2nd Unofficial Engrossment - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to retirement; various public pension plans; 1.3 clarifying and revising various plan provisions; 1.4 eliminating obsolete provisions; defining final 1.5 average salary and salary limitations; modifying the 1.6 definition of allowable service to include time on 1.7 strike; permitting judges to purchase service credit 1.8 for an authorized leave; requiring specified payments; 1.9 clarifying references to actuarial services in 1.10 determining actuarial equivalence; defining covered 1.11 salary to include certain employer contributions to 1.12 supplemental retirement plans; modifying provisions 1.13 regarding employer contribution rates; specifying 1.14 itemized detail of plan administrative expenses in 1.15 annual financial reporting; excluding police officers 1.16 of the University of Minnesota from the public 1.17 employees police and fire fund; clarifying collection 1.18 procedures relating to charter schools; adding a 1.19 uniform nonassignment and legal process exemption 1.20 provision; adding employees of Bridges Medical 1.21 Services, Hutchinson Area Health Care, and Northfield 1.22 Hospital to privatization coverage; extending date for 1.23 filing special law approval with the secretary of 1.24 state for the RenVilla Nursing Home; requiring the 1.25 privatization periodic filing of updated copies of 1.26 articles of incorporation and bylaws; modifying a 1.27 higher education individual retirement account plan 1.28 investment option provision; implementing the 1.29 recommendations of the Volunteer Firefighter Relief 1.30 Association working group of the state auditor; 1.31 modifying the trigger date for filing financial 1.32 reports; revising the per firefighter financing 1.33 requirements for monthly benefit service pensions; 1.34 modifying the options for crediting interest on 1.35 deferred service pensions; clarifying the deferred 1.36 service pension options available to defined 1.37 contribution plans; providing for the crediting of 1.38 service during military service leaves; requiring the 1.39 amortization of experience losses; clarifying the 1.40 compliance requirements for the qualification for fire 1.41 state aid; modifying a limit on mutual fund 1.42 investments; clarifying corporate stock and exchange 1.43 traded funds investment authority; modifying the 1.44 municipal representation requirements on relief 1.45 association governing boards; clarifying exemptions 1.46 from process and taxation; providing that certain laws 2.1 do not apply to the consolidation of specified 2.2 volunteer firefighter relief associations; providing 2.3 an ad hoc postretirement adjustment to Eveleth police 2.4 and fire trust fund benefit recipients; authorizing 2.5 the Maplewood Firefighters Relief Association to 2.6 transfer assets to the Oakdale Firefighters Relief 2.7 Association to cover service credits earned by certain 2.8 individuals; appropriating money; amending Minnesota 2.9 Statutes 2004, sections 3A.01, subdivisions 1, 2, 6, 2.10 8, by adding subdivisions; 3A.011; 3A.02, subdivisions 2.11 1, 1b, 3, 4, 5; 3A.03, subdivisions 1, 2; 3A.04, 2.12 subdivisions 1, 2, 3, 4, by adding a subdivision; 2.13 3A.05; 3A.07; 3A.10, subdivision 1; 3A.12; 3A.13; 2.14 43A.17, subdivision 9; 69.011, subdivision 2b, by 2.15 adding a subdivision; 69.021, subdivisions 5, 11; 2.16 69.051, subdivisions 1, 1a; 69.33; 69.77, subdivision 2.17 4; 69.771; 69.772, subdivisions 3, 4; 69.773, 2.18 subdivisions 4, 5; 69.775; 352.01, subdivisions 2a, 4, 2.19 5, 12, 13, 21, 23, by adding a subdivision; 352.021, 2.20 subdivisions 1, 2, 3, 4; 352.04, subdivisions 1, 12; 2.21 352.041, subdivisions 1, 2, 3, 5; 352.115, 2.22 subdivisions 2, 3; 352.15, subdivisions 1, 3, 4; 2.23 352.22, subdivision 10; 352.87, subdivision 3; 352.91, 2.24 by adding a subdivision; 352.93, subdivision 1; 2.25 352B.01, subdivisions 1, 2, 3, 11; 352B.02, 2.26 subdivision 1e; 