1.1 .................... moves to amend S. F. No. 1057, the third engrossment, as follows:
1.2 Delete everything after the enacting clause and insert:
1.3 "ARTICLE 1
1.4 MINNESOTA POSTRETIREMENT
1.5 INVESTMENT FUND CHANGES
1.6 Section 1. Minnesota Statutes 2004, section 11A.18, subdivision 9, is amended to read:
1.7 Subd. 9. Calculation of postretirement adjustment. (a) Annually, following June
1.8 30, the state board shall use the procedures in paragraphs (b), (c), and (d) to determine
1.9 whether a postretirement adjustment is payable and to determine the amount of any
1.10 postretirement adjustment.
1.11 (b) If the Consumer Price Index for urban wage earners and clerical workers all
1.12 items index published by the Bureau of Labor Statistics of the United States Department
1.13 of Labor increases from June 30 of the preceding year to June 30 of the current year,
1.14 the state board shall certify the percentage increase. The amount certified must not
1.15 exceed the lesser of the difference between the preretirement interest assumption and
1.16 postretirement interest assumption in section 356.215, subdivision 8, paragraph (a), or
1.17 2.5 percent. For the Minneapolis Employees Retirement Fund, the amount certified must
1.18 not exceed 3.5 percent.
1.19 (c) In addition to any percentage increase certified under paragraph (b), the board
1.20 shall use the following procedures to determine if a postretirement adjustment is payable
1.21 under this paragraph:
1.22 (1) The state board shall determine the market value of the fund on June 30 of
1.23 that year;
1.24 (2) The amount of reserves required as of the current June 30 for the annuity or
1.25 benefit payable to an annuitant and benefit recipient of the participating public pension
1.26 plans or funds must be determined by the commission-retained actuary as of the current
1.27 June 30 retained under section 356.214. An annuitant or benefit recipient who has been
2.1 receiving an annuity or benefit for at least 12 full months as of the current June 30 is
2.2 eligible to receive a full postretirement adjustment. An annuitant or benefit recipient who
2.3 has been receiving an annuity or benefit for at least one full month, but less than 12 full
2.4 months as of the current June 30, is eligible to receive a partial postretirement adjustment.
2.5 Each fund shall report separately the amount of the reserves for those annuitants and
2.6 benefit recipients who are eligible to receive a full postretirement benefit adjustment. This
2.7 amount is known as "eligible reserves." Each fund shall also report separately the amount
2.8 of the reserves for those annuitants and benefit recipients who are not eligible to receive
2.9 a postretirement adjustment. This amount is known as "noneligible reserves." For an
2.10 annuitant or benefit recipient who is eligible to receive a partial postretirement adjustment,
2.11 each fund shall report separately as additional "eligible reserves" an amount that bears the
2.12 same ratio to the total reserves required for the annuitant or benefit recipient as the number
2.13 of full months of annuity or benefit receipt as of the current June 30 bears to 12 full
2.14 months. The remainder of the annuitant's or benefit recipient's reserves must be separately
2.15 reported as additional "noneligible reserves." The amount of "eligible" and "noneligible"
2.16 required reserves must be certified to the board by the commission-retained actuary as
2.17 soon as is practical following the current June 30;
2.18 (3) The state board shall determine the percentage increase certified under paragraph
2.19 (b) multiplied by the eligible required reserves, as adjusted for mortality gains and losses
2.20 under subdivision 11, determined under clause (2);
2.21 (4) The state board shall add the amount of reserves required for the annuities or
2.22 benefits payable to annuitants and benefit recipients of the participating public pension
2.23 plans or funds as of the current June 30 to the amount determined under clause (3);
2.24 (5) The state board shall subtract the amount determined under clause (4) from the
2.25 market value of the fund determined under clause (1);
2.26 (6) The state board shall adjust the amount determined under clause (5) by the
2.27 cumulative current balance determined pursuant to under clause (8) and any negative
2.28 balance carried forward under clause (9);
2.29 (7) A positive amount resulting from the calculations in clauses (1) to (6) is the
2.30 excess market value. A negative amount is the negative balance;
2.31 (8) The state board shall allocate one-fifth of the excess market value or one-fifth
2.32 of the negative balance to each of five consecutive years, beginning with the fiscal year
2.33 ending the current June 30; and
2.34 (9) To calculate the postretirement adjustment under this paragraph based on
2.35 investment performance for a fiscal year, the state board shall add together all excess
2.36 market value allocated to that year and subtract from the sum all negative balances
3.1 allocated to that year. If this calculation results in a negative number, the entire negative
3.2 balance must be carried forward and allocated to the next year. If the resulting amount is
3.3 positive, a postretirement adjustment is payable under this paragraph. The board shall
3.4 express a positive amount as a percentage of the total eligible required reserves certified to
3.5 the board under clause (2).
3.6 (d) The state board shall determine the amount of any postretirement adjustment
3.7 which is payable using the following procedure:
3.8 (1) The total "eligible" required reserves as of the first of January next following
3.9 the end of the fiscal year for the annuitants and benefit recipients eligible to receive a full
3.10 or partial postretirement adjustment as determined by clause (2) must be certified to the
3.11 state board by the commission-retained actuary retained under section 356.214. The total
3.12 "eligible" required reserves must be determined by the commission-retained actuary
3.13 retained under section 356.214 on the assumption that all annuitants and benefit recipients
3.14 eligible to receive a full or partial postretirement adjustment will be alive on the January
3.15 1 in question; and
3.16 (2) The state board shall add the percentage certified under paragraph (b) to any
3.17 positive percentage calculated under paragraph (c). The board shall not subtract from the
3.18 percentage certified under paragraph (b) any negative amount calculated under paragraph
3.19 (c). The sum of these percentages must be carried to five decimal places and must be
3.20 certified to each participating public pension fund or plan as the full postretirement
3.21 adjustment percentage. The full postretirement adjustment percentage certified to each
3.22 participating public pension plan or fund must not exceed five percent. For the Minneapolis
3.23 Employees Retirement Fund, no maximum percentage adjustment is applicable.
3.24 (e) A retirement annuity payable in the event of retirement before becoming eligible
3.25 for Social Security benefits as provided in section 352.116, subdivision 3; 353.29,
3.26 subdivision 6; or 354.35 must be treated as the sum of a period certain retirement annuity
3.27 and a life retirement annuity for the purposes of any postretirement adjustment. The
3.28 period certain retirement annuity plus the life retirement annuity must be the annuity
3.29 amount payable until age 62 or 65, whichever applies. A postretirement adjustment
3.30 granted on the period certain retirement annuity must terminate when the period certain
3.31 retirement annuity terminates.
3.32 Sec. 2. [354A.42] ST. PAUL TEACHER INCREASE LIMIT.
3.33 Notwithstanding any law to the contrary, the St. Paul Teachers Retirement Fund
3.34 Association may not pay a postretirement adjustment of more than five percent in any
3.35 year, effective July 1, 2010.
3.36 Sec. 3. EFFECTIVE DATE.
4.1 Section 1 is effective July 1, 2010.
4.2 ARTICLE 2
4.3 DEFERRED ANNUITY
4.4 AUGMENTATION RATE CHANGE
4.5 Section 1. Minnesota Statutes 2004, section 352.116, subdivision 1a, is amended to
4.6 read:
4.7 Subd. 1a. Actuarial reduction for early retirement. This subdivision applies to a
4.8 person who has become at least 55 years old and first became a covered employee after
4.9 June 30, 1989, and to any other covered employee who has become at least 55 years
4.10 old and whose annuity is higher when calculated under section 352.115, subdivision 3,
4.11 paragraph (b), in conjunction with this subdivision than when calculated under section
4.12 352.115, subdivision 3, paragraph (a), in conjunction with subdivision 1. A covered
4.13 employee who retires before the normal retirement age shall be paid the normal retirement
4.14 annuity provided in section 352.115, subdivisions 2 and 3, paragraph (b), reduced so
4.15 that the reduced annuity is the actuarial equivalent of the annuity that would be payable
4.16 to the employee if the employee deferred receipt of the annuity and the annuity amount
4.17 were augmented at an annual rate of three percent compounded annually from the day
4.18 the annuity begins to accrue until the normal retirement age if the employee became an
4.19 employee before July 1, 2006, and at an annual rate of 2.5 percent compounded annually
4.20 from the day the annuity begins to accrue until the normal retirement age if the employee
4.21 initially becomes an employee after June 30, 2006.
4.22 Sec. 2. Minnesota Statutes 2004, section 352.72, subdivision 2, is amended to read:
4.23 Subd. 2. Computation of deferred annuity. (a) The deferred annuity, if any,
4.24 accruing under subdivision 1, or section 352.22, subdivision 3, must be computed as
4.25 provided in section 352.22, subdivision 3, on the basis of allowable service before
4.26 termination of state service and augmented as provided herein. The required reserves
4.27 applicable to a deferred annuity or to an annuity for which a former employee was eligible
4.28 but had not applied or to any deferred segment of an annuity must be determined as of the
4.29 date the benefit begins to accrue and augmented by interest compounded annually from
4.30 the first day of the month following the month in which the employee ceased to be a state
4.31 employee, or July 1, 1971, whichever is later, to the first day of the month in which the
4.32 annuity begins to accrue. The rates of interest used for this purpose must be five percent
4.33 compounded annually until January 1, 1981, and three percent compounded annually
4.34 thereafter until January 1 of the year following the year in which the former employee
4.35 attains age 55., and from that date to the effective date of retirement, the rate is five percent
4.36 compounded annually if the employee became an employee before July 1, 2006, and at
5.1 2.5 percent compounded annually if the employee becomes an employee after June 30,
5.2 2006. If a person has more than one period of uninterrupted service, the required reserves
5.3 related to each period must be augmented by interest under this subdivision. The sum
5.4 of the augmented required reserves so determined is the present value of the annuity.
5.5 "Uninterrupted service" for the purpose of this subdivision means periods of covered
5.6 employment during which the employee has not been separated from state service for more
5.7 than two years. If a person repays a refund, the service restored by the repayment must be
5.8 considered continuous with the next period of service for which the employee has credit
5.9 with this system. The formula percentages used for each period of uninterrupted service
5.10 must be those applicable to a new employee. The mortality table and interest assumption
5.11 used to compute the annuity must be those in effect when the employee files application
5.12 for annuity. This section does not reduce the annuity otherwise payable under this chapter.
5.13 (b) The retirement annuity or disability benefit of, or the survivor benefit payable on
5.14 behalf of, a former state employee who terminated service before July 1, 1997, which is
5.15 not first payable until after June 30, 1997, must be increased on an actuarial equivalent
5.16 basis to reflect the change in the postretirement interest rate actuarial assumption under
5.17 section 356.215, subdivision 8, from five percent to six percent under a calculation
5.18 procedure and the tables adopted by the board and approved by the actuary retained by
5.19 the Legislative Commission on Pensions and Retirement.
5.20 Sec. 3. Minnesota Statutes 2004, section 352B.30, subdivision 2, is amended to read:
5.21 Subd. 2. Computation of deferred annuity. Deferred annuities must be computed
5.22 according to this chapter on the basis of allowable service before termination of service
5.23 and augmented as provided in this chapter. The required reserves applicable to a deferred
5.24 annuity must be augmented by interest compounded annually from the first day of the
5.25 month following the month in which the member terminated service, or July 1, 1971,
5.26 whichever is later, to the first day of the month in which the annuity begins to accrue. The
5.27 rates of interest used for this purpose shall be five percent per year compounded annually
5.28 until January 1, 1981, and after that date three percent per year compounded annually if
5.29 the employee became an employee before July 1, 2006, and at 2.5 percent compounded
5.30 annually if the employee becomes an employee after June 30, 2006. The mortality table
5.31 and interest assumption used to compute the annuity shall be those in effect when the
5.32 member files application for annuity.
5.33 Sec. 4. Minnesota Statutes 2004, section 353.30, subdivision 5, is amended to read:
5.34 Subd. 5. Actuarial reduction for early retirement. This subdivision applies to a
5.35 member who has become at least 55 years old and first became a public employee after
5.36 June 30, 1989, and to any other member who has become at least 55 years old and whose
6.1 annuity is higher when calculated under section 353.29, subdivision 3, paragraph (b), in
6.2 conjunction with this subdivision than when calculated under section 353.29, subdivision
6.3 3, paragraph (a), in conjunction with subdivision 1, 1a, 1b, or 1c. An employee who
6.4 retires before normal retirement age shall be paid the retirement annuity provided in
6.5 section 353.29, subdivision 3, paragraph (b), reduced so that the reduced annuity is the
6.6 actuarial equivalent of the annuity that would be payable to the employee if the employee
6.7 deferred receipt of the annuity and the annuity amount were augmented at an annual rate
6.8 of three percent compounded annually from the day the annuity begins to accrue until the
6.9 normal retirement age if the employee became an employee before July 1, 2006, and at 2.5
6.10 percent compounded annually from the day the annuity begins to accrue until the normal
6.11 retirement age if the employee initially becomes an employee after June 30, 2006.
6.12 Sec. 5. Minnesota Statutes 2004, section 353.71, subdivision 2, is amended to read:
6.13 Subd. 2. Deferred annuity computation; augmentation. (a) The deferred
6.14 annuity accruing under subdivision 1, or under sections 353.34, subdivision 3, and
6.15 353.68, subdivision 4, must be computed on the basis of allowable service prior to the
6.16 termination of public service and augmented as provided in this paragraph. The required
6.17 reserves applicable to a deferred annuity, or to any deferred segment of an annuity must
6.18 be determined as of the first day of the month following the month in which the former
6.19 member ceased to be a public employee, or July 1, 1971, whichever is later. These
6.20 required reserves must be augmented at the rate of five percent annually compounded
6.21 annually until January 1, 1981, and at the rate of three percent thereafter until January 1
6.22 of the year following the year in which the former member attains age 55. and from that
6.23 date to the effective date of retirement, the rate is five percent compounded annually if
6.24 the employee became an employee before July 1, 2006, and at 2.5 percent compounded
6.25 annually if the employee becomes an employee after June 30, 2006. If a person has more
6.26 than one period of uninterrupted service, the required reserves related to each period
6.27 must be augmented as specified in this paragraph. The sum of the augmented required
6.28 reserves is the present value of the annuity. Uninterrupted service for the purpose of this
6.29 subdivision means periods of covered employment during which the employee has not
6.30 been separated from public service for more than two years. If a person repays a refund,
6.31 the restored service must be considered as continuous with the next period of service
6.32 for which the employee has credit with this association. This section must not reduce
6.33 the annuity otherwise payable under this chapter. This paragraph applies to individuals
6.34 who become deferred annuitants on or after July 1, 1971. For a member who became a
6.35 deferred annuitant before July 1, 1971, the paragraph applies from July 1, 1971, if the
6.36 former active member applies for an annuity after July 1, 1973.
7.1 (b) The retirement annuity or disability benefit of, or the survivor benefit payable on
7.2 behalf of, a former member who terminated service before July 1, 1997, or the survivor
7.3 benefit payable on behalf of a basic or police and fire member who was receiving disability
7.4 benefits before July 1, 1997, which is first payable after June 30, 1997, must be increased
7.5 on an actuarial equivalent basis to reflect the change in the postretirement interest rate
7.6 actuarial assumption under section 356.215, subdivision 8, from five percent to six percent
7.7 under a calculation procedure and tables adopted by the board and approved by the actuary
7.8 retained by the Legislative Commission on Pensions and Retirement.
7.9 Sec. 6. Minnesota Statutes 2005 Supplement, section 354.44, subdivision 6, is
7.10 amended to read:
7.11 Subd. 6. Computation of formula program retirement annuity. (a) The formula
7.12 retirement annuity must be computed in accordance with the applicable provisions of the
7.13 formulas stated in paragraph (b) or (d) on the basis of each member's average salary under
7.14 section 354.05, subdivision 13a, for the period of the member's formula service credit.
7.15 (b) This paragraph, in conjunction with paragraph (c), applies to a person who first
7.16 became a member of the association or a member of a pension fund listed in section
7.17 356.30, subdivision 3, before July 1, 1989, unless paragraph (d), in conjunction with
7.18 paragraph (e), produces a higher annuity amount, in which case paragraph (d) applies. The
7.19 average salary as defined in section 354.05, subdivision 13a, multiplied by the following
7.20 percentages per year of formula service credit shall determine the amount of the annuity to
7.21 which the member qualifying therefor is entitled:
7.22 Coordinated Member Basic Member
7.23 the percent
7.24 specified in
7.25 the percent specified section 356.315,
7.26 Each year of service in section 356.315, subdivision 3, per
7.27 during first ten subdivision 1, per year year
7.28 the percent
7.29 specified in
7.30 the percent specified section 356.315,
7.31 Each year of service in section 356.315, subdivision 4, per
7.32 thereafter subdivision 2, per year year
7.33 (c) (i) This paragraph applies only to a person who first became a member of
7.34 the association or a member of a pension fund listed in section 356.30, subdivision 3,
7.35 before July 1, 1989, and whose annuity is higher when calculated under paragraph (b), in
7.36 conjunction with this paragraph than when calculated under paragraph (d), in conjunction
7.37 with paragraph (e).
7.38 (ii) Where any member retires prior to normal retirement age under a formula
7.39 annuity, the member shall be paid a retirement annuity in an amount equal to the normal
8.1 annuity provided in paragraph (b) reduced by one-quarter of one percent for each month
8.2 that the member is under normal retirement age at the time of retirement except that for
8.3 any member who has 30 or more years of allowable service credit, the reduction shall be
8.4 applied only for each month that the member is under age 62.
8.5 (iii) Any member whose attained age plus credited allowable service totals 90 years
8.6 is entitled, upon application, to a retirement annuity in an amount equal to the normal
8.7 annuity provided in paragraph (b), without any reduction by reason of early retirement.
8.8 (d) This paragraph applies to a member who has become at least 55 years old and
8.9 first became a member of the association after June 30, 1989, and to any other member
8.10 who has become at least 55 years old and whose annuity amount when calculated under
8.11 this paragraph and in conjunction with paragraph (e), is higher than it is when calculated
8.12 under paragraph (b), in conjunction with paragraph (c). The average salary, as defined in
8.13 section 354.05, subdivision 13a, multiplied by the percent specified by section 356.315,
8.14 subdivision 4, for each year of service for a basic member and by the percent specified in
8.15 section 356.315, subdivision 2, for each year of service for a coordinated member shall
8.16 determine the amount of the retirement annuity to which the member is entitled.
