The applicable annual rates are the following:
19.21(i) until June 30, 2019, 2.5 percent;
19.22(ii) a rate that changes each month, beginning July 1, 2019, through June 30, 2024, which
19.23is determined by reducing the rate in item (i) to zero in equal monthly increments over the
19.24five-year period; and
19.25(iii) after June 30, 2024, zero percent.
19.26After June 30, 2024, the reduced annuity commencing before normal retirement age
19.27under this clause shall not take into account any augmentation.
19.28(2) If the member retires when the member is at least age 62 or older and has at least 30
19.29years of service, the member is entitled to receive a retirement annuity calculated using the
19.30retirement annuity formula percentage in subdivision 4, paragraph (d), multiplied by the
19.31applicable early retirement factor specified for members "Age 62 or older with 30 years of
19.32service" in the table in paragraph (c).
20.1(c) A coordinated member who retires before the normal retirement age and before July
20.21, 2019, is entitled to receive a retirement annuity calculated using the retirement annuity
20.3formula percentage in subdivision 4, paragraph (d), multiplied by the applicable early
20.4retirement factor specified below:

20.5		Under age 62	Age 62 or older
20.6		or less than 30 years of service	with 30 years of service

20.7	Normal retirement age:	65	66	65	66
20.8	Age at retirement
20.9	55	0.5376	0.4592
20.10	56	0.5745	0.4992
20.11	57	0.6092	0.5370
20.12	58	0.6419	0.5726
20.13	59	0.6726	0.6062
20.14	60	0.7354	0.6726
20.15	61	0.7947	0.7354
20.16	62	0.8507	0.7947	0.8831	0.8389
20.17	63	0.9035	0.8507	0.9246	0.8831
20.18	64	0.9533	0.9035	0.9635	0.9246
20.19	65	1.0000	0.9533	1.0000	0.9635
20.20	66		1.0000		1.0000

20.21For normal retirement ages between ages 65 and 66, the early retirement factors must
20.22be determined by linear interpolation between the early retirement factors applicable for
20.23normal retirement ages 65 and 66.

20.24    Sec. 4. Minnesota Statutes 2016, section 354A.37, subdivision 2, is amended to read:
20.25    Subd. 2. Eligibility for deferred retirement annuity. (a) Any coordinated member
20.26who ceases to render teaching services for the school district in which the teachers retirement
20.27fund association is located, with sufficient allowable service credit to meet the minimum
20.28service requirements specified in section 354A.31, subdivision 1, shall be entitled to a
20.29deferred retirement annuity in lieu of a refund under subdivision 1.
20.30(b) The deferred retirement annuity must be computed under section 354A.31 and shall
20.31be augmented as provided in this subdivision from the first day of the month following the
20.32termination of active service to the effective date of retirement. There is no augmentation
20.33if this period is less than three months.
21.1(c) The deferred annuity commences upon application after the person on deferred status
21.2attains at least the minimum age specified in section 354A.31, subdivision 1.
21.3(b) The monthly annuity amount that had accrued when the member ceased to render
21.4teaching service must be augmented from the first day of the month following the month
21.5during which the member ceased to render teaching service to the effective date of retirement.
21.6There is no augmentation if this period is less than three months. The rate of augmentation
21.7is
21.8(d) For a person who became a covered employee before July 1, 2006, the annuity must
21.9be augmented at the following rate or rates, compounded annually:
21.10(1) three percent compounded annually until January 1 of the year following the year
21.11in which the former member attains age 55, or June 30, 2012, whichever is earlier;
21.12(2) five percent compounded annually after that date to July 1 from the January 1 next
21.13following the attainment of age 55 or until June 30, 2012, and;
21.14(3) two percent compounded annually after that date to the effective date of retirement
21.15if the employee became an employee before July 1, 2006, and at from July 1, 2012, until
21.16June 30, 2019; and
21.17(4) after June 30, 2019, the deferred annuity must not be augmented.
21.18(e) For a person who became a covered employee after June 30, 2006, the annuity must
21.19be augmented at the following rate or rates, compounded annually:
21.20(1) 2.5 percent compounded annually to July 1, 2012, and until June 30, 2012;
21.21(2) two percent compounded annually after that date to the effective date of retirement
21.22if the employee became an employee after June 30, 2006. If a person has more than one
21.23period of uninterrupted service, a separate average salary determined under section 354A.31
21.24must be used for each period, and the monthly annuity amount related to each period must
21.25be augmented as provided in this subdivision. The sum of the augmented monthly annuity
21.26amounts determines the total deferred annuity payable. If a person repays a refund, the
21.27service restored by the repayment must be considered as continuous with the next period
21.28of service for which the person has credit with the fund. If a person does not render teaching
21.29services in any one fiscal year or more consecutive fiscal years and then resumes teaching
21.30service, the formula percentages used from the date of resumption of teaching service are
21.31those applicable to new members. The mortality table and interest assumption used to
21.32compute the annuity are the table established by the fund to compute other annuities, and
21.33the interest assumption under section 356.215 in effect when the member retires. A period
22.1of uninterrupted service for the purpose of this subdivision means a period of covered
22.2teaching service during which the member has not been separated from active service for
22.3more than one fiscal year. from July 1, 2012, until June 30, 2019; and
22.4(3) after June 30, 2019, the deferred annuity must not be augmented.
22.5(c) (f) The augmentation provided by this subdivision applies to the benefit provided in
22.6section 354A.35, subdivision 2. The augmentation provided by this subdivision does not
22.7apply to any period in which a person is on an approved leave of absence from an employer
22.8unit.

22.9    Sec. 5. Minnesota Statutes 2016, section 354A.37, subdivision 3, is amended to read:
22.10    Subd. 3. Computation of refund amount. A former coordinated member who qualifies
22.11for a refund under subdivision 1 is entitled to receive a refund equal to the amount of the
22.12former coordinated member's accumulated employee contributions with interest at the rate
22.13of following rates for the applicable period:
22.14(1) Six percent per annum compounded annually to July 1, 2011, if the person is a former
22.15member of the St. Paul Teachers Retirement Fund Association, and;
22.16(2) four percent per annum compounded annually to July 1, 2018; and
22.17(3) three percent per annum compounded annually thereafter.

22.18    Sec. 6. REPEALER.
22.19Minnesota Statutes 2016, sections 354A.29, subdivisions 8 and 9; and 354A.39, are
22.20repealed.

22.21    Sec. 7. EFFECTIVE DATE.
22.22Sections 1 to 6 are effective June 30, 2018.


22.26    Section 1. Minnesota Statutes 2017 Supplement, section 356.215, subdivision 8, is amended
22.27to read:
22.28    Subd. 8. Interest and salary Actuarial assumptions. (a) The actuarial valuation must
22.29use the applicable following interest investment return assumption:
23.1(1) select and ultimate interest rate assumption

23.2 23.3	plan	ultimate interest rate assumption
23.4	teachers retirement plan	8.5%

23.5The select preretirement interest rate assumption for the period through June 30, 2017,
23.6is eight percent.
23.7(2) single rate interest rate assumption

23.8 23.9 23.10	plan	interest rate investment return assumption
23.11	general state employees retirement plan	8 7.5%
23.12	correctional state employees retirement plan	8 7.5
23.13	State Patrol retirement plan	8 7.5
23.14 23.15 23.16	legislators retirement plan, and for the constitutional officers calculation of total plan liabilities	0
23.17	judges retirement plan	8 7.5
23.18	general public employees retirement plan	8 7.5
23.19	public employees police and fire retirement plan	8 7.5
23.20 23.21	local government correctional service retirement plan	8 7.5
23.22	teachers retirement plan	7.5
23.23	St. Paul teachers retirement plan	8 7.5
23.24	Bloomington Fire Department Relief Association	6
23.25 23.26	local monthly benefit volunteer firefighter relief associations	5
23.27 23.28	monthly benefit retirement plans in the statewide volunteer firefighter retirement plan	6

23.29(b)(1) If funding stability has been attained, The actuarial valuation for each of the
23.30covered retirement plans listed in section 356.415, subdivision 2, and the St. Paul Teachers
23.31Retirement Fund Association must use a take into account the postretirement adjustment
23.32rate actuarial assumption equal to the postretirement adjustment rate or rates applicable to
23.33the plan as specified in section 354A.29, subdivision 9 7, or 356.415, subdivision 1,
23.34whichever applies.
23.35(2) If funding stability has not been attained, the valuation must use a select postretirement
23.36adjustment rate actuarial assumption equal to the postretirement adjustment rate specified
23.37in section 354A.29, subdivision 8, or 356.415, subdivision 1a, 1b, 1c, 1d, 1e, or 1f, whichever
23.38applies, for a period ending when the approved actuary estimates that the plan will attain
24.1the defined funding stability measure, and thereafter an ultimate postretirement adjustment
24.2rate actuarial assumption equal to the postretirement adjustment rate under section 354A.29,
24.3subdivision 9, or 356.415, subdivision 1, for the applicable period or periods beginning
24.4when funding stability is projected to be attained.
24.5    (c) The actuarial valuation must use the applicable following single rate future salary
24.6increase assumption, the applicable following modified single rate future salary increase
24.7assumption, or the applicable following graded rate future salary increase assumption: and
24.8payroll growth assumptions found in the appendix to the standards for actuarial work adopted
24.9by the Legislative Commission on Pensions and Retirement pursuant to section 3.85,
24.10subdivision 10. The appendix must be updated whenever new assumptions have been
24.11approved or deemed approved under subdivision 18.
24.12    (1) single rate future salary increase assumption

24.13	plan	future salary increase assumption
24.14	legislators retirement plan		5%
24.15	judges retirement plan		2.75
24.16	Bloomington Fire Department Relief Association		4

24.17    (2) age-related future salary increase age-related select and ultimate future salary increase
24.18assumption or graded rate future salary increase assumption

24.19	plan	future salary increase assumption
24.20	local government correctional service retirement plan	assumption B
24.21	St. Paul teachers retirement plan	assumption A

24.22For plans other than the St. Paul teachers
24.23retirement plan and the local government
24.24correctional service retirement plan, the select
24.25calculation is: during the designated select
24.26period, a designated percentage rate is
24.27multiplied by the result of the designated
24.28integer minus T, where T is the number of
24.29completed years of service, and is added to
24.30the applicable future salary increase
24.31assumption. The designated select period is
24.32ten years and the designated integer is ten for
24.33the local government correctional service
24.34retirement plan and 15 for the St. Paul
24.35Teachers Retirement Fund Association. The
25.1designated percentage rate is 0.2 percent for
25.2the St. Paul Teachers Retirement Fund
25.3Association.
25.4    The ultimate future salary increase assumption is:

25.5	age	A	B
25.6	16	5.9%		8.75%
25.7	17	5.9		8.75
25.8	18	5.9		8.75
25.9	19	5.9		8.75
25.10	20	5.9		8.75
25.11	21	5.9		8.5
25.12	22	5.9		8.25
25.13	23	5.85		8
25.14	24	5.8		7.75
25.15	25	5.75		7.5
25.16	26	5.7		7.25
25.17	27	5.65		7
25.18	28	5.6		6.75
25.19	29	5.55		6.5
25.20	30	5.5		6.5
25.21	31	5.45		6.25
25.22	32	5.4		6.25
25.23	33	5.35		6.25
25.24	34	5.3		6
25.25	35	5.25		6
25.26	36	5.2		5.75
25.27	37	5.15		5.75
25.28	38	5.1		5.75
25.29	39	5.05		5.5
25.30	40	5		5.5
25.31	41	4.95		5.5
25.32	42	4.9		5.25
25.33	43	4.85		5
25.34	44	4.8		5
25.35	45	4.75		4.75
25.36	46	4.7		4.75
25.37	47	4.65		4.75
26.1	48	4.6		4.75
26.2	49	4.55		4.75
26.3	50	4.5		4.75
26.4	51	4.45		4.75
26.5	52	4.4		4.75
26.6	53	4.35		4.75
26.7	54	4.3		4.75
26.8	55	4.25		4.5
26.9	56	4.2		4.5
26.10	57	4.15		4.25
26.11	58	4.1		4
26.12	59	4.05		4
26.13	60	4		4
26.14	61	4		4
26.15	62	4		4
26.16	63	4		4
26.17	64	4		4
26.18	65	4		3.75
26.19	66	4		3.75
26.20	67	4		3.75
26.21	68	4		3.75
26.22	69	4		3.75
26.23	70	4		3.75

26.24(3) service-related ultimate future salary increase assumption

26.25 26.26	general state employees retirement plan of the Minnesota State Retirement System	assumption A
26.27 26.28	general employees retirement plan of the Public Employees Retirement Association	assumption B
26.29	Teachers Retirement Association	assumption C
26.30	public employees police and fire retirement plan	assumption D
26.31	State Patrol retirement plan	assumption E
26.32 26.33	correctional state employees retirement plan of the Minnesota State Retirement System	assumption F

26.34 26.35	service length	A	B	C	D	E	F
26.36	1	10.25%	11.78%	12%	12.75%	7.75%	5.75%
26.37	2	7.85	8.65	9	10.75	7.25	5.6
26.38	3	6.65	7.21	8	8.75	6.75	5.45
27.1	4	5.95	6.33	7.5	7.75	6.5	5.3
27.2	5	5.45	5.72	7.25	6.25	6.25	5.15
27.3	6	5.05	5.27	7	5.85	6	5
27.4	7	4.75	4.91	6.85	5.55	5.75	4.85
27.5	8	4.45	4.62	6.7	5.35	5.6	4.7
27.6	9	4.25	4.38	6.55	5.15	5.45	4.55
27.7	10	4.15	4.17	6.4	5.05	5.3	4.4
27.8	11	3.95	3.99	6.25	4.95	5.15	4.3
27.9	12	3.85	3.83	6	4.85	5	4.2
27.10	13	3.75	3.69	5.75	4.75	4.85	4.1
27.11	14	3.55	3.57	5.5	4.65	4.7	4
27.12	15	3.45	3.45	5.25	4.55	4.55	3.9
27.13	16	3.35	3.35	5	4.55	4.4	3.8
27.14	17	3.25	3.26	4.75	4.55	4.25	3.7
27.15	18	3.25	3.25	4.5	4.55	4.1	3.6
27.16	19	3.25	3.25	4.25	4.55	3.95	3.5
27.17	20	3.25	3.25	4	4.55	3.8	3.5
27.18	21	3.25	3.25	3.9	4.45	3.75	3.5
27.19	22	3.25	3.25	3.8	4.35	3.75	3.5
27.20	23	3.25	3.25	3.7	4.25	3.75	3.5
27.21	24	3.25	3.25	3.6	4.25	3.75	3.5
27.22	25	3.25	3.25	3.5	4.25	3.75	3.5
27.23	26	3.25	3.25	3.5	4.25	3.75	3.5
27.24	27	3.25	3.25	3.5	4.25	3.75	3.5
27.25	28	3.25	3.25	3.5	4.25	3.75	3.5
27.26	29	3.25	3.25	3.5	4.25	3.75	3.5
27.27	30 or more	3.25	3.25	3.5	4.25	3.75	3.5

27.28    (d) The actuarial valuation must use the applicable following payroll growth assumption
27.29for calculating the amortization requirement for the unfunded actuarial accrued liability
27.30where the amortization retirement is calculated as a level percentage of an increasing payroll:

27.31	plan	payroll growth assumption
27.32 27.33	general state employees retirement plan of the Minnesota State Retirement System	3.5%
27.34	correctional state employees retirement plan	3.5
27.35	State Patrol retirement plan	3.5
27.36	judges retirement plan	2.75
27.37 27.38	general employees retirement plan of the Public Employees Retirement Association	3.5
28.1	public employees police and fire retirement plan	3.5
28.2	local government correctional service retirement plan	3.5
28.3	teachers retirement plan	3.75
28.4	St. Paul teachers retirement plan	4

28.5    (e) (d) The assumptions set forth in paragraphs (c) and (d) the appendix to the standards
28.6for actuarial work continue to apply, unless a different salary assumption or a different
28.7payroll increase assumption:
28.8    (1) has been proposed by the governing board of the applicable retirement plan;
28.9    (2) is accompanied by the concurring recommendation of the actuary retained under
28.10section 356.214, subdivision 1, if applicable, or by the approved actuary preparing the most
28.11recent actuarial valuation report if section 356.214 does not apply; and
28.12    (3) has been approved or deemed approved under subdivision 18.

28.13    Sec. 2. Minnesota Statutes 2016, section 356.215, subdivision 9, is amended to read:
28.14    Subd. 9. Other assumptions. The (a) Each plan's actuarial valuation must use
28.15assumptions concerning base mortality rates, disability, retirement, withdrawal, retirement
28.16age, and any other relevant demographic or economic factor. These assumptions must be
28.17set at levels consistent with those determined in the most recent quadrennial experience
28.18study completed under subdivision 16, if required, or representative of the best estimate of
28.19future experience as recommended by the plan's approved actuary, if a quadrennial experience
28.20study is not required.
28.21(b) The actuarial valuation may use an assumption concerning future mortality
28.22improvement. This assumption may be set at levels consistent with those determined in the
28.23most recent mortality improvement scale published by the Society of Actuaries or as
28.24otherwise recommended by the plan's approved actuary.
28.25(c) The actuarial valuation must contain an exhibit indicating any the actuarial
28.26assumptions used in preparing the valuation report.

28.27    Sec. 3. Minnesota Statutes 2016, section 356.215, subdivision 11, is amended to read:
28.28    Subd. 11. Amortization contributions. (a) In addition to the exhibit indicating the level
28.29normal cost, the actuarial valuation of the retirement plan must contain an exhibit for financial
28.30reporting purposes indicating the additional annual contribution sufficient to amortize the
28.31unfunded actuarial accrued liability and must contain an exhibit for contribution
28.32determination purposes indicating the additional contribution sufficient to amortize the
29.1unfunded actuarial accrued liability. For the retirement plans listed in subdivision 8, paragraph
29.2(c), but excluding the legislators retirement plan, the additional contribution must be
29.3calculated on a level percentage of covered payroll basis by the established date for full
29.4funding in effect when the valuation is prepared, assuming annual payroll growth at the
29.5applicable percentage rate set forth in subdivision 8, paragraph (d). For all other retirement
29.6plans and for the legislators retirement plan, the additional annual contribution must be
29.7calculated on a level annual dollar amount basis.
29.8    (b) For any retirement plan other than a retirement plan governed by paragraph (d), (e),
29.9(f), (g), (h), (i), or (j), if there has not been a change in the actuarial assumptions used for
29.10calculating the actuarial accrued liability of the fund, a change in the benefit plan governing
29.11annuities and benefits payable from the fund, a change in the actuarial cost method used in
29.12calculating the actuarial accrued liability of all or a portion of the fund, or a combination
29.13of the three, which change or changes by itself or by themselves without inclusion of any
29.14other items of increase or decrease produce a net increase in the unfunded actuarial accrued
29.15liability of the fund, the established date for full funding is the first actuarial valuation date
29.16occurring after June 1, 2020.
29.17    (c) For any retirement plan, if there has been a change in any or all of the actuarial
29.18assumptions used for calculating the actuarial accrued liability of the fund, a change in the
29.19benefit plan governing annuities and benefits payable from the fund, a change in the actuarial
29.20cost method used in calculating the actuarial accrued liability of all or a portion of the fund,
29.21or a combination of the three, and the change or changes, by itself or by themselves and
29.22without inclusion of any other items of increase or decrease, produce a net increase in the
29.23unfunded actuarial accrued liability in the fund, the established date for full funding must
29.24be determined using the following procedure:
29.25    (i) the unfunded actuarial accrued liability of the fund must be determined in accordance
29.26with the plan provisions governing annuities and retirement benefits and the actuarial
29.27assumptions in effect before an applicable change;
29.28    (ii) the level annual dollar contribution or level percentage, whichever is applicable,
29.29needed to amortize the unfunded actuarial accrued liability amount determined under item
29.30(i) by the established date for full funding in effect before the change must be calculated
29.31using the interest assumption specified in subdivision 8 in effect before the change;
29.32    (iii) the unfunded actuarial accrued liability of the fund must be determined in accordance
29.33with any new plan provisions governing annuities and benefits payable from the fund and
30.1any new actuarial assumptions and the remaining plan provisions governing annuities and
30.2benefits payable from the fund and actuarial assumptions in effect before the change;
30.3    (iv) the level annual dollar contribution or level percentage, whichever is applicable,
30.4needed to amortize the difference between the unfunded actuarial accrued liability amount
30.5calculated under item (i) and the unfunded actuarial accrued liability amount calculated
30.6under item (iii) over a period of 30 years from the end of the plan year in which the applicable
30.7change is effective must be calculated using the applicable interest assumption specified in
30.8subdivision 8 in effect after any applicable change;
30.9    (v) the level annual dollar or level percentage amortization contribution under item (iv)
30.10must be added to the level annual dollar amortization contribution or level percentage
30.11calculated under item (ii);
30.12    (vi) the period in which the unfunded actuarial accrued liability amount determined in
30.13item (iii) is amortized by the total level annual dollar or level percentage amortization
30.14contribution computed under item (v) must be calculated using the interest assumption
30.15specified in subdivision 8 in effect after any applicable change, rounded to the nearest
30.16integral number of years, but not to exceed 30 years from the end of the plan year in which
30.17the determination of the established date for full funding using the procedure set forth in
30.18this clause is made and not to be less than the period of years beginning in the plan year in
30.19which the determination of the established date for full funding using the procedure set forth
30.20in this clause is made and ending by the date for full funding in effect before the change;
30.21and
30.22    (vii) the period determined under item (vi) must be added to the date as of which the
30.23actuarial valuation was prepared and the date obtained is the new established date for full
30.24funding.
30.25    (d) For the general employees retirement plan of the Public Employees Retirement
30.26Association, the established date for full funding is June 30, 2031 2048.
30.27    (e) For the Teachers Retirement Association, the established date for full funding is June
30.2830, 2037 2048.
30.29    (f) For the correctional state employees retirement plan and the State Patrol retirement
30.30plan of the Minnesota State Retirement System, the established date for full funding is June
30.3130, 2038 2048.
30.32    (g) For the judges retirement plan, the established date for full funding is June 30, 2038
30.332048.
31.1    (h) For the local government correctional service retirement plan and the public employees
31.2police and fire retirement plan, the established date for full funding is June 30, 2038 2048.
31.3    (i) For the St. Paul Teachers Retirement Fund Association, the established date for full
31.4funding is June 30, 2042. In addition to other requirements of this chapter, the annual
31.5actuarial valuation must contain an exhibit indicating the funded ratio and the deficiency
31.6or sufficiency in annual contributions when comparing liabilities to the market value of the
31.7assets of the fund as of the close of the most recent fiscal year 2048.
31.8(j) For the general state employees retirement plan of the Minnesota State Retirement
31.9System, the established date for full funding is June 30, 2040 2048.
31.10    (k) For the retirement plans for which the annual actuarial valuation indicates an excess
31.11of valuation assets over the actuarial accrued liability, the valuation assets in excess of the
31.12actuarial accrued liability must be recognized as a reduction in the current contribution
31.13requirements by an amount equal to the amortization of the excess expressed as a level
31.14percentage of pay over a 30-year period beginning anew with each annual actuarial valuation
31.15of the plan.

31.16    Sec. 4. Minnesota Statutes 2016, section 356.30, subdivision 1, is amended to read:
31.17    Subdivision 1. Eligibility; computation of annuity. (a) Notwithstanding any provisions
31.18of the laws governing the covered retirement plans enumerated listed in subdivision 3, a
31.19person who has met the qualifications of paragraph (b) may elect to receive, upon retirement,
31.20a retirement annuity from each enumerated covered retirement plan in which the person has
31.21at least one-half year of allowable service, based on the allowable service in each plan,
31.22subject to the provisions of paragraph (c). (b), if the person has:
31.23(1) allowable service in any two or more of the covered plans;
31.24(2) at least one-half year of allowable service in each covered plan, based on the allowable
31.25service in each plan;
31.26(3) total allowable service that equals or exceeds the longest service credit vesting
31.27requirement of the applicable retirement plan; and
31.28(4) not begun to receive an annuity from any covered plan or made application for
31.29benefits from each applicable plan and the retirement annuity effective dates of each plan
31.30are within a one-year period.
31.31(b) A person may receive, upon retirement, a retirement annuity from each enumerated
31.32retirement plan in which the person has at least one-half year of allowable service, and
32.1augmentation of a deferred annuity calculated at the appropriate rate under the laws governing
32.2each public pension plan or fund named in subdivision 3, based on the date of the person's
32.3initial entry into public employment from the date the person terminated all public service
32.4if:
32.5(1) the person has allowable service in any two or more of the enumerated plans;
32.6(2) the person has sufficient allowable service in total that equals or exceeds the applicable
32.7service credit vesting requirement of the retirement plan with the longest applicable service
32.8credit vesting requirement; and
32.9(3) the person has not begun to receive an annuity from any enumerated plan or the
32.10person has made application for benefits from each applicable plan and the effective dates
32.11of the retirement annuity with each plan under which the person chooses to receive an
32.12annuity are within a one-year period.
32.13(c) (b) If all requirements in paragraph (a) have been satisfied, the retirement annuity
32.14from each plan must be based upon the allowable service, accrual rates, and average salary
32.15in the applicable plan except as further specified or modified in the following clauses:
32.16(1) the laws governing annuities must be the law in effect on the date of termination
32.17from the last period of public service under a covered retirement plan with which the person
32.18earned a minimum of one-half year of allowable service credit during that employment;
32.19(2) the "average salary" on which the annuity from each covered plan in which the
32.20employee has credit in a used to calculate the annuity for each formula plan must be based
32.21on the employee's highest five successive years of covered salary during the entire service
32.22in covered plans;
32.23(3) the accrual rates to be used by under each plan must be those the percentages
32.24prescribed by each plan's formula as continued in effect for the respective years of allowable
32.25service from one plan to the next, recognizing all previous allowable service with the other
32.26covered plans;
32.27(4) the allowable service in all the covered plans must be combined in determining
32.28eligibility for and the application of each plan's provisions in with respect to reduction in
32.29the annuity amount for retirement prior to normal retirement age; and
32.30(5) the annuity amount payable for any allowable service under a nonformula plan of
32.31that is a covered plan must not be affected, but such service and covered salary must be
32.32used in the above calculation.
33.1(c) If a person eligible for an annuity under paragraph (a) from each covered plan
33.2terminates all public service, the deferred annuity must be augmented from the date of
33.3termination until the earlier of:
33.4(1) the effective date of retirement; or
33.5(2) December 31, 2018, for the Minnesota State Retirement System and the Public
33.6Employees Retirement Association or June 30, 2019, for the Teachers Retirement Association
33.7and the St. Paul Teachers Retirement Association.
33.8A deferred annuity must not be augmented after the applicable dates under clause (2).
33.9The appropriate rate of augmentation is the rate in effect on the date on which the person
33.10entered into public employment and subsequently adjusted according to the laws governing
33.11each covered plan, as applicable.
33.12(d) This section does not apply to any person whose final termination from the last public
33.13service under a covered plan was before May 1, 1975.
33.14(e) For the purpose of computing annuities under this section, the accrual rates used by
33.15any covered plan, except the public employees police and fire plan, the judges retirement
33.16fund, and the State Patrol retirement plan, must not exceed 2.7 percent per year of service
33.17for any year of service or fraction thereof. The formula percentage used by:
33.18(1) the judges retirement fund accrual rate must not exceed 3.2 percent per year of service
33.19for any year of service or fraction thereof. The accrual rate used by;
33.20(2) the public employees police and fire plan and the State Patrol retirement plan accrual
33.21rate must not exceed 3.0 percent per year of service for any year of service or fraction
33.22thereof. The accrual rate or rates used by;
33.23(3) the legislators retirement plan accrual rate must not exceed 2.5 percent, but this limit
33.24does not apply to the adjustment provided under section 3A.02, subdivision 1, paragraph
33.25(c).; and
33.26(4) any other covered plan's accrual rate must not exceed 2.7 percent per year of service
33.27for any year of service or fraction thereof.
33.28(f) Any period of time for which a person has credit in more than one of the covered
33.29plans must be used only once for the purpose of determining total allowable service.
33.30(g) If the period of duplicated service credit is more than one-half year, or the person
33.31has credit for more than one-half year, with each of the plans, each plan must apply its
33.32formula to a prorated service credit for the period of duplicated service based on a fraction
34.1of the salary on which deductions were paid to that fund for the period divided by the total
34.2salary on which deductions were paid to all plans for the period.
34.3(h) If the period of duplicated service credit is less than one-half year, or when added
34.4to other service credit with that plan is less than one-half year, the service credit must be
34.5ignored and a refund of contributions made to the person in accord with that plan's refund
34.6provisions.

34.7    Sec. 5. [356.311] COVERAGE BY MORE THAN ONE PLAN.
34.8(a) Any person who has been a member of two or more of the retirement plans listed in
34.9paragraph (b) is entitled, when qualified, to an annuity from each fund if:
34.10(1) the person's combined service in any two or more retirement plans equals or exceeds
34.11the vesting requirement of the fund with the longest vesting requirement; and
34.12(2) the person has not taken a refund from any of the retirement plans.
34.13(b) This section applies to any defined benefit plan administered by the Minnesota State
34.14Retirement System, including the State Patrol Retirement Plan; the Public Employees
34.15Retirement Association, including the public employees police and fire plan; the Teachers
34.16Retirement Association; and the St. Paul Teachers Retirement Fund Association, except as
34.17noted in paragraph (c).
34.18(c) This section does not apply to plans providing benefits for police officers or
34.19firefighters under sections 424A.091 to 424A.096 or the Bloomington Fire Department
34.20Relief Association.
34.21(d) No portion of the service upon which the retirement annuity from one retirement
34.22plan is based shall be again used in the computation of a retirement annuity from another
34.23plan. The annuity from each plan must be determined under the laws applicable to that plan
34.24except that the requirement that a person meet the vesting requirement in any particular
34.25plan shall not apply, provided the combined service in any two or more plans equals or
34.26exceeds the vesting requirement of the plan with the longest vesting requirement.
34.27(e) Any deferred annuity payable under this section shall be subject to augmentation
34.28under the laws applicable to the deferred annuity.
34.29(f) Any person to whom an annuity is not payable under this section because the person
34.30took a refund from one of the funds shall be entitled to repay the refund in accordance with
34.31the laws governing the refund. Upon repayment, the person is entitled to annuities under
34.32this section, if the person would otherwise be entitled.

35.1    Sec. 6. Minnesota Statutes 2016, section 356.415, subdivision 1, is amended to read:
35.2    Subdivision 1. Annual postretirement adjustments; generally Minnesota State
35.3Retirement System general state employees retirement plan, legislators retirement
35.4plan, and unclassified state employees retirement program. (a) Except as otherwise
35.5provided in subdivision 1a, 1b, 1c, 1d, 1e, or 1f set forth in paragraph (c), recipients of a
35.6retirement annuity, disability benefit, or survivor benefit recipients of a covered from the
35.7general state employees retirement plan, the legislators retirement plan, or the unclassified
35.8state employees retirement program are entitled to a an annual postretirement adjustment
35.9annually on, effective as of each January 1, as follows:
35.10(1) effective January 1, 2019, through December 31, 2023, a postretirement increase of
35.112.5 one percent must be applied each year, effective January 1, to the amount of the monthly
35.12annuity or benefit of each annuitant or benefit recipient who has been receiving an annuity
35.13or a benefit for at least 12 full months as of the June 30 of the calendar year immediately
35.14before the adjustment; and
35.15(2) effective January 1, 2019, through December 31, 2023, for each annuitant or benefit
35.16recipient who has been receiving an annuity or a benefit amount for at least one full month,
35.17but less than 12 full months as of the June 30 of the calendar year immediately before the
35.18adjustment, an annual a postretirement increase of 1/12 of 2.5 one percent for each month
35.19that the person has been receiving an annuity or benefit must be applied. to the amount of
35.20the monthly annuity or benefit of the annuitant or benefit recipient;
35.21(3) effective January 1, 2024, and thereafter, a postretirement increase of 1.5 percent
35.22must be applied each year to the amount of the monthly annuity or benefit of each annuitant
35.23or benefit recipient who has been receiving an annuity or a benefit for at least 12 full months
35.24as of the June 30 of the calendar year immediately before the adjustment; and
35.25(4) effective January 1, 2024, and thereafter, for each annuitant or benefit recipient who
35.26has been receiving an annuity or a benefit for at least one full month, but less than 12 full
35.27months as of the June 30 of the calendar year immediately before the adjustment, an annual
35.28postretirement increase of 1/12 of 1.5 percent for each month that the person has been
35.29receiving an annuity or benefit must be applied to the amount of the monthly annuity or
35.30benefit of the annuitant or benefit recipient.
35.31(b) An increase in annuity or benefit payments under this section subdivision must be
35.32made automatically unless written notice is filed by the annuitant or benefit recipient with
35.33the executive director of the covered retirement plan requesting that the increase not be
35.34made.
36.1(c) Members who retire on or after January 1, 2024, under the general state employees
36.2retirement plan, the legislators retirement plan, or the unclassified state employees retirement
36.3program are entitled to an annual postretirement adjustment of the member's retirement
36.4annuity, effective as of each January 1, beginning with the year following the year in which
36.5the member attains normal retirement age, as follows:
36.6(1) if a member has been receiving an annuity for at least 12 full months as of the June
36.730 of the calendar year immediately before the date of the adjustment, a postretirement
36.8increase equal to the percentage specified in paragraph (a), clause (3), must be applied,
36.9effective on January 1, to the amount of the member's monthly annuity;
36.10(2) if a member has been receiving an annuity for at least one full month, but less than
36.1112 full months as of the June 30 of the calendar year immediately before the date of
36.12adjustment, a postretirement increase of 1/12 of the percentage specified in paragraph (a),
36.13clause (4), for each month that the member has been receiving an annuity must be applied,
36.14effective on January 1, to the amount of the member's monthly annuity; or
36.15(3) if a member has been receiving an annuity for fewer than seven months before the
36.16date of adjustment, a postretirement increase shall not be applied until the next January 1
36.17and the amount of the adjustment shall be the amount determined under clause (2).
36.18(d) Paragraph (c) does not apply to members who retire under section 352.116,
36.19subdivision 1, paragraph (c).

36.20    Sec. 7. Minnesota Statutes 2016, section 356.415, subdivision 1a, is amended to read:
36.21    Subd. 1a. Annual postretirement adjustments; Minnesota State Retirement System
36.22plans other than State Patrol correctional state employees retirement plan. (a)
36.23Retirement annuity, disability benefit, or survivor benefit recipients of the legislators
36.24retirement plan, including constitutional officers as specified in chapter 3A, the general
36.25state employees retirement plan, the correctional state employees retirement plan, and the
36.26unclassified state employees retirement program are entitled to a an annual postretirement
36.27adjustment annually on, effective as of each January 1, as follows:
36.28(1) for each successive January 1, if the definition of funding stability under paragraph
36.29(b) has not been met as of the prior July 1 for or with respect to the applicable retirement
36.30plan, a postretirement increase of two 1.5 percent must be applied each year, effective on
36.31January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who has
36.32been receiving an annuity or a benefit for at least 12 full months as of the June 30 of the
36.33calendar year immediately before the adjustment; and
37.1(2) for each successive January 1, if the definition of funding stability under paragraph
37.2(b) has not been met as of the prior July 1 for or with respect to the applicable retirement
37.3plan, for each annuitant or benefit recipient who has been receiving an annuity or a benefit
37.4for at least one full month, but less than 12 full months as of the June 30 of the calendar
37.5year immediately before the adjustment, an annual postretirement increase of 1/12 of two
37.61.5 percent for each month that the person has been receiving an annuity or benefit must
37.7be applied to the amount of the monthly annuity or benefit of each annuitant or benefit
37.8recipient.
37.9(b) Increases under this subdivision for the general state employees retirement plan or
37.10the correctional state employees retirement plan terminate on December 31 of the calendar
37.11year in which two prior consecutive actuarial valuations prepared by the approved actuary
37.12under sections 356.214 and 356.215 and the standards for actuarial work promulgated by
37.13the Legislative Commission on Pensions and Retirement indicate that the market value of
37.14assets of the retirement plan equals or exceeds 90 percent of the actuarial accrued liability
37.15of the retirement plan and increases under subdivision 1 recommence after that date. Increases
37.16under this subdivision for the legislators retirement plan established under chapter 3A,
37.17including the constitutional officers specified in that chapter, and for the unclassified state
37.18employees retirement program, terminate on December 31 of the calendar year in which
37.19two prior consecutive actuarial valuations prepared by the approved actuary under sections
37.20356.214 and 356.215 and the standards for actuarial work promulgated by the Legislative
37.21Commission on Pensions and Retirement indicate that the market value of assets of the
37.22general state employees retirement plan equals or exceeds 90 percent of the actuarial accrued
37.23liability of the retirement plan and increases under subdivision 1 recommence after that
37.24date.
37.25(c) After having met the definition of funding stability under paragraph (b), the increase
37.26provided in paragraph (a), clauses (1) and (2), rather than an increase under subdivision 1,
37.27for the general state employees retirement plan or the correctional state employees retirement
37.28plan, is again to be applied in a subsequent year or years if the market value of assets of the
37.29applicable plan equals or is less than:
37.30(1) 85 percent of the actuarial accrued liabilities of the applicable plan for two consecutive
37.31actuarial valuations; or
37.32(2) 80 percent of the actuarial accrued liabilities of the applicable plan for the most recent
37.33actuarial valuation.
38.1(d) After having met the definition of funding stability under paragraph (b), the increase
38.2provided in paragraph (a), clauses (1) and (2), rather than an increase under subdivision 1,
38.3for the legislators retirement plan, including the constitutional officers, and for the
38.4unclassified state employees retirement program, is again to be applied in a subsequent year
38.5or years if the market value of assets of the general state employees retirement plan equals
38.6or is less than:
38.7(1) 85 percent of the actuarial accrued liabilities of the applicable plan for two consecutive
38.8actuarial valuations; or
38.9(2) 80 percent of the actuarial accrued liabilities of the applicable plan for the most recent
38.10actuarial valuation.
38.11(e) (b) An increase in annuity or benefit payments under this subdivision must be made
38.12automatically unless written notice is filed by the annuitant or benefit recipient with the
38.13executive director of the applicable covered retirement plan requesting that the increase not
38.14be made.

38.15    Sec. 8. Minnesota Statutes 2016, section 356.415, subdivision 1b, is amended to read:
38.16    Subd. 1b. Annual postretirement adjustments; PERA; general employees retirement
38.17plan and local government correctional retirement plan. (a) Retirement annuity, disability
38.18benefit, or survivor benefit recipients of Annuities, disability benefits, and survivor benefits
38.19being paid from the general employees retirement plan of the Public Employees Retirement
38.20Association and the local government correctional service retirement plan are entitled to a
38.21postretirement adjustment annually on shall be increased effective each January 1, as follows:
38.22by the percentage of increase determined under this subdivision. The increase to the annuity
38.23or benefit shall be determined by multiplying the monthly amount of the annuity or benefit
38.24by the percentage of increase specified in paragraph (b), after taking into account any
38.25reduction to the percentage of increase required under paragraph (c).
38.26(1) for each successive January 1 until funding stability is restored for the applicable
38.27retirement plan, a postretirement increase of one percent must be applied each year, effective
38.28on January 1, to the monthly annuity or benefit amount of each annuitant or benefit recipient
38.29who has been receiving an annuity or benefit for at least 12 full months as of the June 30
38.30of the calendar year immediately before the adjustment;
38.31(2) for each successive January 1 until funding stability is restored for the applicable
38.32retirement plan, for each annuitant or benefit recipient who has been receiving an annuity
38.33or a benefit for at least one full month, but less than 12 full months as of the June 30 of the
39.1calendar year immediately before the adjustment, an annual postretirement increase of 1/12
39.2of one percent for each month the person has been receiving an annuity or benefit must be
39.3applied;
39.4(3) for each January 1 following the restoration of funding stability for the applicable
39.5retirement plan, a postretirement increase of 2.5 percent must be applied each year, effective
39.6January 1, to the monthly annuity or benefit amount of each annuitant or benefit recipient
39.7who has been receiving an annuity or benefit for at least 12 full months as of the June 30
39.8of the calendar year immediately before the adjustment; and
39.9(4) for each January 1 following restoration of funding stability for the applicable
39.10retirement plan, for each annuity or benefit recipient who has been receiving an annuity or
39.11a benefit for at least one full month, but less than 12 full months as of the June 30 of the
39.12calendar year immediately before the adjustment, an annual postretirement increase of 1/12
39.13of 2.5 percent for each month the person has been receiving an annuity or benefit must be
39.14applied.
39.15(b) Funding stability is restored when the market value of assets of the applicable
39.16retirement plan equals or exceeds 90 percent of the actuarial accrued liabilities of the
39.17applicable plan in the two most recent consecutive actuarial valuations prepared under
39.18section 356.215 and the standards for actuarial work by the approved actuary retained by
39.19the Public Employees Retirement Association under section 356.214.
39.20(c) After having met the definition of funding stability under paragraph (b), the increase
39.21provided in paragraph (a), clauses (1) and (2), rather than an increase under subdivision 1,
39.22is again to be applied in a subsequent year or years if the market value of assets of the
39.23applicable plan equals or is less than:
39.24(1) 85 percent of the actuarial accrued liabilities of the applicable plan for two consecutive
39.25actuarial valuations; or
39.26(2) 80 percent of the actuarial accrued liabilities of the applicable plan for the most recent
39.27actuarial valuation.
39.28(b) The percentage of increase shall be one percent unless the federal Social Security
39.29Administration has announced a cost-of-living adjustment pursuant to United States Code,
39.30title 42, section 415(i), in the last quarter of the preceding calendar year that is greater than
39.31two percent. If the cost-of-living adjustment announced by the federal Social Security
39.32Administration is greater than two percent, the percentage of increase shall be 50 percent
39.33of the cost-of-living adjustment announced by the federal Social Security Administration,
39.34but in no event may the percentage of increase exceed 1.5 percent.
40.1(c)(1) If the recipient of an annuity, disability benefit, or survivor's benefit has been
40.2receiving the annuity or benefit for at least 12 full months as of the June 30 of the calendar
40.3year immediately before the effective date of the increase, there is no reduction in the
40.4percentage of increase.
40.5(2) If the recipient of an annuity, disability benefit, or survivor's benefit has been receiving
40.6the annuity or benefit for at least one month, but less than 12 full months, as of the June 30
40.7of the calendar year immediately preceding the effective date of the increase, the percentage
40.8of increase is multiplied by a fraction, the numerator of which is the number of months the
40.9annuity or benefit was received as of June 30 of the preceding calendar year and the
40.10denominator of which is 12.
40.11(d) Effective for members who retire on or after January 1, 2024, annuities shall not be
40.12increased under paragraphs (a) to (c) until January 1 of the year following the year in which
40.13the member reaches normal retirement age. January 1 of the year following the year in
40.14which the member reaches normal retirement age shall be considered the effective date of
40.15the increase under paragraph (c). If a member has been receiving an annuity for fewer than
40.16seven months as of the January 1 of the year following the year in which the member reaches
40.17normal retirement age, no increase shall be paid until January 1 of the next year.
40.18(d) (e) An increase in annuity or benefit payments under this section must be made
40.19automatically unless written notice is filed by the annuitant or benefit recipient with the
40.20executive director of the Public Employees Retirement Association requesting that the
40.21increase not be made.
40.22(f) Paragraph (d) does not apply to members who retire under section 353.30, subdivision
40.231a.