352B.071; 352C.021, by adding a 2.27 subdivision; 352C.091, subdivision 1; 352C.10; 2.28 352D.01; 352D.015, subdivisions 3, 4; 352D.02, 2.29 subdivision 1; 352D.03; 352D.05, subdivision 4; 2.30 352D.085, subdivision 1; 352D.09, subdivision 5; 2.31 352D.12; 353.01, subdivisions 6, 10, 14, 32, 33, by 2.32 adding a subdivision; 353.025; 353.026; 353.027; 2.33 353.028; 353.14; 353.15, subdivisions 1, 3; 353.27, 2.34 subdivisions 2, 3, 3a, 11, by adding subdivisions; 2.35 353.271; 353.28, subdivisions 5, 6; 353.29, 2.36 subdivision 3; 353.31, subdivision 1c; 353.32, 2.37 subdivision 9; 353.33, subdivisions 3, 12; 353.64, by 2.38 adding a subdivision; 353.65, subdivisions 2, 3; 2.39 353.651, subdivision 3; 353.656, subdivision 1; 2.40 353B.02, subdivision 10; 353F.02, subdivision 4; 2.41 354.05, subdivisions 7, 35, by adding a subdivision; 2.42 354.091; 354.094, subdivision 1; 354.10, subdivisions 2.43 1, 3, 4; 354.33, subdivision 5; 354.39; 354.41, 2.44 subdivision 2; 354.42, by adding a subdivision; 2.45 354.44, subdivisions 2, 6; 354A.011, subdivisions 3a, 2.46 24, by adding a subdivision; 354A.021, subdivision 5, 2.47 by adding a subdivision; 354A.097, subdivision 1; 2.48 354A.31, subdivisions 4, 4a, 5; 354B.21, subdivisions 2.49 2, 3; 354B.25, subdivision 2; 355.01, subdivision 3e; 2.50 356.20, subdivision 4; 356.215, subdivision 8; 2.51 356.216; 356.24, subdivision 1; 356.47, subdivision 3; 2.52 356.551; 356.611, subdivision 1; 356.65, subdivision 2.53 2; 356A.06, subdivision 7; 383B.46, subdivision 2; 2.54 383B.47; 383B.48; 383B.49; 422A.01, subdivisions 6, 2.55 11, by adding subdivisions; 422A.05, subdivision 2c; 2.56 422A.06, subdivisions 3, 5, 7, 8; 422A.10, 2.57 subdivisions 1, 2; 422A.101, subdivision 3; 422A.15, 2.58 subdivision 1; 422A.16, subdivision 9; 422A.22, 2.59 subdivisions 1, 3, 4, 6; 422A.231; 422A.24; 423B.01, 2.60 by adding a subdivision; 423B.05, subdivision 3; 2.61 423B.09, subdivision 1, by adding a subdivision; 2.62 423B.10, subdivision 1; 423B.17; 423C.01, by adding a 2.63 subdivision; 423C.05, subdivision 2; 423C.09; 424A.02, 2.64 subdivisions 3, 4, 7; 424A.04, subdivision 1; 424B.10, 2.65 subdivision 1; 471A.10; 490.121, subdivisions 1, 4, 6, 2.66 7, 13, 14, 15, 20, 21, 22, by adding subdivisions; 2.67 490.122; 490.123, subdivisions 1, 1a, 1b, 1c, 2, 3; 2.68 490.124, subdivisions 1, 2, 3, 4, 5, 8, 9, 10, 11, 12, 2.69 13; 490.125, subdivisions 1, 2; 490.126; 490.133; 2.70 525.05; Laws 1999, chapter 222, article 16, section 2.71 16, as amended; Laws 2000, chapter 461, article 4, 3.1 section 4, as amended; Laws 2004, chapter 267, article 3.2 12, section 4; proposing coding for new law in 3.3 Minnesota Statutes, chapters 352C; 356; 383B; 423C; 3.4 424A; proposing coding for new law as Minnesota 3.5 Statutes, chapter 490A; repealing Minnesota Statutes 3.6 2004, sections 3A.01, subdivisions 3, 4, 6a, 7; 3A.02, 3.7 subdivision 2; 3A.04, subdivision 1a; 3A.09; 352.119, 3.8 subdivision 1; 352.15, subdivision 1a; 352C.01; 3.9 352C.011; 352C.021; 352C.031; 352C.033; 352C.04; 3.10 352C.051; 352C.09; 352C.091, subdivisions 2, 3; 3.11 353.15, subdivision 2; 353.29, subdivision 2; 353.34, 3.12 subdivision 3b; 353.36, subdivisions 2, 2a, 2b, 2c; 3.13 353.46, subdivision 4; 353.651, subdivision 2; 3.14 353.663; 353.74; 353.75; 354.10, subdivision 2; 3.15 354.59; 422A.101, subdivision 4; 422A.22, subdivisions 3.16 2, 5; 422A.221; 490.021; 490.025; 490.101; 490.102; 3.17 490.103; 490.105; 490.106; 490.107; 490.108; 490.109; 3.18 490.1091; 490.12; 490.121, subdivisions 2, 3, 5, 8, 9, 3.19 10, 11, 12, 16, 17, 18, 19, 20; 490.124, subdivision 3.20 6; 490.132; 490.15; 490.16; 490.18. 