SF 1057

1.1                                         A bill for an act
1.2     relating to retirement; merging the Minneapolis Teachers Retirement 
1.3     Fund Association and the Teachers Retirement Association; modifying the 
1.4     postretirement adjustment amount calculation; adjusting contribution rates; 
1.5     limiting certain postretirement adjustments; making technical changes; providing 
1.6     a benefit increase; making state aid adjustment; amending the powers and 
1.7     duties of the State Board of Investment; requiring an analysis; requiring certain 
1.8     studies; requiring certain reports; appropriating money; amending Minnesota 
1.9     Statutes 2004, sections 11A.07, subdivision 5; 11A.18, subdivision 9; 43A.04, 
1.10    subdivision 12; 127A.50, subdivision 1; 128D.10; 352.116, subdivision 1a; 
1.11    352.72, subdivision 2; 352B.30, subdivision 2; 353.30, subdivision 5; 353.71, 
1.12    subdivision 2; 354.05, subdivisions 2, 13; 354.42, subdivisions 2, 3; 354.55, 
1.13    subdivision 11; 354A.011, subdivisions 15a, 27; 354A.021, subdivision 
1.14    1; 354A.092; 354A.093, subdivision 1; 354A.095; 354A.096; 354A.12, 
1.15    subdivisions 1, 2, 2a, 3a, 3b, 3c, 3d; 354A.30; 354A.31, subdivision 7; 354A.32, 
1.16    subdivision 1; 354A.37, subdivision 2; 354A.39; 354A.40, subdivision 1; 
1.17    354A.41; 356.20, subdivision 2; 356.214, subdivision 1; 356.215, subdivision 11; 
1.18    356.219, by adding subdivisions; 356.30, subdivisions 1, 3; 356.302, subdivision 
1.19    7; 356.303, subdivision 4; 356.315, by adding subdivisions; 356.42, subdivision 
1.20    3; 356.465, subdivision 3; 423A.02, subdivision 1b; Minnesota Statutes 2005 
1.21    Supplement, sections 11A.04; 11A.07, subdivision 4; 354.44, subdivision 6; 
1.22    354A.31, subdivision 4; 356.215, subdivision 8;  Laws 2005, chapter 156, article 
1.23    1, section 8; proposing coding for new law in Minnesota Statutes, chapters 128D; 
1.24    354; 354A; repealing Minnesota Statutes 2004, sections 354A.051; 354A.105; 
1.25    354A.23, subdivision 1; 354A.28.
1.26     BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.27                                           ARTICLE 1
1.28                                    MINNESOTA POSTRETIREMENT
1.29                                    INVESTMENT FUND CHANGES

1.30        Section 1. Minnesota Statutes 2004, section 11A.18, subdivision 9, is amended to read:
1.31        Subd. 9. Calculation of postretirement adjustment.  (a) Annually, following June 
1.32    30, the state board shall use the procedures in paragraphs (b), (c), and (d) to determine 
2.1     whether a postretirement adjustment is payable and to determine the amount of any 
2.2     postretirement adjustment.
2.3     (b) If the Consumer Price Index for urban wage earners and clerical workers all 
2.4     items index published by the Bureau of Labor Statistics of the United States Department 
2.5     of Labor increases from June 30 of the preceding year to June 30 of the current year, 
2.6     the state board shall certify the percentage increase.  The amount certified must not 
2.7     exceed the lesser of the difference between the preretirement interest assumption and 
2.8     postretirement interest assumption in section 356.215, subdivision 8, paragraph (a), or 
2.9     2.5 percent.  For the Minneapolis Employees Retirement Fund, the amount certified must 
2.10    not exceed 3.5 percent.
2.11    (c) In addition to any percentage increase certified under paragraph (b), the board 
2.12    shall use the following procedures to determine if a postretirement adjustment is payable 
2.13    under this paragraph:
2.14    (1) The state board shall determine the market value of the fund on June 30 of 
2.15    that year;
2.16    (2) The amount of reserves required as of the current June 30 for the annuity or 
2.17    benefit payable to an annuitant and benefit recipient of the participating public pension 
2.18    plans or funds must be determined by the commission-retained actuary as of the current 
2.19    June 30 retained under section 356.214. An annuitant or benefit recipient who has been 
2.20    receiving an annuity or benefit for at least 12 full months as of the current June 30 is 
2.21    eligible to receive a full postretirement adjustment.  An annuitant or benefit recipient who 
2.22    has been receiving an annuity or benefit for at least one full month, but less than 12 full 
2.23    months as of the current June 30, is eligible to receive a partial postretirement adjustment.  
2.24    Each fund shall report separately the amount of the reserves for those annuitants and 
2.25    benefit recipients who are eligible to receive a full postretirement benefit adjustment.  This 
2.26    amount is known as "eligible reserves."  Each fund shall also report separately the amount 
2.27    of the reserves for those annuitants and benefit recipients who are not eligible to receive 
2.28    a postretirement adjustment.  This amount is known as "noneligible reserves." For an 
2.29    annuitant or benefit recipient who is eligible to receive a partial postretirement adjustment, 
2.30    each fund shall report separately as additional "eligible reserves" an amount that bears the 
2.31    same ratio to the total reserves required for the annuitant or benefit recipient as the number 
2.32    of full months of annuity or benefit receipt as of the current June 30 bears to 12 full 
2.33    months.  The remainder of the annuitant's or benefit recipient's reserves must be separately 
2.34    reported as additional "noneligible reserves."  The amount of "eligible" and "noneligible" 
2.35    required reserves must be certified to the board by the commission-retained actuary as 
2.36    soon as is practical following the current June 30;
3.1     (3) The state board shall determine the percentage increase certified under paragraph 
3.2     (b) multiplied by the eligible required reserves, as adjusted for mortality gains and losses 
3.3     under subdivision 11, determined under clause (2);
3.4     (4) The state board shall add the amount of reserves required for the annuities or 
3.5     benefits payable to annuitants and benefit recipients of the participating public pension 
3.6     plans or funds as of the current June 30 to the amount determined under clause (3);
3.7     (5) The state board shall subtract the amount determined under clause (4) from the 
3.8     market value of the fund determined under clause (1);
3.9     (6) The state board shall adjust the amount determined under clause (5) by the 
3.10    cumulative current balance determined pursuant to under clause (8) and any negative 
3.11    balance carried forward under clause (9);
3.12    (7) A positive amount resulting from the calculations in clauses (1) to (6) is the 
3.13    excess market value.  A negative amount is the negative balance;
3.14    (8) The state board shall allocate one-fifth of the excess market value or one-fifth 
3.15    of the negative balance to each of five consecutive years, beginning with the fiscal year 
3.16    ending the current June 30; and
3.17    (9) To calculate the postretirement adjustment under this paragraph based on 
3.18    investment performance for a fiscal year, the state board shall add together all excess 
3.19    market value allocated to that year and subtract from the sum all negative balances 
3.20    allocated to that year.  If this calculation results in a negative number, the entire negative 
3.21    balance must be carried forward and allocated to the next year.  If the resulting amount is 
3.22    positive, a postretirement adjustment is payable under this paragraph.  The board shall 
3.23    express a positive amount as a percentage of the total eligible required reserves certified to 
3.24    the board under clause (2).
3.25    (d) The state board shall determine the amount of any postretirement adjustment 
3.26    which is payable using the following procedure:
3.27    (1) The total "eligible" required reserves as of the first of January next following 
3.28    the end of the fiscal year for the annuitants and benefit recipients eligible to receive a full 
3.29    or partial postretirement adjustment as determined by clause (2) must be certified to the 
3.30    state board by the commission-retained actuary retained under section 356.214.  The total 
3.31    "eligible" required reserves must be determined by the commission-retained actuary 
3.32    retained under section 356.214 on the assumption that all annuitants and benefit recipients 
3.33    eligible to receive a full or partial postretirement adjustment will be alive on the January 
3.34    1 in question; and
3.35    (2) The state board shall add the percentage certified under paragraph (b) to any 
3.36    positive percentage calculated under paragraph (c).  The board shall not subtract from the 
4.1     percentage certified under paragraph (b) any negative amount calculated under paragraph 
4.2     (c).  The sum of these percentages must be carried to five decimal places and must be 
4.3     certified to each participating public pension fund or plan as the full postretirement 
4.4     adjustment percentage. The full postretirement adjustment percentage certified to each 
4.5     participating public pension plan or fund must not exceed five percent. For the Minneapolis 
4.6     Employees Retirement Fund, no maximum percentage adjustment is applicable.
4.7     (e) A retirement annuity payable in the event of retirement before becoming eligible 
4.8     for Social Security benefits as provided in section 352.116, subdivision 3; 353.29, 
4.9     subdivision 6; or 354.35 must be treated as the sum of a period certain retirement annuity 
4.10    and a life retirement annuity for the purposes of any postretirement adjustment.  The 
4.11    period certain retirement annuity plus the life retirement annuity must be the annuity 
4.12    amount payable until age 62 or 65, whichever applies.  A postretirement adjustment 
4.13    granted on the period certain retirement annuity must terminate when the period certain 
4.14    retirement annuity terminates. 

4.15        Sec. 2. [354A.42] ST. PAUL TEACHER INCREASE LIMIT.
4.16    Notwithstanding any law to the contrary, the St. Paul Teachers Retirement Fund 
4.17    Association may not pay a postretirement adjustment of more than five percent in any 
4.18    year, effective July 1, 2010.

4.19        Sec. 3. EFFECTIVE DATE.
4.20    Section 1 is effective July 1, 2010.

4.21                                           ARTICLE 2
4.22                                        DEFERRED ANNUITY
4.23                                    AUGMENTATION RATE CHANGE

4.24        Section 1. Minnesota Statutes 2004, section 352.116, subdivision 1a, is amended to 
4.25    read:
4.26        Subd. 1a. Actuarial reduction for early retirement. This subdivision applies to a 
4.27    person who has become at least 55 years old and first became a covered employee after 
4.28    June 30, 1989, and to any other covered employee who has become at least 55 years 
4.29    old and whose annuity is higher when calculated under section  352.115, subdivision 3, 
4.30    paragraph (b), in conjunction with this subdivision than when calculated under section  
4.31    352.115, subdivision 3, paragraph (a), in conjunction with subdivision 1. A covered 
4.32    employee who retires before the normal retirement age shall be paid the normal retirement 
4.33    annuity provided in section  352.115, subdivisions 2 and 3, paragraph (b), reduced so 
5.1     that the reduced annuity is the actuarial equivalent of the annuity that would be payable 
5.2     to the employee if the employee deferred receipt of the annuity and the annuity amount 
5.3     were augmented at an annual rate of three percent compounded annually from the day 
5.4     the annuity begins to accrue until the normal retirement age if the employee became an 
5.5     employee before July 1, 2006, and at an annual rate of 2.5 percent compounded annually 
5.6     from the day the annuity begins to accrue until the normal retirement age if the employee 
5.7     initially becomes an employee after June 30, 2006. 

5.8         Sec. 2. Minnesota Statutes 2004, section 352.72, subdivision 2, is amended to read:
5.9         Subd. 2. Computation of deferred annuity. (a) The deferred annuity, if any, 
5.10    accruing under subdivision 1, or section  352.22, subdivision 3, must be computed as 
5.11    provided in section  352.22, subdivision 3, on the basis of allowable service before 
5.12    termination of state service and augmented as provided herein. The required reserves 
5.13    applicable to a deferred annuity or to an annuity for which a former employee was eligible 
5.14    but had not applied or to any deferred segment of an annuity must be determined as of the 
5.15    date the benefit begins to accrue and augmented by interest compounded annually from 
5.16    the first day of the month following the month in which the employee ceased to be a state 
5.17    employee, or July 1, 1971, whichever is later, to the first day of the month in which the 
5.18    annuity begins to accrue. The rates of interest used for this purpose must be five percent 
5.19    compounded annually until January 1, 1981, and three percent compounded annually 
5.20    thereafter until January 1 of the year following the year in which the former employee 
5.21    attains age 55., and from that date to the effective date of retirement, the rate is five percent 
5.22    compounded annually if the employee became an employee before July 1, 2006, and at 
5.23    2.5 percent compounded annually if the employee becomes an employee after June 30, 
5.24    2006. If a person has more than one period of uninterrupted service, the required reserves 
5.25    related to each period must be augmented by interest under this subdivision. The sum 
5.26    of the augmented required reserves so determined is the present value of the annuity. 
5.27    "Uninterrupted service" for the purpose of this subdivision means periods of covered 
5.28    employment during which the employee has not been separated from state service for more 
5.29    than two years. If a person repays a refund, the service restored by the repayment must be 
5.30    considered continuous with the next period of service for which the employee has credit 
5.31    with this system. The formula percentages used for each period of uninterrupted service 
5.32    must be those applicable to a new employee. The mortality table and interest assumption 
5.33    used to compute the annuity must be those in effect when the employee files application 
5.34    for annuity. This section does not reduce the annuity otherwise payable under this chapter. 
6.1     (b) The retirement annuity or disability benefit of, or the survivor benefit payable on 
6.2     behalf of, a former state employee who terminated service before July 1, 1997, which is 
6.3     not first payable until after June 30, 1997, must be increased on an actuarial equivalent 
6.4     basis to reflect the change in the postretirement interest rate actuarial assumption under 
6.5     section  356.215, subdivision 8, from five percent to six percent under a calculation 
6.6     procedure and the tables adopted by the board and approved by the actuary retained by 
6.7     the Legislative Commission on Pensions and Retirement. 

6.8         Sec. 3. Minnesota Statutes 2004, section 352B.30, subdivision 2, is amended to read:
6.9         Subd. 2. Computation of deferred annuity. Deferred annuities must be computed 
6.10    according to this chapter on the basis of allowable service before termination of service 
6.11    and augmented as provided in this chapter. The required reserves applicable to a deferred 
6.12    annuity must be augmented by interest compounded annually from the first day of the 
6.13    month following the month in which the member terminated service, or July 1, 1971, 
6.14    whichever is later, to the first day of the month in which the annuity begins to accrue. The 
6.15    rates of interest used for this purpose shall be five percent per year compounded annually 
6.16    until January 1, 1981, and after that date three percent per year compounded annually if 
6.17    the employee became an employee before July 1, 2006, and at 2.5 percent compounded 
6.18    annually if the employee becomes an employee after June 30, 2006. The mortality table 
6.19    and interest assumption used to compute the annuity shall be those in effect when the 
6.20    member files application for annuity.

6.21        Sec. 4. Minnesota Statutes 2004, section 353.30, subdivision 5, is amended to read:
6.22        Subd. 5. Actuarial reduction for early retirement. This subdivision applies to a 
6.23    member who has become at least 55 years old and first became a public employee after 
6.24    June 30, 1989, and to any other member who has become at least 55 years old and whose 
6.25    annuity is higher when calculated under section  353.29, subdivision 3, paragraph (b), in 
6.26    conjunction with this subdivision than when calculated under section  353.29, subdivision 
6.27    3, paragraph (a), in conjunction with subdivision 1, 1a, 1b, or 1c. An employee who 
6.28    retires before normal retirement age shall be paid the retirement annuity provided in 
6.29    section  353.29, subdivision 3, paragraph (b), reduced so that the reduced annuity is the 
6.30    actuarial equivalent of the annuity that would be payable to the employee if the employee 
6.31    deferred receipt of the annuity and the annuity amount were augmented at an annual rate 
6.32    of three percent compounded annually from the day the annuity begins to accrue until the 
6.33    normal retirement age if the employee became an employee before July 1, 2006, and at 2.5 
7.1     percent compounded annually from the day the annuity begins to accrue until the normal 
7.2     retirement age if the employee initially becomes an employee after June 30, 2006. 

7.3         Sec. 5. Minnesota Statutes 2004, section 353.71, subdivision 2, is amended to read:
7.4         Subd. 2. Deferred annuity computation; augmentation. (a) The deferred 
7.5     annuity accruing under subdivision 1, or under sections  353.34, subdivision 3, and  
7.6     353.68, subdivision 4, must be computed on the basis of allowable service prior to the 
7.7     termination of public service and augmented as provided in this paragraph. The required 
7.8     reserves applicable to a deferred annuity, or to any deferred segment of an annuity must 
7.9     be determined as of the first day of the month following the month in which the former 
7.10    member ceased to be a public employee, or July 1, 1971, whichever is later. These 
7.11    required reserves must be augmented at the rate of five percent annually compounded 
7.12    annually until January 1, 1981, and at the rate of three percent thereafter until January 1 
7.13    of the year following the year in which the former member attains age 55. and from that 
7.14    date to the effective date of retirement, the rate is five percent compounded annually if 
7.15    the employee became an employee before July 1, 2006, and at 2.5 percent compounded 
7.16    annually if the employee becomes an employee after June 30, 2006. If a person has more 
7.17    than one period of uninterrupted service, the required reserves related to each period 
7.18    must be augmented as specified in this paragraph. The sum of the augmented required 
7.19    reserves is the present value of the annuity. Uninterrupted service for the purpose of this 
7.20    subdivision means periods of covered employment during which the employee has not 
7.21    been separated from public service for more than two years. If a person repays a refund, 
7.22    the restored service must be considered as continuous with the next period of service 
7.23    for which the employee has credit with this association. This section must not reduce 
7.24    the annuity otherwise payable under this chapter. This paragraph applies to individuals 
7.25    who become deferred annuitants on or after July 1, 1971. For a member who became a 
7.26    deferred annuitant before July 1, 1971, the paragraph applies from July 1, 1971, if the 
7.27    former active member applies for an annuity after July 1, 1973. 
7.28    (b) The retirement annuity or disability benefit of, or the survivor benefit payable on 
7.29    behalf of, a former member who terminated service before July 1, 1997, or the survivor 
7.30    benefit payable on behalf of a basic or police and fire member who was receiving disability 
7.31    benefits before July 1, 1997, which is first payable after June 30, 1997, must be increased 
7.32    on an actuarial equivalent basis to reflect the change in the postretirement interest rate 
7.33    actuarial assumption under section  356.215, subdivision 8, from five percent to six percent 
7.34    under a calculation procedure and tables adopted by the board and approved by the actuary 
7.35    retained by the Legislative Commission on Pensions and Retirement. 

