HF 1313

Subd. 2c.

Minneapolis Employees Retirement Fund investment authority.

(a) For investments made on or after July 1, 1991, the board shall invest funds only in
investments authorized by section 356A.06, subdivision 7.

(b) However, in addition to real estate investments authorized under paragraph (a),
the board may also make loans to purchasers of Minnesota situs nonfarm residential real
estate that is owned by the Minneapolis Employees Retirement Fund. The loans must
be secured by mortgages or deeds of trust.

(c) For investments made before July 1, 1991, the board may, but is not required to,
comply with paragraph (a). However, with respect to these investments, the board shall
act in accordance with subdivision 2a and chapter 356A.

new text begin (d) The board may certify assets for investment by the State Board of Investment
under section 11A.17. Alternatively or in addition, the board may certify assets for
investment by the State Board of Investment in fixed income pools or in a separately
managed account at the discretion of the State Board of Investment as provided in section
11A.14.
new text end

Subd. 3.

Deposit accumulation fund.

new text begin (a) new text end The deposit accumulation fund consists
of the assets held in the fund, including amounts contributed by or for employees, amounts
contributed by the city, amounts contributed by municipal activities supported in whole or
in part by revenues other than taxes and amounts contributed by any public corporation,
amounts paid by the state, and by income from investments.

new text begin (b) new text end There must be paid from the fund the amounts required to be transferred to the
retirement benefit fund, or the disability benefit fund, refunds of contributions, including
the death-while-active refund specified in section 422A.22, subdivision 4, postretirement
increases in retirement allowances granted under Laws 1965, chapter 688, or Laws 1969,
chapter 859, and expenses of the administration of the retirement fund which were not
charged by the retirement board against the income of the retirement benefit fund from
investments as the cost of handling the investments of the retirement benefit fund.

new text begin (c) To the extent that the deposit accumulation fund has insufficient assets to transfer
the total value of the required reserves for retirement annuities to either the disability
benefit fund under subdivisions 5 and 7 or the retirement benefit fund under subdivisions 5
and 8 as required, the deposit accumulation fund has a transfer amount payable on which
an interest charge accrues. The executive director must determine the interest charge for
the period that the transfer amount payable remains unpaid at an annual rate equal to five
percent plus the percentage increase in the amount of the annual Consumer Price Index for
urban wage earners and clerical workers as calculated by the Bureau of Labor Statistics of
the United States Department of Labor from the previous June 30. The interest charge
must be reflected in the books of the Minneapolis Employees Retirement Fund and
assessed against the deposit accumulation fund based on the average quarterly transfer
amount payable balance outstanding. Any revenue received by the deposit accumulation
fund subsequent to unpaid transfers must be transferred from the deposit accumulation
fund to the disability benefit fund or to the retirement fund, whichever applies, and must
first be applied to any remaining interest charge and then must be applied to the principal
amount of transfer amount payable outstanding.
new text end

Subd. 5.

Transfer of reserves to retirement benefit fund; adjustments of
annuities and benefits.

(a) Assets equal to the required reserves for retirement annuities
as determined in accordance with the appropriate mortality table adopted by the board
of trustees based on the experience of the fund as recommended by the actuary retained
under section 356.214 and using the postretirement interest assumption specified in
section 356.215, subdivision 8, deleted text begin shalldeleted text end new text begin must new text end be transferred to the disability benefit fund as
provided in subdivision 7, or the retirement benefit fund, except for any amounts payable
from the survivor benefit fund, as of date of retirement.

(b) new text begin To the extent that the deposit accumulation fund has insufficient assets to cover a
full required transfer amount, the applicable fund must be credited with an interest-bearing
transfer amount payable.
new text end

new text begin (c) new text end Annuity payments deleted text begin shalldeleted text end new text begin must new text end be adjusted in accordance with this chapter, except
that no minimum retirement payments described in this chapter deleted text begin shalldeleted text end new text begin must new text end include
any amounts payable from the survivors' benefit fund or disability benefit fund and
supplemented benefits specifically financed by statute.

deleted text begin (c)deleted text end new text begin (d) new text end Increases in annuity payments deleted text begin pursuant todeleted text end new text begin under new text end this section shall be made
automatically unless written notice on a form prescribed by the board is filed with the
retirement board requesting that the increase not be made.

deleted text begin (d)deleted text end new text begin (e) new text end Any additional annuity which began to accrue on July 1, 1973, or which
began to accrue on January 1, 1974, deleted text begin pursuant todeleted text end new text begin under new text end Laws 1973, chapter 770, section
1, deleted text begin shalldeleted text end new text begin must new text end be considered as part of the base amount to be used in determining any
postretirement adjustments payable deleted text begin pursuant todeleted text end new text begin under new text end the provisions of subdivision 8.

Subd. 7.

Disability benefit fund.

(a) A disability benefit fund is established,
containing the required reserves for disability allowances under this chapter. A
proportionate share of income from investments must be allocated to this fundnew text begin and any
interest charge under subdivision 3, paragraph (c), must be credited to the fundnew text end . deleted text begin There
must be paiddeleted text end deleted text begin from this funddeleted text end The disability allowances payable under this chapternew text begin must be
paid from this fundnew text end .

(b) In the event of the termination of any disability allowance for any reason other
than the death of the recipient, the balance of the required reserves for the disability
allowance as of the date of the termination must be transferred from the disability benefit
fund to the deposit accumulation fund.