40.24    Sec. 9. Minnesota Statutes 2016, section 356.415, subdivision 1c, is amended to read:
40.25    Subd. 1c. Annual postretirement adjustments; PERA-police and fire. (a) Retirement
40.26annuity, disability benefit, or survivor benefit recipients of the public employees police and
40.27fire retirement plan are entitled to a an annual postretirement adjustment annually on,
40.28effective as of each January 1, if the definition of funding stability under paragraph (c) has
40.29not been met, as follows:
40.30(1) for each annuitant or benefit recipient whose annuity or benefit effective date is on
40.31or before June 1, 2014, who has been receiving the annuity or benefit for at least 12 full
40.32months as of the immediate preceding June 30, an amount equal to one percent in each year;
40.33or
41.1(2) for each annuitant or benefit recipient whose annuity or benefit effective date is on
41.2or before June 1, 2014, who has been receiving the annuity or benefit for at least one full
41.3month, but less than 12 months, as of the immediate preceding June 30, an amount equal
41.4to 1/12 of one percent for each month of annuity or benefit receipt; and
41.5(3) (1) for each annuitant or benefit recipient whose annuity or benefit effective date is
41.6after June 1, 2014, who will have been receiving an annuity or benefit for at least 36 full
41.7months as of the immediate preceding June 30, an amount equal to a postretirement increase
41.8of one percent must be applied each year to the amount of the monthly annuity or benefit
41.9of the annuitant or benefit recipient; or
41.10(4) (2) for each annuitant or benefit recipient whose annuity or benefit effective date is
41.11after June 1, 2014, who has been receiving the annuity or benefit for at least 25 full months,
41.12but less than 36 months as of the immediate preceding June 30, an amount equal to a
41.13postretirement increase of 1/12 of one percent for each full month of that the person has
41.14been receiving an annuity or benefit receipt during the fiscal year in which the annuity or
41.15benefit was effective must be applied each year to the amount of the monthly annuity or
41.16benefit of the annuitant or benefit recipient.
41.17(b) Retirement annuity, disability benefit, or survivor benefit recipients of the public
41.18employees police and fire retirement plan are entitled to a postretirement adjustment annually
41.19on each January 1 following the restoration of funding stability as defined under paragraph
41.20(c) and during the continuation of funding stability as defined under paragraph (c), as follows:
41.21(1) for each annuitant or benefit recipient who has been receiving the annuity or benefit
41.22for at least 36 full months as of the immediate preceding June 30, an amount equal to 2.5
41.23percent; and
41.24(2) for each annuitant or benefit recipient who has been receiving the annuity or benefit
41.25for at least 25 full months, but less than 36 full months, as of the immediate preceding June
41.2630, an amount equal to 1/12 of 2.5 percent for each full month of annuity or benefit receipt
41.27during the fiscal year in which the annuity or benefit was effective.
41.28(c) Funding stability is restored when the market value of assets of the public employees
41.29police and fire retirement plan equals or exceeds 90 percent of the actuarial accrued liabilities
41.30of the applicable plan in the two most recent consecutive actuarial valuations prepared under
41.31section 356.215 and under the standards for actuarial work of the Legislative Commission
41.32on Pensions and Retirement by the approved actuary retained by the Public Employees
41.33Retirement Association under section 356.214.
42.1(d) After having met the definition of funding stability under paragraph (c), a full or
42.2prorated increase, as provided in paragraph (a), clause (1), (2), (3), or (4), whichever applies,
42.3rather than adjustments under paragraph (b), is again applied in a subsequent year or years
42.4if the market value of assets of the public employees police and fire retirement plan equals
42.5or is less than:
42.6(1) 85 percent of the actuarial accrued liabilities of the applicable plan for two consecutive
42.7actuarial valuations; or
42.8(2) 80 percent of the actuarial accrued liabilities of the applicable plan for the most recent
42.9actuarial valuation.
42.10(e) (b) An increase in annuity or benefit payments under this section must be made
42.11automatically unless written notice is filed by the annuitant or benefit recipient with the
42.12executive director of the Public Employees Retirement Association requesting that the
42.13increase not be made.

42.14    Sec. 10. Minnesota Statutes 2016, section 356.415, subdivision 1d, is amended to read:
42.15    Subd. 1d. Teachers Retirement Association annual postretirement adjustments. (a)
42.16Except as set forth in paragraph (d), recipients of a retirement annuity, disability benefit,
42.17or survivor benefit recipients of from the Teachers Retirement Association are entitled to
42.18a an annual postretirement adjustment annually on, effective as of each January 1, as follows:
42.19(1) for each effective January 1 until funding stability is restored, 2019, through December
42.2031, 2023, a postretirement increase of two one percent must be applied each year, effective
42.21on January 1, to the amount of the monthly annuity or benefit amount of each annuitant or
42.22benefit recipient who has been receiving an annuity or a benefit for at least 12 full months
42.23as of the June 30 of the calendar year immediately before the adjustment;
42.24(2) for each effective January 1 until funding stability is restored, 2019, through December
42.2531, 2023, for each annuitant or benefit recipient who has been receiving an annuity or a
42.26benefit for at least one full month, but less than 12 full months as of the June 30 of the
42.27calendar year immediately before the adjustment, an annual a postretirement increase of
42.281/12 of two one percent for each month the person has been receiving an annuity or benefit
42.29must be applied; to the amount of the monthly annuity or benefit of the annuitant or benefit
42.30recipient;
42.31(3) for each January 1 following the restoration of funding stability, a postretirement
42.32increase of 2.5 percent must be applied each year, effective January 1, to the monthly annuity
42.33or benefit amount of each annuitant or benefit recipient who has been receiving an annuity
43.1or a benefit for at least 12 full months as of the June 30 of the calendar year immediately
43.2before the adjustment; and
43.3(4) for each January 1 following the restoration of funding stability, for each annuitant
43.4or benefit recipient who has been receiving an annuity or a benefit for at least one month,
43.5but less than 12 full months as of the June 30 of the calendar year immediately before the
43.6adjustment, an annual postretirement increase of 1/12 of 2.5 percent for each month the
43.7person has been receiving an annuity or benefit must be applied.
43.8(b) Funding stability is restored when the market value of assets of the Teachers
43.9Retirement Association equals or exceeds 90 percent of the actuarial accrued liabilities of
43.10the Teachers Retirement Association in the two most recent prior actuarial valuations
43.11prepared under section 356.215 and the standards for actuarial work by the approved actuary
43.12retained by the Teachers Retirement Association under section 356.214.
43.13(c) After having met the definition of funding stability under paragraph (b), the increase
43.14provided in paragraph (a), clauses (1) and (2), rather than an increase under subdivision 1,
43.15or the increase under paragraph (a), clauses (3) and (4), is again to be applied in a subsequent
43.16year or years if the market value of assets of the plan equals or is less than:
43.17(1) 85 percent of the actuarial accrued liabilities of the plan for two consecutive actuarial
43.18valuations; or
43.19(2) 80 percent of the actuarial accrued liabilities of the plan for the most recent actuarial
43.20valuation.
43.21(3) effective January 1, 2024, and thereafter, a postretirement increase must be applied
43.22each year to the amount of the monthly annuity or benefit of each annuitant or benefit
43.23recipient who has been receiving an annuity or a benefit for at least 12 full months as of the
43.24June 30 of the calendar year immediately before the adjustment, at the following rates:

43.25		from January 1, 2024, through December 31, 2024	1.1 percent
43.26		from January 1, 2025, through December 31, 2025	1.2 percent
43.27		from January 1, 2026, through December 31, 2026	1.3 percent
43.28		from January 1, 2027, through December 31, 2027	1.4 percent
43.29		from January 1, 2028, and thereafter	1.5 percent

43.30(4) effective January 1, 2024, and thereafter, for each annuitant or benefit recipient who
43.31has been receiving an annuity or a benefit for at least one full month, but less than 12 full
43.32months, as of the June 30 of the calendar year immediately before the adjustment, an annual
43.33postretirement increase of 1/12 of the applicable percentage for each month that the person
43.34has been receiving an annuity or benefit must be applied to the amount of the monthly
44.1annuity or benefit of the annuitant or benefit recipient. The applicable percentages are the
44.2following:

44.3		from January 1, 2024, through December 31, 2024	1.1 percent
44.4		from January 1, 2025, through December 31, 2025	1.2 percent
44.5		from January 1, 2026, through December 31, 2026	1.3 percent
44.6		from January 1, 2027, through December 31, 2027	1.4 percent
44.7		from January 1, 2028, and thereafter	1.5 percent

44.8(d) (b) An increase in annuity or benefit payments under this section must be made
44.9automatically unless written notice is filed by the annuitant or benefit recipient with the
44.10executive director of the Teachers Retirement Association requesting that the increase not
44.11be made.
44.12(e) (c) The retirement annuity payable to a person who retires before becoming eligible
44.13for Social Security benefits and who has elected the optional payment as provided in section
44.14354.35 must be treated as the sum of a period-certain retirement annuity and a life retirement
44.15annuity for the purposes of any postretirement adjustment. The period-certain retirement
44.16annuity plus the life retirement annuity must be the annuity amount payable until age 62,
44.1765, or normal retirement age, as selected by the member at retirement, for an annuity amount
44.18payable under section 354.35. A postretirement adjustment granted on the period-certain
44.19retirement annuity must terminate when the period-certain retirement annuity terminates.
44.20(d) Members who retire on or after July 1, 2024, are entitled to an annual postretirement
44.21adjustment of the member's retirement annuity, effective as of each January 1, beginning
44.22with the year following the year in which the member attains normal retirement age, as
44.23follows:
44.24(1) if a member has been receiving an annuity for at least 12 full months as of the June
44.2530 of the calendar year immediately before the date of the adjustment, a postretirement
44.26increase equal to the percentage specified in paragraph (a), clause (3), must be applied,
44.27effective on January 1, to the amount of the member's monthly annuity;
44.28(2) if a member has been receiving an annuity for at least one full month, but less than
44.2912 full months as of the June 30 of the calendar year immediately before the date of
44.30adjustment, a postretirement increase of 1/12 of the applicable percentage specified in
44.31paragraph (a), clause (4), for each month that the member has been receiving an annuity
44.32must be applied, effective on January 1, to the amount of the member's monthly annuity;
44.33or
45.1(3) if a member has been receiving an annuity for fewer than seven months as of the
45.2January 1 of the year following the year in which the member attains normal retirement
45.3age, a postretirement adjustment shall be applied effective as of the next January 1. The
45.4amount of the adjustment shall be determined under clause (2).
45.5(e) Paragraph (d) does not apply to members who retire under section 354.44, subdivision
45.66, paragraph (c), clause (3), or who retire when the member is at least age 62 and has at
45.7least 30 years of service under section 354.44, subdivision 6, paragraph (c), (d), (e), or (f),
45.8as applicable.

45.9    Sec. 11. Minnesota Statutes 2016, section 356.415, subdivision 1e, is amended to read:
45.10    Subd. 1e. Annual postretirement adjustments; State Patrol retirement plan. (a)
45.11Retirement annuity, disability benefit, or survivor benefit recipients of the State Patrol
45.12retirement plan are entitled to a an annual postretirement adjustment annually on, effective
45.13as of each January 1 if the definition of funding stability under paragraph (b) has not been
45.14met, as follows:
45.15(1) a postretirement increase of one percent must be applied each year, effective on
45.16January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who has
45.17been receiving an annuity or a benefit for at least 12 full months as of the June 30 of the
45.18calendar year immediately before the adjustment; and
45.19(2) for each annuitant or benefit recipient who has been receiving an annuity or a benefit
45.20for at least one full month, but less than 12 full months as of the June 30 of the calendar
45.21year immediately before the adjustment, an annual postretirement increase of 1/12 of one
45.22percent for each month that the person has been receiving an annuity or benefit must be
45.23applied to the amount of the monthly annuity or benefit of each annuitant or benefit recipient.
45.24(b) Increases under paragraph (a) for the State Patrol retirement plan terminate on
45.25December 31 of the calendar year in which two prior consecutive actuarial valuations for
45.26the plan prepared by the approved actuary under sections 356.214 and 356.215 and the
45.27standards for actuarial work promulgated by the Legislative Commission on Pensions and
45.28Retirement indicates that the market value of assets of the retirement plan equals or exceeds
45.2985 percent of the actuarial accrued liability of the retirement plan. Thereafter, increases
45.30under paragraph (a) become effective again on the December 31 of the calendar year in
45.31which the actuarial valuation, or prior consecutive actuarial valuations for the plan prepared
45.32by the approved actuary under sections 356.214 and 356.215 and the standards for actuarial
45.33work promulgated by the Legislative Commission on Pensions and Retirement indicates
45.34that the market value of the assets of the retirement plan equals or is less than 80 percent
46.1of the actuarial accrued liability of the retirement plan for two years, or equals or is less
46.2than 75 percent of the actuarial accrued liability of the retirement plan for one year and
46.3increases under paragraph (c) commence after that date.
46.4(c) Retirement annuity, disability benefit, or survivor benefit recipients of the State Patrol
46.5retirement plan are entitled to a postretirement adjustment annually on January 1, as follows:
46.6(1) a postretirement increase of 1.5 percent must be applied each year, effective on
46.7January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who has
46.8been receiving an annuity or a benefit for at least 12 full months as of the June 30 of the
46.9calendar year immediately before the adjustment; and
46.10(2) for each annuitant or benefit recipient who has been receiving an annuity or a benefit
46.11for at least one full month, but less than 12 full months as of the June 30 of the calendar
46.12year immediately before the adjustment, an annual postretirement increase of 1/12 of 1.5
46.13percent for each month that the person has been receiving an annuity or benefit must be
46.14applied.
46.15(d) Increases under paragraph (c) for the State Patrol retirement plan terminate on
46.16December 31 of the calendar year in which two prior consecutive actuarial valuations
46.17prepared by the approved actuary under sections 356.214 and 356.215 and the standards
46.18for actuarial work adopted by the Legislative Commission on Pensions and Retirement
46.19indicates that the market value of assets of the retirement plan equals or exceeds 90 percent
46.20of the actuarial accrued liability of the retirement plan and increases under subdivision 1
46.21recommence after that date.
46.22(e) (b) An increase in annuity or benefit payments under this subdivision must be made
46.23automatically unless written notice is filed by the annuitant or benefit recipient with the
46.24executive director of the applicable covered retirement plan requesting that the increase not
46.25be made.

46.26    Sec. 12. Minnesota Statutes 2016, section 356.415, subdivision 1f, is amended to read:
46.27    Subd. 1f. Annual postretirement adjustments; Minnesota State Retirement System
46.28judges retirement plan. (a) The increases provided under this subdivision are in lieu of
46.29increases under subdivision 1 or 1a for retirement annuity, disability benefit, or survivor
46.30benefit recipients of the judges retirement plan.
46.31(b) (a) Retirement annuity, disability benefit, or survivor benefit recipients of the judges
46.32retirement plan are entitled to a an annual postretirement adjustment annually on, effective
47.1as of each January 1, if the definition of funding stability under paragraph (b) has not been
47.2met, as follows:
47.3(1) a postretirement increase of 1.75 percent must be applied each year, effective on
47.4January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who has
47.5been receiving an annuity or a benefit for at least 12 full months as of the June 30 of the
47.6calendar year immediately before the adjustment; and
47.7(2) for each annuitant or benefit recipient who has been receiving an annuity or a benefit
47.8for at least one full month, but less than 12 full months as of the June 30 of the calendar
47.9year immediately before the adjustment, an annual postretirement increase of 1/12 of 1.75
47.10percent for each month that the person has been receiving an annuity or benefit must be
47.11applied to the amount of the monthly annuity or benefit of each annuitant or benefit recipient.
47.12(c) (b) Increases under this subdivision paragraph (a) terminate on December 31 of the
47.13calendar year in which two prior consecutive actuarial valuations prepared by the approved
47.14actuary under sections 356.214 and 356.215 and the standards for actuarial work promulgated
47.15by the Legislative Commission on Pensions and Retirement indicates that the market value
47.16of assets of the judges retirement plan equals or exceeds 70 percent of the actuarial accrued
47.17liability of the retirement plan. and increases under subdivision 1 or 1a, whichever is
47.18applicable, paragraph (c) begin on the January 1 next following after that date.
47.19(c) Retirement annuity, disability benefit, or survivor benefit recipients of the judges
47.20retirement plan are entitled to a postretirement adjustment annually, effective as of each
47.21January 1 if the definition of funding stability under paragraph (d) has not been met, as
47.22follows:
47.23(1) a postretirement increase of two percent must be applied each year to the monthly
47.24annuity or benefit of each annuitant or benefit recipient who has been receiving an annuity
47.25or a benefit for at least 12 full months as of the June 30 of the calendar year immediately
47.26before the adjustment; and
47.27(2) for each annuitant or benefit recipient who has been receiving an annuity or a benefit
47.28for at least one full month, but less than 12 full months as of the June 30 of the calendar
47.29year immediately before the adjustment, an annual postretirement increase of 1/12 of two
47.30percent for each month that the person has been receiving an annuity or benefit must be
47.31applied to the amount of the monthly annuity or benefit of the annuitant or benefit recipient.
47.32(d) Increases under paragraph (c) terminate on December 31 of the calendar year in
47.33which two prior consecutive actuarial valuations prepared by the approved actuary under
47.34section 356.214 and the standards for actuarial work promulgated by the Legislative
48.1Commission on Pensions and Retirement indicate that the market value of assets of the
48.2judges retirement plan equals or exceeds 90 percent of the actuarial accrued liability of the
48.3retirement plan and increases under paragraph (e) begin after that date.
48.4(e) Retirement annuity, disability benefit, or survivor benefit recipients of the judges
48.5retirement plan are entitled to a postretirement adjustment annually, effective as of each
48.6January 1, as follows:
48.7(1) a postretirement increase of 2.5 percent must be applied each year to the monthly
48.8annuity or benefit of each annuitant or benefit recipient who has been receiving an annuity
48.9or a benefit for at least 12 full months as of the June 30 of the calendar year immediately
48.10before the adjustment; and
48.11(2) for each annuitant or benefit recipient who has been receiving an annuity or a benefit
48.12for at least one full month, but less than 12 full months as of the June 30 of the calendar
48.13year immediately before the adjustment, an annual postretirement increase of 1/12 of 2.5
48.14percent for each month that the person has been receiving an annuity or benefit must be
48.15applied to the amount of the monthly annuity or benefit of the annuitant or benefit recipient.
48.16(d) (f) An increase in annuity or benefit payments under this subdivision must be made
48.17automatically unless written notice is filed by the annuitant or benefit recipient with the
48.18executive director of the applicable covered retirement plan requesting that the increase not
48.19be made.

48.20    Sec. 13. Minnesota Statutes 2016, section 356.415, is amended by adding a subdivision
48.21to read:
48.22    Subd. 1g. Annual postretirement adjustments; PERA local government correctional
48.23retirement plan. (a) Annuities, disability benefits, and survivor benefits being paid from
48.24the local government correctional retirement plan of the Public Employees Retirement
48.25Association shall be increased effective each January 1 by the percentage of increase
48.26determined under this subdivision. The increase to the annuity or benefit shall be determined
48.27by multiplying the monthly amount of the annuity or benefit by the percentage of increase
48.28specified in paragraph (b), after taking into account any reduction to the percentage of
48.29increase required under paragraph (c).
48.30(b) The percentage of increase shall be one percent unless the federal Social Security
48.31Administration has announced a cost-of-living adjustment pursuant to United States Code,
48.32title 42, section 415(i), in the last quarter of the preceding calendar year that is greater than
48.33one percent. If the cost-of-living adjustment announced by the federal Social Security
49.1Administration is greater than one percent, the percentage of increase shall be the same as
49.2the cost-of-living adjustment announced by the federal Social Security Administration, but
49.3in no event may the percentage of increase exceed the applicable maximum percentage.
49.4The applicable maximum percentage is 2.5 percent, until either of the following occurs, in
49.5which case the applicable maximum percentage is 1.5 percent and remains at 1.5 percent
49.6thereafter:
49.7(1) the market value of assets equals or is less than 85 percent of the actuarial accrued
49.8liabilities as reported by the plan's actuary in two consecutive annual actuarial valuations;
49.9or
49.10(2) the market value of assets equals or is less than 80 percent of the actuarial accrued
49.11liabilities as reported by the plan's actuary in the most recent annual actuarial valuation.
49.12(c)(1) If the recipient of an annuity, disability benefit, or survivor's benefit has been
49.13receiving the annuity or benefit for at least 12 full months as of the June 30 of the calendar
49.14year immediately before the effective date of the increase, there is no reduction in the
49.15percentage of increase.
49.16(2) If the recipient of an annuity, disability benefit, or survivor's benefit has been receiving
49.17the annuity or benefit for at least one month, but less than 12 full months, as of the June 30
49.18of the calendar year immediately preceding the effective date of the increase, the percentage
49.19of increase is multiplied by a fraction, the numerator of which is the number of months the
49.20annuity or benefit was received as of June 30 of the preceding calendar year and the
49.21denominator of which is 12.
49.22(d) An increase in annuity or benefit payments under this section must be made
49.23automatically unless written notice is filed by the recipient with the executive director of
49.24the Public Employees Retirement Association requesting that the increase not be made.

49.25    Sec. 14. STUDY.
49.26Before December 31, 2020, the Legislative Commission on Pensions and Retirement
49.27must conduct a study of postretirement adjustments for the covered plans as defined in
49.28Minnesota Statutes, section 356.415, subdivision 2, and the St. Paul Teachers Retirement
49.29Fund Association. The study shall take into account the purpose of postretirement adjustments
49.30and whether governing statutes are consistent with the purpose of postretirement adjustments.
49.31The study shall also consider alternative methodologies for determining postretirement
49.32adjustments and evaluate the new methodology to be used by the Public Employees
50.1Retirement Association under this act. The Legislative Commission on Pensions and
50.2Retirement shall report its conclusions based on the study during the 2021 legislative session.

50.3    Sec. 15. EFFECTIVE DATE.
50.4Sections 1 to 14 are effective June 30, 2018.


50.7    Section 1. Minnesota Statutes 2016, section 3A.03, subdivision 2, is amended to read:
50.8    Subd. 2. Refund. (a) A former member who has made contributions under subdivision
50.91 and who is no longer a member of the legislature is entitled to receive, upon written
50.10application to the executive director on a form prescribed by the executive director, a refund
50.11from the general fund of all contributions credited to the member's account with interest
50.12computed as provided in section 352.22, subdivision 2.
50.13    (b) The refund of contributions as provided in paragraph (a) terminates all rights of a
50.14former member of the legislature and the survivors of the former member under this chapter.
50.15    (c) If the former member of the legislature again becomes a member of the legislature
50.16after having taken a refund as provided in paragraph (a), the member is a member of the
50.17unclassified employees retirement program of the Minnesota State Retirement System.
50.18    (d) However, the member may reinstate the rights and credit for service previously
50.19forfeited under this chapter if the member repays all refunds taken, plus interest at the rate
50.20of 8.5 percent until June 30, 2015, and eight percent thereafter applicable annual rate or
50.21rates specified in section 356.59, subdivision 2, compounded annually, from the date on
50.22which the refund was taken to the date on which the refund is repaid.
50.23(e) A member of the legislature who has received a refund from any of the retirement
50.24plans specified in section 356.311, paragraph (b), may repay the refund to the respective
50.25plan under such terms and conditions consistent with the law governing the retirement plan
50.26if the law governing the plan permits the repayment of refunds. If the total amount to be
50.27repaid, including principal and interest exceeds $2,000, repayment may be made in three
50.28equal installments over a period of 18 months, with the interest accrued during the period
50.29of the repayment added to the final installment.
50.30    (e) (f) No person may be required to apply for or to accept a refund.

51.1    Sec. 2. Minnesota Statutes 2016, section 352.01, subdivision 13a, is amended to read:
51.2    Subd. 13a. Reduced salary during period of workers' compensation. An employee
51.3on leave of absence receiving temporary workers' compensation payments and a reduced
51.4salary or no salary from the employer who is entitled to allowable service credit for the
51.5period of absence, may make payment to the fund for the difference between salary received,
51.6if any, and the salary the employee would normally receive if not on leave of absence during
51.7the period. The employee shall pay an amount equal to the employee and employer
51.8contribution rate under section 352.04, subdivisions 2 and 3, on the differential salary amount
51.9for the period of the leave of absence.
51.10The employing department, at its option, may pay the employer amount on behalf of its
51.11employees. Payment made under this subdivision must include interest at the rate of 8.5
51.12percent until June 30, 2015, and eight percent thereafter per year applicable annual rate or
51.13rates specified in section 356.59, subdivision 2, and must be completed within one year of
51.14the return from leave of absence.

51.15    Sec. 3. Minnesota Statutes 2016, section 352.017, subdivision 2, is amended to read:
51.16    Subd. 2. Purchase procedure. (a) An employee covered by a plan specified in this
51.17chapter may purchase credit for allowable service in that plan for a period specified in
51.18subdivision 1 if the employee makes a payment as specified in paragraph (b) or (c), whichever
51.19applies. The employing unit, at its option, may pay the employer portion of the amount
51.20specified in paragraph (b) on behalf of its employees.
51.21    (b) If payment is received by the executive director within one year from the date the
51.22employee returned to work following the authorized leave, the payment amount is equal to
51.23the employee and employer contribution rates specified in law for the applicable plan at the
51.24end of the leave period multiplied by the employee's hourly rate of salary on the date of
51.25return from the leave of absence and by the days and months of the leave of absence for
51.26which the employee is eligible for allowable service credit. The payment must include
51.27compound interest at the monthly rate of 0.71 percent until June 30, 2015, and 0.667 percent
51.28per month thereafter applicable monthly rate or rates specified in section 356.59, subdivision
51.292, from the last day of the leave period until the last day of the month in which payment is
51.30received. If payment is received by the executive director after one year, the payment amount
51.31is the amount determined under section 356.551. Payment under this paragraph must be
51.32made before the date of termination from public employment covered under this chapter.
51.33    (c) If the employee terminates employment covered by this chapter during the leave or
51.34following the leave rather than returning to covered employment, payment must be received
52.1by the executive director within 30 days after the termination date. The payment amount is
52.2equal to the employee and employer contribution rates specified in law for the applicable
52.3plan on the day prior to the termination date, multiplied by the employee's hourly rate of
52.4salary on that date and by the days and months of the leave of absence prior to termination.

52.5    Sec. 4. Minnesota Statutes 2016, section 352.04, subdivision 8, is amended to read:
52.6    Subd. 8. Department required to pay omitted salary deductions. (a) If a department
52.7fails to take deductions past due for a period of 60 days or less from an employee's salary
52.8as provided in this section, those deductions must be taken on later payroll abstracts.
52.9(b) If a department fails to take deductions past due for a period in excess of 60 days
52.10from an employee's salary as provided in this section, the department, and not the employee,
52.11must pay on later payroll abstracts the employee and employer contributions and an amount
52.12equivalent to 8.5 percent until June 30, 2015, and eight percent thereafter of the total amount
52.13due in lieu of interest, or if the delay in payment exceeds one year, 8.5 percent until June
52.1430, 2015, and eight percent thereafter compound annual interest. at the applicable annual
52.15rate or rates specified in section 356.59, subdivision 2, compounded annually, from the date
52.16the employee and employer contributions should have been deducted to the date payment
52.17of the total amount due is paid by the department.
52.18(c) If a department fails to take deductions past due for a period of 60 days or less and
52.19the employee is no longer in state service so that the required deductions cannot be taken
52.20from the salary of the employee, the department must nevertheless pay the required employer
52.21contributions. If any department fails to take deductions past due for a period in excess of
52.2260 days and the employee is no longer in state service, the omitted contributions must be
52.23recovered under paragraph (b).
52.24(d) If an employee from whose salary required deductions were past due for a period of
52.2560 days or less leaves state service before the payment of the omitted deductions and
52.26subsequently returns to state service, the unpaid amount is considered the equivalent of a
52.27refund. The employee accrues no right by reason of the unpaid amount, except that the
52.28employee may pay the amount of omitted deductions as provided in section 352.23.

52.29    Sec. 5. Minnesota Statutes 2016, section 352.04, subdivision 9, is amended to read:
52.30    Subd. 9. Erroneous deductions, canceled warrants. (a) Deductions taken from the
52.31salary of an employee for the retirement fund in excess of required amounts must, upon
52.32discovery and verification by the department making the deduction, be refunded to the
52.33employee.
53.1(b) If a deduction for the retirement fund is taken from a salary warrant or check, and
53.2the check is canceled or the amount of the warrant or check returned to the funds of the
53.3department making the payment, the sum deducted, or the part of it required to adjust the
53.4deductions, must be refunded to the department or institution if the department applies for
53.5the refund on a form furnished by the director. The department's payments must likewise
53.6be refunded to the department.
53.7(c) If erroneous employee deductions and employer contributions are caused by an error
53.8in plan coverage involving the plan and any other plans specified in section 356.99, that
53.9section applies. If the employee should have been covered by the plan governed by chapter
53.10352D, 353D, 354B, or 354D, the employee deductions and employer contributions taken
53.11in error must be directly transferred to the applicable employee's account in the correct
53.12retirement plan, with interest at the rate of 0.71 percent per month until June 30, 2015, and
53.130.667 percent per month thereafter applicable monthly rate or rates specified in section
53.14356.59, subdivision 2, compounded annually, from the first day of the month following the
53.15month in which coverage should have commenced in the correct defined contribution plan
53.16until the end of the month in which the transfer occurs.

53.17    Sec. 6. Minnesota Statutes 2016, section 352.23, is amended to read:
53.18352.23 TERMINATION OF RIGHTS; REPAYMENT OF REFUND.
53.19(a) When any employee accepts a refund as provided in section 352.22, all existing
53.20allowable service credits and all rights and benefits to which the employee was entitled
53.21before accepting the refund terminate.
53.22(b) Terminated service credits and rights must not again be restored until the former
53.23employee acquires at least six months of allowable service credit after taking the last refund.
53.24In that event, the employee may repay all refunds previously taken from the retirement fund.
53.25(c) Repayment of refunds entitles the employee only to credit for service covered by (1)
53.26salary deductions; (2) payments previously made in lieu of salary deductions as permitted
53.27under law in effect when the payment in lieu of deductions was made; (3) payments made
53.28to obtain credit for service as permitted by laws in effect when payment was made; and (4)
53.29allowable service previously credited while receiving temporary workers' compensation as
53.30provided in section 352.01, subdivision 11, paragraph (a), clause (3).
53.31(d) Payments under this section for repayment of refunds are to be paid with interest at
53.32the rate of 8.5 percent until June 30, 2015, and eight percent thereafter applicable annual
53.33rate or rates specified in section 356.59, subdivision 2, compounded annually, from the date
54.1the refund was taken until the date the refund is repaid. They may be paid in a lump sum
54.2or by payroll deduction in the manner provided in section 352.04. Payment may be made
54.3in a lump sum up to six months after termination from service.

54.4    Sec. 7. Minnesota Statutes 2016, section 352.27, is amended to read:
54.5352.27 CREDIT FOR BREAK IN SERVICE TO PROVIDE UNIFORMED
54.6SERVICE.
54.7    (a) An employee who is absent from employment by reason of service in the uniformed
54.8services, as defined in United States Code, title 38, section 4303(13), and who returns to
54.9state service upon discharge from service in the uniformed service within the time frames
54.10required in United States Code, title 38, section 4312(e), may obtain service credit for the
54.11period of the uniformed service as further specified in this section, provided that the employee
54.12did not separate from uniformed service with a dishonorable or bad conduct discharge or
54.13under other than honorable conditions.
54.14    (b) The employee may obtain credit by paying into the fund an equivalent employee
54.15contribution based upon the contribution rate or rates in effect at the time that the uniformed
54.16service was performed multiplied by the full and fractional years being purchased and
54.17applied to the annual salary rate. The annual salary rate is the average annual salary during
54.18the purchase period that the employee would have received if the employee had continued
54.19to be employed in covered employment rather than to provide uniformed service, or, if the
54.20determination of that rate is not reasonably certain, the annual salary rate is the employee's
54.21average salary rate during the 12-month period of covered employment rendered immediately
54.22preceding the period of the uniformed service.
54.23    (c) The equivalent employer contribution and, if applicable, the equivalent additional
54.24employer contribution provided in this chapter must be paid by the department employing
54.25the employee from funds available to the department at the time and in the manner provided
54.26in this chapter, using the employer and additional employer contribution rate or rates in
54.27effect at the time that the uniformed service was performed, applied to the same annual
54.28salary rate or rates used to compute the equivalent employee contribution.
54.29    (d) If the employee equivalent contributions provided in this section are not paid in full,
54.30the employee's allowable service credit must be prorated by multiplying the full and fractional
54.31number of years of uniformed service eligible for purchase by the ratio obtained by dividing
54.32the total employee contribution received by the total employee contribution otherwise
54.33required under this section.
55.1    (e) To receive service credit under this section, the contributions specified in this section
55.2must be transmitted to the Minnesota State Retirement System during the period which
55.3begins with the date on which the individual returns to state service and which has a duration
55.4of three times the length of the uniformed service period, but not to exceed five years. If
55.5the determined payment period is less than one year, the contributions required under this
55.6section to receive service credit may be made within one year of the discharge date.
55.7    (f) The amount of service credit obtainable under this section may not exceed five years
55.8unless a longer purchase period is required under United States Code, title 38, section 4312.
55.9    (g) The employing unit shall pay interest on all equivalent employee and employer
55.10contribution amounts payable under this section. Interest must be computed at the rate of
55.118.5 percent until June 30, 2015, and eight percent thereafter at the applicable annual rate or
55.12rates specified in section 356.59, subdivision 2, compounded annually, from the end of each
55.13fiscal year of the leave or the break in service to the end of the month in which the payment
55.14is received.

55.15    Sec. 8. Minnesota Statutes 2016, section 352.955, subdivision 3, is amended to read:
55.16    Subd. 3. Payment of additional equivalent contributions. (a) An eligible employee
55.17who is transferred to plan coverage and who elects to transfer past service credit under this
55.18section must pay an additional member contribution for that prior service period. The
55.19additional member contribution is the amount computed under paragraph (b), plus the greater
55.20of the amount computed under paragraph (c), or 40 percent of the unfunded actuarial accrued
55.21liability attributable to the past service credit transfer.
55.22    (b) The executive director shall compute, for the most recent 12 months of service credit
55.23eligible for transfer, or for the entire period eligible for transfer if less than 12 months, the
55.24difference between the employee contribution rate or rates for the general state employees
55.25retirement plan and the employee contribution rate or rates for the correctional state
55.26employees retirement plan applied to the eligible employee's salary during that transfer
55.27period, plus compound interest at the applicable monthly rate of 0.71 percent until June 30,
55.282015, and 0.667 percent per month thereafter or rates specified in section 356.59, subdivision
55.292.
55.30    (c) The executive director shall compute, for any service credit being transferred on
55.31behalf of the eligible employee and not included under paragraph (b), the difference between
55.32the employee contribution rate or rates for the general state employees retirement plan and
55.33the employee contribution rate or rates for the correctional state employees retirement plan
55.34applied to the eligible employee's salary during that transfer period, plus compound interest
56.1at the monthly rate of 0.71 percent until June 30, 2015, and 0.667 percent per month thereafter
56.2applicable monthly rate or rates specified in section 356.59, subdivision 2.
56.3    (d) The executive director shall compute an amount using the process specified in
56.4paragraph (b), but based on differences in employer contribution rates between the general
56.5state employees retirement plan and the correctional state employees retirement plan rather
56.6than employee contribution rates.
56.7    (e) The executive director shall compute an amount using the process specified in
56.8paragraph (c), but based on differences in employer contribution rates between the general
56.9state employees retirement plan and the correctional state employees retirement plan rather
56.10than employee contribution rates.
56.11    (f) The additional equivalent member contribution under this subdivision must be paid
56.12in a lump sum. Payment must accompany the election to transfer the prior service credit.
56.13No transfer election or additional equivalent member contribution payment may be made
56.14by a person or accepted by the executive director after the one year anniversary date of the
56.15effective date of the retirement coverage transfer, or the date on which the eligible employee
56.16terminates state employment, whichever is earlier.
56.17    (g) If an eligible employee elects to transfer past service credit under this section and
56.18pays the additional equivalent member contribution amount under paragraph (a), the
56.19applicable department shall pay an additional equivalent employer contribution amount.
56.20The additional employer contribution is the amount computed under paragraph (d), plus the
56.21greater of the amount computed under paragraph (e), or 60 percent of the unfunded actuarial
56.22accrued liability attributable to the past service credit transfer.
56.23    (h) The unfunded actuarial accrued liability attributable to the past service credit transfer
56.24is the present value of the benefit obtained by the transfer of the service credit to the
56.25correctional state employees retirement plan reduced by the amount of the asset transfer
56.26under subdivision 4, by the amount of the member contribution equivalent payment computed
56.27under paragraph (b), and by the amount of the employer contribution equivalent payment
56.28computed under paragraph (d).
56.29    (i) The additional equivalent employer contribution under this subdivision must be paid
56.30in a lump sum and must be paid within 30 days of the date on which the executive director
56.31of the Minnesota State Retirement System certifies to the applicable department that the
56.32employee paid the additional equivalent member contribution.

57.1    Sec. 9. Minnesota Statutes 2016, section 352B.013, subdivision 2, is amended to read:
57.2    Subd. 2. Purchase procedure. (a) An employee covered by the plan specified in this
57.3chapter may purchase credit for allowable service in the plan for a period specified in
57.4subdivision 1 if the employee makes a payment as specified in paragraph (b) or (c), whichever
57.5applies. The employing unit, at its option, may pay the employer portion of the amount
57.6specified in paragraph (b) on behalf of its employees.
57.7(b) If payment is received by the executive director within one year from the date the
57.8employee returned to work following the authorized leave, the payment amount is equal to
57.9the employee and employer contribution rates specified in section 352B.02 at the end of
57.10the leave period multiplied by the employee's hourly rate of salary on the date of return
57.11from the leave of absence and by the days and months of the leave of absence for which
57.12the employee is eligible for allowable service credit. The payment must include compound
57.13interest at the monthly rate of 0.71 percent until June 30, 2015, and 0.667 percent per month
57.14thereafter applicable monthly rate or rates specified in section 356.59, subdivision 2, from
57.15the last day of the leave period until the last day of the month in which payment is received.
57.16If payment is received by the executive director after one year from the date the employee
57.17returned to work following the authorized leave, the payment amount is the amount
57.18determined under section 356.551. Payment under this paragraph must be made before the
57.19date of termination from public employment covered under this chapter.
57.20(c) If the employee terminates employment covered by this chapter during the leave or
57.21following the leave rather than returning to covered employment, payment must be received
57.22by the executive director within 30 days after the termination date. The payment amount is
57.23equal to the employee and employer contribution rates specified in section 352B.02 on the
57.24day prior to the termination date, multiplied by the employee's hourly rate of salary on that
57.25date and by the days and months of the leave of absence prior to termination.

57.26    Sec. 10. Minnesota Statutes 2016, section 352B.085, is amended to read:
57.27352B.085 SERVICE CREDIT FOR CERTAIN DISABILITY LEAVES OF
57.28ABSENCE.
57.29A member on leave of absence receiving temporary workers' compensation payments
57.30and a reduced salary or no salary from the employer who is entitled to allowable service
57.31credit for the period of absence under section 352B.011, subdivision 3, paragraph (b), may
57.32make payment to the fund for the difference between salary received, if any, and the salary
57.33that the member would normally receive if the member was not on leave of absence during
57.34the period. The member shall pay an amount equal to the member and employer contribution
58.1rate under section 352B.02, subdivisions 1b and 1c, on the differential salary amount for
58.2the period of the leave of absence. The employing department, at its option, may pay the
58.3employer amount on behalf of the member. Payment made under this subdivision must
58.4include interest at the rate of 8.5 percent until June 30, 2015, and eight percent thereafter
58.5per year applicable annual rate or rates specified in section 356.59, subdivision 2, and must
58.6be completed within one year of the member's return from the leave of absence.

58.7    Sec. 11. Minnesota Statutes 2016, section 352B.086, is amended to read:
58.8352B.086 SERVICE CREDIT FOR UNIFORMED SERVICE.
58.9(a) A member who is absent from employment by reason of service in the uniformed
58.10services, as defined in United States Code, title 38, section 4303(13), and who returns to
58.11state employment in a position covered by the plan upon discharge from service in the
58.12uniformed services within the time frame required in United States Code, title 38, section
58.134312(e), may obtain service credit for the period of the uniformed service, provided that
58.14the member did not separate from uniformed service with a dishonorable or bad conduct
58.15discharge or under other than honorable conditions.
58.16(b) The member may obtain credit by paying into the fund an equivalent member
58.17contribution based on the member contribution rate or rates in effect at the time that the
58.18uniformed service was performed multiplied by the full and fractional years being purchased
58.19and applied to the annual salary rate. The annual salary rate is the average annual salary
58.20during the purchase period that the member would have received if the member had continued
58.21to provide employment services to the state rather than to provide uniformed service, or if
58.22the determination of that rate is not reasonably certain, the annual salary rate is the member's
58.23average salary rate during the 12-month period of covered employment rendered immediately
58.24preceding the purchase period.
58.25(c) The equivalent employer contribution and, if applicable, the equivalent employer
58.26additional contribution, must be paid by the employing unit, using the employer and employer
58.27additional contribution rate or rates in effect at the time that the uniformed service was
58.28performed, applied to the same annual salary rate or rates used to compute the equivalent
58.29member contribution.
58.30(d) If the member equivalent contributions provided for in this section are not paid in
58.31full, the member's allowable service credit must be prorated by multiplying the full and
58.32fractional number of years of uniformed service eligible for purchase by the ratio obtained
58.33by dividing the total member contributions received by the total member contributions
58.34otherwise required under this section.
59.1(e) To receive allowable service credit under this section, the contributions specified in
59.2this section must be transmitted to the fund during the period which begins with the date
59.3on which the individual returns to state employment covered by the plan and which has a
59.4duration of three times the length of the uniformed service period, but not to exceed five
59.5years. If the determined payment period is calculated to be less than one year, the
59.6contributions required under this section to receive service credit must be transmitted to the
59.7fund within one year from the discharge date.
59.8(f) The amount of allowable service credit obtainable under this section may not exceed
59.9five years, unless a longer purchase period is required under United States Code, title 38,
59.10section 4312.
59.11(g) The employing unit shall pay interest on all equivalent member and employer
59.12contribution amounts payable under this section. Interest must be computed at the rate of
59.138.5 percent until June 30, 2015, and eight percent thereafter applicable annual rate or rates
59.14specified in section 356.59, subdivision 2, compounded annually, from the end of each
59.15fiscal year of the leave or break in service to the end of the month in which payment is
59.16received.

59.17    Sec. 12. Minnesota Statutes 2016, section 352B.11, subdivision 4, is amended to read:
59.18    Subd. 4. Reentry into state service; refund repayment. (a) When a former member,
59.19who has become separated from state service that entitled the member to membership and
59.20has received a refund of retirement payments, reenters the state service in a position that
59.21entitles the member to membership, that member shall receive credit for the period of prior
59.22allowable state service if the member repays into the fund the amount of the refund, plus
59.23interest on it at the rate of 8.5 percent until June 30, 2015, and eight percent thereafter at
59.24the applicable annual rate or rates specified in section 356.59, subdivision 2, compounded
59.25annually, at any time before subsequent retirement. Repayment may be made in installments
59.26or in a lump sum.
59.27(b) A person who has received a refund from the State Patrol retirement fund who is a
59.28member of another public retirement system included in section 356.311 may repay the
59.29refund with interest to the State Patrol retirement fund as provided in paragraph (a).

59.30    Sec. 13. Minnesota Statutes 2016, section 352D.05, subdivision 4, is amended to read:
59.31    Subd. 4. Repayment of refund. (a) A participant in the unclassified program may repay
59.32regular refunds taken under section 352.22, as provided in section 352.23.
60.1(b) A participant in the unclassified program or an employee covered by the general
60.2employees retirement plan who has withdrawn the value of the total shares may repay the
60.3refund taken and thereupon restore the service credit, rights and benefits forfeited by paying
60.4into the fund the amount refunded plus interest at the rate of 8.5 percent until June 30, 2015,
60.5and eight percent thereafter applicable annual rate or rates specified in section 356.59,
60.6subdivision 2, compounded annually, from the date that the refund was taken until the date
60.7that the refund is repaid. If the participant had withdrawn only the employee shares as
60.8permitted under prior laws, repayment must be pro rata.
60.9(c) Except as provided in section 356.441, the repayment of a refund under this section
60.10must be made in a lump sum.

60.11    Sec. 14. Minnesota Statutes 2016, section 352D.11, subdivision 2, is amended to read:
60.12    Subd. 2. Payments by employee. An employee entitled to purchase service credit may
60.13make the purchase by paying to the state retirement system an amount equal to the current
60.14employee contribution rate in effect for the state retirement system applied to the current
60.15or final salary rate multiplied by the months and days of prior temporary, intermittent, or
60.16contract legislative service. Payment shall be made in one lump sum unless the executive
60.17director of the state retirement system agrees to accept payment in installments over a period
60.18of not more than three years from the date of the agreement. Installment payments shall be
60.19charged interest at the rate of 8.5 percent until June 30, 2015, and eight percent thereafter
60.20applicable annual rate or rates specified in section 356.59, subdivision 2, compounded
60.21annually.

60.22    Sec. 15. Minnesota Statutes 2016, section 352D.12, is amended to read:
60.23352D.12 TRANSFER OF PRIOR SERVICE CONTRIBUTIONS.
60.24(a) An employee who is a participant in the unclassified program and who has prior
60.25service credit in a covered plan under chapter 352, 353, 354, 354A, or 422A may, within
60.26the time limits specified in this section, elect to transfer to the unclassified program prior
60.27service contributions to one or more of those plans.
60.28(b) For participants with prior service credit in a plan governed by chapter 352, 353,
60.29354, 354A, or 422A, "prior service contributions" means the accumulated employee and
60.30equal employer contributions with interest at the rate of 8.5 percent until June 30, 2015,
60.31and eight percent thereafter applicable annual rate or rates specified in section 356.59,
60.32subdivision 2, compounded annually, based on fiscal year balances.
61.1(c) If a participant has taken a refund from a retirement plan listed in this section, the
61.2participant may repay the refund to that plan, notwithstanding any restrictions on repayment
61.3to that plan, plus 8.5 percent interest until June 30, 2015, and eight percent interest thereafter
61.4with interest at the applicable annual rate or rates specified in section 356.59, subdivision
61.52, compounded annually, and have the accumulated employee and equal employer
61.6contributions transferred to the unclassified program with interest at the rate of 8.5 percent
61.7until June 30, 2015, and eight percent thereafter compounded annually based on fiscal year
61.8balances. If a person repays a refund and subsequently elects to have the money transferred
61.9to the unclassified program, the repayment amount, including interest, is added to the fiscal
61.10year balance in the year which the repayment was made.
61.11(d) A participant electing to transfer prior service contributions credited to a retirement
61.12plan governed by chapter 352, 353, 354, 354A, or 422A as provided under this section must
61.13complete a written application for the transfer and repay any refund within one year of the
61.14commencement of the employee's participation in the unclassified program.