3.21 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 3.22 2005 OMNIBUS RETIREMENT BILL 3.23 ARTICLE 1 3.24 CLARIFICATION/RECODIFICATION OF 3.25 STATEWIDE SPECIALTY RETIREMENT PLANS 3.26 Section 1. Minnesota Statutes 2004, section 3A.01, 3.27 subdivision 1, is amended to read: 3.28 Subdivision 1. [PURPOSES.] Each of the terms defined in 3.29 this section, for the purposes of this chaptershall be3.30givenhas themeaningsmeaning ascribedto them. 3.31 Sec. 2. Minnesota Statutes 2004, section 3A.01, is amended 3.32 by adding a subdivision to read: 3.33 Subd. 1a. [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" 3.34 means the condition of one allowance or benefit having an equal 3.35 actuarial present value to another allowance or benefit, 3.36 determined by the actuary retained under section 356.214 as of a 3.37 given date at a specified age with each actuarial present value 3.38 based on the mortality table applicable for the plan and 3.39 approved under section 356.215, subdivision 18, and using the 3.40 applicable preretirement or postretirement interest rate 3.41 assumption specified in section 356.215, subdivision 8. 3.42 Sec. 3. Minnesota Statutes 2004, section 3A.01, is amended 3.43 by adding a subdivision to read: 3.44 Subd. 1b. [AVERAGE MONTHLY SALARY.] "Average monthly 3.45 salary" means the average of the member's highest five 4.1 successive years of salary that was received as a member of the 4.2 legislature and upon which the member has made contributions 4.3 under section 3A.03, subdivision 1, or for which the member of 4.4 the legislature has made payments for past service under 4.5 Minnesota Statutes 2004, section 3A.02, subdivision 2, or has 4.6 made, before July 1, 1994, payments in lieu of contributions 4.7 under Minnesota Statutes 1992, section 3A.031. 4.8 Sec. 4. Minnesota Statutes 2004, section 3A.01, is amended 4.9 by adding a subdivision to read: 4.10 Subd. 1c. [CONSTITUTIONAL OFFICER.] "Constitutional 4.11 officer" means a person who was duly elected, qualifies for, and 4.12 serves as the governor, the lieutenant governor, the attorney 4.13 general, the secretary of state, or the state auditor of the 4.14 state of Minnesota. 4.15 Sec. 5. Minnesota Statutes 2004, section 3A.01, 4.16 subdivision 2, is amended to read: 4.17 Subd. 2. [DEPENDENT CHILD.] (a) "Dependent child" means 4.18 any natural or adopted child of a deceased member of the 4.19 legislature or a former legislator who is under the age of 18, 4.20 or who is under the age of 22 and is a full-time student, and 4.21 who, in either case, is unmarried and was actually dependent for 4.22 more than one-half of support uponsuchthe legislator for a 4.23 period of at least 90 days immediatelyprior tobefore the 4.24 legislator's death.It4.25 (b) The term also includes any child of the member of the 4.26 legislature or former legislator who was conceived during the 4.27 lifetime of, and who was born after the death of, the member or 4.28 former legislator.This subdivision shall be retroactive as to4.29any dependent child under the age of 22 years as of April 1,4.301975.4.31 Sec. 6. Minnesota Statutes 2004, section 3A.01, 4.32 subdivision 6, is amended to read: 4.33 Subd. 6. [DIRECTOR.] "Director" means the executive 4.34 director of the Minnesota State Retirement System who was 4.35 appointed under section 352.03, subdivision 5. 4.36 Sec. 7. Minnesota Statutes 2004, section 3A.01, is amended 5.1 by adding a subdivision to read: 5.2 Subd. 6b. [FORMER LEGISLATOR.] "Former legislator" means a 5.3 legislator who has ceased to be a member of the legislature for 5.4 any reason, including, but not limited to, the expiration of the 5.5 term for which a member of the legislature was elected or the 5.6 death of the member. 5.7 Sec. 8. Minnesota Statutes 2004, section 3A.01, is amended 5.8 by adding a subdivision to read: 5.9 Subd. 6c. [MEMBER OF THE LEGISLATURE.] "Member of the 5.10 legislature" means a person who was a member of the House of 5.11 Representatives or of the Senate of the state of Minnesota who 5.12 has subscribed to the oath of office after July 1, 1965, and who 5.13 was first elected to a legislative office before July 1, 1997, 5.14 and retained coverage by the plan under Laws 1997, chapter 233, 5.15 article 2, section 15. 