8.1         Sec. 6. Minnesota Statutes 2005 Supplement, section 354.44, subdivision 6, is 
8.2     amended to read:
8.3         Subd. 6. Computation of formula program retirement annuity. (a) The formula 
8.4     retirement annuity must be computed in accordance with the applicable provisions of the 
8.5     formulas stated in paragraph (b) or (d) on the basis of each member's average salary under 
8.6     section 354.05, subdivision 13a, for the period of the member's formula service credit.
8.7     (b) This paragraph, in conjunction with paragraph (c), applies to a person who first 
8.8     became a member of the association or a member of a pension fund listed in section 
8.9     356.30, subdivision 3, before July 1, 1989, unless paragraph (d), in conjunction with 
8.10    paragraph (e), produces a higher annuity amount, in which case paragraph (d) applies. The 
8.11    average salary as defined in section 354.05, subdivision 13a, multiplied by the following 
8.12    percentages per year of formula service credit shall determine the amount of the annuity to 
8.13    which the member qualifying therefor is entitled:
8.14                                   Coordinated Member        Basic Member      
8.15                                                             the percent       
8.16                                                             specified in      
8.17                                   the percent specified     section 356.315,  
8.18       Each year of service        in section 356.315,       subdivision 3, per 
8.19       during first ten            subdivision 1, per year   year              
8.20                                                             the percent       
8.21                                                             specified in      
8.22                                   the percent specified     section 356.315,  
8.23       Each year of service        in section 356.315,       subdivision 4, per 
8.24       thereafter                  subdivision 2, per year   year              
8.25    (c) (i) This paragraph applies only to a person who first became a member of 
8.26    the association or a member of a pension fund listed in section 356.30, subdivision 3, 
8.27    before July 1, 1989, and whose annuity is higher when calculated under paragraph (b), in 
8.28    conjunction with this paragraph than when calculated under paragraph (d), in conjunction 
8.29    with paragraph (e).
8.30    (ii) Where any member retires prior to normal retirement age under a formula 
8.31    annuity, the member shall be paid a retirement annuity in an amount equal to the normal 
8.32    annuity provided in paragraph (b) reduced by one-quarter of one percent for each month 
8.33    that the member is under normal retirement age at the time of retirement except that for 
9.1     any member who has 30 or more years of allowable service credit, the reduction shall be 
9.2     applied only for each month that the member is under age 62.
9.3     (iii) Any member whose attained age plus credited allowable service totals 90 years 
9.4     is entitled, upon application, to a retirement annuity in an amount equal to the normal 
9.5     annuity provided in paragraph (b), without any reduction by reason of early retirement.
9.6     (d) This paragraph applies to a member who has become at least 55 years old and 
9.7     first became a member of the association after June 30, 1989, and to any other member 
9.8     who has become at least 55 years old and whose annuity amount when calculated under 
9.9     this paragraph and in conjunction with paragraph (e), is higher than it is when calculated 
9.10    under paragraph (b), in conjunction with paragraph (c). The average salary, as defined in 
9.11    section 354.05, subdivision 13a, multiplied by the percent specified by section 356.315, 
9.12    subdivision 4, for each year of service for a basic member and by the percent specified in 
9.13    section 356.315, subdivision 2, for each year of service for a coordinated member shall 
9.14    determine the amount of the retirement annuity to which the member is entitled.
9.15    (e) This paragraph applies to a person who has become at least 55 years old and first 
9.16    becomes a member of the association after June 30, 1989, and to any other member who 
9.17    has become at least 55 years old and whose annuity is higher when calculated under 
9.18    paragraph (d) in conjunction with this paragraph than when calculated under paragraph 
9.19    (b), in conjunction with paragraph (c). An employee who retires under the formula annuity 
9.20    before the normal retirement age shall be paid the normal annuity provided in paragraph 
9.21    (d) reduced so that the reduced annuity is the actuarial equivalent of the annuity that would 
9.22    be payable to the employee if the employee deferred receipt of the annuity and the annuity 
9.23    amount were augmented at an annual rate of three percent compounded annually from the 
9.24    day the annuity begins to accrue until the normal retirement age if the employee became 
9.25    an employee before July 1, 2006, and at 2.5 percent compounded annually if the employee 
9.26    becomes an employee after June 30, 2006.
9.27    (f) No retirement annuity is payable to a former employee with a salary that exceeds 
9.28    95 percent of the governor's salary unless and until the salary figures used in computing 
9.29    the highest five successive years average salary under paragraph (a) have been audited by 
9.30    the Teachers Retirement Association and determined by the executive director to comply 
9.31    with the requirements and limitations of section 354.05, subdivisions 35 and 35a.

9.32        Sec. 7. Minnesota Statutes 2004, section 354.55, subdivision 11, is amended to read:
9.33        Subd. 11. Deferred annuity; augmentation. (a) Any person covered under section  
9.34    354.44, subdivision 6, who ceases to render teaching service, may leave the person's 
9.35    accumulated deductions in the fund for the purpose of receiving a deferred annuity at 
10.1    retirement. Eligibility for an annuity under this subdivision is governed pursuant to 
10.2    section  354.44, subdivision 1, or  354.60. 
10.3    (b) The amount of the deferred retirement annuity is determined by section  354.44, 
10.4    subdivision 6, and augmented as provided in this subdivision. The required reserves 
10.5    related to that portion of the annuity which had accrued when the member ceased to 
10.6    render teaching service must be augmented by interest compounded annually from the 
10.7    first day of the month following the month during which the member ceased to render 
10.8    teaching service to the effective date of retirement. There shall be no augmentation if 
10.9    this period is less than three months or if this period commences prior to July 1, 1971. 
10.10   The rates of interest used for this purpose must be five percent compounded annually 
10.11   commencing July 1, 1971, until January 1, 1981, and three percent compounded annually 
10.12   thereafter until January 1 of the year following the year in which the former member 
10.13   attains age 55. and from that date to the effective date of retirement, the rate is five percent 
10.14   compounded annually if the employee became an employee before July 1, 2006, and at 
10.15   2.5 percent compounded annually if the employee becomes an employee after June 30, 
10.16   2006. If a person has more than one period of uninterrupted service, a separate average 
10.17   salary determined under section  354.44, subdivision 6, must be used for each period and 
10.18   the required reserves related to each period must be augmented by interest pursuant to 
10.19   this subdivision. The sum of the augmented required reserves so determined shall be the 
10.20   basis for purchasing the deferred annuity. If a person repays a refund, the service restored 
10.21   by the repayment must be considered as continuous with the next period of service for 
10.22   which the person has credit with this fund. If a person does not render teaching service in 
10.23   any one fiscal year or more consecutive fiscal years and then resumes teaching service, 
10.24   the formula percentages used from the date of the resumption of teaching service must be 
10.25   those applicable to new members. The mortality table and interest assumption used to 
10.26   compute the annuity must be the applicable mortality table established by the board under 
10.27   section  354.07, subdivision 1, and the interest rate assumption under section  356.215 in 
10.28   effect when the member retires. A period of uninterrupted service for the purposes of this 
10.29   subdivision means a period of covered teaching service during which the member has not 
10.30   been separated from active service for more than one fiscal year. 
10.31   (c) In no case shall the annuity payable under this subdivision be less than the 
10.32   amount of annuity payable pursuant to section  354.44, subdivision 6. 
10.33   (d) The requirements and provisions for retirement before normal retirement age 
10.34   contained in section  354.44, subdivision 6, clause (3) or (5), shall also apply to an 
10.35   employee fulfilling the requirements with a combination of service as provided in section  
10.36   354.60. 
11.1    (e) The augmentation provided by this subdivision applies to the benefit provided 
11.2    in section  354.46, subdivision 2. 
11.3    (f) The augmentation provided by this subdivision shall not apply to any period in 
11.4    which a person is on an approved leave of absence from an employer unit covered by the 
11.5    provisions of this chapter.
11.6    (g) The retirement annuity or disability benefit of, or the survivor benefit payable on 
11.7    behalf of, a former teacher who terminated service before July 1, 1997, which is not first 
11.8    payable until after June 30, 1997, must be increased on an actuarial equivalent basis to 
11.9    reflect the change in the postretirement interest rate actuarial assumption under section  
11.10   356.215, subdivision 8, from five percent to six percent under a calculation procedure and 
11.11   tables adopted by the board as recommended by an approved actuary and approved by the 
11.12   actuary retained by the Legislative Commission on Pensions and Retirement. 

11.13       Sec. 8. Minnesota Statutes 2004, section 354A.31, subdivision 7, is amended to read:
11.14       Subd. 7. Actuarial reduction for early retirement. This subdivision applies to 
11.15   a person who has become at least 55 years old and first becomes a coordinated member 
11.16   after June 30, 1989, and to any other coordinated member who has become at least 55 
11.17   years old and whose annuity is higher when calculated using the retirement annuity 
11.18   formula percentage in subdivision 4, paragraph (d), and subdivision 4a, paragraph (d), in 
11.19   conjunction with this subdivision than when calculated under subdivision 4, paragraph 
11.20   (c), or subdivision 4a, paragraph (c), in conjunction with subdivision 6. A coordinated 
11.21   member who retires before the full benefit age shall be paid the retirement annuity 
11.22   calculated using the retirement annuity formula percentage in subdivision 4, paragraph 
11.23   (d), or subdivision 4a, paragraph (d), reduced so that the reduced annuity is the actuarial 
11.24   equivalent of the annuity that would be payable to the member if the member deferred 
11.25   receipt of the annuity and the annuity amount were augmented at an annual rate of three 
11.26   percent compounded annually from the day the annuity begins to accrue until the normal 
11.27   retirement age if the employee became an employee before July 1, 2006, and at 2.5 
11.28   percent compounded annually from the day the annuity begins to accrue until the normal 
11.29   retirement age if the person initially becomes a teacher after June 30, 2006.

11.30       Sec. 9. Minnesota Statutes 2004, section 354A.37, subdivision 2, is amended to read:
11.31       Subd. 2. Eligibility for deferred retirement annuity. Any coordinated member 
11.32   who ceases to render teaching services for the school district in which the teachers 
11.33   retirement fund association is located, with sufficient allowable service credit to meet 
11.34   the minimum service requirements specified in section  354A.31, subdivision 1, shall be 
12.1    entitled to a deferred retirement annuity in lieu of a refund pursuant to subdivision 1. The 
12.2    deferred retirement annuity shall be computed pursuant to section  354A.31 and shall be 
12.3    augmented as provided in this subdivision. The deferred annuity shall commence upon 
12.4    application after the person on deferred status attains at least the minimum age specified in 
12.5    section  354A.31, subdivision 1. 
12.6    The monthly annuity amount that had accrued when the member ceased to render 
12.7    teaching service must be augmented from the first day of the month following the month 
12.8    during which the member ceased to render teaching service to the effective date of 
12.9    retirement. There is no augmentation if this period is less than three months. The rate of 
12.10   augmentation is three percent compounded annually until January 1 of the year following 
12.11   the year in which the former member attains age 55, and five percent compounded 
12.12   annually after that date to the effective date of retirement if the employee became an 
12.13   employee before July 1, 2006, and at 2.5 percent compounded annually if the employee 
12.14   becomes an employee after June 30, 2006. If a person has more than one period of 
12.15   uninterrupted service, a separate average salary determined under section  354A.31 must 
12.16   be used for each period, and the monthly annuity amount related to each period must be 
12.17   augmented as provided in this subdivision. The sum of the augmented monthly annuity 
12.18   amounts determines the total deferred annuity payable. If a person repays a refund, the 
12.19   service restored by the repayment must be considered as continuous with the next period 
12.20   of service for which the person has credit with the fund. If a person does not render 
12.21   teaching services in any one fiscal year or more consecutive fiscal years and then resumes 
12.22   teaching service, the formula percentages used from the date of resumption of teaching 
12.23   service are those applicable to new members. The mortality table and interest assumption 
12.24   used to compute the annuity are the table established by the fund to compute other 
12.25   annuities, and the interest assumption under section  356.215 in effect when the member 
12.26   retires. A period of uninterrupted service for the purpose of this subdivision means a 
12.27   period of covered teaching service during which the member has not been separated from 
12.28   active service for more than one fiscal year. 
12.29   The augmentation provided by this subdivision applies to the benefit provided in 
12.30   section  354A.35, subdivision 2. The augmentation provided by this subdivision does 
12.31   not apply to any period in which a person is on an approved leave of absence from an 
12.32   employer unit. 

12.33       Sec. 10. Minnesota Statutes 2004, section 356.30, subdivision 1, is amended to read:
12.34       Subdivision 1. Eligibility; computation of annuity. (a) Notwithstanding any 
12.35   provisions of the laws governing the retirement plans enumerated in subdivision 3, a 
13.1    person who has met the qualifications of paragraph (b) may elect to receive a retirement 
13.2    annuity from each enumerated retirement plan in which the person has at least one-half 
13.3    year of allowable service, based on the allowable service in each plan, subject to the 
13.4    provisions of paragraph (c).
13.5    (b) A person may receive, upon retirement, a retirement annuity from each 
13.6    enumerated retirement plan in which the person has at least one-half year of allowable 
13.7    service, and augmentation of a deferred annuity calculated at the appropriate rate under 
13.8    the laws governing each public pension plan or fund named in subdivision 3, based on 
13.9    the date of the person's initial entry into public employment from the date the person 
13.10   terminated all public service if:
13.11   (1) the person has allowable service totaling an amount that allows the person to 
13.12   receive an annuity in any two or more of the enumerated plans; and
13.13   (2) the person has not begun to receive an annuity from any enumerated plan or the 
13.14   person has made application for benefits from each applicable plan and the effective 
13.15   dates of the retirement annuity with each plan under which the person chooses to receive 
13.16   an annuity are within a one-year period.
13.17   (c) The retirement annuity from each plan must be based upon the allowable service, 
13.18   accrual rates, and average salary in the applicable plan except as further specified or 
13.19   modified in the following clauses:
13.20   (1) the laws governing annuities must be the law in effect on the date of termination 
13.21   from the last period of public service under a covered retirement plan with which the 
13.22   person earned a minimum of one-half year of allowable service credit during that 
13.23   employment;
13.24   (2) the "average salary" on which the annuity from each covered plan in which 
13.25   the employee has credit in a formula plan must be based on the employee's highest five 
13.26   successive years of covered salary during the entire service in covered plans;
13.27   (3) the accrual rates to be used by each plan must be those percentages prescribed by 
13.28   each plan's formula as continued for the respective years of allowable service from one 
13.29   plan to the next, recognizing all previous allowable service with the other covered plans;
13.30   (4) the allowable service in all the plans must be combined in determining eligibility 
13.31   for and the application of each plan's provisions in respect to reduction in the annuity 
13.32   amount for retirement prior to normal retirement age; and
13.33   (5) the annuity amount payable for any allowable service under a nonformula plan 
13.34   of a covered plan must not be affected, but such service and covered salary must be used 
13.35   in the above calculation.
14.1    (d) This section does not apply to any person whose final termination from the last 
14.2    public service under a covered plan was before May 1, 1975.
14.3    (e) For the purpose of computing annuities under this section, the accrual rates 
14.4    used by any covered plan, except the public employees police and fire plan, the judges' 
14.5    retirement fund, and the State Patrol retirement plan, must not exceed the percent specified 
14.6    in section  356.315, subdivision 4, per year of service for any year of service or fraction 
14.7    thereof. The formula percentage used by the judges' retirement fund must not exceed the 
14.8    percentage rate specified in section  356.315, subdivision 8, per year of service for any 
14.9    year of service or fraction thereof. The accrual rate used by the public employees police 
14.10   and fire plan and the State Patrol retirement plan must not exceed the percentage rate 
14.11   specified in section  356.315, subdivision 6, per year of service for any year of service or 
14.12   fraction thereof. The accrual rate or rates used by the legislators retirement plan and the 
14.13   elective state officers retirement plan must not exceed 2.5 percent, but this limit does not 
14.14   apply to the adjustment provided under section  3A.02, subdivision 1, paragraph (c), or  
14.15   352C.031, paragraph (b). 
14.16   (f) Any period of time for which a person has credit in more than one of the covered 
14.17   plans must be used only once for the purpose of determining total allowable service.
14.18   (g) If the period of duplicated service credit is more than one-half year, or the person 
14.19   has credit for more than one-half year, with each of the plans, each plan must apply its 
14.20   formula to a prorated service credit for the period of duplicated service based on a fraction 
14.21   of the salary on which deductions were paid to that fund for the period divided by the total 
14.22   salary on which deductions were paid to all plans for the period.
14.23   (h) If the period of duplicated service credit is less than one-half year, or when 
14.24   added to other service credit with that plan is less than one-half year, the service credit 
14.25   must be ignored and a refund of contributions made to the person in accord with that 
14.26   plan's refund provisions.

14.27       Sec. 11. EFFECTIVE DATE.
14.28   Sections 1 to 10 are effective July 1, 2006.

14.29                                          ARTICLE 3
14.30                               TEACHERS RETIREMENT ASSOCIATION
14.31                              COVERAGE AND BENEFIT RESTRUCTURING

14.32       Section 1. Minnesota Statutes 2004, section 127A.50, subdivision 1, is amended to 
14.33   read:
15.1        Subdivision 1. Aid adjustment. Beginning in fiscal year 1998 and each year 
15.2    thereafter, the commissioner of education shall adjust state aid payments to school 
15.3    operating funds for Independent School District No. 625, and Independent School District 
15.4    No. 709, and Special School District No. 1 by the net amount of clauses (1) and (2), 
15.5    for Special School District No. 1 by the net amount of clauses (1), (2), and (4), and for 
15.6    all other districts, including charter schools, but excluding any education organizations 
15.7    that are prohibited from receiving direct state aids under section  123A.26 or  125A.75, 
15.8    subdivision 7, by the net amount of clauses (1), (2), and (3), and (4): 
15.9    (1) a decrease equal to each district's share of the fiscal year 1997 adjustment 
15.10   effected under Minnesota Statutes 1996, section  124.2139; 
15.11   (2) an increase equal to one percent of the salaries paid to members of the general 
15.12   plan of the Public Employees Retirement Association in fiscal year 1997, multiplied by 
15.13   0.35 for fiscal year 1998 and 0.70 each year thereafter;
15.14   (3) a decrease equal to  2.34 percent of the salaries paid to members of the Teachers 
15.15   Retirement Association in fiscal year 1997.; and 
15.16   (4) an increase equal to 0.5 percent of the salaries paid to members of the Teachers 
15.17   Retirement Association in fiscal year 2007. 
15.18   EFFECTIVE DATE.This section is effective for revenue for fiscal year 2008.

15.19       Sec. 2. Minnesota Statutes 2004, section 128D.10, is amended to read:
15.20   128D.10 CONTINUITY ON TENURE, PENSIONS, AND RETIREMENT.
15.21   (a) The tenure, pension, and retirement provisions of any law applicable to 
15.22   employees of the special school district of Minneapolis, including employees belonging 
15.23   to the municipal employees retirement fund and those belonging to the Minneapolis 
15.24   Teachers' Retirement Fund Association before April 24, 1959, shall continue to be 
15.25   applicable in the same manner and to the same extent to employees of the special 
15.26   independent school district after April 24, 1959, except as otherwise provided in law.
15.27   (b) The provisions of any general law or laws which are applicable only to 
15.28   independent school districts wholly or partially within cities of the first class shall not be 
15.29   applicable to the special independent school district of Minneapolis.
15.30   (c) The powers, duties, and corporate structure of the Minneapolis Teachers' 
15.31   Retirement Fund Association, and the laws applicable thereto, shall be and remain the 
15.32   same in the special independent school district of Minneapolis as at the time of enactment 
15.33   of the within law, until changed in accordance with law.