61.15    Sec. 16. Minnesota Statutes 2016, section 353.01, subdivision 16, is amended to read:
61.16    Subd. 16. Allowable service; limits and computation. (a) "Allowable service" means:
61.17    (1) service during years of actual membership in the course of which employee deductions
61.18were withheld from salary and contributions were made at the applicable rates under section
61.19353.27 , 353.65, or 353E.03;
61.20(2) periods of service covered by payments in lieu of salary deductions under sections
61.21353.27, subdivisions 12 and 12a, and 353.35;
61.22    (3) service in years during which the public employee was not a member but for which
61.23the member later elected, while a member, to obtain credit by making payments to the fund
61.24as permitted by any law then in effect;
61.25    (4) a period of authorized leave of absence during which the employee receives pay as
61.26specified in subdivision 10, paragraph (a), clause (4) or (5), from which deductions for
61.27employee contributions are made, deposited, and credited to the fund;
61.28    (5) a period of authorized leave of absence without pay, or with pay that is not included
61.29in the definition of salary under subdivision 10, paragraph (a), clause (4) or (5), for which
61.30salary deductions are not authorized, and for which a member obtained service credit for
61.31up to 12 months of the authorized leave period by payment under section 353.0161 or
61.32353.0162 , to the fund made in place of salary deductions;
62.1    (6) a periodic, repetitive leave that is offered to all employees of a governmental
62.2subdivision. The leave program may not exceed 208 hours per annual normal work cycle
62.3as certified to the association by the employer. A participating member obtains service credit
62.4by making employee contributions in an amount or amounts based on the member's average
62.5salary, excluding overtime pay, that would have been paid if the leave had not been taken.
62.6The employer shall pay the employer and additional employer contributions on behalf of
62.7the participating member. The employee and the employer are responsible to pay interest
62.8on their respective shares at the rate of 8.5 percent until June 30, 2015, and eight percent
62.9thereafter applicable rate or rates specified in section 356.59, subdivision 3, compounded
62.10annually, from the end of the normal cycle until full payment is made. An employer shall
62.11also make the employer and additional employer contributions, plus 8.5 percent interest
62.12until June 30, 2015, and eight percent interest thereafter at the applicable rate or rates
62.13specified in section 356.59, subdivision 3, compounded annually, on behalf of an employee
62.14who makes employee contributions but terminates public service. The employee contributions
62.15must be made within one year after the end of the annual normal working cycle or within
62.1630 days after termination of public service, whichever is sooner. The executive director
62.17shall prescribe the manner and forms to be used by a governmental subdivision in
62.18administering a periodic, repetitive leave. Upon payment, the member must be granted
62.19allowable service credit for the purchased period;
62.20    (7) an authorized temporary or seasonal layoff under subdivision 12, limited to three
62.21months allowable service per authorized temporary or seasonal layoff in one calendar year.
62.22An employee who has received the maximum service credit allowed for an authorized
62.23temporary or seasonal layoff must return to public service and must obtain a minimum of
62.24three months of allowable service subsequent to the layoff in order to receive allowable
62.25service for a subsequent authorized temporary or seasonal layoff;
62.26    (8) a period during which a member is absent from employment by a governmental
62.27subdivision by reason of service in the uniformed services, as defined in United States Code,
62.28title 38, section 4303(13), if the member returns to public service with the same governmental
62.29subdivision upon discharge from service in the uniformed service within the time frames
62.30required under United States Code, title 38, section 4312(e), provided that the member did
62.31not separate from uniformed service with a dishonorable or bad conduct discharge or under
62.32other than honorable conditions. The service must be credited if the member pays into the
62.33fund equivalent employee contributions based upon the contribution rate or rates in effect
62.34at the time that the uniformed service was performed multiplied by the full and fractional
62.35years being purchased and applied to the annual salary rate. The annual salary rate is the
63.1average annual salary during the purchase period that the member would have received if
63.2the member had continued to be employed in covered employment rather than to provide
63.3uniformed service, or, if the determination of that rate is not reasonably certain, the annual
63.4salary rate is the member's average salary rate during the 12-month period of covered
63.5employment rendered immediately preceding the period of the uniformed service. Payment
63.6of the member equivalent contributions must be made during a period that begins with the
63.7date on which the individual returns to public employment and that is three times the length
63.8of the military leave period, or within five years of the date of discharge from the military
63.9service, whichever is less. If the determined payment period is less than one year, the
63.10contributions required under this clause to receive service credit may be made within one
63.11year of the discharge date. Payment may not be accepted following 30 days after termination
63.12of public service under subdivision 11a. If the member equivalent contributions provided
63.13for in this clause are not paid in full, the member's allowable service credit must be prorated
63.14by multiplying the full and fractional number of years of uniformed service eligible for
63.15purchase by the ratio obtained by dividing the total member contributions received by the
63.16total member contributions otherwise required under this clause. The equivalent employer
63.17contribution, and, if applicable, the equivalent additional employer contribution must be
63.18paid by the governmental subdivision employing the member if the member makes the
63.19equivalent employee contributions. The employer payments must be made from funds
63.20available to the employing unit, using the employer and additional employer contribution
63.21rate or rates in effect at the time that the uniformed service was performed, applied to the
63.22same annual salary rate or rates used to compute the equivalent member contribution. The
63.23governmental subdivision involved may appropriate money for those payments. The amount
63.24of service credit obtainable under this section may not exceed five years unless a longer
63.25purchase period is required under United States Code, title 38, section 4312. The employing
63.26unit shall pay interest on all equivalent member and employer contribution amounts payable
63.27under this clause. Interest must be computed at the rate of 8.5 percent until June 30, 2015,
63.28and eight percent thereafter applicable rate or rates specified in section 356.59, subdivision
63.293, compounded annually, from the end of each fiscal year of the leave or the break in service
63.30to the end of the month in which the payment is received. Upon payment, the employee
63.31must be granted allowable service credit for the purchased period; or
63.32(9) a period specified under section 353.0162.
63.33    (b) No member may receive more than 12 months of allowable service credit in a year
63.34either for vesting purposes or for benefit calculation purposes.
64.1    (c) For an active member who was an active member of the former Minneapolis
64.2Firefighters Relief Association on December 29, 2011, "allowable service" is the period of
64.3service credited by the Minneapolis Firefighters Relief Association as reflected in the
64.4transferred records of the association up to December 30, 2011, and the period of service
64.5credited under paragraph (a), clause (1), after December 30, 2011. For an active member
64.6who was an active member of the former Minneapolis Police Relief Association on December
64.729, 2011, "allowable service" is the period of service credited by the Minneapolis Police
64.8Relief Association as reflected in the transferred records of the association up to December
64.930, 2011, and the period of service credited under paragraph (a), clause (1), after December
64.1030, 2011.

64.11    Sec. 17. Minnesota Statutes 2016, section 353.0162, is amended to read:
64.12353.0162 REDUCED SALARY PERIODS SALARY CREDIT PURCHASE.
64.13(a) A member may purchase additional salary credit for a period specified in this section.
64.14(b) The applicable period is a period during which the member is receiving a reduced
64.15salary from the employer while the member is:
64.16(1) receiving temporary workers' compensation payments related to the member's service
64.17to the public employer;
64.18(2) on an authorized leave of absence; or
64.19(3) on an authorized partial paid leave of absence as a result of a budgetary or salary
64.20savings program offered or mandated by a governmental subdivision.
64.21(c) The differential salary amount is the difference between the average monthly salary
64.22received by the member during the period of reduced salary under this section and the
64.23average monthly salary of the member, excluding overtime, on which contributions to the
64.24applicable plan were made during the period of the last six months of covered employment
64.25occurring immediately before the period of reduced salary, applied to the member's normal
64.26employment period, measured in hours or otherwise, as applicable.
64.27(d) To receive eligible salary credit, the member shall pay an amount equal to:
64.28(1) the applicable employee contribution rate under section 353.27, subdivision 2; 353.65,
64.29subdivision 2 ; or 353E.03, subdivision 1, as applicable, multiplied by the differential salary
64.30amount;
65.1(2) plus an employer equivalent payment equal to the applicable employer contribution
65.2rate in section 353.27, subdivision 3; 353.65, subdivision 3; or 353E.03, subdivision 2, as
65.3applicable, multiplied by the differential salary amount;
65.4(3) plus, if applicable, an equivalent employer additional amount equal to the additional
65.5employer contribution rate in section 353.27, subdivision 3a, multiplied by the differential
65.6salary amount.
65.7(e) The employer, by appropriate action of its governing body and documented in its
65.8official records, may pay the employer equivalent contributions and, as applicable, the
65.9equivalent employer additional contributions on behalf of the member.
65.10(f) Payment under this section must include interest on the contribution amount or
65.11amounts, whichever applies, at an 8.5 percent annual rate until June 30, 2015, and at an
65.12eight percent annual rate thereafter the applicable rate or rates specified in section 356.59,
65.13subdivision 3, compounded annually, prorated for applicable the number of months, if less
65.14than 12 months, from the date on which the period of reduced salary specified under this
65.15section terminates to the date on which the payment or payments are received by the
65.16executive director. Payment under this section must be completed within the earlier of 30
65.17days from termination of public service by the employee under section 353.01, subdivision
65.1811a , or one year after the termination of the period specified in paragraph (b), as further
65.19restricted under this section.
65.20(g) The period for which additional allowable salary credit may be purchased is limited
65.21to the period during which the person receives temporary workers' compensation payments
65.22or for those business years in which the governmental subdivision offers or mandates a
65.23budget or salary savings program, as certified to the executive director by a resolution of
65.24the governing body of the governmental subdivision. For an authorized leave of absence,
65.25the period for which allowable salary credit may be purchased may not exceed 12 months
65.26of authorized leave.
65.27(h) To purchase salary credit for a subsequent period of temporary workers' compensation
65.28benefits or subsequent authorized medical leave of absence, the member must return to
65.29public service and render a minimum of three months of allowable service.

65.30    Sec. 18. Minnesota Statutes 2017 Supplement, section 353.27, subdivision 3c, is amended
65.31to read:
65.32    Subd. 3c. Former MERF members; member and employer contributions. (a) For
65.33the period July 1, 2015, through December 31, 2031, the member contributions for former
66.1members of the Minneapolis Employees Retirement Fund and by the former Minneapolis
66.2Employees Retirement Fund-covered employing units are governed by this subdivision.
66.3(b) The member contribution for a public employee who was a member of the former
66.4Minneapolis Employees Retirement Fund on June 29, 2010, is 9.75 percent of the salary of
66.5the employee.
66.6(c) The employer regular contribution with respect to a public employee who was a
66.7member of the former Minneapolis Employees Retirement Fund on June 29, 2010, is 9.75
66.8percent of the salary of the employee.
66.9(d) The annual employer supplemental contribution is the employing unit's share of
66.10$31,000,000. For calendar years 2017 and 2018, the employer supplemental contribution
66.11is the employing unit's share of $21,000,000.
66.12(e) Each employing unit's share under paragraph (d) is the amount determined from an
66.13allocation between each employing unit in the portion equal to the unit's employer
66.14supplemental contribution paid or payable under Minnesota Statutes 2012, section 353.50,
66.15during calendar year 2014.
66.16(f) The employer supplemental contribution amount under paragraph (d) for calendar
66.17year 2015 must be invoiced by the executive director of the Public Employees Retirement
66.18Association by July 1, 2015. The calendar year 2015 payment is payable in a single amount
66.19on or before September 30, 2015. For subsequent calendar years, the employer supplemental
66.20contribution under paragraph (d) must be invoiced on January 31 of each year and is payable
66.21in two parts, with the first half payable on or before July 31 and with the second half payable
66.22on or before December 15. Late payments are payable with compound interest, compounded
66.23annually, at the rate of 0.71 percent applicable rate or rates specified in section 356.59,
66.24subdivision 3, per month for each month or portion of a month that has elapsed after the
66.25due date.
66.26(g) The employer supplemental contribution under paragraph (d) terminates on December
66.2731, 2031.

66.28    Sec. 19. Minnesota Statutes 2016, section 353.27, subdivision 7a, is amended to read:
66.29    Subd. 7a. Deductions or contributions transmitted by error. (a) If employee deductions
66.30and employer contributions under this section, section 353.50, 353.65, or 353E.03 were
66.31erroneously transmitted to the association, but should have been transmitted to a plan covered
66.32by chapter 352D, 353D, 354B, or 354D, the executive director shall transfer the erroneous
66.33employee deductions and employer contributions to the appropriate retirement fund or
67.1individual account, as applicable. The time limitations specified in subdivisions 7 and 12
67.2do not apply. The transfer to the applicable defined contribution plan account must include
67.3interest at the rate of 0.71 percent per month until June 30, 2015, and 0.667 percent applicable
67.4rate or rates specified in section 356.59, subdivision 3, per month thereafter, compounded
67.5annually, from the first day of the month following the month in which coverage should
67.6have commenced in the defined contribution plan until the end of the month in which the
67.7transfer occurs.
67.8(b) A potential transfer under paragraph (a) that is reasonably determined to cause the
67.9plan to fail to be a qualified plan under section 401(a) of the federal Internal Revenue Code,
67.10as amended, must not be made by the executive director of the association. Within 30 days
67.11after being notified by the Public Employees Retirement Association of an unmade potential
67.12transfer under this paragraph, the employer of the affected person must transmit an amount
67.13representing the applicable salary deductions and employer contributions, without interest,
67.14to the retirement fund of the appropriate Minnesota public pension plan, or to the applicable
67.15individual account if the proper coverage is by a defined contribution plan. The association
67.16must provide the employing unit a credit for the amount of the erroneous salary deductions
67.17and employer contributions against future contributions from the employer. If the employing
67.18unit receives a credit under this paragraph, the employing unit is responsible for refunding
67.19to the applicable employee any amount that had been erroneously deducted from the person's
67.20salary.
67.21(c) If erroneous employee deductions and employer contributions reflect a plan coverage
67.22error involving any Public Employees Retirement Association plan specified in section
67.23356.99 and any other plan specified in that section, section 356.99 applies.

67.24    Sec. 20. Minnesota Statutes 2016, section 353.27, subdivision 12, is amended to read:
67.25    Subd. 12. Omitted salary deductions; obligations. (a) In the case of omission of
67.26required deductions for the general employees retirement plan, the public employees police
67.27and fire retirement plan, or the local government correctional employees retirement plan
67.28from the salary of an employee, the department head or designee shall immediately, upon
67.29discovery, report the employee for membership and deduct the employee deductions under
67.30subdivision 4 during the current pay period or during the pay period immediately following
67.31the discovery of the omission. Payment for the omitted obligations may only be made in
67.32accordance with reporting procedures and methods established by the executive director.
67.33(b) When the entire omission period of an employee does not exceed 60 days, the
67.34governmental subdivision may report and submit payment of the omitted employee
68.1deductions and the omitted employer contributions through the reporting processes under
68.2subdivision 4.
68.3(c) When the omission period of an employee exceeds 60 days, the governmental
68.4subdivision shall furnish to the association sufficient data and documentation upon which
68.5the obligation for omitted employee and employer contributions can be calculated. The
68.6omitted employee deductions must be deducted from the employee's subsequent salary
68.7payment or payments and remitted to the association for deposit in the applicable retirement
68.8fund. The employee shall pay omitted employee deductions due for the 60 days prior to the
68.9end of the last pay period in the omission period during which salary was earned. The
68.10employer shall pay any remaining omitted employee deductions and any omitted employer
68.11contributions, plus cumulative interest at the annual rate of 8.5 percent until June 30, 2015,
68.12and eight percent thereafter compounded annually, from the date or dates each omitted
68.13employee contribution was first payable.
68.14(d) An employer shall not hold an employee liable for omitted employee deductions
68.15beyond the pay period dates under paragraph (c), nor attempt to recover from the employee
68.16those employee deductions paid by the employer on behalf of the employee. Omitted
68.17deductions due under paragraph (c) which are not paid by the employee constitute a liability
68.18of the employer that failed to deduct the omitted deductions from the employee's salary.
68.19The employer shall make payment with interest at the annual rate of 8.5 percent until June
68.2030, 2015, and eight percent thereafter applicable rate or rates specified in section 356.59,
68.21subdivision 3, compounded annually. Omitted employee deductions are no longer due if an
68.22employee terminates public service before making payment of omitted employee deductions
68.23to the association, but the employer remains liable to pay omitted employer contributions
68.24plus interest at the annual rate of 8.5 percent until June 30, 2015, and eight percent thereafter
68.25applicable rate or rates specified in section 356.59, subdivision 3, compounded annually,
68.26from the date the contributions were first payable.
68.27(e) The association may not commence action for the recovery of omitted employee
68.28deductions and employer contributions after the expiration of three calendar years after the
68.29calendar year in which the contributions and deductions were omitted. Except as provided
68.30under paragraph (b), no payment may be made or accepted unless the association has already
68.31commenced action for recovery of omitted deductions. An action for recovery commences
68.32on the date of the mailing of any written correspondence from the association requesting
68.33information from the governmental subdivision upon which to determine whether or not
68.34omitted deductions occurred.

69.1    Sec. 21. Minnesota Statutes 2016, section 353.27, subdivision 12a, is amended to read:
69.2    Subd. 12a. Terminated employees: omitted deductions. A terminated employee who
69.3was a member of the general employees retirement plan of the Public Employees Retirement
69.4Association, the public employees police and fire retirement plan, or the local government
69.5correctional employees retirement plan and who has a period of employment in which
69.6previously omitted employer contributions were made under subdivision 12 but for whom
69.7no, or only partial, omitted employee contributions have been made, or a member who had
69.8prior coverage in the association for which previously omitted employer contributions were
69.9made under subdivision 12 but who terminated service before required omitted employee
69.10deductions could be withheld from salary, may pay the omitted employee deductions for
69.11the period on which omitted employer contributions were previously paid plus interest at
69.12the annual rate of 8.5 percent until June 30, 2015, and eight percent thereafter applicable
69.13rate or rates specified in section 356.59, subdivision 3, compounded annually. A terminated
69.14employee may pay the omitted employee deductions plus interest within six months of an
69.15initial notification from the association of eligibility to pay those omitted deductions. If a
69.16terminated employee is reemployed in a position covered under a public pension fund under
69.17section 356.30, subdivision 3, and elects to pay omitted employee deductions, payment
69.18must be made no later than six months after a subsequent termination of public service.

69.19    Sec. 22. Minnesota Statutes 2016, section 353.27, subdivision 12b, is amended to read:
69.20    Subd. 12b. Terminated employees: immediate eligibility. If deductions were omitted
69.21from salary adjustments or final salary of a terminated employee who was a member of the
69.22general employees retirement plan, the public employees police and fire retirement plan,
69.23or the local government correctional employees retirement plan and who is immediately
69.24eligible to draw a monthly benefit, the employer shall pay the omitted employer and employer
69.25additional contributions plus interest on both the employer and employee amounts due at
69.26an annual rate of 8.5 percent the applicable rate or rates specified in section 356.59,
69.27subdivision 3, compounded annually. The employee shall pay the employee deductions
69.28within six months of an initial notification from the association of eligibility to pay omitted
69.29deductions or the employee forfeits the right to make the payment.

69.30    Sec. 23. Minnesota Statutes 2016, section 353.28, subdivision 5, is amended to read:
69.31    Subd. 5. Interest chargeable on amounts due. Any amount due under this section or
69.32section 353.27, subdivision 4, is payable with interest at the annual compound rate of 8.5
69.33percent until June 30, 2015, and eight percent thereafter applicable rate or rates specified
70.1in section 356.59, subdivision 3, compounded annually, from the date due until the date
70.2payment is received by the association, with a minimum interest charge of $10.

70.3    Sec. 24. Minnesota Statutes 2016, section 353.35, subdivision 1, is amended to read:
70.4    Subdivision 1. Refund rights. (a) Except as provided in paragraph (b), when any former
70.5member accepts a refund, all existing service credits and all rights and benefits to which
70.6the person was entitled prior to the acceptance of the refund must terminate.
70.7(b) A refund under section 353.651, subdivision 3, paragraph (c), does not result in a
70.8forfeiture of salary credit for the allowable service credit covered by the refund.
70.9(c) The rights and benefits of a former member must not be restored until the person
70.10returns to active service and acquires at least six months of allowable service credit after
70.11taking the last refund and repays the refund or refunds taken and interest received under
70.12section 353.34, subdivisions 1 and 2, plus interest at the annual rate of 8.5 percent until June
70.1330, 2015, and eight percent thereafter applicable rate or rates specified in section 356.59,
70.14subdivision 3, compounded annually. If the person elects to restore service credit in a
70.15particular fund from which the person has taken more than one refund, the person must
70.16repay all refunds to that fund. All refunds must be repaid within six months of the last date
70.17of termination of public service.

70.18    Sec. 25. Minnesota Statutes 2016, section 354.50, subdivision 2, is amended to read:
70.19    Subd. 2. Interest charge. If a member desires to repay the refunds, payment shall include
70.20interest at an annual rate of 8.5 percent the applicable annual rate or rates specified in section
70.21356.59, subdivision 4, compounded annually, from date of withdrawal to the date payment
70.22is made and shall be credited to the fund.

70.23    Sec. 26. Minnesota Statutes 2016, section 354.51, subdivision 5, is amended to read:
70.24    Subd. 5. Payment of shortages. (a) Except as provided in paragraph (b), in the event
70.25that full required member contributions are not deducted from the salary of a teacher,
70.26payment of shortages in member deductions on salary earned are the sole obligation of the
70.27employing unit and are payable by the employing unit upon notification by the executive
70.28director of the shortage. The amount of the shortage shall be paid with interest at an annual
70.29rate of 8.5 percent the applicable annual rate or rates specified in section 356.59, subdivision
70.304, compounded annually, from the end of the fiscal year in which the shortage occurred to
70.31the end of the month in which payment is made and the interest must be credited to the
70.32fund. The employing unit shall also pay the employer contributions as specified in section
71.1354.42 , subdivisions 3 and 5 for the shortages. If the shortage payment is not paid by the
71.2employing unit within 60 days of notification, and if the executive director does not use the
71.3recovery procedure in section 354.512, the executive director shall certify the amount of
71.4the shortage to the applicable county auditor, who shall spread a levy in the amount of the
71.5shortage payment over the taxable property of the taxing district of the employing unit if
71.6the employing unit is supported by property taxes. Payment may not be made for shortages
71.7in member deductions on salary paid or payable under paragraph (b) or for shortages in
71.8member deductions for persons employed by the Minnesota State Colleges and Universities
71.9system in a faculty position or in an eligible unclassified administrative position and whose
71.10employment was less than 25 percent of a full academic year, exclusive of the summer
71.11session, for the applicable institution that exceeds the most recent 36 months.
71.12(b) For a person who is employed by the Minnesota State Colleges and Universities
71.13system in a faculty position or in an eligible unclassified administrative position and whose
71.14employment was less than 25 percent of a full academic year, exclusive of the summer
71.15session, for the applicable institution, upon the person's election under section 354B.21 of
71.16retirement coverage under this chapter, the shortage in member deductions on the salary
71.17for employment by the Minnesota State Colleges and Universities system institution of less
71.18than 25 percent of a full academic year, exclusive of the summer session, for the applicable
71.19institution for the most recent 36 months and the associated employer contributions must
71.20be paid by the Minnesota State Colleges and Universities system institution, plus annual
71.21compound interest at the rate of 8.5 percent applicable annual rate or rates specified in
71.22section 356.59, subdivision 4, compounded annually, from the end of the fiscal year in
71.23which the shortage occurred to the end of the month in which the Teachers Retirement
71.24Association coverage election is made. An individual electing coverage under this paragraph
71.25shall repay the amount of the shortage in member deductions, plus interest, through deduction
71.26from salary or compensation payments within the first year of employment after the election
71.27under section 354B.21, subject to the limitations in section 16D.16. The Minnesota State
71.28Colleges and Universities system may use any means available to recover amounts which
71.29were not recovered through deductions from salary or compensation payments. No payment
71.30of the shortage in member deductions under this paragraph may be made for a period longer
71.31than the most recent 36 months.

71.32    Sec. 27. Minnesota Statutes 2016, section 354.52, subdivision 4, is amended to read:
71.33    Subd. 4. Reporting and remittance requirements. An employer shall remit all amounts
71.34due to the association and furnish a statement indicating the amount due and transmitted
71.35with any other information required by the executive director. If an amount due is not
72.1received by the association within 14 calendar days of the payroll warrant, the amount
72.2accrues interest at an annual rate of 8.5 percent employer shall pay interest on the amount
72.3due at the applicable annual rate or rates specified in section 356.59, subdivision 4,
72.4compounded annually, from the due date until the amount is received by the association.
72.5All amounts due and other employer obligations not remitted within 60 days of notification
72.6by the association must be certified to the commissioner of management and budget who
72.7shall deduct the amount from any state aid or appropriation amount applicable to the
72.8employing unit.

72.9    Sec. 28. Minnesota Statutes 2016, section 354.53, subdivision 5, is amended to read:
72.10    Subd. 5. Interest requirements. The employer shall pay interest on all equivalent
72.11employee and employer contribution amounts payable under this section. Interest must be
72.12computed at a rate of 8.5 percent at the applicable annual rate or rates specified in section
72.13356.59, subdivision 4, compounded annually, from the end of each fiscal year of the leave
72.14or the break in service to the end of the month in which the payment is received.

72.15    Sec. 29. Minnesota Statutes 2016, section 354.72, subdivision 2, is amended to read:
72.16    Subd. 2. Purchase procedure. (a) A teacher may purchase credit for allowable and
72.17formula service in the plan for a period specified in subdivision 1 if the teacher makes a
72.18payment as specified in paragraph (b), (c), or (d), whichever applies. The employing unit,
72.19at its option, may pay the employer portion of the amount on behalf of its employees.
72.20    (b) If payment is received by the executive director by June 30 of the fiscal year of the
72.21strike period or by December 31 of the fiscal year following an authorized leave included
72.22under section 354.093, 354.095, or 354.096, payment must equal the total employee and
72.23employer contribution rates, including amortization contribution rates if applicable, multiplied
72.24by the member's average monthly salary rate on the date the leave or strike period
72.25commenced, multiplied by the months and portions of a month of the leave or strike period
72.26for which the teacher seeks allowable service credit. This paragraph also applies to an
72.27extended leave under section 354.094, except that payment must be received by June 30 of
72.28the year of the leave, and the salary used in the computation is the salary received during
72.29the year immediately preceding the initial year of the leave.
72.30    (c) If payment is made after June 30 and before the following June 30 for a strike period,
72.31or after December 31 of the fiscal year following a leave of absence under section 354.093,
72.32354.095 , or 354.096, and before July 1, the payment must include the amount determined
72.33in paragraph (b) plus compound interest at a the applicable monthly rate of 0.71 percent or
73.1rates specified in section 356.59, subdivision 4, from June 30 for a strike period, or from
73.2December 31 for a leave under section 354.093, 354.095, or 354.096, until the last day of
73.3the month in which payment is received. If payment is made on or after July 1 and before
73.4the following July 1 for an extended leave of absence under section 354.094, the payment
73.5must include the amount determined in paragraph (b) plus compound interest at a monthly
73.6rate of 0.71 percent the applicable monthly rate or rates specified in section 356.59,
73.7subdivision 4, from June 30 until the last day of the month in which payment is received.
73.8    (d) If payment is received by the executive director after the applicable last permitted
73.9date under paragraph (c), the payment amount is the amount determined under section
73.10356.551 . Notwithstanding payment deadlines specified in section 356.551, payment under
73.11this section may be made anytime before the effective date of retirement.

73.12    Sec. 30. Minnesota Statutes 2016, section 354A.093, subdivision 6, is amended to read:
73.13    Subd. 6. Interest requirements. The employer shall pay interest on all equivalent
73.14employee and employer contribution amounts payable under this section. Interest must be
73.15computed at the rate of 8.5 percent until June 30, 2015, and eight percent thereafter applicable
73.16annual rate or rates specified in section 356.59, subdivision 5, compounded annually, from
73.17the end of each fiscal year of the leave or break in service to the end of the month in which
73.18payment is received.

73.19    Sec. 31. Minnesota Statutes 2016, section 354A.096, is amended to read:
73.20354A.096 MEDICAL LEAVE.
73.21Any teacher in the coordinated program of the St. Paul Teachers Retirement Fund
73.22Association who is on an authorized medical leave of absence and subsequently returns to
73.23teaching service is entitled to receive allowable service credit, not to exceed one year, for
73.24the period of leave, upon making the prescribed payment to the fund. This payment must
73.25include the required employee and employer contributions at the rates specified in section
73.26354A.12 , subdivisions 1 and 2a, as applied to the member's average full-time monthly salary
73.27rate on the date the leave of absence commenced plus annual interest at the rate of 8.5
73.28percent until June 30, 2015, and eight percent thereafter per year applicable annual rate or
73.29rates specified in section 356.59, subdivision 5, compounded annually, from the end of the
73.30fiscal year during which the leave terminates to the end of the month during which payment
73.31is made. The member must pay the total amount required unless the employing unit, at its
73.32option, pays the employer contributions. The total amount required must be paid by the end
73.33of the fiscal year following the fiscal year in which the leave of absence terminated or before
74.1the member retires, whichever is earlier. Payment must be accompanied by a copy of the
74.2resolution or action of the employing authority granting the leave and the employing
74.3authority, upon granting the leave, must certify the leave to the association in a manner
74.4specified by the executive director. A member may not receive more than one year of
74.5allowable service credit during any fiscal year by making payment under this section. A
74.6member may not receive disability benefits under section 354A.36 and receive allowable
74.7service credit under this section for the same period of time.

74.8    Sec. 32. Minnesota Statutes 2016, section 354A.12, subdivision 1a, is amended to read:
74.9    Subd. 1a. Obligation for omitted salary deductions. If the full required contributions
74.10are not deducted from the salary of a teacher, payment of the shortage in such deductions
74.11is the sole obligation of the employing unit during the three-year period following the end
74.12of the fiscal year in which the shortage occurred. The shortage is payable by the employing
74.13unit upon notification of the shortage by the executive director of the applicable retirement
74.14fund association. The employing unit shall also pay any employer contributions related to
74.15the shortage. The amount of the shortage in employee contributions and associated employer
74.16contributions is payable with interest at the preretirement interest assumption for the
74.17retirement fund as specified in section 356.215, subdivision 8, stated as a monthly rate
74.18applicable annual rate or rates specified in section 356.59, subdivision 5, from the date due
74.19until the date payment is received in the office of the association, compounded annually,
74.20with a minimum interest charge of $10. If the shortage payment and interest is not paid by
74.21the employing unit within 60 days of notification, the executive director shall certify the
74.22amount of the shortage payment and interest to the commissioner of management and budget,
74.23who shall deduct the amount from any state aid or appropriation amount applicable to the
74.24employing unit.

74.25    Sec. 33. Minnesota Statutes 2016, section 354A.12, subdivision 7, is amended to read:
74.26    Subd. 7. Recovery of benefit overpayments. (a) If the executive director discovers,
74.27within the time period specified in subdivision 8 following the payment of a refund or the
74.28accrual date of any retirement annuity, survivor benefit, or disability benefit, that benefit
74.29overpayment has occurred due to using invalid service or salary, or due to any erroneous
74.30calculation procedure, the executive director must recalculate the annuity or benefit payable
74.31and recover any overpayment. The executive director shall recover the overpayment by
74.32requiring direct repayment or by suspending or reducing the payment of a retirement annuity
74.33or other benefit payable under this chapter to the applicable person or the person's estate,
74.34whichever applies, until all outstanding amounts have been recovered. If a benefit
75.1overpayment or improper payment of benefits occurred caused by a failure of the person
75.2to satisfy length of separation requirements for retirement under section 354A.011,
75.3subdivision 21 , the executive director shall recover the improper payments by requiring
75.4direct repayment. The repayment must include interest at the rate of 0.71 percent per month
75.5applicable annual rate or rates specified in section 356.59, subdivision 5, from the first of
75.6the month in which a monthly benefit amount was paid to the first of the month in which
75.7the amount is repaid, with annual compounding.
75.8(b) In the event the executive director determines that an overpaid annuity or benefit
75.9that is the result of invalid salary included in the average salary used to calculate the payment
75.10amount must be recovered, the executive director must determine the amount of the employee
75.11deductions taken in error on the invalid salary, with interest as determined under 354A.37,
75.12subdivision 3 , and must subtract that amount from the total annuity or benefit overpayment,
75.13and the remaining balance of the overpaid annuity or benefit, if any, must be recovered.
75.14(c) If the invalid employee deductions plus interest exceed the amount of the overpaid
75.15benefits, the balance must be refunded to the person to whom the benefit or annuity is being
75.16paid.
75.17(d) Any invalid employer contributions reported on the invalid salary must be credited
75.18against future contributions payable by the employer.
75.19(e) If a member or former member, who is receiving a retirement annuity or disability
75.20benefit for which an overpayment is being recovered, dies before recovery of the overpayment
75.21is completed and an optional annuity or refund is payable, the remaining balance of the
75.22overpaid annuity or benefit must continue to be recovered from the payment to the optional
75.23annuity beneficiary or refund recipient.
75.24(f) The board of trustees shall adopt policies directing the period of time and manner
75.25for the collection of any overpaid retirement or optional annuity, and survivor or disability
75.26benefit, or a refund that the executive director determines must be recovered as provided
75.27under this section.

75.28    Sec. 34. Minnesota Statutes 2016, section 354A.34, is amended to read:
75.29354A.34 DISPOSITION OF UNPAID PERIOD CERTAIN FOR LIFE OR
75.30GUARANTEED REFUND OPTIONAL ANNUITIES.
75.31If a retiree from a coordinated program who has elected a period certain and for life
75.32thereafter or a guaranteed refund optional annuity form dies without having a designated
75.33beneficiary who has survived the retiree, any remaining unpaid guaranteed annuity payments
76.1shall be computed at the rate of interest specified in section 356.215, subdivision 8, and
76.2paid in one lump sum to the estate of the retiree. If a retiree from a coordinated program
76.3who has elected a period certain and for life or a guaranteed refund optional annuity form
76.4dies with a designated beneficiary who has survived the retiree but the designated beneficiary
76.5dies without there existing another designated beneficiary, any remaining unpaid guaranteed
76.6annuity payments shall be computed at the rate of with interest at the applicable annual rate
76.7or rates specified in section 356.215, subdivision 8 356.59, subdivision 5, and paid in one
76.8lump sum to the estate of the designated beneficiary.

76.9    Sec. 35. Minnesota Statutes 2016, section 356.195, subdivision 2, is amended to read:
76.10    Subd. 2. Purchase procedure for strike periods. (a) An employee covered by a plan
76.11specified in subdivision 1 may purchase allowable service credit in the applicable plan for
76.12any period of time during which the employee was on a public employee strike without
76.13pay, not to exceed a period of one year, if the employee makes a payment in lieu of salary
76.14deductions as specified in paragraph (b) or (c), whichever applies. The employing unit, at
76.15its option, may pay the employer portion of the amount specified in paragraph (b) on behalf
76.16of its employees.
76.17(b) If payment is received by the applicable pension plan executive director within one
76.18year from the end of the strike, the payment amount is equal to the applicable employee
76.19and employer contribution rates specified in law for the applicable plan during the strike
76.20period, applied to the employee's rate of salary in effect at the conclusion of the strike for
76.21the period of the strike without pay, plus compound interest at the monthly rate of 0.71
76.22percent for any period for the Teachers Retirement Association and at the monthly rate of
76.230.71 percent until June 30, 2015, and 0.667 percent thereafter for any other retirement plan
76.24listed in section 356.30, subdivision 3 applicable monthly rate or rates specified in section
76.25356.59, subdivision 2, 3, 4, or 5, whichever applies, from the last day of the strike period
76.26until the date payment is received.
76.27(c) If payment is received by the applicable pension fund director after one year and
76.28before five years from the end of the strike, the payment amount is the amount determined
76.29under section 356.551.
76.30(d) Payments may not be made more than five years after the end of the strike.

76.31    Sec. 36. Minnesota Statutes 2016, section 356.44, is amended to read:
76.32356.44 PARTIAL PAYMENT OF PENSION PLAN REFUND.
77.1(a) Notwithstanding any provision of law to the contrary, a member of a pension plan
77.2listed in section 356.30, subdivision 3, with at least two years of forfeited service taken
77.3from a single pension plan, may repay a portion of all refunds. A partial refund repayment
77.4must comply with this section.
77.5(b) The minimum portion of a refund repayment is one-third of the total service credit
77.6period of all refunds taken from a single plan.
77.7(c) The cost of the partial refund repayment is the product of the cost of the total
77.8repayment multiplied by the ratio of the restored service credit to the total forfeited service
77.9credit. The total repayment amount includes interest at the annual rate of 8.5 percent for
77.10any period for the Teachers Retirement Association and is 8.5 percent until June 30, 2015,
77.11and eight percent thereafter for any other retirement plan listed in section 356.30, subdivision
77.123 applicable annual rate or rates specified in section 356.59, subdivision 2, 3, 4, or 5,
77.13whichever applies, compounded annually, from the refund date to the date repayment is
77.14received.
77.15(d) The restored service credit must be allocated based on the relationship the restored
77.16service bears to the total service credit period for all refunds taken from a single pension
77.17plan.
77.18(e) This section does not authorize a public pension plan member to repay a refund if
77.19the law governing the plan does not authorize the repayment of a refund of member
77.20contributions.

77.21    Sec. 37. Minnesota Statutes 2016, section 356.50, subdivision 2, is amended to read:
77.22    Subd. 2. Service credit procedure. (a) To obtain the public pension plan allowable
77.23service credit, the eligible person under subdivision 1 shall pay the required member
77.24contribution amount. The required member contribution amount is the member contribution
77.25rate or rates in effect for the pension plan during the period of service covered by the back
77.26pay award, applied to the unpaid gross salary amounts of the back pay award including
77.27unemployment insurance, workers' compensation, or wages from other sources which
77.28reduced the back award. No contributions may be made under this clause for compensation
77.29covered by a public pension plan listed in section 356.30, subdivision 3, for employment
77.30during the removal period. The person shall pay the required member contribution amount
77.31within 60 days of the date of receipt of the back pay award or within 60 days of a billing
77.32from the retirement fund, whichever is later.
78.1(b) The public employer who wrongfully discharged the public employee must pay an
78.2employer contribution on the back pay award. The employer contribution must be based
78.3on the employer contribution rate or rates in effect for the pension plan during the period
78.4of service covered by the back pay award, applied to the salary amount on which the member
78.5contribution amount was determined under paragraph (a). Interest on both the required
78.6member and employer contribution amount must be paid by the employer at the annual
78.7compound rate of 8.5 percent for any period for the Teachers Retirement Association and
78.88.5 percent until June 30, 2015, and eight percent thereafter, for any other retirement plan
78.9listed in section 356.30, subdivision 3, per year, expressed monthly The employer must pay
78.10compound interest on both the required member and employer contribution amounts at the
78.11applicable monthly rate or rates specified in section 356.59, subdivision 2, 3, 4, or 5,
78.12whichever applies, between the date the contribution amount would have been paid to the
78.13date of actual payment. The employer payment must be made within 30 days of the payment
78.14under paragraph (a).

78.15    Sec. 38. Minnesota Statutes 2016, section 356.551, subdivision 2, is amended to read:
78.16    Subd. 2. Determination. (a) Unless the minimum purchase amount set forth in paragraph
78.17(c) applies, the prior service credit purchase amount is an amount equal to the actuarial
78.18present value, on the date of payment, as calculated by the chief administrative officer of
78.19the pension plan and reviewed by the actuary retained under section 356.214, of the amount
78.20of the additional retirement annuity obtained by the acquisition of the additional service
78.21credit in this section.
78.22    (b) Calculation of this amount must be made using the preretirement interest rate
78.23applicable to the public pension plan specified in section 356.215, subdivision 8, and the
78.24mortality table adopted for the public pension plan. The calculation must assume continuous
78.25future service in the public pension plan until, and retirement at, the age at which the
78.26minimum requirements of the fund for normal retirement or retirement with an annuity
78.27unreduced for retirement at an early age, including section 356.30, are met with the additional
78.28service credit purchased. The calculation must also assume a full-time equivalent salary, or
78.29actual salary, whichever is greater, and a future salary history that includes annual salary
78.30increases at the applicable salary increase rate for the plan specified in section 356.215,
78.31subdivision 4d 8.
78.32    (c) The prior service credit purchase amount may not be less than the amount determined
78.33by applying, for each year or fraction of a year being purchased, the sum of the employee
78.34contribution rate, the employer contribution rate, and the additional employer contribution
79.1rate, if any, applicable during that period, to the person's annual salary during that period,
79.2or fractional portion of a year's salary, if applicable, plus interest at the annual rate of 8.5
79.3percent until June 30, 2015, and eight percent thereafter applicable annual rate or rates
79.4specified in section 356.59, subdivision 2, 3, 4, or 5, whichever applies, compounded
79.5annually, from the end of the year in which contributions would otherwise have been made
79.6to the date on which the payment is received.
79.7    (d) Unless otherwise provided by statutes governing a specific plan, payment must be
79.8made in one lump sum within one year of the prior service credit authorization or prior to
79.9the member's effective date of retirement, whichever is earlier. Payment of the amount
79.10calculated under this section must be made by the applicable eligible person.
79.11    (e) However, the current employer or the prior employer may, at its discretion, pay all
79.12or any portion of the payment amount that exceeds an amount equal to the employee
79.13contribution rates in effect during the period or periods of prior service applied to the actual
79.14salary rates in effect during the period or periods of prior service, plus interest at the
79.15applicable annual rate of 8.5 percent a year or rates specified in section 356.59, subdivision
79.162, 3, 4, or 5, whichever applies, compounded annually, from the date on which the
79.17contributions would otherwise have been made to the date on which the payment is made.
79.18If the employer agrees to payments under this subdivision, the purchaser must make the
79.19employee payments required under this subdivision within 90 days of the prior service credit
79.20authorization. If that employee payment is made, the employer payment under this
79.21subdivision must be remitted to the chief administrative officer of the public pension plan
79.22within 60 days of receipt by the chief administrative officer of the employee payments
79.23specified under this subdivision.

79.24    Sec. 39. [356.59] INTEREST RATES.
79.25    Subdivision 1. Applicable interest rates. Whenever the payment of interest is required
79.26with respect to any payment, including refunds, remittances, shortages, contributions, or
79.27repayments, the rate of interest is the rate or rates specified in subdivisions 2 to 5 for each
79.28public retirement plan.
79.29    Subd. 2. Minnesota State Retirement System. The interest rates for all retirement plans
79.30administered by the Minnesota State Retirement System are as follows:

79.31				Annual		Monthly
79.32		before July 1, 2015	8.5 percent		0.71 percent
79.33		from July 1, 2015, to June 30, 2018	8.0 percent		0.667 percent
79.34		after June 30, 2018	7.5 percent		0.625 percent

80.1    Subd. 3. Public Employees Retirement Association. The interest rates for all retirement
80.2plans administered by the Public Employees Retirement Association are as follows:

80.3		before July 1, 2015	8.5 percent
80.4		from July 1, 2015, to June 30, 2018	8.0 percent
80.5		after June 30, 2018	7.5 percent

80.6    Subd. 4. Teachers Retirement Association. The interest rates for the retirement plan
80.7administered by the Teachers Retirement Association are as follows:

80.8				Annual		Monthly
80.9		before July 1, 2018	8.5 percent		0.71 percent
80.10		after June 30, 2018	7.5 percent		0.625 percent

80.11    Subd. 5. St. Paul Teachers Retirement Fund Association. The interest rates for the
80.12retirement plan administered by the St. Paul Teachers Retirement Fund Association are as
80.13follows:

80.14				Annual		Monthly
80.15		before July 1, 2015	8.5 percent		0.71 percent
80.16		from July 1, 2015, to June 30, 2018	8.0 percent		0.667 percent
80.17		after June 30, 2018	7.5 percent		0.625 percent

80.18    Sec. 40. Minnesota Statutes 2016, section 490.121, subdivision 4, is amended to read:
80.19    Subd. 4. Allowable service. (a) "Allowable service" means any calendar month, subject
80.20to the service credit limit in subdivision 22, served as a judge at any time, during which the
80.21judge received compensation for that service from the state, municipality, or county,
80.22whichever applies, and for which the judge made any required member contribution. It also
80.23includes any month served as a referee in probate for all referees in probate who were in
80.24office before January 1, 1974.
80.25(b) "Allowable service" also means a period of authorized leave of absence for which
80.26the judge has made a payment in lieu of contributions, not in an amount in excess of the
80.27service credit limit under subdivision 22. To obtain the service credit, the judge shall pay
80.28an amount equal to the normal cost of the judges retirement plan on the date of return from
80.29the leave of absence, as determined in the most recent actuarial report for the plan filed with
80.30the Legislative Commission on Pensions and Retirement, multiplied by the judge's average
80.31monthly salary rate during the authorized leave of absence and multiplied by the number
80.32of months of the authorized leave of absence, plus annual compound interest at the rate of
80.338.5 percent until June 30, 2015, and eight percent thereafter interest at the applicable annual
80.34rate or rates specified in section 356.59, subdivision 2, compounded annually, from the date
81.1of the termination of the leave to the date on which payment is made. The payment must
81.2be made within one year of the date on which the authorized leave of absence terminated.
81.3Service credit for an authorized leave of absence is in addition to a uniformed service leave
81.4under section 490.1211.
81.5(c) "Allowable service" does not mean service as a retired judge.