5.16 Sec. 9. Minnesota Statutes 2004, section 3A.01, 5.17 subdivision 8, is amended to read: 5.18 Subd. 8. [NORMAL RETIREMENT AGE.] "Normal retirement age" 5.19 means the age of60 years with regard to any member of the5.20legislature whose service terminates prior to the beginning of5.21the 1981 legislative session, and the age of62 yearswith5.22regard to any member of the legislature whose service terminates5.23after the beginning of the 1981 session. 5.24 Sec. 10. Minnesota Statutes 2004, section 3A.01, is 5.25 amended by adding a subdivision to read: 5.26 Subd. 9. [RETIREMENT.] "Retirement" means the period of 5.27 time after which a former legislator is entitled to a retirement 5.28 allowance. 5.29 Sec. 11. Minnesota Statutes 2004, section 3A.01, is 5.30 amended by adding a subdivision to read: 5.31 Subd. 10. [SALARY.] (a) "Salary" means the regular 5.32 compensation payable under law to a member of the legislature 5.33 and paid to the person for service as a legislator. 5.34 (b) The term includes the monthly compensation paid to the 5.35 member of the legislature and the per diem payments paid during 5.36 a regular or special session to the member of the legislature. 6.1 (c) The term does not include per diem payments paid to a 6.2 member of the legislature other than during the regular or 6.3 special session; additional compensation attributable to a 6.4 leadership position under section 3.099, subdivision 3; living 6.5 expense payments under section 3.101; and special session living 6.6 expense payments under section 3.103. 6.7 Sec. 12. Minnesota Statutes 2004, section 3A.011, is 6.8 amended to read: 6.9 3A.011 [ADMINISTRATION OF PLAN.] 6.10 The executive director and the board of directors of the 6.11 Minnesota State Retirement System shall administer the 6.12 legislators retirement plan in accordance with this chapter and 6.13 chapter 356A. 6.14 Sec. 13. Minnesota Statutes 2004, section 3A.02, 6.15 subdivision 1, is amended to read: 6.16 Subdivision 1. [QUALIFICATIONS.] (a) A former legislator 6.17 is entitled, upon written application to the director, to 6.18 receive a retirement allowance monthly, if the person: 6.19 (1) has either served at least six full years, without 6.20 regard to the application of section 3A.10, subdivision 2, or 6.21 has served during all or part of four regular sessions as a 6.22 member of the legislature, which service need not be continuous; 6.23 (2) has attained the normal retirement age; 6.24 (3) has retired as a member of the legislature; and 6.25 (4) has made all contributions provided for in section 6.26 3A.03, has made payments for past service under subdivision 2, 6.27 or has made payments in lieu of contributions under Minnesota 6.28 Statutes 1992, section 3A.031,prior tobefore July 1, 1994. 6.29 (b)This paragraph applies to members of the legislature6.30who terminate service as a legislator before July 1, 1997. For6.31service rendered before the beginning of the 1979 legislative6.32session, but not to exceed eight years of service, the6.33retirement allowance is an amount equal to five percent per year6.34of service of that member's average monthly salary. For service6.35in excess of eight years rendered before the beginning of the6.361979 legislative session, and for service rendered after the7.1beginning of the 1979 legislative session,Unless the former 7.2 legislator has legislative service before January 1, 1979, the 7.3 retirement allowance is an amount equal to 2-1/2 percent per 7.4 year of service of that member's average monthly salary.7.5(c) This paragraph applies to members of the legislature7.6who terminate service as a legislator after June 30, 1997. The7.7retirement allowance is an amount equal to the applicable rate7.8or rates under paragraph (b) per year of service of the member's7.9average monthly salaryand adjusted for that person on an 7.10 actuarial equivalent basis to reflect the change in the 7.11 postretirement interest rate actuarial