(c) At the end of each fiscal year, as part of the annual actuarial valuation, a
determination must be made of the required reserves for all disability allowances being
paid from the disability benefit fund. Any excess of assets over actuarial required reserves
in the disability benefit fund must be transferred to the deposit accumulation fund. new text begin Unless
subdivision 3, paragraph (c), applies, new text end any excess of actuarial reserves over assets in the
disability benefit fund must be funded by a transfer of the appropriate amount of assets
from the deposit accumulation fund.

Subd. 8.

Retirement benefit fund.

(a) The retirement benefit fund deleted text begin shall consistdeleted text end
new text begin consists new text end of amounts held for payment of retirement allowances for members retired
deleted text begin pursuant todeleted text end new text begin under new text end this chapternew text begin , including any transfer amount payable under subdivision 3,
paragraph (c)new text end .

(b) new text begin Unless subdivision 3, paragraph (c), applies, new text end assets equal to the required reserves
for retirement allowances deleted text begin pursuant todeleted text end new text begin under new text end this chapter determined in accordance with
the appropriate mortality table adopted by the board of trustees based on the experience of
the fund as recommended by the actuary retained under section 356.214 deleted text begin shalldeleted text end new text begin must new text end be
transferred from the deposit accumulation fund to the retirement benefit fund as of the last
business day of the month in which the retirement allowance begins. The income from
investments of these assets deleted text begin shalldeleted text end new text begin must new text end be allocated to this fundnew text begin and any interest charge
under subdivision 3, paragraph (c), must be credited to the fundnew text end . There deleted text begin shalldeleted text end new text begin must new text end be paid
from this fund the retirement annuities authorized by law. A required reserve calculation
for the retirement benefit fund must be made by the actuary retained under section 356.214
and must be certified to the retirement board by the actuary retained under section 356.214.

(c) The retirement benefit fund deleted text begin shalldeleted text end new text begin must new text end be governed by the applicable laws
governing the accounting and audit procedures, investment, actuarial requirements,
calculation and payment of postretirement benefit adjustments, discharge of any deficiency
in the assets of the fund when compared to the actuarially determined required reserves,
and other applicable operations and procedures regarding the Minnesota postretirement
investment fund in effect on June 30, 1997, established under Minnesota Statutes 1996,
section 11A.18, and any legal or administrative interpretations of those laws of the State
Board of Investment, the legal advisor to the Board of Investment and the executive
director of the State Board of Investment in effect on June 30, 1997. If a deferred yield
adjustment account is established for the Minnesota postretirement investment fund
before June 30, 1997, under Minnesota Statutes 1996, section 11A.18, subdivision 5, the
retirement board shall also establish and maintain a deferred yield adjustment account
within this fund.

(d) Annually, following the calculation of any postretirement adjustment payable
from the retirement benefit fund, the board of trustees shall submit a report to the
executive director of the Legislative Commission on Pensions and Retirement and to the
commissioner of finance indicating the amount of any postretirement adjustment and
the underlying calculations on which that postretirement adjustment amount is based,
including the amount of dividends, the amount of interest, and the amount of net realized
capital gains or losses utilized in the calculations.

(e) With respect to a former contributing member who began receiving a retirement
annuity or disability benefit under section 422A.151, paragraph (a), clause (2), after June
30, 1997, or with respect to a survivor of a former contributing member who began
receiving a survivor benefit under section 422A.151, paragraph (a), clause (2), after June
30, 1997, the reserves attributable to the one percent lower amount of the cost-of-living
adjustment payable to those annuity or benefit recipients annually must be transferred back
to the deposit accumulation fund to the credit of the Metropolitan Airports Commission.
The calculation of this annual reduced cost-of-living adjustment reserve transfer must be
reviewed by the actuary retained under section 356.214.

Subd. 3.

State contributions.

(a) Subject to the limitation set forth in paragraph (c),
the state shall pay to the Minneapolis Employees Retirement Fund annually an amount
equal to the amount calculated under paragraph (b).

(b) The payment amount is an amount equal to the financial requirements of the
Minneapolis Employees Retirement Fund reported in the actuarial valuation of the fund
prepared by the actuary retained under section 356.214 deleted text begin pursuant todeleted text end new text begin consistent with new text end section
356.215 for the most recent year but based on a target date for full amortization of the
unfunded actuarial accrued liabilities by June 30, 2020, less the amount of employee
contributions required deleted text begin pursuant todeleted text end new text begin under new text end section 422A.10, and the amount of employer
contributions required deleted text begin pursuant todeleted text end new text begin under new text end subdivisions 1a, 2, and 2a. Payments shall be
made September 15 annually.

(c) The annual state contribution under this subdivision may not exceed $9,000,000,
plus the cost of the annual supplemental benefit determined under section 356.43.

(d) If the amount determined under paragraph (b) exceeds deleted text begin $11,910,000deleted text end new text begin $9,000,000new text end ,
the excess must be allocated to and paid to the fund by the employers identified in
subdivisions 1a and 2, other than units of metropolitan government. Each employer's
share of the excess is proportionate to the employer's share of the fund's unfunded
actuarial accrued liability as disclosed in the annual actuarial valuation prepared by the
actuary retained under section 356.214 compared to the total unfunded actuarial accrued
liability attributed to all employers identified in subdivisions 1a and 2, other than units of
metropolitan government. Payments must be made in equal installments as set forth in
paragraph (b).