8.17 (e) This paragraph applies to a person who has become at least 55 years old and first
8.18 becomes a member of the association after June 30, 1989, and to any other member who
8.19 has become at least 55 years old and whose annuity is higher when calculated under
8.20 paragraph (d) in conjunction with this paragraph than when calculated under paragraph
8.21 (b), in conjunction with paragraph (c). An employee who retires under the formula annuity
8.22 before the normal retirement age shall be paid the normal annuity provided in paragraph
8.23 (d) reduced so that the reduced annuity is the actuarial equivalent of the annuity that would
8.24 be payable to the employee if the employee deferred receipt of the annuity and the annuity
8.25 amount were augmented at an annual rate of three percent compounded annually from the
8.26 day the annuity begins to accrue until the normal retirement age if the employee became
8.27 an employee before July 1, 2006, and at 2.5 percent compounded annually if the employee
8.28 becomes an employee after June 30, 2006.
8.29 (f) No retirement annuity is payable to a former employee with a salary that exceeds
8.30 95 percent of the governor's salary unless and until the salary figures used in computing
8.31 the highest five successive years average salary under paragraph (a) have been audited by
8.32 the Teachers Retirement Association and determined by the executive director to comply
8.33 with the requirements and limitations of section 354.05, subdivisions 35 and 35a.
8.34 Sec. 7. Minnesota Statutes 2004, section 354.55, subdivision 11, is amended to read:
8.35 Subd. 11. Deferred annuity; augmentation. (a) Any person covered under section
8.36 354.44, subdivision 6, who ceases to render teaching service, may leave the person's
9.1 accumulated deductions in the fund for the purpose of receiving a deferred annuity at
9.2 retirement. Eligibility for an annuity under this subdivision is governed pursuant to
9.3 section 354.44, subdivision 1, or 354.60.
9.4 (b) The amount of the deferred retirement annuity is determined by section 354.44,
9.5 subdivision 6, and augmented as provided in this subdivision. The required reserves
9.6 related to that portion of the annuity which had accrued when the member ceased to
9.7 render teaching service must be augmented by interest compounded annually from the
9.8 first day of the month following the month during which the member ceased to render
9.9 teaching service to the effective date of retirement. There shall be no augmentation if
9.10 this period is less than three months or if this period commences prior to July 1, 1971.
9.11 The rates of interest used for this purpose must be five percent compounded annually
9.12 commencing July 1, 1971, until January 1, 1981, and three percent compounded annually
9.13 thereafter until January 1 of the year following the year in which the former member
9.14 attains age 55. and from that date to the effective date of retirement, the rate is five percent
9.15 compounded annually if the employee became an employee before July 1, 2006, and at
9.16 2.5 percent compounded annually if the employee becomes an employee after June 30,
9.17 2006. If a person has more than one period of uninterrupted service, a separate average
9.18 salary determined under section 354.44, subdivision 6, must be used for each period and
9.19 the required reserves related to each period must be augmented by interest pursuant to
9.20 this subdivision. The sum of the augmented required reserves so determined shall be the
9.21 basis for purchasing the deferred annuity. If a person repays a refund, the service restored
9.22 by the repayment must be considered as continuous with the next period of service for
9.23 which the person has credit with this fund. If a person does not render teaching service in
9.24 any one fiscal year or more consecutive fiscal years and then resumes teaching service,
9.25 the formula percentages used from the date of the resumption of teaching service must be
9.26 those applicable to new members. The mortality table and interest assumption used to
9.27 compute the annuity must be the applicable mortality table established by the board under
9.28 section 354.07, subdivision 1, and the interest rate assumption under section 356.215 in
9.29 effect when the member retires. A period of uninterrupted service for the purposes of this
9.30 subdivision means a period of covered teaching service during which the member has not
9.31 been separated from active service for more than one fiscal year.
9.32 (c) In no case shall the annuity payable under this subdivision be less than the
9.33 amount of annuity payable pursuant to section 354.44, subdivision 6.
9.34 (d) The requirements and provisions for retirement before normal retirement age
9.35 contained in section 354.44, subdivision 6, clause (3) or (5), shall also apply to an
10.1 employee fulfilling the requirements with a combination of service as provided in section
10.2 354.60.
10.3 (e) The augmentation provided by this subdivision applies to the benefit provided
10.4 in section 354.46, subdivision 2.
10.5 (f) The augmentation provided by this subdivision shall not apply to any period in
10.6 which a person is on an approved leave of absence from an employer unit covered by the
10.7 provisions of this chapter.
10.8 (g) The retirement annuity or disability benefit of, or the survivor benefit payable on
10.9 behalf of, a former teacher who terminated service before July 1, 1997, which is not first
10.10 payable until after June 30, 1997, must be increased on an actuarial equivalent basis to
10.11 reflect the change in the postretirement interest rate actuarial assumption under section
10.12 356.215, subdivision 8, from five percent to six percent under a calculation procedure and
10.13 tables adopted by the board as recommended by an approved actuary and approved by the
10.14 actuary retained by the Legislative Commission on Pensions and Retirement.
10.15 Sec. 8. Minnesota Statutes 2004, section 354A.31, subdivision 7, is amended to read:
10.16 Subd. 7. Actuarial reduction for early retirement. This subdivision applies to
10.17 a person who has become at least 55 years old and first becomes a coordinated member
10.18 after June 30, 1989, and to any other coordinated member who has become at least 55
10.19 years old and whose annuity is higher when calculated using the retirement annuity
10.20 formula percentage in subdivision 4, paragraph (d), and subdivision 4a, paragraph (d), in
10.21 conjunction with this subdivision than when calculated under subdivision 4, paragraph
10.22 (c), or subdivision 4a, paragraph (c), in conjunction with subdivision 6. A coordinated
10.23 member who retires before the full benefit age shall be paid the retirement annuity
10.24 calculated using the retirement annuity formula percentage in subdivision 4, paragraph
10.25 (d), or subdivision 4a, paragraph (d), reduced so that the reduced annuity is the actuarial
10.26 equivalent of the annuity that would be payable to the member if the member deferred
10.27 receipt of the annuity and the annuity amount were augmented at an annual rate of three
10.28 percent compounded annually from the day the annuity begins to accrue until the normal
10.29 retirement age if the employee became an employee before July 1, 2006, and at 2.5
10.30 percent compounded annually from the day the annuity begins to accrue until the normal
10.31 retirement age if the person initially becomes a teacher after June 30, 2006.
10.32 Sec. 9. Minnesota Statutes 2004, section 354A.37, subdivision 2, is amended to read:
10.33 Subd. 2. Eligibility for deferred retirement annuity. Any coordinated member
10.34 who ceases to render teaching services for the school district in which the teachers
10.35 retirement fund association is located, with sufficient allowable service credit to meet
10.36 the minimum service requirements specified in section 354A.31, subdivision 1, shall be
11.1 entitled to a deferred retirement annuity in lieu of a refund pursuant to subdivision 1. The
11.2 deferred retirement annuity shall be computed pursuant to section 354A.31 and shall be
11.3 augmented as provided in this subdivision. The deferred annuity shall commence upon
11.4 application after the person on deferred status attains at least the minimum age specified in
11.5 section 354A.31, subdivision 1.
11.6 The monthly annuity amount that had accrued when the member ceased to render
11.7 teaching service must be augmented from the first day of the month following the month
11.8 during which the member ceased to render teaching service to the effective date of
11.9 retirement. There is no augmentation if this period is less than three months. The rate of
11.10 augmentation is three percent compounded annually until January 1 of the year following
11.11 the year in which the former member attains age 55, and five percent compounded
11.12 annually after that date to the effective date of retirement if the employee became an
11.13 employee before July 1, 2006, and at 2.5 percent compounded annually if the employee
11.14 becomes an employee after June 30, 2006. If a person has more than one period of
11.15 uninterrupted service, a separate average salary determined under section 354A.31 must
11.16 be used for each period, and the monthly annuity amount related to each period must be
11.17 augmented as provided in this subdivision. The sum of the augmented monthly annuity
11.18 amounts determines the total deferred annuity payable. If a person repays a refund, the
11.19 service restored by the repayment must be considered as continuous with the next period
11.20 of service for which the person has credit with the fund. If a person does not render
11.21 teaching services in any one fiscal year or more consecutive fiscal years and then resumes
11.22 teaching service, the formula percentages used from the date of resumption of teaching
11.23 service are those applicable to new members. The mortality table and interest assumption
11.24 used to compute the annuity are the table established by the fund to compute other
11.25 annuities, and the interest assumption under section 356.215 in effect when the member
11.26 retires. A period of uninterrupted service for the purpose of this subdivision means a
11.27 period of covered teaching service during which the member has not been separated from
11.28 active service for more than one fiscal year.
11.29 The augmentation provided by this subdivision applies to the benefit provided in
11.30 section 354A.35, subdivision 2. The augmentation provided by this subdivision does
11.31 not apply to any period in which a person is on an approved leave of absence from an
11.32 employer unit.
11.33 Sec. 10. Minnesota Statutes 2004, section 356.30, subdivision 1, is amended to read:
11.34 Subdivision 1. Eligibility; computation of annuity. (a) Notwithstanding any
11.35 provisions of the laws governing the retirement plans enumerated in subdivision 3, a
11.36 person who has met the qualifications of paragraph (b) may elect to receive a retirement
12.1 annuity from each enumerated retirement plan in which the person has at least one-half
12.2 year of allowable service, based on the allowable service in each plan, subject to the
12.3 provisions of paragraph (c).
12.4 (b) A person may receive, upon retirement, a retirement annuity from each
12.5 enumerated retirement plan in which the person has at least one-half year of allowable
12.6 service, and augmentation of a deferred annuity calculated at the appropriate rate under
12.7 the laws governing each public pension plan or fund named in subdivision 3, based on
12.8 the date of the person's initial entry into public employment from the date the person
12.9 terminated all public service if:
12.10 (1) the person has allowable service totaling an amount that allows the person to
12.11 receive an annuity in any two or more of the enumerated plans; and
12.12 (2) the person has not begun to receive an annuity from any enumerated plan or the
12.13 person has made application for benefits from each applicable plan and the effective
12.14 dates of the retirement annuity with each plan under which the person chooses to receive
12.15 an annuity are within a one-year period.
12.16 (c) The retirement annuity from each plan must be based upon the allowable service,
12.17 accrual rates, and average salary in the applicable plan except as further specified or
12.18 modified in the following clauses:
12.19 (1) the laws governing annuities must be the law in effect on the date of termination
12.20 from the last period of public service under a covered retirement plan with which the
12.21 person earned a minimum of one-half year of allowable service credit during that
12.22 employment;
12.23 (2) the "average salary" on which the annuity from each covered plan in which
12.24 the employee has credit in a formula plan must be based on the employee's highest five
12.25 successive years of covered salary during the entire service in covered plans;
12.26 (3) the accrual rates to be used by each plan must be those percentages prescribed by
12.27 each plan's formula as continued for the respective years of allowable service from one
12.28 plan to the next, recognizing all previous allowable service with the other covered plans;
12.29 (4) the allowable service in all the plans must be combined in determining eligibility
12.30 for and the application of each plan's provisions in respect to reduction in the annuity
12.31 amount for retirement prior to normal retirement age; and
12.32 (5) the annuity amount payable for any allowable service under a nonformula plan
12.33 of a covered plan must not be affected, but such service and covered salary must be used
12.34 in the above calculation.
12.35 (d) This section does not apply to any person whose final termination from the last
12.36 public service under a covered plan was before May 1, 1975.
13.1 (e) For the purpose of computing annuities under this section, the accrual rates
13.2 used by any covered plan, except the public employees police and fire plan, the judges'
13.3 retirement fund, and the State Patrol retirement plan, must not exceed the percent specified
13.4 in section 356.315, subdivision 4, per year of service for any year of service or fraction
13.5 thereof. The formula percentage used by the judges' retirement fund must not exceed the
13.6 percentage rate specified in section 356.315, subdivision 8, per year of service for any
13.7 year of service or fraction thereof. The accrual rate used by the public employees police
13.8 and fire plan and the State Patrol retirement plan must not exceed the percentage rate
13.9 specified in section 356.315, subdivision 6, per year of service for any year of service or
13.10 fraction thereof. The accrual rate or rates used by the legislators retirement plan and the
13.11 elective state officers retirement plan must not exceed 2.5 percent, but this limit does not
13.12 apply to the adjustment provided under section 3A.02, subdivision 1, paragraph (c), or
13.13 352C.031, paragraph (b).
13.14 (f) Any period of time for which a person has credit in more than one of the covered
13.15 plans must be used only once for the purpose of determining total allowable service.
13.16 (g) If the period of duplicated service credit is more than one-half year, or the person
13.17 has credit for more than one-half year, with each of the plans, each plan must apply its
13.18 formula to a prorated service credit for the period of duplicated service based on a fraction
13.19 of the salary on which deductions were paid to that fund for the period divided by the total
13.20 salary on which deductions were paid to all plans for the period.
13.21 (h) If the period of duplicated service credit is less than one-half year, or when
13.22 added to other service credit with that plan is less than one-half year, the service credit
13.23 must be ignored and a refund of contributions made to the person in accord with that
13.24 plan's refund provisions.
13.25 Sec. 11. EFFECTIVE DATE.
13.26 Sections 1 to 10 are effective July 1, 2006.
13.27 ARTICLE 3
13.28 TEACHERS RETIREMENT ASSOCIATION
13.29 COVERAGE AND BENEFIT RESTRUCTURING
13.30 Section 1. Minnesota Statutes 2004, section 127A.50, subdivision 1, is amended to
13.31 read:
13.32 Subdivision 1. Aid adjustment. Beginning in fiscal year 1998 and each year
13.33 thereafter, the commissioner of education shall adjust state aid payments to school
13.34 operating funds for Independent School District No. 625, and Independent School District
13.35 No. 709, and Special School District No. 1 by the net amount of clauses (1) and (2),
13.36 for Special School District No. 1 by the net amount of clauses (1), (2), and (4), and for
14.1 all other districts, including charter schools, but excluding any education organizations
14.2 that are prohibited from receiving direct state aids under section 123A.26 or 125A.75,
14.3 subdivision 7, by the net amount of clauses (1), (2), and (3), and (4):
14.4 (1) a decrease equal to each district's share of the fiscal year 1997 adjustment
14.5 effected under Minnesota Statutes 1996, section 124.2139;
14.6 (2) an increase equal to one percent of the salaries paid to members of the general
14.7 plan of the Public Employees Retirement Association in fiscal year 1997, multiplied by
14.8 0.35 for fiscal year 1998 and 0.70 each year thereafter;
14.9 (3) a decrease equal to 2.34 percent of the salaries paid to members of the Teachers
14.10 Retirement Association in fiscal year 1997.; and
14.11 (4) an increase equal to 0.5 percent of the salaries paid to members of the Teachers
14.12 Retirement Association in fiscal year 2007.
14.13 EFFECTIVE DATE.This section is effective for revenue for fiscal year 2008.
14.14 Sec. 2. Minnesota Statutes 2004, section 128D.10, is amended to read:
14.15 128D.10 CONTINUITY ON TENURE, PENSIONS, AND RETIREMENT.
14.16 (a) The tenure, pension, and retirement provisions of any law applicable to
14.17 employees of the special school district of Minneapolis, including employees belonging
14.18 to the municipal employees retirement fund and those belonging to the Minneapolis
14.19 Teachers' Retirement Fund Association before April 24, 1959, shall continue to be
14.20 applicable in the same manner and to the same extent to employees of the special
14.21 independent school district after April 24, 1959, except as otherwise provided in law.
14.22 (b) The provisions of any general law or laws which are applicable only to
14.23 independent school districts wholly or partially within cities of the first class shall not be
14.24 applicable to the special independent school district of Minneapolis.
14.25 (c) The powers, duties, and corporate structure of the Minneapolis Teachers'
14.26 Retirement Fund Association, and the laws applicable thereto, shall be and remain the
14.27 same in the special independent school district of Minneapolis as at the time of enactment
14.28 of the within law, until changed in accordance with law.
14.29 Sec. 3. [128D.19] AID REDEDICATION.
14.30 Notwithstanding any law to the contrary and subject to section 354A.12, subdivision
14.31 3c, special direct state aid previously paid to the Minneapolis Teachers Retirement Fund
14.32 Association under sections 354A.12, subdivisions 3a and 3b, and 423A.02, must be paid
14.33 to the Teachers Retirement Association.
14.34 Sec. 4. Minnesota Statutes 2004, section 354.05, subdivision 2, is amended to read:
14.35 Subd. 2. Teacher. (a) "Teacher" means:
15.1 (1) a person who renders service as a teacher, supervisor, principal, superintendent,
15.2 librarian, nurse, counselor, social worker, therapist, or psychologist in a public school of
15.3 the state located outside of the corporate limits of a city of the first class the city of Duluth
15.4 or the city of St. Paul, or in any charter school, irrespective of the location of the school,
15.5 or in any charitable, penal, or correctional institutions of a governmental subdivision, or
15.6 who is engaged in educational administration in connection with the state public school
15.7 system, but excluding the University of Minnesota, whether the position be a public office
15.8 or an employment, and not including the members or officers of any general governing or
15.9 managing board or body;
15.10 (2) an employee of the Teachers Retirement Association;
15.11 (3) a person who renders teaching service on a part-time basis and who also renders
15.12 other services for a single employing unit. A person whose teaching service comprises at
15.13 least 50 percent of the combined employment salary is a member of the association for all
15.14 services with the single employing unit. If the person's teaching service comprises less
15.15 than 50 percent of the combined employment salary, the executive director must determine
15.16 whether all or none of the combined service is covered by the association; or
15.17 (4) a person who is not covered by the plans established under chapter 352D, 354A,
15.18 or 354B and who is employed by the Board of Trustees of the Minnesota State Colleges
15.19 and Universities system in an unclassified position as:
15.20 (i) a president, vice-president, or dean;
15.21 (ii) a manager or a professional in an academic or an academic support program
15.22 other than specified in item (i);
15.23 (iii) an administrative or a service support faculty position; or
15.24 (iv) a teacher or a research assistant.