81.6    Sec. 41. Minnesota Statutes 2016, section 490.1211, is amended to read:
81.7490.1211 UNIFORMED SERVICE.
81.8(a) A judge who is absent from employment by reason of service in the uniformed
81.9services, as defined in United States Code, title 38, section 4303(13), and who returns to
81.10state employment as a judge upon discharge from service in the uniformed service within
81.11the time frame required in United States Code, title 38, section 4312(e), may obtain service
81.12credit for the period of the uniformed service, provided that the judge did not separate from
81.13uniformed service with a dishonorable or bad conduct discharge or under other than honorable
81.14conditions.
81.15(b) The judge may obtain credit by paying into the fund equivalent member contribution
81.16based on the contribution rate or rates in effect at the time that the uniformed service was
81.17performed multiplied by the full and fractional years being purchased and applied to the
81.18annual salary rate. The annual salary rate is the average annual salary during the purchase
81.19period that the judge would have received if the judge had continued to provide employment
81.20services to the state rather than to provide uniformed service, or if the determination of that
81.21rate is not reasonably certain, the annual salary rate is the judge's average salary rate during
81.22the 12-month period of judicial employment rendered immediately preceding the purchase
81.23period.
81.24(c) The equivalent employer contribution and, if applicable, the equivalent employer
81.25additional contribution, must be paid by the employing unit, using the employer and employer
81.26additional contribution rate or rates in effect at the time that the uniformed service was
81.27performed, applied to the same annual salary rate or rates used to compute the equivalent
81.28member contribution.
81.29(d) If the member equivalent contributions provided for in this section are not paid in
81.30full, the judge's allowable service credit must be prorated by multiplying the full and
81.31fractional number of years of uniformed service eligible for purchase by the ratio obtained
81.32by dividing the total member contributions received by the total member contributions
81.33otherwise required under this section.
82.1(e) To receive allowable service credit under this section, the contributions specified in
82.2this section and section 490.121 must be transmitted to the fund during the period which
82.3begins with the date on which the individual returns to judicial employment and which has
82.4a duration of three times the length of the uniformed service period, but not to exceed five
82.5years. If the determined payment period is calculated to be less than one year, the
82.6contributions required under this section to receive service credit may be within one year
82.7from the discharge date.
82.8(f) The amount of allowable service credit obtainable under this section and section
82.9490.121 may not exceed five years, unless a longer purchase period is required under United
82.10States Code, title 38, section 4312.
82.11(g) The state court administrator shall pay interest on all equivalent member and employer
82.12contribution amounts payable under this section. Interest must be computed at the rate of
82.138.5 percent until June 30, 2015, and eight percent thereafter at the applicable annual rate or
82.14rates specified in section 356.59, subdivision 2, compounded annually, from the end of each
82.15fiscal year of the leave or break in service to the end of the month in which payment is
82.16received.

82.17    Sec. 42. Minnesota Statutes 2016, section 490.124, subdivision 12, is amended to read:
82.18    Subd. 12. Refund. (a) A person who ceases to be a judge is entitled to a refund in an
82.19amount that is equal to all of the member's employee contributions to the judges' retirement
82.20fund plus interest computed under section 352.22, subdivision 2.
82.21    (b) A refund of contributions under paragraph (a) terminates all service credits and all
82.22rights and benefits of the judge and the judge's survivors under this chapter.
82.23    (c) A person who becomes a judge again after taking a refund under paragraph (a) may
82.24reinstate the previously terminated allowable service credit, rights, and benefits by repaying
82.25the total amount of the previously received refund. The refund repayment must include
82.26interest on the total amount previously received at the annual rate of 8.5 percent until June
82.2730, 2015, and eight percent thereafter at the applicable annual rate or rates specified in
82.28section 356.59, subdivision 2, compounded annually, from the date on which the refund
82.29was received until the date on which the refund is repaid.

82.30    Sec. 43. EFFECTIVE DATE.
82.31Sections 1 to 42 are effective June 30, 2018.


83.3    Section 1. Minnesota Statutes 2016, section 352.04, subdivision 2, is amended to read:
83.4    Subd. 2. Employee contributions. (a) The employee contribution to the fund must be
83.5equal to the following percent of salary:

83.6		from July 1, 2010, to June 30, 2014	5
83.7		from July 1, 2014, and thereafter to June 30, 2018	5.5
83.8		from July 1, 2018, to June 30, 2019	5.75
83.9		after June 30, 2019	6

83.10(b) These contributions must be made by deduction from salary as provided in subdivision
83.114.
83.12(c) Contribution increases under paragraph (a) must be paid starting the first day of the
83.13first full pay period after the effective date of the increase.

83.14    Sec. 2. Minnesota Statutes 2016, section 352.04, subdivision 3, is amended to read:
83.15    Subd. 3. Employer contributions. (a) The employer contribution to the fund must be
83.16equal to the following percent of salary:

83.17		from July 1, 2010, to June 30, 2014	5
83.18		from July 1, 2014, and thereafter to June 30, 2018	5.5
83.19		from July 1, 2018, to June 30, 2019	5.875
83.20		after June 30, 2019	6.25

83.21(b) Contribution increases under paragraph (a) must be paid starting the first day of the
83.22first full pay period after the effective date of the increase.

83.23    Sec. 3. Minnesota Statutes 2016, section 352.92, subdivision 1, is amended to read:
83.24    Subdivision 1. Employee contributions. (a) Employee contributions of covered
83.25correctional employees must be in an amount equal to the following percent of salary:

83.26		from July 1, 2010, to June 30, 2014	8.6
83.27		from July 1, 2014, and thereafter to June 30, 2018	9.1
83.28		after June 30, 2018	9.6

83.29(b) These contributions must be made by deduction from salary as provided in section
83.30352.04, subdivision 4 .
84.1(c) Contribution increases under paragraph (a) must be paid starting the first day of the
84.2first full pay period after the effective date of the increase.

84.3    Sec. 4. Minnesota Statutes 2016, section 352.92, subdivision 2, is amended to read:
84.4    Subd. 2. Employer contributions. (a) The employer shall contribute for covered
84.5correctional employees an amount equal to the following percent of salary:

84.6		from July 1, 2010, to June 30, 2014	12.1
84.7		from July 1, 2014, and thereafter to June 30, 2018	12.85
84.8		after June 30, 2018	14.4

84.9(b) Contribution increases under paragraph (a) must be paid starting the first day of the
84.10first full pay period after the effective date of the increase.

84.11    Sec. 5. Minnesota Statutes 2016, section 352.92, is amended by adding a subdivision to
84.12read:
84.13    Subd. 2a. Supplemental employer contribution. (a) Effective July 1, 2019, the employer
84.14shall pay a supplemental contribution. The supplemental contribution is 1.45 percent of
84.15salary for covered correctional employees from July 1, 2019, through June 30, 2020; 2.95
84.16percent of salary for covered correctional employees from July 1, 2020, through June 30,
84.172021; and 4.45 percent of salary for covered correctional employees thereafter. The
84.18supplemental contribution rate of 4.45 percent remains in effect until the market value of
84.19the assets of the correctional state employees retirement plan of the Minnesota State
84.20Retirement System equals or exceeds the actuarial accrued liability of the plan as determined
84.21by the actuary retained under section 356.214. The expiration of the supplemental employer
84.22contribution is effective the first day of the first full pay period of the fiscal year immediately
84.23following the issuance of the actuarial valuation upon which the expiration is based.
84.24(b) The supplemental contribution under paragraph (a) must be paid starting the first
84.25day of the first full pay period after the effective date of this subdivision.

84.26    Sec. 6. Minnesota Statutes 2016, section 352B.02, subdivision 1a, is amended to read:
84.27    Subd. 1a. Member contributions. (a) The member contribution is the following
84.28percentage of the member's salary:

84.29 84.30		(1) before the first day of the first pay period beginning after July 1, 2014	12.4 percent
84.31 84.32		(2) on or after the first day of the first pay period beginning after from July 1, 2014, to June 30, 2016	13.4 percent
85.1 85.2		(3) after June 30, 2016 from July 1, 2016, to June 30, 2018	14.4 percent
85.3		from July 1, 2018, to June 30, 2020	14.9
85.4		after June 30, 2020	15.4

85.5(b) These contributions must be made by deduction from salary as provided in section
85.6352.04, subdivision 4 .
85.7(c) Contribution increases under paragraph (a) must be paid starting the first day of the
85.8first full pay period after the effective date of the increase.

85.9    Sec. 7. Minnesota Statutes 2016, section 352B.02, subdivision 1c, is amended to read:
85.10    Subd. 1c. Employer contributions and supplemental employer contribution. (a) In
85.11addition to member contributions, department heads shall pay a sum equal to the specified
85.12percentage of the salary upon which deductions were made, which constitutes the employer
85.13contribution to the fund as follows:

85.14 85.15		(1) before the first day of the first pay period beginning after July 1, 2014	18.6 percent
85.16 85.17		(2) on or after the first day of the first pay period beginning after from July 1, 2014, to June 30, 2016	20.1 percent
85.18 85.19		(3) after June 30, 2016 from July 1, 2016, to June 30, 2018	21.6 percent
85.20		from July 1, 2018, to June 30, 2019	22.35
85.21		after June 30, 2019	23.1

85.22(b) Department contributions must be paid out of money appropriated to departments
85.23for this purpose.
85.24(c) Contribution increases under paragraph (a) must be paid starting the first day of the
85.25first full pay period after the effective date of the increase.
85.26(d) Effective July 1, 2018, department heads shall pay a supplemental employer
85.27contribution. The supplemental contribution is 1.75 percent of the salary upon which
85.28deductions are made from July 1, 2018, through June 30, 2019; three percent of the salary
85.29upon which deductions are made from July 1, 2019, through June 30, 2020; five percent of
85.30the salary which deductions are made from July 1, 2020, through June 30, 2021; and seven
85.31percent of the salary upon which deductions are made thereafter. The supplemental
85.32contribution must be paid starting the first day of the first full pay period after the effective
85.33date of this subdivision. The supplemental contribution rate of seven percent remains in
85.34effect until the market value of the assets of the State Patrol retirement plan of the Minnesota
85.35State Retirement System equals or exceeds the actuarial accrued liability of the plan as
86.1determined by the actuary retained under section 356.214. The expiration of the supplemental
86.2employer contribution is effective the first day of the first full pay period of the fiscal year
86.3immediately following the issuance of the actuarial valuation upon which the expiration is
86.4based.

86.5    Sec. 8. Minnesota Statutes 2016, section 352D.04, subdivision 2, is amended to read:
86.6    Subd. 2. Contribution rates. (a) The money used to purchase shares under this section
86.7is the employee and employer contributions provided in this subdivision.
86.8    (b) The employee contribution is an amount equal to the percent of salary specified in
86.9section 352.04, subdivision 2, or 352.045, subdivision 3a.
86.10    (c) The employer contribution is an amount equal to six percent the following percentage
86.11of salary.:

86.12		from July 1, 2018, through June 30, 2019	6 percent
86.13		after June 30, 2019	6.25 percent

86.14    (d) For members of the legislature, the contributions under this subdivision also must
86.15be made on per diem payments received during a regular or special legislative session, but
86.16may not be made on per diem payments received outside of a regular or special legislative
86.17session, on the additional compensation attributable to a leadership position under section
86.183.099 , subdivision 3, living expense payments under section 3.101, or special session living
86.19expense payments under section 3.103.
86.20    (e) For a judge who is a member of the unclassified plan under section 352D.02,
86.21subdivision 1, paragraph (c), clause (16), the employee contribution rate is eight percent of
86.22salary, and there is no employer contribution.
86.23(f) These contributions must be made in the manner provided in section 352.04,
86.24subdivisions 4, 5, and 6.

86.25    Sec. 9. Minnesota Statutes 2016, section 353.65, subdivision 2, is amended to read:
86.26    Subd. 2. Employee contribution. (a) For members other than members who were active
86.27members of the former Minneapolis Firefighters Relief Association on December 29, 2011,
86.28or for members other than members who were active members of the former Minneapolis
86.29Police Relief Association on December 29, 2011, the employee contribution is an amount
86.30equal to the following percentage of the total salary of each member, as follows: 9.6 percent
86.31before calendar year 2014; 10.2 percent in calendar year 2014; and 10.8 percent in calendar
86.32year 2015 and thereafter.

87.1		before January 1, 2019	10.8 percent
87.2		from January 1, 2019, through December 31, 2019	11.3 percent
87.3		from January 1, 2020, and thereafter	11.8 percent

87.4(b) For members who were active members of the former Minneapolis Firefighters Relief
87.5Association on December 29, 2011, the employee contribution is an amount equal to eight
87.6percent of the monthly unit value under section 353.01, subdivision 10a, multiplied by 80
87.7and expressed as a biweekly amount for each member. The employee contribution made
87.8by a member with at least 25 years of service credit as an active member of the former
87.9Minneapolis Firefighters Relief Association must be deposited in the postretirement health
87.10care savings account established under section 352.98.
87.11(c) For members who were active members of the former Minneapolis Police Relief
87.12Association on December 29, 2011, the employee contribution is an amount equal to eight
87.13percent of the monthly unit value under section 353.01, subdivision 10b, multiplied by 80
87.14and expressed as a biweekly amount for each member. The employee contribution made
87.15by a member with at least 25 years of service credit as an active member of the former
87.16Minneapolis Police Relief Association must be deposited in the postretirement health care
87.17savings account established under section 352.98.
87.18(d) Contributions under this section must be made by deduction from salary in the manner
87.19provided in subdivision 4. Where any portion of a member's salary is paid from other than
87.20public funds, the member's employee contribution is based on the total salary received from
87.21all sources.

87.22    Sec. 10. Minnesota Statutes 2016, section 353.65, subdivision 3, is amended to read:
87.23    Subd. 3. Employer contribution. (a) With respect to members other than members who
87.24were active members of the former Minneapolis Firefighters Relief Association on December
87.2529, 2011, or for members other than members who were active members of the former
87.26Minneapolis Police Relief Association on December 29, 2011, the employer contribution
87.27is an amount equal to the following percentage of the total salary of each member, as follows:
87.2814.4 percent before calendar year 2014; 15.3 percent in calendar year 2014; and 16.2 percent
87.29in calendar year 2015 and thereafter.

87.30		before January 1, 2019	16.2 percent
87.31		from January 1, 2019, through December 31, 2019	16.95 percent
87.32		from January 1, 2020, and thereafter	17.7 percent

87.33(b) With respect to members who were active members of the former Minneapolis
87.34Firefighters Relief Association on December 29, 2011, the employer contribution is an
88.1amount equal to the amount of the member contributions under subdivision 2, paragraph
88.2(b).
88.3(c) With respect to members who were active members of the former Minneapolis Police
88.4Relief Association on December 29, 2011, the employer contribution is an amount equal
88.5to the amount of the member contributions under subdivision 2, paragraph (c).
88.6(d) Contributions under this subdivision must be made from funds available to the
88.7employing subdivision by the means and in the manner provided in section 353.28.

88.8    Sec. 11. Minnesota Statutes 2016, section 354.42, subdivision 2, is amended to read:
88.9    Subd. 2. Employee contribution. (a) The employee contribution to the fund is the
88.10following percentage of the member's salary:

88.11		Period	Basic Program	Coordinated Program
88.12		from July 1, 2013, until June 30, 2014	10.5 percent	7 percent
88.13 88.14		after June 30, 2014 from July 1, 2014, through June 30, 2023	11 percent	7.5 percent
88.15		after June 30, 2023	11.25 percent	7.75 percent

88.16(b) When an employee contribution rate changes for a fiscal year, the new contribution
88.17rate is effective for the entire salary paid for each employer unit with the first payroll cycle
88.18reported.
88.19(c) After June 30, 2015, if a contribution rate revision is required under subdivisions 4a,
88.204b, and 4c, the employee contributions under paragraphs (a) and (b) must be adjusted
88.21accordingly.
88.22(d) This contribution must be made by deduction from salary. Where any portion of a
88.23member's salary is paid from other than public funds, the member's employee contribution
88.24must be based on the entire salary received.

88.25    Sec. 12. Minnesota Statutes 2016, section 354.42, subdivision 3, is amended to read:
88.26    Subd. 3. Employer. (a) The regular employer contribution to the fund by Special School
88.27District No. 1, Minneapolis, is an amount equal to the applicable following percentage of
88.28salary of each coordinated member and the applicable percentage of salary of each basic
88.29member specified in paragraph (c).
88.30The additional employer contribution to the fund by Special School District No. 1,
88.31Minneapolis, is an amount equal to 3.64 percent of the salary of each teacher who is a
88.32coordinated member or who is a basic member.
89.1(b) The regular employer contribution to the fund by Independent School District No.
89.2709, Duluth, is an amount equal to the applicable percentage of salary of each old law or
89.3new law coordinated member specified for the coordinated program in paragraph (c).
89.4(c) The employer contribution to the fund for every other employer is an amount equal
89.5to the applicable following percentage of the salary of each coordinated member and the
89.6applicable following percentage of the salary of each basic member:

89.7		Period	Coordinated Member			Basic Member
89.8		from July 1, 2013, until June 30, 2014		7 percent		11 percent
89.9 89.10		after June 30, 2014 from July 1, 2014, through June 30, 2018		7.5 percent		11.5 percent
89.11		from July 1, 2018, through June 30, 2019		7.71 percent		11.71 percent
89.12		from July 1, 2019, through June 30, 2020		7.92 percent		11.92 percent
89.13		from July 1, 2020, through June 30, 2021		8.13 percent		12.13 percent
89.14		from July 1, 2021, through June 30, 2022		8.34 percent		12.34 percent
89.15		from July 1, 2022, through June 30, 2023		8.55 percent		12.55 percent
89.16		after June 30, 2023		8.75 percent		12.75 percent

89.17(d) When an employer contribution rate changes for a fiscal year, the new contribution
89.18rate is effective for the entire salary paid for each employer unit with the first payroll cycle
89.19reported.
89.20(e) After June 30, 2015, if a contribution rate revision is made under subdivisions 4a,
89.214b, and 4c, the employer contributions under paragraphs (a), (b), and (c) must be adjusted
89.22accordingly.

89.23    Sec. 13. Minnesota Statutes 2016, section 354A.12, subdivision 1, is amended to read:
89.24    Subdivision 1. Employee contributions. (a) The contribution required to be paid by
89.25each member of the St. Paul Teachers Retirement Fund Association is the percentage of
89.26total salary specified below for the applicable association and program:

89.27		Program	Percentage of Total Salary
89.28	St. Paul Teachers Retirement Fund Association
89.29		basic program after June 30, 2014	9 percent
89.30		basic program after June 30, 2015	9.5 percent
89.31		basic program after June 30, 2016	10 percent
89.32		basic program after June 30, 2022	10.25 percent
89.33		coordinated program after June 30, 2014	6.5 percent
89.34		coordinated program after June 30, 2015	7 percent
89.35		coordinated program after June 30, 2016	7.5 percent
90.1		coordinated program after June 30, 2022	7.75 percent

90.2(b) Contributions must be made by deduction from salary and must be remitted directly
90.3to the St. Paul Teachers Retirement Fund Association at least once each month.
90.4(c) When an employee contribution rate changes for a fiscal year, the new contribution
90.5rate is effective for the entire salary paid by the employer with the first payroll cycle reported.

90.6    Sec. 14. Minnesota Statutes 2016, section 354A.12, subdivision 2a, is amended to read:
90.7    Subd. 2a. Employer regular and additional contributions. (a) The employing units
90.8shall make the following employer contributions to the teachers retirement fund association:
90.9(1) for any each coordinated member of the St. Paul Teachers Retirement Fund
90.10Association, the employing unit shall make a regular employer contribution to the retirement
90.11fund association in an amount equal to the designated percentage of the salary of the
90.12coordinated member as provided below:

90.13		after June 30, 2014	5.5 percent
90.14		after June 30, 2015	6 percent
90.15		after June 30, 2016	6.25 percent
90.16		after June 30, 2017	6.5 percent
90.17		after June 30, 2018	7.335 percent
90.18		after June 30, 2019	8.17 percent
90.19		after June 30, 2020	8.38 percent
90.20		after June 30, 2021	8.59 percent
90.21		after June 30, 2022	8.8 percent
90.22		after June 30, 2023	9 percent

90.23(2) for any each basic member of the St. Paul Teachers Retirement Fund Association,
90.24the employing unit shall make a regular employer contribution to the respective retirement
90.25fund in an amount according to the schedule below:

90.26		after June 30, 2014	9 percent of salary
90.27		after June 30, 2015	9.5 percent of salary
90.28		after June 30, 2016	9.75 percent of salary
90.29		after June 30, 2017	10 percent of salary
90.30		after June 30, 2018	10.835 percent of salary
90.31		after June 30, 2019	11.67 percent of salary
90.32		after June 30, 2020	11.88 percent of salary
90.33		after June 30, 2021	12.09 percent of salary
90.34		after June 30, 2022	12.3 percent of salary
91.1		after June 30, 2023	12.5 percent of salary

91.2(3) for a each basic member of the St. Paul Teachers Retirement Fund Association, the
91.3employing unit shall make an additional employer contribution to the respective fund in an
91.4amount equal to 3.64 percent of the salary of the basic member;
91.5(4) for a each coordinated member of the St. Paul Teachers Retirement Fund Association,
91.6the employing unit shall make an additional employer contribution to the respective fund
91.7in an amount equal to 3.84 percent of the coordinated member's salary.
91.8(b) The regular and additional employer contributions must be remitted directly to the
91.9St. Paul Teachers Retirement Fund Association at least once each month. Delinquent amounts
91.10are payable with interest under the procedure in subdivision 1a.
91.11(c) Payments of regular and additional employer contributions for school district or
91.12technical college employees who are paid from normal operating funds must be made from
91.13the appropriate fund of the district or technical college.
91.14(d) When an employer contribution rate changes for a fiscal year, the new contribution
91.15rate is effective for the entire salary paid by the employer with the first payroll cycle reported.

91.16    Sec. 15. EFFECTIVE DATE.
91.17Sections 1 to 14 are effective June 30, 2018.


91.20    Section 1. Minnesota Statutes 2016, section 353.65, is amended by adding a subdivision
91.21to read:
91.22    Subd. 3b. Direct state aid. (a) The state shall pay $4,500,000 on October 1, 2018, and
91.23October 1, 2019, to the public employees police and fire retirement plan. By October 1 of
91.24each year after 2019, the state shall pay $9,000,000 to the public employees police and fire
91.25retirement plan. The commissioner of management and budget shall pay the aid specified
91.26in this subdivision. The amount required is annually appropriated from the general fund to
91.27the commissioner of management and budget.
91.28(b) The aid under paragraph (a) continues until the earlier of:
91.29(1) the first day of the fiscal year following the fiscal year in which the actuarial value
91.30of assets of the fund equals or exceeds 100 percent of the actuarial accrued liabilities as
92.1reported by the actuary retained under section 356.214 in the annual actuarial valuation
92.2prepared under section 356.215; or
92.3(2) July 1, 2048.

92.4    Sec. 2. Minnesota Statutes 2016, section 354.435, subdivision 4, is amended to read:
92.5    Subd. 4. Expiration. This The aid amounts specified in this section expires effective
92.6shall continue until the earlier of:
92.7(1) the first day of the fiscal year next following the fiscal year in which the Teachers
92.8Retirement Association has no unfunded actuarial value of assets of the fund equals or
92.9exceeds 100 percent of the actuarial accrued liability liabilities as determined by the reported
92.10by the actuary retained under section 356.214 in the annual actuarial valuation prepared
92.11under section 356.215 by the approved actuary retained under section 356.214.; or
92.12(2) July 1, 2048.

92.13    Sec. 3. Minnesota Statutes 2016, section 354.436, subdivision 3, is amended to read:
92.14    Subd. 3. Aid expiration. The aid amounts specified in this section terminate and this
92.15section expires on the October 1 next following the later of the following dates: (1) when
92.16the current assets of the Teachers Retirement Association fund equal or exceed continue
92.17until the earlier of:
92.18(1) the first day of the fiscal year following the fiscal year in which the actuarial value
92.19of assets of the fund equals or exceeds 100 percent of the actuarial accrued liabilities of the
92.20fund as determined in the most recent actuarial valuation report for the Teachers Retirement
92.21Association fund reported by the actuary retained under section 356.214 in the annual
92.22actuarial valuation prepared under section 356.215; or
92.23(2) when the member and employer contribution rates are first determined to be eligible
92.24for a reduction under section 354.42, subdivisions 4a, 4b, 4c, and 4d July 1, 2048.

92.25    Sec. 4. Minnesota Statutes 2016, section 354A.12, subdivision 3a, is amended to read:
92.26    Subd. 3a. Direct state aid to first class city teachers retirement fund associations.
92.27    (a) The state shall pay $2,827,000 to the St. Paul Teachers Retirement Fund Association.
92.28(b) In addition to other amounts specified in this subdivision, the state shall pay
92.29$7,000,000 as state aid to the St. Paul Teachers Retirement Fund Association.
93.1(c) In addition to the amounts specified in paragraphs (a) and (b), the state shall pay
93.2$5,000,000 as state aid to the St. Paul Teachers Retirement Fund Association.
93.3    (c) (d) The aid under this subdivision is payable October 1 annually. The commissioner
93.4of management and budget shall pay the aid specified in this subdivision. The amount
93.5required is appropriated annually from the general fund to the commissioner of management
93.6and budget.

93.7    Sec. 5. Minnesota Statutes 2016, section 354A.12, subdivision 3c, is amended to read:
93.8    Subd. 3c. Termination of supplemental contributions and direct matching and state
93.9aid. (a) The supplemental contributions payable to the St. Paul Teachers Retirement Fund
93.10Association by Independent School District No. 625 under section 423A.02, subdivision 3,
93.11and all forms of the aid under subdivision 3a to the St. Paul Teachers Retirement Fund
93.12Association must, paragraphs (a) and (b), continue until the actuarial earlier of:
93.13    (1) the first day of the fiscal year following the year in which the actuarial value of assets
93.14of the fund equal equals or exceed exceeds 100 percent of the actuarial accrued liability of
93.15the fund as determined in the most recent actuarial report for the fund reported by the actuary
93.16retained under section 356.214 or until the established date for full funding under section
93.17356.215, subdivision 11 , whichever occurs earlier in the most recent annual actuarial
93.18valuation prepared under section 356.215; or
93.19    (2) July 1, 2048.
93.20(b) The aid to the Duluth Teachers Retirement Fund Association under section 423A.02,
93.21subdivision 3 , and all forms of state aid under subdivision 3a to the Duluth Teachers
93.22Retirement Fund Association must continue until the current assets of the fund equal or
93.23exceed the actuarial accrued liability of the fund as determined in the most recent actuarial
93.24report for the fund by the actuary retained under section 356.214 or until the established
93.25date for full funding under section 356.215, subdivision 11, whichever occurs earlier.
93.26(b) The aid under subdivision 3a, paragraph (c), continues until the earlier of:
93.27(1) the first day of the fiscal year following the fiscal year in which the actuarial value
93.28of assets of the fund equals or exceeds 100 percent of the actuarial accrued liabilities as
93.29reported by the actuary retained under section 356.214 in the annual actuarial valuation
93.30prepared under section 356.215; or
93.31(2) July 1, 2048.

94.1    Sec. 6. Minnesota Statutes 2016, section 423A.02, subdivision 3, is amended to read:
94.2    Subd. 3. Reallocation of amortization state aid. (a) Seventy percent of the difference
94.3between $5,720,000 and the current year amortization aid distributed under subdivision 1
94.4that is not distributed for any reason to a municipality must be distributed by the
94.5commissioner of revenue according to this paragraph. The commissioner shall distribute
94.660 percent of the amounts derived under this paragraph to the Teachers Retirement
94.7Association, and 40 percent to the St. Paul Teachers Retirement Fund Association to fund
94.8the unfunded actuarial accrued liabilities of the respective funds. These payments must be
94.9made on July 15 each fiscal year. If the St. Paul Teachers Retirement Fund Association or
94.10the Duluth Teachers Retirement Fund Association becomes fully funded, the association's
94.11satisfies subdivision 5, eligibility for its portion of this aid ceases. Amounts remaining in
94.12the undistributed balance account at the end of the biennium if aid eligibility ceases cancel
94.13to the general fund.
94.14    (b) In order to receive amortization aid under paragraph (a), before June 30 annually
94.15Independent School District No. 625, St. Paul, must make an additional contribution of
94.16$800,000 each year to the St. Paul Teachers Retirement Fund Association.
94.17    (c) Thirty percent of the difference between $5,720,000 and the current year amortization
94.18aid under subdivision 1 that is not distributed for any reason to a municipality must be
94.19distributed under section 69.021, subdivision 7, paragraph (d), as additional funding to
94.20support a minimum fire state aid amount for volunteer firefighter relief associations.

94.21    Sec. 7. Minnesota Statutes 2016, section 423A.02, subdivision 5, is amended to read:
94.22    Subd. 5. Termination of state aid programs. The amortization state aid and additional
94.23amortization state aid programs terminate as continue until the earlier of:
94.24    (1) the December 31, next following the date of the actuarial valuation when end of the
94.25fiscal year in which the actuarial value of assets of the St. Paul Teachers Retirement Fund
94.26Association equal or the Teachers Retirement Association equals or exceeds 100 percent
94.27of the actuarial accrued liability of that plan or when the assets of the Duluth Teachers
94.28Retirement Fund Association equal the actuarial accrued liability of that plan, whichever
94.29is later. liabilities as reported by the actuary retained under section 356.214 in the annual
94.30actuarial valuation report prepared under section 356.215; or
94.31    (2) July 1, 2048.

95.1    Sec. 8. Minnesota Statutes 2016, section 423A.022, subdivision 5, is amended to read:
95.2    Subd. 5. Aid termination. (a) The aid under subdivision 2, paragraph (a), clauses (1)
95.3and (3), ends on continues until the earlier of:
95.4    (1) the December 1 next following the actuarial valuation date on end of the fiscal year
95.5in which the actuarial value of assets of both the State Patrol retirement plan and the public
95.6employees police and fire retirement plan on a market value basis equals or exceeds 90
95.7percent of the total actuarial accrued liabilities of the retirement plan as disclosed in an
95.8reported by the actuary retained under section 356.214 in the annual actuarial valuation
95.9prepared under section 356.215 and the Standards for Actuarial Work promulgated by the
95.10Legislative Commission on Pensions and Retirement, for the State Patrol retirement plan
95.11or the public employees police and fire retirement plan, whichever occurs last; or
95.12    (2) July 1, 2048.
95.13    (b) The aid under subdivision 2, paragraph (a), clause (2), does not terminate.

95.14    Sec. 9. Minnesota Statutes 2016, section 490.123, is amended by adding a subdivision to
95.15read:
95.16    Subd. 5. Direct state aid. (a) The state shall pay $6,000,000 annually to the judges'
95.17retirement fund. The aid is payable each October 1. The commissioner of management and
95.18budget shall pay the aid specified in this subdivision. The amount required is annually
95.19appropriated from the general fund to the commissioner of management and budget.
95.20(b) The aid under paragraph (a) continues until the earlier of:
95.21(1) the first day of the fiscal year following the fiscal year in which the actuarial value
95.22of assets of the fund equals or exceeds 100 percent of the actuarial accrued liabilities as
95.23reported by the actuary retained under section 356.214 in the annual actuarial valuation
95.24prepared under section 356.215; or
95.25(2) July 1, 2048.

95.26    Sec. 10. REPEALER.
95.27Laws 2008, chapter 349, article 8, section 4, is repealed.

95.28    Sec. 11. EFFECTIVE DATE.
95.29Sections 1 to 10 are effective June 30, 2018.


96.4    Section 1. Minnesota Statutes 2016, section 3A.03, subdivision 2, is amended to read:
96.5    Subd. 2. Refund. (a) A former member who has made contributions under subdivision
96.61 and who is no longer a member of the legislature is entitled to receive, upon written
96.7application to the executive director on a form prescribed by the executive director, a refund
96.8from the general fund of all contributions credited to the member's account with interest
96.9computed as provided in section 352.22, subdivision 2.
96.10    (b) The refund of contributions as provided in paragraph (a) terminates all rights of a
96.11former member of the legislature and the survivors of the former member under this chapter.
96.12    (c) If the former member of the legislature again becomes a member of the legislature
96.13after having taken a refund as provided in paragraph (a), the member is a member of the
96.14unclassified employees retirement program of the Minnesota State Retirement System.
96.15    (d) However, the member may reinstate the rights and credit for service previously
96.16forfeited under this chapter if the member repays all refunds taken, plus interest at the rate
96.17of 8.5 percent until June 30, 2015, and eight percent thereafter compounded annually from
96.18the date on which the refund was taken to the date on which the refund is repaid. Repayment
96.19must be made as provided in section 352.23, paragraph (d).
96.20    (e) No person may be required to apply for or to accept a refund.

96.21    Sec. 2. Minnesota Statutes 2016, section 3A.03, subdivision 3, is amended to read:
96.22    Subd. 3. Legislators retirement fund. (a) The legislators retirement fund, a special
96.23retirement fund, is created within the state treasury. The legislators retirement fund must
96.24be credited with any investment proceeds on the assets of the retirement fund.
96.25(b) The payment of annuities under section 3A.115, paragraph (b), is appropriated from
96.26the legislators retirement fund.
96.27(c) The legislators retirement fund may receive transfers of general fund proceeds.

96.28    Sec. 3. Minnesota Statutes 2016, section 16A.14, subdivision 2a, is amended to read:
96.29    Subd. 2a. Exceptions. The allotment and encumbrance system does not apply to:
96.30(1) appropriations for the courts or the legislature;
97.1(2) payment of unemployment benefits.; and
97.2(3) transactions within the defined contribution funds administered by the Minnesota
97.3State Retirement System.

97.4    Sec. 4. Minnesota Statutes 2016, section 352.01, subdivision 2a, is amended to read:
97.5    Subd. 2a. Included employees. (a) "State employee" includes:
97.6    (1) employees of the Minnesota Historical Society;
97.7    (2) employees of the State Horticultural Society;
97.8    (3) employees of the Minnesota Crop Improvement Association;
97.9    (4) employees of the adjutant general whose salaries are paid from federal funds and
97.10who are not covered by any federal civilian employees retirement system;
97.11    (5) employees of the Minnesota State Colleges and Universities who are employed under
97.12the university or college activities program;
97.13    (6) currently contributing employees covered by the system who are temporarily
97.14employed by the legislature during a legislative session or any currently contributing
97.15employee employed for any special service as defined in subdivision 2b, clause (6);
97.16    (7) employees of the legislature who are appointed without a limit on the duration of
97.17their employment;
97.18    (8) trainees who are employed on a full-time established training program performing
97.19the duties of the classified position for which they will be eligible to receive immediate
97.20appointment at the completion of the training period;
97.21    (9) employees of the Minnesota Safety Council;
97.22    (10) any employees who are on authorized leave of absence from the Transit Operating
97.23Division of the former Metropolitan Transit Commission and who are employed by the
97.24labor organization which is the exclusive bargaining agent representing employees of the
97.25Transit Operating Division;
97.26    (11) employees of the Metropolitan Council, Metropolitan Parks and Open Space
97.27Commission, Metropolitan Sports Facilities Commission, or Metropolitan Mosquito Control
97.28Commission unless excluded under subdivision 2b or are covered by another public pension
97.29fund or plan under section 473.415, subdivision 3;
97.30    (12) judges of the Tax Court;
98.1    (13) personnel who were employed on June 30, 1992, by the University of Minnesota
98.2in the management, operation, or maintenance of its heating plant facilities, whose
98.3employment transfers to an employer assuming operation of the heating plant facilities, so
98.4long as the person is employed at the University of Minnesota heating plant by that employer
98.5or by its successor organization;
98.6    (14) personnel who are employed as seasonal employees in the classified or unclassified
98.7service;
98.8    (15) persons who are employed by the Department of Commerce as a peace officer in
98.9the Commerce Fraud Bureau under section 45.0135 who have attained the mandatory
98.10retirement age specified in section 43A.34, subdivision 4;
98.11    (16) employees of the University of Minnesota unless excluded under subdivision 2b,
98.12clause (3);
98.13    (17) employees of the Middle Management Association whose employment began after
98.14July 1, 2007, and to whom section 352.029 does not apply;
98.15    (18) employees of the Minnesota Government Engineers Council to whom section
98.16352.029 does not apply;
98.17(19) employees of the Minnesota Sports Facilities Authority;
98.18(20) employees of the Minnesota Association of Professional Employees;
98.19(21) employees of the Minnesota State Retirement System;
98.20(22) employees of the State Agricultural Society;
98.21(23) employees of the Gillette Children's Hospital Board who were employed in the
98.22state unclassified service at the former Gillette Children's Hospital on March 28, 1974; and
98.23(24) if approved for coverage by the Board of Directors of Conservation Corps Minnesota,
98.24employees of Conservation Corps Minnesota so employed on June 30, 2003.; and
98.25(25) employees of the Perpich Center for Arts Education who are covered by the general
98.26state employees retirement plan of the Minnesota State Retirement System as of July 1,
98.272016.
98.28    (b) Employees specified in paragraph (a), clause (13), are included employees under
98.29paragraph (a) if employer and employee contributions are made in a timely manner in the
98.30amounts required by section 352.04. Employee contributions must be deducted from salary.
98.31Employer contributions are the sole obligation of the employer assuming operation of the
99.1University of Minnesota heating plant facilities or any successor organizations to that
99.2employer.

99.3    Sec. 5. Minnesota Statutes 2016, section 352.03, subdivision 5, is amended to read:
99.4    Subd. 5. Executive director;, deputy director, and assistant director. (a) The board
99.5shall appoint an executive director, in this chapter called the director, of the system must
99.6be appointed by the board on the basis of fitness education, experience in the retirement
99.7field, and leadership ability to manage and lead system staff, and ability to assist the board
99.8in setting a vision for the system. The director must have had at least five years' experience
99.9on the administrative staff of a major retirement system in either an executive level
99.10management position or in a position with responsibility for the governance, management,
99.11or administration of a retirement plan.
99.12    (b) The executive director, deputy director, and assistant director must be in the
99.13unclassified service but appointees may be selected from civil service lists if desired.
99.14Notwithstanding any law to the contrary, the board must set the salary of the executive
99.15director. The salary of the executive director must not exceed the limit for a position listed
99.16in section 15A.0815, subdivision 2. The salary of the deputy director and assistant director
99.17must be set in accordance with section 43A.18, subdivision 3.

99.18    Sec. 6. Minnesota Statutes 2016, section 352.03, subdivision 6, is amended to read:
99.19    Subd. 6. Duties and powers of executive director. The management of the system is
99.20vested in the director, who is the executive and administrative head of the system. The
99.21director may appoint a deputy director and an assistant director with the approval of the
99.22board. The director shall be advisor to the board on matters pertaining to the system and
99.23shall also act as the secretary of the board. The director shall:
99.24(1) attend meetings of the board;
99.25(2) prepare and recommend to the board appropriate rules to carry out this chapter;
99.26(3) establish and maintain an adequate system of records and accounts following
99.27recognized accounting principles and controls;
99.28(4) designate an assistant director with the approval of the board;
99.29(5) (4) appoint any employees, both permanent and temporary, that are necessary to
99.30carry out the provisions of this chapter;
100.1(6) (5) organize the work of the system as the director deems necessary to fulfill the
100.2functions of the system, and define the duties of its employees and delegate to them any
100.3powers or duties, subject to the control of the director and under conditions the director may
100.4prescribe. Appointments to exercise delegated power must be by written order and shall be
100.5filed with the secretary of state;
100.6(7) (6) with the advice and consent of the board, contract for the services of an approved
100.7actuary, professional management services, and any other consulting services as necessary
100.8and fix the compensation for those services. The contracts are not subject to competitive
100.9bidding under chapter 16C. Any approved actuary retained by the executive director shall
100.10function as the actuarial advisor of the board and the executive director, and may perform
100.11actuarial valuations and experience studies to supplement those performed by the actuary
100.12retained under section 356.214. Any supplemental actuarial valuations or experience studies
100.13shall be filed with the executive director of the Legislative Commission on Pensions and
100.14Retirement. Professional management services may not be contracted for more often than
100.15once in six years. Copies of professional management survey reports must be transmitted
100.16to the secretary of the senate, the chief clerk of the house of representatives, and the
100.17Legislative Reference Library as provided by section 3.195, and to the executive director
100.18of the commission at the time as reports are furnished to the board. Only management firms
100.19experienced in conducting management surveys of federal, state, or local public retirement
100.20systems are qualified to contract with the director;
100.21(8) (7) with the advice and consent of the board provide in-service training for the
100.22employees of the system;
100.23(9) (8) make refunds of accumulated contributions to former state employees and to the
100.24designated beneficiary, surviving spouse, legal representative, or next of kin of deceased
100.25state employees or deceased former state employees, as provided in this chapter;
100.26(10) (9) determine the amount of the annuities and disability benefits of employees
100.27covered by the system and authorize payment of the annuities and benefits beginning as of
100.28the dates on which the annuities and benefits begin to accrue, in accordance with the
100.29provisions of this chapter;
100.30(11) (10) pay annuities, refunds, survivor benefits, salaries, and necessary operating
100.31expenses of the system;
100.32(12) (11) certify funds available for investment to the State Board of Investment;
100.33(13) (12) with the advice and approval of the board request the State Board of Investment
100.34to sell securities when the director determines that funds are needed for the system;
101.1(14) (13) prepare and submit to the board and the legislature an annual financial report
101.2covering the operation of the system, as required by section 356.20;
101.3(15) (14) prepare and submit biennial and annual budgets to the board and with the
101.4approval of the board submit the budgets to the Department of Management and Budget;
101.5and
101.6(16) (15) with the approval of the board, perform other duties required to administer the
101.7retirement and other provisions of this chapter and to do its business.

101.8    Sec. 7. Minnesota Statutes 2016, section 352.113, subdivision 4, is amended to read:
101.9    Subd. 4. Medical or psychological examinations; authorization for payment of
101.10benefit. (a) Any physician, psychologist, chiropractor, or physician assistant, or nurse
101.11practitioner providing any service specified in this section must be licensed.
101.12(b) An applicant shall provide a detailed report signed by a physician, and at least one
101.13additional report signed by a physician, chiropractor, psychologist, or chiropractor, physician
101.14assistant, or nurse practitioner with evidence to support an application for total and permanent
101.15disability. The reports must include an expert opinion regarding whether the employee is
101.16permanently and totally disabled within the meaning of section 352.01, subdivision 17, and
101.17that the disability arose before the employee was placed on any paid or unpaid leave of
101.18absence or terminated public service.
101.19(c) If there is medical evidence that supports the expectation that at some point the person
101.20applying for the disability benefit will no longer be disabled, the decision granting the
101.21disability benefit may provide for a termination date upon which the total and permanent
101.22disability can be expected to no longer exist. When a termination date is part of the decision
101.23granting benefits, prior to the benefit termination the executive director shall review any
101.24evidence provided by the disabled employee to show that the disabling condition for which
101.25benefits were initially granted continues. If the benefits cease, the disabled employee may
101.26follow the appeal procedures described in section 356.96 or may reapply for disability
101.27benefits using the process described in this subdivision.
101.28(d) Any claim to disability must be supported by a report from the employer indicating
101.29that there is no available work that the employee can perform with the disabling condition
101.30and that all reasonable accommodations have been considered. Upon request of the executive
101.31director, an employer shall provide evidence of the steps the employer has taken to attempt
101.32to provide reasonable accommodations and continued employment to the claimant.
102.1(e) The director shall also obtain written certification from the employer stating whether
102.2the employment has ceased or whether the employee is on sick leave of absence because
102.3of a disability that will prevent further service to the employer and that the employee is not
102.4entitled to compensation from the employer.
102.5(f) The medical adviser shall consider the reports of the physicians, physician assistants,
102.6psychologists, and chiropractors physician, psychologist, chiropractor, physician assistant,
102.7or nurse practitioner and any other evidence supplied by the employee or other interested
102.8parties. If the medical adviser finds the employee totally and permanently disabled, the
102.9adviser shall make appropriate recommendation to the director in writing together with the
102.10date from which the employee has been totally disabled. The director shall then determine
102.11if the disability occurred within 18 months of filing the application, while still in the
102.12employment of the state, and the propriety of authorizing payment of a disability benefit as
102.13provided in this section and constitutes a total and permanent disability as defined in section
102.14352.01, subdivision 17.
102.15(g) A terminated employee may apply for a disability benefit within 18 months of
102.16termination as long as the disability occurred while in the employment of the state. The fact
102.17that an employee is placed on leave of absence without compensation because of disability
102.18does not bar that employee from receiving a disability benefit.
102.19(h) Upon appeal, the board of directors may extend the disability benefit application
102.20deadline in paragraph (g) by an additional 18 months if the terminated employee is
102.21determined by the board of directors to have a cognitive impairment that made it unlikely
102.22that the terminated employee understood that there was an application deadline or that the
102.23terminated employee was able to meet the application deadline.
102.24(h) (i) Unless the payment of a disability benefit has terminated because the employee
102.25is no longer totally disabled, or because the employee has reached normal retirement age
102.26as provided in this section, the disability benefit must cease with the last payment received
102.27by the disabled employee or which had accrued during the lifetime of the employee unless
102.28there is a spouse surviving. In that event, the surviving spouse is entitled to the disability
102.29benefit for the calendar month in which the disabled employee died.