16.1        Sec. 3. [128D.19] AID REDEDICATION.
16.2    Notwithstanding any law to the contrary and subject to section 354A.12, subdivision 
16.3    3c, special direct state aid previously paid to the Minneapolis Teachers Retirement Fund 
16.4    Association under sections 354A.12, subdivisions 3a and 3b, and 423A.02, must be paid 
16.5    to the Teachers Retirement Association.

16.6        Sec. 4. Minnesota Statutes 2004, section 354.05, subdivision 2, is amended to read:
16.7        Subd. 2. Teacher. (a) "Teacher" means:
16.8    (1) a person who renders service as a teacher, supervisor, principal, superintendent, 
16.9    librarian, nurse, counselor, social worker, therapist, or psychologist in a public school of 
16.10   the state located outside of the corporate limits of a city of the first class the city of Duluth 
16.11   or the city of St. Paul, or in any charter school, irrespective of the location of the school, 
16.12   or in any charitable, penal, or correctional institutions of a governmental subdivision, or 
16.13   who is engaged in educational administration in connection with the state public school 
16.14   system, but excluding the University of Minnesota, whether the position be a public office 
16.15   or an employment, and not including the members or officers of any general governing or 
16.16   managing board or body;
16.17   (2) an employee of the Teachers Retirement Association;
16.18   (3) a person who renders teaching service on a part-time basis and who also renders 
16.19   other services for a single employing unit. A person whose teaching service comprises at 
16.20   least 50 percent of the combined employment salary is a member of the association for all 
16.21   services with the single employing unit. If the person's teaching service comprises less 
16.22   than 50 percent of the combined employment salary, the executive director must determine 
16.23   whether all or none of the combined service is covered by the association; or
16.24   (4) a person who is not covered by the plans established under chapter 352D, 354A, 
16.25   or 354B and who is employed by the Board of Trustees of the Minnesota State Colleges 
16.26   and Universities system in an unclassified position as:
16.27   (i) a president, vice-president, or dean;
16.28   (ii) a manager or a professional in an academic or an academic support program 
16.29   other than specified in item (i);
16.30   (iii) an administrative or a service support faculty position; or
16.31   (iv) a teacher or a research assistant.
16.32   (b) "Teacher" does not mean:
16.33   (1) a person who works for a school or institution as an independent contractor as 
16.34   defined by the Internal Revenue Service;
17.1    (2) a person who renders part-time teaching service or who is a customized trainer 
17.2    as defined by the Minnesota State Colleges and Universities system if (i) the service is 
17.3    incidental to the regular nonteaching occupation of the person; and (ii) the employer 
17.4    stipulates annually in advance that the part-time teaching service or customized training 
17.5    service will not exceed 300 hours in a fiscal year and retains the stipulation in its records; 
17.6    and (iii) the part-time teaching service or customized training service actually does not 
17.7    exceed 300 hours in a fiscal year; or
17.8    (3) a person exempt from licensure under section  122A.30. 

17.9        Sec. 5. Minnesota Statutes 2004, section 354.05, subdivision 13, is amended to read:
17.10       Subd. 13. Allowable service. "Allowable service" means:
17.11   (1) Any service rendered by a teacher for which on or before July 1, 1957, the 
17.12   teacher's account in the retirement fund was credited by reason of employee contributions 
17.13   in the form of salary deductions, payments in lieu of salary deductions, or in any other 
17.14   manner authorized by Minnesota Statutes 1953, sections  135.01 to  135.13, as amended by 
17.15   Laws 1955, chapters 361, 549, 550, 611, or 
17.16   (2) Any service rendered by a teacher for which on or before July 1, 1961, the 
17.17   teacher elected to obtain credit for service by making payments to the fund pursuant to 
17.18   Minnesota Statutes 1980, section  354.09 and section  354.51, or 
17.19   (3) Any service rendered by a teacher after July 1, 1957, for any calendar month 
17.20   when the member receives salary from which deductions are made, deposited and credited 
17.21   in the fund, or
17.22   (4) Any service rendered by a person after July 1, 1957, for any calendar month 
17.23   where payments in lieu of salary deductions are made, deposited and credited into the 
17.24   fund as provided in Minnesota Statutes 1980, section  354.09, subdivision 4, and section  
17.25   354.53, or 
17.26   (5) Any service rendered by a teacher for which the teacher elected to obtain 
17.27   credit for service by making payments to the fund pursuant to Minnesota Statutes 1980, 
17.28   section  354.09, subdivisions 1 and 4, sections  354.50,  354.51, Minnesota Statutes 1957, 
17.29   section  135.41, subdivision 4, Minnesota Statutes 1971, section  354.09, subdivision 2, or 
17.30   Minnesota Statutes, 1973 Supplement, section  354.09, subdivision 3, or 
17.31   (6) Both service during years of actual membership in the course of which 
17.32   contributions were currently made and service in years during which the teacher was not a 
17.33   member but for which the teacher later elected to obtain credit by making payments to the 
17.34   fund as permitted by any law then in effect, or
18.1    (7) Any service rendered where contributions were made and no allowable service 
18.2    credit was established because of the limitations contained in Minnesota Statutes 1957, 
18.3    section  135.09, subdivision 2, as determined by the ratio between the amounts of money 
18.4    credited to the teacher's account in a fiscal year and the maximum retirement contribution 
18.5    allowable for that year, or 
18.6    (8) MS 2002 (Expired)
18.7    (9) A period of time during which a teacher who is a state employee was on strike 
18.8    without pay, not to exceed a period of one year, if the teacher makes a payment in lieu of 
18.9    salary deductions or makes a prior service credit purchase payment, whichever applies. If 
18.10   the payment is made within 12 months, the payment by the teacher must be an amount 
18.11   equal to the employee and employer contribution rates set forth in section  354.42, 
18.12   subdivisions 2 and 3, applied to the teacher's rate of salary in effect on the conclusion of 
18.13   the strike for the period of the strike without pay, plus compound interest at a monthly rate 
18.14   of 0.71 percent from the last day of the strike until the date of payment. If the payment by 
18.15   the employee is not made within 12 months, the payment must be in an amount equal to 
18.16   the payment amount determined under section  356.55 or  356.551, whichever applies, or
18.17   (10) A period of service before July 1, 2006, that was properly credited as allowable 
18.18   service by the Minneapolis Teachers Retirement Fund Association, and that was rendered 
18.19   by a teacher as an employee of Special School District No. 1, Minneapolis, or by an 
18.20   employee of the Minneapolis Teachers Retirement Fund Association who was a member 
18.21   of the Minneapolis Teachers Retirement Fund Association by virtue of that employment, 
18.22   who has not begun receiving an annuity or other retirement benefit from the former 
18.23   Minneapolis Teachers Retirement Fund Association calculated in whole or in part on that 
18.24   service before July 1, 2006, and who has not taken a refund of member contributions 
18.25   related to that service unless the refund is repaid under section 354.50, subdivision 4. 
18.26   Service as an employee of Special School District No. 1, Minneapolis on or after July 1, 
18.27   2006 is "allowable service" only as provided by this chapter. 

18.28       Sec. 6. Minnesota Statutes 2004, section 354.42, subdivision 2, is amended to read:
18.29       Subd. 2. Employee. (a) The employee contribution to the fund is an amount equal 
18.30   to 5.0 the following percentage of the salary of a member:
18.31   (1) after July 1, 2006, for a teacher employed by Special School District No. 1, 
18.32   Minneapolis, 5.5 percent if the teacher is a coordinated member, and 9.0 percent if the 
18.33   teacher is a basic member;
19.1    (2) for every other teacher, after July 1, 2006, 5.5 percent of if the salary of every 
19.2    teacher is a coordinated member and 9.0 percent of if the salary of every teacher is a 
19.3    basic member.
19.4    (b) This contribution must be made by deduction from salary. Where any portion 
19.5    of a member's salary is paid from other than public funds, the member's employee 
19.6    contribution must be based on the entire salary received.

19.7        Sec. 7. Minnesota Statutes 2004, section 354.42, subdivision 3, is amended to read:
19.8        Subd. 3. Employer. (a) The regular employer contribution to the fund by Special 
19.9    School District No. 1, Minneapolis, after July 1, 2006, and before July 1, 2007, is an 
19.10   amount equal to 5.00 percent of the salary of each of its teachers who is a coordinated 
19.11   member and 9.00 percent of the salary of each of its teachers who is a basic member. After 
19.12   July 1, 2007, the regular employer contribution to the fund by Special School District No. 
19.13   1, Minneapolis, is an amount equal to 5.50 percent of salary of each coordinated member 
19.14   and 9.50 percent of salary of each basic member. The additional employer contribution to 
19.15   the fund by Special School District No. 1, Minneapolis, after July 1, 2006, is an amount 
19.16   equal to 3.64 percent of the salary of each teacher who is a coordinated member or is a 
19.17   basic member.
19.18   (b) The employer contribution to the fund for every other employer, is an amount 
19.19   equal to 5.0 percent of the salary of each coordinated member and 9.0 percent of the salary 
19.20   of each basic member before July 1, 2007, and 5.5 percent of the salary of each coordinated 
19.21   member and 9.5 percent of the salary of each basic member after June 30, 2007.

19.22       Sec. 8. Minnesota Statutes 2005 Supplement, section 354.44, subdivision 6, is 
19.23   amended to read:
19.24       Subd. 6. Computation of formula program retirement annuity. (a) The formula 
19.25   retirement annuity must be computed in accordance with the applicable provisions of the 
19.26   formulas stated in paragraph (b) or (d) on the basis of each member's average salary under 
19.27   section 354.05, subdivision 13a, for the period of the member's formula service credit.
19.28   (b) This paragraph, in conjunction with paragraph (c), applies to a person who first 
19.29   became a member of the association or a member of a pension fund listed in section 
19.30   356.30, subdivision 3, before July 1, 1989, unless paragraph (d), in conjunction with 
19.31   paragraph (e), produces a higher annuity amount, in which case paragraph (d) applies. The 
19.32   average salary as defined in section 354.05, subdivision 13a, multiplied by the following 
19.33   percentages per year of formula service credit shall determine the amount of the annuity to 
19.34   which the member qualifying therefor is entitled for service rendered before July 1, 2006:
20.1                                   Coordinated Member        Basic Member      
20.2                                                             the percent       
20.3                                                             specified in      
20.4                                   the percent specified     section 356.315,  
20.5       Each year of service        in section 356.315,       subdivision 3, per 
20.6       during first ten            subdivision 1, per year   year              
20.7                                                             the percent       
20.8                                                             specified in      
20.9                                   the percent specified     section 356.315,  
20.10      Each year of service        in section 356.315,       subdivision 4, per 
20.11      thereafter                  subdivision 2, per year   year              
20.12   For service rendered on or after July 1, 2006, the average salary as defined in section 
20.13   354.05, subdivision 13a, multiplied by the following percentages per year of service 
20.14   credit, determines the amount the annuity to which the member qualifying therefor is:
20.15                                  Coordinated Member        Basic Member      
20.16                                                            the percent       
20.17                                                            specified in      
20.18                                  the percent specified     section 356.315,  
20.19      Each year of service        in section 356.315,       subdivision 3, per 
20.20      during first ten            subdivision 1a, per year  year              
20.21                                                            the percent       
20.22                                                            specified in      
20.23                                  the percent specified     section 356.315,  
20.24      Each year of service after    in section 356.315,       subdivision 4, per 
20.25      ten years of service        subdivision 2b, per year  year              
20.26   (c)(i) This paragraph applies only to a person who first became a member of the 
20.27   association or a member of a pension fund listed in section 356.30, subdivision 3, before 
20.28   July 1, 1989, and whose annuity is higher when calculated under paragraph (b), in 
20.29   conjunction with this paragraph than when calculated under paragraph (d), in conjunction 
20.30   with paragraph (e).
20.31   (ii) Where any member retires prior to normal retirement age under a formula 
20.32   annuity, the member shall be paid a retirement annuity in an amount equal to the normal 
20.33   annuity provided in paragraph (b) reduced by one-quarter of one percent for each month 
21.1    that the member is under normal retirement age at the time of retirement except that for 
21.2    any member who has 30 or more years of allowable service credit, the reduction shall be 
21.3    applied only for each month that the member is under age 62.
21.4    (iii) Any member whose attained age plus credited allowable service totals 90 years 
21.5    is entitled, upon application, to a retirement annuity in an amount equal to the normal 
21.6    annuity provided in paragraph (b), without any reduction by reason of early retirement.
21.7    (d) This paragraph applies to a member who has become at least 55 years old and 
21.8    first became a member of the association after June 30, 1989, and to any other member 
21.9    who has become at least 55 years old and whose annuity amount when calculated under 
21.10   this paragraph and in conjunction with paragraph (e), is higher than it is when calculated 
21.11   under paragraph (b), in conjunction with paragraph (c). For a basic member, the average 
21.12   salary, as defined in section 354.05, subdivision 13a, multiplied by the percent specified 
21.13   by section 356.315, subdivision 4, for each year of service for a basic member and by 
21.14   the percent specified in section 356.315, subdivision 2, for each year of service for a 
21.15   coordinated member shall determine the amount of the retirement annuity to which the 
21.16   basic member is entitled. The annuity of a basic member who was a member for the 
21.17   former Minneapolis Teachers Retirement Fund Association as of June 30, 2006, must 
21.18   be determined according to the annuity formula under the articles of incorporation of 
21.19   the former Minneapolis Teachers Retirement Fund Association in effect as of that date. 
21.20   For a coordinated member, the average salary, as defined in section 354.05, subdivision 
21.21   13a, multiplied by the percent specified in section 356.315, subdivision 2, for each year 
21.22   of service rendered before July 1, 2006, and by the percent specified in section 356.315, 
21.23   subdivision 2b, for each year of service rendered on or after July 1, 2006, determines the 
21.24   amount of the retirement annuity to which the coordinated member is entitled.
21.25   (e) This paragraph applies to a person who has become at least 55 years old and first 
21.26   becomes a member of the association after June 30, 1989, and to any other member who 
21.27   has become at least 55 years old and whose annuity is higher when calculated under 
21.28   paragraph (d) in conjunction with this paragraph than when calculated under paragraph 
21.29   (b), in conjunction with paragraph (c). An employee who retires under the formula annuity 
21.30   before the normal retirement age shall be paid the normal annuity provided in paragraph 
21.31   (d) reduced so that the reduced annuity is the actuarial equivalent of the annuity that would 
21.32   be payable to the employee if the employee deferred receipt of the annuity and the annuity 
21.33   amount were augmented at an annual rate of three percent compounded annually from the 
21.34   day the annuity begins to accrue until the normal retirement age.
21.35   (f) No retirement annuity is payable to a former employee with a salary that exceeds 
21.36   95 percent of the governor's salary unless and until the salary figures used in computing 
22.1    the highest five successive years average salary under paragraph (a) have been audited by 
22.2    the Teachers Retirement Association and determined by the executive director to comply 
22.3    with the requirements and limitations of section 354.05, subdivisions 35 and 35a.