15.25 (b) "Teacher" does not mean:
15.26 (1) a person who works for a school or institution as an independent contractor as
15.27 defined by the Internal Revenue Service;
15.28 (2) a person who renders part-time teaching service or who is a customized trainer
15.29 as defined by the Minnesota State Colleges and Universities system if (i) the service is
15.30 incidental to the regular nonteaching occupation of the person; and (ii) the employer
15.31 stipulates annually in advance that the part-time teaching service or customized training
15.32 service will not exceed 300 hours in a fiscal year and retains the stipulation in its records;
15.33 and (iii) the part-time teaching service or customized training service actually does not
15.34 exceed 300 hours in a fiscal year; or
15.35 (3) a person exempt from licensure under section 122A.30.
15.36 Sec. 5. Minnesota Statutes 2004, section 354.05, subdivision 13, is amended to read:
16.1 Subd. 13. Allowable service. "Allowable service" means:
16.2 (1) Any service rendered by a teacher for which on or before July 1, 1957, the
16.3 teacher's account in the retirement fund was credited by reason of employee contributions
16.4 in the form of salary deductions, payments in lieu of salary deductions, or in any other
16.5 manner authorized by Minnesota Statutes 1953, sections 135.01 to 135.13, as amended by
16.6 Laws 1955, chapters 361, 549, 550, 611, or
16.7 (2) Any service rendered by a teacher for which on or before July 1, 1961, the
16.8 teacher elected to obtain credit for service by making payments to the fund pursuant to
16.9 Minnesota Statutes 1980, section 354.09 and section 354.51, or
16.10 (3) Any service rendered by a teacher after July 1, 1957, for any calendar month
16.11 when the member receives salary from which deductions are made, deposited and credited
16.12 in the fund, or
16.13 (4) Any service rendered by a person after July 1, 1957, for any calendar month
16.14 where payments in lieu of salary deductions are made, deposited and credited into the
16.15 fund as provided in Minnesota Statutes 1980, section 354.09, subdivision 4, and section
16.16 354.53, or
16.17 (5) Any service rendered by a teacher for which the teacher elected to obtain
16.18 credit for service by making payments to the fund pursuant to Minnesota Statutes 1980,
16.19 section 354.09, subdivisions 1 and 4, sections 354.50, 354.51, Minnesota Statutes 1957,
16.20 section 135.41, subdivision 4, Minnesota Statutes 1971, section 354.09, subdivision 2, or
16.21 Minnesota Statutes, 1973 Supplement, section 354.09, subdivision 3, or
16.22 (6) Both service during years of actual membership in the course of which
16.23 contributions were currently made and service in years during which the teacher was not a
16.24 member but for which the teacher later elected to obtain credit by making payments to the
16.25 fund as permitted by any law then in effect, or
16.26 (7) Any service rendered where contributions were made and no allowable service
16.27 credit was established because of the limitations contained in Minnesota Statutes 1957,
16.28 section 135.09, subdivision 2, as determined by the ratio between the amounts of money
16.29 credited to the teacher's account in a fiscal year and the maximum retirement contribution
16.30 allowable for that year, or
16.31 (8) MS 2002 (Expired)
16.32 (9) A period of time during which a teacher who is a state employee was on strike
16.33 without pay, not to exceed a period of one year, if the teacher makes a payment in lieu of
16.34 salary deductions or makes a prior service credit purchase payment, whichever applies. If
16.35 the payment is made within 12 months, the payment by the teacher must be an amount
16.36 equal to the employee and employer contribution rates set forth in section 354.42,
17.1 subdivisions 2 and 3, applied to the teacher's rate of salary in effect on the conclusion of
17.2 the strike for the period of the strike without pay, plus compound interest at a monthly rate
17.3 of 0.71 percent from the last day of the strike until the date of payment. If the payment by
17.4 the employee is not made within 12 months, the payment must be in an amount equal to
17.5 the payment amount determined under section 356.55 or 356.551, whichever applies, or
17.6 (10) A period of service before July 1, 2006, that was properly credited as allowable
17.7 service by the Minneapolis Teachers Retirement Fund Association, and that was rendered
17.8 by a teacher as an employee of Special School District No. 1, Minneapolis, or by an
17.9 employee of the Minneapolis Teachers Retirement Fund Association who was a member
17.10 of the Minneapolis Teachers Retirement Fund Association by virtue of that employment,
17.11 who has not begun receiving an annuity or other retirement benefit from the former
17.12 Minneapolis Teachers Retirement Fund Association calculated in whole or in part on that
17.13 service before July 1, 2006, and who has not taken a refund of member contributions
17.14 related to that service unless the refund is repaid under section 354.50, subdivision 4.
17.15 Service as an employee of Special School District No. 1, Minneapolis on or after July 1,
17.16 2006 is "allowable service" only as provided by this chapter.
17.17 Sec. 6. Minnesota Statutes 2004, section 354.42, subdivision 2, is amended to read:
17.18 Subd. 2. Employee. (a) The employee contribution to the fund is an amount equal
17.19 to 5.0 the following percentage of the salary of a member:
17.20 (1) after July 1, 2006, for a teacher employed by Special School District No. 1,
17.21 Minneapolis, 5.5 percent if the teacher is a coordinated member, and 9.0 percent if the
17.22 teacher is a basic member;
17.23 (2) for every other teacher, after July 1, 2006, 5.5 percent of if the salary of every
17.24 teacher is a coordinated member and 9.0 percent of if the salary of every teacher is a
17.25 basic member.
17.26 (b) This contribution must be made by deduction from salary. Where any portion
17.27 of a member's salary is paid from other than public funds, the member's employee
17.28 contribution must be based on the entire salary received.
17.29 Sec. 7. Minnesota Statutes 2004, section 354.42, subdivision 3, is amended to read:
17.30 Subd. 3. Employer. (a) The regular employer contribution to the fund by Special
17.31 School District No. 1, Minneapolis, after July 1, 2006, and before July 1, 2007, is an
17.32 amount equal to 5.00 percent of the salary of each of its teachers who is a coordinated
17.33 member and 9.00 percent of the salary of each of its teachers who is a basic member. After
17.34 July 1, 2007, the regular employer contribution to the fund by Special School District No.
17.35 1, Minneapolis, is an amount equal to 5.50 percent of salary of each coordinated member
17.36 and 9.50 percent of salary of each basic member. The additional employer contribution to
18.1 the fund by Special School District No. 1, Minneapolis, after July 1, 2006, is an amount
18.2 equal to 3.64 percent of the salary of each teacher who is a coordinated member or is a
18.3 basic member.
18.4 (b) The employer contribution to the fund for every other employer, is an amount
18.5 equal to 5.0 percent of the salary of each coordinated member and 9.0 percent of the salary
18.6 of each basic member before July 1, 2007, and 5.5 percent of the salary of each coordinated
18.7 member and 9.5 percent of the salary of each basic member after June 30, 2007.
18.8 Sec. 8. Minnesota Statutes 2005 Supplement, section 354.44, subdivision 6, is
18.9 amended to read:
18.10 Subd. 6. Computation of formula program retirement annuity. (a) The formula
18.11 retirement annuity must be computed in accordance with the applicable provisions of the
18.12 formulas stated in paragraph (b) or (d) on the basis of each member's average salary under
18.13 section 354.05, subdivision 13a, for the period of the member's formula service credit.
18.14 (b) This paragraph, in conjunction with paragraph (c), applies to a person who first
18.15 became a member of the association or a member of a pension fund listed in section
18.16 356.30, subdivision 3, before July 1, 1989, unless paragraph (d), in conjunction with
18.17 paragraph (e), produces a higher annuity amount, in which case paragraph (d) applies. The
18.18 average salary as defined in section 354.05, subdivision 13a, multiplied by the following
18.19 percentages per year of formula service credit shall determine the amount of the annuity to
18.20 which the member qualifying therefor is entitled for service rendered before July 1, 2006:
18.21 Coordinated Member Basic Member
18.22 the percent
18.23 specified in
18.24 the percent specified section 356.315,
18.25 Each year of service in section 356.315, subdivision 3, per
18.26 during first ten subdivision 1, per year year
18.27 the percent
18.28 specified in
18.29 the percent specified section 356.315,
18.30 Each year of service in section 356.315, subdivision 4, per
18.31 thereafter subdivision 2, per year year
18.32 For service rendered on or after July 1, 2006, the average salary as defined in section
18.33 354.05, subdivision 13a, multiplied by the following percentages per year of service
18.34 credit, determines the amount the annuity to which the member qualifying therefor is:
18.35 Coordinated Member Basic Member
18.36 the percent
18.37 specified in
18.38 the percent specified section 356.315,
18.39 Each year of service in section 356.315, subdivision 3, per
18.40 during first ten subdivision 1a, per year year
19.1 the percent
19.2 specified in
19.3 the percent specified section 356.315,
19.4 Each year of service after in section 356.315, subdivision 4, per
19.5 ten years of service subdivision 2b, per year year
19.6 (c)(i) This paragraph applies only to a person who first became a member of the
19.7 association or a member of a pension fund listed in section 356.30, subdivision 3, before
19.8 July 1, 1989, and whose annuity is higher when calculated under paragraph (b), in
19.9 conjunction with this paragraph than when calculated under paragraph (d), in conjunction
19.10 with paragraph (e).
19.11 (ii) Where any member retires prior to normal retirement age under a formula
19.12 annuity, the member shall be paid a retirement annuity in an amount equal to the normal
19.13 annuity provided in paragraph (b) reduced by one-quarter of one percent for each month
19.14 that the member is under normal retirement age at the time of retirement except that for
19.15 any member who has 30 or more years of allowable service credit, the reduction shall be
19.16 applied only for each month that the member is under age 62.
19.17 (iii) Any member whose attained age plus credited allowable service totals 90 years
19.18 is entitled, upon application, to a retirement annuity in an amount equal to the normal
19.19 annuity provided in paragraph (b), without any reduction by reason of early retirement.
19.20 (d) This paragraph applies to a member who has become at least 55 years old and
19.21 first became a member of the association after June 30, 1989, and to any other member
19.22 who has become at least 55 years old and whose annuity amount when calculated under
19.23 this paragraph and in conjunction with paragraph (e), is higher than it is when calculated
19.24 under paragraph (b), in conjunction with paragraph (c). For a basic member, the average
19.25 salary, as defined in section 354.05, subdivision 13a, multiplied by the percent specified
19.26 by section 356.315, subdivision 4, for each year of service for a basic member and by
19.27 the percent specified in section 356.315, subdivision 2, for each year of service for a
19.28 coordinated member shall determine the amount of the retirement annuity to which the
19.29 basic member is entitled. The annuity of a basic member who was a member for the
19.30 former Minneapolis Teachers Retirement Fund Association as of June 30, 2006, must
19.31 be determined according to the annuity formula under the articles of incorporation of
19.32 the former Minneapolis Teachers Retirement Fund Association in effect as of that date.
19.33 For a coordinated member, the average salary, as defined in section 354.05, subdivision
19.34 13a, multiplied by the percent specified in section 356.315, subdivision 2, for each year
19.35 of service rendered before July 1, 2006, and by the percent specified in section 356.315,
19.36 subdivision 2b, for each year of service rendered on or after July 1, 2006, determines the
19.37 amount of the retirement annuity to which the coordinated member is entitled.
20.1 (e) This paragraph applies to a person who has become at least 55 years old and first
20.2 becomes a member of the association after June 30, 1989, and to any other member who
20.3 has become at least 55 years old and whose annuity is higher when calculated under
20.4 paragraph (d) in conjunction with this paragraph than when calculated under paragraph
20.5 (b), in conjunction with paragraph (c). An employee who retires under the formula annuity
20.6 before the normal retirement age shall be paid the normal annuity provided in paragraph
20.7 (d) reduced so that the reduced annuity is the actuarial equivalent of the annuity that would
20.8 be payable to the employee if the employee deferred receipt of the annuity and the annuity
20.9 amount were augmented at an annual rate of three percent compounded annually from the
20.10 day the annuity begins to accrue until the normal retirement age.
20.11 (f) No retirement annuity is payable to a former employee with a salary that exceeds
20.12 95 percent of the governor's salary unless and until the salary figures used in computing
20.13 the highest five successive years average salary under paragraph (a) have been audited by
20.14 the Teachers Retirement Association and determined by the executive director to comply
20.15 with the requirements and limitations of section 354.05, subdivisions 35 and 35a.
20.16 Sec. 9. [354.70] CONSOLIDATION OF MINNEAPOLIS TEACHERS
20.17 RETIREMENT FUND ASSOCIATION.
20.18 Subdivision 1. Membership transfer. All active, inactive, and retired members of
20.19 the Minneapolis Teachers Retirement Fund Association are transferred to the Teachers
20.20 Retirement Association and are no longer members of the Minneapolis Teachers
20.21 Retirement Fund Association as of July 1, 2006.
20.22 Subd. 2. TRA membership. A person first hired as a teacher by Special School
20.23 District No. 1, Minneapolis, after June 30, 2006, and who is a teacher as defined in
20.24 section 354.05, subdivision 2, is a member of the Teachers Retirement Association for the
20.25 person's teaching service.
20.26 Subd. 3. Service credit and liability transfer. All allowable service and salary
20.27 credit of the members and other individuals transferred under subdivision 1 as specified in
20.28 the records of the Minneapolis Teachers Retirement Fund Association on the transfer date
20.29 is allowable service credit under section 354.05, subdivision 13, formula service credit
20.30 under section 354.05, subdivision 25, and salary credit under section 354.05, subdivision
20.31 35, for the Teachers Retirement Association.
20.32 Subd. 4. Transfer of records. On or before June 30, 2006, the chief administrative
20.33 officer of the Minneapolis Teachers Retirement Fund Association shall transfer all
20.34 records and documents relating to the funds and the benefit plans of the association to the
21.1 executive director of the Teachers Retirement Association. To the extent possible, original
21.2 copies of all records and documents must be transferred.
21.3 Subd. 5. Transfer of assets. (a) On or before June 30, 2006, the chief administrative
21.4 officer of the Minneapolis Teachers Retirement Fund Association shall transfer to the
21.5 Teachers Retirement Association the entire assets of the special retirement fund of the
21.6 Minneapolis Teachers Retirement Fund Association. The transfer of the assets of the
21.7 Minneapolis Teachers Retirement Fund Association special retirement fund must include
21.8 any accounts receivable that are determined by the executive director of the State Board of
21.9 Investment as reasonably capable of being collected. Legal title to account receivables that
21.10 are determined by the executive director of the State Board of Investment as not reasonably
21.11 capable of being collected transfers to Special School District No. 1, Minneapolis, as of
21.12 the date of the determination of the executive director of the State Board of Investment.
21.13 If the account receivables transferred to Special School District No. 1, Minneapolis,
21.14 are subsequently recovered by the school district, the superintendent of Special School
21.15 District No. 1, Minneapolis, shall transfer the recovered amount to the executive director
21.16 of the Teachers Retirement Association, in cash, for deposit in the teachers retirement
21.17 fund, less the reasonable expenses of the school district related to the recovery.
21.18 (b) As of June 30, 2006, assets of the special retirement fund of the Minneapolis
21.19 Teachers Retirement Fund Association are assets of the Teachers Retirement Association
21.20 to be invested by the State Board of Investment pursuant to the provisions of section
21.21 354.07, subdivision 4. The Teachers Retirement Association is the successor in interest to
21.22 all claims which the Minneapolis Teachers Retirement Fund Association may have or may
21.23 assert against any person and is the successor in interest to all claims which could have
21.24 been asserted against the former Minneapolis Teachers Retirement Fund Association,
21.25 subject to the following exceptions and qualifications:
21.26 (1) the Teachers Retirement Association is not liable for any claim against the
21.27 Minneapolis Teachers Retirement Fund Association, its former board or board members,
21.28 which is founded upon a claim of breach of fiduciary duty, where the act or acts
21.29 constituting the claimed breach were not done in good faith;
21.30 (2) the Teachers Retirement Association may assert any applicable defense to any
21.31 claim in any judicial or administrative proceeding that the former Minneapolis Teachers
21.32 Retirement Fund Association or its Board would otherwise have been entitled to assert;
21.33 (3) the Teachers Retirement Association may assert any applicable defense that the
21.34 Teachers Retirement Association may assert in its capacity as a statewide agency; and
22.1 (4) the Teachers Retirement Association shall indemnify any former fiduciary of the
22.2 Minneapolis Teachers Retirement Fund Association consistent with the provisions of the
22.3 Public Pension Fiduciary Responsibility Act, in section 356A.11.
22.4 (c) From the assets of the former Minneapolis Teachers Retirement Fund Association
22.5 transferred to the Teachers Retirement Association, an amount equal to the percentage
22.6 figure that represents the ratio between the market value of the Minnesota postretirement
22.7 investment fund as of June 30, 2006, and the required reserves of the Minnesota post
22.8 retirement investment fund as of June 30, 2006, applied to the present value of future
22.9 benefits payable to annuitants of the former Minneapolis Teachers Retirement Fund
22.10 Association as of June 30, 2006, including any postretirement adjustment from the
22.11 Minnesota postretirement investment fund expected to be payable on January 1, 2007,
22.12 must be transferred to the Minnesota postretirement investment fund. The executive
22.13 director of the State Board of Investment shall estimate this ratio at the time of the
22.14 transfer. By January 1, 2007, after all necessary financial information becomes available
22.15 to determine the actual funded ratio of the Minnesota postretirement investment fund, the
22.16 postretirement investment fund must refund to the Teachers Retirement Association any
22.17 excess assets or the Teachers Retirement Association must contribute any deficiency
22.18 to the Minnesota postretirement investment fund with interest under section 11A.18,
22.19 subdivision 6. The balance of the assets of the former Minneapolis Teachers Retirement
22.20 Fund Association after the transfer to the Minnesota postretirement investment fund must
22.21 be credited to the Teachers Retirement Association.
22.22 If the assets transferred by the Minneapolis Teachers Retirement Fund Association
22.23 to the Teachers Retirement Association are insufficient to meet its obligation to the
22.24 Minnesota postretirement investment fund, additional assets must be transferred by the
22.25 executive director of the Teachers Retirement Association to meet the amount required.