102.30    Sec. 8. Minnesota Statutes 2016, section 352.113, subdivision 14, is amended to read:
102.31    Subd. 14. Disabilitant earnings reports. Disability benefit recipients must report all
102.32earnings from reemployment and income from workers' compensation to the system annually
102.33by May 15 in a format prescribed by the executive director. The executive director may
102.34waive the earnings report requirement for any disabled employee who is not required to
103.1undergo regular medical or psychological examinations under subdivision 6. If the form is
103.2not submitted by June 15, benefits must be suspended effective July 1. If the form deemed
103.3acceptable by the executive director is received after the June 15 deadline, benefits shall be
103.4reinstated retroactive to July 1.

103.5    Sec. 9. Minnesota Statutes 2016, section 352.23, is amended to read:
103.6352.23 TERMINATION OF RIGHTS; REPAYMENT OF REFUND.
103.7(a) When any employee accepts a refund as provided in section 352.22, all existing
103.8allowable service credits and all rights and benefits to which the employee was entitled
103.9before accepting the refund terminate.
103.10(b) Terminated service credits and rights must not again be restored until the former
103.11employee acquires at least six months of allowable service credit after taking the last refund.
103.12In that event, the employee may repay and repays all refunds previously taken from the
103.13retirement fund with interest as provided in paragraph (d).
103.14(c) Repayment of refunds entitles the employee only to credit for service covered by (1)
103.15salary deductions; (2) payments previously made in lieu of salary deductions as permitted
103.16under law in effect when the payment in lieu of deductions was made; (3) payments made
103.17to obtain credit for service as permitted by laws in effect when payment was made; and (4)
103.18allowable service previously credited while receiving temporary workers' compensation as
103.19provided in section 352.01, subdivision 11, paragraph (a), clause (3).
103.20(d) Payments under this section for repayment of refunds are to be paid with interest at
103.21the rate of 8.5 percent until June 30, 2015, and eight percent thereafter compounded annually
103.22from the date the refund was taken until the date the refund is repaid. They Repayment may
103.23be paid in a lump sum or by payroll deduction in the manner provided in section 352.04.
103.24Payment may be made in partial payments consistent with section 356.44 during employment
103.25or in a lump sum up to six months after termination from service.

103.26    Sec. 10. Minnesota Statutes 2016, section 352B.11, subdivision 4, is amended to read:
103.27    Subd. 4. Reentry into state service. When a former member, who has become separated
103.28from state service that entitled the member to membership and has received a refund of
103.29retirement payments, reenters the state service in a position that entitles the member to
103.30membership, that member shall receive credit for the period of prior allowable state service
103.31if the member repays into the fund the amount of the refund, plus interest on it at the rate
103.32of 8.5 percent until June 30, 2015, and eight percent thereafter compounded annually, at
104.1any time before subsequent retirement. Repayment may be made in installments or in a
104.2lump sum. Repayment must be made as provided in section 352.23, paragraph (d).

104.3    Sec. 11. Minnesota Statutes 2016, section 352D.02, subdivision 1, is amended to read:
104.4    Subdivision 1. Coverage. (a) Employees enumerated in paragraph (c), clauses (2), (3),
104.5(4), (6) to (14), and (16) to (18), if they are in the unclassified service of the state or
104.6Metropolitan Council and are eligible for coverage under the general state employees
104.7retirement plan under chapter 352, are participants in the unclassified program under this
104.8chapter unless the employee gives notice to the executive director of the Minnesota State
104.9Retirement System within one year following the commencement of employment in the
104.10unclassified service that the employee desires coverage under the general state employees
104.11retirement plan. For the purposes of this chapter, an employee who does not file notice with
104.12the executive director is deemed to have exercised the option to participate in the unclassified
104.13program.
104.14    (b) Persons referenced in paragraph (c), clause (5), are participants in the unclassified
104.15program under this chapter unless the person was eligible to elect different coverage under
104.16section 3A.07 and elected retirement coverage by the applicable alternative retirement plan.
104.17Persons referenced in paragraph (c), clause (15), are participants in the unclassified program
104.18under this chapter for judicial employment in excess of the service credit limit in section
104.19490.121, subdivision 22 .
104.20    (c) Enumerated employees and referenced persons are:
104.21    (1) the governor, the lieutenant governor, the secretary of state, the state auditor, and
104.22the attorney general;
104.23    (2) an employee in the Office of the Governor, Lieutenant Governor, Secretary of State,
104.24State Auditor, Attorney General;
104.25    (3) an employee of the State Board of Investment;
104.26    (4) the head of a department, division, or agency created by statute in the unclassified
104.27service, an acting department head subsequently appointed to the position, or an employee
104.28enumerated in section 15A.0815 or 15A.083, subdivision 4;
104.29    (5) a member of the legislature;
104.30    (6) an unclassified employee of the legislature or a commission or agency of the
104.31legislature who is appointed without a limit on the duration of the employment or a temporary
104.32legislative employee having shares in the supplemental retirement fund as a result of former
105.1employment covered by this chapter, whether or not eligible for coverage under the
105.2Minnesota State Retirement System;
105.3    (7) a person who is employed in a position established under section 43A.08, subdivision
105.41 , clause (3), or in a position authorized under a statute creating or establishing a department
105.5or agency of the state, which is at the deputy or assistant head of department or agency or
105.6director level;
105.7    (8) the regional administrator, or executive director of the Metropolitan Council, general
105.8counsel, division directors, operations managers, and other positions as designated by the
105.9council, all of which may not exceed 27 positions at the council and the chair;
105.10    (9) the commissioner, deputy commissioner, and not to exceed nine positions of the
105.11Minnesota Office of Higher Education in the unclassified service, as designated by the
105.12Minnesota Office of Higher Education before January 1, 1992, or subsequently redesignated
105.13with the approval of the board of directors of the Minnesota State Retirement System, unless
105.14the person has elected coverage by the individual retirement account plan under chapter
105.15354B;
105.16    (10) the clerk of the appellate courts appointed under article VI, section 2, of the
105.17Constitution of the state of Minnesota, the state court administrator and judicial district
105.18administrators;
105.19    (11) the chief executive officers of correctional facilities operated by the Department of
105.20Corrections and of hospitals and nursing homes operated by the Department of Human
105.21Services;
105.22    (12) an employee whose principal employment is at the state ceremonial house;
105.23    (13) an employee of the Agricultural Utilization Research Institute;
105.24    (14) an employee of the State Lottery who is covered by the managerial plan established
105.25under section 43A.18, subdivision 3;
105.26    (15) a judge who has exceeded the service credit limit in section 490.121, subdivision
105.2722 ;
105.28    (16) an employee of Enterprise Minnesota, Inc.;
105.29    (17) a person employed by the Minnesota State Colleges and Universities as faculty or
105.30in an eligible unclassified administrative position as defined in section 354B.20, subdivision
105.316, who was employed by the former state university or the former community college system
105.32before May 1, 1995, and elected unclassified program coverage prior to May 1, 1995; and
106.1    (18) a person employed by the Minnesota State Colleges and Universities who was
106.2employed in state service before July 1, 1995, who subsequently is employed in an eligible
106.3unclassified administrative position as defined in section 354B.20, subdivision 6, and who
106.4elects coverage by the unclassified program.

106.5    Sec. 12. Minnesota Statutes 2016, section 352D.02, subdivision 3, is amended to read:
106.6    Subd. 3. Transfer to general employees retirement plan. (a) If permitted under
106.7paragraph (b), an employee A person in the unclassified program and referred to in
106.8subdivision 1, paragraph (c), clauses (2) to (4), (6) to (14), and (16) to (18), who is credited
106.9with shares in the unclassified program and has credit for allowable service may elect to
106.10terminate participation in the unclassified program and be covered by the general state
106.11employees retirement plan. (b) An employee specified in paragraph (a) is permitted to
106.12terminate participation in the unclassified program and be covered by if the person files an
106.13election to transfer to the general state employees retirement plan if the employee with the
106.14executive director of the Minnesota State Retirement System as provided in paragraph (b)
106.15and the person's current employment or appointment:
106.16(1) was employed began before July 1, 2010, and the person has at least ten years of
106.17allowable service covered employment; or
106.18(2) was first employed began after June 30, 2010, and the person has no more than seven
106.19years of allowable service in the unclassified program.
106.20The (b) An election to transfer must be in writing, on a form provided by the executive
106.21director, and can be made no later than one month following the termination of covered
106.22employment. delivered to the executive director:
106.23(1) for persons described in paragraph (a), clause (1), no later than one month following
106.24the termination of covered employment; or
106.25(2) for persons described in paragraph (a), clause (2), by the earlier of (i) the end of the
106.26month following the termination of employment in a position covered by the unclassified
106.27program, and (ii) the last day of the seventh year of allowable service in the unclassified
106.28program.
106.29For purposes of this chapter, an employee who does not file an election to transfer with
106.30the executive director is deemed to have exercised the option to participate in the unclassified
106.31program.
106.32(c) If the transfer election is made, the executive director shall redeem the employee's
106.33total shares and credit to the employee's account in the general employees retirement plan
107.1the amount of contributions that would have been credited had the employee been covered
107.2by the general employees retirement plan during the employee's entire covered employment.
107.3The balance of money redeemed and not credited to the employee's account must be
107.4transferred to the general employees retirement plan, except that the executive director must
107.5determine:
107.6(1) the employee contributions paid to the unclassified program; and
107.7(2) the employee contributions that would have been paid to the general employees
107.8retirement plan for the comparable period, if the individual had been covered by that plan.
107.9If clause (1) is greater than clause (2), the difference must be refunded to the employee
107.10as provided in section 352.22. If clause (2) is greater than clause (1), the difference must
107.11be paid by the employee within six months of electing general employees retirement plan
107.12coverage or before the effective date of the annuity, whichever is sooner.
107.13    (d) An election under paragraph (b) to transfer coverage to the general employees
107.14retirement plan is irrevocable during any period of covered employment.
107.15(e) A person referenced in subdivision 1, paragraph (c), clause (1), (5), or (15), who is
107.16credited with employee shares in the unclassified program is not permitted to terminate
107.17participation in the unclassified program and be covered by the general employees retirement
107.18plan.

107.19    Sec. 13. Minnesota Statutes 2016, section 352D.05, subdivision 4, is amended to read:
107.20    Subd. 4. Repayment of refund. (a) A participant in the unclassified program may repay
107.21regular refunds taken under section 352.22, as provided in section 352.23.
107.22(b) A participant in the unclassified program or an employee covered by the general
107.23employees retirement plan who has withdrawn the value of the total shares may repay the
107.24refund taken and thereupon restore the service credit, rights and benefits forfeited by paying
107.25into the fund the amount refunded plus interest at the rate of 8.5 percent until June 30, 2015,
107.26and eight percent thereafter compounded annually from the date that the refund was taken
107.27until the date that the refund is repaid. If the participant had withdrawn only the employee
107.28shares as permitted under prior laws, repayment must be pro rata.
107.29(c) Except as provided in section 356.441, the repayment of a refund under this section
107.30must be made in a lump sum Repayment must be made as provided in section 352.23,
107.31paragraph (d).

108.1    Sec. 14. Minnesota Statutes 2016, section 490.124, subdivision 12, is amended to read:
108.2    Subd. 12. Refund. (a) A person who ceases to be a judge is entitled to a refund in an
108.3amount that is equal to all of the member's employee contributions to the judges' retirement
108.4fund plus interest computed under section 352.22, subdivision 2.
108.5    (b) A refund of contributions under paragraph (a) terminates all service credits and all
108.6rights and benefits of the judge and the judge's survivors under this chapter.
108.7    (c) A person who becomes a judge again after taking a refund under paragraph (a) may
108.8reinstate the previously terminated allowable service credit, rights, and benefits by repaying
108.9the total amount of the previously received refund. The refund repayment must include
108.10interest on the total amount previously received at the annual rate of 8.5 percent until June
108.1130, 2015, and eight percent thereafter, compounded annually, from the date on which the
108.12refund was received until the date on which the refund is repaid. Repayment must be made
108.13as provided in section 352.23, paragraph (d).

108.14    Sec. 15. EFFECTIVE DATE.
108.15Sections 1 to 14 are effective June 30, 2018.


108.19    Section 1. Minnesota Statutes 2016, section 353.01, subdivision 2b, is amended to read:
108.20    Subd. 2b. Excluded employees. (a) The following public employees are not eligible to
108.21participate as members of the association with retirement coverage by the general employees
108.22retirement plan, the local government correctional employees retirement plan under chapter
108.23353E, or the public employees police and fire retirement plan:
108.24    (1) persons whose annual salary from one governmental subdivision never exceeds an
108.25amount, stipulated in writing in advance, of $5,100 if the person is not a school district
108.26employee or $3,800 if the person is a school year employee. If annual compensation from
108.27one governmental subdivision to an employee exceeds the stipulated amount in a calendar
108.28year or a school year, whichever applies, after being stipulated in advance not to exceed the
108.29applicable amount, the stipulation is no longer valid and contributions must be made on
108.30behalf of the employee under section 353.27, subdivision 12, from the first month in which
108.31the employee received salary exceeding $425 in a month;
109.1(2) public officers who are elected to a governing body, city mayors, or persons who
109.2are appointed to fill a vacancy in an elective elected office of a governing body, whose term
109.3of office commences on or after July 1, 2002, for the service to be rendered in that elective
109.4elected position;
109.5    (3) election judges and persons employed solely to administer elections;
109.6    (4) patient and inmate personnel who perform services for a governmental subdivision;
109.7    (5) except as otherwise specified in subdivision 12a, employees who are employed solely
109.8in a temporary position as defined under subdivision 12a, and employees who resign from
109.9a nontemporary position and accept a temporary position within 30 days of that resignation
109.10in the same governmental subdivision;
109.11    (6) employees who are employed by reason of work emergency caused by fire, flood,
109.12storm, or similar disaster, but if the person becomes a probationary or provisional employee
109.13within the same pay period, other than on a temporary basis, the person is a "public
109.14employee" retroactively to the beginning of the pay period;
109.15    (7) employees who by virtue of their employment in one governmental subdivision are
109.16required by law to be a member of and to contribute to any of the plans or funds administered
109.17by the Minnesota State Retirement System, the Teachers Retirement Association, or the St.
109.18Paul Teachers Retirement Fund Association, but this exclusion must not be construed to
109.19prevent a person from being a member of and contributing to the Public Employees
109.20Retirement Association and also belonging to and contributing to another public pension
109.21plan or fund for other service occurring during the same period of time, and a person who
109.22meets the definition of "public employee" in subdivision 2 by virtue of other service occurring
109.23during the same period of time becomes a member of the association unless contributions
109.24are made to another public retirement plan on the salary based on the other service or to the
109.25Teachers Retirement Association by a teacher as defined in section 354.05, subdivision 2;
109.26    (8) persons who are members of a religious order and are excluded from coverage under
109.27the federal Old Age, Survivors, Disability, and Health Insurance Program for the performance
109.28of service as specified in United States Code, title 42, section 410(a)(8)(A), as amended, if
109.29no irrevocable election of coverage has been made under section 3121(r) of the Internal
109.30Revenue Code of 1954, as amended;
109.31    (9) persons who are:
109.32    (i) employed by a governmental subdivision who have not reached the age of 23 and
109.33who are enrolled on a full-time basis to attend or are attending classes on a full-time basis
110.1at an accredited school, college, or university in an undergraduate, graduate, or
110.2professional-technical program, or at a public or charter high school;
110.3    (ii) employed as resident physicians, medical interns, pharmacist residents, or pharmacist
110.4interns and are serving in a degree or residency program in a public hospital or in a public
110.5clinic; or
110.6    (iii) students who are serving for a period not to exceed five years in an internship or a
110.7residency program that is sponsored by a governmental subdivision, including an accredited
110.8educational institution;
110.9    (10) persons who hold a part-time adult supplementary technical college license who
110.10render part-time teaching service in a technical college;
110.11    (11) except for employees of for the first three years of employment, foreign citizens
110.12who are employed by a governmental subdivision, other than Hennepin County or employees
110.13of Hennepin Healthcare System, Inc., foreign citizens who are employed by a governmental
110.14subdivision under a one or more work permit permits or under an H-1b visa initially issued
110.15or extended for a combined period of less than three years of employment but upon extension
110.16of the employment of the visa beyond the three-year period, the foreign citizen must be
110.17reported for membership beginning on the first of the month following the extension if the
110.18monthly earnings threshold as provided under subdivision 2a, paragraph (a), is met work
110.19visas;
110.20    (12) public hospital employees who elected not to participate as members of the
110.21association before 1972 and who did not elect to participate from July 1, 1988, to October
110.221, 1988;
110.23    (13) except as provided in section 353.86, volunteer ambulance service personnel, as
110.24defined in subdivision 35, but persons who serve as volunteer ambulance service personnel
110.25may still qualify as public employees under subdivision 2 and may be members of the Public
110.26Employees Retirement Association and participants in the general employees retirement
110.27plan or the public employees police and fire plan, whichever applies, on the basis of
110.28compensation received from public employment service other than service as volunteer
110.29ambulance service personnel;
110.30    (14) except as provided in section 353.87, volunteer firefighters, as defined in subdivision
110.3136, engaging in activities undertaken as part of volunteer firefighter duties, but a person
110.32who is a volunteer firefighter may still qualify as a public employee under subdivision 2
110.33and may be a member of the Public Employees Retirement Association and a participant
110.34in the general employees retirement plan or the public employees police and fire plan,
111.1whichever applies, on the basis of compensation received from public employment activities
111.2other than those as a volunteer firefighter;
111.3    (15) pipefitters and associated trades personnel employed by Independent School District
111.4No. 625, St. Paul, with coverage under a collective bargaining agreement by the pipefitters
111.5local 455 pension plan who were either first employed after May 1, 1997, or, if first employed
111.6before May 2, 1997, elected to be excluded under Laws 1997, chapter 241, article 2, section
111.712;
111.8    (16) electrical workers, plumbers, carpenters, and associated trades personnel who are
111.9employed by Independent School District No. 625, St. Paul, or the city of St. Paul, who
111.10have retirement coverage under a collective bargaining agreement by the Electrical Workers
111.11Local 110 pension plan, the United Association Plumbers Local 34 pension plan, or the
111.12pension plan applicable to Carpenters Local 322 who were either first employed after May
111.131, 2000, or, if first employed before May 2, 2000, elected to be excluded under Laws 2000,
111.14chapter 461, article 7, section 5;
111.15    (17) bricklayers, allied craftworkers, cement masons, glaziers, glassworkers, painters,
111.16allied tradesworkers, and plasterers who are employed by the city of St. Paul or Independent
111.17School District No. 625, St. Paul, with coverage under a collective bargaining agreement
111.18by the Bricklayers and Allied Craftworkers Local 1 pension plan, the Cement Masons Local
111.19633 pension plan, the Glaziers and Glassworkers Local L-1324 pension plan, the Painters
111.20and Allied Trades Local 61 pension plan, or the Twin Cities Plasterers Local 265 pension
111.21plan who were either first employed after May 1, 2001, or if first employed before May 2,
111.222001, elected to be excluded under Laws 2001, First Special Session chapter 10, article 10,
111.23section 6;
111.24    (18) plumbers who are employed by the Metropolitan Airports Commission, with
111.25coverage under a collective bargaining agreement by the Plumbers Local 34 pension plan,
111.26who either were first employed after May 1, 2001, or if first employed before May 2, 2001,
111.27elected to be excluded under Laws 2001, First Special Session chapter 10, article 10, section
111.286;
111.29    (19) employees who are hired after June 30, 2002, solely to fill seasonal positions under
111.30subdivision 12b which are limited in duration by the employer to 185 consecutive calendar
111.31days or less in each year of employment with the governmental subdivision;
111.32    (20) persons who are provided supported employment or work-study positions by a
111.33governmental subdivision and who participate in an employment or industries program
111.34maintained for the benefit of these persons where the governmental subdivision limits the
112.1position's duration to up to five years, including persons participating in a federal or state
112.2subsidized on-the-job training, work experience, senior citizen, youth, or unemployment
112.3relief program where the training or work experience is not provided as a part of, or for,
112.4future permanent public employment;
112.5    (21) independent contractors and the employees of independent contractors;
112.6    (22) reemployed annuitants of the association during the course of that reemployment;
112.7(23) persons appointed to serve on a board or commission of a governmental subdivision
112.8or an instrumentality thereof;
112.9(24) persons employed as full-time fixed-route bus drivers by the St. Cloud Metropolitan
112.10Transit Commission who are members of the International Brotherhood of Teamsters Local
112.11638 and who are, by virtue of that employment, members of the International Brotherhood
112.12of Teamsters Central States pension plan; and
112.13(25) electricians or pipefitters employed by the Minneapolis Park and Recreation Board,
112.14with coverage under a collective bargaining agreement by the IBEW local 292, or pipefitters
112.15local 539 pension plan, who were first employed before May 2, 2015, and who elected to
112.16be excluded under Laws 2015, chapter 68, article 11, section 5.
112.17(b) Any person performing the duties of a public officer in a position defined in
112.18subdivision 2a, paragraph (a), clause (3), is not an independent contractor and is not an
112.19employee of an independent contractor.

112.20    Sec. 2. Minnesota Statutes 2016, section 353.01, subdivision 10, is amended to read:
112.21    Subd. 10. Salary. (a) Subject to the limitations of section 356.611, "salary" means:
112.22    (1) the wages or periodic compensation payable to a public employee by the employing
112.23governmental subdivision before:
112.24    (i) employee retirement deductions that are designated as picked-up contributions under
112.25section 356.62;
112.26    (ii) any employee-elected deductions for deferred compensation, supplemental retirement
112.27plans, or other voluntary salary reduction programs that would have otherwise been available
112.28as a cash payment to the employee; and
112.29(iii) employee deductions for contributions to a supplemental plan or to a governmental
112.30trust established under section 356.24, subdivision 1, clause (7), to save for postretirement
112.31health care expenses, unless otherwise excluded under paragraph (b);
113.1    (2) for a public employee who is covered by a supplemental retirement plan under section
113.2356.24, subdivision 1 , clause (8), (9), (10), or (12), the employer contributions to the
113.3applicable supplemental retirement plan when an agreement between the parties establishes
113.4that the contributions will either result in a mandatory reduction of employees' wages through
113.5payroll withholdings, or be made in lieu of an amount that would otherwise be paid as
113.6wages;
113.7(3) a payment from a public employer through a grievance proceeding, settlement, or
113.8court order that is attached to a specific earnings period in which the employee's regular
113.9salary was not earned or paid to the member due to a suspension or a period of involuntary
113.10termination that is not a wrongful discharge under section 356.50; provided the amount is
113.11not less than the equivalent of the average of the hourly base salary rate in effect during the
113.12last six months of allowable service prior to the suspension or period of involuntary
113.13termination, plus any applicable increases awarded during the period that would have been
113.14paid under a collective bargaining agreement or personnel policy but for the suspension or
113.15involuntary termination, multiplied by the average number of regular hours for which the
113.16employee was compensated during the six months of allowable service prior to the suspension
113.17or period of involuntary termination, but not to exceed the compensation that the public
113.18employee would have earned if regularly employed during the applicable period;
113.19(4) for a member who is absent from employment due to compensation paid during an
113.20authorized leave of absence, other than an authorized medical leave of absence, as long as
113.21the compensation paid during the leave if equivalent to a pay period is not less than the
113.22lesser of:
113.23(i) the product of the average hourly base salary rate in effect during the six months of
113.24allowable service, or portions thereof, prior to immediately preceding the leave, multiplied
113.25by the average number of regular hours for which the employee was compensated each pay
113.26period during the six months of allowable service prior to immediately preceding the
113.27applicable leave of absence; or
113.28(ii) compensation equal to the value of the employee's total available accrued leave
113.29hours;
113.30(5) for a member who is absent from employment by reason of compensation paid during
113.31an authorized medical leave of absence, other than a workers' compensation leave, as long
113.32as the compensation paid during the leave if specified in advance to be at least a pay period
113.33is not less than the lesser of:
114.1(i) the product of one-half of, but no more than equal to, the earnings the member
114.2received, on which contributions were reported and allowable service credited and the
114.3average hourly base salary rate in effect during the six months of allowable service
114.4immediately preceding the medical leave of absence; and or
114.5(ii) compensation equal to the value of the employee's total available accrued leave
114.6hours; and
114.7    (6) for a public employee who receives performance or merit bonus payment under a
114.8written compensation plan, policy, or collective bargaining agreement in addition to regular
114.9salary or in lieu of regular salary increases, the compensation paid to the employee for
114.10attaining or exceeding performance goals, duties, or measures during a specified period of
114.11employment.
114.12    (b) Salary does not mean:
114.13    (1) fees paid to district court reporters;
114.14    (2) unused annual leave, vacation, or sick leave payments, in the form of lump-sum or
114.15periodic payments;
114.16    (3) for the donor, payment to another person of the value of hours donated under a
114.17benevolent vacation, personal, or sick leave donation program;
114.18    (4) any form of severance or retirement incentive payments;
114.19    (5) an allowance payment or per diem payments for or reimbursement of expenses;
114.20    (6) lump-sum settlements not attached to a specific earnings period;
114.21    (7) workers' compensation payments or disability insurance payments, including payments
114.22from employer self-insurance arrangements;
114.23    (8) employer-paid amounts used by an employee toward the cost of insurance coverage,
114.24flexible spending accounts, cafeteria plans, health care expense accounts, day care expenses,
114.25or any payments in lieu of any employer-paid group insurance coverage, including the
114.26difference between single and family rates that may be paid to a member with single coverage
114.27and certain amounts determined by the executive director to be ineligible;
114.28(9) employer-paid fringe benefits, including, but not limited to:
114.29(i) employer-paid premiums or supplemental contributions for employees for all types
114.30of insurance;
114.31(ii) membership dues or fees for the use of fitness or recreational facilities;
115.1(iii) incentive payments or cash awards relating to a wellness program;
115.2(iv) the value of any nonmonetary benefits;
115.3(v) any form of payment made in lieu of an employer-paid fringe benefit;
115.4(vi) an employer-paid amount made to a deferred compensation or tax-sheltered annuity
115.5program; and
115.6(vii) any amount paid by the employer as a supplement to salary, either as a lump-sum
115.7amount or a fixed or matching amount paid on a recurring basis, that is not available to the
115.8employee as cash;
115.9    (10) the amount equal to that which the employing governmental subdivision would
115.10otherwise pay toward single or family insurance coverage for a covered employee when,
115.11through a contract or agreement with some but not all employees, the employer:
115.12    (i) discontinues, or for new hires does not provide, payment toward the cost of the
115.13employee's selected insurance coverages under a group plan offered by the employer;
115.14    (ii) makes the employee solely responsible for all contributions toward the cost of the
115.15employee's selected insurance coverages under a group plan offered by the employer,
115.16including any amount the employer makes toward other employees' selected insurance
115.17coverages under a group plan offered by the employer; and
115.18    (iii) provides increased salary rates for employees who do not have any employer-paid
115.19group insurance coverages;
115.20    (11) except as provided in section 353.86 or 353.87, compensation of any kind paid to
115.21volunteer ambulance service personnel or volunteer firefighters, as defined in subdivision
115.2235 or 36;
115.23    (12) the amount of compensation that exceeds the limitation provided in section 356.611;
115.24    (13) amounts paid by a federal or state grant for which the grant specifically prohibits
115.25grant proceeds from being used to make pension plan contributions, unless the contributions
115.26to the plan are made from sources other than the federal or state grant; and
115.27(14) bonus pay that is not performance or merit pay under paragraph (a), clause (6).
115.28    (c) Amounts, other than those provided under paragraph (a), clause (3), provided to an
115.29employee by the employer through a grievance proceeding, a court order, or a legal settlement
115.30are salary only if the settlement or court order is reviewed by the executive director and the
115.31amounts are determined by the executive director to be consistent with paragraph (a) and
115.32prior determinations.

116.1    Sec. 3. Minnesota Statutes 2016, section 353.01, subdivision 47, is amended to read:
116.2    Subd. 47. Vesting. (a) "Vesting" means obtaining a nonforfeitable entitlement to an
116.3annuity or benefit from a retirement plan administered by the Public Employees Retirement
116.4Association by having credit for sufficient allowable service under paragraph (b), (c), or
116.5(d), whichever applies.
116.6(b) For purposes of qualifying for an annuity or benefit as a basic or coordinated plan
116.7member of the general employees retirement plan of the Public Employees Retirement
116.8Association:
116.9(1) a public employee who first became a member of the association before July 1, 2010,
116.10is 100 percent vested when the person has accrued credit for not less than three years of
116.11allowable service as defined under subdivision 16 in the general employees retirement plan;
116.12and
116.13(2) a public employee who first becomes a member of the association after June 30,
116.142010, is 100 percent vested when the person has accrued credit for not less than five years
116.15of allowable service as defined under subdivision 16 in the general employees retirement
116.16plan.
116.17(c) For purposes of qualifying for an annuity or benefit as a member of the local
116.18government correctional employees service retirement plan:
116.19(1) a public employee who first became a member of the association before July 1, 2010,
116.20is 100 percent vested when the person has accrued credit for not less than three years of
116.21allowable service as defined under subdivision 16 in the local government correctional
116.22service retirement plan; and
116.23(2) a public employee who first becomes a member of the association after June 30,
116.242010, is vested at the following percentages when the person has accrued credited credit
116.25for allowable service as defined under subdivision 16, in the local government correctional
116.26service retirement plan, as follows:
116.27(i) 50 percent after five years;
116.28(ii) 60 percent after six years;
116.29(iii) 70 percent after seven years;
116.30(iv) 80 percent after eight years;
116.31(v) 90 percent after nine years; and
116.32(vi) 100 percent after ten years.
117.1(d) For purposes of qualifying for an annuity or benefit as a member of the public
117.2employees police and fire retirement plan:
117.3(1) a public employee who first became a member of the association before July 1, 2010,
117.4is 100 percent vested when the person has accrued credit for not less than three years of
117.5allowable service as defined under subdivision 16 in the public employees police and fire
117.6retirement plan;
117.7(2) a public employee who first becomes a member of the association after June 30,
117.82010, and before July 1, 2014, is vested at the following percentages when the person has
117.9accrued credited allowable service as defined under subdivision 16 in the public employees
117.10police and fire retirement plan, as follows:
117.11(i) 50 percent after five years;
117.12(ii) 60 percent after six years;
117.13(iii) 70 percent after seven years;
117.14(iv) 80 percent after eight years;
117.15(v) 90 percent after nine years; and
117.16(vi) 100 percent after ten years; and
117.17(3) a public employee who first becomes a member of the association after June 30,
117.182014, is vested at the following percentages when the person has accrued credited credit
117.19for allowable service as defined under subdivision 16 in the public employees police and
117.20fire retirement plan, as follows:
117.21(i) 50 percent after ten years;
117.22(ii) 55 percent after 11 years;
117.23(iii) 60 percent after 12 years;
117.24(iv) 65 percent after 13 years;
117.25(v) 70 percent after 14 years;
117.26(vi) 75 percent after 15 years;
117.27(vii) 80 percent after 16 years;
117.28(viii) 85 percent after 17 years;
117.29(ix) 90 percent after 18 years;
117.30(x) 95 percent after 19 years; and
118.1(xi) 100 percent after 20 or more years.

118.2    Sec. 4. Minnesota Statutes 2016, section 353.0162, is amended to read:
118.3353.0162 REDUCED SALARY PERIODS SALARY CREDIT PURCHASE FOR
118.4PERIODS OF REDUCED SALARY.
118.5(a) A member may purchase additional differential salary credit as described in paragraph
118.6(c) for a period specified in this section paragraph (b).
118.7(b) The applicable period is a period during which the member is receiving no or a
118.8reduced salary from the employer while the member is:
118.9(1) receiving temporary workers' compensation payments related to the member's service
118.10to the public employer;
118.11(2) on an authorized leave of absence, except that if the authorized leave of absence
118.12exceeds 12 months, the period of leave for which differential salary credit may be purchased
118.13is limited to 12 months; or
118.14(3) on an authorized partial paid leave of absence as a result of a budgetary or salary
118.15savings program offered or mandated by a governmental subdivision, if certified to the
118.16executive director by the governmental subdivision.
118.17(c) The Differential salary amount credit is the difference between the average monthly
118.18salary received by the member during the a period of reduced salary under this section
118.19specified in paragraph (b) and the average monthly salary of the member, excluding overtime,
118.20on which contributions to the applicable plan were would have been made during the period
118.21of the last six months of covered employment occurring immediately before the period of
118.22reduced salary, applied to based on the member's normal employment period, measured in
118.23hours or otherwise, as applicable, and rate of pay.
118.24(d) To receive eligible differential salary credit, the member shall pay the plan, by
118.25delivering payment to the executive director, an amount equal to:
118.26(1) the applicable employee contribution rate under section 353.27, subdivision 2; 353.65,
118.27subdivision 2 ; or 353E.03, subdivision 1, as applicable, multiplied by the differential salary
118.28amount;
118.29(2) plus an employer equivalent payment equal to the applicable employer contribution
118.30rate in section 353.27, subdivision 3; 353.65, subdivision 3; or 353E.03, subdivision 2, as
118.31applicable, multiplied by the differential salary amount;
119.1(3) plus, if applicable, an equivalent employer additional amount equal to the additional
119.2employer contribution rate in section 353.27, subdivision 3a, multiplied by the differential
119.3salary amount.
119.4(e) The employer, by appropriate action of its governing body and documented in its
119.5official records, may pay the employer equivalent contributions and, as applicable, the
119.6equivalent employer additional contributions on behalf of the member.
119.7(f) Payment under this section must include interest on the contribution amount or
119.8amounts, whichever applies, at an 8.5 percent annual rate until June 30, 2015, and at an
119.9eight percent annual rate thereafter, prorated for applicable months from the date on which
119.10the period of reduced salary specified under this section in paragraph (b) terminates to the
119.11date on which the payment or payments are received by the executive director. Payment
119.12under this section must be completed within by the earlier earliest of:
119.13(1) 30 days from after termination of public service by the employee under section
119.14353.01, subdivision 11a , or;
119.15(2) one year after the termination of the period specified in paragraph (b), as further
119.16restricted under this section.; or
119.17(3) 30 days after the commencement of a disability benefit.
119.18(g) The period for which additional allowable salary credit may be purchased is limited
119.19to the period during which the person receives temporary workers' compensation payments
119.20or for those business years in which the governmental subdivision offers or mandates a
119.21budget or salary savings program, as certified to the executive director by a resolution of
119.22the governing body of the governmental subdivision. For an authorized leave of absence,
119.23the period for which allowable salary credit may be purchased may not exceed 12 months
119.24of authorized leave.
119.25(h) To purchase (g) If the member has purchased 12 months of differential salary credit
119.26for a subsequent period of temporary workers' compensation benefits or subsequent
119.27authorized medical leave of absence, the member must return to public service and render
119.28a minimum of three months of allowable service to purchase differential salary credit for a
119.29subsequent leave of absence.

119.30    Sec. 5. Minnesota Statutes 2016, section 353.03, subdivision 3, is amended to read:
119.31    Subd. 3. Duties and powers. (a) The board shall:
119.32    (1) elect a president and vice-president;
120.1    (2) approve the staffing complement, as recommended by the executive director,
120.2necessary to administer the fund;
120.3    (3) adopt bylaws for its own government and for the management of the fund consistent
120.4with the laws of the state and may modify them at pleasure;
120.5    (4) adopt, alter, and enforce reasonable rules consistent with the laws of the state and
120.6the terms of the applicable benefit plans for the administration and management of the fund,
120.7for the payment and collection of payments from members and for the payment of
120.8withdrawals and benefits, and that are necessary in order to comply with the applicable
120.9federal Internal Revenue Service and Department of Labor requirements;
120.10    (5) pass upon and allow or disallow all applications for membership in the fund and
120.11allow or disallow claims for withdrawals, pensions, or benefits payable from the fund;
120.12(6) authorize procedures for use of electronic signatures as defined in section 325L.02,
120.13paragraph (h), on applications and forms required by the association;
120.14    (7) (6) adopt an appropriate mortality table based on experience of the fund as
120.15recommended by the association actuary and approved under section 356.215, subdivision
120.1618 , with interest set at the rate specified in section 356.215, subdivision 8;
120.17    (8) (7) provide for the payment out of the fund of the cost of administering this chapter,
120.18of all necessary expenses for the administration of the fund and of all claims for withdrawals,
120.19pensions, or benefits allowed;
120.20    (9) (8) approve or disapprove all recommendations and actions of the executive director
120.21made subject to its approval or disapproval by subdivision 3a; and
120.22    (10) (9) approve early retirement and optional annuity factors, subject to review by the
120.23actuary retained by the Legislative Commission on Pensions and Retirement; establish the
120.24schedule for implementation of the approved factors; and notify the Legislative Commission
120.25on Pensions and Retirement of the implementation schedule.
120.26    (b) In passing upon all applications and claims, the board may summon, swear, hear,
120.27and examine witnesses and, in the case of claims for disability benefits, may require the
120.28claimant to submit to a medical examination by a physician of the board's choice, at the
120.29expense of the fund, as a condition precedent to the passing on the claim, and, in the case
120.30of all applications and claims, may conduct investigations necessary to determine their
120.31validity and merit.
120.32    (c) The board may continue to authorize the sale of life insurance to members under the
120.33insurance program in effect on January 1, 1985, but must not change that program without
121.1the approval of the commissioner of management and budget. The association shall not
121.2receive any financial benefit from the life insurance program beyond the amount necessary
121.3to reimburse the association for costs incurred in administering the program. The association
121.4shall not engage directly or indirectly in any other activity involving the sale or promotion
121.5of goods or services, or both, whether to members or nonmembers.
121.6    (d) The board shall establish procedures governing reimbursement of expenses to board
121.7members. These procedures must define the types of activities and expenses that qualify
121.8for reimbursement, must provide that all out-of-state travel be authorized by the board, and
121.9must provide for the independent verification of claims for expense reimbursement. The
121.10procedures must comply with the applicable rules and policies of the Department of
121.11Management and Budget and the Department of Administration.
121.12    (e) The board may purchase fiduciary liability insurance and official bonds for the
121.13officers and members of the board of trustees and employees of the association and may
121.14purchase property insurance or may establish a self-insurance risk reserve including, but
121.15not limited to, data processing insurance and "extra-expense" coverage.

121.16    Sec. 6. Minnesota Statutes 2016, section 353.29, subdivision 4, is amended to read:
121.17    Subd. 4. Application for annuity. Application for a retirement annuity or optional
121.18annuity may be made by a member or by a person authorized to act acting on behalf of the
121.19member, upon proof of authority satisfactory to the executive director. Every application
121.20for retirement must be made in writing on a form or in a format prescribed by the executive
121.21director and must be substantiated by written proof of the member's age and identity. The
121.22notarized signature of a member's spouse on a retirement annuity application acknowledging
121.23the member's annuity selection meets the notice requirement to the spouse under section
121.24356.46, subdivision 3 . An application for a retirement annuity is not complete until all
121.25necessary supporting documents are received by the executive director.

121.26    Sec. 7. Minnesota Statutes 2016, section 353.29, subdivision 7, is amended to read:
121.27    Subd. 7. Annuities; accrual Annuity starting date. (a) Except as to elected public
121.28officials specified in paragraph (b), a retirement annuity granted under this chapter begins
121.29with on the first day of the first calendar month after the date of termination of public service
121.30or up to six months before the first of the month in which a complete application is received
121.31by the executive director under subdivision 4, whichever is later. The annuity must be paid
121.32in equal monthly installments and does not accrue, unless suspended or reduced under
122.1section 353.37. Annuity payments shall not be paid beyond the end of the month in which
122.2entitlement to the annuity has terminated.
122.3(b) An annuity granted to an elective elected public official accrues may begin on the
122.4day following the expiration of the public office or expiration of the right to hold that office
122.5that qualified the elected official for membership under section 353.01, subdivision 2a or
122.62d, if a complete application is received by the executive director under subdivision 4 within
122.7six months of the date of termination of public service. The annuity for the month during
122.8which the expiration occurred is prorated accordingly.
122.9(c) An annuity, once granted, must not be increased, decreased, or revoked except under
122.10this chapter.
122.11(d) An annuity payment may be made retroactive for up to one year prior to that month
122.12in which a complete application is received by the executive director under subdivision 4.
122.13(e) (d) If an annuitant dies before negotiating the check for the month in which death
122.14occurs, payment must first be made to the surviving spouse, or if none, then to the designated
122.15beneficiary, or if none, lastly to the estate.

122.16    Sec. 8. Minnesota Statutes 2016, section 353.30, subdivision 3c, is amended to read:
122.17    Subd. 3c. Effective date of bounce-back annuity. In the event of the death of the
122.18designated optional annuity beneficiary before the retired employee or disabilitant, the
122.19restoration of the normal single life annuity under subdivision 3a or 3b will take effect on
122.20the first of the month following the date of death of the designated optional annuity
122.21beneficiary or on the first of the month following one year six months before the date on
122.22which a certified copy satisfactory verification of the death record is received in the office
122.23of the public employees retirement association established by the executive director,
122.24whichever date is later.

122.25    Sec. 9. Minnesota Statutes 2016, section 353.32, subdivision 1, is amended to read:
122.26    Subdivision 1. Before retirement. If a member or former member who terminated public
122.27service dies before retirement or before receiving any retirement annuity and no other
122.28payment of any kind is or may become payable to any person, a refund is payable to the
122.29designated beneficiary or, if there be none, to the surviving spouse, or, if none, to the legal
122.30representative of the decedent's estate. The refund must be in an amount equal to accumulated
122.31deductions, less the sum of any disability or survivor benefits that have been paid by the
122.32fund, plus annual compound interest thereon at the rate specified in section 353.34,
123.1subdivision 2 , and less the sum of any disability or survivor benefits, if any, that may have
123.2been paid by the fund; provided that a survivor who has a right to benefits under section
123.3353.31 may waive such benefits in writing, except such benefits for a dependent child under
123.4the age of 18 years may only be waived under an order of the district court.

123.5    Sec. 10. Minnesota Statutes 2016, section 353.34, subdivision 2, is amended to read:
123.6    Subd. 2. Refund with interest. (a) Except as provided in subdivision 1, any person who
123.7ceases to be a public employee is entitled to receive a refund in an amount equal to
123.8accumulated deductions with, less the sum of any disability benefits that have been paid by
123.9the fund, plus annual compound interest to the first day of the month in which the refund
123.10is processed.
123.11(b) For a person who ceases to be a public employee before July 1, 2011, the refund
123.12interest is at the rate of six percent to June 30, 2011, and at the rate of four percent after
123.13June 30, 2011. For a person who ceases to be a public employee after July 1, 2011, the
123.14refund interest is at the rate of four percent.
123.15(c) If a person repays a refund and subsequently applies for another refund, the repayment
123.16amount, including interest, is added to the fiscal year balance in which the repayment was
123.17made.
123.18(d) If the refund payable to a member is based on employee deductions that are
123.19determined to be invalid under section 353.27, subdivision 7, the interest payable on the
123.20invalid employee deductions is four percent.

123.21    Sec. 11. Minnesota Statutes 2016, section 353.35, subdivision 1, is amended to read:
123.22    Subdivision 1. Refund rights. (a) Except as provided in paragraph (b), when any former
123.23member accepts a refund, all existing service credits and all rights and benefits to which
123.24the person was entitled prior to the acceptance of the refund must terminate.
123.25(b) A refund under section 353.651, subdivision 3, paragraph (c), does not result in a
123.26forfeiture of salary credit for the allowable service credit covered by the refund.
123.27(c) The If a person forfeits service credits, rights, and benefits under paragraph (a), the
123.28person's service credits, rights, and benefits of a former member must not shall be restored
123.29until if the person returns to active service and acquires employment covered by the
123.30association for at least six months of allowable service credit after taking the last refund
123.31and repays the refund or refunds taken and interest all amounts previously received under
123.32section 353.34, subdivisions 1 and subdivision 2, plus interest at the annual rate of 8.5
124.1percent until June 30, 2015, and eight percent thereafter, compounded annually, from the
124.2date each amount was received to the date the amount is repaid. If the person elects to restore
124.3service credit in a particular fund from which the person has taken more than one refund,
124.4the person must repay all refunds to that fund. All refunds The repayment must be repaid
124.5made within six months of the last date of termination day of public service employment.
124.6A person may have service credits, rights, and benefits restored under this paragraph only
124.7one time.