22.4        Sec. 9. [354.70] CONSOLIDATION OF MINNEAPOLIS TEACHERS 
22.5    RETIREMENT FUND ASSOCIATION.
22.6        Subdivision 1. Membership transfer. All active, inactive, and retired members of 
22.7    the Minneapolis Teachers Retirement Fund Association are transferred to the Teachers 
22.8    Retirement Association and are no longer members of the Minneapolis Teachers 
22.9    Retirement Fund Association as of July 1, 2006.
22.10       Subd. 2. TRA membership. A person first hired as a teacher by Special School 
22.11   District No. 1, Minneapolis, after June 30, 2006, and who is a teacher as defined in 
22.12   section 354.05, subdivision 2, is a member of the Teachers Retirement Association for the 
22.13   person's teaching service.
22.14       Subd. 3. Service credit and liability transfer. All allowable service and salary 
22.15   credit of the members and other individuals transferred under subdivision 1 as specified in 
22.16   the records of the Minneapolis Teachers Retirement Fund Association on the transfer date 
22.17   is allowable service credit under section 354.05, subdivision 13, formula service credit 
22.18   under section 354.05, subdivision 25, and salary credit under section 354.05, subdivision 
22.19   35, for the Teachers Retirement Association.
22.20       Subd. 4. Transfer of records. On or before June 30, 2006, the chief administrative 
22.21   officer of the Minneapolis Teachers Retirement Fund Association shall transfer all 
22.22   records and documents relating to the funds and the benefit plans of the association to the 
22.23   executive director of the Teachers Retirement Association. To the extent possible, original 
22.24   copies of all records and documents must be transferred.
22.25       Subd. 5. Transfer of assets. (a) On or before June 30, 2006, the chief administrative 
22.26   officer of the Minneapolis Teachers Retirement Fund Association shall transfer to the 
22.27   Teachers Retirement Association the entire assets of the special retirement fund of the 
22.28   Minneapolis Teachers Retirement Fund Association. The transfer of the assets of the 
22.29   Minneapolis Teachers Retirement Fund Association special retirement fund must include 
22.30   any accounts receivable that are determined by the executive director of the State Board of 
22.31   Investment as reasonably capable of being collected. Legal title to account receivables that 
22.32   are determined by the executive director of the State Board of Investment as not reasonably 
22.33   capable of being collected transfers to Special School District No. 1, Minneapolis, as of 
22.34   the date of the determination of the executive director of the State Board of Investment. 
22.35   If the account receivables transferred to Special School District No. 1, Minneapolis, 
23.1    are subsequently recovered by the school district, the superintendent of Special School 
23.2    District No. 1, Minneapolis, shall transfer the recovered amount to the executive director 
23.3    of the Teachers Retirement Association, in cash, for deposit in the teachers retirement 
23.4    fund, less the reasonable expenses of the school district related to the recovery.
23.5    (b) As of June 30, 2006, assets of the special retirement fund of the Minneapolis 
23.6    Teachers Retirement Fund Association are assets of the Teachers Retirement Association 
23.7    to be invested by the State Board of Investment pursuant to the provisions of section 
23.8    354.07, subdivision 4. The Teachers Retirement Association is the successor in interest to 
23.9    all claims which the Minneapolis Teachers Retirement Fund Association may have or may 
23.10   assert against any person and is the successor in interest to all claims which could have 
23.11   been asserted against the former Minneapolis Teachers Retirement Fund Association, 
23.12   subject to the following exceptions and qualifications: 
23.13   (1)  the Teachers Retirement Association is not liable for any claim against the 
23.14   Minneapolis Teachers Retirement Fund Association, its former board or board members, 
23.15   which is founded upon a claim of breach of fiduciary duty, where the act or acts 
23.16   constituting the claimed breach were not done in good faith;
23.17    (2) the Teachers Retirement Association may assert any applicable defense to any 
23.18   claim in any judicial or administrative proceeding that the former Minneapolis Teachers 
23.19   Retirement Fund Association or its Board would otherwise have been entitled to assert; 
23.20   (3) the Teachers Retirement Association may assert any applicable defense that the 
23.21   Teachers Retirement Association may assert in its capacity as a statewide agency; and 
23.22   (4) the Teachers Retirement Association shall indemnify any former fiduciary of the 
23.23   Minneapolis Teachers Retirement Fund Association consistent with the provisions of the 
23.24   Public Pension Fiduciary Responsibility Act, in section 356A.11.
23.25   (c) From the assets of the former Minneapolis Teachers Retirement Fund Association 
23.26   transferred to the Teachers Retirement Association, an amount equal to the percentage 
23.27   figure that represents the ratio between the market value of the Minnesota postretirement 
23.28   investment fund as of June 30, 2006, and the required reserves of the Minnesota post 
23.29   retirement investment fund as of June 30, 2006, applied to the present value of future 
23.30   benefits payable to annuitants of the former Minneapolis Teachers Retirement Fund 
23.31   Association as of June 30, 2006, including any postretirement adjustment from the 
23.32   Minnesota postretirement investment fund expected to be payable on January 1, 2007, 
23.33   must be transferred to the Minnesota postretirement investment fund. The executive 
23.34   director of the State Board of Investment shall estimate this ratio at the time of the 
23.35   transfer. By January 1, 2007, after all necessary financial information becomes available 
23.36   to determine the actual funded ratio of the Minnesota postretirement investment fund, the 
24.1    postretirement investment fund must refund to the Teachers Retirement Association any 
24.2    excess assets or the Teachers Retirement Association must contribute any deficiency 
24.3    to the Minnesota postretirement investment fund with interest under section 11A.18, 
24.4    subdivision 6. The balance of the assets of the former Minneapolis Teachers Retirement 
24.5    Fund Association after the transfer to the Minnesota postretirement investment fund must 
24.6    be credited to the Teachers Retirement Association.
24.7    If the assets transferred by the Minneapolis Teachers Retirement Fund Association 
24.8    to the Teachers Retirement Association are insufficient to meet its obligation to the 
24.9    Minnesota postretirement investment fund, additional assets must be transferred by the 
24.10   executive director of the Teachers Retirement Association to meet the amount required.
24.11       Subd. 6. Benefit calculation. (a) For every deferred, inactive, disabled, and retired 
24.12   member of the Minneapolis Teachers Retirement Fund Association transferred under 
24.13   subdivision 1, and the survivors of these members, annuities or benefits earned before 
24.14   the date of the transfer, other than future postretirement adjustments, must be calculated 
24.15   and paid by the Teachers Retirement Association under the laws, articles of incorporation, 
24.16   and bylaws of the former Minneapolis Teachers Retirement Fund Association that were 
24.17   in effect relative to the person on the date of the person's termination of active service 
24.18   covered by the former Minneapolis Teachers Retirement Fund Association.
24.19   (b) Former Minneapolis Teachers Retirement Fund Association members who retired 
24.20   before July 1, 2006, must receive postretirement adjustments after December 31, 2006, 
24.21   only as provided in section 11A.18. All other benefit recipients of the former Minneapolis 
24.22   Teachers Retirement Fund Association must receive postretirement adjustments after 
24.23   December 31, 2006, only as provided in section 356.41.
24.24   (c) This consolidation does not impair or diminish benefits for an active, deferred, 
24.25   or retired member or a survivor of an active, deferred, or retired member under the 
24.26   former Minneapolis Teachers Retirement Fund Association in existence at the time of the 
24.27   consolidation, except that any future guaranteed or investment-related postretirement 
24.28   adjustments must be paid after July 1, 2006, in accordance with paragraph (b), and all 
24.29   benefits based on service on or after July 1, 2006 must be determined only by laws 
24.30   governing the Teachers Retirement Association.
24.31       Subd. 7. Termination of Minneapolis Teachers Retirement Fund Association 
24.32   special retirement fund. (a) As of June 30, 2006, the Minneapolis Teachers Retirement 
24.33   Fund Association ceases to exist.
24.34   (b) Contracts, records, and obligations of the Minneapolis Teachers Retirement Fund 
24.35   Association special retirement fund existing at the time of consolidation with the Teachers 
24.36   Retirement Association are transferred to the Teachers Retirement Association pursuant to 
25.1    the provisions of section 15.039, subdivisions 5 and 5a, except that contracts, records, and 
25.2    obligations of the Minneapolis Teachers Retirement Fund Association special retirement 
25.3    fund related to investment and safekeeping of assets are transferred to the State Board 
25.4    of Investment pursuant to the provisions of section 15.039, subdivisions 5 and 5a. The 
25.5    State Board of Investment has the authority to pay the investment-related liabilities and 
25.6    obligations from the assets transferred from the Minnesota Teachers Retirement Fund 
25.7    Association incurred by the Teachers Retirement Association. The audit or examination of 
25.8    the Minneapolis Teachers Retirement Fund Association for year-end June 30, 2006 must 
25.9    be performed by either the State Auditor or the Legislative Auditor under an agreement 
25.10   with the Teachers Retirement Association. The costs of the audit or examination must 
25.11   be paid by the Teachers Retirement Association. Between the date of enactment of this 
25.12   section and June 30, 2006, the Minneapolis Teachers Retirement Fund Association cannot 
25.13   incur a new or additional enforceable contractual liability or obligation without approval 
25.14   of the Teachers Retirement Association.

25.15       Sec. 10. [354.75] MINNEAPOLIS EMPLOYEES RETIREMENT FUND STATE 
25.16   AID REDEDICATED.
25.17       Subdivision 1. Appropriation. The positive difference, if any, between the actual 
25.18   state aid paid to the Minneapolis Employees Retirement fund under section 422A.101, 
25.19   subdivision 3, and $8,065,000 annually is appropriated from the general fund to the 
25.20   commissioner of finance for deposit in the Teachers Retirement Association to offset all or 
25.21   a portion of the current and future unfunded actuarial accrued liability of the Minneapolis 
25.22   Teachers Retirement Fund Association.
25.23       Subd. 2. Financial requirements. The appropriation in subdivision 1 is available 
25.24   to the extent that financial requirements of the Minneapolis Employees Retirement Fund 
25.25   under section 422A.101, subdivision 3, have been satisfied.

25.26       Sec. 11. Minnesota Statutes 2004, section 354A.011, subdivision 15a, is amended to 
25.27   read:
25.28       Subd. 15a. Normal retirement age. "Normal retirement age" means age 65 for 
25.29   a person who first became a member of the coordinated program of the Minneapolis or 
25.30   St. Paul Teachers Retirement Fund Association or the new law coordinated program of 
25.31   the Duluth Teachers Retirement Fund Association or a member of a pension fund listed 
25.32   in section  356.30, subdivision 3, before July 1, 1989. For a person who first became a 
25.33   member of the coordinated program of the Minneapolis or St. Paul Teachers Retirement 
25.34   Fund Association or the new law coordinated program of the Duluth Teachers Retirement 
26.1    Fund Association after June 30, 1989, normal retirement age means the higher of age 65 
26.2    or retirement age, as defined in United States Code, title 42, section 416(l), as amended, 
26.3    but not to exceed age 66. For a person who is a member of the basic program of the 
26.4    Minneapolis or St. Paul Teachers Retirement Fund Association or the old law coordinated 
26.5    program of the Duluth Teachers Retirement Fund Association, normal retirement age 
26.6    means the age at which a teacher becomes eligible for a normal retirement annuity 
26.7    computed upon meeting the age and service requirements specified in the applicable 
26.8    provisions of the articles of incorporation or bylaws of the respective teachers retirement 
26.9    fund association. 

26.10       Sec. 12. Minnesota Statutes 2004, section 354A.011, subdivision 27, is amended to 
26.11   read:
26.12       Subd. 27. Teacher. (a) "Teacher" means any person who renders service for a public 
26.13   school district, other than a charter school, located in the corporate limits of one of the 
26.14   cities of the first class which was so classified on January 1, 1979 Duluth and St. Paul, 
26.15   as any of the following:
26.16   (1) a full-time employee in a position for which a valid license from the state 
26.17   Department of Education is required;
26.18   (2) an employee of the teachers retirement fund association located in the city of 
26.19   the first class unless the employee has exercised the option pursuant to Laws 1955, 
26.20   chapter 10, section 1, to retain membership in the Minneapolis Employees Retirement 
26.21   Fund established pursuant to chapter 422A;
26.22   (3) a part-time employee in a position for which a valid license from the state 
26.23   Department of Education is required; or
26.24   (4) a part-time employee in a position for which a valid license from the state 
26.25   Department of Education is required who also renders other nonteaching services for the 
26.26   school district, unless the board of trustees of the teachers retirement fund association 
26.27   determines that the combined employment is on the whole so substantially dissimilar to 
26.28   teaching service that the service may not be covered by the association.
26.29   (b) The term does not mean any person who renders service in the school district 
26.30   as any of the following:
26.31   (1) an independent contractor or the employee of an independent contractor;
26.32   (2) an employee who is a full-time teacher covered by the Teachers Retirement 
26.33   Association or by another teachers retirement fund association established pursuant to this 
26.34   chapter or chapter 354;
26.35   (3) an employee exempt from licensure pursuant to section  122A.30; 
27.1    (4) an employee who is a teacher in a technical college located in a city of the first 
27.2    class unless the person elects coverage by the applicable first class city teacher retirement 
27.3    fund association under section  354B.21, subdivision 2; 
27.4    (5) a teacher employed by a charter school, irrespective of the location of the 
27.5    school; or
27.6    (6) an employee who is a part-time teacher in a technical college in a city of the first 
27.7    class and who has elected coverage by the applicable first class city teacher retirement 
27.8    fund association under section  354B.21, subdivision 2, but (i) the teaching service is 
27.9    incidental to the regular nonteaching occupation of the person; (ii) the applicable technical 
27.10   college stipulates annually in advance that the part-time teaching service will not exceed 
27.11   300 hours in a fiscal year; and (iii) the part-time teaching actually does not exceed 300 
27.12   hours in the fiscal year to which the certification applies. 

27.13       Sec. 13. Minnesota Statutes 2004, section 354A.021, subdivision 1, is amended to read:
27.14       Subdivision 1. Establishment. There is established a teachers retirement fund 
27.15   association in each of the cities of the first class which were so classified on January 1, 
27.16   1979 Duluth and St. Paul. The associations shall be known respectively as the "Duluth 
27.17   Teachers Retirement Fund Association," the "Minneapolis Teachers Retirement Fund 
27.18   Association" and the "St. Paul Teachers Retirement Fund Association." Each association 
27.19   shall be a continuation of the teachers retirement fund association with the same corporate 
27.20   name established pursuant to the authorization contained in Laws 1909, chapter 343, 
27.21   section 1.

27.22       Sec. 14. Minnesota Statutes 2004, section 354A.092, is amended to read:
27.23   354A.092 SABBATICAL LEAVE.
27.24   Any teacher in the coordinated program of either the Minneapolis Teachers 
27.25   Retirement Fund Association or the St. Paul Teachers Retirement Fund Association or 
27.26   any teacher in the new law coordinated program of the Duluth Teachers Retirement 
27.27   Fund Association who is granted a sabbatical leave shall be entitled to receive allowable 
27.28   service credit in the applicable association for periods of sabbatical leave. To obtain the 
27.29   service credit, the teacher on sabbatical leave shall make an employee contribution to the 
27.30   applicable association. No teacher shall be entitled to receive more than three years of 
27.31   allowable service credit pursuant to this section for a period or periods of sabbatical 
27.32   leave during any ten consecutive fiscal or calendar years, whichever is the applicable 
27.33   plan year for the teachers retirement fund association. If the teacher granted a sabbatical 
27.34   leave makes the employee contribution for a period of sabbatical leave pursuant to this 
28.1    section, the employing unit shall make an employer contribution on behalf of the teacher 
28.2    to the applicable association for that period of sabbatical leave in the manner described 
28.3    in section  354A.12, subdivision 2a. The employee and employer contributions shall be 
28.4    in an amount equal to the employee and employer contribution rates in effect for other 
28.5    active members of the association covered by the same program applied to a salary figure 
28.6    equal to the teacher's actual covered salary for the plan year immediately preceding the 
28.7    sabbatical leave period. Payment of the employee contribution authorized pursuant to this 
28.8    section shall be made by the teacher on or before June 30 of year next following the year 
28.9    in which the sabbatical leave terminated and shall be made without interest. For sabbatical 
28.10   leaves taken after June 30, 1986, the required employer contributions shall be paid by the 
28.11   employing unit within 30 days after notification by the association of the amount due. 
28.12   If the employee contributions for the sabbatical leave period are less than an amount 
28.13   equal to the applicable contribution rate applied to a salary figure equal to the teacher's 
28.14   actual covered salary for the plan year immediately preceding the sabbatical leave period, 
28.15   service credit shall be prorated. The prorated service credit shall be determined by the 
28.16   ratio between the amount of the actual payment which was made and the full contribution 
28.17   amount payable pursuant to this section. 

28.18       Sec. 15. Minnesota Statutes 2004, section 354A.093, subdivision 1, is amended to read:
28.19       Subdivision 1. Eligibility. Any teacher in the coordinated program of either the 
28.20   Minneapolis Teachers Retirement Fund Association or the St. Paul Teachers Retirement 
28.21   Fund Association or any teacher in the new law coordinated program of the Duluth 
28.22   Teachers Retirement Fund Association who is absent from employment by reason of 
28.23   service in the uniformed services as defined in United States Code, title 38, section 
28.24   4303(13) and who returns to the employer providing active teaching service upon 
28.25   discharge from uniformed service within the time frames required under United States 
28.26   Code, title 38, section 4312(e), may receive allowable service credit in the applicable 
28.27   association for all or a portion of the period of uniformed service, provided that the teacher 
28.28   did not separate from uniformed service with a dishonorable or bad conduct discharge 
28.29   or under other than honorable conditions.

28.30       Sec. 16. Minnesota Statutes 2004, section 354A.095, is amended to read:
28.31   354A.095 PARENTAL AND MATERNITY LEAVE.
28.32   Basic or coordinated members of the St. Paul Teachers Retirement Fund 
28.33   Association, the Minneapolis Teachers Retirement Fund Association, and new coordinated 
28.34   members of the Duluth Teachers Retirement Fund Association, who are granted parental 
29.1    or maternity leave of absence by the employing authority, are entitled to obtain service 
29.2    credit not to exceed one year for the period of leave upon payment to the applicable 
29.3    fund by the end of the fiscal year following the fiscal year in which the leave of absence 
29.4    terminated. The amount of the payment must include the total required employee and 
29.5    employer contributions for the period of leave prescribed in section  354A.12. Payment 
29.6    must be based on the member's average monthly salary rate upon return to teaching 
29.7    service, and is payable without interest. Payment must be accompanied by a certified or 
29.8    otherwise adequate copy of the resolution or action of the employing authority granting 
29.9    or approving the leave. 

29.10       Sec. 17. Minnesota Statutes 2004, section 354A.096, is amended to read:
29.11   354A.096 MEDICAL LEAVE.
29.12   Any teacher in the coordinated program of either the Minneapolis Teachers 
29.13   Retirement Fund Association or the St. Paul Teachers Retirement Fund Association or the 
29.14   new law coordinated program of the Duluth Teachers Retirement Fund Association who is 
29.15   on an authorized medical leave of absence and subsequently returns to teaching service 
29.16   is entitled to receive allowable service credit, not to exceed one year, for the period of 
29.17   leave, upon making the prescribed payment to the fund. This payment must include the 
29.18   required employee and employer contributions at the rates specified in section  354A.12, 
29.19   subdivisions 1 and 2, as applied to the member's average full-time monthly salary rate on 
29.20   the date the leave of absence commenced plus annual interest at the rate of 8.5 percent per 
29.21   year from the end of the fiscal year during which the leave terminates to the end of the 
29.22   month during which payment is made. The member must pay the total amount required 
29.23   unless the employing unit, at its option, pays the employer contributions. The total amount 
29.24   required must be paid by the end of the fiscal year following the fiscal year in which the 
29.25   leave of absence terminated or before the member retires, whichever is earlier. Payment 
29.26   must be accompanied by a copy of the resolution or action of the employing authority 
29.27   granting the leave and the employing authority, upon granting the leave, must certify 
29.28   the leave to the association in a manner specified by the executive director. A member 
29.29   may not receive more than one year of allowable service credit during any fiscal year by 
29.30   making payment under this section. A member may not receive disability benefits under 
29.31   section  354A.36 and receive allowable service credit under this section for the same 
29.32   period of time. 

29.33       Sec. 18. Minnesota Statutes 2004, section 354A.12, subdivision 1, is amended to read:
30.1        Subdivision 1. Employee contributions. The contribution required to be paid by 
30.2    each member of a teachers retirement fund association shall not be less than the percentage 
30.3    of total salary specified below for the applicable association and program:
30.4            Association and Program                               Percentage of                                                                    
30.5                                                                  Total Salary                                                                     
30.6    Duluth Teachers Retirement Association                                                                                                         
30.7                   old law and new law                                                                                                            
30.8                   coordinated programs                           5.5 percent                                                                      
30.9    Minneapolis Teachers Retirement                                                                                                                
30.10   Association                                                                                                                                    
30.11                  basic program                                  8.5 percent                                                                      
30.12                  coordinated program                            5.5 percent                                                                      
30.13   St. Paul Teachers Retirement Association                                                                                                       
30.14                  basic program                                  8 percent                                                                        
30.15                  coordinated program                            5.5 percent                                                                      
30.16   Contributions shall be made by deduction from salary and must be remitted directly 
30.17   to the respective teachers retirement fund association at least once each month.

30.18       Sec. 19. Minnesota Statutes 2004, section 354A.12, subdivision 2, is amended to read:
30.19       Subd. 2. Retirement contribution levy disallowed. Except as provided in 
30.20   subdivision 3b and in section   423A.02, subdivision 3, with respect to the city of 
30.21   Minneapolis and special school district No. 1 and in section   423A.02, subdivision 3, with 
30.22   respect to independent school district No. 625, notwithstanding any law to the contrary, 
30.23   levies for teachers retirement fund associations in the cities of the first class Duluth and St. 
30.24   Paul, including levies for any employer Social Security taxes for teachers covered by the 
30.25   Duluth Teachers Retirement Fund Association or the Minneapolis Teachers Retirement 
30.26   Fund Association or the St. Paul Teachers Retirement Fund Association, are disallowed. 