22.26 Subd. 6. Benefit calculation. (a) For every deferred, inactive, disabled, and retired
22.27 member of the Minneapolis Teachers Retirement Fund Association transferred under
22.28 subdivision 1, and the survivors of these members, annuities or benefits earned before
22.29 the date of the transfer, other than future postretirement adjustments, must be calculated
22.30 and paid by the Teachers Retirement Association under the laws, articles of incorporation,
22.31 and bylaws of the former Minneapolis Teachers Retirement Fund Association that were
22.32 in effect relative to the person on the date of the person's termination of active service
22.33 covered by the former Minneapolis Teachers Retirement Fund Association.
22.34 (b) Former Minneapolis Teachers Retirement Fund Association members who retired
22.35 before July 1, 2006, must receive postretirement adjustments after December 31, 2006,
22.36 only as provided in section 11A.18. All other benefit recipients of the former Minneapolis
23.1 Teachers Retirement Fund Association must receive postretirement adjustments after
23.2 December 31, 2006, only as provided in section 356.41.
23.3 (c) This consolidation does not impair or diminish benefits for an active, deferred,
23.4 or retired member or a survivor of an active, deferred, or retired member under the
23.5 former Minneapolis Teachers Retirement Fund Association in existence at the time of the
23.6 consolidation, except that any future guaranteed or investment-related postretirement
23.7 adjustments must be paid after July 1, 2006, in accordance with paragraph (b), and all
23.8 benefits based on service on or after July 1, 2006 must be determined only by laws
23.9 governing the Teachers Retirement Association.
23.10 Subd. 7. Termination of Minneapolis Teachers Retirement Fund Association
23.11 special retirement fund. (a) As of June 30, 2006, the Minneapolis Teachers Retirement
23.12 Fund Association ceases to exist.
23.13 (b) Contracts, records, and obligations of the Minneapolis Teachers Retirement Fund
23.14 Association special retirement fund existing at the time of consolidation with the Teachers
23.15 Retirement Association are transferred to the Teachers Retirement Association pursuant to
23.16 the provisions of section 15.039, subdivisions 5 and 5a, except that contracts, records, and
23.17 obligations of the Minneapolis Teachers Retirement Fund Association special retirement
23.18 fund related to investment and safekeeping of assets are transferred to the State Board
23.19 of Investment pursuant to the provisions of section 15.039, subdivisions 5 and 5a. The
23.20 State Board of Investment has the authority to pay the investment-related liabilities and
23.21 obligations from the assets transferred from the Minnesota Teachers Retirement Fund
23.22 Association incurred by the Teachers Retirement Association. The audit or examination of
23.23 the Minneapolis Teachers Retirement Fund Association for year-end June 30, 2006 must
23.24 be performed by either the State Auditor or the Legislative Auditor under an agreement
23.25 with the Teachers Retirement Association. The costs of the audit or examination must
23.26 be paid by the Teachers Retirement Association. Between the date of enactment of this
23.27 section and June 30, 2006, the Minneapolis Teachers Retirement Fund Association cannot
23.28 incur a new or additional enforceable contractual liability or obligation without approval
23.29 of the Teachers Retirement Association.
23.30 Sec. 10. [354.75] MINNEAPOLIS EMPLOYEES RETIREMENT FUND STATE
23.31 AID REDEDICATED.
23.32 Subdivision 1. Appropriation. The positive difference, if any, between the actual
23.33 state aid paid to the Minneapolis Employees Retirement fund under section 422A.101,
23.34 subdivision 3, and $8,065,000 annually is appropriated from the general fund to the
23.35 commissioner of finance for deposit in the Teachers Retirement Association to offset all or
24.1 a portion of the current and future unfunded actuarial accrued liability of the Minneapolis
24.2 Teachers Retirement Fund Association.
24.3 Subd. 2. Financial requirements. The appropriation in subdivision 1 is available
24.4 to the extent that financial requirements of the Minneapolis Employees Retirement Fund
24.5 under section 422A.101, subdivision 3, have been satisfied.
24.6 Sec. 11. Minnesota Statutes 2004, section 354A.011, subdivision 15a, is amended to
24.7 read:
24.8 Subd. 15a. Normal retirement age. "Normal retirement age" means age 65 for
24.9 a person who first became a member of the coordinated program of the Minneapolis or
24.10 St. Paul Teachers Retirement Fund Association or the new law coordinated program of
24.11 the Duluth Teachers Retirement Fund Association or a member of a pension fund listed
24.12 in section 356.30, subdivision 3, before July 1, 1989. For a person who first became a
24.13 member of the coordinated program of the Minneapolis or St. Paul Teachers Retirement
24.14 Fund Association or the new law coordinated program of the Duluth Teachers Retirement
24.15 Fund Association after June 30, 1989, normal retirement age means the higher of age 65
24.16 or retirement age, as defined in United States Code, title 42, section 416(l), as amended,
24.17 but not to exceed age 66. For a person who is a member of the basic program of the
24.18 Minneapolis or St. Paul Teachers Retirement Fund Association or the old law coordinated
24.19 program of the Duluth Teachers Retirement Fund Association, normal retirement age
24.20 means the age at which a teacher becomes eligible for a normal retirement annuity
24.21 computed upon meeting the age and service requirements specified in the applicable
24.22 provisions of the articles of incorporation or bylaws of the respective teachers retirement
24.23 fund association.
24.24 Sec. 12. Minnesota Statutes 2004, section 354A.011, subdivision 27, is amended to
24.25 read:
24.26 Subd. 27. Teacher. (a) "Teacher" means any person who renders service for a public
24.27 school district, other than a charter school, located in the corporate limits of one of the
24.28 cities of the first class which was so classified on January 1, 1979 Duluth and St. Paul,
24.29 as any of the following:
24.30 (1) a full-time employee in a position for which a valid license from the state
24.31 Department of Education is required;
24.32 (2) an employee of the teachers retirement fund association located in the city of
24.33 the first class unless the employee has exercised the option pursuant to Laws 1955,
24.34 chapter 10, section 1, to retain membership in the Minneapolis Employees Retirement
24.35 Fund established pursuant to chapter 422A;
25.1 (3) a part-time employee in a position for which a valid license from the state
25.2 Department of Education is required; or
25.3 (4) a part-time employee in a position for which a valid license from the state
25.4 Department of Education is required who also renders other nonteaching services for the
25.5 school district, unless the board of trustees of the teachers retirement fund association
25.6 determines that the combined employment is on the whole so substantially dissimilar to
25.7 teaching service that the service may not be covered by the association.
25.8 (b) The term does not mean any person who renders service in the school district
25.9 as any of the following:
25.10 (1) an independent contractor or the employee of an independent contractor;
25.11 (2) an employee who is a full-time teacher covered by the Teachers Retirement
25.12 Association or by another teachers retirement fund association established pursuant to this
25.13 chapter or chapter 354;
25.14 (3) an employee exempt from licensure pursuant to section 122A.30;
25.15 (4) an employee who is a teacher in a technical college located in a city of the first
25.16 class unless the person elects coverage by the applicable first class city teacher retirement
25.17 fund association under section 354B.21, subdivision 2;
25.18 (5) a teacher employed by a charter school, irrespective of the location of the
25.19 school; or
25.20 (6) an employee who is a part-time teacher in a technical college in a city of the first
25.21 class and who has elected coverage by the applicable first class city teacher retirement
25.22 fund association under section 354B.21, subdivision 2, but (i) the teaching service is
25.23 incidental to the regular nonteaching occupation of the person; (ii) the applicable technical
25.24 college stipulates annually in advance that the part-time teaching service will not exceed
25.25 300 hours in a fiscal year; and (iii) the part-time teaching actually does not exceed 300
25.26 hours in the fiscal year to which the certification applies.
25.27 Sec. 13. Minnesota Statutes 2004, section 354A.021, subdivision 1, is amended to read:
25.28 Subdivision 1. Establishment. There is established a teachers retirement fund
25.29 association in each of the cities of the first class which were so classified on January 1,
25.30 1979 Duluth and St. Paul. The associations shall be known respectively as the "Duluth
25.31 Teachers Retirement Fund Association," the "Minneapolis Teachers Retirement Fund
25.32 Association" and the "St. Paul Teachers Retirement Fund Association." Each association
25.33 shall be a continuation of the teachers retirement fund association with the same corporate
25.34 name established pursuant to the authorization contained in Laws 1909, chapter 343,
25.35 section 1.
25.36 Sec. 14. Minnesota Statutes 2004, section 354A.092, is amended to read:
26.1 354A.092 SABBATICAL LEAVE.
26.2 Any teacher in the coordinated program of either the Minneapolis Teachers
26.3 Retirement Fund Association or the St. Paul Teachers Retirement Fund Association or
26.4 any teacher in the new law coordinated program of the Duluth Teachers Retirement
26.5 Fund Association who is granted a sabbatical leave shall be entitled to receive allowable
26.6 service credit in the applicable association for periods of sabbatical leave. To obtain the
26.7 service credit, the teacher on sabbatical leave shall make an employee contribution to the
26.8 applicable association. No teacher shall be entitled to receive more than three years of
26.9 allowable service credit pursuant to this section for a period or periods of sabbatical
26.10 leave during any ten consecutive fiscal or calendar years, whichever is the applicable
26.11 plan year for the teachers retirement fund association. If the teacher granted a sabbatical
26.12 leave makes the employee contribution for a period of sabbatical leave pursuant to this
26.13 section, the employing unit shall make an employer contribution on behalf of the teacher
26.14 to the applicable association for that period of sabbatical leave in the manner described
26.15 in section 354A.12, subdivision 2a. The employee and employer contributions shall be
26.16 in an amount equal to the employee and employer contribution rates in effect for other
26.17 active members of the association covered by the same program applied to a salary figure
26.18 equal to the teacher's actual covered salary for the plan year immediately preceding the
26.19 sabbatical leave period. Payment of the employee contribution authorized pursuant to this
26.20 section shall be made by the teacher on or before June 30 of year next following the year
26.21 in which the sabbatical leave terminated and shall be made without interest. For sabbatical
26.22 leaves taken after June 30, 1986, the required employer contributions shall be paid by the
26.23 employing unit within 30 days after notification by the association of the amount due.
26.24 If the employee contributions for the sabbatical leave period are less than an amount
26.25 equal to the applicable contribution rate applied to a salary figure equal to the teacher's
26.26 actual covered salary for the plan year immediately preceding the sabbatical leave period,
26.27 service credit shall be prorated. The prorated service credit shall be determined by the
26.28 ratio between the amount of the actual payment which was made and the full contribution
26.29 amount payable pursuant to this section.
26.30 Sec. 15. Minnesota Statutes 2004, section 354A.093, subdivision 1, is amended to read:
26.31 Subdivision 1. Eligibility. Any teacher in the coordinated program of either the
26.32 Minneapolis Teachers Retirement Fund Association or the St. Paul Teachers Retirement
26.33 Fund Association or any teacher in the new law coordinated program of the Duluth
26.34 Teachers Retirement Fund Association who is absent from employment by reason of
26.35 service in the uniformed services as defined in United States Code, title 38, section
26.36 4303(13) and who returns to the employer providing active teaching service upon
27.1 discharge from uniformed service within the time frames required under United States
27.2 Code, title 38, section 4312(e), may receive allowable service credit in the applicable
27.3 association for all or a portion of the period of uniformed service, provided that the teacher
27.4 did not separate from uniformed service with a dishonorable or bad conduct discharge
27.5 or under other than honorable conditions.
27.6 Sec. 16. Minnesota Statutes 2004, section 354A.095, is amended to read:
27.7 354A.095 PARENTAL AND MATERNITY LEAVE.
27.8 Basic or coordinated members of the St. Paul Teachers Retirement Fund
27.9 Association, the Minneapolis Teachers Retirement Fund Association, and new coordinated
27.10 members of the Duluth Teachers Retirement Fund Association, who are granted parental
27.11 or maternity leave of absence by the employing authority, are entitled to obtain service
27.12 credit not to exceed one year for the period of leave upon payment to the applicable
27.13 fund by the end of the fiscal year following the fiscal year in which the leave of absence
27.14 terminated. The amount of the payment must include the total required employee and
27.15 employer contributions for the period of leave prescribed in section 354A.12. Payment
27.16 must be based on the member's average monthly salary rate upon return to teaching
27.17 service, and is payable without interest. Payment must be accompanied by a certified or
27.18 otherwise adequate copy of the resolution or action of the employing authority granting
27.19 or approving the leave.
27.20 Sec. 17. Minnesota Statutes 2004, section 354A.096, is amended to read:
27.21 354A.096 MEDICAL LEAVE.
27.22 Any teacher in the coordinated program of either the Minneapolis Teachers
27.23 Retirement Fund Association or the St. Paul Teachers Retirement Fund Association or the
27.24 new law coordinated program of the Duluth Teachers Retirement Fund Association who is
27.25 on an authorized medical leave of absence and subsequently returns to teaching service
27.26 is entitled to receive allowable service credit, not to exceed one year, for the period of
27.27 leave, upon making the prescribed payment to the fund. This payment must include the
27.28 required employee and employer contributions at the rates specified in section 354A.12,
27.29 subdivisions 1 and 2, as applied to the member's average full-time monthly salary rate on
27.30 the date the leave of absence commenced plus annual interest at the rate of 8.5 percent per
27.31 year from the end of the fiscal year during which the leave terminates to the end of the
27.32 month during which payment is made. The member must pay the total amount required
27.33 unless the employing unit, at its option, pays the employer contributions. The total amount
27.34 required must be paid by the end of the fiscal year following the fiscal year in which the
27.35 leave of absence terminated or before the member retires, whichever is earlier. Payment
27.36 must be accompanied by a copy of the resolution or action of the employing authority
28.1 granting the leave and the employing authority, upon granting the leave, must certify
28.2 the leave to the association in a manner specified by the executive director. A member
28.3 may not receive more than one year of allowable service credit during any fiscal year by
28.4 making payment under this section. A member may not receive disability benefits under
28.5 section 354A.36 and receive allowable service credit under this section for the same
28.6 period of time.
28.7 Sec. 18. Minnesota Statutes 2004, section 354A.12, subdivision 1, is amended to read:
28.8 Subdivision 1. Employee contributions. The contribution required to be paid by
28.9 each member of a teachers retirement fund association shall not be less than the percentage
28.10 of total salary specified below for the applicable association and program:
28.11 Association and Program Percentage of
28.12 Total Salary
28.13 Duluth Teachers Retirement Association
28.14 old law and new law
28.15 coordinated programs 5.5 percent
28.16 Minneapolis Teachers Retirement
28.17 Association
28.18 basic program 8.5 percent
28.19 coordinated program 5.5 percent
28.20 St. Paul Teachers Retirement Association
28.21 basic program 8 percent
28.22 coordinated program 5.5 percent
28.23 Contributions shall be made by deduction from salary and must be remitted directly
28.24 to the respective teachers retirement fund association at least once each month.
28.25 Sec. 19. Minnesota Statutes 2004, section 354A.12, subdivision 2, is amended to read:
28.26 Subd. 2. Retirement contribution levy disallowed. Except as provided in
28.27 subdivision 3b and in section 423A.02, subdivision 3, with respect to the city of
28.28 Minneapolis and special school district No. 1 and in section 423A.02, subdivision 3, with
28.29 respect to independent school district No. 625, notwithstanding any law to the contrary,
28.30 levies for teachers retirement fund associations in the cities of the first class Duluth and St.
28.31 Paul, including levies for any employer Social Security taxes for teachers covered by the
28.32 Duluth Teachers Retirement Fund Association or the Minneapolis Teachers Retirement
28.33 Fund Association or the St. Paul Teachers Retirement Fund Association, are disallowed.
28.34 Sec. 20. Minnesota Statutes 2004, section 354A.12, subdivision 2a, is amended to read:
28.35 Subd. 2a. Employer regular and additional contribution rates. (a) The
28.36 employing units shall make the following employer contributions to teachers retirement
28.37 fund associations:
29.1 (1) for any coordinated member of a teachers retirement fund association in a city
29.2 of the first class, the employing unit shall pay the employer Social Security taxes in
29.3 accordance with section 355.46, subdivision 3, clause (b);
29.4 (2) for any coordinated member of one of the following teachers retirement fund
29.5 associations in a city of the first class, the employing unit shall make a regular employer
29.6 contribution to the respective retirement fund association in an amount equal to the
29.7 designated percentage of the salary of the coordinated member as provided below:
29.8 Duluth Teachers Retirement
29.9 Fund Association 4.50 percent
29.10 Minneapolis Teachers Retirement
29.11 Fund Association 4.50 percent
29.12 St. Paul Teachers Retirement
29.13 Fund Association 4.50 percent
29.14 (3) for any basic member of one of the following St. Paul Teachers Retirement
29.15 Fund associations in a city of the first class Association, the employing unit shall make a
29.16 regular employer contribution to the respective retirement fund in an amount equal to the
29.17 designated percentage 8.00 percent of the salary of the basic member as provided below:;
29.18 Minneapolis Teachers Retirement
29.19 Fund Association 8.50 percent
29.20 St. Paul Teachers Retirement
29.21 Fund Association 8.00 percent
29.22 (4) for a basic member of a the St. Paul Teachers Retirement Fund Association in a
29.23 city of the first class, the employing unit shall make an additional employer contribution to
29.24 the respective fund in an amount equal to the designated percentage 3.64 percent of the
29.25 salary of the basic member, as provided below:;
29.26 Minneapolis Teachers Retirement
29.27 Fund Association
29.28 July 1, 1993 - June 30, 1994 4.85 percent
29.29 July 1, 1994, and thereafter 3.64 percent
29.30 St. Paul Teachers Retirement
29.31 Fund Association
29.32 July 1, 1993 - June 30, 1995 4.63 percent
29.33 July 1, 1995, and thereafter 3.64 percent
29.34 (5) for a coordinated member of a teachers retirement fund association in a city
29.35 of the first class, the employing unit shall make an additional employer contribution to
29.36 the respective fund in an amount equal to the applicable percentage of the coordinated
29.37 member's salary, as provided below:
30.1 Duluth Teachers Retirement
30.2 Fund Association 1.29 percent
30.3 Minneapolis Teachers Retirement
30.4 Fund Association
30.5 July 1, 1993 - June 30, 1994 0.50 percent
30.6 July 1, 1994, and thereafter 3.64 percent
30.7 St. Paul Teachers Retirement
30.8 Fund Association
30.9 July 1, 1993 - June 30, 1994 0.50 percent
30.10 July 1, 1994 - June 30, 1995 1.50 percent
30.11 July 1, 1997, and thereafter 3.84 percent
30.12 (b) The regular and additional employer contributions must be remitted directly to
30.13 the respective teachers retirement fund association at least once each month. Delinquent
30.14 amounts are payable with interest under the procedure in subdivision 1a.