124.8    Sec. 12. Minnesota Statutes 2016, section 353.37, subdivision 1, is amended to read:
124.9    Subdivision 1. Salary maximums. (a) The annuity of a person otherwise eligible for
124.10If a member who is receiving an annuity from the general employees retirement plan of the
124.11Public Employees Retirement Association, the public employees police and fire retirement
124.12plan, or the local government correctional employees retirement plan must be suspended
124.13under subdivision 2 or reduced under subdivision 3, whichever results in the higher annual
124.14annuity amount, if the person reenters public service as a nonelective employee of a
124.15retirement plan administered by the association is employed by (1) a governmental
124.16subdivision employer in a nonelected position not required by law to be covered by a plan
124.17administered by the Minnesota State Retirement System, the Teachers Retirement
124.18Association, or the St. Paul Teachers Retirement Fund Association, or returns to work as
124.19an employee of (2) by a labor organization that represents public employees who are
124.20association members under this chapter, and the member's salary for the reemployment
124.21service exceeds the annual maximum salary defined in paragraph (b), the annuity shall be
124.22suspended under subdivision 2 or reduced under subdivision 3, whichever results in the
124.23higher annuity amount.
124.24(b) The annual maximum salary means the annual maximum earnings allowable for that
124.25at the member's age for the continued receipt of full benefit amounts monthly under the
124.26federal Old Age, Survivors and Disability Insurance Program as set by the secretary of
124.27health and human services under United States Code, title 42, section 403, in any effect for
124.28the calendar year. If the person member has not yet reached the minimum age for the receipt
124.29of Social Security benefits, the maximum salary for the person is equal to means the annual
124.30maximum earnings allowable for the minimum age for the receipt of Social Security benefits.
124.31(b)(c) The provisions of paragraph (a) do not apply to the members of the general
124.32employees plan of the Public Employees Retirement Association who were former members
124.33of MERF.

125.1    Sec. 13. Minnesota Statutes 2016, section 353.64, subdivision 10, is amended to read:
125.2    Subd. 10. Pension coverage for Hennepin Healthcare System, Inc.; paramedics and
125.3emergency medical technicians. An employee of Hennepin Healthcare System, Inc. is a
125.4member of the public employees police and fire retirement plan under sections 353.63 to
125.5353.68 if the person is:
125.6(1) certified as a paramedic or emergency medical technician by the state under section
125.7144E.28, subdivision 4 ;
125.8(2) employed full at least half time by Hennepin Healthcare System, Inc. as:
125.9(i) a paramedic or;
125.10(ii) an emergency medical technician by Hennepin County; or
125.11(iii) a supervisor or manager of paramedics or emergency medical technicians; and
125.12(3) not eligible for coverage under the agreement signed between the state and the
125.13secretary of the federal Department of Health and Human Services making the provisions
125.14of the federal Old Age, Survivors, and Disability Insurance Act applicable to paramedics
125.15and emergency medical technicians because the person's position is excluded after that date
125.16from application under United States Code, title 42, sections 418(d)(5)(A) and 418(d)(8)(D),
125.17and section 355.07.
125.18Hennepin Healthcare System, Inc. shall deduct the employee contribution from the salary
125.19of each full-time paramedic and emergency medical technician it employs covered employee,
125.20as required by section 353.65, subdivision 2, shall make the employer contribution for each
125.21full-time paramedic and emergency medical technician it employs covered employee, as
125.22required by section 353.65, subdivision 3, and shall meet the employer recording and
125.23reporting requirements in section 353.65, subdivision 4.

125.24    Sec. 14. Minnesota Statutes 2016, section 353F.02, subdivision 5a, is amended to read:
125.25    Subd. 5a. Privatized former public employer. "Privatized former public employer"
125.26means a medical facility that was formerly included in the definition of governmental
125.27subdivision under section 353.01, subdivision 6, on the day before the effective date of
125.28privatization that is privatized and whose employees are certified for participation under
125.29this chapter.

126.1    Sec. 15. Minnesota Statutes 2016, section 353F.025, subdivision 2, is amended to read:
126.2    Subd. 2. Reporting privatizations. (a) If the actuarial calculations under subdivision
126.31, paragraph (c), indicate privatization can be approved because a net gain to the general
126.4employees retirement plan of the Public Employees Retirement Association is expected, or
126.5if paragraph (b) applies, the executive director shall, following acceptance of the actuarial
126.6calculations by the board of trustees, forward notice and supporting documentation, including
126.7a copy of the actuary's report and findings, to the chair and the executive director of the
126.8Legislative Commission on Pensions and Retirement and the chairs and the ranking minority
126.9members of the committees with jurisdiction over governmental operations in the house of
126.10representatives and senate.
126.11    (b) If the calculations under subdivision 1, paragraph (c), indicate a net loss, the executive
126.12director shall recommend to the board of trustees that the privatization be approved if the
126.13chief clerical officer of the applicable governmental subdivision submits a resolution from
126.14the governing body specifying that a lump sum payment will be made to the Public
126.15Employees Retirement Association equal to the net loss, plus interest. The interest must be
126.16computed using the applicable ultimate preretirement interest rate assumption under section
126.17356.215, subdivision 8 , expressed as a monthly rate, from the date of the actuarial valuation
126.18from which the actuarial accrued liability data was used to determine the net loss in the
126.19actuarial study under subdivision 1, to the date of payment, with annual compounding.
126.20Payment must be made on or after the effective date of privatization.
126.21    (c) The Public Employees Retirement Association must maintain a list that includes the
126.22names of all privatized former public employers in the association's comprehensive annual
126.23financial report and on the association's Web site. Annually by March 1, the association
126.24must submit to the executive director of the Legislative Commission on Pensions and
126.25Retirement the names of any privatized former public employers approved since the
126.26publication of the previous fiscal year's comprehensive annual financial report.

126.27    Sec. 16. Minnesota Statutes 2016, section 353F.04, subdivision 2, is amended to read:
126.28    Subd. 2. Exceptions. The increased augmentation rates specified in subdivision 1 do
126.29not apply to a privatized former public employee:
126.30(1) beginning the first of the month in which the privatized former public employee
126.31becomes covered again by a retirement plan enumerated in section 356.30, subdivision 3,
126.32if the employee accrues at least six months of credited service in any single plan enumerated
126.33in section 356.30, subdivision 3, except clause (6);
127.1(2) beginning the first of the month in which the privatized former public employee
127.2becomes covered again by the general employees retirement plan of the Public Employees
127.3Retirement Association;
127.4(3) beginning the first of the month after a privatized former public employee terminates
127.5service with the successor entity privatized former public employer; or
127.6(4) if the person begins receipt of a retirement annuity while employed by the employer
127.7which assumed operations of or purchased the privatized former public employer.

127.8    Sec. 17. Minnesota Statutes 2016, section 353F.05, is amended to read:
127.9353F.05 AUTHORIZATION FOR ADDITIONAL ALLOWABLE SERVICE FOR
127.10EARLY RETIREMENT PURPOSES.
127.11(a) For the purpose of determining eligibility for early retirement benefits provided under
127.12section 353.30, subdivision 1a, of the edition of Minnesota Statutes published in the year
127.13before the year in which the privatization occurred, and notwithstanding any provision of
127.14chapter 353, to the contrary, the years of allowable service for a privatized former public
127.15employee who transfers employment on the effective date of privatization and does not
127.16apply for a refund of contributions under section 353.34, subdivision 1, of the edition of
127.17Minnesota Statutes published in the year before the year in which the privatization occurred,
127.18or any similar provision, includes service with the successor employer to the privatized
127.19former public employer following the effective date. The successor privatized former public
127.20employer shall provide any reports that the executive director of the Public Employees
127.21Retirement Association may reasonably request to permit calculation of benefits.
127.22(b) To be eligible for early retirement benefits under this section, the individual must
127.23separate from service with the successor to the privatized former public employer. The
127.24privatized former public employee, or an individual authorized to act on behalf of that
127.25employee, may apply for an annuity following application procedures under section 353.29,
127.26subdivision 4 .

127.27    Sec. 18. Minnesota Statutes 2016, section 353F.057, is amended to read:
127.28353F.057 TERMINATION FROM SERVICE REQUIREMENT.
127.29Upon termination of service from the privatized former public employer or any successor
127.30entity after the effective date of privatization, a privatized former public employee must
127.31separate from any employment relationship with the privatized former public employer or
128.1any successor entity for at least 30 days to qualify to receive a retirement annuity under this
128.2chapter.

128.3    Sec. 19. Minnesota Statutes 2016, section 353F.06, is amended to read:
128.4353F.06 APPLICATION OF REEMPLOYED ANNUITANT EARNINGS
128.5LIMITATIONS.
128.6If a privatized former public employee satisfies the separation from service requirement
128.7in section 353F.057 and thereafter resumes employment with the privatized former public
128.8employer or any successor entity or a governmental subdivision under section 353.01,
128.9subdivision 6 , the reemployed annuitant earnings limitations of section 353.37 apply.

128.10    Sec. 20. Minnesota Statutes 2016, section 353F.07, is amended to read:
128.11353F.07 EFFECT ON REFUND.
128.12Notwithstanding any provision of chapter 353 to the contrary, privatized former public
128.13employees may receive a refund of employee accumulated contributions plus interest as
128.14provided in section 353.34, subdivision 2, at any time after the transfer of employment to
128.15the successor employer of the privatized former public employer. If a privatized former
128.16public employee has received a refund from a pension plan listed in section 356.30,
128.17subdivision 3 , the person may not repay that refund unless the person again becomes a
128.18member of one of those listed plans and complies with section 356.30, subdivision 2.

128.19    Sec. 21. [353F.09] APPLICATION TO SALES OF PRIVATIZED FORMER PUBLIC
128.20EMPLOYERS.
128.21A medical facility or other employing unit shall cease to be a privatized former public
128.22employer and its employees shall cease to be considered privatized former public employees
128.23under this chapter upon the sale of the operations of the medical facility or employing unit
128.24to another employer or the sale of the medical facility or employing unit to another employer.
128.25The privatized former public employees shall be entitled to benefits accrued under this
128.26chapter to the date of the sale, but shall not accrue additional benefits after the date of the
128.27sale.

128.28    Sec. 22. REPEALER.
128.29Minnesota Statutes 2016, section 353.0161, is repealed.

129.1    Sec. 23. EFFECTIVE DATE.
129.2(a) Sections 1 to 13 and 22 are effective June 30, 2018.
129.3(b) Sections 14 to 21 are effective for privatizations with an effective date of privatization
129.4under Minnesota Statutes, section 353F.02, subdivision 3, after June 30, 2018, and for sales
129.5of privatized former public employers after June 30, 2018.


129.9    Section 1. Minnesota Statutes 2016, section 354.05, subdivision 2, is amended to read:
129.10    Subd. 2. Teacher. (a) "Teacher" means:
129.11(1) a person who renders service as a teacher, supervisor, principal, superintendent,
129.12librarian, nurse, counselor, social worker, therapist, or psychologist in:
129.13(i) a public school of the state other than in Independent School District No. 625 or in
129.14Independent School District No. 709, or in any;
129.15(ii) a charter school, irrespective of the location of the school, or in any;
129.16(iii) a charitable, penal, or correctional institutions institution of a governmental
129.17subdivision,; or
129.18(iv) the Perpich Center for Arts Education, except that any employee of the Perpich
129.19Center for Arts Education who was covered by the Minnesota State Retirement System
129.20general state employees retirement plan as of July 1, 2018, shall continue to be covered by
129.21that plan and not by the Teachers Retirement Association;
129.22(2) a person who is engaged in educational administration in connection with the state
129.23public school system, whether the position be a public office or an as employment;
129.24(3) a person who renders service as a charter school director or chief administrative
129.25officer; provided, however, that if the charter school director or chief administrative officer
129.26is covered by the Public Employees Retirement Association general employees retirement
129.27plan on July 1, 2018, the charter school director or chief administrative officer shall continue
129.28to be covered by that plan and not by the Teachers Retirement Association;
129.29(2) (4) an employee of the Teachers Retirement Association;
129.30(3) (5) a person who renders teaching service on a part-time basis and who also renders
129.31other services for a single employing unit where the teaching service comprises at least 50
130.1percent of the combined employment salary is a member of the association for all services
130.2with the single employing unit or, if less than 50 percent of the combined employment
130.3salary, the executive director determines all of the combined service is covered by the
130.4association; or
130.5(4) (6) a person who is not covered by the plans established under chapter 352D, 354A,
130.6or 354B and who is employed by the Board of Trustees of the Minnesota State Colleges
130.7and Universities system in an unclassified position as:
130.8(i) a president, vice-president, or dean;
130.9(ii) a manager or a professional in an academic or an academic support program other
130.10than specified in item (i);
130.11(iii) an administrative or a service support faculty position; or
130.12(iv) a teacher or a research assistant.
130.13(b) "Teacher" does not mean:
130.14(1) a person who works for a school or institution as an independent contractor as defined
130.15by the Internal Revenue Service;
130.16(2) a person who renders part-time teaching service or who is a customized trainer as
130.17defined by the Minnesota State Colleges and Universities system if (i) the service is incidental
130.18to the regular nonteaching occupation of the person; and (ii) the employer stipulates annually
130.19in advance that the part-time teaching service or customized training service will not exceed
130.20300 hours in a fiscal year and retains the stipulation in its records; and (iii) the part-time
130.21teaching service or customized training service actually does not exceed 300 hours in a
130.22fiscal year;
130.23(3) a person exempt from licensure under section 122A.30;
130.24(4) (2) annuitants of the teachers retirement plan who are employed after retirement by
130.25an employing unit that participates in the teachers retirement plan during the course of that
130.26reemployment;
130.27(5) (3) a person who is employed by the University of Minnesota;
130.28(6) (4) a member or an officer of any general governing or managing board or body of
130.29an employing unit that participates in the teachers retirement plan; or
130.30(7) (5) a person employed by Independent School District No. 625 or Independent School
130.31District No. 709 as a teacher as defined in section 354A.011, subdivision 27.

131.1    Sec. 2. Minnesota Statutes 2016, section 354.05, is amended by adding a subdivision to
131.2read:
131.3    Subd. 17a. Former spouse. "Former spouse" means a person who is no longer a spouse
131.4of a member due to dissolution of the marriage, legal separation, or annulment.

131.5    Sec. 3. Minnesota Statutes 2016, section 354.06, subdivision 2, is amended to read:
131.6    Subd. 2. President; executive director. The board shall annually elect one of its members
131.7as president. It shall elect an executive director. Notwithstanding any law to the contrary,
131.8the board must set the salary of the executive director. The salary of the executive director
131.9must not exceed the limit for a position listed in section 15A.0815, subdivision 2. The salary
131.10of the assistant executive director who shall be in the unclassified service, shall be set in
131.11accordance with section 43A.18, subdivision 3. The executive director shall serve during
131.12the pleasure of the board and be the executive officer of the board, with such duties as the
131.13board shall prescribe. The board shall employ all other clerks and employees necessary to
131.14properly administer the association. The cost and expense of administering the provisions
131.15of this chapter shall be paid by the association. The board shall appoint an executive director
131.16shall be appointed by the board on the basis of fitness education, experience in the retirement
131.17field and leadership, ability to manage and lead system staff, and ability to assist the board
131.18in setting a vision for the system. The executive director shall have had at least five years
131.19of experience on the administrative staff of a major retirement system.

131.20    Sec. 4. Minnesota Statutes 2016, section 354.06, subdivision 2a, is amended to read:
131.21    Subd. 2a. Duties of executive director. The management of the association is vested
131.22in the executive director who shall be the executive and administrative head of the
131.23association. The executive director shall act as advisor to the board on all matters pertaining
131.24to the association and shall also act as the secretary of the board. The executive director
131.25shall:
131.26(1) attend all meetings of the board;
131.27(2) prepare and recommend to the board appropriate rules to carry out the provisions of
131.28this chapter;
131.29(3) establish and maintain an adequate system of records and accounts following
131.30recognized accounting principles and controls;
131.31(4) designate, as necessary, a deputy executive director and an assistant executive director
131.32in the unclassified service, as defined in section 43A.08, whose salaries shall be set in
132.1accordance with section 43A.18, subdivision 3, and two assistant executive directors in the
132.2classified service, as defined in section 43A.07, with the approval of the board, and appoint
132.3such employees, both permanent and temporary, as are necessary to carry out the provisions
132.4of this chapter;
132.5(5) organize the work of the association as the director deems necessary to fulfill the
132.6functions of the association, and define the duties of its employees and delegate to them
132.7any powers or duties, subject to the director's control and under such conditions as the
132.8director may prescribe;
132.9(6) with the approval of the board, contract and set the compensation for the services of
132.10an approved actuary, professional management services, and any other consulting services.
132.11These contracts are not subject to the competitive bidding procedure prescribed by chapter
132.1216C. An approved actuary retained by the executive director shall function as the actuarial
132.13advisor of the board and the executive director and may perform actuarial valuations and
132.14experience studies to supplement those performed by the actuary retained under section
132.15356.214 . Any supplemental actuarial valuations or experience studies shall be filed with
132.16the executive director of the Legislative Commission on Pensions and Retirement. Copies
132.17of professional management survey reports must be transmitted to the secretary of the senate,
132.18the chief clerk of the house of representatives, and the Legislative Reference Library as
132.19provided by section 3.195, and to the executive director of the commission at the same time
132.20as reports are furnished to the board. Only management firms experienced in conducting
132.21management surveys of federal, state, or local public retirement systems are qualified to
132.22contract with the executive director;
132.23(7) with the approval of the board, provide in-service training for the employees of the
132.24association;
132.25(8) make refunds of accumulated contributions to former members and to the designated
132.26beneficiary, surviving spouse, legal representative, or next of kin of deceased members or
132.27deceased former members, under this chapter;
132.28(9) determine the amount of the annuities and disability benefits of members covered
132.29by the association and authorize payment of the annuities and benefits beginning as of the
132.30dates on which the annuities and benefits begin to accrue, under this chapter;
132.31(10) pay annuities, refunds, survivor benefits, salaries, and necessary operating expenses
132.32of the association;
132.33(11) prepare and submit to the board and the legislature an annual financial report
132.34covering the operation of the association, as required by section 356.20;
133.1(12) certify funds available for investment to the State Board of Investment;
133.2(13) with the advice and approval of the board, request the State Board of Investment
133.3to sell securities on determining that funds are needed for the purposes of the association;
133.4(14) prepare and submit biennial and annual budgets to the board and with the approval
133.5of the board submit those budgets to the Department of Management and Budget; and
133.6(15) with the approval of the board, perform such other duties as may be required for
133.7the administration of the association and the other provisions of this chapter and for the
133.8transaction of its business. The executive director may:
133.9(i) reduce all or part of the accrued interest and fines payable by an employing unit for
133.10reporting requirements under section 354.52 this chapter, based on an evaluation of any
133.11extenuating circumstances of the employing unit;
133.12(ii) assign association employees to conduct field audits of an employing unit to ensure
133.13compliance with the provisions of this chapter; and
133.14(iii) recover overpayments, if not repaid to the association, by suspending or reducing
133.15the payment of a retirement annuity, refund, disability benefit, survivor benefit, or optional
133.16annuity under this chapter until the overpayment, plus interest, has been recovered.

133.17    Sec. 5. Minnesota Statutes 2016, section 354.095, is amended to read:
133.18354.095 MEDICAL LEAVE.
133.19    (a) Upon granting a medical leave, an employing unit must certify the leave to the
133.20association on a form specified by the executive director. A member of the association who
133.21is on an authorized medical leave of absence is entitled to receive allowable service credit,
133.22not to exceed one year five years, for the period of leave, upon making the prescribed
133.23payment to the fund under section 354.72. A member may not receive more than one year
133.24of allowable service credit during any fiscal year by making payment under this section. A
133.25member may not receive disability benefits under section 354.48 and receive allowable
133.26service credit under this section for the same period of time.
133.27    (b) The executive director shall reject an application for disability benefits under section
133.28354.48 if the member is applying only because an employer-sponsored provider of private
133.29disability insurance benefits requires the application and the member would not have applied
133.30for disability benefits in the absence of the requirement. The member shall submit a copy
133.31of the disability insurance policy that requires an application for disability benefits from
134.1the plan if the member wishes to assert that the application is only being submitted because
134.2of the disability insurance policy requirement.
134.3    (c) Notwithstanding the provisions of any agreement to the contrary, employee and
134.4employer contributions may not be made to receive allowable service credit under this
134.5section if the member does not retain the right to full reinstatement both during and at the
134.6end of the medical leave.

134.7    Sec. 6. Minnesota Statutes 2016, section 354.44, subdivision 3, is amended to read:
134.8    Subd. 3. Application for retirement. A member or a person authorized to act on behalf
134.9of the member may make application for retirement provided the age and service
134.10requirements under subdivision 1 are satisfied on or before the member's retirement annuity
134.11accrual date under subdivision 4. The application may be made no earlier than 120 180 days
134.12before the termination of teaching service. The application must be made on a form prescribed
134.13by the executive director and is not complete until all necessary supporting documents are
134.14received by the executive director.

134.15    Sec. 7. Minnesota Statutes 2016, section 354.44, subdivision 9, is amended to read:
134.16    Subd. 9. Determining applicable law. A former teacher who returns to covered service
134.17following a termination and who is not receiving a retirement annuity under this section
134.18must have earned at least 85 days one-half year of credited service following the return to
134.19covered service to be eligible for improved benefits resulting from any law change enacted
134.20subsequent to that termination.

134.21    Sec. 8. Minnesota Statutes 2016, section 354.45, is amended by adding a subdivision to
134.22read:
134.23    Subd. 3. Payment upon death of former spouse. Upon the death of the former spouse
134.24to whom payments are to be made before the end of the specified payment period, payments
134.25shall be made according to the terms of a beneficiary form completed by the former spouse
134.26or, if no beneficiary form, to the estate of the former spouse or as otherwise ordered by a
134.27court of competent jurisdiction.

134.28    Sec. 9. Minnesota Statutes 2016, section 354.46, subdivision 6, is amended to read:
134.29    Subd. 6. Application. (a) A beneficiary designation and an application for benefits under
134.30this section must be in writing on a form prescribed by the executive director.
135.1(b) Sections 354.55, subdivision 11, and 354.60 apply to a deferred annuity payable
135.2under this section.
135.3(c) Unless otherwise specified, the annuity must be computed under section 354.44,
135.4subdivision 2 or 6, whichever is applicable.
135.5(d) Each designated beneficiary eligible for a lifetime benefit under this subdivision may
135.6apply for an annuity any time after the member's death. The benefit may not begin to accrue
135.7more than six months before the date the application is filed with the executive director and
135.8may not accrue before the member's death.

135.9    Sec. 10. Minnesota Statutes 2016, section 354.48, subdivision 1, is amended to read:
135.10    Subdivision 1. Age, service and salary requirements. A member who is totally and
135.11permanently disabled, who has not reached the normal retirement age as defined in section
135.12354.05, subdivision 38, and who has at least three years of credited allowable service at the
135.13time that the total and permanent disability begins is entitled to a disability benefit based
135.14on this allowable service in an amount provided in subdivision 3. If the disabled member's
135.15teaching service has terminated at any time, at least two of the required three years of
135.16allowable service must have been rendered after last becoming a member. Any member
135.17whose average salary is less than $75 per month is not entitled to disability benefits.

135.18    Sec. 11. Minnesota Statutes 2016, section 354.512, is amended to read:
135.19354.512 RECOVERY OF DEFICIENCIES.
135.20In addition to any other remedies permitted under law, if an employing unit or other
135.21entity required by law to make any form of payment to the Teachers Retirement Association
135.22fails to make full payment within 60 days of notification, the executive director is authorized
135.23to certify the amount of deficiency to the commissioner of management and budget, who
135.24shall deduct the amount from any state aid or appropriation applicable to the employing
135.25unit or entity, and transmit the withheld aid or appropriation to the executive director for
135.26deposit in the fund.

135.27    Sec. 12. Minnesota Statutes 2016, section 354.52, subdivision 4, is amended to read:
135.28    Subd. 4. Reporting and remittance requirements. An employer shall remit all amounts
135.29due to the association and furnish a statement indicating the amount due and transmitted
135.30with any other information required by the executive director. If an amount due is not
135.31received by the association within 14 calendar days of the payroll warrant, the amount
135.32accrues interest at an annual rate of 8.5 percent compounded annually from the due date
136.1until the amount is received by the association. All amounts due and other employer
136.2obligations not remitted within 60 days of notification by the association must may be
136.3certified to the commissioner of management and budget who shall deduct the amount from
136.4any state aid or appropriation amount applicable to the employing unit.

136.5    Sec. 13. Minnesota Statutes 2016, section 354.52, subdivision 4d, is amended to read:
136.6    Subd. 4d. Annual base salary reporting. An employing unit must provide the following
136.7annual base salary data, as defined in section 354.05, subdivision 41, to the association on
136.8or before June 30 of each fiscal year: (1) annual base salary, as defined in section 354.05,
136.9subdivision 41 ; and.
136.10(2) beginning and ending dates for the regular school work year.

136.11    Sec. 14. Minnesota Statutes 2016, section 354.66, subdivision 2, is amended to read:
136.12    Subd. 2. Qualified part-time teacher program participation requirements. (a) A
136.13teacher in a Minnesota public elementary school, a Minnesota secondary school, or the
136.14Minnesota State Colleges and Universities system who has three years or more of allowable
136.15service in the association or three years or more of full-time teaching service in Minnesota
136.16public elementary schools, Minnesota secondary schools, or the Minnesota State Colleges
136.17and Universities system, by agreement with the board of the employing district or with the
136.18authorized representative of the board, may be assigned to teaching service in a part-time
136.19teaching position under subdivision 3. The agreement must be executed before October 1
136.20of the school year for which the teacher requests to make retirement contributions under
136.21subdivision 4 has been assigned to teaching service in a part-time teaching position under
136.22this section. A copy of the executed agreement must be filed with the executive director of
136.23the association. If the copy of the executed agreement is filed with the association after
136.24October 1 of the school year for which the teacher requests to make retirement contributions
136.25under subdivision 4 has been assigned to teaching service in a part-time teaching position,
136.26the employing unit shall pay the fine specified in section 354.52, subdivision 6, for each
136.27calendar day that elapsed since the October 1 due date, unless the association waives the
136.28fine. The association may not accept an executed agreement that is received by the association
136.29more than 15 months late. The association may not waive the fine required by this section.
136.30(b) Notwithstanding paragraph (a), if the teacher is also a legislator:
136.31(1) the agreement in paragraph (a) must be executed before March 1 of the school year
136.32for which the teacher requests to make retirement contributions under subdivision 4; and
137.1(2) the fines specified in paragraph (a) apply if the employing unit does not file the
137.2executed agreement with the executive director of the association by March 1.

137.3    Sec. 15. Minnesota Statutes 2016, section 354.72, subdivision 1, is amended to read:
137.4    Subdivision 1. Application. This section applies to any strike period under section
137.5354.05, subdivision 13 , clause (6), and to any period of authorized leave of absence without
137.6pay under sections 354.093, 354.094, 354.095, and 354.096 for which the teacher obtains
137.7credit for allowable service by making payment as specified in this section to the Teachers
137.8Retirement Association fund. Each year of an extended leave of absence under section
137.9354.094 is considered to be a separate leave for purposes of this section.

137.10    Sec. 16. Minnesota Statutes 2016, section 423A.02, subdivision 3, is amended to read:
137.11    Subd. 3. Reallocation of amortization state aid. (a) Seventy percent of the difference
137.12between $5,720,000 and the current year amortization aid distributed under subdivision 1
137.13that is not distributed for any reason to a municipality must be distributed by the
137.14commissioner of revenue according to this paragraph. The commissioner shall distribute
137.1560 percent of the amounts derived under this paragraph to the Teachers Retirement
137.16Association, and 40 percent to the St. Paul Teachers Retirement Fund Association to fund
137.17the unfunded actuarial accrued liabilities of the respective funds. These payments must be
137.18made on July 15 each fiscal year. If the St. Paul Teachers Retirement Fund Association or
137.19the Duluth Teachers Retirement Fund Association becomes fully funded, the association's
137.20eligibility for its portion of this aid ceases. Amounts remaining in the undistributed balance
137.21account at the end of the biennium if aid eligibility ceases cancel to the general fund.
137.22    (b) In order to receive amortization aid under paragraph (a), before June 30 annually
137.23Independent School District No. 625, St. Paul, must make an additional contribution of
137.24$800,000 each year to the St. Paul Teachers Retirement Fund Association.
137.25    (c) Thirty percent of the difference between $5,720,000 and the current year amortization
137.26aid under subdivision 1 that is not distributed for any reason to a municipality must be
137.27distributed under section 69.021, subdivision 7, paragraph (d), as additional funding to
137.28support a minimum fire state aid amount for volunteer firefighter relief associations.

137.29    Sec. 17. EFFECTIVE DATE.
137.30Sections 1 to 16 are effective June 30, 2018.


138.4    Section 1. Minnesota Statutes 2016, section 354A.093, subdivision 4, is amended to read:
138.5    Subd. 4. Eligible payment period. (a) To receive service credit under this section, the
138.6contributions specified in this section must be transmitted to the applicable first class city
138.7St. Paul Teachers Retirement Fund Association during the period which begins with the
138.8date the individual returns to teaching service and which has a duration of three times the
138.9length of the uniformed service period, but not to exceed five years.
138.10(b) Notwithstanding paragraph (a), if the payment period determined under paragraph
138.11(a) is less than one year, the contributions required under this section to receive service
138.12credit may be made within one year from the discharge date.

138.13    Sec. 2. Minnesota Statutes 2016, section 354A.31, subdivision 5, is amended to read:
138.14    Subd. 5. Unreduced normal retirement annuity. Upon retirement at normal retirement
138.15age, a vested coordinated member is entitled to a normal retirement annuity calculated under
138.16subdivision 4 or 4a, whichever applies.

138.17    Sec. 3. Minnesota Statutes 2016, section 354A.31, subdivision 6, is amended to read:
138.18    Subd. 6. Reduced retirement annuity. This subdivision applies only to a person who
138.19first became a coordinated member or a member of a pension fund listed in section 356.30,
138.20subdivision 3 , before July 1, 1989, and whose annuity is higher when calculated using the
138.21retirement annuity formula percentage in subdivision 4, paragraph (c), or subdivision 4a,
138.22paragraph (c), in conjunction with this subdivision than when calculated under subdivision
138.234, paragraph (d), or subdivision 4a, paragraph (d), in conjunction with subdivision 7.
138.24(a) Upon retirement at an age before normal retirement age or prior to age 62 with at
138.25least 30 years of service credit, a vested coordinated member shall be entitled to a retirement
138.26annuity in an amount equal to the normal retirement annuity calculated using the retirement
138.27annuity formula percentage in subdivision 4, paragraph (c), or subdivision 4a, paragraph
138.28(c), reduced by one-quarter of one percent for each month that the coordinated member is
138.29under normal retirement age if the coordinated member has less than 30 years of service
138.30credit or is under the age of 62 if the coordinated member has at least 30 years of service
138.31credit.
139.1(b) Any coordinated member whose attained age plus credited allowable service totals
139.290 years is entitled, upon application, to a retirement annuity in an amount equal to the
139.3normal retirement annuity calculated using the retirement annuity formula percentage in
139.4subdivision 4, paragraph (c), or subdivision 4a, paragraph (c), without any reduction by
139.5reason of early retirement.

139.6    Sec. 4. Minnesota Statutes 2016, section 354A.36, subdivision 4, is amended to read:
139.7    Subd. 4. Determination of disability. (a) The board of the teachers retirement fund
139.8association shall make the final determination of the existence of a permanent and total
139.9disability. The board shall have the coordinated member examined by at least two licensed
139.10physicians, licensed chiropractors, or licensed psychologists who are selected by the board.
139.11After making any required examinations, each physician, chiropractor, or psychologist with
139.12respect to a mental impairment, shall make a written report to the board concerning the
139.13coordinated member, which shall include a statement of the expert opinion of the physician,
139.14chiropractor, or psychologist as to whether or not the member is permanently and totally
139.15disabled within the meaning of section 354A.011, subdivision 14. The board shall also
139.16obtain a written statement from the employer as to whether or not the coordinated member
139.17was terminated or separated from active employment due to a disability which is deemed
139.18by the employer to reasonably prevent further service by the member to the employer and
139.19which caused the coordinated member not to be entitled to further compensation from the
139.20employer for services rendered by the member. If, after consideration of the reports of the
139.21physicians, chiropractors, or psychologists with respect to a mental impairment, and any
139.22evidence presented by the member or by any other interested parties, the board determines
139.23that the coordinated member is totally and permanently disabled within the meaning of
139.24section 354A.011, subdivision 14, it shall grant the coordinated member a disability benefit.
139.25A member who is placed on a leave of absence without compensation as a result of the
139.26disability is not barred from receiving a disability benefit under this section.
139.27(b) The executive director shall reject an application for disability benefits under section
139.28354A.36 if the member is applying only because an employer-sponsored provider of private
139.29disability insurance benefits requires the application and the member would not have applied
139.30for disability benefits in the absence of the requirement. The member shall submit a copy
139.31of the disability insurance policy that requires an application for disability benefits from
139.32the plan if the member wishes to assert that the application is only being submitted because
139.33of the disability insurance policy requirement.

140.1    Sec. 5. Minnesota Statutes 2016, section 354A.38, is amended to read:
140.2354A.38 EFFECT OF REFUND; REPAYMENT OF REFUND.
140.3    Subdivision 1. Effect of refund; termination of service credit. If a coordinated member
140.4or former coordinated member applies for and accepts is issued a refund pursuant to section
140.5354A.37 , all allowable service which was credited to the member or former member shall
140.6be terminated.
140.7    Subd. 2. Repayment of refund. A coordinated member with at least two years of
140.8allowable service credited subsequent to the member's last application for and acceptance
140.9payment of a refund pursuant to section 354A.37 shall be entitled to repay the refund. The
140.10amount of the refund repayment shall be calculated pursuant to subdivision 3. If the member
140.11has previously applied for and accepted taken more than one refund, and the previous refund
140.12or all refunds have not been must be repaid, then the member shall be entitled only to repay
140.13all outstanding refunds and shall not be entitled to repay only the most recent refund pro
140.14rata.
140.15    Subd. 3. Computation of refund repayment amount. If the coordinated member elects
140.16to repay a refund under subdivision 2, the repayment to the fund must be in an amount equal
140.17to refunds the member has accepted been issued plus interest at the rate of 8.5 percent until
140.18June 30, 2015, and eight percent thereafter applicable annual rate or rates specified in section
140.19356.59, subdivision 5, compounded annually, from the date that the refund was accepted
140.20issued to the date that the refund is repaid.

140.21    Sec. 6. EFFECTIVE DATE.
140.22Sections 1 to 5 are effective June 30, 2018.


140.26    Section 1. Minnesota Statutes 2016, section 356.32, subdivision 2, is amended to read:
140.27    Subd. 2. Covered retirement plans. The provisions of this section apply to the following
140.28retirement plans:
140.29(1) the general state employees retirement plan of the Minnesota State Retirement System,
140.30established under chapter 352;
140.31(2) the correctional state employees retirement plan of the Minnesota State Retirement
140.32System, established under chapter 352;
141.1(3) the State Patrol retirement plan, established under chapter 352B;
141.2(4) the general employees retirement plan of the Public Employees Retirement
141.3Association, established under chapter 353;
141.4(5) the public employees police and fire plan of the Public Employees Retirement
141.5Association, established under chapter 353;
141.6(6) the local government correctional service retirement plan of the Public Employees
141.7Retirement Association, established under chapter 353E;
141.8(7) the Teachers Retirement Association, established under chapter 354; and
141.9(7) (8) the St. Paul Teachers Retirement Fund Association, established under chapter
141.10354A.

141.11    Sec. 2. Minnesota Statutes 2016, section 356.47, subdivision 3, is amended to read:
141.12    Subd. 3. Payment. (a) Beginning one year after the reemployment withholding period
141.13ends relating to the reemployment that gave rise to the limitation, and the filing of a written
141.14application, the retired member is entitled to the payment, in a lump sum, of the value of
141.15the person's amount under subdivision 2, plus annual compound interest. For the general
141.16state employees retirement plan, the correctional state employees retirement plan, the general
141.17employees retirement plan of the Public Employees Retirement Association, the public
141.18employees police and fire retirement plan, the local government correctional employees
141.19retirement plan, and the teachers retirement plan, the annual interest rate is six percent from
141.20the date on which the amount was deducted from the retirement annuity to the date of
141.21payment or until January 1, 2011, whichever is earlier, and no interest after January 1, 2011.
141.22For the St. Paul Teachers Retirement Fund Association, the annual interest is the rate of six
141.23percent from the date that the amount was deducted from the retirement annuity to the date
141.24of payment or June 30, 2011, whichever is earlier, and with no interest accrual after June
141.2530, 2011.
141.26    (b) The written application must be on a form prescribed by the chief administrative
141.27officer of the applicable retirement plan.
141.28    (c) If the retired member dies before the payment provided for in paragraph (a) is made,
141.29the amount is payable, upon written application, to the deceased person's surviving spouse,
141.30or if none, to the deceased person's designated beneficiary, or if none, to the deceased
141.31person's estate.
142.1    (d) If the amount under subdivision 2 is an eligible rollover distribution as defined in
142.2section 356.635, subdivisions 4 and 5, the applicable retirement plan shall provide notice
142.3and an election:
142.4    (1) to the member regarding the member's right to elect a direct rollover under section
142.5356.635, subdivisions 3 to 7, in lieu of the a direct payment of the person's amount under
142.6subdivision 2, on or after the payment date under paragraph (a), if the federal Internal
142.7Revenue Code so permits, the retired member may elect to have all or any portion of the
142.8payment amount under this section paid in the form of a direct rollover to an eligible
142.9retirement plan as defined in section 402(c) of the federal Internal Revenue Code that is
142.10specified by the retired member. If the retired member dies with a balance remaining payable
142.11under this section, the surviving spouse of the retired member, or if none, the deceased
142.12person's designated beneficiary, or if none, the administrator of the deceased person's estate
142.13may elect a direct rollover under this paragraph.; or
142.14(2) if paragraph (c) applies and the amount is to be paid to a person who is a distributee
142.15as defined in section 356.635, subdivision 7, to the distributee regarding the distributee's
142.16right to elect a direct rollover under section 356.635, subdivisions 3 to 7, in lieu of a direct
142.17payment.

142.18    Sec. 3. Minnesota Statutes 2016, section 356.635, is amended by adding a subdivision to
142.19read:
142.20    Subd. 9a. Definitions. (a) The following definitions apply for purposes of this subdivision
142.21and subdivisions 10 to 12.
142.22(b) "Annual addition" means the sum for the limitation year of all pretax and after-tax
142.23contributions made by the member or the member's employer and credited to an account in
142.24the name of the member in any defined contribution plan maintained by the employer.
142.25(c) "Compensation" means the compensation actually paid or made available to a member
142.26for any limitation year, including all items of remuneration described in Code of Federal
142.27Regulations, title 26, section 1.415(c)-2(b), and excluding all items of remuneration described
142.28in Code of Federal Regulations, title 26, section 1.415(c)-2(c). Compensation for pension
142.29plan purposes for any limitation year shall not exceed the applicable federal compensation
142.30limit described in section 356.611, subdivision 2.
142.31(d) "Limitation year" means the calendar year or fiscal year, whichever is applicable to
142.32the particular pension plan.
143.1(e) "Maximum permissible benefit" means an annual benefit of $160,000, automatically
143.2adjusted under section 415(d) of the Internal Revenue Code for each limitation year ending
143.3after December 31, 2001, payable in the form of a single life annuity. The new limitation
143.4shall apply to limitation years ending with or within the calendar year of the date of the
143.5adjustment, but a member's benefits shall not reflect the adjusted limit prior to January 1 of
143.6that calendar year. The maximum permissible benefit amount shall be further adjusted as
143.7follows:
143.8(1) if the member has less than ten years of participation, the maximum permissible
143.9benefit shall be multiplied by a fraction, the numerator of which is the number of years, or
143.10part thereof, but not less than one year, of participation in the plan, and the denominator of
143.11which is ten;
143.12(2) if the annual benefit begins before the member has attained age 62, the determination
143.13as to whether the maximum permissible benefit limit has been satisfied shall be made, in
143.14accordance with regulations prescribed by the United States secretary of the treasury, by
143.15reducing the limit so that the limit, as so reduced, equals an annual benefit, beginning when
143.16the annual benefit actually begins, which is equivalent to a $160,000, as adjusted, annual
143.17benefit beginning at age 62; and
143.18(3) if the annual benefit begins after the member has attained age 65, the determination
143.19as to whether the maximum permissible benefit limit has been satisfied shall be made, in
143.20accordance with regulations prescribed by the United States secretary of the treasury, by
143.21increasing the limit so that the limit, as so increased, equals an annual benefit, beginning
143.22when the annual benefit actually begins, which is equivalent to a $160,000, as adjusted,
143.23annual benefit beginning at age 65.

143.24    Sec. 4. Minnesota Statutes 2016, section 356.635, subdivision 10, is amended to read:
143.25    Subd. 10. Annual benefit limitations; defined benefit plans. (a) The annual benefit
143.26payable to a member shall not exceed the maximum permissible benefit. If the benefit the
143.27member would otherwise receive for a limitation year would result in the payment of an
143.28annual benefit in excess of the maximum permissible benefit, the benefit shall be reduced
143.29to the extent necessary so the benefit does not exceed the maximum permissible benefit.
143.30(b) For purposes of applying the limits of section 415(b) of the Internal Revenue Code,
143.31a retirement limitation in paragraph (a), an annual benefit that is payable in any form other
143.32than a single life annuity and that is subject to section 417(e)(3) of the Internal Revenue
143.33Code must shall be adjusted to an actuarially equivalent single life annuity that equals, if
143.34the annuity starting date is in a plan year beginning after 2005, the annual amount of the
144.1single life annuity commencing at the same annuity starting date that has the same actuarial
144.2present value as the participant's member's form of benefit, using whichever of the following
144.3produces the greatest annual amount:
144.4(1) the interest rate and the mortality table or other tabular factor specified in the plan
144.5for adjusting benefits in the same form;
144.6(2) a 5.5 percent interest rate assumption and the applicable mortality table; or
144.7(3) the applicable interest rate under section 417(e)(3) of the Internal Revenue Code and
144.8the applicable mortality table, divided by 1.05.
144.9(c) If a member participated in more than one pension plan in which the employer
144.10participates, the benefits under each plan must be reduced proportionately to satisfy the
144.11limitation in paragraph (a).

144.12    Sec. 5. Minnesota Statutes 2016, section 356.635, is amended by adding a subdivision to
144.13read:
144.14    Subd. 11. Annual addition limitation; defined contribution plans. The annual additions
144.15by or on behalf of a member to a defined contribution plan for any limitation year shall not
144.16exceed the lesser of (1) 100 percent of the member's compensation for the limitation year
144.17or (2) the dollar limit in effect for the limitation year under section 415(c)(1)(A) of the
144.18Internal Revenue Code, as adjusted by the United States secretary of the treasury under
144.19section 415(d)(1)(C) of the Internal Revenue Code.

144.20    Sec. 6. Minnesota Statutes 2016, section 356.635, is amended by adding a subdivision to
144.21read:
144.22    Subd. 12. Incorporation by reference. Any requirements of section 415(b) and (c) of
144.23the Internal Revenue Code and related regulations and agency guidance not addressed by
144.24subdivisions 10 and 11 shall be considered incorporated by reference, including provisions
144.25applicable to qualified police and firefighters and to survivor and disability benefits.
144.26Subdivisions 10 to 12 shall be interpreted in a manner that is consistent with the requirements
144.27of section 415(b) and (c) of the Internal Revenue Code and the related regulations.

144.28    Sec. 7. Minnesota Statutes 2016, section 356.635, is amended by adding a subdivision to
144.29read:
144.30    Subd. 13. Correction of errors. The executive director of each plan may correct an
144.31operational, demographic, employer eligibility, or plan document error as the executive
145.1director deems necessary or appropriate to preserve and protect the plan's tax qualification
145.2under section 401(a) of the Internal Revenue Code, including as provided in the Internal
145.3Revenue Service's Employee Plans Compliance Resolution System (EPCRS) or any successor
145.4thereto. To the extent deemed necessary by the executive director to implement correction,
145.5the executive director may:
145.6(1) make distributions;
145.7(2) transfer assets; or
145.8(3) recover an overpayment by reducing future benefit payments or designating
145.9appropriate revenue or source of funding that will restore to the plan the amount of the
145.10overpayment.