assumption under section 7.12 356.215, subdivision 8, from five percent to six percent. The 7.13 adjustment must be calculated by or, alternatively, the 7.14 adjustment procedure must be specified by, the actuary retained 7.15by the Legislative Commission on Pensions and Retirementunder 7.16 section 356.214. The purpose of this adjustment is to ensure 7.17 that the total amount of benefits that the actuary predicts an 7.18 individual member will receive over the member's lifetime under 7.19 this paragraph will be the same as the total amount of benefits 7.20 the actuary predicts the individual member would receive over 7.21 the member's lifetime under the law in effect before enactment 7.22 of this paragraph. If the former legislator has legislative 7.23 service before January 1, 1979, the person's benefit must 7.24 include the additional benefit amount in effect on January 1, 7.25 1979, and adjusted as otherwise provided in this paragraph. 7.26(d)(c) The retirement allowance accrues beginning with the 7.27 first day of the month of receipt of the application, but not 7.28 before age 60, and for the remainder of the former legislator's 7.29 life, if the former legislator is not serving as a member of the 7.30 legislature or as a constitutional officeror commissioneras 7.31 defined insection 352C.021, subdivisions 2 and 3section 3A.01, 7.32 subdivision 1c. The annuity does not begin to accrueprior to7.33 before the person's retirement as a legislator. No annuity 7.34 payment may be made retroactive for more than 180 days before 7.35 the date that the annuity application is filed with the director. 7.36(e)(d) Any member who has served during all or part of 8.1 four regular sessions is considered to have served eight years 8.2 as a member of the legislature. 8.3(f)(e) The retirement allowance ceases with the last 8.4 payment that accrued to the retired legislator during the 8.5 retired legislator's lifetime, except that the surviving spouse, 8.6 if any, is entitled to receive the retirement allowance of the 8.7 retired legislator for the calendar month in which the retired 8.8 legislator died. 8.9 Sec. 14. Minnesota Statutes 2004, section 3A.02, 8.10 subdivision 1b, is amended to read: 8.11 Subd. 1b. [REDUCED RETIREMENT ALLOWANCE.] (a) Upon 8.12 separation from service after the beginning of the 1981 8.13 legislative session, a former member of the legislature who has 8.14 attained the age set by the board of directors of the Minnesota 8.15 State Retirement System and who is otherwise qualifiedin8.16accordance withunder subdivision 1 is entitled, upon making 8.17 written application onforms supplieda form prescribed by the 8.18 director, to a reduced retirement allowancein. The reduced 8.19 retirement allowance is an amount equal to the retirement 8.20 allowance specified in subdivision 1, paragraph (b), that is 8.21 reduced so that the reducedannuityallowance is the actuarial 8.22 equivalent of theannuityallowance that would be payable if the 8.23 former member of the legislature deferred receipt of theannuity8.24 allowance and theannuityallowance amountwerewas augmented 8.25 at an annual rate of three percent compounded annually from the 8.26 date theannuityallowance begins to accrue until age 62. 8.27 (b) The age set by the board of directors under paragraph 8.28 (a) cannot belessan earlier age than the early retirement age 8.29 under section 352.116, subdivision 1a. 8.30 (c) If there is an actuarial cost to the plan of resetting 8.31 the early retirement age under paragraph (a), the retired 8.32 legislator is required to pay an additional amount to cover the 8.33 full actuarial value. The additional amount must be paid in a 8.34 lump sum within 30 days of the certification of the amount by 8.35 the executive director. 8.36 (d) The executive director of the Minnesota State 9.1 Retirement System shall report to the Legislative Commission on 9.2 Pensions and Retirement on the utilization of this 9.3 provision annually on or before September 1, 2000. 