30.15 (c) Payments of regular and additional employer contributions for school district
30.16 or technical college employees who are paid from normal operating funds must be made
30.17 from the appropriate fund of the district or technical college.
30.18 Sec. 21. Minnesota Statutes 2004, section 354A.12, subdivision 3a, is amended to read:
30.19 Subd. 3a. Special direct state aid to first class city teachers retirement fund
30.20 associations. (a) In fiscal year 1998, the state shall pay $4,827,000 to the St. Paul
30.21 Teachers Retirement Fund Association, $17,954,000 to the Minneapolis Teachers
30.22 Retirement Fund Association, and $486,000 to the Duluth Teachers Retirement Fund
30.23 Association. In each subsequent fiscal year after fiscal year 2006, these payments to the
30.24 first class city teachers retirement fund associations must be $2,827,000 for St. Paul,
30.25 $12,954,000 to the Teachers Retirement Association for the former Minneapolis Teachers
30.26 Retirement Fund Association, and $486,000 for Duluth.
30.27 (b) The direct state aids under this subdivision are payable October 1 annually. The
30.28 commissioner of finance shall pay the direct state aid. The amount required under this
30.29 subdivision is appropriated annually from the general fund to the commissioner of finance.
30.30 Sec. 22. Minnesota Statutes 2004, section 354A.12, subdivision 3b, is amended to read:
30.31 Subd. 3b. Special direct state matching aid to the Minneapolis Teachers
30.32 Retirement Fund Association. (a) Special School District No. 1 may must make
30.33 an additional employer contribution to the Minneapolis Teachers Retirement Fund
30.34 Association. The city of Minneapolis may must make a contribution to the Minneapolis
30.35 Teachers Retirement Fund Association. This contribution may must be made by a levy
30.36 of the board of estimate and taxation of the city of Minneapolis and the levy, if made, is
31.1 classified as that of a special taxing district for purposes of sections 275.065 and 276.04,
31.2 and for all other property tax purposes.
31.3 (b) For every $1,000 $1,125,000 must be contributed in equal proportion by Special
31.4 School District No. 1 and $1,125,000 must be contributed by the city of Minneapolis to
31.5 the Minneapolis Teachers Retirement Fund Association under paragraph (a), and the
31.6 state shall pay to the Minneapolis Teachers Retirement Fund Association $1,000, but not
31.7 to exceed $2,500,000 in total in each fiscal year 1994. The superintendent of Special
31.8 School District No. 1, the mayor of the city of Minneapolis, and the executive director
31.9 of the Minneapolis Teachers Retirement Fund Association shall jointly certify to the
31.10 commissioner of finance the total amount that has been contributed by Special School
31.11 District No. 1 and by the city of Minneapolis to the Minneapolis Teachers Retirement
31.12 Fund Association. Any certification to the commissioner of education must be made
31.13 quarterly. If the total certifications for a fiscal year exceed the maximum annual direct state
31.14 matching aid amount in any quarter, the amount of direct state matching aid payable to the
31.15 Minneapolis Teachers Retirement Fund Association must be limited to the balance of the
31.16 maximum annual direct state matching aid amount available. The amount required under
31.17 this paragraph, subject to the maximum direct state matching aid amount, is appropriated
31.18 annually to the commissioner of finance.
31.19 (c) The commissioner of finance may prescribe the form of the certifications
31.20 required under paragraph (b).
31.21 Sec. 23. Minnesota Statutes 2004, section 354A.12, subdivision 3c, is amended to read:
31.22 Subd. 3c. Termination of supplemental contributions and direct matching
31.23 and state aid. (a) The supplemental contributions payable to the Minneapolis Teachers
31.24 Retirement Fund Association by Special School District No. 1 and the city of Minneapolis
31.25 under section 423A.02, subdivision 3, which must continue to be paid to the Teachers
31.26 Retirement Association until 2037, or to the St. Paul Teachers Retirement Fund
31.27 Association by Independent School District No. 625 under section 423A.02, subdivision
31.28 3, or the direct state aids under subdivision 3a to the first class city St. Paul Teachers
31.29 Retirement associations, and the direct matching and state aid under subdivision 3b to
31.30 the Minneapolis Teachers Retirement Fund Association terminate for the respective fund
31.31 at the end of the fiscal year in which the accrued liability funding ratio for that fund, as
31.32 determined in the most recent actuarial report for that fund by the actuary retained by the
31.33 Legislative Commission on Pensions and Retirement, equals or exceeds the accrued
31.34 liability funding ratio for the teachers retirement association, as determined in the most
31.35 recent actuarial report for the Teachers Retirement Association by the actuary retained by
31.36 the Legislative Commission on Pensions and Retirement.
32.1 (b) If the state direct matching, state supplemental, or state aid is terminated for a
32.2 first class city teachers retirement fund association under paragraph (a), it may not again
32.3 be received by that fund.
32.4 (c) If either the Minneapolis Teachers Retirement Fund Association, the St.
32.5 Paul Teachers Retirement Fund Association, or the Duluth Teachers Retirement Fund
32.6 Association remain is funded at less than the funding ratio applicable to the Teachers
32.7 Retirement Association when the provisions of paragraph (b) become effective, then any
32.8 state aid not previously distributed to that association must be immediately transferred to
32.9 the other associations in proportion to the relative sizes of their unfunded actuarial accrued
32.10 liabilities Teachers Retirement Association.
32.11 Sec. 24. Minnesota Statutes 2004, section 354A.12, subdivision 3d, is amended to read:
32.12 Subd. 3d. Supplemental administrative expense assessment. (a) The active
32.13 and retired membership of the Minneapolis Teachers Retirement Fund Association and
32.14 of the St. Paul Teachers Retirement Fund Association is responsible for defraying
32.15 supplemental administrative expenses other than investment expenses of the respective
32.16 teacher retirement fund association.
32.17 (b) Investment expenses of the teachers retirement fund association are those
32.18 expenses incurred by or on behalf of the retirement fund in connection with the investment
32.19 of the assets of the retirement fund other than investment security transaction costs. Other
32.20 administrative expenses are all expenses incurred by or on behalf of the retirement fund
32.21 for all other retirement fund functions other than the investment of retirement fund assets.
32.22 Investment and other administrative expenses must be accounted for using generally
32.23 accepted accounting principles and in a manner consistent with the comprehensive annual
32.24 financial report of the teachers retirement fund association for the immediately previous
32.25 fiscal year under section 356.20.
32.26 (c) Supplemental administrative expenses other than investment expenses of a first
32.27 class city teacher the St. Paul Teachers Retirement Fund Association are those expenses
32.28 for the fiscal year that:
32.29 (1) exceed, for the St. Paul Teachers Retirement Fund Association, $443,745, or
32.30 for the Minneapolis Teacher Retirement Fund Association $671,513, plus, in each case,
32.31 an additional amount derived by applying the percentage increase in the Consumer Price
32.32 Index for Urban Wage Earners and Clerical Workers All Items Index published by the
32.33 Bureau of Labor Statistics of the United States Department of Labor since July 1, 2001, to
32.34 the applicable dollar amount; and
32.35 (2) exceed the amount computed by applying the most recent percentage of
32.36 pay administrative expense amount, other than investment expenses, for the teachers
33.1 retirement association governed by chapter 354 to the covered payroll of the respective
33.2 teachers retirement fund association for the fiscal year.
33.3 (d) The board of trustees of each first class city the St. Paul Teachers Retirement
33.4 Fund Association shall allocate the total dollar amount of supplemental administrative
33.5 expenses other than investment expenses determined under paragraph (c), clause (2),
33.6 among the various active and retired membership groups of the teachers retirement fund
33.7 association and shall assess the various membership groups their respective share of
33.8 the supplemental administrative expenses other than investment expenses, in amounts
33.9 determined by the board of trustees. The supplemental administrative expense assessments
33.10 must be paid by the membership group in a manner determined by the board of trustees
33.11 of the respective teachers retirement association. Supplemental administrative expenses
33.12 payable by the active members of the pension plan must be picked up by the employer in
33.13 accordance with section 356.62.
33.14 (e) With respect to the St. Paul Teachers Retirement Fund Association, the
33.15 supplemental administrative expense assessment must be fully disclosed to the various
33.16 active and retired membership groups of the teachers retirement fund association. The
33.17 chief administrative officer of the St. Paul Teachers Retirement Fund Association shall
33.18 prepare a supplemental administrative expense assessment disclosure notice, which must
33.19 include the following:
33.20 (1) the total amount of administrative expenses of the St. Paul Teachers Retirement
33.21 Fund Association, the amount of the investment expenses of the St. Paul Teachers
33.22 Retirement Fund Association, and the net remaining amount of administrative expenses of
33.23 the St. Paul Teachers Retirement Fund Association;
33.24 (2) the amount of administrative expenses for the St. Paul Teachers Retirement Fund
33.25 Association that would be equivalent to the teachers retirement association noninvestment
33.26 administrative expense level described in paragraph (c);
33.27 (3) the total amount of supplemental administrative expenses required for assessment
33.28 calculated under paragraph (c);
33.29 (4) the portion of the total amount of the supplemental administrative expense
33.30 assessment allocated to each membership group and the rationale for that allocation;
33.31 (5) the manner of collecting the supplemental administrative expense assessment
33.32 from each membership group, the number of assessment payments required during the
33.33 year, and the amount of each payment or the procedure used to determine each payment;
33.34 and
34.1 (6) any other information that the chief administrative officer determines is necessary
34.2 to fairly portray the manner in which the supplemental administrative expense assessment
34.3 was determined and allocated.
34.4 (f) The disclosure notice must be provided annually in the annual report of the
34.5 association.
34.6 (g) The supplemental administrative expense assessments must be deposited in the
34.7 applicable teachers retirement fund upon receipt.
34.8 (h) Any omitted active membership group assessments that remain undeducted
34.9 and unpaid to the teachers retirement fund association for 90 days must be paid by the
34.10 respective school district. The school district may recover any omitted active membership
34.11 group assessment amounts that it has previously paid. The teachers retirement fund
34.12 association shall deduct any omitted retired membership group assessment amounts from
34.13 the benefits next payable after the discovery of the omitted amounts.
34.14 Sec. 25. Minnesota Statutes 2004, section 354A.30, is amended to read:
34.15 354A.30 MINNEAPOLIS AND ST. PAUL TEACHERS RETIREMENT FUND
34.16 ASSOCIATIONS ASSOCIATION; COORDINATED PROGRAM.
34.17 There is established a coordinated program within the Minneapolis Teachers
34.18 Retirement Fund Association and a coordinated program within the St. Paul Teachers
34.19 Retirement Fund Association to provide retirement coverage for teachers who are covered
34.20 by an agreement or modification made between the state and the secretary of health,
34.21 education and welfare making the provisions of the federal Old Age, Survivors and
34.22 Disability Insurance Act applicable to certain teachers covered by the teachers retirement
34.23 fund association. The provisions governing the coordinated program shall be sections
34.24 354A.31 to 354A.41 and any other applicable provisions of this chapter.
34.25 Sec. 26. Minnesota Statutes 2005 Supplement, section 354A.31, subdivision 4, is
34.26 amended to read:
34.27 Subd. 4. Computation of the normal coordinated retirement annuity;
34.28 Minneapolis and St. Paul funds fund. (a) This subdivision applies to the coordinated
34.29 programs program of the Minneapolis Teachers Retirement Fund Association and the St.
34.30 Paul Teachers Retirement Fund Association.
34.31 (b) The normal coordinated retirement annuity is an amount equal to a retiring
34.32 coordinated member's average salary under section 354A.011, subdivision 7a, multiplied
34.33 by the retirement annuity formula percentage.
34.34 (c) This paragraph, in conjunction with subdivision 6, applies to a person who first
34.35 became a member or a member in a pension fund listed in section 356.30, subdivision 3,
34.36 before July 1, 1989, unless paragraph (d), in conjunction with subdivision 7, produces a
35.1 higher annuity amount, in which case paragraph (d) will apply. The retirement annuity
35.2 formula percentage for purposes of this paragraph is the percent specified in section
35.3 356.315, subdivision 1, per year for each year of coordinated service for the first ten years
35.4 and the percent specified in section 356.315, subdivision 2, for each year of coordinated
35.5 service thereafter.
35.6 (d) This paragraph applies to a person who has become at least 55 years old and who
35.7 first becomes a member after June 30, 1989, and to any other member who has become
35.8 at least 55 years old and whose annuity amount, when calculated under this paragraph
35.9 and in conjunction with subdivision 7 is higher than it is when calculated under paragraph
35.10 (c), in conjunction with the provisions of subdivision 6. The retirement annuity formula
35.11 percentage for purposes of this paragraph is the percent specified in section 356.315,
35.12 subdivision 2, for each year of coordinated service.
35.13 Sec. 27. Minnesota Statutes 2004, section 354A.32, subdivision 1, is amended to read:
35.14 Subdivision 1. Optional forms generally. The boards board of the Minneapolis and
35.15 the St. Paul Teachers Retirement Fund Associations Association shall each establish for the
35.16 coordinated program and the board of the Duluth Teachers Retirement Fund Association
35.17 shall establish for the new law coordinated program an optional retirement annuity which
35.18 shall take the form of a joint and survivor annuity. Each board may also in its discretion
35.19 establish an optional annuity which shall take the form of an annuity payable for a period
35.20 certain and for life thereafter. Each board shall also establish an optional retirement
35.21 annuity that guarantees payment of the balance of the annuity recipient's accumulated
35.22 deductions to a designated beneficiary upon the death of the annuity recipient. Except as
35.23 provided in subdivision 1a, optional annuity forms shall be the actuarial equivalent of the
35.24 normal forms provided in section 354A.31. In establishing these optional annuity forms,
35.25 the board shall obtain the written recommendation of the commission-retained actuary.
35.26 The recommendation shall be a part of the permanent records of the board.
35.27 Sec. 28. Minnesota Statutes 2004, section 354A.39, is amended to read:
35.28 354A.39 SERVICE IN OTHER PUBLIC RETIREMENT FUNDS; ANNUITY.
35.29 Any person who has been a member of the Minnesota State Retirement System, the
35.30 Public Employees Retirement Association including the Public Employees Retirement
35.31 Association Police and Fire Fund, the Teachers Retirement Association, the Minnesota
35.32 State Patrol Retirement Association, the legislators retirement plan, the constitutional
35.33 officers retirement plan, the Minneapolis Employees Retirement Fund, the Duluth
35.34 Teachers Retirement Fund Association new law coordinated program, the Minneapolis
35.35 Teachers Retirement Fund Association coordinated program, the St. Paul Teachers
35.36 Retirement Fund Association coordinated program, or any other public employee
36.1 retirement system in the state of Minnesota having a like provision but excluding all other
36.2 funds providing retirement benefits for police officers or firefighters shall be entitled
36.3 when qualified to an annuity from each fund if the person's total allowable service in all
36.4 of the funds or in any two or more of the funds totals three or more years, provided that
36.5 no portion of the allowable service upon which the retirement annuity from one fund is
36.6 based is used again in the computation for a retirement annuity from another fund and
36.7 provided further that the person has not taken a refund from any of funds or associations
36.8 since the person's membership in the fund or association has terminated. The annuity
36.9 from each fund or association shall be determined by the appropriate provisions of the
36.10 law governing each fund or association, except that the requirement that a person must
36.11 have at least three years of allowable service in the respective fund or association shall not
36.12 apply for the purposes of this section, provided that the aggregate service in two or more
36.13 of these funds equals three or more years.
36.14 Sec. 29. Minnesota Statutes 2004, section 354A.40, subdivision 1, is amended to read:
36.15 Subdivision 1. Retirement annuity. Any coordinated member of either the
36.16 Minneapolis Teachers Retirement Fund Association or of the St. Paul Teachers Retirement
36.17 Fund Association who has credited service prior to July 1, 1978 shall be entitled to
36.18 receive a retirement annuity when otherwise qualified, the calculation of which shall
36.19 utilize the applicable retirement annuity formula specified in articles of incorporation and
36.20 bylaws of the teachers retirement fund association governing the basic program for that
36.21 portion of credited service which was served prior to July 1, 1978, and the retirement
36.22 annuity formula specified in section 354A.31 for the remainder of the member's credited
36.23 service, both applied to the member's average salary as specified in section 354A.31,
36.24 subdivision 4. The formula percentages to be used in calculating the coordinated portion
36.25 of the retirement annuity or coordinated service under this section shall recognize the
36.26 coordinated service as a continuation of any service prior to July 1, 1978.
36.27 Sec. 30. Minnesota Statutes 2004, section 354A.41, is amended to read:
36.28 354A.41 ADMINISTRATION OF COORDINATED PROGRAM.
36.29 Subdivision 1. Administrative provisions. The provisions of the articles of
36.30 incorporation and bylaws of the Minneapolis or the St. Paul Teachers Retirement
36.31 Fund Association, whichever is applicable, relating to the administration of the fund
36.32 shall govern the administration of the coordinated program and basic programs and the
36.33 provisions of the articles of incorporation and bylaws of the Duluth Teachers Retirement
36.34 Fund Association relating to the administration of the fund shall govern the administration
36.35 of the new law coordinated program in instances where the administrative provisions are
36.36 not inconsistent with the provisions of sections 354A.31 to 354A.41, including but not
37.1 limited to provisions relating to the composition and function of the board of trustees, the
37.2 investment of assets of the teachers retirement fund association, and the definition of the
37.3 plan year. The administrative provisions in the articles of incorporation and the bylaws
37.4 of the Minneapolis Teachers Retirement Fund Association pertaining to the granting of
37.5 pension benefits of the basic and coordinated programs are no longer in effect after June
37.6 30, 2006.
37.7 Subd. 2. Actuarial valuations. In any actuarial valuation of the Minneapolis
37.8 Teachers Retirement Fund Association, the St. Paul Teachers Retirement Fund
37.9 Association, or the Duluth Teachers Retirement Fund Association under section 356.215
37.10 prepared by the commission-retained actuary or supplemental actuarial valuation prepared
37.11 by an approved actuary retained by the teachers retirement fund association, there shall
37.12 be included a finding of the condition of the fund showing separately the basic and
37.13 coordinated programs or the old law coordinated and new law coordinated programs, as
37.14 appropriate. The finding shall include the level normal cost and the applicable employee
37.15 and employer contribution rates for each program.