145.11    Sec. 8. Minnesota Statutes 2016, section 356.96, subdivision 1, is amended to read:
145.12    Subdivision 1. Definitions. (a) Unless the language or context clearly indicates that a
145.13different meaning is intended, for the purpose of this section, the terms in paragraphs (b)
145.14to (e) this subdivision have the meanings given them.
145.15    (b) "Chief administrative officer" "Executive director" means the executive director of
145.16a covered pension plan or the executive director's designee or representative.
145.17    (c) "Covered pension plan" means a plan enumerated in section 356.20, subdivision 2,
145.18clauses (1) to (4), (8), and (11) to (14), but does not mean the deferred compensation plan
145.19administered under sections 352.965 and 352.97 or to the postretirement health care savings
145.20plan administered under section 352.98.
145.21    (d) "Governing board" means the Board of Trustees of the Public Employees Retirement
145.22Association, the Board of Trustees of the Teachers Retirement Association, or the Board
145.23of Directors of the Minnesota State Retirement System.
145.24    (e) "Person" includes means an active, retired, deferred, or nonvested inactive participant
145.25in a covered pension plan or a beneficiary of a participant, or an individual who has applied
145.26to be a participant or who is or may be a survivor of a participant, or the representative of
145.27a state agency or other governmental unit that employs active participants in a covered
145.28pension plan.
145.29(f) "Petitioner" means a person who has filed a petition for review of an executive
145.30director's determination under this section.

146.1    Sec. 9. Minnesota Statutes 2016, section 356.96, subdivision 2, is amended to read:
146.2    Subd. 2. Right to review appeal to executive director; determination. A determination
146.3made by the chief administrative officer person may appeal a decision by the staff of a
146.4covered pension plan regarding a the person's eligibility, benefits, or other rights under the
146.5plan with which the person does not agree to the executive director of the plan. The appeal
146.6must be in writing and be delivered to the executive director no later than 60 days after the
146.7date of the written notice of the staff decision. The executive director may overturn, modify,
146.8or affirm the staff's decision. The executive director's determination is subject to review
146.9under this section.

146.10    Sec. 10. Minnesota Statutes 2016, section 356.96, subdivision 3, is amended to read:
146.11    Subd. 3. Notice of determination. If the applicable chief administrative officer denies
146.12an application or a written request, modifies a benefit, or terminates a benefit of a person
146.13claiming a right or potential rights under a covered pension plan, the chief administrative
146.14officer shall notify that person through a written notice containing: The executive director
146.15shall issue a written notice of determination to the person who files an appeal under
146.16subdivision 2. The notice of determination must be delivered by certified mail to the address
146.17to which the most recent benefit payment was sent or, if that address is that of a financial
146.18institution, to the last known address of the person. The notice of determination shall include
146.19the following:
146.20    (1) a statement of the reasons for the determination;
146.21    (2) a notice statement that the person may petition the governing board of the covered
146.22pension plan for a review of the determination and that a person's petition for review must
146.23be filed in the administrative office of the covered pension plan within no later than 60 days
146.24of the receipt after the date of the written notice of the determination;
146.25    (3) a statement indicating that a failure to petition for review within 60 days precludes
146.26the person from contesting in any other further administrative or judicial review or court
146.27procedure the issues determined by the chief administrative officer of the executive director's
146.28determination;
146.29    (4) a statement indicating that all relevant materials, documents, affidavits, and other
146.30records that the person wishes to be reviewed in support of the petition and a list of any
146.31witnesses who will testify before the governing board, along with a summary of the witness'
146.32testimony, must be filed with and received in the administrative office of the covered pension
146.33plan at least 15 days before the date of the hearing under subdivision 10 or as directed by
147.1the administrative law judge who conducts a fact-finding conference under subdivision 7,
147.2paragraph (b), or a contested case hearing under subdivision 12, paragraph (b); and
147.3    (5) a summary of this section, including all filing requirements and deadlines.; and
147.4(6) the statement required under subdivision 4, paragraph (a), if applicable.

147.5    Sec. 11. Minnesota Statutes 2016, section 356.96, subdivision 4, is amended to read:
147.6    Subd. 4. Termination of benefits. (a) If a covered pension plan decides to the executive
147.7director's determination will terminate a benefit that is being paid to a person, before
147.8terminating the benefit, the chief administrative officer must, in addition to the other
147.9procedures prescribed in this section, provide the individual with written notice of the
147.10pending benefit termination by certified mail. The notice must explain the reason for the
147.11pending benefit termination. The person must be given an the notice of determination must
147.12also state that the person has the opportunity to explain, in writing, in person, by telephone,
147.13or by e-mail, the reasons that the benefit should not be terminated.
147.14    (b) If the chief administrative officer is unable to contact the person and notice of
147.15determination is returned as undeliverable and the person cannot be reached by any other
147.16reasonable means of communication and the executive director determines that a failure to
147.17terminate the benefit will result in unauthorized payment by a covered pension plan, the
147.18chief administrative officer executive director may terminate the benefit immediately upon
147.19mailing a written notice containing the information required by subdivision 3 to the address
147.20to which the most recent benefit payment was sent and, if that address is that of a financial
147.21institution, to the last known address of the person.

147.22    Sec. 12. Minnesota Statutes 2016, section 356.96, subdivision 5, is amended to read:
147.23    Subd. 5. Petition for review. (a) Upon receipt of the notice of determination required
147.24in subdivision 3, a person who claims a right under subdivision 2 may petition the governing
147.25board of the covered pension plan for a review of that decision by the governing board of
147.26the covered pension plan the executive director's determination.
147.27    (b) A petition under this section must be sent to the chief administrative officer by mail
147.28and must be postmarked The petitioner must file the petition for review with the
147.29administrative office of the covered pension plan no later than 60 days after the person
147.30received date of the notice of determination required by subdivision 3. Filing of the petition
147.31is effective upon mailing or personal delivery. The petition must include the person's
147.32petitioner's statement of the reason or reasons that the person believes the decision of the
148.1chief administrative officer determination of the executive director should be reversed or
148.2modified. The petition may include all documentation and written materials that the petitioner
148.3deems to be relevant. In developing a record for review by the board when a decision is
148.4appealed, the chief administrative officer may direct that the applicant participate in a
148.5fact-finding session conducted by an administrative law judge assigned by the Office of
148.6Administrative Hearings and, as applicable, participate in a vocational assessment conducted
148.7by a qualified rehabilitation counselor on contract with the applicable retirement system.

148.8    Sec. 13. Minnesota Statutes 2016, section 356.96, subdivision 6, is amended to read:
148.9    Subd. 6. Failure to petition. If a timely petition for review under subdivision 5 is not
148.10filed with the chief administrative officer, office of the covered pension plan's plan, the
148.11executive director's determination is final and is not subject to further administrative or
148.12judicial review.

148.13    Sec. 14. Minnesota Statutes 2016, section 356.96, subdivision 7, is amended to read:
148.14    Subd. 7. Notice of hearing; fact-finding; filing and timing requirements. (a) After
148.15receiving a petition, the chief administrative officer executive director must schedule a
148.16timely hearing to review of the petition before the governing board of the covered pension
148.17plan or the executive director may defer the scheduling of a hearing until after a fact-finding
148.18conference under paragraph (b). The review must be scheduled to take into consideration
148.19any necessary accommodations to allow the petitioner to participate in the governing board's
148.20review.
148.21    (b) The executive director may direct the petitioner to participate in a fact-finding
148.22conference conducted by an administrative law judge assigned by the Office of
148.23Administrative Hearings. The fact-finding conference is an informal proceeding not subject
148.24to Minnesota Rules, chapter 1400, except that Minnesota Rules, part 1400.7300, shall govern
148.25the admissibility of evidence and Minnesota Rules, part 1400.8603, shall govern how the
148.26fact-finding conference is conducted. The administrative law judge must issue a report and
148.27a recommendation to the governing board.
148.28    (c) If the petitioner's claim relates to disability benefits, the executive director may direct
148.29the petitioner to participate in a vocational assessment conducted by a qualified rehabilitation
148.30counselor under contract with the covered pension plan. The counselor must issue a report
148.31regarding the assessment to the governing board.
148.32    (b) (d) Not less than 30 calendar days before the date scheduled for the hearing date
148.33before the governing board, the chief administrative officer executive director must provide
149.1by mail to notify the petitioner an acknowledgment of the receipt of the person's petition
149.2and a follow-up notice of the time and place of the meeting at which the governing board
149.3is scheduled to consider the petition and conduct the hearing. If there has been no fact-finding
149.4conference under paragraph (b), not less than 15 days before the date scheduled for the
149.5hearing, the petitioner and the executive director must provide a copy to the governing board
149.6and the other party copies of all relevant documents, documentary evidence, summaries,
149.7and recommendations assembled by or on behalf of the plan administration to be considered
149.8by the governing board that will be presented and a list of witnesses who will testify, along
149.9with a summary of their testimony.
149.10    (c) All documents and materials that the petitioner wishes to be part of the record for
149.11review must be filed with the chief administrative officer and must be received in the offices
149.12of the covered pension plan at least 15 days before the date of the meeting at which the
149.13petition is scheduled to be heard.
149.14    (d) A (e) The petitioner may request a continuance postponement of a the date scheduled
149.15for the hearing if the request is received by the chief administrative officer within before
149.16the governing board within a reasonable time, but no later than ten calendar days of before
149.17the scheduled hearing date of the applicable board meeting. The chief administrative officer
149.18must reschedule the review within a reasonable time. Only one continuance may be granted
149.19to any petitioner. A petitioner shall be granted only one postponement unless the applicable
149.20covered pension plan agrees to additional postponements.

149.21    Sec. 15. Minnesota Statutes 2016, section 356.96, subdivision 8, is amended to read:
149.22    Subd. 8. Record for review. (a) All evidence, including all records, documents, and
149.23affidavits in the possession of the covered pension plan of which the covered pension plan
149.24desires to avail itself and be considered by the governing board, and all evidence which the
149.25petitioner wishes to present to the governing board, including any evidence which would
149.26otherwise be classified by law as "private," must be made part of the hearing record.
149.27    (b) The chief administrative officer executive director must provide a copy of the record
149.28to each member of the governing board at least seven five days before the scheduled hearing
149.29date.
149.30    (c) Any additional document, affidavit, or other relevant information that the petitioner
149.31requests be part of the record may be admitted with the consent of the governing board. If
149.32a fact-finding conference under subdivision 7, paragraph (b), is not conducted, the record
149.33is limited to those materials provided to the petitioner in accordance with subdivision 7,
149.34paragraph (d), those filed by the petitioner with the covered pension plan in a timely manner
150.1in accordance with subdivision 7, paragraph (e), any vocational assessment report under
150.2subdivision 7, paragraph (c), and any testimony at the hearing before the governing board.
150.3Any additional evidence may be placed in the record pursuant to subdivision 10, paragraph
150.4(b).
150.5(d) If a fact-finding conference under subdivision 7, paragraph (b), or a contested case
150.6hearing under subdivision 12, paragraph (b), is conducted, the record before the governing
150.7board must be limited to the following:
150.8(1) the record from the Office of Administrative Hearings;
150.9(2) seven-page submissions by the petitioner and a representative of the covered pension
150.10plan commenting on the administrative law judge's recommendation; and
150.11(3) any vocational assessment report under subdivision 7, paragraph (c).

150.12    Sec. 16. Minnesota Statutes 2016, section 356.96, subdivision 9, is amended to read:
150.13    Subd. 9. Amended determination. At any time before the hearing before the governing
150.14board, for good cause shown and made part of the records of the plan, the chief administrative
150.15officer executive director may reverse, alter, amend, or modify the prior decision which is
150.16subject to review under this section by issuing an amended decision determination to the
150.17petitioner. Upon doing so, the chief administrative officer executive director may cancel
150.18the governing board's scheduled review of the person's petition and shall so notify the
150.19petitioner.

150.20    Sec. 17. Minnesota Statutes 2016, section 356.96, subdivision 10, is amended to read:
150.21    Subd. 10. Board hearing. (a) The governing board shall hold a timely hearing on a
150.22petition for review as part of a regularly scheduled board meeting, or as part of a special
150.23meeting if so scheduled. All governing board members who participate in the
150.24decision-making process must be familiar with the record. The governing board shall make
150.25its decision on a petition solely on the record as submitted and on the proceedings of the
150.26hearing.
150.27    (b) At the hearing, the petitioner, the petitioner's attorney, and the chief administrative
150.28officer representative, if any, the executive director, and a representative of the covered
150.29pension plan who does not also serve as the governing board's legal advisor during the
150.30board's decision-making process may state and discuss with the governing board their
150.31positions with respect to the petition. If no fact-finding conference under subdivision 7,
150.32paragraph (b), or contested case hearing under subdivision 12, paragraph (b), was conducted,
151.1additional evidence may be received in the form of testimony from previously disclosed
151.2witnesses. The governing board may allow further documentation to be placed in the record
151.3at the board meeting only with the agreement of both the chief administrative officer
151.4executive director and the petitioner. The chief administrative officer executive director
151.5may not otherwise participate in the board's decision-making process.
151.6    (b) When a petition presents a contested issue of law, an assistant attorney general may
151.7participate and may argue on behalf of the legal position taken by the chief administrative
151.8officer if that assistant attorney general does not also serve as the governing board's legal
151.9advisor during the board's decision-making process.
151.10    (c) A motion by a board member, supported by a summary of the relevant facts,
151.11conclusions and reasons, as properly amended and approved by a majority of the governing
151.12board, constitutes the board's final decision. A verbatim statement of the board's final
151.13decision must be served upon the petitioner. If the decision is contrary to the petitioner's
151.14desired outcome, the notice shall inform the petitioner of the appeal rights set forth in
151.15subdivision 13.
151.16    (d) (c) If a petitioner who received timely notice of a scheduled hearing fails to appear,
151.17the governing board may nevertheless hear the petition and issue a decision.
151.18(d) The governing board's decision shall be made upon a motion by a board member
151.19and approval by a majority of the governing board. The governing board must issue its
151.20decision as a written order containing findings of fact, conclusions of law, and the board's
151.21decision no later than 30 days after the hearing. If the decision is contrary to the petitioner's
151.22desired outcome, the notice must inform the petitioner of the appeal rights set forth in
151.23subdivision 13.

151.24    Sec. 18. Minnesota Statutes 2016, section 356.96, subdivision 11, is amended to read:
151.25    Subd. 11. Disability medical issues. (a) If a person petitions the governing board the
151.26petitioner seeks to reverse or modify a determination which found by the executive director
151.27that there exists no was insufficient medical data supporting to support an application for
151.28disability benefits, the governing board may reverse that determination only if there is in
151.29fact medical evidence supporting the application. The governing board has the discretion
151.30to resubmit a disability benefit application at any time to a medical advisor for
151.31reconsideration, and the resubmission may include an instruction that further medical
151.32examinations be obtained.
152.1    (b) The governing board may make a determination contrary to the recommendation of
152.2the medical advisor only if there is expert medical evidence in the record to support its
152.3contrary decision. If there is no medical evidence contrary to the opinion of the medical
152.4advisor in the record and the medical advisor attests that the decision was made in accordance
152.5with the applicable disability standard, the board must follow the decision of the medical
152.6advisor regarding the cause of the disability.
152.7    (c) The obligation of the governing board to follow the decision of the medical advisor
152.8under paragraph (b) does not apply to instances when the governing board makes a
152.9determination different from the recommendation of the medical advisor on issues that do
152.10not involve medical issues.

152.11    Sec. 19. Minnesota Statutes 2016, section 356.96, subdivision 12, is amended to read:
152.12    Subd. 12. Referral for administrative hearing. (a) Notwithstanding any provision of
152.13sections 14.03, 14.06, and 14.57 to 14.69 to the contrary, a challenge to a determination of
152.14the chief administrative officer of a covered pension plan A fact-finding conference under
152.15subdivision 7, paragraph (b), must be conducted exclusively under the procedures set forth
152.16in this section and is not as a contested case under chapter 14.
152.17    (b) Notwithstanding the provisions of paragraph (a), A governing board, in its sole
152.18discretion, may refer a petition brought under this section to the Office of Administrative
152.19Hearings for a contested case hearing under sections 14.57 to 14.69.

152.20    Sec. 20. Minnesota Statutes 2016, section 356.96, subdivision 13, is amended to read:
152.21    Subd. 13. Appeal of the governing board's decision; judicial review. Within No later
152.22than 60 days of after the date of the mailing of the notice of the governing board's decision,
152.23the petitioner may appeal the decision by filing a writ of certiorari with the Court of Appeals
152.24under section 606.01 and Rule 115 of the Minnesota Rules of Civil Appellate Procedure.
152.25Failure by a person to appeal to the Court of Appeals within the 60-day period precludes
152.26the person from later raising, in any subsequent administrative hearing or court proceeding,
152.27those substantive and procedural issues that reasonably should have been raised upon a
152.28timely appeal.

152.29    Sec. 21. REPEALER.
152.30Minnesota Statutes 2016, sections 356.611, subdivisions 3, 3a, 4, and 5; and 356.96,
152.31subdivisions 14 and 15, are repealed.

153.1    Sec. 22. EFFECTIVE DATE.
153.2Sections 1 to 21 are effective June 30, 2018.


153.5    Section 1. Minnesota Statutes 2016, section 356A.06, subdivision 7, is amended to read:
153.6    Subd. 7. Expanded list of authorized investment securities. (a) Authority. A covered
153.7pension plan not described by subdivision 6, paragraph (a), is an expanded list plan and
153.8shall invest its assets as specified in this subdivision. The governing board of an expanded
153.9list plan may select and appoint investment agencies to act for or on its behalf.
153.10    (b) Securities generally; investment forms. An expanded list plan is authorized to
153.11purchase, sell, lend, and exchange the investment securities authorized under this subdivision,
153.12including puts and call options and future contracts traded on a contract market regulated
153.13by a governmental agency or by a financial institution regulated by a governmental agency.
153.14These securities may be owned directly or through shares in exchange-traded or mutual
153.15funds, or as units in commingled trusts, subject to any limitations specified in this subdivision.
153.16    (c) Government obligations. An expanded list plan is authorized to invest funds in
153.17governmental bonds, notes, bills, mortgages, and other evidences of indebtedness if the
153.18issue is backed by the full faith and credit of the issuer or the issue is rated among the top
153.19four quality rating categories by a nationally recognized rating agency. The obligations in
153.20which funds may be invested under this paragraph are guaranteed or insured issues of:
153.21(1) the United States, one of its agencies, one of its instrumentalities, or an organization
153.22created and regulated by an act of Congress;
153.23(2) the Dominion of Canada or one of its provinces if the principal and interest are
153.24payable in United States dollars;
153.25(3) a state or one of its municipalities, political subdivisions, agencies, or
153.26instrumentalities; and
153.27(4) a United States government-sponsored organization of which the United States is a
153.28member if the principal and interest are payable in United States dollars.
153.29    (d) Investment-grade corporate obligations. An expanded list plan is authorized to
153.30invest funds in bonds, notes, debentures, transportation equipment obligations, or any other
153.31longer term evidences of indebtedness issued or guaranteed by a corporation organized
154.1under the laws of the United States or any of its states, or the Dominion of Canada or any
154.2of its provinces if:
154.3    (1) the principal and interest are payable in United States dollars; and
154.4    (2) the obligations are rated among the top four quality categories by a nationally
154.5recognized rating agency.
154.6(e) Below-investment-grade corporate obligations. An expanded list plan is authorized
154.7to invest in unrated corporate obligations or in corporate obligations that are not rated among
154.8the top four quality categories by a nationally recognized rating agency if:
154.9(1) the aggregate value of these obligations does not exceed five percent of the covered
154.10pension plan's market value;
154.11(2) the covered pension plan's participation is limited to 50 percent of a single offering
154.12subject to this paragraph; and
154.13(3) the covered pension plan's participation is limited to 25 percent of an issuer's
154.14obligations subject to this paragraph.
154.15    (f) Other obligations. (1) An expanded list plan is authorized to invest funds in:
154.16    (i) bankers acceptances and deposit notes if issued by a United States bank that is rated
154.17in the highest four quality categories by a nationally recognized rating agency;
154.18    (ii) certificates of deposit if issued by a United States bank or savings institution rated
154.19in the highest four quality categories by a nationally recognized rating agency or whose
154.20certificates of deposit are fully insured by federal agencies, or if issued by a credit union in
154.21an amount within the limit of the insurance coverage provided by the National Credit Union
154.22Administration;
154.23    (iii) commercial paper if issued by a United States corporation or its Canadian subsidiary
154.24and if rated in the highest two quality categories by a nationally recognized rating agency;
154.25    (iv) mortgage securities and asset-backed securities if rated in the top four quality
154.26categories by a nationally recognized rating agency;
154.27    (v) repurchase agreements and reverse repurchase agreements if collateralized with
154.28letters of credit or securities authorized in this section;
154.29    (vi) guaranteed investment contracts if issued by an insurance company or a bank that
154.30is rated in the top four quality categories by a nationally recognized rating agency or
154.31alternative guaranteed investment contracts if the underlying assets comply with the
154.32requirements of this subdivision;
155.1    (vii) savings accounts if fully insured by a federal agency; and
155.2    (viii) guaranty fund certificates, surplus notes, or debentures if issued by a domestic
155.3mutual insurance company.
155.4    (2) Sections 16A.58, 16C.03, subdivision 4, and 16C.05 do not apply to certificates of
155.5deposit and collateralization agreements executed by the covered pension plan under clause
155.6(1), item (ii).
155.7    (3) In addition to investments authorized by clause (1), item (iv), an expanded list plan
155.8is authorized to purchase from the Minnesota Housing Finance Agency all or any part of a
155.9pool of residential mortgages, not in default, that has previously been financed by the
155.10issuance of bonds or notes of the agency. The covered pension plan may also enter into a
155.11commitment with the agency, at the time of any issue of bonds or notes, to purchase at a
155.12specified future date, not exceeding 12 years from the date of the issue, the amount of
155.13mortgage loans then outstanding and not in default that have been made or purchased from
155.14the proceeds of the bonds or notes. The covered pension plan may charge reasonable fees
155.15for any such commitment and may agree to purchase the mortgage loans at a price sufficient
155.16to produce a yield to the covered pension plan comparable, in its judgment, to the yield
155.17available on similar mortgage loans at the date of the bonds or notes. The covered pension
155.18plan may also enter into agreements with the agency for the investment of any portion of
155.19the funds of the agency. The agreement must cover the period of the investment, withdrawal
155.20privileges, and any guaranteed rate of return.
155.21    (g) Corporate stocks. An expanded list plan is authorized to invest in stocks or
155.22convertible issues of any corporation organized under the laws of the United States or any
155.23of its states, any corporation organized under the laws of the Dominion of Canada or any
155.24of its provinces, or any corporation listed on an exchange that is regulated by an agency of
155.25the United States or of the Canadian national government.
155.26    An investment in any corporation must not exceed five percent of the total outstanding
155.27shares of that corporation, except that an expanded list plan may hold up to 20 percent of
155.28the shares of a real estate investment trust and up to 20 percent of the shares of a closed
155.29mutual fund. Purchase of shares of exchange-traded or mutual funds shall be consistent
155.30with paragraph (b).
155.31    (h) Other investments. (1) In addition to the investments authorized in paragraphs (b)
155.32to (g), and subject to the provisions in clause (2), an expanded list plan is authorized to
155.33invest funds in:
156.1    (i) equity and debt investment businesses through participation in limited partnerships,
156.2trusts, private placements, limited liability corporations, limited liability companies, limited
156.3liability partnerships, and corporations;
156.4    (ii) real estate ownership interests or loans secured by mortgages or deeds of trust or
156.5shares of real estate investment trusts, through investment in limited partnerships,
156.6bank-sponsored collective funds, trusts, mortgage participation agreements, and insurance
156.7company commingled accounts, including separate accounts;
156.8    (iii) resource investments through limited partnerships, trusts, private placements, limited
156.9liability corporations, limited liability companies, limited liability partnerships, and
156.10corporations; and
156.11    (iv) international securities.
156.12    (2) The investments authorized in clause (1) must conform to the following provisions:
156.13    (i) the aggregate value of all investments made under clause (1), items (i), (ii), and (iii),
156.14may not exceed 35 percent of the market value of the fund for which the expanded list plan
156.15is investing;
156.16    (ii) there must be at least four unrelated owners of the investment other than the expanded
156.17list plan for investments made under clause (1), item (i), (ii), or (iii);
156.18    (iii) the expanded list plan's participation in an investment vehicle is limited to 20 percent
156.19thereof for investments made under clause (1), item (i), (ii), or (iii);
156.20    (iv) the expanded list plan's participation in a limited partnership does not include a
156.21general partnership interest or other interest involving general liability. The expanded list
156.22plan may not engage in any activity as a limited partner which creates general liability;
156.23(v) the aggregate value of all unrated obligations and obligations that are not rated among
156.24the top four quality categories by a nationally recognized rating agency authorized by
156.25paragraph (e) and clause (1), item (iv), must not exceed five percent of the covered plan's
156.26market value; and
156.27(vi) for volunteer firefighter relief associations, emerging market equity and international
156.28debt investments authorized under clause (1), item (iv), must not exceed 15 percent of the
156.29association's special fund market value.
156.30(i) Supplemental plan investments. The governing body of an expanded list plan may
156.31certify assets to the State Board of Investment for investment under section 11A.17.
157.1(j) Asset mix limitations. The aggregate value of an expanded list plan's investments
157.2under paragraphs (g) and (h) and equity investments under paragraph (i), regardless of the
157.3form in which these investments are held, must not exceed 85 percent of the covered plan's
157.4market value.
157.5EFFECTIVE DATE.This section is effective January 1, 2019.

157.6    Sec. 2. Minnesota Statutes 2016, section 424A.001, subdivision 2, is amended to read:
157.7    Subd. 2. Fire department. "Fire department" includes a municipal fire department or,
157.8an independent nonprofit firefighting corporation, and a fire department established as or
157.9operated by a joint powers entity under section 471.59.
157.10EFFECTIVE DATE.This section is effective January 1, 2019.

157.11    Sec. 3. Minnesota Statutes 2016, section 424A.001, is amended by adding a subdivision
157.12to read:
157.13    Subd. 2a. Municipal. "Municipal" means of a city or township.
157.14EFFECTIVE DATE.This section is effective January 1, 2019.

157.15    Sec. 4. Minnesota Statutes 2016, section 424A.001, subdivision 3, is amended to read:
157.16    Subd. 3. Municipality. "Municipality" means a municipality city or township which
157.17has established a fire department with which the relief association is directly associated, or
157.18the municipalities a city or township which have has entered into a contract with the
157.19independent nonprofit firefighting corporation of which the relief association is a subsidiary
157.20directly associated, or a city or township that has entered into a contract with a joint powers
157.21entity established under section 471.59 of which the relief association is directly associated.
157.22EFFECTIVE DATE.This section is effective January 1, 2019.

157.23    Sec. 5. Minnesota Statutes 2016, section 424A.001, subdivision 10, is amended to read:
157.24    Subd. 10. Volunteer firefighter. "Volunteer firefighter" means a person who is a member
157.25of the applicable fire department or the independent nonprofit firefighting corporation and
157.26is eligible for membership in the applicable relief association and:
157.27(i) is engaged in providing emergency response services or delivering fire education or
157.28prevention services as a member of a municipal fire department, a joint powers entity fire
157.29department, or an independent nonprofit firefighting corporation;
158.1(ii) is trained in or is qualified to provide fire suppression duties or to provide fire
158.2prevention duties under subdivision 8; and
158.3(iii) meets any other minimum firefighter and service standards established by the fire
158.4department or the independent nonprofit firefighting corporation or specified in the articles
158.5of incorporation or bylaws of the relief association.
158.6EFFECTIVE DATE.This section is effective January 1, 2019.

158.7    Sec. 6. Minnesota Statutes 2016, section 424A.002, subdivision 1, is amended to read:
158.8    Subdivision 1. Authorization. A municipal fire department or an independent nonprofit
158.9firefighting corporation, with approval by the applicable municipality or municipalities,
158.10may establish a new volunteer firefighter relief association or may retain an existing volunteer
158.11firefighter relief association. A municipal fire department or an independent nonprofit
158.12firefighting corporation may be associated with only one volunteer firefighter relief
158.13association at one time.
158.14EFFECTIVE DATE.This section is effective January 1, 2019.

158.15    Sec. 7. [424A.003] CERTIFICATION OF SERVICE CREDIT.
158.16(a) When a municipal fire department, a joint powers fire department, or an independent
158.17nonprofit firefighting corporation is directly associated with the volunteer firefighters relief
158.18association, the fire chief shall certify annually by March 31 the service credit for the
158.19previous calendar year of each volunteer firefighter rendering active service with the fire
158.20department.
158.21(b) The certification shall be made to an officer of the relief association's board of trustees
158.22and to the municipal clerk or clerk-treasurer of the largest municipality in population served
158.23by the associated fire department.
158.24(c) The fire chief shall notify each volunteer firefighter rendering active service with
158.25the fire department of the amount of service credit rendered by the firefighter for the previous
158.26calendar year. The service credit notification and a description of the process and deadlines
158.27for the firefighter to challenge the fire chief's determination of service credit must be provided
158.28to the firefighter 60 days prior to its certification to the relief association and municipality.
158.29If the service credit amount is challenged, the fire chief shall accept and consider any
158.30additional pertinent information and shall make a final determination of service credit.
158.31(d) The service credit certification must be expressed as the number of completed months
158.32of the previous year during which an active volunteer firefighter rendered at least the
159.1minimum level of duties as specified and required by the fire department under the rules,
159.2regulations, and policies applicable to the fire department. No more than one year of service
159.3credit may be certified for a calendar year.
159.4(e) If a volunteer firefighter who is a member of the relief association leaves active
159.5firefighting service to render active military service that is required to be governed by the
159.6federal Uniformed Services Employment and Reemployment Rights Act, as amended, the
159.7firefighter must be certified as providing service credit for the period of the military service,
159.8up to the applicable limit of the federal Uniformed Services Employment and Reemployment
159.9Rights Act. If the volunteer firefighter does not return from the military service in compliance
159.10with the federal Uniformed Services Employment and Reemployment Rights Act, the service
159.11credits applicable to that military service credit period are forfeited and canceled at the end
159.12of the calendar year in which the time limit set by federal law occurs.
159.13EFFECTIVE DATE.This section is effective January 1, 2019.

159.14    Sec. 8. Minnesota Statutes 2016, section 424A.01, subdivision 1, is amended to read:
159.15    Subdivision 1. Minors. No volunteer firefighters relief association associated with a
159.16municipality, a joint powers entity, or an independent nonprofit firefighting corporation
159.17may include as a relief association member a minor serving as a volunteer firefighter.
159.18EFFECTIVE DATE.This section is effective January 1, 2019.

159.19    Sec. 9. Minnesota Statutes 2016, section 424A.01, is amended by adding a subdivision to
159.20read:
159.21    Subd. 4a. Prohibition on receipt of concurrent service credit. No firefighter may be
159.22credited with service credit in a volunteer firefighters relief association for the same hours
159.23of service for which coverage is already provided in a fund operated pursuant to chapter
159.24353.
159.25EFFECTIVE DATE.This section is effective January 1, 2019, and applies to service
159.26rendered on or after that date.

159.27    Sec. 10. Minnesota Statutes 2016, section 424A.01, subdivision 5, is amended to read:
159.28    Subd. 5. Fire prevention personnel. (a) If the fire department is a municipal department
159.29and the applicable municipality approves, or if the fire department is an independent nonprofit
159.30firefighting corporation and the contracting municipality or municipalities approve, the fire
160.1department may employ or otherwise utilize the services of persons as volunteer firefighters
160.2to perform fire prevention duties and to supervise fire prevention activities.
160.3(b) Personnel serving in fire prevention positions are eligible to be members of the
160.4applicable volunteer firefighter relief association and to qualify for service pension or other
160.5benefit coverage of the relief association on the same basis as fire department personnel
160.6who perform fire suppression duties.
160.7(c) Personnel serving in fire prevention positions also are eligible to receive any other
160.8benefits under the applicable law or practice for services on the same basis as personnel
160.9who are employed to perform fire suppression duties.
160.10EFFECTIVE DATE.This section is effective January 1, 2019.

160.11    Sec. 11. Minnesota Statutes 2016, section 424A.01, is amended by adding a subdivision
160.12to read:
160.13    Subd. 5a. Volunteer emergency medical personnel. Volunteer emergency medical
160.14personnel are eligible to be members of the applicable volunteer firefighters relief association
160.15and to qualify for service pension or other benefit coverage of the relief association on the
160.16same basis as fire department personnel who perform or supervise fire suppression or fire
160.17prevention duties if:
160.18(1) the fire department employs or otherwise uses the services of persons solely as
160.19volunteer emergency medical personnel to perform emergency medical response duties or
160.20supervise emergency medical response activities;
160.21(2) the bylaws of the relief association authorize the eligibility; and
160.22(3) the eligibility is approved by:
160.23(i) the municipality, if the fire department is a municipal department;
160.24(ii) the joint powers board, if the fire department is a joint powers entity; or
160.25(iii) the contracting municipality or municipalities, if the fire department is an independent
160.26nonprofit firefighting corporation.
160.27EFFECTIVE DATE.This section is effective January 1, 2019, and applies to service
160.28rendered on or after that date.

161.1    Sec. 12. Minnesota Statutes 2016, section 424A.01, subdivision 6, is amended to read:
161.2    Subd. 6. Return to active firefighting after break in service. (a) This subdivision
161.3governs the service pension calculation requirements of a firefighter who returns to active
161.4service after a break in service and applies to all breaks in service, except that the resumption
161.5service requirements of this subdivision do not apply to leaves of absence made available
161.6by federal statute, such as the Family Medical Leave Act, United States Code, title 29,
161.7section 2691, and the Uniformed Services Employment and Reemployment Rights Act,
161.8United States Code, title 38, section 4301, and do not apply to leaves of absence made
161.9available by state statute, such as the Parental Leave Act, section 181.941; the Leave for
161.10Organ Donation Act, section 181.9456; the Leave for Civil Air Patrol Service Act, section
161.11181.946 ; the Leave for Immediate Family Members of Military Personnel Injured or Killed
161.12in Active Service Act, section 181.947; or the Protection of Jurors' Employment Act, section
161.13593.50 .
161.14(b)(1) If a firefighter who has ceased to perform or supervise fire suppression and fire
161.15prevention duties for at least 60 days resumes performing active firefighting with the fire
161.16department associated with the relief association, if the bylaws of the relief association so
161.17permit, the firefighter may again become an active member of the relief association. A
161.18firefighter who returns to active service and membership is subject to the service pension
161.19calculation requirements under this section.
161.20(2) A firefighter who has been granted an approved leave of absence not exceeding one
161.21year by the fire department or by the relief association is exempt from the minimum period
161.22of resumption service requirement of this section.
161.23(3) A person who has a break in service not exceeding one year but has not been granted
161.24an approved leave of absence and who has not received a service pension or disability benefit
161.25may be made exempt from the minimum period of resumption service requirement of this
161.26section by the relief association bylaws.
161.27(4) If the bylaws so provide, a firefighter who returns to active relief association
161.28membership under this paragraph may continue to collect a monthly service pension,
161.29notwithstanding the service pension eligibility requirements under chapter 424A.
161.30(c) If a former firefighter who has received a service pension or disability benefit returns
161.31to active relief association membership under paragraph (b), the firefighter may qualify for
161.32the receipt of a service pension from the relief association for the resumption service period
161.33if the firefighter meets the service requirements of section 424A.016, subdivision 3, or
162.1424A.02, subdivision 2 . No firefighter may be paid a service pension more than once for
162.2the same period of service.
162.3(d) If a former firefighter who has not received a service pension or disability benefit
162.4returns to active relief association membership under paragraph (b), the firefighter may
162.5qualify for the receipt of a service pension from the relief association for the original and
162.6resumption service periods if the firefighter meets the service requirements of section
162.7424A.016 , subdivision 3, or 424A.02, subdivision 2, based on the original and resumption
162.8years of service credit.
162.9(e) A firefighter who returns to active lump-sum relief association membership under
162.10paragraph (b) and who qualifies for a service pension under paragraph (c) must have, upon
162.11a subsequent cessation of duties, any service pension for the resumption service period
162.12calculated as a separate benefit. If a lump-sum service pension had been paid to the firefighter
162.13upon the firefighter's previous cessation of duties, a second lump-sum service pension for
162.14the resumption service period must be calculated by applying the service pension amount
162.15in effect on the date of the firefighter's termination of the resumption service for all years
162.16of the resumption service.
162.17(f) A firefighter who had not been paid a lump-sum service pension returns to active
162.18relief association membership under paragraph (b), who did not meet the minimum period
162.19of resumption service requirement specified in the relief association's bylaws, but who does
162.20meet the minimum service requirement of section 424A.02, subdivision 2, based on the
162.21firefighter's original and resumption years of active service, must have, upon a subsequent
162.22cessation of duties, a service pension for the original and resumption service periods
162.23calculated by applying the service pension amount in effect on the date of the firefighter's
162.24termination of the resumption service, or, if the bylaws so provide, based on the service
162.25pension amount in effect on the date of the firefighter's previous cessation of duties. The
162.26service pension for a firefighter who returns to active lump-sum relief association membership
162.27under this paragraph, but who had met the minimum period of resumption service requirement
162.28specified in the relief association's bylaws, must be calculated by applying the service
162.29pension amount in effect on the date of the firefighter's termination of the resumption service.
162.30(g) If a firefighter receiving a monthly benefit service pension returns to active monthly
162.31benefit relief association membership under paragraph (b), and if the relief association
162.32bylaws do not allow for the firefighter to continue collecting a monthly service pension,
162.33any monthly benefit service pension payable to the firefighter is suspended as of the first
162.34day of the month next following the date on which the firefighter returns to active
162.35membership. If the firefighter was receiving a monthly benefit service pension, and qualifies
163.1for a service pension under paragraph (c), the firefighter is entitled to an additional monthly
163.2benefit service pension upon a subsequent cessation of duties calculated based on the
163.3resumption service credit and the service pension accrual amount in effect on the date of
163.4the termination of the resumption service. A suspended initial service pension resumes as
163.5of the first of the month next following the termination of the resumption service. If the
163.6firefighter was not receiving a monthly benefit service pension and meets the minimum
163.7service requirement of section 424A.02, subdivision 2, a service pension must be calculated
163.8by applying the service pension amount in effect on the date of the firefighter's termination
163.9of the resumption service for all years of service credit.
163.10(h) A firefighter who was not receiving a monthly benefit service pension returns to
163.11active relief association membership under paragraph (b), who did not meet the minimum
163.12period of resumption service requirement specified in the relief association's bylaws, but
163.13who does meet the minimum service requirement of section 424A.02, subdivision 2, based
163.14on the firefighter's original and resumption years of active service, must have, upon a
163.15subsequent cessation of duties, a service pension for the original and resumption service
163.16periods calculated by applying the service pension amount in effect on the date of the
163.17firefighter's termination of the resumption service, or, if the bylaws so provide, based on
163.18the service pension amount in effect on the date of the firefighter's previous cessation of
163.19duties. The service pension for a firefighter who returns to active relief association
163.20membership under this paragraph, but who had met the minimum period of resumption
163.21service requirement specified in the relief association's bylaws, must be calculated by
163.22applying the service pension amount in effect on the date of the firefighter's termination of
163.23the resumption service.
163.24(i) For defined contribution plans, a firefighter who returns to active relief association
163.25membership under paragraph (b) and who qualifies for a service pension under paragraph
163.26(c) or (d) must have, upon a subsequent cessation of duties, any service pension for the
163.27resumption service period calculated as a separate benefit. If a service pension had been
163.28paid to the firefighter upon the firefighter's previous cessation of duties, and if the firefighter
163.29meets the minimum service requirement of section 424A.016, subdivision 3, based on the
163.30resumption years of service, a second service pension for the resumption service period
163.31must be calculated to include allocations credited to the firefighter's individual account
163.32during the resumption period of service and deductions for administrative expenses, if
163.33applicable.
163.34(j) For defined contribution plans, if a firefighter who had not been paid a service pension
163.35returns to active relief association membership under paragraph (b), and who meets the
164.1minimum service requirement of section 424A.016, subdivision 3, based on the firefighter's
164.2original and resumption years of service, must have, upon a subsequent cessation of duties,
164.3a service pension for the original and resumption service periods calculated to include
164.4allocations credited to the firefighter's individual account during the original and resumption
164.5periods of service and deductions for administrative expenses, if applicable, less any amounts
164.6previously forfeited under section 424A.016, subdivision 4.
164.7EFFECTIVE DATE.This section is effective January 1, 2019.

164.8    Sec. 13. Minnesota Statutes 2016, section 424A.015, subdivision 1, is amended to read:
164.9    Subdivision 1. Separation from active service; exception. (a) No service pension is
164.10payable to a person while the person remains an active member of the respective fire
164.11department, and a person who is receiving a service pension is not entitled to receive any
164.12other benefits from the special fund of the relief association.
164.13(b) No relief association as defined in section 424A.001, subdivision 4, may pay a service
164.14pension or disability benefit to a former member of the relief association if that person has
164.15not separated from active service with the fire department to which the relief association is
164.16directly associated, unless:
164.17(1) the person discontinues volunteer firefighter duties with the municipality or the
164.18independent nonprofit firefighting corporation, whichever applies, fire department and
164.19performs duties within the municipal fire department or corporation on a full-time basis;
164.20(2) the governing body of the municipality or, of the independent nonprofit firefighting
164.21corporation, or of the joint powers entity has filed its determination with the board of trustees
164.22of the relief association that the person's experience with and service to the fire department
164.23in that person's full-time capacity would be difficult to replace; and
164.24(3) the bylaws of the relief association were amended to provide for the payment of a
164.25service pension or disability benefit for such full-time employees.
164.26EFFECTIVE DATE.This section is effective January 1, 2019.

164.27    Sec. 14. Minnesota Statutes 2016, section 424A.015, is amended by adding a subdivision
164.28to read:
164.29    Subd. 7. Combined service pensions. (a) A volunteer firefighter with credit for service
164.30as an active firefighter in more than one volunteer firefighters relief association is entitled
164.31to a prorated service pension from each relief association if:
165.1(1) the articles of incorporation or bylaws of the relief associations provide;
165.2(2) the applicable requirements of paragraphs (b) and (c) are met; and
165.3(3) the volunteer firefighter otherwise qualifies.
165.4(b) A volunteer firefighter receiving a prorated service pension under this subdivision
165.5must have a total combined amount of service credit from the two or more relief associations
165.6of ten years or more, unless the bylaws of every affected relief association specify less than
165.7a ten-year service vesting requirement, in which case, the total amount of required service
165.8credit is the longest service vesting requirement of the relief associations. The member must
165.9have one year or more of service credit in each relief association. The prorated service
165.10pension must be based on:
165.11(1) for defined benefit relief associations, the service pension amount in effect for the
165.12relief association on the date on which active volunteer firefighting services covered by that
165.13relief association terminate; and
165.14(2) for defined contribution relief associations, the member's individual account balance
165.15on the date on which active volunteer firefighting services covered by that relief association
165.16terminate.
165.17(c) To receive a prorated service pension under this subdivision, the firefighter must
165.18become a member of the second or succeeding association and must give notice of
165.19membership to the prior association within two years of the date of termination of active
165.20service with the prior association. The second or subsequent relief association secretary
165.21must certify the notice.
165.22EFFECTIVE DATE.This section is effective January 1, 2019.

165.23    Sec. 15. Minnesota Statutes 2016, section 424A.016, subdivision 2, is amended to read:
165.24    Subd. 2. Defined contribution service pension eligibility. (a) A relief association,
165.25when its articles of incorporation or bylaws so provide, may pay out of the assets of its
165.26special fund a defined contribution service pension to each of its members who:
165.27(1) separates from active service with the fire department;
165.28(2) reaches age 50;
165.29(3) completes at least five years of active service as an active member of the municipal
165.30fire department to which the relief association is associated;
166.1(4) completes at least five years of active membership with the relief association before
166.2separation from active service; and
166.3(5) complies with any additional conditions as to age, service, and membership that are
166.4prescribed by the bylaws of the relief association.
166.5(b) In the case of a member who has completed at least five years of active service as
166.6an active member of the fire department to which the relief association is associated on the
166.7date that the relief association is established and incorporated, the requirement that the
166.8member complete at least five years of active membership with the relief association before
166.9separation from active service may be waived by the board of trustees of the relief association
166.10if the member completes at least five years of inactive membership with the relief association
166.11before the date of the payment of the service pension. During the period of inactive
166.12membership, the member is not entitled to receive any disability benefit coverage, is not
166.13entitled to receive additional individual account allocation of fire state aid or municipal
166.14contribution towards a service pension, and is considered to have the status of a person
166.15entitled to a deferred service pension.
166.16(c) The service pension earned by a volunteer under this chapter and the articles of
166.17incorporation and bylaws of the relief association may be paid whether or not the municipality
166.18or independent nonprofit firefighting corporation to which the relief association is associated
166.19qualifies for the receipt of fire state aid under chapter 69.
166.20EFFECTIVE DATE.This section is effective January 1, 2019.