9.4 Sec. 15. Minnesota Statutes 2004, section 3A.02, 9.5 subdivision 3, is amended to read: 9.6 Subd. 3. [APPROPRIATION.] The amounts required for payment 9.7 of retirement allowances provided by this section are 9.8 appropriated annually to the director from the participation of 9.9 the legislators retirement plan in the Minnesota postretirement 9.10 investment fundand shall. The retirement allowance must be 9.11 paid monthly to the recipients entitledtheretoto those 9.12 retirement allowances. 9.13 Sec. 16. Minnesota Statutes 2004, section 3A.02, 9.14 subdivision 4, is amended to read: 9.15 Subd. 4. [DEFERRED ANNUITIES AUGMENTATION.] (a) The 9.16 deferredannuityretirement allowance of any former legislator 9.17 must be augmented as provided herein. 9.18 (b) The required reserves applicable to the 9.19 deferredannuityretirement allowance, determined as of the date 9.20 the benefit begins to accrue using an appropriate mortality 9.21 table and an interest assumption of six percent, must be 9.22 augmented from the first of the month following the termination 9.23 of active service, or July 1, 1973, whichever is later, to the 9.24 first day of the month in which theannuityallowance begins to 9.25 accrue, at the following annually compounded rateof five9.26percent per annum compounded annually until January 1, 1981, and9.27thereafter at the rate of three percent per annum compounded9.28annually until January 1 of the year in which the former9.29legislator attains age 55. From that date to the effective date9.30of retirement, the rate is five percent compounded annually.or 9.31 rates: 9.32 rate period 9.33 (1) five percent until January 1, 1981 9.34 (2) three percent from January 1, 1981, or from the 9.35 first day of the month following 9.36 the termination of active service, 10.1 whichever is later, until January 1 10.2 of the year in which the former 10.3 legislator attains age 55 10.5 (3) five percent from the period end date under 10.6 clause (2) to the effective date 10.7 of retirement. 10.8(b) The retirement allowance of, or the survivor benefit10.9payable on behalf of, a former member of the legislature who10.10terminated service before July 1, 1997, which is not first10.11payable until after June 30, 1997, must be increased on an10.12actuarial equivalent basis to reflect the change in the10.13postretirement interest rate actuarial assumption under section10.14356.215, subdivision 8, from five percent to six percent under a10.15calculation procedure and tables adopted by the board of10.16directors of the Minnesota State Retirement System and approved10.17by the actuary retained by the Legislative Commission on10.18Pensions and Retirement.10.19 Sec. 17. Minnesota Statutes 2004, section 3A.02, 10.20 subdivision 5, is amended to read: 10.21 Subd. 5. [OPTIONAL ANNUITIES.] (a) The board of directors 10.22 shall establish an optional retirement annuity in the form of a 10.23 joint and survivor annuity and an optional retirement annuity in 10.24 the form of a period certain and life thereafter. Except as 10.25 provided in paragraph (b), these optional annuity forms must be 10.26 actuarially equivalent to the normalannuityallowance computed 10.27 under this section, plus the actuarial value of any surviving 10.28 spouse benefit otherwise potentially payable at the time of 10.29 retirement under section 3A.04, subdivision 1. An individual 10.30 selecting an optional annuity under this subdivisionwaivesand 10.31 the person's spouse waive any rights to surviving spouse 10.32 benefits under section 3A.04, subdivision 1. 10.33 (b) If a retired legislator selects the joint and survivor 10.34 annuity option, the retired legislator must receive a normal 10.35 single-lifeannuityallowance if the designated optional annuity 10.36 beneficiary dies before the retired legislator and no reduction 11.1 may be made in the annuity to provide for restoration of the 11.2 normal single-lifeannuityallowance in the event of the death 11.3 of the designated optional annuity beneficiary. 