37.16 Sec. 31. Minnesota Statutes 2004, section 356.20, subdivision 2, is amended to read:
37.17 Subd. 2. Covered public pension plans and funds. This section applies to the
37.18 following public pension plans:
37.19 (1) the general state employees retirement plan of the Minnesota State Retirement
37.20 System;
37.21 (2) the general employees retirement plan of the Public Employees Retirement
37.22 Association;
37.23 (3) the Teachers Retirement Association;
37.24 (4) the State Patrol retirement plan;
37.25 (5) the Minneapolis Teachers Retirement Fund Association;
37.26 (6) the St. Paul Teachers Retirement Fund Association;
37.27 (7) (6) the Duluth Teachers Retirement Fund Association;
37.28 (8) (7) the Minneapolis Employees Retirement Fund;
37.29 (9) (8) the University of Minnesota faculty retirement plan;
37.30 (10) (9) the University of Minnesota faculty supplemental retirement plan;
37.31 (11) (10) the judges retirement fund;
37.32 (12) (11) a police or firefighter's relief association specified or described in section
37.33 69.77, subdivision 1a, or 69.771, subdivision 1;
37.34 (13) (12) the public employees police and fire plan of the Public Employees
37.35 Retirement Association;
38.1 (14) (13) the correctional state employees retirement plan of the Minnesota State
38.2 Retirement System; and
38.3 (15) (14) the local government correctional service retirement plan of the Public
38.4 Employees Retirement Association.
38.5 Sec. 32. Minnesota Statutes 2004, section 356.214, subdivision 1, is amended to read:
38.6 Subdivision 1. Joint retention. (a) The chief administrative officers of the
38.7 Minnesota State Retirement System, the Public Employees Retirement Association, the
38.8 Teachers Retirement Association, the Duluth Teachers Retirement Fund Association,
38.9 the Minneapolis Teachers Retirement Fund Association, the Minneapolis Employees
38.10 Retirement Fund, and the St. Paul Teachers Retirement Fund Association, jointly, on
38.11 behalf of the state, its employees, its taxpayers, and its various public pension plans,
38.12 shall contract with an established actuarial consulting firm to conduct annual actuarial
38.13 valuations and related services for the retirement plans named in paragraph (b). The
38.14 principal from the actuarial consulting firm on the contract must be an approved actuary
38.15 under section 356.215, subdivision 1, paragraph (c). Prior to becoming effective,
38.16 the contract under this section is subject to a review and approval by the Legislative
38.17 Commission on Pensions and Retirement.
38.18 (b) The contract for actuarial services must include the preparation of actuarial
38.19 valuations and related actuarial work for the following retirement plans:
38.20 (1) the teachers retirement plan, Teachers Retirement Association;
38.21 (2) the general state employees retirement plan, Minnesota State Retirement System;
38.22 (3) the correctional employees retirement plan, Minnesota State Retirement System;
38.23 (4) the State Patrol retirement plan, Minnesota State Retirement System;
38.24 (5) the judges retirement plan, Minnesota State Retirement System;
38.25 (6) the Minneapolis employees retirement plan, Minneapolis Employees Retirement
38.26 Fund;
38.27 (7) the public employees retirement plan, Public Employees Retirement Association;
38.28 (8) the public employees police and fire plan, Public Employees Retirement
38.29 Association;
38.30 (9) the Duluth teachers retirement plan, Duluth Teachers Retirement Fund
38.31 Association;
38.32 (10) the Minneapolis teachers retirement plan, Minneapolis Teachers Retirement
38.33 Fund Association;
38.34 (11) (10) the St. Paul teachers retirement plan, St. Paul Teachers Retirement Fund
38.35 Association;
38.36 (12) (11) the legislators retirement plan, Minnesota State Retirement System;
39.1 (13) (12) the elective state officers retirement plan, Minnesota State Retirement
39.2 System; and
39.3 (14) (13) local government correctional service retirement plan, Public Employees
39.4 Retirement Association.
39.5 (c) The contract must require completion of the annual actuarial valuation
39.6 calculations on a fiscal year basis, with the contents of the actuarial valuation calculations
39.7 as specified in section 356.215, and in conformity with the standards for actuarial work
39.8 adopted by the Legislative Commission on Pensions and Retirement.
39.9 The contract must require completion of annual experience data collection and
39.10 processing and a quadrennial published experience study for the plans listed in paragraph
39.11 (b), clauses (1), (2), and (7), as provided for in the standards for actuarial work adopted by
39.12 the commission. The experience data collection, processing, and analysis must evaluate
39.13 the following:
39.14 (1) individual salary progression;
39.15 (2) the rate of return on investments based on the current asset value;
39.16 (3) payroll growth;
39.17 (4) mortality;
39.18 (5) retirement age;
39.19 (6) withdrawal; and
39.20 (7) disablement.
39.21 The contract must include provisions for the preparation of cost analyses by the
39.22 jointly retained actuary for proposed legislation that include changes in benefit provisions
39.23 or funding policies prior to their consideration by the Legislative Commission on Pensions
39.24 and Retirement.
39.25 (d) The actuary retained by the joint retirement systems shall annually prepare a
39.26 report to the legislature, including a commentary on the actuarial valuation calculations
39.27 for the plans named in paragraph (b) and summarizing the results of the actuarial valuation
39.28 calculations. The actuary shall include with the report the actuary's recommendations
39.29 to the legislature concerning the appropriateness of the support rates to achieve proper
39.30 funding of the retirement plans by the required funding dates. The actuary shall, as part
39.31 of the quadrennial experience study, include recommendations to the legislature on the
39.32 appropriateness of the actuarial valuation assumptions required for evaluation in the study.
39.33 (e) If the actuarial gain and loss analysis in the actuarial valuation calculations
39.34 indicates a persistent pattern of sizable gains or losses, as directed by the joint retirement
39.35 systems or as requested by the chair of the Legislative Commission on Pensions and
39.36 Retirement, the actuary shall prepare a special experience study for a plan listed in
40.1 paragraph (b), clause (3), (4), (5), (6), (8), (9), (10), (11), (12), (13), or (14) (13), in the
40.2 manner provided for in the standards for actuarial work adopted by the commission.
40.3 (f) The term of the contract between the joint retirement systems and the actuary
40.4 retained may not exceed five years. The joint retirement system administrative officers
40.5 shall establish procedures for the consideration and selection of contract bidders and
40.6 the requirements for the contents of an actuarial services contract under this section.
40.7 The procedures and requirements must be submitted to the Legislative Commission on
40.8 Pensions and Retirement for review and comment prior to final approval by the joint
40.9 administrators. The contract is subject to the procurement procedures under chapter 16C.
40.10 The consideration of bids and the selection of a consulting actuarial firm by the chief
40.11 administrative officers must occur at a meeting that is open to the public and reasonable
40.12 timely public notice of the date and the time of the meeting and its subject matter must
40.13 be given.
40.14 (g) The actuarial services contract may not limit the ability of the Minnesota
40.15 legislature and its standing committees and commissions to rely on the actuarial results
40.16 of the work prepared under the contract.
40.17 (h) The joint retirement systems shall designate one of the retirement system
40.18 executive directors as the actuarial services contract manager.
40.19 Sec. 33. Minnesota Statutes 2005 Supplement, section 356.215, subdivision 8, is
40.20 amended to read:
40.21 Subd. 8. Interest and salary assumptions. (a) The actuarial valuation must use
40.22 the applicable following preretirement interest assumption and the applicable following
40.23 postretirement interest assumption:
40.24 preretirement postretirement
40.25 interest rate interest rate
40.26 plan assumption assumption
40.27 general state employees retirement plan 8.5% 6.0%
40.28 correctional state employees retirement
40.29 plan 8.5 6.0
40.30 State Patrol retirement plan 8.5 6.0
40.31 legislators retirement plan 8.5 6.0
40.32 elective state officers retirement plan 8.5 6.0
40.33 judges retirement plan 8.5 6.0
40.34 general public employees retirement
40.35 plan 8.5 6.0
40.36 public employees police and fire
40.37 retirement plan 8.5 6.0
40.38 local government correctional service
40.39 retirement plan 8.5 6.0
40.40 teachers retirement plan 8.5 6.0
41.1 Minneapolis employees retirement plan 6.0 5.0
41.2 Duluth teachers retirement plan 8.5 8.5
41.3 Minneapolis teachers retirement plan 8.5 8.5
41.4 St. Paul teachers retirement plan 8.5 8.5
41.5 Minneapolis Police Relief Association 6.0 6.0
41.6 Fairmont Police Relief Association 5.0 5.0
41.7 Minneapolis Fire Department Relief
41.8 Association 6.0 6.0
41.9 Virginia Fire Department Relief
41.10 Association 5.0 5.0
41.11 Bloomington Fire Department Relief
41.12 Association 6.0 6.0
41.13 local monthly benefit volunteer
41.14 firefighters relief associations 5.0 5.0
41.15 (b) The actuarial valuation must use the applicable following single rate future salary
41.16 increase assumption, the applicable following modified single rate future salary increase
41.17 assumption, or the applicable following graded rate future salary increase assumption:
41.18 (1) single rate future salary increase assumption
41.19 future salary
41.20 plan increase assumption
41.21 legislators retirement plan 5.0%
41.22 elective state officers retirement plan 5.0
41.23 judges retirement plan 5.0
41.24 Minneapolis Police Relief Association 4.0
41.25 Fairmont Police Relief Association 3.5
41.26 Minneapolis Fire Department Relief
41.27 Association 4.0
41.28 Virginia Fire Department Relief Association 3.5
41.29 Bloomington Fire Department Relief
41.30 Association 4.0
41.31 (2) modified single rate future salary increase assumption
41.32 future salary
41.33 plan increase assumption
41.34 the prior calendar year amount
41.35 increased first by 1.0198 percent to
41.36 prior fiscal year date and then increased
41.37 Minneapolis employees by 4.0 percent annually for each future
41.38 retirement plan year
41.39 (3) select and ultimate future salary increase assumption or graded rate future salary
41.40 increase assumption
41.41 future salary
41.42 plan increase assumption
41.43 general state employees
41.44 retirement plan select calculation and assumption A
42.1 correctional state employees
42.2 retirement plan assumption HG
42.3 State Patrol retirement plan assumption HG
42.4 general public employees
42.5 retirement plan select calculation and assumption B
42.6 public employees police and fire
42.7 fund retirement plan assumption C
42.8 local government correctional
42.9 service retirement plan assumption HG
42.10 teachers retirement plan assumption D
42.11 Duluth teachers retirement plan assumption E
42.12 Minneapolis teachers retirement
42.13 plan assumption F
42.14 St. Paul teachers retirement plan assumption GF
42.15 The select calculation is: during the ten-year
42.16 select period, a designated percent is
42.17 multiplied by the result of ten minus T,
42.18 where T is the number of completed years of
42.19 service, and is added to the applicable future
42.20 salary increase assumption. The designated
42.21 percent is 0.2 percent for the correctional
42.22 state employees retirement plan, the State
42.23 Patrol retirement plan, the public employees
42.24 police and fire plan, and the local government
42.25 correctional service plan; and 0.3 percent for
42.26 the general state employees retirement plan,
42.27 the general public employees retirement
42.28 plan, the teachers retirement plan, the Duluth
42.29 Teachers Retirement Fund Association,
42.30 and the St. Paul Teachers Retirement
42.31 Fund Association; and 0.4 percent for the
42.32 Minneapolis Teachers Retirement Fund
42.33 Association.
42.34 The ultimate future salary increase assumption is:
42.35 age A B C D E F GF HG
42.36 16 6.95% 6.95% 11.50% 8.20% 8.00% 6.50% 6.90% 7.7500
42.37 17 6.90 6.90 11.50 8.15 8.00 6.50 6.90 7.7500
42.38 18 6.85 6.85 11.50 8.10 8.00 6.50 6.90 7.7500
42.39 19 6.80 6.80 11.50 8.05 8.00 6.50 6.90 7.7500
42.40 20 6.75 6.40 11.50 6.00 6.90 6.50 6.90 7.7500
42.41 21 6.75 6.40 11.50 6.00 6.90 6.50 6.90 7.1454
43.1 22 6.75 6.40 11.00 6.00 6.90 6.50 6.90 7.0725
43.2 23 6.75 6.40 10.50 6.00 6.85 6.50 6.85 7.0544
43.3 24 6.75 6.40 10.00 6.00 6.80 6.50 6.80 7.0363
43.4 25 6.75 6.40 9.50 6.00 6.75 6.50 6.75 7.0000
43.5 26 6.75 6.36 9.20 6.00 6.70 6.50 6.70 7.0000
43.6 27 6.75 6.32 8.90 6.00 6.65 6.50 6.65 7.0000
43.7 28 6.75 6.28 8.60 6.00 6.60 6.50 6.60 7.0000
43.8 29 6.75 6.24 8.30 6.00 6.55 6.50 6.55 7.0000
43.9 30 6.75 6.20 8.00 6.00 6.50 6.50 6.50 7.0000
43.10 31 6.75 6.16 7.80 6.00 6.45 6.50 6.45 7.0000
43.11 32 6.75 6.12 7.60 6.00 6.40 6.50 6.40 7.0000
43.12 33 6.75 6.08 7.40 6.00 6.35 6.50 6.35 7.0000
43.13 34 6.75 6.04 7.20 6.00 6.30 6.50 6.30 7.0000
43.14 35 6.75 6.00 7.00 6.00 6.25 6.50 6.25 7.0000
43.15 36 6.75 5.96 6.80 6.00 6.20 6.50 6.20 6.9019
43.16 37 6.75 5.92 6.60 6.00 6.15 6.50 6.15 6.8074
43.17 38 6.75 5.88 6.40 5.90 6.10 6.50 6.10 6.7125
43.18 39 6.75 5.84 6.20 5.80 6.05 6.50 6.05 6.6054
43.19 40 6.75 5.80 6.00 5.70 6.00 6.50 6.00 6.5000
43.20 41 6.75 5.76 5.90 5.60 5.90 6.50 5.95 6.3540
43.21 42 6.75 5.72 5.80 5.50 5.80 6.50 5.90 6.2087
43.22 43 6.65 5.68 5.70 5.40 5.70 6.50 5.85 6.0622
43.23 44 6.55 5.64 5.60 5.30 5.60 6.50 5.80 5.9048
43.24 45 6.45 5.60 5.50 5.20 5.50 6.50 5.75 5.7500
43.25 46 6.35 5.56 5.45 5.10 5.40 6.40 5.70 5.6940
43.26 47 6.25 5.52 5.40 5.00 5.30 6.30 5.65 5.6375
43.27 48 6.15 5.48 5.35 5.00 5.20 6.20 5.60 5.5822
43.28 49 6.05 5.44 5.30 5.00 5.10 6.10 5.55 5.5404
43.29 50 5.95 5.40 5.25 5.00 5.00 6.00 5.50 5.5000
43.30 51 5.85 5.36 5.25 5.00 5.00 5.90 5.45 5.4384
43.31 52 5.75 5.32 5.25 5.00 5.00 5.80 5.40 5.3776
43.32 53 5.65 5.28 5.25 5.00 5.00 5.70 5.35 5.3167
43.33 54 5.55 5.24 5.25 5.00 5.00 5.60 5.30 5.2826
43.34 55 5.45 5.20 5.25 5.00 5.00 5.50 5.25 5.2500
43.35 56 5.35 5.16 5.25 5.00 5.00 5.40 5.20 5.2500
43.36 57 5.25 5.12 5.25 5.00 5.00 5.30 5.15 5.2500
43.37 58 5.25 5.08 5.25 5.10 5.00 5.20 5.10 5.2500
43.38 59 5.25 5.04 5.25 5.20 5.00 5.10 5.05 5.2500
43.39 60 5.25 5.00 5.25 5.30 5.00 5.00 5.00 5.2500
43.40 61 5.25 5.00 5.25 5.40 5.00 5.00 5.00 5.2500
43.41 62 5.25 5.00 5.25 5.50 5.00 5.00 5.00 5.2500
43.42 63 5.25 5.00 5.25 5.60 5.00 5.00 5.00 5.2500
43.43 64 5.25 5.00 5.25 5.70 5.00 5.00 5.00 5.2500
43.44 65 5.25 5.00 5.25 5.70 5.00 5.00 5.00 5.2500
43.45 66 5.25 5.00 5.25 5.70 5.00 5.00 5.00 5.2500
43.46 67 5.25 5.00 5.25 5.70 5.00 5.00 5.00 5.2500
44.1 68 5.25 5.00 5.25 5.70 5.00 5.00 5.00 5.2500
44.2 69 5.25 5.00 5.25 5.70 5.00 5.00 5.00 5.2500
44.3 70 5.25 5.00 5.25 5.70 5.00 5.00 5.00 5.2500
44.4 71 5.25 5.00 5.70
44.5 (c) The actuarial valuation must use the applicable following payroll growth
44.6 assumption for calculating the amortization requirement for the unfunded actuarial
44.7 accrued liability where the amortization retirement is calculated as a level percentage
44.8 of an increasing payroll:
44.9 payroll growth
44.10 plan assumption
44.11 general state employees retirement plan 5.00%
44.12 correctional state employees retirement plan 5.00
44.13 State Patrol retirement plan 5.00
44.14 legislators retirement plan 5.00
44.15 elective state officers retirement plan 5.00
44.16 judges retirement plan 5.00
44.17 general public employees retirement plan 6.00
44.18 public employees police and fire retirement
44.19 plan 6.00
44.20 local government correctional service
44.21 retirement plan 6.00
44.22 teachers retirement plan 5.00
44.23 Duluth teachers retirement plan 5.00
44.24 Minneapolis teachers retirement plan 5.00
44.25 St. Paul teachers retirement plan 5.00
44.26 Sec. 34. Minnesota Statutes 2004, section 356.215, subdivision 11, is amended to read:
44.27 Subd. 11. Amortization contributions. (a) In addition to the exhibit indicating the
44.28 level normal cost, the actuarial valuation must contain an exhibit indicating the additional
44.29 annual contribution sufficient to amortize the unfunded actuarial accrued liability. For
44.30 funds governed by chapters 3A, 352, 352B, 352C, 353, 354, 354A, and 490, the additional
44.31 contribution must be calculated on a level percentage of covered payroll basis by the
44.32 established date for full funding in effect when the valuation is prepared. For funds
44.33 governed by chapter 3A, sections 352.90 through 352.951, chapters 352B, 352C, sections
44.34 353.63 through 353.68, and chapters 353C, 354A, and 490, the level percent additional
44.35 contribution must be calculated assuming annual payroll growth of 6.5 percent. For funds
44.36 governed by sections 352.01 through 352.86 and chapter 354, the level percent additional
44.37 contribution must be calculated assuming an annual payroll growth of five percent. For the
44.38 fund governed by sections 353.01 through 353.46, the level percent additional contribution
45.1 must be calculated assuming an annual payroll growth of six percent. For all other funds,
45.2 the additional annual contribution must be calculated on a level annual dollar amount basis.