166.21    Sec. 16. Minnesota Statutes 2016, section 424A.02, subdivision 1, is amended to read:
166.22    Subdivision 1. Authorization. (a) A defined benefit relief association, when its articles
166.23of incorporation or bylaws so provide, may pay out of the assets of its special fund a defined
166.24benefit service pension to each of its members who: (1) separates from active service with
166.25the fire department; (2) reaches age 50; (3) completes at least five years of active service
166.26as an active member of the municipal fire department to which the relief association is
166.27associated; (4) completes at least five years of active membership with the relief association
166.28before separation from active service; and (5) complies with any additional conditions as
166.29to age, service, and membership that are prescribed by the bylaws of the relief association.
166.30A service pension computed under this section may be prorated monthly for fractional years
166.31of service as the bylaws or articles of incorporation of the relief association so provide. The
166.32bylaws or articles of incorporation may define a "month," but the definition must require a
166.33calendar month to have at least 16 days of active service. If the bylaws or articles of
166.34incorporation do not define a "month," a "month" is a completed calendar month of active
167.1service measured from the member's date of entry to the same date in the subsequent month.
167.2The service pension earned by a volunteer firefighter under this chapter and the articles of
167.3incorporation and bylaws of the volunteer firefighters relief association may be paid whether
167.4or not the municipality or independent nonprofit firefighting corporation to which the relief
167.5association is associated qualifies for the receipt of fire state aid under chapter 69.
167.6(b) In the case of a member who has completed at least five years of active service as
167.7an active member of the fire department to which the relief association is associated on the
167.8date that the relief association is established and incorporated, the requirement that the
167.9member complete at least five years of active membership with the relief association before
167.10separation from active service may be waived by the board of trustees of the relief association
167.11if the member completes at least five years of inactive membership with the relief association
167.12before the date of the payment of the service pension. During the period of inactive
167.13membership, the member is not entitled to receive disability benefit coverage, is not entitled
167.14to receive additional service credit towards computation of a service pension, and is
167.15considered to have the status of a person entitled to a deferred service pension under
167.16subdivision 7.
167.17(c) No municipality or, independent nonprofit firefighting corporation, or joint powers
167.18entity may delegate the power to take final action in setting a service pension or ancillary
167.19benefit amount or level to the board of trustees of the relief association or to approve in
167.20advance a service pension or ancillary benefit amount or level equal to the maximum amount
167.21or level that this chapter would allow rather than a specific dollar amount or level.
167.22EFFECTIVE DATE.This section is effective January 1, 2019.

167.23    Sec. 17. Minnesota Statutes 2016, section 424A.02, subdivision 3a, is amended to read:
167.24    Subd. 3a. Penalty for paying pension greater than applicable maximum. (a) If a
167.25defined benefit relief association pays a service pension greater than the maximum service
167.26pension associated with the applicable average amount of available financing per active
167.27covered firefighter under the table in subdivision 3, paragraph (c) or (d), whichever applies,
167.28the maximum service pension under subdivision 3, paragraph (f), or the applicable maximum
167.29service pension amount specified in subdivision 3, paragraph (g), whichever is less, the
167.30state auditor shall:
167.31(1) disqualify the municipality or the independent nonprofit firefighting corporation
167.32associated with the relief association from receiving fire state aid by making the appropriate
167.33notification to the municipality and the commissioner of revenue, with the disqualification
167.34applicable for the next apportionment and payment of fire state aid; and
168.1(2) order the treasurer of the applicable relief association to recover the amount of the
168.2overpaid service pension or pensions from any retired firefighter who received an
168.3overpayment.
168.4(b) Fire state aid amounts from disqualified municipalities for the period of
168.5disqualifications under paragraph (a), clause (1), must be credited to the amount of fire
168.6insurance premium tax proceeds available for the next subsequent fire state aid
168.7apportionment.
168.8(c) The amount of any overpaid service pension recovered under paragraph (a), clause
168.9(2), must be credited to the amount of fire insurance premium tax proceeds available for
168.10the next subsequent fire state aid apportionment.
168.11(d) The determination of the state auditor that a relief association has paid a service
168.12pension greater than the applicable maximum must be made on the basis of the information
168.13filed by the relief association and the municipality with the state auditor under sections
168.1469.011, subdivision 2 , and 69.051, subdivision 1 or 1a, whichever applies, and any other
168.15relevant information that comes to the attention of the state auditor. The determination of
168.16the state auditor is final. An aggrieved municipality, relief association, or person may appeal
168.17the determination under section 480A.06.
168.18(e) The state auditor may certify, upon learning that a relief association overpaid a service
168.19pension based on an error in the maximum service pension calculation, the municipality or
168.20independent nonprofit firefighting corporation associated with the relief association for fire
168.21state aid if (1) there is evidence that the error occurred in good faith, and (2) the relief
168.22association has initiated recovery of any overpayment amount. Notwithstanding paragraph
168.23(c), all overpayments recovered under this paragraph must be credited to the relief
168.24association's special fund.
168.25EFFECTIVE DATE.This section is effective January 1, 2019.

168.26    Sec. 18. Minnesota Statutes 2016, section 424A.02, subdivision 7, is amended to read:
168.27    Subd. 7. Deferred service pensions. (a) A member of a defined benefit relief association
168.28is entitled to a deferred service pension if the member separates from active service and
168.29membership and has completed the minimum service and membership requirements in
168.30subdivision 1. The requirement that a member separate from active service and membership
168.31is waived for persons who have discontinued their volunteer firefighter duties and who are
168.32employed on a full-time basis under section 424A.015, subdivision 1.
169.1    (b) The deferred service pension is payable when the former member reaches at least
169.2age 50, or at least the minimum age specified in the bylaws governing the relief association
169.3if that age is greater than age 50, and when the former member makes a valid written
169.4application.
169.5    (c) A defined benefit relief association that provides a lump-sum service pension governed
169.6by subdivision 3 may, when its governing bylaws so provide, pay interest on the deferred
169.7lump-sum service pension during the period of deferral. If provided for in the bylaws, interest
169.8must be paid in one of the following manners:
169.9    (1) at the investment performance rate actually earned on that portion of the assets if the
169.10deferred benefit amount is invested by the relief association in a separate account established
169.11and maintained by the relief association;
169.12(2) at the investment performance rate actually earned on that portion of the assets if the
169.13deferred benefit amount is invested in a separate investment vehicle held by the relief
169.14association; or
169.15    (3) at an interest rate of up to five percent, compounded annually, as set by the board of
169.16trustees.
169.17(d) Any change in the interest rate set by the board of trustees under paragraph (c), clause
169.18(3), must be ratified by the governing body of the municipality or joint powers entity served
169.19by the fire department to which the relief association is directly associated, or by the
169.20independent nonprofit firefighting corporation, as applicable.
169.21    (e) Interest under paragraph (c), clause (3), is payable beginning on the January 1 next
169.22following the date on which the deferred service pension interest rate as set by the board of
169.23trustees was ratified by the governing body of the municipality or joint powers entity served
169.24by the fire department to which the relief association is directly associated, or by the
169.25independent nonprofit firefighting corporation, as applicable.
169.26    (f) Unless the bylaws of a relief association that has elected to pay interest or additional
169.27investment performance on deferred lump-sum service pensions under paragraph (c) specifies
169.28a different interest or additional investment performance method, including the interest or
169.29additional investment performance period starting date and ending date, the interest or
169.30additional investment performance on a deferred service pension is creditable as follows:
169.31(1) for a relief association that has elected to pay interest or additional investment
169.32performance under paragraph (c), clause (1) or (3), beginning on the first day of the month
169.33next following the date on which the member separates from active service and membership
170.1and ending on the last day of the month immediately before the month in which the deferred
170.2member commences receipt of the deferred service pension; or
170.3(2) for a relief association that has elected to pay interest or additional investment
170.4performance under paragraph (c), clause (2), beginning on the date that the member separates
170.5from active service and membership and ending on the date that the separate investment
170.6vehicle is valued immediately before the date on which the deferred member commences
170.7receipt of the deferred service pension.
170.8(g) For a deferred service pension that is transferred to a separate account established
170.9and maintained by the relief association or separate investment vehicle held by the relief
170.10association, the deferred member bears the full investment risk subsequent to transfer and
170.11in calculating the accrued liability of the volunteer firefighters relief association that pays
170.12a lump-sum service pension, the accrued liability for deferred service pensions is equal to
170.13the separate relief association account balance or the fair market value of the separate
170.14investment vehicle held by the relief association.
170.15EFFECTIVE DATE.This section is effective January 1, 2019.

170.16    Sec. 19. Minnesota Statutes 2016, section 424A.04, subdivision 1, is amended to read:
170.17    Subdivision 1. Membership. (a) A relief association that is directly associated with a
170.18municipal fire department must be managed by a board of trustees consisting of nine
170.19members. Six trustees must be elected from the membership of the relief association and
170.20three trustees must be drawn from the officials of the municipalities served by the fire
170.21department to which the relief association is directly associated. The bylaws of a relief
170.22association which provides a monthly benefit service pension may provide that one of the
170.23six trustees elected from the relief association membership may be a retired member receiving
170.24a monthly pension who is elected by the membership of the relief association. The three
170.25municipal trustees must be one elected municipal official and one elected or appointed
170.26municipal official who are designated as municipal representatives by the municipal
170.27governing board annually and the chief of the municipal fire department.
170.28(b) A relief association that is a subsidiary of an independent nonprofit firefighting
170.29corporation must be managed by a board of trustees consisting of nine members. Six trustees
170.30must be elected from the membership of the relief association, two trustees must be drawn
170.31from the officials of the municipalities served by the fire department to which the relief
170.32association is directly associated, and one trustee must be the fire chief serving with the
170.33independent nonprofit firefighting corporation. The bylaws of a relief association may
170.34provide that one of the six trustees elected from the relief association membership may be
171.1a retired member receiving a monthly pension who is elected by the membership of the
171.2relief association. The two municipal trustees must be elected or appointed municipal
171.3officials, selected as follows:
171.4(1) if only one municipality contracts with the independent nonprofit firefighting
171.5corporation, the municipal trustees must be two officials of the contracting municipality
171.6who are designated annually by the governing body of the municipality; or
171.7(2) if two or more municipalities contract with the independent nonprofit corporation,
171.8the municipal trustees must be one official from each of the two largest municipalities in
171.9population who are designated annually by the governing bodies of the applicable
171.10municipalities.
171.11(c) The municipal trustees for a relief association that is directly associated with a fire
171.12department operated as or by a joint powers entity must be the fire chief of the fire department
171.13and two trustees designated annually by the joint powers board. The municipal trustees for
171.14a relief association that is directly associated with a fire department service area township
171.15must be the fire chief of the fire department and two trustees designated by the township
171.16board.
171.17(d) If a relief association lacks the municipal board members provided for in paragraph
171.18(a), (b), or (c) because the fire department is not located in or associated with an organized
171.19a municipality, or joint powers entity, or township, the municipal board members must be
171.20the fire chief of the fire department and two board members appointed from the fire
171.21department service area by the board of commissioners of the applicable county.
171.22(e) The term of the appointed municipal board members is one year or until the person's
171.23successor is qualified, whichever is later.
171.24(f) A municipal trustee under paragraph (a), (b), (c), or (d) has all the rights and duties
171.25accorded to any other trustee, except the right to be an officer of the relief association board
171.26of trustees.
171.27(g) A board must have at least three officers, who are a president, a secretary and a
171.28treasurer. These officers must be elected from among the elected trustees by either the full
171.29board of trustees or by the relief association membership, as specified in the bylaws. In no
171.30event may any trustee hold more than one officer position at any one time. The terms of the
171.31elected trustees and of the officers of the board must be specified in the bylaws of the relief
171.32association, but may not exceed three years. If the term of the elected trustees exceeds one
171.33year, the election of the various trustees elected from the membership must be staggered
171.34on as equal a basis as is practicable.
172.1EFFECTIVE DATE.This section is effective January 1, 2019.

172.2    Sec. 20. Minnesota Statutes 2016, section 424A.07, is amended to read:
172.3424A.07 NONPROFIT FIREFIGHTING CORPORATIONS; ESTABLISHMENT
172.4OF RELIEF ASSOCIATIONS.
172.5Before paying any service pensions or retirement benefits under section 424A.02 or
172.6before becoming entitled to receive any amounts of fire state aid upon transmittal from a
172.7contracting municipality under section 69.031, subdivision 5, a an independent nonprofit
172.8firefighting corporation shall establish a volunteer firefighters relief association governed
172.9by this chapter.
172.10EFFECTIVE DATE.This section is effective January 1, 2019.

172.11    Sec. 21. Minnesota Statutes 2016, section 424A.091, subdivision 3, is amended to read:
172.12    Subd. 3. Remedy for noncompliance; determination. (a) A municipality in which
172.13there exists a firefighters relief association as specified in subdivision 1 which does not
172.14comply with the applicable provisions of sections 424A.091 to 424A.096 or the provisions
172.15of any applicable special law relating to the funding or financing of the association does
172.16not qualify initially to receive, and is not entitled subsequently to retain, fire state aid under
172.17sections 69.011 to 69.051 until the reason for the disqualification specified by the state
172.18auditor is remedied, whereupon the municipality or relief association, if otherwise qualified,
172.19is entitled to again receive fire state aid for the year occurring immediately subsequent to
172.20the year in which the disqualification is remedied.
172.21(b) The state auditor shall determine if a municipality to which a firefighters' relief
172.22association is directly associated or a firefighters relief association fails to comply with the
172.23provisions of sections 424A.091 to 424A.096 or the funding or financing provisions of any
172.24applicable special law based upon the information contained in the annual financial report
172.25of the firefighters relief association required under section 69.051, the actuarial valuation
172.26of the relief association, if applicable, the relief association officers' financial requirements
172.27of the relief association and minimum municipal obligation determination documentation
172.28under section 424A.092, subdivisions 3 and 4; 424A.093, subdivisions 4 and 5; or 424A.094,
172.29subdivision 2 , if requested to be filed by the state auditor, the applicable municipal or
172.30independent nonprofit firefighting corporation budget, if requested to be filed by the state
172.31auditor, and any other relevant documents or reports obtained by the state auditor.
173.1(c) The municipality or independent nonprofit firefighting corporation and the associated
173.2relief association are not eligible to receive or to retain fire state aid if:
173.3(1) the relief association fails to prepare or to file the financial report or financial
173.4statement under section 69.051;
173.5(2) the relief association treasurer is not bonded in the manner and in the amount required
173.6by section 69.051, subdivision 2;
173.7(3) the relief association officers fail to determine or improperly determine the accrued
173.8liability and the annual accruing liability of the relief association under section 424A.092,
173.9subdivisions 2, 2a, and 3 , paragraph (c), clause (2), if applicable;
173.10(4) if applicable, the relief association officers fail to obtain and file a required actuarial
173.11valuation or the officers file an actuarial valuation that does not contain the special fund
173.12actuarial liability calculated under the entry age normal actuarial cost method, the special
173.13fund current assets, the special fund unfunded actuarial accrued liability, the special fund
173.14normal cost under the entry age normal actuarial cost method, the amortization requirement
173.15for the special fund unfunded actuarial accrued liability by the applicable target date, a
173.16summary of the applicable benefit plan, a summary of the membership of the relief
173.17association, a summary of the actuarial assumptions used in preparing the valuation, and a
173.18signed statement by the actuary attesting to its results and certifying to the qualifications of
173.19the actuary as an approved actuary under section 356.215, subdivision 1, paragraph (c);
173.20(5) the municipality failed to provide a municipal contribution, or the independent
173.21nonprofit firefighting corporation failed to provide a corporate contribution, in the amount
173.22equal to the minimum municipal obligation if the relief association is governed under section
173.23424A.092 , or the amount necessary, when added to the fire state aid actually received in
173.24the plan year in question, to at least equal in total the calculated annual financial requirements
173.25of the special fund of the relief association if the relief association is governed under section
173.26424A.093 , and, if the municipal or corporate contribution is deficient, the municipality
173.27failed to include the minimum municipal obligation certified under section 424A.092,
173.28subdivision 3 , or 424A.093, subdivision 5, in its budget and tax levy or the independent
173.29nonprofit firefighting corporation failed to include the minimum corporate obligation certified
173.30under section 424A.094, subdivision 2, in the corporate budget;
173.31(6) the defined benefit relief association did not receive municipal ratification for the
173.32most recent plan amendment when municipal ratification was required under section 424A.02,
173.33subdivision 10; 424A.092, subdivision 6 ; or 424A.093, subdivision 6;
174.1(7) the relief association invested special fund assets in an investment security that is
174.2not authorized under section 424A.095;
174.3(8) the relief association had an administrative expense that is not authorized under
174.4section 69.80 or 424A.05, subdivision 3, or the municipality had an expenditure that is not
174.5authorized under section 424A.08;
174.6(9) the relief association officers fail to provide a complete and accurate public pension
174.7plan investment portfolio and performance disclosure under section 356.219;
174.8(10) the relief association fails to obtain the acknowledgment from a broker of the
174.9statement of investment restrictions under section 356A.06, subdivision 8b;
174.10(11) the relief association officers permitted to occur a prohibited transaction under
174.11section 356A.06, subdivision 9, or 424A.04, subdivision 2a, or failed to undertake correction
174.12of a prohibited transaction that did occur; or
174.13(12) the relief association pays a defined benefit service pension in an amount that is in
174.14excess of the applicable service pension maximum under section 424A.02, subdivision 3.
174.15EFFECTIVE DATE.This section is effective January 1, 2019.

174.16    Sec. 22. Minnesota Statutes 2016, section 424A.094, subdivision 3, is amended to read:
174.17    Subd. 3. Authorized pension disbursements. Authorized disbursements of assets of
174.18the special fund of the subsidiary relief association of the independent nonprofit firefighting
174.19corporation shall be governed by the provisions of section 424A.05.
174.20EFFECTIVE DATE.This section is effective January 1, 2019.

174.21    Sec. 23. Minnesota Statutes 2016, section 424A.10, subdivision 1, is amended to read:
174.22    Subdivision 1. Definitions. For purposes of this section:
174.23    (1) "qualified recipient" means an individual a volunteer firefighter who receives a
174.24lump-sum distribution of pension or retirement benefits from a volunteer firefighters relief
174.25association or from the voluntary statewide lump-sum volunteer firefighter retirement plan
174.26for service that the individual has performed as a volunteer firefighter;
174.27    (2) "survivor of a deceased active or deferred volunteer firefighter" means the surviving
174.28spouse of a deceased active or deferred volunteer firefighter or, if none, the surviving child
174.29or children of a deceased active or deferred volunteer firefighter;
174.30    (3) "active volunteer firefighter" means a person who:
175.1    (i) regularly renders fire suppression service, the performance or supervision of authorized
175.2fire prevention duties, or the performance or supervision of authorized emergency medical
175.3response activities for a municipal fire department or an independent nonprofit firefighting
175.4corporation, who;
175.5    (ii) has met the statutory and other requirements for relief association membership,; and
175.6who
175.7    (iii) is deemed by the relief association under law and its bylaws to be a fully qualified
175.8member of the relief association or from the voluntary statewide lump-sum volunteer
175.9firefighter retirement plan for at least one month; and
175.10    (4) "deferred volunteer firefighter" means a former active volunteer firefighter who:
175.11    (i) terminated active firefighting service, the performance or supervision of authorized
175.12fire prevention duties, or the performance or supervision of authorized emergency medical
175.13response activities; and
175.14    (ii) has sufficient service credit from the applicable relief association or from the voluntary
175.15statewide lump-sum volunteer firefighter retirement plan to be entitled to a service pension
175.16under the bylaws of the relief association, but has not applied for or has not received the
175.17service pension.; and
175.18    (5) "volunteer firefighter" includes an individual whose services were utilized to perform
175.19or supervise fire prevention duties if authorized under section 424A.01, subdivision 5, and
175.20individuals whose services were used to perform emergency medical response duties or
175.21supervise emergency medical response activities if authorized under section 424A.01,
175.22subdivision 5a.
175.23EFFECTIVE DATE.This section is effective January 1, 2019.

175.24    Sec. 24. Minnesota Statutes 2016, section 424B.20, subdivision 4, is amended to read:
175.25    Subd. 4. Benefit trust fund establishment. (a) After the settlement of nonbenefit legal
175.26obligations of the special fund of the volunteer firefighters relief association under subdivision
175.273, the board of the relief association shall transfer the remaining assets of the special fund,
175.28as securities or in cash, as applicable, to the chief financial official of the municipality in
175.29which the associated fire department was located if the fire department was a municipal fire
175.30department or to the chief financial official of the municipality with the largest population
175.31served by the fire department if the fire department was an independent nonprofit firefighting
175.32corporation. If the fire department was a joint powers entity, the remaining assets of the
175.33special fund shall be transferred to the chief financial official of the municipality designated
176.1as the fiscal agent in the joint powers agreement or, if the agreement does not designate a
176.2municipality as the fiscal agent, the remaining assets of the special fund shall be transferred
176.3to the chief financial official of the municipality with the largest population served by the
176.4joint powers fire department. The board shall also compile a schedule of the relief association
176.5members to whom a service pension is or will be owed, any beneficiary to whom a benefit
176.6is owed, the amount of the service pension or benefit payable based on the applicable bylaws
176.7and state law and the service rendered to the date of the dissolution, and the date on which
176.8the pension or benefit would first be payable under the bylaws of the relief association and
176.9state law.
176.10(b) The municipality in which is located receiving the remaining assets of the special
176.11fund of a volunteer firefighters relief association that is dissolving under this section shall
176.12establish a separate account in the municipal treasury which must function as a trust fund
176.13for members of the volunteer firefighters relief association and their beneficiaries to whom
176.14the volunteer firefighters relief association owes a service pension or other benefit under
176.15the bylaws of the relief association and state law. Upon proper application, on or after the
176.16initial date on which the service pension or benefit is payable, the municipal treasurer shall
176.17pay the pension or benefit due, based on the schedule prepared under paragraph (a) and the
176.18other records of the dissolved relief association. The trust fund under this section must be
176.19invested and managed consistent with chapter 356A and section 424A.095. Upon payment
176.20of the last service pension or benefit due and owing, any remaining assets in the trust fund
176.21cancel to the general fund of the municipality. or, if the fire department was a joint powers
176.22entity, any remaining assets in the trust fund cancel to the general fund of each municipality
176.23that was a contracting party to the joint powers agreement as specified in the joint powers
176.24agreement. If the joint powers agreement does not specify how the remaining assets are to
176.25be distributed among the contracting parties, each of the contracting parties shall receive a
176.26pro rata share of the remaining assets based on the proportion of total operating contributions
176.27each contracting municipality made to the joint powers entity over the most recent ten
176.28calendar years. If the special fund of the volunteer firefighters relief association had an
176.29unfunded actuarial accrued liability upon dissolution, the municipality is liable for that
176.30unfunded actuarial accrued liability. If the fire department was a joint powers entity, the
176.31contracting municipalities are liable for their share of the unfunded actuarial accrued liability
176.32as specified in the joint powers agreement. If the joint powers agreement does not specify
176.33liability for any unfunded actuarial accrued liability, the contracting municipalities are liable
176.34for their pro rata share of the unfunded actuarial accrued liability based on the proportion
176.35of total operating contributions each contracting municipality made to the joint powers
176.36entity over the most recent ten calendar years.
177.1EFFECTIVE DATE.This section is effective January 1, 2019.

177.2    Sec. 25. CITY OF AUSTIN; ALLOCATION OF FIRE STATE AID FOR
177.3FIREFIGHTERS.
177.4(a) Notwithstanding any law to the contrary, the city of Austin must annually:
177.5(1) determine the amount of state aid required under the bylaws of the Austin Parttime
177.6Firefighters Relief Association to fund the volunteer firefighters' service pensions;
177.7(2) transmit to the Austin Parttime Firefighters Relief Association any supplemental
177.8state aid received under Minnesota Statutes, section 423A.022;
177.9(3) transmit to the Austin Parttime Firefighters Relief Association an amount of fire
177.10state aid under Minnesota Statutes, sections 69.011 to 69.051, equal to the difference between
177.11the amount determined under clause (1) and the amount transmitted under clause (2); and
177.12(4) transmit the remaining balance of fire state aid under Minnesota Statutes, sections
177.1369.011 to 69.051, for the payment of the employer contribution requirements for firefighters
177.14covered by the public employees police and fire retirement plan under Minnesota Statutes,
177.15section 353.65, subdivision 3.
177.16(b) Notwithstanding Minnesota Statutes, section 69.031, subdivision 5, the city of Austin
177.17has no liability to the relief association related to payments it made or will make to the
177.18public employees police and fire retirement plan from fire state aid for 2013, 2014, 2015,
177.192016, 2017, and 2018.
177.20(c) This section expires July 1, 2019.
177.21EFFECTIVE DATE.This section is effective the day after the governing body of the
177.22city of Austin and its chief clerical officer comply with Minnesota Statutes, section 645.021,
177.23subdivisions 2 and 3, and applies retroactively from January 1, 2013.

177.24    Sec. 26. FIRE STATE AID WORK GROUP.
177.25(a) The executive director of the Public Employees Retirement Association shall convene
177.26a Fire State Aid Work Group to study and make recommendations to the Legislative
177.27Commission on Pensions and Retirement on:
177.28(1) the current requirement that all fire state aid provided to municipalities with
177.29firefighters as defined in Minnesota Statutes, section 353G.01, subdivision 15, or 424A.001,
177.30subdivision 10, must be used to fund service pensions governed by Minnesota Statutes,
177.31chapter 353G or 424A; and
178.1(2) modifying the requirement to allow municipalities to allocate a portion of fire state
178.2aid to pay employer contributions on behalf of firefighters covered by the public employees
178.3police and fire retirement plan under Minnesota Statutes, section 353.65, subdivision 3.
178.4(b) In making recommendations with information provided by Public Employees
178.5Retirement Association and Legislative Commission on Pensions and Retirement staff, the
178.6work group shall consider:
178.7(1) the history and purpose of fire state aid;
178.8(2) the history, purpose, and utilization of Minnesota Statutes 2012, section 353A.10,
178.9subdivision 6, which allowed certain municipalities to allocate a portion of fire state aid to
178.10pay public employees police and fire employer contributions;
178.11(3) the impact on current volunteer firefighters, volunteer firefighter recruitment and
178.12retention, and municipalities if fire state aid is allocated between service pensions and public
178.13employees police and fire employer contributions; and
178.14(4) a presentation by a city of Austin official and a representative from the Austin Parttime
178.15Firefighters Relief Association on the city of Austin's current allocation of fire state aid.
178.16(c) Members of the work group shall include:
178.17(1) two representatives of Minnesota cities, appointed by the League of Minnesota Cities;
178.18(2) two representatives of Minnesota fire chiefs, who are fire chiefs from fire departments
178.19with both volunteer firefighters covered by either a volunteer firefighter relief association
178.20governed by Minnesota Statutes, chapter 424A, or the voluntary statewide volunteer
178.21firefighter retirement plan governed by Minnesota Statutes, chapter 353G, and firefighters
178.22covered by the public employees police and fire retirement plan governed by Minnesota
178.23Statutes, section 353.64, appointed by the Minnesota State Fire Chiefs Association;
178.24(3) two representatives of Minnesota volunteer firefighters, who are active volunteer
178.25firefighters, appointed by the Minnesota State Fire Departments Association;
178.26(4) one representative of the Office of the State Auditor, designated by the state auditor;
178.27and
178.28(5) one representative of the Department of Revenue, designated by the commissioner
178.29of revenue.
178.30(d) The work group shall elect a chair from among its members.
178.31(e) The work group shall submit a report by December 31, 2018, that contains the work
178.32group's recommendations to the chair, vice-chair, and executive director of the Legislative
179.1Commission on Pensions and Retirement. The report shall include recommendations
179.2regarding:
179.3(1) municipalities allocating a portion of fire state aid to pay employer contributions to
179.4the public employees police and fire retirement plan;
179.5(2) implementation of policies if fire state aid is divided, including the determination
179.6of:
179.7(i) the entities that will decide how the fire state aid is allocated;
179.8(ii) how the allocation will be documented;
179.9(iii) how the allocation may be amended, if at all;
179.10(iv) what entity allocates the fire state aid; and
179.11(v) whether a government agency must monitor and enforce the allocation;
179.12(3) the scope of allowable allocations of fire state aid; and
179.13(4) other issues the work group determines are relevant.
179.14(e) The work group expires the day following the last day of the 2019 legislative session.
179.15EFFECTIVE DATE.This section is effective June 30, 2018.

179.16    Sec. 27. EDEN PRAIRIE VOLUNTEER FIREFIGHTERS RELIEF ASSOCIATION
179.17SERVICE PENSIONS.
179.18    Subdivision 1. Lump-sum service pension maximum. (a) Notwithstanding any provision
179.19of Minnesota Statutes, section 424A.02, subdivision 3, paragraph (d), to the contrary, the
179.20maximum lump-sum pension amount for each year of service credited that may be provided
179.21for in the bylaws of the Eden Prairie volunteer firefighters relief association is the maximum
179.22service pension figure corresponding to the average amount of available financing per active
179.23covered firefighter for the applicable specified period:

179.24 179.25 179.26	Minimum Average Amount of Available Financing per Firefighter		Maximum Lump-Sum Service Pension Amount Payable for Each Year of Service
179.27	$ ...		$ 10
179.28	11		20
179.29	16		30
179.30	23		40
179.31	27		50
179.32	32		60
180.1	43		80
180.2	54		100
180.3	65		120
180.4	77		140
180.5	86		160
180.6	97		180
180.7	108		200
180.8	131		240
180.9	151		280
180.10	173		320
180.11	194		360
180.12	216		400
180.13	239		440
180.14	259		480
180.15	281		520
180.16	302		560
180.17	324		600
180.18	347		640
180.19	367		680
180.20	389		720
180.21	410		760
180.22	432		800
180.23	486		900
180.24	540		1000
180.25	594		1100
180.26	648		1200
180.27	702		1300
180.28	756		1400
180.29	810		1500
180.30	864		1600
180.31	918		1700
180.32	972		1800
180.33	1026		1900
180.34	1080		2000
180.35	1134		2100
180.36	1188		2200
180.37	1242		2300
180.38	1296		2400
181.1	1350		2500
181.2	1404		2600
181.3	1458		2700
181.4	1512		2800
181.5	1566		2900
181.6	1620		3000
181.7	1672		3100
181.8	1726		3200
181.9	1753		3250
181.10	1780		3300
181.11	1820		3375
181.12	1834		3400
181.13	1888		3500
181.14	1942		3600
181.15	1996		3700
181.16	2023		3750
181.17	2050		3800
181.18	2104		3900
181.19	2158		4000
181.20	2212		4100
181.21	2265		4200
181.22	2319		4300
181.23	2373		4400
181.24	2427		4500
181.25	2481		4600
181.26	2535		4700
181.27	2589		4800
181.28	2643		4900
181.29	2697		5000
181.30	2751		5100
181.31	2805		5200
181.32	2859		5300
181.33	2913		5400
181.34	2967		5500
181.35	3021		5600
181.36	3075		5700
181.37	3129		5800
181.38	3183		5900
182.1	3237		6000
182.2	3291		6100
182.3	3345		6200
182.4	3399		6300
182.5	3453		6400
182.6	3507		6500
182.7	3561		6600
182.8	3615		6700
182.9	3669		6800
182.10	3723		6900
182.11	3777		7000
182.12	3831		7100
182.13	3885		7200
182.14	3939		7300
182.15	3993		7400
182.16	4047		7500
182.17	4101		7600
182.18	4155		7700
182.19	4209		7800
182.20	4263		7900
182.21	4317		8000
182.22	4371		8100
182.23	4425		8200
182.24	4479		8300
182.25	4533		8400
182.26	4587		8500
182.27	4641		8600
182.28	4695		8700
182.29	4749		8800
182.30	4803		8900
182.31	4857		9000
182.32	4911		9100
182.33	4965		9200
182.34	5019		9300
182.35	5073		9400
182.36	5127		9500
182.37	5181		9600
182.38	5235		9700
183.1	5289		9800
183.2	5343		9900
183.3	5397		10,000
183.4	5451		10,100
183.5	5505		10,200
183.6	5559		10,300
183.7	5613		10,400
183.8	5667		10,500
183.9	5721		10,600
183.10	5775		10,700
183.11	5729		10,800
183.12	5883		10,900
183.13	5937		11,000
183.14	5991		11,100
183.15	6045		11,200
183.16	6099		11,300
183.17	6153		11,400
183.18	6207		11,500
183.19	6261		11,600
183.20	6315		11,700
183.21	6369		11,800
183.22	6423		11,900
183.23	6477		12,000
183.24	6531		12,100
183.25	6585		12,200
183.26	6639		12,300
183.27	6693		12,400
183.28	6747		12,500
183.29	6801		12,600
183.30	6855		12,700
183.31	6909		12,800
183.32	6963		12,900
183.33	7017		13,000
183.34	7071		13,100
183.35	7125		13,200
183.36	7179		13,300
183.37	7233		13,400
183.38	7287		13,500
184.1	7341		13,600
184.2	7395		13,700
184.3	7449		13,800
184.4	7503		13,900
184.5	7557		14,000
184.6	7611		14,100
184.7	7665		14,200
184.8	7719		14,300
184.9	7773		14,400
184.10	7827		14,500
184.11	7881		14,600
184.12	7935		14,700
184.13	7989		14,800
184.14	8043		14,900
184.15	8097		15,000
184.16	Any amount in excess of 8097		15,000

184.17    (b) The maximum monthly service pension amount per month for each year of service
184.18credited that may be provided for in the bylaws of the Eden Prairie volunteer firefighters
184.19relief association must be set pursuant to Minnesota Statutes, section 424A.02, subdivision
184.203, paragraph (c).
184.21    Subd. 2. Return to active service. (a) Notwithstanding any provision of Minnesota
184.22Statutes, section 424A.01, subdivision 6, 424A.02, subdivision 2, or any other provision of
184.23law, to the contrary, if the bylaws of the Eden Prairie volunteer firefighters relief association
184.24so provide, a former firefighter who has received a lump-sum service pension or is receiving
184.25a monthly benefit service pension and returns to active relief association membership under
184.26Minnesota Statutes, section 424A.01, subdivision 6, paragraph (b), is entitled to receive an
184.27unreduced lump-sum service pension for the resumption service period if the firefighter
184.28completes at least three years of active service as an active member of the fire department
184.29during the resumption service period and completes at least three years of active membership
184.30with the relief association during the resumption service period.
184.31(b) A lump-sum service pension must be calculated by applying the service pension
184.32amount in effect on the date of the firefighter's termination of the resumption service for all
184.33years of the resumption service. No firefighter may be paid a service pension more than
184.34once for the same period of service. Payment of a lump-sum service pension shall have no
184.35effect on the firefighter's previous service pension.
185.1EFFECTIVE DATE.This section is effective the day after the Eden Prairie city council
185.2and its chief clerical officer timely complete their compliance with Minnesota Statutes,
185.3section 645.021, subdivisions 2 and 3.

185.4    Sec. 28. CLEARBROOK FIRE DEPARTMENT RELIEF ASSOCIATION;
185.5DEADLINE EXTENSION.
185.6Notwithstanding Minnesota Statutes, section 69.051, subdivision 1b, the deadline for
185.7reports submitted by the Clearbrook Fire Department Relief Association under Minnesota
185.8Statutes, section 69.051, subdivisions 1 and 1a, for 2016 is extended to May 30, 2018. The
185.9Clearbrook Fire Department Relief Association does not forfeit its 2017 state aid if 2016
185.10reports are received by the state auditor on or before May 30, 2018.
185.11EFFECTIVE DATE.This section is effective May 27, 2018.

185.12    Sec. 29. REPEALER.
185.13Minnesota Statutes 2016, section 424A.02, subdivision 13, is repealed.
185.14EFFECTIVE DATE.This section is effective January 1, 2019.


185.17    Section 1. Minnesota Statutes 2016, section 352.113, subdivision 2, is amended to read:
185.18    Subd. 2. Application; accrual of benefits. (a) An employee making claim for a total
185.19and permanent disability benefit, or someone acting on behalf of the employee upon proof
185.20of authority satisfactory to the director, shall file a written application for benefits in the
185.21office of the system on or before the deadline specified in subdivision 4, paragraph (g).
185.22(b) The application must be in a form and manner prescribed by the executive director.
185.23(c) The benefit shall begin to accrue the day following the start of disability or the day
185.24following the last day paid, whichever is later, but not earlier than 180 days before the date
185.25the application is filed with the director.

185.26    Sec. 2. Minnesota Statutes 2016, section 352.91, subdivision 3f, is amended to read:
185.27    Subd. 3f. Additional Department of Human Services personnel. (a) "Covered
185.28correctional service" means service by a state employee in one of the employment positions
185.29specified in paragraph (b) in the state-operated forensic services program or the Minnesota
185.30sex offender program if at least 75 percent of the employee's working time is spent in direct
186.1contact with patients and the determination of this direct contact is certified to the executive
186.2director by the commissioner of human services.
186.3    (b) The employment positions are:
186.4    (1) behavior analyst 2;
186.5    (2) behavior analyst 3;
186.6    (3) certified occupational therapy assistant 1;
186.7    (4) certified occupational therapy assistant 2;
186.8    (5) chemical dependency counselor senior;
186.9    (6) client advocate;
186.10    (7) clinical program therapist 2;
186.11    (8) clinical program therapist 3;
186.12(9) clinical program therapist 4;
186.13(10) customer services specialist principal;
186.14    (11) dental assistant registered;
186.15    (12) group supervisor;
186.16    (13) group supervisor assistant;
186.17    (14) human services support specialist;
186.18    (15) licensed alcohol and drug counselor;
186.19    (16) licensed practical nurse;
186.20    (17) management analyst 3;
186.21    (18) occupational therapist;
186.22    (19) occupational therapist, senior;
186.23(20) physical therapist;
186.24    (20) (21) psychologist 1;
186.25    (21) (22) psychologist 2;
186.26    (22) (23) psychologist 3;
186.27    (23) (24) recreation program assistant;
187.1    (24) (25) recreation therapist lead;
187.2    (25) (26) recreation therapist senior;
187.3    (26) (27) rehabilitation counselor senior;
187.4    (27) (28) security supervisor;
187.5    (28) (29) skills development specialist;
187.6    (29) (30) social worker senior;
187.7    (30) (31) social worker specialist;
187.8    (31) (32) social worker specialist, senior;
187.9    (32) (33) special education program assistant;
187.10    (33) (34) speech pathology clinician;
187.11    (34) (35) work therapy assistant; and
187.12    (35) (36) work therapy program coordinator.

187.13    Sec. 3. Minnesota Statutes 2016, section 352.91, subdivision 3g, is amended to read:
187.14    Subd. 3g. Additional Corrections Department personnel. (a) "Covered correctional
187.15service" means service by a state employee in one of the employment positions specified
187.16in paragraph (b) if at least 75 percent of the employee's working time is spent in direct
187.17contact with inmates and the determination of this direct contact is certified to the executive
187.18director by the commissioner of corrections.
187.19(b) The qualifying employment positions are:
187.20(1) corrections discipline unit supervisor;
187.21(2) dental assistant registered;
187.22(3) dental hygienist;
187.23(4) food service supervisor;
187.24(5) medical assistant, certified;
187.25(6) psychologist 2; and
187.26(5) (7) sentencing to service crew leader involved with the inmate community work
187.27crew program.

188.1    Sec. 4. Minnesota Statutes 2016, section 352.91, is amended by adding a subdivision to
188.2read:
188.3    Subd. 4c. Department of Human Services; procedure for coverage change
188.4considerations. (a) The commissioner of human services shall appoint a standing review
188.5committee to review and determine classifications or positions that may be included in
188.6legislative requests for correctional state employees retirement plan coverage under
188.7subdivision 4a.
188.8(b) The department's human resources director shall convene a meeting of the review
188.9committee only at the request of a labor organization or a member of the department's
188.10management team.
188.11(c) The review committee must review all requests and the supporting documentation
188.12for coverage by the correctional state employees retirement plan and must make a
188.13recommendation to the commissioner regarding which classifications or positions meet the
188.14statutory requirements for coverage. The review committee must also make a
188.15recommendation to the commissioner regarding classifications or positions that no longer
188.16meet the statutory requirement for coverage by the correctional state employees retirement
188.17plan and removal of the classification or position from the applicable statute.
188.18(d) The department's human resources director must provide a notice of each
188.19determination and of the employee's right to appeal the determination. Appeals must be
188.20filed with the department's human resources director within 30 days of the date of the notice
188.21of determination.
188.22(e) The commissioner of human services shall review appeals of determinations for
188.23coverage. The commissioner's determinations are final.
188.24(f) All classifications or positions recommended by the review committee for inclusion
188.25in or exclusion from the correctional state employees retirement plan must be forwarded to
188.26the commissioner of human services for the preparation of legislation to implement the
188.27coverage change and submission. If the commissioner determines that the employment
188.28position is appropriate for inclusion in or exclusion from the correctional state employees
188.29retirement plan, the commissioner shall submit a written recommendation documenting
188.30classifications or positions that should or should not be covered by the correctional state
188.31employees retirement plan. The department's human resources director must retain the
188.32documentation of each request and the final determination.

189.1    Sec. 5. Minnesota Statutes 2016, section 352F.04, subdivision 1, is amended to read:
189.2    Subdivision 1. Enhanced augmentation rates. (a) The deferred annuity of a terminated
189.3hospital employee who attained that status before June 2, 2006, is subject to augmentation
189.4under Minnesota Statutes 1994, section 352.72, subdivision 2, except that the rate of
189.5augmentation is 5.5 percent compounded annually until to be applied each January 1 is the
189.6following the year in which the person attains age 55.:

189.7		January 1, 2019	4.5 percent
189.8		January 1, 2020	3.75 percent
189.9		January 1, 2021	3.0 percent
189.10		January 1, 2022	2.25 percent
189.11		January 1, 2023	1.5 percent
189.12		January 1, 2024	0.75 percent
189.13		After December 31, 2024, the deferred annuity must not be augmented.

189.14Augmentation for each year is effective as of January 1 of that year.
189.15From that date to the effective date of retirement, the augmentation rate is 7.5 percent
189.16compounded annually.
189.17(b) If a terminated hospital employee attained that status on or after June 2, 2006, the
189.18augmentation rate is four percent compounded annually until January 1, following the year
189.19in which the person attains age 55. From that date to the effective date of retirement, the
189.20augmentation rate is six percent compounded annually.

189.21    Sec. 6. Minnesota Statutes 2016, section 352F.04, subdivision 2, is amended to read:
189.22    Subd. 2. Exceptions Exception. The increased enhanced augmentation rates specified
189.23in subdivision 1 do not apply if the terminated hospital employee:
189.24(1) becomes covered again by a retirement plan enumerated in section 356.30, subdivision
189.253 , on or before June 30, 2015; or
189.26(2) begins receipt of a retirement annuity under chapter 352 before age 62 while employed
189.27by the employer which assumed operations of the medical facility or other public employing
189.28unit or purchased the medical facility or other public employing unit.

189.29    Sec. 7. Minnesota Statutes 2016, section 352F.04, is amended by adding a subdivision to
189.30read:
189.31    Subd. 3. Return to covered employment. (a) If a terminated hospital employee becomes
189.32covered by a retirement plan enumerated in section 356.30, subdivision 3, the employee
190.1shall be entitled to whichever of the following annuities produces the highest monthly
190.2payment:
190.3(1) the deferred annuity and augmentation to which the employee would have been
190.4entitled under subdivision 1 reduced by the dollar amount of any annuity earned under any
190.5enumerated retirement plan after the effective date defined in section 352F.02, subdivision
190.63;
190.7(2) a combined service annuity calculated under section 356.30; or
190.8(3) an annuity calculated under section 352.72 for coverage by more than one retirement
190.9system using the augmentation rates in section 352.72, subdivision 2, paragraph (a).
190.10(b) This subdivision applies to any terminated hospital employee who begins to receive
190.11a retirement annuity under chapter 352 on or after July 1, 2015.

190.12    Sec. 8. Minnesota Statutes 2016, section 356.645, is amended to read:
190.13356.645 INVESTMENT OF VARIOUS DEFINED CONTRIBUTION PLAN
190.14ASSETS.
190.15The State Board of Investment shall determine the investments to be made available to
190.16plan participants in plans defined in sections 352.965 and, 352.98, and 383B.46 and chapters
190.17352D and 353D. Investments made available to plan participants must include at least one
190.18or more of the following:
190.19(1) shares in the Minnesota supplemental investment fund established in section 11A.17;
190.20(2) savings accounts in federally insured financial institutions;
190.21(3) life insurance contracts, fixed annuity contracts, and variable annuity contracts from
190.22companies that are subject to regulation by the commissioner of commerce;
190.23(4) investment options from open-end investment companies registered under the federal
190.24Investment Company Act of 1940, United States Code, title 15, sections 80a-1 to 80a-64;
190.25(5) investment options from a firm that is a registered investment adviser under the
190.26Investment Advisers Act of 1940, United States Code, title 15, sections 80b-1 to 80b-21;
190.27and
190.28(6) investment options of a bank as defined in United States Code, title 15, section 80b-2,
190.29subsection (a), paragraph (2), or a bank holding company as defined in the Bank Holding
190.30Company Act of 1956, United States Code, title 12, section 1841, subsection (a), paragraph
190.31(1).

191.1    Sec. 9. Minnesota Statutes 2016, section 383B.47, is amended to read:
191.2383B.47 INVESTMENT OF RETIREMENT MONEY FOR STATE
191.3SUPPLEMENTAL FUND SHARES.
191.4With the When moneys are deposited to the credit of the supplemental retirement account,
191.5the Minnesota State Retirement System shall purchase shares on behalf of Hennepin County
191.6in the accounts of the Minnesota supplemental investment fund make available those
191.7investments chosen by the State Board of Investment under section 356.645 in the manner