30.27       Sec. 20. Minnesota Statutes 2004, section 354A.12, subdivision 2a, is amended to read:
30.28       Subd. 2a. Employer regular and additional contribution rates. (a) The 
30.29   employing units shall make the following employer contributions to teachers retirement 
30.30   fund associations:
31.1    (1)  for any coordinated member of a teachers retirement fund association in a city 
31.2    of the first class, the employing unit shall pay the employer Social Security taxes in 
31.3    accordance with section   355.46, subdivision 3, clause (b); 
31.4    (2) for any coordinated member of one of the following teachers retirement fund 
31.5    associations in a city of the first class, the employing unit shall make a regular employer 
31.6    contribution to the respective retirement fund association in an amount equal to the 
31.7    designated percentage of the salary of the coordinated member as provided below:
31.8          Duluth Teachers Retirement                                   
31.9          Fund Association                           4.50 percent      
31.10         Minneapolis Teachers Retirement                              
31.11         Fund Association                           4.50 percent      
31.12         St. Paul Teachers Retirement                                 
31.13         Fund Association                           4.50 percent      
31.14   (3) for any basic member of one of the following St. Paul Teachers Retirement 
31.15   Fund associations in a city of the first class Association, the employing unit shall make a 
31.16   regular employer contribution to the respective retirement fund in an amount equal to the 
31.17   designated percentage 8.00 percent of the salary of the basic member as provided below:;
31.18         Minneapolis Teachers Retirement                              
31.19         Fund Association                           8.50 percent      
31.20         St. Paul Teachers Retirement                                 
31.21         Fund Association                           8.00 percent      
31.22   (4) for a basic member of a the St. Paul Teachers Retirement Fund Association in a 
31.23   city of the first class, the employing unit shall make an additional employer contribution to 
31.24   the respective fund in an amount equal to the designated percentage 3.64 percent of the 
31.25   salary of the basic member, as provided below:;
31.26         Minneapolis Teachers Retirement                               
31.27         Fund Association                                              
31.28          July 1, 1993 - June 30, 1994              4.85 percent      
31.29          July 1, 1994, and thereafter              3.64 percent      
31.30         St. Paul Teachers Retirement                                  
31.31         Fund Association                                              
32.1           July 1, 1993 - June 30, 1995              4.63 percent      
32.2           July 1, 1995, and thereafter              3.64 percent      
32.3    (5) for a coordinated member of a teachers retirement fund association in a city 
32.4    of the first class, the employing unit shall make an additional employer contribution to 
32.5    the respective fund in an amount equal to the applicable percentage of the coordinated 
32.6    member's salary, as provided below:
32.7          Duluth Teachers Retirement                                    
32.8          Fund Association                            1.29 percent      
32.9          Minneapolis Teachers Retirement                               
32.10         Fund Association                                              
32.11          July 1, 1993 - June 30, 1994              0.50 percent      
32.12          July 1, 1994, and thereafter              3.64 percent      
32.13         St. Paul Teachers Retirement                                  
32.14         Fund Association                                              
32.15          July 1, 1993 - June 30, 1994              0.50 percent      
32.16          July 1, 1994 - June 30, 1995              1.50 percent      
32.17          July 1, 1997, and thereafter              3.84 percent      
32.18   (b) The regular and additional employer contributions must be remitted directly to 
32.19   the respective teachers retirement fund association at least once each month. Delinquent 
32.20   amounts are payable with interest under the procedure in subdivision 1a.
32.21   (c) Payments of regular and additional employer contributions for school district 
32.22   or technical college employees who are paid from normal operating funds must be made 
32.23   from the appropriate fund of the district or technical college.

32.24       Sec. 21. Minnesota Statutes 2004, section 354A.12, subdivision 3a, is amended to read:
32.25       Subd. 3a. Special direct state aid to first class city teachers retirement fund 
32.26   associations. (a) In fiscal year 1998, the state shall pay $4,827,000 to the St. Paul 
32.27   Teachers Retirement Fund Association, $17,954,000 to the Minneapolis Teachers 
32.28   Retirement Fund Association, and $486,000 to the Duluth Teachers Retirement Fund 
32.29   Association. In each subsequent fiscal year after fiscal year 2006, these payments to the 
32.30   first class city teachers retirement fund associations must be $2,827,000 for St. Paul, 
33.1    $12,954,000 to the Teachers Retirement Association for the former Minneapolis Teachers 
33.2    Retirement Fund Association, and $486,000 for Duluth.
33.3    (b) The direct state aids under this subdivision are payable October 1 annually. The 
33.4    commissioner of finance shall pay the direct state aid. The amount required under this 
33.5    subdivision is appropriated annually from the general fund to the commissioner of finance.

33.6        Sec. 22. Minnesota Statutes 2004, section 354A.12, subdivision 3b, is amended to read:
33.7        Subd. 3b. Special direct state matching aid to the Minneapolis Teachers 
33.8    Retirement Fund Association. (a) Special School District No. 1 may must make 
33.9    an additional employer contribution to the Minneapolis Teachers Retirement Fund 
33.10   Association. The city of Minneapolis may must make a contribution to the Minneapolis 
33.11   Teachers Retirement Fund Association. This contribution may must be made by a levy 
33.12   of the board of estimate and taxation of the city of Minneapolis and the levy, if made, is 
33.13   classified as that of a special taxing district for purposes of sections   275.065 and   276.04, 
33.14   and for all other property tax purposes. 
33.15   (b) For every $1,000 $1,125,000 must be contributed in equal proportion by Special 
33.16   School District No. 1 and $1,125,000 must be contributed by the city of Minneapolis to 
33.17   the Minneapolis Teachers Retirement Fund Association under paragraph (a), and the 
33.18   state shall pay to the Minneapolis Teachers Retirement Fund Association $1,000, but not 
33.19   to exceed $2,500,000 in total in each fiscal year 1994. The superintendent of Special 
33.20   School District No. 1, the mayor of the city of Minneapolis, and the executive director 
33.21   of the Minneapolis Teachers Retirement Fund Association shall jointly certify to the 
33.22   commissioner of finance the total amount that has been contributed by Special School 
33.23   District No. 1 and by the city of Minneapolis to the Minneapolis Teachers Retirement 
33.24   Fund Association. Any certification to the commissioner of education must be made 
33.25   quarterly. If the total certifications for a fiscal year exceed the maximum annual direct state 
33.26   matching aid amount in any quarter, the amount of direct state matching aid payable to the 
33.27   Minneapolis Teachers Retirement Fund Association must be limited to the balance of the 
33.28   maximum annual direct state matching aid amount available. The amount required under 
33.29   this paragraph, subject to the maximum direct state matching aid amount, is appropriated 
33.30   annually to the commissioner of finance.
33.31   (c) The commissioner of finance may prescribe the form of the certifications 
33.32   required under paragraph (b).

33.33       Sec. 23. Minnesota Statutes 2004, section 354A.12, subdivision 3c, is amended to read:
34.1        Subd. 3c. Termination of supplemental contributions and direct matching 
34.2    and state aid. (a) The supplemental contributions payable to the Minneapolis Teachers 
34.3    Retirement Fund Association by Special School District No. 1 and the city of Minneapolis 
34.4    under section   423A.02, subdivision 3, which must continue to be paid to the Teachers 
34.5    Retirement Association until 2037, or to the St. Paul Teachers Retirement Fund 
34.6    Association by Independent School District No. 625 under section   423A.02, subdivision 
34.7    3, or the direct state aids under subdivision 3a to the first class city St. Paul Teachers 
34.8    Retirement associations, and the direct matching and state aid under subdivision 3b to 
34.9    the Minneapolis Teachers Retirement Fund Association terminate for the respective fund 
34.10   at the end of the fiscal year in which the accrued liability funding ratio for that fund, as 
34.11   determined in the most recent actuarial report for that fund by the actuary retained by the 
34.12   Legislative Commission on Pensions and Retirement, equals or exceeds the accrued 
34.13   liability funding ratio for the teachers retirement association, as determined in the most 
34.14   recent actuarial report for the Teachers Retirement Association by the actuary retained by 
34.15   the Legislative Commission on Pensions and Retirement. 
34.16   (b) If the state direct matching, state supplemental, or state aid is terminated for a 
34.17   first class city teachers retirement fund association under paragraph (a), it may not again 
34.18   be received by that fund.
34.19   (c) If either the Minneapolis Teachers Retirement Fund Association, the St. 
34.20   Paul Teachers Retirement Fund Association, or the Duluth Teachers Retirement Fund 
34.21   Association remain is funded at less than the funding ratio applicable to the Teachers 
34.22   Retirement Association when the provisions of paragraph (b) become effective, then any 
34.23   state aid not previously distributed to that association must be immediately transferred to 
34.24   the other associations in proportion to the relative sizes of their unfunded actuarial accrued 
34.25   liabilities Teachers Retirement Association.

34.26       Sec. 24. Minnesota Statutes 2004, section 354A.12, subdivision 3d, is amended to read:
34.27       Subd. 3d. Supplemental administrative expense assessment. (a) The active 
34.28   and retired membership of the Minneapolis Teachers Retirement Fund Association and 
34.29   of the St. Paul Teachers Retirement Fund Association is responsible for defraying 
34.30   supplemental administrative expenses other than investment expenses of the respective 
34.31   teacher retirement fund association.
34.32   (b) Investment expenses of the teachers retirement fund association are those 
34.33   expenses incurred by or on behalf of the retirement fund in connection with the investment 
34.34   of the assets of the retirement fund other than investment security transaction costs. Other 
34.35   administrative expenses are all expenses incurred by or on behalf of the retirement fund 
35.1    for all other retirement fund functions other than the investment of retirement fund assets. 
35.2    Investment and other administrative expenses must be accounted for using generally 
35.3    accepted accounting principles and in a manner consistent with the comprehensive annual 
35.4    financial report of the teachers retirement fund association for the immediately previous 
35.5    fiscal year under section   356.20. 
35.6    (c) Supplemental administrative expenses other than investment expenses of a first 
35.7    class city teacher the St. Paul Teachers Retirement Fund Association are those expenses 
35.8    for the fiscal year that:
35.9    (1) exceed, for the St. Paul Teachers Retirement Fund Association, $443,745, or 
35.10   for the Minneapolis Teacher Retirement Fund Association $671,513, plus, in each case, 
35.11   an additional amount derived by applying the percentage increase in the Consumer Price 
35.12   Index for Urban Wage Earners and Clerical Workers All Items Index published by the 
35.13   Bureau of Labor Statistics of the United States Department of Labor since July 1, 2001, to 
35.14   the applicable dollar amount; and
35.15   (2)  exceed the amount computed by applying the most recent percentage of 
35.16   pay administrative expense amount, other than investment expenses, for the teachers 
35.17   retirement association governed by chapter 354 to the covered payroll of the respective 
35.18   teachers retirement fund association for the fiscal year.
35.19   (d) The board of trustees of each first class city the St. Paul Teachers Retirement 
35.20   Fund Association shall allocate the total dollar amount of supplemental administrative 
35.21   expenses other than investment expenses determined under paragraph (c), clause (2), 
35.22   among the various active and retired membership groups of the teachers retirement fund 
35.23   association and shall assess the various membership groups their respective share of 
35.24   the supplemental administrative expenses other than investment expenses, in amounts 
35.25   determined by the board of trustees. The supplemental administrative expense assessments 
35.26   must be paid by the membership group in a manner determined by the board of trustees 
35.27   of the respective teachers retirement association. Supplemental administrative expenses 
35.28   payable by the active members of the pension plan must be picked up by the employer in 
35.29   accordance with section   356.62. 
35.30   (e) With respect to the St. Paul Teachers Retirement Fund Association, the 
35.31   supplemental administrative expense assessment must be fully disclosed to the various 
35.32   active and retired membership groups of the teachers retirement fund association. The 
35.33   chief administrative officer of the St. Paul Teachers Retirement Fund Association shall 
35.34   prepare a supplemental administrative expense assessment disclosure notice, which must 
35.35   include the following:
36.1    (1) the total amount of administrative expenses of the St. Paul Teachers Retirement 
36.2    Fund Association, the amount of the investment expenses of the St. Paul Teachers 
36.3    Retirement Fund Association, and the net remaining amount of administrative expenses of 
36.4    the St. Paul Teachers Retirement Fund Association;
36.5    (2) the amount of administrative expenses for the St. Paul Teachers Retirement Fund 
36.6    Association that would be equivalent to the teachers retirement association noninvestment 
36.7    administrative expense level described in paragraph (c);
36.8    (3) the total amount of supplemental administrative expenses required for assessment 
36.9    calculated under paragraph (c);
36.10   (4) the portion of the total amount of the supplemental administrative expense 
36.11   assessment allocated to each membership group and the rationale for that allocation;
36.12   (5) the manner of collecting the supplemental administrative expense assessment 
36.13   from each membership group, the number of assessment payments required during the 
36.14   year, and the amount of each payment or the procedure used to determine each payment; 
36.15   and
36.16   (6) any other information that the chief administrative officer determines is necessary 
36.17   to fairly portray the manner in which the supplemental administrative expense assessment 
36.18   was determined and allocated.
36.19   (f) The disclosure notice must be provided annually in the annual report of the 
36.20   association.
36.21   (g)  The supplemental administrative expense assessments must be deposited in the 
36.22   applicable teachers retirement fund upon receipt.
36.23   (h)  Any omitted active membership group assessments that remain undeducted 
36.24   and unpaid to the teachers retirement fund association for 90 days must be paid by the 
36.25   respective school district. The school district may recover any omitted active membership 
36.26   group assessment amounts that it has previously paid. The teachers retirement fund 
36.27   association shall deduct any omitted retired membership group assessment amounts from 
36.28   the benefits next payable after the discovery of the omitted amounts.

36.29       Sec. 25. Minnesota Statutes 2004, section 354A.30, is amended to read:
36.30   354A.30 MINNEAPOLIS AND ST. PAUL TEACHERS RETIREMENT FUND 
36.31   ASSOCIATIONS ASSOCIATION; COORDINATED PROGRAM.
36.32   There is established a coordinated program within the Minneapolis Teachers 
36.33   Retirement Fund Association and a coordinated program within the St. Paul Teachers 
36.34   Retirement Fund Association to provide retirement coverage for teachers who are covered 
36.35   by an agreement or modification made between the state and the secretary of health, 
37.1    education and welfare making the provisions of the federal Old Age, Survivors and 
37.2    Disability Insurance Act applicable to certain teachers covered by the teachers retirement 
37.3    fund association. The provisions governing the coordinated program shall be sections  
37.4    354A.31 to  354A.41 and any other applicable provisions of this chapter. 

37.5        Sec. 26. Minnesota Statutes 2005 Supplement, section 354A.31, subdivision 4, is 
37.6    amended to read:
37.7        Subd. 4. Computation of the normal coordinated retirement annuity; 
37.8    Minneapolis and St. Paul funds fund. (a) This subdivision applies to the coordinated 
37.9    programs program of the Minneapolis Teachers Retirement Fund Association and the St. 
37.10   Paul Teachers Retirement Fund Association.
37.11   (b) The normal coordinated retirement annuity is an amount equal to a retiring 
37.12   coordinated member's average salary under section 354A.011, subdivision 7a, multiplied 
37.13   by the retirement annuity formula percentage.
37.14   (c) This paragraph, in conjunction with subdivision 6, applies to a person who first 
37.15   became a member or a member in a pension fund listed in section 356.30, subdivision 3, 
37.16   before July 1, 1989, unless paragraph (d), in conjunction with subdivision 7, produces a 
37.17   higher annuity amount, in which case paragraph (d) will apply. The retirement annuity 
37.18   formula percentage for purposes of this paragraph is the percent specified in section 
37.19   356.315, subdivision 1, per year for each year of coordinated service for the first ten years 
37.20   and the percent specified in section 356.315, subdivision 2, for each year of coordinated 
37.21   service thereafter.
37.22   (d) This paragraph applies to a person who has become at least 55 years old and who 
37.23   first becomes a member after June 30, 1989, and to any other member who has become 
37.24   at least 55 years old and whose annuity amount, when calculated under this paragraph 
37.25   and in conjunction with subdivision 7 is higher than it is when calculated under paragraph 
37.26   (c), in conjunction with the provisions of subdivision 6. The retirement annuity formula 
37.27   percentage for purposes of this paragraph is the percent specified in section 356.315, 
37.28   subdivision 2, for each year of coordinated service.

37.29       Sec. 27. Minnesota Statutes 2004, section 354A.32, subdivision 1, is amended to read:
37.30       Subdivision 1. Optional forms generally. The boards board of the Minneapolis and 
37.31   the St. Paul Teachers Retirement Fund Associations Association shall each establish for the 
37.32   coordinated program and the board of the Duluth Teachers Retirement Fund Association 
37.33   shall establish for the new law coordinated program an optional retirement annuity which 
37.34   shall take the form of a joint and survivor annuity. Each board may also in its discretion 
38.1    establish an optional annuity which shall take the form of an annuity payable for a period 
38.2    certain and for life thereafter. Each board shall also establish an optional retirement 
38.3    annuity that guarantees payment of the balance of the annuity recipient's accumulated 
38.4    deductions to a designated beneficiary upon the death of the annuity recipient. Except as 
38.5    provided in subdivision 1a, optional annuity forms shall be the actuarial equivalent of the 
38.6    normal forms provided in section  354A.31. In establishing these optional annuity forms, 
38.7    the board shall obtain the written recommendation of the commission-retained actuary. 
38.8    The recommendation shall be a part of the permanent records of the board. 

38.9        Sec. 28. Minnesota Statutes 2004, section 354A.39, is amended to read:
38.10   354A.39 SERVICE IN OTHER PUBLIC RETIREMENT FUNDS; ANNUITY.
38.11   Any person who has been a member of the Minnesota State Retirement System, the 
38.12   Public Employees Retirement Association including the Public Employees Retirement 
38.13   Association Police and Fire Fund, the Teachers Retirement Association, the Minnesota 
38.14   State Patrol Retirement Association, the legislators retirement plan, the constitutional 
38.15   officers retirement plan, the Minneapolis Employees Retirement Fund, the Duluth 
38.16   Teachers Retirement Fund Association new law coordinated program, the Minneapolis 
38.17   Teachers Retirement Fund Association coordinated program, the St. Paul Teachers 
38.18   Retirement Fund Association coordinated program, or any other public employee 
38.19   retirement system in the state of Minnesota having a like provision but excluding all other 
38.20   funds providing retirement benefits for police officers or firefighters shall be entitled 
38.21   when qualified to an annuity from each fund if the person's total allowable service in all 
38.22   of the funds or in any two or more of the funds totals three or more years, provided that 
38.23   no portion of the allowable service upon which the retirement annuity from one fund is 
38.24   based is used again in the computation for a retirement annuity from another fund and 
38.25   provided further that the person has not taken a refund from any of funds or associations 
38.26   since the person's membership in the fund or association has terminated. The annuity 
38.27   from each fund or association shall be determined by the appropriate provisions of the 
38.28   law governing each fund or association, except that the requirement that a person must 
38.29   have at least three years of allowable service in the respective fund or association shall not 
38.30   apply for the purposes of this section, provided that the aggregate service in two or more 
38.31   of these funds equals three or more years.

38.32       Sec. 29. Minnesota Statutes 2004, section 354A.40, subdivision 1, is amended to read:
38.33       Subdivision 1. Retirement annuity. Any coordinated member of either the 
38.34   Minneapolis Teachers Retirement Fund Association or of the St. Paul Teachers Retirement 
39.1    Fund Association who has credited service prior to July 1, 1978 shall be entitled to 
39.2    receive a retirement annuity when otherwise qualified, the calculation of which shall 
39.3    utilize the applicable retirement annuity formula specified in articles of incorporation and 
39.4    bylaws of the teachers retirement fund association governing the basic program for that 
39.5    portion of credited service which was served prior to July 1, 1978, and the retirement 
39.6    annuity formula specified in section  354A.31 for the remainder of the member's credited 
39.7    service, both applied to the member's average salary as specified in section  354A.31, 
39.8    subdivision 4. The formula percentages to be used in calculating the coordinated portion 
39.9    of the retirement annuity or coordinated service under this section shall recognize the 
39.10   coordinated service as a continuation of any service prior to July 1, 1978. 