45.3 (b) For any fund other than the Minneapolis Employees Retirement Fund and the
45.4 Public Employees Retirement Association general plan, if there has not been a change in
45.5 the actuarial assumptions used for calculating the actuarial accrued liability of the fund, a
45.6 change in the benefit plan governing annuities and benefits payable from the fund, a
45.7 change in the actuarial cost method used in calculating the actuarial accrued liability of all
45.8 or a portion of the fund, or a combination of the three, which change or changes by itself
45.9 or by themselves without inclusion of any other items of increase or decrease produce a
45.10 net increase in the unfunded actuarial accrued liability of the fund, the established date for
45.11 full funding is the first actuarial valuation date occurring after June 1, 2020.
45.12 (c) For any fund or plan other than the Minneapolis Employees Retirement Fund and
45.13 the Public Employees Retirement Association general plan, if there has been a change in
45.14 any or all of the actuarial assumptions used for calculating the actuarial accrued liability
45.15 of the fund, a change in the benefit plan governing annuities and benefits payable from
45.16 the fund, a change in the actuarial cost method used in calculating the actuarial accrued
45.17 liability of all or a portion of the fund, or a combination of the three, and the change or
45.18 changes, by itself or by themselves and without inclusion of any other items of increase or
45.19 decrease, produce a net increase in the unfunded actuarial accrued liability in the fund, the
45.20 established date for full funding must be determined using the following procedure:
45.21 (i) the unfunded actuarial accrued liability of the fund must be determined in
45.22 accordance with the plan provisions governing annuities and retirement benefits and the
45.23 actuarial assumptions in effect before an applicable change;
45.24 (ii) the level annual dollar contribution or level percentage, whichever is applicable,
45.25 needed to amortize the unfunded actuarial accrued liability amount determined under item
45.26 (i) by the established date for full funding in effect before the change must be calculated
45.27 using the interest assumption specified in subdivision 8 in effect before the change;
45.28 (iii) the unfunded actuarial accrued liability of the fund must be determined in
45.29 accordance with any new plan provisions governing annuities and benefits payable from
45.30 the fund and any new actuarial assumptions and the remaining plan provisions governing
45.31 annuities and benefits payable from the fund and actuarial assumptions in effect before
45.32 the change;
45.33 (iv) the level annual dollar contribution or level percentage, whichever is applicable,
45.34 needed to amortize the difference between the unfunded actuarial accrued liability amount
45.35 calculated under item (i) and the unfunded actuarial accrued liability amount calculated
45.36 under item (iii) over a period of 30 years from the end of the plan year in which the
46.1 applicable change is effective must be calculated using the applicable interest assumption
46.2 specified in subdivision 8 in effect after any applicable change;
46.3 (v) the level annual dollar or level percentage amortization contribution under item
46.4 (iv) must be added to the level annual dollar amortization contribution or level percentage
46.5 calculated under item (ii);
46.6 (vi) the period in which the unfunded actuarial accrued liability amount determined
46.7 in item (iii) is amortized by the total level annual dollar or level percentage amortization
46.8 contribution computed under item (v) must be calculated using the interest assumption
46.9 specified in subdivision 8 in effect after any applicable change, rounded to the nearest
46.10 integral number of years, but not to exceed 30 years from the end of the plan year in
46.11 which the determination of the established date for full funding using the procedure set
46.12 forth in this clause is made and not to be less than the period of years beginning in the
46.13 plan year in which the determination of the established date for full funding using the
46.14 procedure set forth in this clause is made and ending by the date for full funding in effect
46.15 before the change; and
46.16 (vii) the period determined under item (vi) must be added to the date as of which
46.17 the actuarial valuation was prepared and the date obtained is the new established date
46.18 for full funding.
46.19 (d) For the Minneapolis Employees Retirement Fund, the established date for full
46.20 funding is June 30, 2020.
46.21 (e) For the general employees retirement plan of the Public Employees Retirement
46.22 Association, the established date for full funding is June 30, 2031.
46.23 (f) For the Teachers Retirement Association, the established date for full funding is
46.24 June 30, 2037.
46.25 (g) For the retirement plans for which the annual actuarial valuation indicates an
46.26 excess of valuation assets over the actuarial accrued liability, the valuation assets in
46.27 excess of the actuarial accrued liability must be recognized as a reduction in the current
46.28 contribution requirements by an amount equal to the amortization of the excess expressed
46.29 as a level percentage of pay over a 30-year period beginning anew with each annual
46.30 actuarial valuation of the plan.
46.31 Sec. 35. Minnesota Statutes 2004, section 356.30, subdivision 3, is amended to read:
46.32 Subd. 3. Covered plans. This section applies to the following retirement plans:
46.33 (1) the general state employees retirement plan of the Minnesota State Retirement
46.34 System, established under chapter 352;
46.35 (2) the correctional state employees retirement plan of the Minnesota State
46.36 Retirement System, established under chapter 352;
47.1 (3) the unclassified employees retirement program, established under chapter 352D;
47.2 (4) the State Patrol retirement plan, established under chapter 352B;
47.3 (5) the legislators retirement plan, established under chapter 3A;
47.4 (6) the elective state officers' retirement plan, established under chapter 352C;
47.5 (7) the general employees retirement plan of the Public Employees Retirement
47.6 Association, established under chapter 353;
47.7 (8) the public employees police and fire retirement plan of the Public Employees
47.8 Retirement Association, established under chapter 353;
47.9 (9) the local government correctional service retirement plan of the Public
47.10 Employees Retirement Association, established under chapter 353E;
47.11 (10) the Teachers Retirement Association, established under chapter 354;
47.12 (11) the Minneapolis Employees Retirement Fund, established under chapter 422A;
47.13 (12) the Minneapolis Teachers Retirement Fund Association, established under
47.14 chapter 354A;
47.15 (13) (12) the St. Paul Teachers Retirement Fund Association, established under
47.16 chapter 354A;
47.17 (14) (13) the Duluth Teachers Retirement Fund Association, established under
47.18 chapter 354A; and
47.19 (15) (14) the judges' retirement fund, established by sections 490.121 to 490.132.
47.20 Sec. 36. Minnesota Statutes 2004, section 356.302, subdivision 7, is amended to read:
47.21 Subd. 7. Covered retirement plans. This section applies to the following
47.22 retirement plans:
47.23 (1) the general state employees retirement plan of the Minnesota State Retirement
47.24 System, established by chapter 352;
47.25 (2) the unclassified state employees retirement program of the Minnesota State
47.26 Retirement System, established by chapter 352D;
47.27 (3) the general employees retirement plan of the Public Employees Retirement
47.28 Association, established by chapter 353;
47.29 (4) the Teachers Retirement Association, established by chapter 354;
47.30 (5) the Duluth Teachers Retirement Fund Association, established by chapter 354A;
47.31 (6) the Minneapolis Teachers Retirement Fund Association, established by chapter
47.32 354A;
47.33 (7) (6) the St. Paul Teachers Retirement Fund Association, established by chapter
47.34 354A;
47.35 (8) (7) the Minneapolis Employees Retirement Fund, established by chapter 422A;
48.1 (9) (8) the state correctional employees retirement plan of the Minnesota State
48.2 Retirement System, established by chapter 352;
48.3 (10) (9) the State Patrol retirement plan, established by chapter 352B;
48.4 (11) (10) the public employees police and fire plan of the Public Employees
48.5 Retirement Association, established by chapter 353;
48.6 (12) (11) the local government correctional service retirement plan of the Public
48.7 Employees Retirement Association, established by chapter 353E; and
48.8 (13) (12) the judges' retirement plan, established by sections 490.121 to 490.132.
48.9 Sec. 37. Minnesota Statutes 2004, section 356.303, subdivision 4, is amended to read:
48.10 Subd. 4. Covered retirement plans. This section applies to the following
48.11 retirement plans:
48.12 (1) the legislators retirement plan, established by chapter 3A;
48.13 (2) the general state employees retirement plan of the Minnesota State Retirement
48.14 System, established by chapter 352;
48.15 (3) the correctional state employees retirement plan of the Minnesota State
48.16 Retirement System, established by chapter 352;
48.17 (4) the State Patrol retirement plan, established by chapter 352B;
48.18 (5) the elective state officers retirement plan, established by chapter 352C;
48.19 (6) the unclassified state employees retirement program, established by chapter
48.20 352D;
48.21 (7) the general employees retirement plan of the Public Employees Retirement
48.22 Association, established by chapter 353;
48.23 (8) the public employees police and fire plan of the Public Employees Retirement
48.24 Association, established by chapter 353;
48.25 (9) the local government correctional service retirement plan of the Public
48.26 Employees Retirement Association, established by chapter 353E;
48.27 (10) the Teachers Retirement Association, established by chapter 354;
48.28 (11) the Duluth Teachers Retirement Fund Association, established by chapter 354A;
48.29 (12) the Minneapolis Teachers Retirement Fund Association, established by chapter
48.30 354A;
48.31 (13) (12) the St. Paul Teachers Retirement Fund Association, established by chapter
48.32 354A;
48.33 (14) (13) the Minneapolis Employees Retirement Fund, established by chapter
48.34 422A; and
48.35 (15) (14) the judges' retirement fund, established by sections 490.121 to 490.132.
49.1 Sec. 38. Minnesota Statutes 2004, section 356.315, is amended by adding a subdivision
49.2 to read:
49.3 Subd. 1a. Coordinated plan members. The applicable benefit accrual rate is
49.4 1.4 percent.
49.5 Sec. 39. Minnesota Statutes 2004, section 356.315, is amended by adding a subdivision
49.6 to read:
49.7 Subd. 2b. Certain coordinated program members. The applicable benefit accrual
49.8 rate is 1.9 percent.
49.9 Sec. 40. Minnesota Statutes 2004, section 356.42, subdivision 3, is amended to read:
49.10 Subd. 3. Covered retirement plans. The postretirement adjustment provided in
49.11 this section applies to the following retirement funds:
49.12 (1) the general employees retirement plans of the Public Employees Retirement
49.13 Association;
49.14 (2) the public employees police and fire plan of the Public Employees Retirement
49.15 Association;
49.16 (3) the teachers retirement association;
49.17 (4) the State Patrol retirement plan;
49.18 (5) the state employees retirement plan of the Minnesota State Retirement System;
49.19 (6) the Minneapolis Teachers Retirement Fund Association established under
49.20 chapter 354A;
49.21 (7) (6) the St. Paul Teachers Retirement Fund Association established under chapter
49.22 354A; and
49.23 (8) (7) the Duluth Teachers Retirement Fund Association established under chapter
49.24 354A.
49.25 Sec. 41. Minnesota Statutes 2004, section 356.465, subdivision 3, is amended to read:
49.26 Subd. 3. Covered retirement plans. The provisions of this section apply to the
49.27 following retirement plans:
49.28 (1) the general state employees retirement plan of the Minnesota State Retirement
49.29 System established under chapter 352;
49.30 (2) the correctional state employees retirement plan of the Minnesota State
49.31 Retirement System established under chapter 352;
49.32 (3) the State Patrol retirement plan established under chapter 352B;
49.33 (4) the legislators retirement plan established under chapter 3A;
49.34 (5) the judges retirement plan established under chapter 490;
50.1 (6) the general employees retirement plan of the Public Employees Retirement
50.2 Association established under chapter 353;
50.3 (7) the public employees police and fire plan of the Public Employees Retirement
50.4 Association established under chapter 353;
50.5 (8) the teachers retirement plan established under chapter 354;
50.6 (9) the Duluth Teachers Retirement Fund Association established under chapter
50.7 354A;
50.8 (10) the St. Paul Teachers Retirement Fund Association established under chapter
50.9 354A;
50.10 (11) the Minneapolis Teachers Retirement Fund Association established under
50.11 chapter 354A;
50.12 (12) (11) the Minneapolis employees retirement plan established under chapter
50.13 422A;
50.14 (13) (12) the Minneapolis Firefighters Relief Association established under chapter
50.15 423C;
50.16 (14) (13) the Minneapolis Police Relief Association established under chapter
50.17 423B; and
50.18 (15) (14) the local government correctional service retirement plan of the Public
50.19 Employees Retirement Association established under chapter 353E.
50.20 Sec. 42. Minnesota Statutes 2004, section 423A.02, subdivision 1b, is amended to read:
50.21 Subd. 1b. Additional amortization state aid. (a) Annually, on October 1, the
50.22 commissioner of revenue shall allocate the additional amortization state aid transferred
50.23 under section 69.021, subdivision 11, to:
50.24 (1) all police or salaried firefighters relief associations governed by and in full
50.25 compliance with the requirements of section 69.77, that had an unfunded actuarial accrued
50.26 liability in the actuarial valuation prepared under sections 356.215 and 356.216 as of the
50.27 preceding December 31;
50.28 (2) all local police or salaried firefighter consolidation accounts governed by chapter
50.29 353A that are certified by the executive director of the public employees retirement
50.30 association as having for the current fiscal year an additional municipal contribution
50.31 amount under section 353A.09, subdivision 5, paragraph (b), and that have implemented
50.32 section 353A.083, subdivision 1, if the effective date of the consolidation preceded May
50.33 24, 1993, and that have implemented section 353A.083, subdivision 2, if the effective date
50.34 of the consolidation preceded June 1, 1995; and
51.1 (3) the municipalities that are required to make an additional municipal contribution
51.2 under section 353.665, subdivision 8, for the duration of the required additional
51.3 contribution.
51.4 (b) The commissioner shall allocate the state aid on the basis of the proportional share
51.5 of the relief association or consolidation account of the total unfunded actuarial accrued
51.6 liability of all recipient relief associations and consolidation accounts as of December 31,
51.7 1993, for relief associations, and as of June 30, 1994, for consolidation accounts.
51.8 (c) Beginning October 1, 2000, and annually thereafter, the commissioner shall
51.9 allocate the state aid, including any state aid in excess of the limitation in subdivision
51.10 4, on the following basis:
51.11 (1) 64.5 percent to the municipalities to which section 353.665, subdivision
51.12 8, paragraph (b), or 353A.09, subdivision 5, paragraph (b), apply for distribution in
51.13 accordance with paragraph (b) and subject to the limitation in subdivision 4;
51.14 (2) 34.2 percent to the city of Minneapolis to fund any unfunded actuarial accrued
51.15 liability in the actuarial valuation prepared under sections 356.215 and 356.216 as of the
51.16 preceding December 31 for the Minneapolis Police Relief Association or the Minneapolis
51.17 Fire Department Relief Association; and
51.18 (3) 1.3 percent to the city of Virginia to fund any unfunded actuarial accrued liability
51.19 in the actuarial valuation prepared under sections 356.215 and 356.216 as of the preceding
51.20 December 31 for the Virginia Fire Department Relief Association.
51.21 If there is no unfunded actuarial accrued liability in both the Minneapolis Police
51.22 Relief Association and the Minneapolis Fire Department Relief Association as disclosed
51.23 in the most recent actuarial valuations for the relief associations prepared under sections
51.24 356.215 and 356.216, the commissioner shall allocate that 34.2 percent of the aid as
51.25 follows: 49 percent to the Minneapolis Teachers Retirement Fund Association, 21 percent
51.26 to the St. Paul Teachers Retirement Fund Association, and 30 percent as additional
51.27 funding to support minimum fire state aid for volunteer firefighters relief associations.
51.28 If there is no unfunded actuarial accrued liability in the Virginia Fire Department Relief
51.29 Association as disclosed in the most recent actuarial valuation for the relief association
51.30 prepared under sections 356.215 and 356.216, the commissioner shall allocate that 1.3
51.31 percent of the aid as follows: 49 percent to the Minneapolis Teachers Retirement Fund
51.32 Association, 21 percent to the St. Paul Teachers Retirement Fund Association, and 30
51.33 percent as additional funding to support minimum fire state aid for volunteer firefighters
51.34 relief associations. The allocation must be made by the commissioner at the same time and
51.35 under the same procedures as specified in subdivision 3. With respect to the Minneapolis
51.36 Teachers Retirement Fund Association or the St. Paul Teachers Retirement Fund
52.1 Association, annually, beginning on July 1, 2005, if the applicable teacher's association
52.2 five-year average time-weighted rate of investment return does not equal or exceed the
52.3 performance of a composite portfolio assumed passively managed (indexed) invested ten
52.4 percent in cash equivalents, 60 percent in bonds and similar debt securities, and 30 percent
52.5 in domestic stock calculated using the formula under section 11A.04, clause (11), the aid
52.6 allocation to that retirement fund under this section ceases until the five-year annual rate
52.7 of investment return equals or exceeds the performance of that composite portfolio.
52.8 (d) The amounts required under this subdivision are annually appropriated to the
52.9 commissioner of revenue.
52.10 Sec. 43. MTRFA EMPLOYEES.
52.11 Effective June 30, 2006, the Minneapolis Teachers Retirement Fund Association
52.12 employees have their employment with the Minneapolis Teachers Retirement Fund
52.13 Association terminated and, effective July 1, 2006, the Minneapolis Teachers Retirement
52.14 Fund Association employees, excluding the Executive Director, become employees
52.15 of the Teachers Retirement Association until December 31, 2007. The commissioner
52.16 of employee relations shall place employees from the former Minneapolis Teachers
52.17 Retirement Fund Association into state service in their proper classifications, except that
52.18 employees are appointed without examination and must be compensated at their current
52.19 hourly salary rate. Employees must have their accumulated, but unused, vacation leave
52.20 balance as of June 30, 2006, posted to their credit by the Teachers Retirement Association
52.21 but if the employee has vacation time in excess of the applicable maximum no additional
52.22 vacation may accrue until the employee's balance falls below the maximum permitted
52.23 by the state for the employee's position. The employees must receive length of service
52.24 credit for vacation leave accrual for time served at the Minneapolis Teachers Retirement
52.25 Fund Association. Minneapolis Teachers Retirement Fund Association employees who
52.26 become employees of the Teachers Retirement Association effective on July 1, 2006
52.27 must be considered to have completed six months of continuous service for vacation use
52.28 purposes. Employees of the former Minneapolis Teachers Retirement Fund Association
52.29 appointed to the classified service are subject to a probationary period under the collective
52.30 bargaining agreement or compensation plan applicable to the employee's position at the
52.31 Teachers Retirement Association. Effective July 1, 2006, all transferred employees must
52.32 be enrolled in the state employees' group insurance program as provided in Minnesota
52.33 Statutes, sections 43A.22 to 43A.31 and the commissioner of employee relations shall
52.34 provide open enrollment in all state employee health and dental insurance plans with
52.35 no limitation on preexisting conditions except as specified in existing state employee
52.36 certificates of coverage. The commissioner of employee relations shall provide these
53.1 transferred employees with the opportunity to purchase optional life and disability
53.2 insurance as provided by the state group insurance program in accordance with the
53.3 policies of the department of employee relations.
53.4 Sec. 44. MTRFA ARTICLES AND BYLAWS; REPEAL; APPLICABILITY.
53.5 (a) The articles of incorporation and bylaws of the Minneapolis Teachers Retirement
53.6 Fund Association are repealed and have application only as provided in section 9,
53.7 subdivision 6, and in paragraph (b).
53.8 (b) The articles of incorporation and bylaws of the Minneapolis Teachers Retirement
53.9 Fund Association only apply to members of the former Minneapolis Teachers Retirement
53.10 Fund Association with service credit in the plan on or before June 30, 2006, and apply
53.11 solely for purposes of determining the retirement annuity for or benefit on behalf of a
53.12 member of the basic program of that retirement plan.
53.13 (c) No annuity adjustment or increase under article 30 of the articles of incorporation
53.14 of the Minneapolis Teachers Retirement Fund Association is applicable or payable after
53.15 June 30, 2006.
53.16 Sec. 45. REPEALER.
53.17 Minnesota Statutes 2004, sections 354A.051; 354A.105; 354A.23, subdivision 1;
53.18 and 354A.28, are repealed effective June 30, 2006.
53.19 Sec. 46. EFFECTIVE DATE.
53.20 Sections 2 to 45 are effective July 1, 2006, except that section 9, subdivision 7, is
53.21 effective the day following final enactment.
53.22 ARTICLE 4
53.23 STATE BOARD OF INVESTMENT
53.24 Section 1. Laws 2005, chapter 156, article 1, section 8, is amended to read:
53.25 2,167,000
53.26 Sec. 8. INVESTMENT BOARD 2,167,000 151,000
53.27 Sec. 2. Minnesota Statutes 2005 Supplement, section 11A.04, is amended to read:
53.28 11A.04 DUTIES AND POWERS.
53.29 The state board shall:
53.30 (1) Act as trustees for each fund for which it invests or manages money in
53.31 accordance with the standard of care set forth in section 11A.09 if state assets are involved
53.32 and in accordance with chapter 356A if pension assets are involved.
53.33 (2) Formulate policies and procedures deemed necessary and appropriate to carry
53.34 out its functions. Procedures adopted by the board must allow fund beneficiaries and
53.35 members of the public to become informed of proposed board actions. Procedures and
53.36 policies of the board are not subject to the Administrative Procedure Act.
54.1 (3) Employ an executive director as provided in section 11A.07.
54.2 (4) Employ investment advisors and consultants as it deems necessary.
54.3 (5) Prescribe policies concerning personal investments of all employees of the board
54.4 to prevent conflicts of interest.
54.5 (6) Maintain a record of its proceedings.
54.6 (7) As it deems necessary, establish advisory committees subject to section 15.059 to
54.7 assist the board in carrying out its duties.
54.8 (8) Not permit state funds to be used for the underwriting or direct purchase of
54.9 municipal securities from the issuer or the issuer's agent.
54.10 (9) Direct the commissioner of finance to sell property other than money that has
54.11 escheated to the state when the board determines that sale of the property is in the best
54.12 interest of the state. Escheated property must be sold to the highest bidder in the manner
54.13 and upon terms and conditions prescribed by the board.
54.14 (10) Undertake any other activities necessary to implement the duties and powers
54.15 set forth in this section.
54.16 (11) Establish a formula or formulas to measure management performance and
54.17 return on investment. Public pension funds in the state shall utilize the formula or
54.18 formulas developed by the state board.
54.19 (12) Except as otherwise provided in article XI, section 8, of the Constitution of the
54.20 state of Minnesota, employ, at its discretion, qualified private firms to invest and manage
54.21 the assets of funds over which the state board has investment management responsibility.
54.22 There is annually appropriated to the state board, from the assets of the funds for which
54.23 the state board utilizes a private investment manager, sums sufficient to pay the costs of
54.24 employing private firms. Each year, by January 15, the board shall report to the governor
54.25 and legislature on the cost and the investment performance of each investment manager
54.26 employed by the board.
54.27 (13) Adopt an investment policy statement that includes investment objectives, asset
54.28 allocation, and the investment management structure for the retirement fund assets under
54.29 its control. The statement may be revised at the discretion of the state board. The state
54.30 board shall seek the advice of the council regarding its investment policy statement.
54.31 Adoption of the statement is not subject to chapter 14.
54.32 (14) Adopt a compensation plan setting the terms and conditions of employment for
54.33 unclassified board employees who are not covered by a collective bargaining agreement.
54.34 There is annually appropriated to the state board, from the assets of the funds for
54.35 which the state board provides investment services, sums sufficient to pay the costs of
54.36 all necessary expenses for the administration of the board. These sums will be deposited
55.1 in the State Board of Investment operating account, which must be established by the
55.2 commissioner of finance.
55.3 Sec. 3. Minnesota Statutes 2005 Supplement, section 11A.07, subdivision 4, is
55.4 amended to read:
55.5 Subd. 4. Duties and powers. The director, at the direction of the state board, shall:
55.6 (1) plan, direct, coordinate, and execute administrative and investment functions
55.7 in conformity with the policies and directives of the state board and the requirements of
55.8 this chapter and of chapter 356A;
55.9 (2) prepare and submit biennial and annual budgets to the board and with the
55.10 approval of the board submit the budgets to the Department of Finance;
55.11 (3) employ professional and clerical staff as necessary. Employees whose primary
55.12 responsibility is to invest or manage money or employees who hold positions designated
55.13 as unclassified under section 43A.08, subdivision 1a, are in the unclassified service of the
55.14 state. Other employees are in the classified service. Unclassified employees who are
55.15 not covered by a collective bargaining agreement are employed under the terms and
55.16 conditions of the compensation plan approved under section 43A.18, subdivision 3b;
55.17 (3) (4) report to the state board on all operations under the director's control and
55.18 supervision;
55.19 (4) (5) maintain accurate and complete records of securities transactions and official
55.20 activities;
55.21 (5) (6) establish a policy relating to the purchase and sale of securities on the basis of
55.22 competitive offerings or bids. The policy is subject to board approval;
55.23 (6) (7) cause securities acquired to be kept in the custody of the commissioner of
55.24 finance or other depositories consistent with chapter 356A, as the state board deems
55.25 appropriate;
55.26 (7) (8) prepare and file with the director of the Legislative Reference Library, by
55.27 December 31 of each year, a report summarizing the activities of the state board, the
55.28 council, and the director during the preceding fiscal year. The report must be prepared
55.29 so as to provide the legislature and the people of the state with a clear, comprehensive
55.30 summary of the portfolio composition, the transactions, the total annual rate of return, and
55.31 the yield to the state treasury and to each of the funds whose assets are invested by the
55.32 state board, and the recipients of business placed or commissions allocated among the
55.33 various commercial banks, investment bankers, and brokerage organizations. The report
55.34 must contain financial statements for funds managed by the board prepared in accordance
55.35 with generally accepted accounting principles;
56.1 (8) (9) require state officials from any department or agency to produce and provide
56.2 access to any financial documents the state board deems necessary in the conduct of
56.3 its investment activities;
56.4 (9) (10) receive and expend legislative appropriations; and
56.5 (10) (11) undertake any other activities necessary to implement the duties and
56.6 powers set forth in this subdivision consistent with chapter 356A.
56.7 Sec. 4. Minnesota Statutes 2004, section 11A.07, subdivision 5, is amended to read:
56.8 Subd. 5. Apportionment of expenses. The executive director shall apportion the
56.9 actual expenses incurred by the board on an accrual basis among the several funds whose
56.10 assets are invested by the board based on the weighted average assets under management
56.11 during each quarter. The charge to each fund must be calculated, billed, and paid on a
56.12 quarterly basis in accordance with procedures for interdepartmental payments established
56.13 by the commissioner of finance. The amounts necessary to pay these charges are
56.14 appropriated from the investment earnings of each fund. Receipts must be credited to the
56.15 general fund as nondedicated receipts. The annual expenses incurred by the State Board
56.16 of Investment will be apportioned among the state general fund, the retirement funds
56.17 administered by the Minnesota State Retirement System, Public Employees Retirement
56.18 Association, and Teachers Retirement Association, and all other funds as follows:
56.19 (1) on a biennial basis, the State Board of Investment, in accordance with biennial
56.20 budget procedures established by the commissioner of finance, may request a direct
56.21 appropriation that represents the portion of the State Board of Investment expenses
56.22 necessary to provide investment services to the state general fund. This appropriation
56.23 must be deposited in the State Board of Investment operating account;
56.24 (2) the executive director shall apportion the actual expenses incurred by the State
56.25 Board of Investment, less the charge to the state general fund, among the funds whose
56.26 assets are invested by the State Board of Investment, with the exception of the state general
56.27 fund, based on the weighted average assets under management during the fiscal year. The
56.28 amounts necessary to pay these charges are apportioned from the investment earnings of
56.29 each fund. Receipts must be credited to the State Board of Investment operating account;
56.30 (3) the actual expenses apportioned and charged to the funds, with the exception
56.31 of the state general fund and the retirement funds administered by the Minnesota State
56.32 Retirement System, Public Employees Retirement Association, and Teachers Retirement
56.33 Association, must be calculated, billed, and paid on a quarterly basis in accordance with
56.34 procedures for interdepartmental payments established by the commissioner of finance;
56.35 and
57.1 (4) the annual estimated expenses to be incurred by the State Board of Investment
57.2 that will be payable by the retirement funds administered by the Minnesota State
57.3 Retirement System, Public Employees Retirement Association, and Teachers Retirement
57.4 Association must be deposited in the State Board of Investment operating account on the
57.5 first business day of each fiscal year. A reconciliation of the actual expenses compared to
57.6 the estimated costs must occur at the end of each fiscal year with any surplus or deficit
57.7 being credited or debited to each of the respective funds. The State Board of Investment
57.8 must present a statement of accrued actual expenses to each fund at the end of each
57.9 quarter during each fiscal year.
57.10 ARTICLE 5
57.11 BUDGET PRESENTATION OF
57.12 EMPLOYER PENSION CONTRIBUTIONS
57.13 Section 1. Minnesota Statutes 2004, section 16A.11, subdivision 3, is amended to read:
57.14 Subd. 3. Part two: detailed budget. (a) Part two of the budget, the detailed budget
57.15 estimates both of expenditures and revenues, must contain any statements on the financial
57.16 plan which the governor believes desirable or which may be required by the legislature.
57.17 The detailed estimates shall include the governor's budget arranged in tabular form.
57.18 (b) Tables listing expenditures for the next biennium must show the appropriation
57.19 base for each year. The appropriation base is the amount appropriated for the second
57.20 year of the current biennium. The tables must separately show any adjustments to the
57.21 base required by current law or policies of the commissioner of finance. For forecasted
57.22 programs, the tables must also show the amount of the forecast adjustments, based on the
57.23 most recent forecast prepared by the commissioner of finance under section 16A.103. For
57.24 all programs, the tables must show the amount of appropriation changes recommended
57.25 by the governor, after adjustments to the base and forecast adjustments, and the total
57.26 recommendation of the governor for that year.
57.27 (c) The detailed estimates must include a separate line listing the total cost of
57.28 professional and technical service contracts for the prior biennium and the projected costs
57.29 of those contracts for the current and upcoming biennium. They must also include a
57.30 summary of the personnel employed by the agency, reflected as full-time equivalent
57.31 positions.
57.32 (d) The detailed estimates must include a separate indication of the number of
57.33 employees by agency, department, or program, the number of employees in each agency,
57.34 department, or program separated by retirement plan membership, and for each the total
57.35 direct compensation, the total employee retirement plan contributions, and the total
57.36 employer retirement plan contributions.
58.1 (e) The detailed estimates for internal service funds must include the number of
58.2 full-time equivalents by program; detail on any loans from the general fund, including
58.3 dollar amounts by program; proposed investments in technology or equipment of $100,000
58.4 or more; an explanation of any operating losses or increases in retained earnings; and a
58.5 history of the rates that have been charged, with an explanation of any rate changes and
58.6 the impact of the rate changes on affected agencies.
58.7 Sec. 2. Minnesota Statutes 2004, section 275.065, is amended by adding a subdivision
58.8 to read:
58.9 Subd. 5b. Public employee compensation and retirement contribution
58.10 disclosure. As a disclosure exhibit for distribution at the initial hearing under subdivision
58.11 6, for inclusion in any internet website of the governmental entity relating to budgets and
58.12 financing, and otherwise available upon request, there must be an indication of the number
58.13 of employees in total, the number of employees separated by retirement plan membership,
58.14 the total direct compensation in each case, the total employee retirement plan contributions
58.15 in each case, and the total employer retirement plan contributions in each case.
58.16 Sec. 3. EFFECTIVE DATE.
58.17 Sections 1 and 2 are effective on the day following final enactment.
58.18 ARTICLE 6
58.19 INVESTMENT PERFORMANCE REPORTING
58.20 Section 1. Minnesota Statutes 2004, section 356.219, is amended by adding a
58.21 subdivision to read:
58.22 Subd. 9. Data availability. Any information received by the state auditor under
58.23 this section, if the data are public, must be made available to individuals or organizations
58.24 which request that information. The state auditor is authorized to charge fees sufficient to
58.25 cover the cost of providing the requested information in usable formats.
58.26 Sec. 2. Minnesota Statutes 2004, section 356.219, is amended by adding a subdivision
58.27 to read:
58.28 Subd. 10. Pension performance reporting. In addition to report presentations
58.29 that the state auditor is required to provide elsewhere in this section, the state auditor
58.30 shall provide an analysis comparing the one year and the five year rate of return for each
58.31 pension fund and the benchmark rate of return for each fund. The state auditor shall select
58.32 the benchmark rate of return based on the best practice in the industry.
58.33 Sec. 3. EFFECTIVE DATE.
58.34 (a) Sections 1 and 2 are effective the day following final enactment.
58.35 (b) Section 2 expires on July 1, 2010.
59.1 ARTICLE 7
59.2 STUDY OF COMPARATIVE
59.3 PUBLIC RETIREMENT PLAN PROVISIONS
59.4 Section 1. STUDY BY THE LEGISLATIVE COMMISSION ON PENSIONS
59.5 AND RETIREMENT.
59.6 (a) The Legislative Commission on Pensions and Retirement shall study the structure
59.7 and implications of procedures used by the Minnesota State Retirement System plans,
59.8 Public Employees Retirement Association plans, the Teachers Retirement Association,
59.9 the Minneapolis Employees Retirement Fund, the first class city teacher retirement fund
59.10 associations, and the Minneapolis police and fire relief associations to provide investment
59.11 performance based postretirement increases to plan benefit recipients. The study shall
59.12 include but not be limited to consideration of the ability of these systems offset the impact
59.13 of inflation; the cost, budget, and aid implications of these systems; and consistency across
59.14 plans. In addition, the study must compare Minnesota retirement plans with pension plans
59.15 in other states on the following items: normal retirement age; penalties that attach to
59.16 early retirement; taxation of benefits; and pension benefits, including, but not limited to,
59.17 the coordination with Social Security benefits, formula multipliers, final average salary
59.18 periods, and special early normal retirement provisions.
59.19 (b) The Legislative Commission on Pensions and Retirement shall produce a report
59.20 of the findings of the study. The Legislative Commission on Pensions and Retirement
59.21 shall include draft proposed legislation to implement any recommended changes included
59.22 in the report.
59.23 (c) The report must be filed by December 1, 2006, with the chairs of the Senate State
59.24 and Local Government Operations Committee, the Senate Finance Committee, the House
59.25 Government Operations and Veterans Affairs Committee, the House State Government
59.26 Finance Committee, and the House Ways and Means Committee.
59.27 Sec. 2. EFFECTIVE DATE.
59.28 Section 1 is effective the day following final enactment.
59.29 ARTICLE 8
59.30 STUDY OF STATEWIDE
59.31 RETIREMENT PLAN STRUCTURE
59.32 Section 1. STUDY BY THE LEGISLATIVE COMMISSION ON PENSIONS
59.33 AND RETIREMENT.
59.34 (a) The Legislative Commission on Pensions and Retirement shall study the structure
59.35 of the Minnesota combined investment funds under Minnesota Statutes, section 11A.14,
60.1 and the Minnesota postretirement investment fund under Minnesota Statutes, section
60.2 11A.18, including transfer requirements between these funds.
60.3 (b) The Legislative Commission on Pensions and Retirement shall produce a report
60.4 of the findings from the study. The Legislative Commission on Pensions and Retirement
60.5 shall include draft proposed legislation to implement any recommended changes included
60.6 in the report.
60.7 (c) The report must be filed by December 1, 2006, with the chairs of the Senate State
60.8 and Local Government Operations Committee, the Senate Finance Committee, the House
60.9 Government Operations and Veterans Affairs Committee, the House State Government
60.10 Finance Committee, and the House Ways and Means Committee.
60.11 Sec. 2. EFFECTIVE DATE.
60.12 Section 1 is effective the day following final enactment."
60.13 Amend the title accordingly