39.11       Sec. 30. Minnesota Statutes 2004, section 354A.41, is amended to read:
39.12   354A.41 ADMINISTRATION OF COORDINATED PROGRAM.
39.13       Subdivision 1. Administrative provisions. The provisions of the articles of 
39.14   incorporation and bylaws of the Minneapolis or the St. Paul Teachers Retirement 
39.15   Fund Association, whichever is applicable, relating to the administration of the fund 
39.16   shall govern the administration of the coordinated program and basic programs and the 
39.17   provisions of the articles of incorporation and bylaws of the Duluth Teachers Retirement 
39.18   Fund Association relating to the administration of the fund shall govern the administration 
39.19   of the new law coordinated program in instances where the administrative provisions are 
39.20   not inconsistent with the provisions of sections  354A.31 to  354A.41, including but not 
39.21   limited to provisions relating to the composition and function of the board of trustees, the 
39.22   investment of assets of the teachers retirement fund association, and the definition of the 
39.23   plan year. The administrative provisions in the articles of incorporation and the bylaws 
39.24   of the Minneapolis Teachers Retirement Fund Association pertaining to the granting of 
39.25   pension benefits of the basic and coordinated programs are no longer in effect after June 
39.26   30, 2006. 
39.27       Subd. 2. Actuarial valuations. In any actuarial valuation of the Minneapolis 
39.28   Teachers Retirement Fund Association, the St. Paul Teachers Retirement Fund 
39.29   Association, or the Duluth Teachers Retirement Fund Association under section  356.215 
39.30   prepared by the commission-retained actuary or supplemental actuarial valuation prepared 
39.31   by an approved actuary retained by the teachers retirement fund association, there shall 
39.32   be included a finding of the condition of the fund showing separately the basic and 
39.33   coordinated programs or the old law coordinated and new law coordinated programs, as 
39.34   appropriate. The finding shall include the level normal cost and the applicable employee 
39.35   and employer contribution rates for each program. 

40.1        Sec. 31. Minnesota Statutes 2004, section 356.20, subdivision 2, is amended to read:
40.2        Subd. 2. Covered public pension plans and funds. This section applies to the 
40.3    following public pension plans:
40.4    (1) the general state employees retirement plan of the Minnesota State Retirement 
40.5    System;
40.6    (2) the general employees retirement plan of the Public Employees Retirement 
40.7    Association;
40.8    (3) the Teachers Retirement Association;
40.9    (4)  the State Patrol retirement plan;
40.10   (5) the Minneapolis Teachers Retirement Fund Association;
40.11   (6) the St. Paul Teachers Retirement Fund Association;
40.12   (7) (6) the Duluth Teachers Retirement Fund Association;
40.13   (8) (7) the Minneapolis Employees Retirement Fund;
40.14   (9) (8) the University of Minnesota faculty retirement plan;
40.15   (10) (9) the University of Minnesota faculty supplemental retirement plan;
40.16   (11) (10) the judges retirement fund;
40.17   (12) (11) a police or firefighter's relief association specified or described in section   
40.18   69.77, subdivision 1a, or   69.771, subdivision 1; 
40.19   (13) (12) the public employees police and fire plan of the Public Employees 
40.20   Retirement Association;
40.21   (14) (13) the correctional state employees retirement plan of the Minnesota State 
40.22   Retirement System; and
40.23   (15) (14) the local government correctional service retirement plan of the Public 
40.24   Employees Retirement Association.

40.25       Sec. 32. Minnesota Statutes 2004, section 356.214, subdivision 1, is amended to read:
40.26       Subdivision 1. Joint retention. (a) The chief administrative officers of the 
40.27   Minnesota State Retirement System, the Public Employees Retirement Association, the 
40.28   Teachers Retirement Association, the Duluth Teachers Retirement Fund Association, 
40.29   the Minneapolis Teachers Retirement Fund Association, the Minneapolis Employees 
40.30   Retirement Fund, and the St. Paul Teachers Retirement Fund Association, jointly, on 
40.31   behalf of the state, its employees, its taxpayers, and its various public pension plans, 
40.32   shall contract with an established actuarial consulting firm to conduct annual actuarial 
40.33   valuations and related services for the retirement plans named in paragraph (b). The 
40.34   principal from the actuarial consulting firm on the contract must be an approved actuary 
40.35   under section  356.215, subdivision 1, paragraph (c). Prior to becoming effective, 
41.1    the contract under this section is subject to a review and approval by the Legislative 
41.2    Commission on Pensions and Retirement. 
41.3    (b) The contract for actuarial services must include the preparation of actuarial 
41.4    valuations and related actuarial work for the following retirement plans:
41.5    (1) the teachers retirement plan, Teachers Retirement Association;
41.6    (2) the general state employees retirement plan, Minnesota State Retirement System;
41.7    (3) the correctional employees retirement plan, Minnesota State Retirement System;
41.8    (4) the State Patrol retirement plan, Minnesota State Retirement System;
41.9    (5) the judges retirement plan, Minnesota State Retirement System;
41.10   (6) the Minneapolis employees retirement plan, Minneapolis Employees Retirement 
41.11   Fund;
41.12   (7) the public employees retirement plan, Public Employees Retirement Association;
41.13   (8) the public employees police and fire plan, Public Employees Retirement 
41.14   Association;
41.15   (9) the Duluth teachers retirement plan, Duluth Teachers Retirement Fund 
41.16   Association;
41.17   (10) the Minneapolis teachers retirement plan, Minneapolis Teachers Retirement 
41.18   Fund Association;
41.19   (11) (10) the St. Paul teachers retirement plan, St. Paul Teachers Retirement Fund 
41.20   Association;
41.21   (12) (11) the legislators retirement plan, Minnesota State Retirement System;
41.22   (13) (12) the elective state officers retirement plan, Minnesota State Retirement 
41.23   System; and
41.24   (14) (13) local government correctional service retirement plan, Public Employees 
41.25   Retirement Association.
41.26   (c) The contract must require completion of the annual actuarial valuation 
41.27   calculations on a fiscal year basis, with the contents of the actuarial valuation calculations 
41.28   as specified in section  356.215, and in conformity with the standards for actuarial work 
41.29   adopted by the Legislative Commission on Pensions and Retirement. 
41.30   The contract must require completion of annual experience data collection and 
41.31   processing and a quadrennial published experience study for the plans listed in paragraph 
41.32   (b), clauses (1), (2), and (7), as provided for in the standards for actuarial work adopted by 
41.33   the commission. The experience data collection, processing, and analysis must evaluate 
41.34   the following:
41.35   (1) individual salary progression;
41.36   (2) the rate of return on investments based on the current asset value;
42.1    (3) payroll growth;
42.2    (4) mortality;
42.3    (5) retirement age;
42.4    (6) withdrawal; and
42.5    (7) disablement.
42.6    The contract must include provisions for the preparation of cost analyses by the 
42.7    jointly retained actuary for proposed legislation that include changes in benefit provisions 
42.8    or funding policies prior to their consideration by the Legislative Commission on Pensions 
42.9    and Retirement.
42.10   (d) The actuary retained by the joint retirement systems shall annually prepare a 
42.11   report to the legislature, including a commentary on the actuarial valuation calculations 
42.12   for the plans named in paragraph (b) and summarizing the results of the actuarial valuation 
42.13   calculations. The actuary shall include with the report the actuary's recommendations 
42.14   to the legislature concerning the appropriateness of the support rates to achieve proper 
42.15   funding of the retirement plans by the required funding dates. The actuary shall, as part 
42.16   of the quadrennial experience study, include recommendations to the legislature on the 
42.17   appropriateness of the actuarial valuation assumptions required for evaluation in the study.
42.18   (e) If the actuarial gain and loss analysis in the actuarial valuation calculations 
42.19   indicates a persistent pattern of sizable gains or losses, as directed by the joint retirement 
42.20   systems or as requested by the chair of the Legislative Commission on Pensions and 
42.21   Retirement, the actuary shall prepare a special experience study for a plan listed in 
42.22   paragraph (b), clause (3), (4), (5), (6), (8), (9), (10), (11), (12), (13), or (14) (13), in the 
42.23   manner provided for in the standards for actuarial work adopted by the commission.
42.24   (f) The term of the contract between the joint retirement systems and the actuary 
42.25   retained may not exceed five years. The joint retirement system administrative officers 
42.26   shall establish procedures for the consideration and selection of contract bidders and 
42.27   the requirements for the contents of an actuarial services contract under this section. 
42.28   The procedures and requirements must be submitted to the Legislative Commission on 
42.29   Pensions and Retirement for review and comment prior to final approval by the joint 
42.30   administrators. The contract is subject to the procurement procedures under chapter 16C. 
42.31   The consideration of bids and the selection of a consulting actuarial firm by the chief 
42.32   administrative officers must occur at a meeting that is open to the public and reasonable 
42.33   timely public notice of the date and the time of the meeting and its subject matter must 
42.34   be given.
43.1    (g) The actuarial services contract may not limit the ability of the Minnesota 
43.2    legislature and its standing committees and commissions to rely on the actuarial results 
43.3    of the work prepared under the contract.
43.4    (h) The joint retirement systems shall designate one of the retirement system 
43.5    executive directors as the actuarial services contract manager.

43.6        Sec. 33. Minnesota Statutes 2005 Supplement, section 356.215, subdivision 8, is 
43.7    amended to read:
43.8        Subd. 8. Interest and salary assumptions. (a) The actuarial valuation must use 
43.9    the applicable following preretirement interest assumption and the applicable following 
43.10   postretirement interest assumption:
43.11                                           preretirement                postretirement
43.12                                           interest rate                interest rate
43.13             plan                           assumption                  assumption  
43.14   general state employees retirement plan      8.5%                        6.0%  
43.15   correctional state employees retirement                                         
43.16   plan                                       8.5                         6.0   
43.17   State Patrol retirement plan               8.5                         6.0   
43.18   legislators retirement plan                8.5                         6.0   
43.19   elective state officers retirement plan      8.5                         6.0   
43.20   judges retirement plan                     8.5                         6.0   
43.21   general public employees retirement                                          
43.22   plan                                       8.5                         6.0   
43.23   public employees police and fire                                             
43.24   retirement plan                            8.5                         6.0   
43.25   local government correctional service                                         
43.26   retirement plan                            8.5                         6.0   
43.27   teachers retirement plan                   8.5                         6.0   
43.28   Minneapolis employees retirement plan      6.0                         5.0   
43.29   Duluth teachers retirement plan            8.5                         8.5   
43.30   Minneapolis teachers retirement plan       8.5                         8.5   
43.31   St. Paul teachers retirement plan          8.5                         8.5   
44.1    Minneapolis Police Relief Association      6.0                         6.0   
44.2    Fairmont Police Relief Association         5.0                         5.0   
44.3    Minneapolis Fire Department Relief                                           
44.4    Association                                6.0                         6.0   
44.5    Virginia Fire Department Relief                                              
44.6    Association                                5.0                         5.0   
44.7    Bloomington Fire Department Relief                                           
44.8    Association                                6.0                         6.0   
44.9    local monthly benefit volunteer                                              
44.10   firefighters relief associations           5.0                         5.0   
44.11   (b) The actuarial valuation must use the applicable following single rate future salary 
44.12   increase assumption, the applicable following modified single rate future salary increase 
44.13   assumption, or the applicable following graded rate future salary increase assumption:
44.14   (1) single rate future salary increase assumption
44.15                                                   future salary      
44.16                      plan                      increase assumption   
44.17   legislators retirement plan                            5.0%  
44.18   elective state officers retirement plan                5.0   
44.19   judges retirement plan                                 5.0   
44.20   Minneapolis Police Relief Association                  4.0   
44.21   Fairmont Police Relief Association                     3.5   
44.22   Minneapolis Fire Department Relief                           
44.23   Association                                            4.0   
44.24   Virginia Fire Department Relief Association            3.5   
44.25   Bloomington Fire Department Relief                           
44.26   Association                                            4.0   
44.27   (2) modified single rate future salary increase assumption
45.1                                                           future salary             
45.2                 plan                                    increase assumption          
45.3                                               the prior calendar year amount       
45.4                                               increased first by 1.0198 percent to 
45.5                                               prior fiscal year date and then increased 
45.6    Minneapolis employees                      by 4.0 percent annually for each future 
45.7    retirement plan                            year                                 
45.8    (3) select and ultimate future salary increase assumption or graded rate future salary 
45.9    increase assumption
45.10                                                 future salary                
45.11                plan                           increase assumption             
45.12   general state employees                                                   
45.13   retirement plan                    select calculation and assumption A     
45.14   correctional state employees                                              
45.15   retirement plan                               assumption HG                
45.16   State Patrol retirement plan                  assumption HG                
45.17   general public employees                                                  
45.18   retirement plan                    select calculation and assumption B     
45.19   public employees police and fire                                            
45.20   fund retirement plan                          assumption C                
45.21   local government correctional                                             
45.22   service retirement plan                       assumption HG                
45.23   teachers retirement plan                      assumption D                
45.24   Duluth teachers retirement plan               assumption E                
45.25   Minneapolis teachers retirement                                            
45.26   plan                                          assumption F                
45.27   St. Paul teachers retirement plan               assumption GF                
45.28   The select calculation is: during the ten-year 
45.29   select period, a designated percent is 
45.30   multiplied by the result of ten minus T, 
45.31   where T is the number of completed years of 
45.32   service, and is added to the applicable future 
46.1    salary increase assumption. The designated 
46.2    percent is 0.2 percent for the correctional 
46.3    state employees retirement plan, the State 
46.4    Patrol retirement plan, the public employees 
46.5    police and fire plan, and the local government 
46.6    correctional service plan;  and 0.3 percent for 
46.7    the general state employees retirement plan, 
46.8    the general public employees retirement 
46.9    plan, the teachers retirement plan, the Duluth 
46.10   Teachers Retirement Fund Association, 
46.11   and the St. Paul Teachers Retirement 
46.12   Fund Association; and 0.4 percent for the 
46.13   Minneapolis Teachers Retirement Fund 
46.14   Association.
46.15   The ultimate future salary increase assumption is:
46.16   age   A        B        C        D        E        F        GF       HG       
46.17   16    6.95%    6.95%    11.50%   8.20%    8.00%    6.50%    6.90%    7.7500   
46.18   17    6.90     6.90     11.50    8.15     8.00     6.50     6.90     7.7500   
46.19   18    6.85     6.85     11.50    8.10     8.00     6.50     6.90     7.7500   
46.20   19    6.80     6.80     11.50    8.05     8.00     6.50     6.90     7.7500   
46.21   20    6.75     6.40     11.50    6.00     6.90     6.50     6.90     7.7500   
46.22   21    6.75     6.40     11.50    6.00     6.90     6.50     6.90     7.1454   
46.23   22    6.75     6.40     11.00    6.00     6.90     6.50     6.90     7.0725   
46.24   23    6.75     6.40     10.50    6.00     6.85     6.50     6.85     7.0544   
46.25   24    6.75     6.40     10.00    6.00     6.80     6.50     6.80     7.0363   
46.26   25    6.75     6.40     9.50     6.00     6.75     6.50     6.75     7.0000   
46.27   26    6.75     6.36     9.20     6.00     6.70     6.50     6.70     7.0000   
46.28   27    6.75     6.32     8.90     6.00     6.65     6.50     6.65     7.0000   
46.29   28    6.75     6.28     8.60     6.00     6.60     6.50     6.60     7.0000   
46.30   29    6.75     6.24     8.30     6.00     6.55     6.50     6.55     7.0000   
46.31   30    6.75     6.20     8.00     6.00     6.50     6.50     6.50     7.0000   
46.32   31    6.75     6.16     7.80     6.00     6.45     6.50     6.45     7.0000   
47.1    32    6.75     6.12     7.60     6.00     6.40     6.50     6.40     7.0000   
47.2    33    6.75     6.08     7.40     6.00     6.35     6.50     6.35     7.0000   
47.3    34    6.75     6.04     7.20     6.00     6.30     6.50     6.30     7.0000   
47.4    35    6.75     6.00     7.00     6.00     6.25     6.50     6.25     7.0000   
47.5    36    6.75     5.96     6.80     6.00     6.20     6.50     6.20     6.9019   
47.6    37    6.75     5.92     6.60     6.00     6.15     6.50     6.15     6.8074   
47.7    38    6.75     5.88     6.40     5.90     6.10     6.50     6.10     6.7125   
47.8    39    6.75     5.84     6.20     5.80     6.05     6.50     6.05     6.6054   
47.9    40    6.75     5.80     6.00     5.70     6.00     6.50     6.00     6.5000   
47.10   41    6.75     5.76     5.90     5.60     5.90     6.50     5.95     6.3540   
47.11   42    6.75     5.72     5.80     5.50     5.80     6.50     5.90     6.2087   
47.12   43    6.65     5.68     5.70     5.40     5.70     6.50     5.85     6.0622   
47.13   44    6.55     5.64     5.60     5.30     5.60     6.50     5.80     5.9048   
47.14   45    6.45     5.60     5.50     5.20     5.50     6.50     5.75     5.7500   
47.15   46    6.35     5.56     5.45     5.10     5.40     6.40     5.70     5.6940   
47.16   47    6.25     5.52     5.40     5.00     5.30     6.30     5.65     5.6375   
47.17   48    6.15     5.48     5.35     5.00     5.20     6.20     5.60     5.5822   
47.18   49    6.05     5.44     5.30     5.00     5.10     6.10     5.55     5.5404   
47.19   50    5.95     5.40     5.25     5.00     5.00     6.00     5.50     5.5000   
47.20   51    5.85     5.36     5.25     5.00     5.00     5.90     5.45     5.4384   
47.21   52    5.75     5.32     5.25     5.00     5.00     5.80     5.40     5.3776   
47.22   53    5.65     5.28     5.25     5.00     5.00     5.70     5.35     5.3167   
47.23   54    5.55     5.24     5.25     5.00     5.00     5.60     5.30     5.2826   
47.24   55    5.45     5.20     5.25     5.00     5.00     5.50     5.25     5.2500   
47.25   56    5.35     5.16     5.25     5.00     5.00     5.40     5.20     5.2500   
47.26   57    5.25     5.12     5.25     5.00     5.00     5.30     5.15     5.2500   
47.27   58    5.25     5.08     5.25     5.10     5.00     5.20     5.10     5.2500   
47.28   59    5.25     5.04     5.25     5.20     5.00     5.10     5.05     5.2500   
47.29   60    5.25     5.00     5.25     5.30     5.00     5.00     5.00     5.2500   
48.1    61    5.25     5.00     5.25     5.40     5.00     5.00     5.00     5.2500   
48.2    62    5.25     5.00     5.25     5.50     5.00     5.00     5.00     5.2500   
48.3    63    5.25     5.00     5.25     5.60     5.00     5.00     5.00     5.2500   
48.4    64    5.25     5.00     5.25     5.70     5.00     5.00     5.00     5.2500   
48.5    65    5.25     5.00     5.25     5.70     5.00     5.00     5.00     5.2500   
48.6    66    5.25     5.00     5.25     5.70     5.00     5.00     5.00     5.2500   
48.7    67    5.25     5.00     5.25     5.70     5.00     5.00     5.00     5.2500   
48.8    68    5.25     5.00     5.25     5.70     5.00     5.00     5.00     5.2500   
48.9    69    5.25     5.00     5.25     5.70     5.00     5.00     5.00     5.2500   
48.10   70    5.25     5.00     5.25     5.70     5.00     5.00     5.00     5.2500   
48.11   71    5.25     5.00              5.70                                         
48.12   (c) The actuarial valuation must use the applicable following payroll growth 
48.13   assumption for calculating the amortization requirement for the unfunded actuarial 
48.14   accrued liability where the amortization retirement is calculated as a level percentage 
48.15   of an increasing payroll:
48.16                                                      payroll growth          
48.17   plan                                                 assumption            
48.18   general state employees retirement plan                5.00% 
48.19   correctional state employees retirement plan            5.00  
48.20   State Patrol retirement plan                           5.00  
48.21   legislators retirement plan                            5.00  
48.22   elective state officers retirement plan                5.00  
48.23   judges retirement plan                                 5.00  
48.24   general public employees retirement plan               6.00  
48.25   public employees police and fire retirement                   
48.26   plan                                                   6.00  
48.27   local government correctional service                        
48.28   retirement plan                                        6.00  
48.29   teachers retirement plan                               5.00  
48.30   Duluth teachers retirement plan                        5.00  
49.1    Minneapolis teachers retirement plan                   5.00  
49.2    St. Paul teachers retirement plan                      5.00  

49.3        Sec. 34. Minnesota Statutes 2004, section 356.215, subdivision 11, is amended to read:
49.4        Subd. 11. Amortization contributions. (a) In addition to the exhibit indicating the 
49.5    level normal cost, the actuarial valuation must contain an exhibit indicating the additional 
49.6    annual contribution sufficient to amortize the unfunded actuarial accrued liability. For 
49.7    funds governed by chapters 3A, 352, 352B, 352C, 353, 354, 354A, and 490, the additional 
49.8    contribution must be calculated on a level percentage of covered payroll basis by the 
49.9    established date for full funding in effect when the valuation is prepared. For funds 
49.10   governed by chapter 3A, sections    352.90 through    352.951, chapters 352B, 352C, sections    
49.11   353.63 through    353.68, and chapters 353C, 354A, and 490, the level percent additional 
49.12   contribution must be calculated assuming annual payroll growth of 6.5 percent. For funds 
49.13   governed by sections    352.01 through    352.86 and chapter 354, the level percent additional 
49.14   contribution must be calculated assuming an annual payroll growth of five percent. For the 
49.15   fund governed by sections    353.01 through    353.46, the level percent additional contribution 
49.16   must be calculated assuming an annual payroll growth of six percent. For all other funds, 
49.17   the additional annual contribution must be calculated on a level annual dollar amount basis. 
49.18   (b) For any fund other than the Minneapolis Employees Retirement Fund and the 
49.19   Public Employees Retirement Association general plan, if there has not been a change in 
49.20   the actuarial assumptions used for calculating the actuarial accrued liability of the fund, a 
49.21   change in the benefit plan governing annuities and benefits payable from the fund, a 
49.22   change in the actuarial cost method used in calculating the actuarial accrued liability of all 
49.23   or a portion of the fund, or a combination of the three, which change or changes by itself 
49.24   or by themselves without inclusion of any other items of increase or decrease produce a 
49.25   net increase in the unfunded actuarial accrued liability of the fund, the established date for 
49.26   full funding is the first actuarial valuation date occurring after June 1, 2020.
49.27   (c) For any fund or plan other than the Minneapolis Employees Retirement Fund and 
49.28   the Public Employees Retirement Association general plan, if there has been a change in 
49.29   any or all of the actuarial assumptions used for calculating the actuarial accrued liability 
49.30   of the fund, a change in the benefit plan governing annuities and benefits payable from 
49.31   the fund, a change in the actuarial cost method used in calculating the actuarial accrued 
49.32   liability of all or a portion of the fund, or a combination of the three, and the change or 
49.33   changes, by itself or by themselves and without inclusion of any other items of increase or 
50.1    decrease, produce a net increase in the unfunded actuarial accrued liability in the fund, the 
50.2    established date for full funding must be determined using the following procedure:
50.3    (i) the unfunded actuarial accrued liability of the fund must be determined in 
50.4    accordance with the plan provisions governing annuities and retirement benefits and the 
50.5    actuarial assumptions in effect before an applicable change;
50.6    (ii) the level annual dollar contribution or level percentage, whichever is applicable, 
50.7    needed to amortize the unfunded actuarial accrued liability amount determined under item 
50.8    (i) by the established date for full funding in effect before the change must be calculated 
50.9    using the interest assumption specified in subdivision 8 in effect before the change;
50.10   (iii) the unfunded actuarial accrued liability of the fund must be determined in 
50.11   accordance with any new plan provisions governing annuities and benefits payable from 
50.12   the fund and any new actuarial assumptions and the remaining plan provisions governing 
50.13   annuities and benefits payable from the fund and actuarial assumptions in effect before 
50.14   the change;
50.15   (iv) the level annual dollar contribution or level percentage, whichever is applicable, 
50.16   needed to amortize the difference between the unfunded actuarial accrued liability amount 
50.17   calculated under item (i) and the unfunded actuarial accrued liability amount calculated 
50.18   under item (iii) over a period of 30 years from the end of the plan year in which the 
50.19   applicable change is effective must be calculated using the applicable interest assumption 
50.20   specified in subdivision 8 in effect after any applicable change;
50.21   (v) the level annual dollar or level percentage amortization contribution under item 
50.22   (iv) must be added to the level annual dollar amortization contribution or level percentage 
50.23   calculated under item (ii);
50.24   (vi) the period in which the unfunded actuarial accrued liability amount determined 
50.25   in item (iii) is amortized by the total level annual dollar or level percentage amortization 
50.26   contribution computed under item (v) must be calculated using the interest assumption 
50.27   specified in subdivision 8 in effect after any applicable change, rounded to the nearest 
50.28   integral number of years, but not to exceed 30 years from the end of the plan year in 
50.29   which the determination of the established date for full funding using the procedure set 
50.30   forth in this clause is made and not to be less than the period of years beginning in the 
50.31   plan year in which the determination of the established date for full funding using the 
50.32   procedure set forth in this clause is made and ending by the date for full funding in effect 
50.33   before the change; and
50.34   (vii) the period determined under item (vi) must be added to the date as of which 
50.35   the actuarial valuation was prepared and the date obtained is the new established date 
50.36   for full funding.
51.1    (d) For the Minneapolis Employees Retirement Fund, the established date for full 
51.2    funding is June 30, 2020.
51.3    (e) For the general employees retirement plan of the Public Employees Retirement 
51.4    Association, the established date for full funding is June 30, 2031.
51.5    (f) For the Teachers Retirement Association, the established date for full funding is 
51.6    June 30, 2037.
51.7    (g) For the retirement plans for which the annual actuarial valuation indicates an 
51.8    excess of valuation assets over the actuarial accrued liability, the valuation assets in 
51.9    excess of the actuarial accrued liability must be recognized as a reduction in the current 
51.10   contribution requirements by an amount equal to the amortization of the excess expressed 
51.11   as a level percentage of pay over a 30-year period beginning anew with each annual 
51.12   actuarial valuation of the plan.

51.13       Sec. 35. Minnesota Statutes 2004, section 356.30, subdivision 3, is amended to read:
51.14       Subd. 3. Covered plans. This section applies to the following retirement plans:
51.15   (1) the general state employees retirement plan of the Minnesota State Retirement 
51.16   System, established under chapter 352;
51.17   (2) the correctional state employees retirement plan of the Minnesota State 
51.18   Retirement System, established under chapter 352;
51.19   (3) the unclassified employees retirement program, established under chapter 352D;
51.20   (4) the State Patrol retirement plan, established under chapter 352B;
51.21   (5) the legislators retirement plan, established under chapter 3A;
51.22   (6) the elective state officers' retirement plan, established under chapter 352C;
51.23   (7) the general employees retirement plan of the Public Employees Retirement 
51.24   Association, established under chapter 353;
51.25   (8) the public employees police and fire retirement plan of the Public Employees 
51.26   Retirement Association, established under chapter 353;
51.27   (9) the local government correctional service retirement plan of the Public 
51.28   Employees Retirement Association, established under chapter 353E;
51.29   (10) the Teachers Retirement Association, established under chapter 354;
51.30   (11) the Minneapolis Employees Retirement Fund, established under chapter 422A;
51.31   (12) the Minneapolis Teachers Retirement Fund Association, established under 
51.32   chapter 354A;
51.33   (13) (12) the St. Paul Teachers Retirement Fund Association, established under 
51.34   chapter 354A;
52.1    (14) (13) the Duluth Teachers Retirement Fund Association, established under 
52.2    chapter 354A; and
52.3    (15) (14) the judges' retirement fund, established by sections  490.121 to  490.132. 

52.4        Sec. 36. Minnesota Statutes 2004, section 356.302, subdivision 7, is amended to read:
52.5        Subd. 7. Covered retirement plans. This section applies to the following 
52.6    retirement plans:
52.7    (1) the general state employees retirement plan of the Minnesota State Retirement 
52.8    System, established by chapter 352;
52.9    (2) the unclassified state employees retirement program of the Minnesota State 
52.10   Retirement System, established by chapter 352D;
52.11   (3) the general employees retirement plan of the Public Employees Retirement 
52.12   Association, established by chapter 353;
52.13   (4) the Teachers Retirement Association, established by chapter 354;
52.14   (5) the Duluth Teachers Retirement Fund Association, established by chapter 354A;
52.15   (6) the Minneapolis Teachers Retirement Fund Association, established by chapter 
52.16   354A;
52.17   (7) (6) the St. Paul Teachers Retirement Fund Association, established by chapter 
52.18   354A;
52.19   (8) (7) the Minneapolis Employees Retirement Fund, established by chapter 422A;
52.20   (9) (8) the state correctional employees retirement plan of the Minnesota State 
52.21   Retirement System, established by chapter 352;
52.22   (10) (9) the State Patrol retirement plan, established by chapter 352B;
52.23   (11) (10) the public employees police and fire plan of the Public Employees 
52.24   Retirement Association, established by chapter 353;
52.25   (12) (11) the local government correctional service retirement plan of the Public 
52.26   Employees Retirement Association, established by chapter 353E; and
52.27   (13) (12) the judges' retirement plan, established by sections  490.121 to  490.132. 

52.28       Sec. 37. Minnesota Statutes 2004, section 356.303, subdivision 4, is amended to read:
52.29       Subd. 4. Covered retirement plans. This section applies to the following 
52.30   retirement plans:
52.31   (1) the legislators retirement plan, established by chapter 3A;
52.32   (2) the general state employees retirement plan of the Minnesota State Retirement 
52.33   System, established by chapter 352;
53.1    (3) the correctional state employees retirement plan of the Minnesota State 
53.2    Retirement System, established by chapter 352;
53.3    (4) the State Patrol retirement plan, established by chapter 352B;
53.4    (5) the elective state officers retirement plan, established by chapter 352C;
53.5    (6) the unclassified state employees retirement program, established by chapter 
53.6    352D;
53.7    (7) the general employees retirement plan of the Public Employees Retirement 
53.8    Association, established by chapter 353;
53.9    (8) the public employees police and fire plan of the Public Employees Retirement 
53.10   Association, established by chapter 353;
53.11   (9) the local government correctional service retirement plan of the Public 
53.12   Employees Retirement Association, established by chapter 353E;
53.13   (10) the Teachers Retirement Association, established by chapter 354;
53.14   (11) the Duluth Teachers Retirement Fund Association, established by chapter 354A;
53.15   (12) the Minneapolis Teachers Retirement Fund Association, established by chapter 
53.16   354A;
53.17   (13) (12) the St. Paul Teachers Retirement Fund Association, established by chapter 
53.18   354A;
53.19   (14) (13) the Minneapolis Employees Retirement Fund, established by chapter 
53.20   422A; and
53.21   (15) (14) the judges' retirement fund, established by sections  490.121 to  490.132. 

53.22       Sec. 38. Minnesota Statutes 2004, section 356.315, is amended by adding a subdivision 
53.23   to read:
53.24       Subd. 1a. Coordinated plan members. The applicable benefit accrual rate is 
53.25   1.4 percent.

53.26       Sec. 39. Minnesota Statutes 2004, section 356.315, is amended by adding a subdivision 
53.27   to read:
53.28       Subd. 2b. Certain coordinated program members. The applicable benefit accrual 
53.29   rate is 1.9 percent.

53.30       Sec. 40. Minnesota Statutes 2004, section 356.42, subdivision 3, is amended to read:
53.31       Subd. 3. Covered retirement plans. The postretirement adjustment provided in 
53.32   this section applies to the following retirement funds:
54.1    (1) the general employees retirement plans of the Public Employees Retirement 
54.2    Association;
54.3    (2) the public employees police and fire plan of the Public Employees Retirement 
54.4    Association;
54.5    (3) the teachers retirement association;
54.6    (4) the State Patrol retirement plan;
54.7    (5) the state employees retirement plan of the Minnesota State Retirement System;
54.8    (6) the Minneapolis Teachers Retirement Fund Association established under 
54.9    chapter 354A;
54.10   (7) (6) the St. Paul Teachers Retirement Fund Association established under chapter 
54.11   354A; and
54.12   (8) (7) the Duluth Teachers Retirement Fund Association established under chapter 
54.13   354A.

54.14       Sec. 41. Minnesota Statutes 2004, section 356.465, subdivision 3, is amended to read:
54.15       Subd. 3. Covered retirement plans. The provisions of this section apply to the 
54.16   following retirement plans:
54.17   (1) the general state employees retirement plan of the Minnesota State Retirement 
54.18   System established under chapter 352;
54.19   (2) the correctional state employees retirement plan of the Minnesota State 
54.20   Retirement System established under chapter 352;
54.21   (3) the State Patrol retirement plan established under chapter 352B;
54.22   (4) the legislators retirement plan established under chapter 3A;
54.23   (5) the judges retirement plan established under chapter 490;
54.24   (6) the general employees retirement plan of the Public Employees Retirement 
54.25   Association established under chapter 353;
54.26   (7) the public employees police and fire plan of the Public Employees Retirement 
54.27   Association established under chapter 353;
54.28   (8) the teachers retirement plan established under chapter 354;
54.29   (9) the Duluth Teachers Retirement Fund Association established under chapter 
54.30   354A;
54.31   (10) the St. Paul Teachers Retirement Fund Association established under chapter 
54.32   354A;
54.33   (11) the Minneapolis Teachers Retirement Fund Association established under 
54.34   chapter 354A;
55.1    (12) (11) the Minneapolis employees retirement plan established under chapter 
55.2    422A;
55.3    (13) (12) the Minneapolis Firefighters Relief Association established under chapter 
55.4    423C;
55.5    (14) (13) the Minneapolis Police Relief Association established under chapter 
55.6    423B; and
55.7    (15) (14) the local government correctional service retirement plan of the Public 
55.8    Employees Retirement Association established under chapter 353E.

55.9        Sec. 42. Minnesota Statutes 2004, section 423A.02, subdivision 1b, is amended to read:
55.10       Subd. 1b. Additional amortization state aid. (a) Annually, on October 1, the 
55.11   commissioner of revenue shall allocate the additional amortization state aid transferred 
55.12   under section   69.021, subdivision 11, to: 
55.13   (1) all police or salaried firefighters relief associations governed by and in full 
55.14   compliance with the requirements of section   69.77, that had an unfunded actuarial accrued 
55.15   liability in the actuarial valuation prepared under sections   356.215 and   356.216 as of the 
55.16   preceding December 31; 
55.17   (2) all local police or salaried firefighter consolidation accounts governed by chapter 
55.18   353A that are certified by the executive director of the public employees retirement 
55.19   association as having for the current fiscal year an additional municipal contribution 
55.20   amount under section   353A.09, subdivision 5, paragraph (b), and that have implemented 
55.21   section   353A.083, subdivision 1, if the effective date of the consolidation preceded May 
55.22   24, 1993, and that have implemented section   353A.083, subdivision 2, if the effective date 
55.23   of the consolidation preceded June 1, 1995; and 
55.24   (3) the municipalities that are required to make an additional municipal contribution 
55.25   under section   353.665, subdivision 8, for the duration of the required additional 
55.26   contribution. 
55.27   (b) The commissioner shall allocate the state aid on the basis of the proportional share 
55.28   of the relief association or consolidation account of the total unfunded actuarial accrued 
55.29   liability of all recipient relief associations and consolidation accounts as of December 31, 
55.30   1993, for relief associations, and as of June 30, 1994, for consolidation accounts.
55.31   (c) Beginning October 1, 2000, and annually thereafter, the commissioner shall 
55.32   allocate the state aid, including any state aid in excess of the limitation in subdivision 
55.33   4, on the following basis:
56.1    (1) 64.5 percent to the municipalities to which section   353.665, subdivision 
56.2    8, paragraph (b), or   353A.09, subdivision 5, paragraph (b), apply for distribution in 
56.3    accordance with paragraph (b) and subject to the limitation in subdivision 4; 
56.4    (2) 34.2 percent to the city of Minneapolis to fund any unfunded actuarial accrued 
56.5    liability in the actuarial valuation prepared under sections   356.215 and   356.216 as of the 
56.6    preceding December 31 for the Minneapolis Police Relief Association or the Minneapolis 
56.7    Fire Department Relief Association; and 
56.8    (3)  1.3 percent to the city of Virginia to fund any unfunded actuarial accrued liability 
56.9    in the actuarial valuation prepared under sections   356.215 and   356.216 as of the preceding 
56.10   December 31 for the Virginia Fire Department Relief Association. 
56.11   If there is no unfunded actuarial accrued liability in both the Minneapolis Police 
56.12   Relief Association and the Minneapolis Fire Department Relief Association as disclosed 
56.13   in the most recent actuarial valuations for the relief associations prepared under sections   
56.14   356.215 and   356.216, the commissioner shall allocate that 34.2 percent of the aid as 
56.15   follows: 49 percent to the Minneapolis Teachers Retirement Fund Association, 21 percent 
56.16   to the St. Paul Teachers Retirement Fund Association, and 30 percent as additional 
56.17   funding to support minimum fire state aid for volunteer firefighters relief associations. 
56.18   If there is no unfunded actuarial accrued liability in the Virginia Fire Department Relief 
56.19   Association as disclosed in the most recent actuarial valuation for the relief association 
56.20   prepared under sections   356.215 and   356.216, the commissioner shall allocate that 1.3 
56.21   percent of the aid as follows: 49 percent to the Minneapolis Teachers Retirement Fund 
56.22   Association, 21 percent to the St. Paul Teachers Retirement Fund Association, and 30 
56.23   percent as additional funding to support minimum fire state aid for volunteer firefighters 
56.24   relief associations. The allocation must be made by the commissioner at the same time and 
56.25   under the same procedures as specified in subdivision 3. With respect to the Minneapolis 
56.26   Teachers Retirement Fund Association or the St. Paul Teachers Retirement Fund 
56.27   Association, annually, beginning on July 1, 2005, if the applicable teacher's association 
56.28   five-year average time-weighted rate of investment return does not equal or exceed the 
56.29   performance of a composite portfolio assumed passively managed (indexed) invested ten 
56.30   percent in cash equivalents, 60 percent in bonds and similar debt securities, and 30 percent 
56.31   in domestic stock calculated using the formula under section   11A.04, clause (11), the aid 
56.32   allocation to that retirement fund under this section ceases until the five-year annual rate 
56.33   of investment return equals or exceeds the performance of that composite portfolio. 
56.34   (d) The amounts required under this subdivision are annually appropriated to the 
56.35   commissioner of revenue.

57.1        Sec. 43. MTRFA EMPLOYEES.
57.2    Effective June 30, 2006, the Minneapolis Teachers Retirement Fund Association 
57.3    employees have their employment with the Minneapolis Teachers Retirement Fund 
57.4    Association terminated and, effective July 1, 2006,  the Minneapolis Teachers Retirement 
57.5    Fund Association employees, excluding the Executive Director,  become employees 
57.6    of the Teachers Retirement Association until December 31, 2007.  The commissioner 
57.7    of employee relations shall place employees from the former Minneapolis Teachers 
57.8    Retirement Fund Association into state service in their proper classifications, except that 
57.9    employees are appointed without examination and must be compensated at their current 
57.10   hourly salary rate.  Employees must have their accumulated, but unused, vacation leave 
57.11   balance as of June 30, 2006, posted to their credit by the Teachers Retirement Association 
57.12   but if the employee has vacation time in excess of the applicable maximum no additional 
57.13   vacation may accrue until the employee's balance falls below the maximum permitted 
57.14   by the state for the employee's position. The employees must receive length of service 
57.15   credit for vacation leave accrual for time served at the Minneapolis Teachers Retirement 
57.16   Fund Association. Minneapolis Teachers Retirement Fund Association employees who 
57.17   become employees of the Teachers Retirement Association effective on July 1, 2006 
57.18   must be considered to have completed six months of continuous service for vacation use 
57.19   purposes. Employees of the former Minneapolis Teachers Retirement Fund Association 
57.20   appointed to the classified service are subject to a probationary period under the collective 
57.21   bargaining agreement or compensation plan applicable to the employee's position at the 
57.22   Teachers Retirement Association. Effective July 1, 2006, all transferred employees must 
57.23   be enrolled in the state employees' group insurance program as provided in Minnesota 
57.24   Statutes, sections 43A.22 to 43A.31 and the commissioner of employee relations shall 
57.25   provide open enrollment in all state employee health and dental insurance plans with 
57.26   no limitation on preexisting conditions except as specified in existing state employee 
57.27   certificates of coverage.  The commissioner of employee relations shall provide these 
57.28   transferred employees with the opportunity to purchase optional life and disability 
57.29   insurance as provided by the state group insurance program in accordance with the 
57.30   policies of the department of employee relations.

57.31       Sec. 44. MTRFA ARTICLES AND BYLAWS; REPEAL; APPLICABILITY.
57.32   (a) The articles of incorporation and bylaws of the Minneapolis Teachers Retirement 
57.33   Fund Association are repealed and have application only as provided in section 9, 
57.34   subdivision 6, and in paragraph (b).
58.1    (b) The articles of incorporation and bylaws of the Minneapolis Teachers Retirement 
58.2    Fund Association only apply to members of the former Minneapolis Teachers Retirement 
58.3    Fund Association with service credit in the plan on or before June 30, 2006, and apply 
58.4    solely for purposes of determining the retirement annuity for or benefit on behalf of a 
58.5    member of the basic program of that retirement plan.
58.6    (c) No annuity adjustment or increase under article 30 of the articles of incorporation 
58.7    of the Minneapolis Teachers Retirement Fund Association is applicable or payable after 
58.8    June 30, 2006.

58.9        Sec. 45.  REPEALER.
58.10   Minnesota Statutes 2004, sections 354A.051; 354A.105; 354A.23, subdivision 1; 
58.11   and 354A.28, are repealed effective June 30, 2006.

58.12       Sec. 46. EFFECTIVE DATE.
58.13   Sections 2 to 45 are effective July 1, 2006, except that section 9, subdivision 7, is 
58.14   effective the day following final enactment.

58.15                                          ARTICLE 4
58.16                                  STATE BOARD OF INVESTMENT

58.17       Section 1. Laws 2005, chapter 156, article 1, section 8, is amended to read:
58.18                                                                            2,167,000
58.19   Sec. 8. INVESTMENT BOARD                               2,167,000           151,000

58.20       Sec. 2. Minnesota Statutes 2005 Supplement, section 11A.04, is amended to read:
58.21   11A.04 DUTIES AND POWERS.
58.22   The state board shall:
58.23   (1) Act as trustees for each fund for which it invests or manages money in 
58.24   accordance with the standard of care set forth in section 11A.09 if state assets are involved 
58.25   and in accordance with chapter 356A if pension assets are involved.
58.26   (2) Formulate policies and procedures deemed necessary and appropriate to carry 
58.27   out its functions. Procedures adopted by the board must allow fund beneficiaries and 
58.28   members of the public to become informed of proposed board actions. Procedures and 
58.29   policies of the board are not subject to the Administrative Procedure Act.
58.30   (3) Employ an executive director as provided in section 11A.07.
58.31   (4) Employ investment advisors and consultants as it deems necessary.
59.1    (5) Prescribe policies concerning personal investments of all employees of the board 
59.2    to prevent conflicts of interest.
59.3    (6) Maintain a record of its proceedings.
59.4    (7) As it deems necessary, establish advisory committees subject to section 15.059 to 
59.5    assist the board in carrying out its duties.
59.6    (8) Not permit state funds to be used for the underwriting or direct purchase of 
59.7    municipal securities from the issuer or the issuer's agent.
59.8    (9) Direct the commissioner of finance to sell property other than money that has 
59.9    escheated to the state when the board determines that sale of the property is in the best 
59.10   interest of the state. Escheated property must be sold to the highest bidder in the manner 
59.11   and upon terms and conditions prescribed by the board.
59.12   (10) Undertake any other activities necessary to implement the duties and powers 
59.13   set forth in this section.
59.14   (11) Establish a formula or formulas to measure management performance and 
59.15   return on investment. Public pension funds in the state shall utilize the formula or 
59.16   formulas developed by the state board.
59.17   (12) Except as otherwise provided in article XI, section 8, of the Constitution of the 
59.18   state of Minnesota, employ, at its discretion, qualified private firms to invest and manage 
59.19   the assets of funds over which the state board has investment management responsibility. 
59.20   There is annually appropriated to the state board, from the assets of the funds for which 
59.21   the state board utilizes a private investment manager, sums sufficient to pay the costs of 
59.22   employing private firms. Each year, by January 15, the board shall report to the governor 
59.23   and legislature on the cost and the investment performance of each investment manager 
59.24   employed by the board.
59.25   (13) Adopt an investment policy statement that includes investment objectives, asset 
59.26   allocation, and the investment management structure for the retirement fund assets under 
59.27   its control. The statement may be revised at the discretion of the state board. The state 
59.28   board shall seek the advice of the council regarding its investment policy statement. 
59.29   Adoption of the statement is not subject to chapter 14.
59.30   (14) Adopt a compensation plan setting the terms and conditions of employment for 
59.31   unclassified board employees who are not covered by a collective bargaining agreement.
59.32   There is annually appropriated to the state board, from the assets of the funds for 
59.33   which the state board provides investment services, sums sufficient to pay the costs of 
59.34   all necessary expenses for the administration of the board. These sums will be deposited 
59.35   in the State Board of Investment operating account, which must be established by the 
59.36   commissioner of finance.

60.1        Sec. 3. Minnesota Statutes 2005 Supplement, section 11A.07, subdivision 4, is 
60.2    amended to read:
60.3        Subd. 4. Duties and powers. The director, at the direction of the state board, shall:
60.4    (1) plan, direct, coordinate, and execute administrative and investment functions 
60.5    in conformity with the policies and directives of the state board and the requirements of 
60.6    this chapter and of chapter 356A;
60.7    (2) prepare and submit biennial and annual budgets to the board and with the 
60.8    approval of the board submit the budgets to the Department of Finance;
60.9    (3) employ professional and clerical staff as necessary. Employees whose primary 
60.10   responsibility is to invest or manage money or employees who hold positions designated 
60.11   as unclassified under section 43A.08, subdivision 1a, are in the unclassified service of the 
60.12   state. Other employees are in the classified service. Unclassified employees who are 
60.13   not covered by a collective bargaining agreement are employed under the terms and 
60.14   conditions of the compensation plan approved under section 43A.18, subdivision 3b;
60.15   (3) (4) report to the state board on all operations under the director's control and 
60.16   supervision;
60.17   (4) (5) maintain accurate and complete records of securities transactions and official 
60.18   activities;
60.19   (5) (6) establish a policy relating to the purchase and sale of securities on the basis of 
60.20   competitive offerings or bids. The policy is subject to board approval;
60.21   (6) (7) cause securities acquired to be kept in the custody of the commissioner of 
60.22   finance or other depositories consistent with chapter 356A, as the state board deems 
60.23   appropriate;
60.24   (7) (8) prepare and file with the director of the Legislative Reference Library, by 
60.25   December 31 of each year, a report summarizing the activities of the state board, the 
60.26   council, and the director during the preceding fiscal year. The report must be prepared 
60.27   so as to provide the legislature and the people of the state with a clear, comprehensive 
60.28   summary of the portfolio composition, the transactions, the total annual rate of return, and 
60.29   the yield to the state treasury and to each of the funds whose assets are invested by the 
60.30   state board, and the recipients of business placed or commissions allocated among the 
60.31   various commercial banks, investment bankers, and brokerage organizations. The report 
60.32   must contain financial statements for funds managed by the board prepared in accordance 
60.33   with generally accepted accounting principles;
60.34   (8) (9) require state officials from any department or agency to produce and provide 
60.35   access to any financial documents the state board deems necessary in the conduct of 
60.36   its investment activities;
61.1    (9) (10) receive and expend legislative appropriations; and
61.2    (10) (11) undertake any other activities necessary to implement the duties and 
61.3    powers set forth in this subdivision consistent with chapter 356A.

61.4        Sec. 4. Minnesota Statutes 2004, section 11A.07, subdivision 5, is amended to read:
61.5         Subd. 5. Apportionment of expenses. The executive director shall apportion the 
61.6    actual expenses incurred by the board on an accrual basis among the several funds whose 
61.7    assets are invested by the board based on the weighted average assets under management 
61.8    during each quarter.  The charge to each fund must be calculated, billed, and paid on a 
61.9    quarterly basis in accordance with procedures for interdepartmental payments established 
61.10   by the commissioner of finance.  The amounts necessary to pay these charges are 
61.11   appropriated from the investment earnings of each fund.  Receipts must be credited to the 
61.12   general fund as nondedicated receipts. The annual expenses incurred by the State Board 
61.13   of Investment will be apportioned among the state general fund, the retirement funds 
61.14   administered by the Minnesota State Retirement System, Public Employees Retirement 
61.15   Association, and Teachers Retirement Association, and all other funds as follows:
61.16   (1) on a biennial basis, the State Board of Investment, in accordance with biennial 
61.17   budget procedures established by the commissioner of finance, may request a direct 
61.18   appropriation that represents the portion of the State Board of Investment expenses 
61.19   necessary to provide investment services to the state general fund.  This appropriation 
61.20   must be deposited in the State Board of Investment operating account;
61.21   (2) the executive director shall apportion the actual expenses incurred by the State 
61.22   Board of Investment, less the charge to the state general fund, among the funds whose 
61.23   assets are invested by the State Board of Investment, with the exception of the state general 
61.24   fund, based on the weighted average assets under management during the fiscal year.  The 
61.25   amounts necessary to pay these charges are apportioned from the investment earnings of 
61.26   each fund.  Receipts must be credited to the State Board of Investment operating account;
61.27   (3) the actual expenses apportioned and charged to the funds, with the exception 
61.28   of the state general fund and the retirement funds administered by the Minnesota State 
61.29   Retirement System, Public Employees Retirement Association, and Teachers Retirement 
61.30   Association, must be calculated, billed, and paid on a quarterly basis in accordance with 
61.31   procedures for interdepartmental payments established by the commissioner of finance; 
61.32   and 
61.33   (4) the annual estimated expenses to be incurred by the State Board of Investment 
61.34   that will be payable by the retirement funds administered by the Minnesota State 
61.35   Retirement System, Public Employees Retirement Association, and Teachers Retirement 
62.1    Association must be deposited in the State Board of Investment operating account on the 
62.2    first business day of each fiscal year.  A reconciliation of the actual expenses compared to 
62.3    the estimated costs must occur at the end of each fiscal year with any surplus or deficit 
62.4    being credited or debited to each of the respective funds.  The State Board of Investment 
62.5    must present a statement of accrued actual expenses to each fund at the end of each 
62.6    quarter during each fiscal year.

62.7                                           ARTICLE 5
62.8                                     BUDGET PRESENTATION OF
62.9                                 EMPLOYER PENSION CONTRIBUTIONS

62.10       Section 1. Minnesota Statutes 2004, section 43A.04, subdivision 12, is amended to 
62.11   read:
62.12       Subd. 12. Total compensation reporting. (a) The commissioner, in consultation 
62.13   with the commissioner of finance, shall report to the governor and the legislature by 
62.14   January 15 each year on executive branch employee salary and benefits. The purpose of 
62.15   the report is to assist in effective long-range planning and to provide data necessary to 
62.16   compute annual and biennial costs related to the state workforce. The report must use data 
62.17   available in the biennial budget system and other necessary sources. The report also must 
62.18   be made available to the public in an electronic format.
62.19   (b) The report must be organized by agency. The report must list the salary or 
62.20   hourly rate of pay for each agency employee. The report may list the employee by name 
62.21   or by an identification number.
62.22   (c) The report must also include an estimate of the average cost to the state of 
62.23   providing insurance and other benefits to a state employee.
62.24   (d) The report must also include the number of employees by agency or department, 
62.25   separated by retirement plan membership, and for each plan, the total compensation, 
62.26   the total employee retirement plan contribution, and the total employer retirement plan 
62.27   contributions.

62.28       Sec. 2. EFFECTIVE DATE.
62.29   Section 1 is effective the day following final enactment.

62.30                                          ARTICLE 6
62.31                               INVESTMENT PERFORMANCE REPORTING

62.32       Section 1. Minnesota Statutes 2004, section 356.219, is amended by adding a 
62.33   subdivision to read:
63.1        Subd. 9. Data availability. Any information received by the state auditor under 
63.2    this section, if the data are public, must be made available to individuals or organizations 
63.3    which request that information. The state auditor is authorized to charge fees sufficient to 
63.4    cover the cost of providing the requested information in usable formats.

63.5        Sec. 2. Minnesota Statutes 2004, section 356.219, is amended by adding a subdivision 
63.6    to read:
63.7        Subd. 10. Pension performance reporting. In addition to report presentations 
63.8    that the state auditor is required to provide elsewhere in this section, the state auditor 
63.9    shall provide an analysis comparing the one year and the five year rate of return for each 
63.10   pension fund and the benchmark rate of return for each fund. The state auditor shall select 
63.11   the benchmark rate of return based on the best practice in the industry.

63.12       Sec. 3. EFFECTIVE DATE.
63.13   Sections 1 and 2 are effective the day following final enactment.

63.14                                          ARTICLE 7
63.15                                     STUDY OF COMPARATIVE
63.16                              PUBLIC RETIREMENT PLAN PROVISIONS

63.17       Section 1. STUDY BY LEGISLATIVE COMMISSION ON PENSIONS AND 
63.18   RETIREMENT.
63.19   (a) The Legislative Commission on Pensions and Retirement shall study the structure 
63.20   and implications of procedures used by the Minnesota State Retirement System plans, 
63.21   Public Employees Retirement Association plans, the Teachers Retirement Association, 
63.22   the Minneapolis Employees Retirement Fund, the first class city teacher retirement fund 
63.23   associations, and the Minneapolis police and fire relief associations to provide investment 
63.24   performance based postretirement increases to plan benefit recipients. The study shall 
63.25   include but not be limited to consideration of the ability of these systems offset the impact 
63.26   of inflation; the cost, budget, and aid implications of these systems; and consistency 
63.27   across plans. In addition, the study must compare Minnesota teacher retirement plans 
63.28   with teacher pension plans in other states on the following items: normal retirement 
63.29   age; penalties that attach to early retirement; taxation of benefits; and pension benefits, 
63.30   including, but not limited to, the coordination with Social Security benefits, formula 
63.31   multipliers, final average salary periods, and special early normal retirement provisions.
63.32   (b) The Legislative Commission on Pensions and Retirement shall produce a report 
63.33   of the findings of the study. The Legislative Commission on Pensions and Retirement 
64.1    shall include draft proposed legislation to implement any recommended changes included 
64.2    in the report.
64.3    (c) The report must be filed by December 1, 2006, with the chairs of the Senate State 
64.4    and Local Government Operations Committee, the Senate Finance Committee, the House 
64.5    Government Operations and Veterans Affairs Committee, the House State Government 
64.6    Finance Committee, and the House Ways and Means Committee.

64.7        Sec. 2. EFFECTIVE DATE.
64.8    Section 1 is effective the day following final enactment.

64.9                                           ARTICLE 8
64.10                                      STUDY OF STATEWIDE
64.11                                  RETIREMENT PLAN STRUCTURE

64.12       Section 1. STUDY BY LEGISLATIVE COMMISSION ON PENSIONS AND 
64.13   RETIREMENT.
64.14   (a) The Legislative Commission on Pensions and Retirement shall study the structure 
64.15   of the Minnesota combined investment funds under Minnesota Statutes, section 11A.14, 
64.16   and the Minnesota postretirement investment fund under Minnesota Statutes, section 
64.17   11A.18, including transfer requirements between these funds.
64.18   (b) The Legislative Commission on Pensions and Retirement shall produce a report 
64.19   of the findings from the study. The Legislative Commission on Pensions and Retirement 
64.20   shall include draft proposed legislation to implement any recommended changes included 
64.21   in the report.
64.22   (c) The report must be filed by December 1, 2006, with the chairs of the Senate State 
64.23   and Local Government Operations Committee, the Senate Finance Committee, the House 
64.24   Government Operations and Veterans Affairs Committee, the House State Government 
64.25   Finance Committee, and the House Ways and Means Committee.

64.26       Sec. 2. EFFECTIVE DATE.
64.27   Section 1 is effective the day following final enactment.