11.4 (c) The surviving spouse of a legislator who has attained 11.5 at least age 60 and who dies while a member of the legislature 11.6 may elect an optional joint and survivor annuity under paragraph 11.7 (a), in lieu of surviving spouse benefits under section 3A.04, 11.8 subdivision 1. 11.9 Sec. 18. Minnesota Statutes 2004, section 3A.03, 11.10 subdivision 1, is amended to read: 11.11 Subdivision 1. [PERCENTAGE.] (a) Every member of the 11.12 legislature shall contribute nine percent of total salary,. 11.13 (b) The contribution must be made by payroll deduction,11.14toand must be paid into the state treasury and deposited in the 11.15 general fund.It shall be the duty of11.16 (c) The directortomust record the periodic contributions 11.17 of each member of the legislature and must creditsucheach 11.18 contribution to the member's account. 11.19 Sec. 19. Minnesota Statutes 2004, section 3A.03, 11.20 subdivision 2, is amended to read: 11.21 Subd. 2. [REFUND.] (a) A former member who has made 11.22 contributions under subdivision 1 and who is no longer a member 11.23 of the legislature is entitled to receive, upon written 11.24 application to the executive director on a form prescribed by 11.25 the executive director, a refund from the general fund of all 11.26 contributions credited to the member's account with interest 11.27 computed as provided in section 352.22, subdivision 2. 11.28 (b) The refund of contributions as provided in paragraph (a) 11.29 terminates all rights of a former member of the legislature and 11.30 the survivors of the former member under this chapter. 11.31 (c) If the former member of the legislature again becomes a 11.32 member of the legislature after having taken a refund as 11.33 provided in paragraph (a), the membermust be consideredis a 11.34newmember ofthis planthe unclassified employees retirement 11.35 program of the Minnesota State Retirement System. 11.36 (d) However, the member may reinstate the rights and credit 12.1 for service previously forfeited under this chapter if the 12.2 member repays all refunds taken, plus interest at an annual rate 12.3 of 8.5 percent compounded annually from the date on which the 12.4 refund was taken to the date on which the refund is repaid. 12.5(d)(e) No person may be required to apply for or to accept 12.6 a refund. 12.7 Sec. 20. Minnesota Statutes 2004, section 3A.04, 12.8 subdivision 1, is amended to read: 12.9 Subdivision 1. [SURVIVING SPOUSE.] (a) Upon the death of a 12.10 member of the legislature while serving assucha memberafter12.11June 30, 1973, or upon the death of a former member of the 12.12 legislature with at leastthe number ofsix full years of 12.13 serviceas required by section 3A.02, subdivision 1, clause12.14(1)or service in all or part of four regular legislative 12.15 sessions, the surviving spouseshall be paidis entitled to a 12.16 survivor benefitin the amount of. 12.17 (b) The surviving spouse benefit is one-half of the 12.18 retirement allowance of the member of the legislature computed 12.19 as though the member were at least normal retirement age on the 12.20 date of death and based upon the member's allowable service 12.21 or upon eight years, whichever is greater. The augmentation 12.22 provided in section 3A.02, subdivision 4, if applicable,shall12.23 must be applied for the period up to, and including, the month 12.24 of death. 12.25 (c) Upon the death of a former legislator receiving a 12.26 retirement allowance, the surviving spouseshall beis entitled 12.27 to one-half of the amount of the retirement allowance being paid 12.28 to the legislator.Such12.29 (d) The surviving spouse benefitshall be paid duringis 12.30 payable for the lifetime of the surviving spouse. 12.31 Sec. 21. Minnesota Statutes 2004, section 3A.04, 12.32 subdivision 2, is amended to read: 12.33 Subd. 2. [DEPENDENT CHILDREN.] (a) Upon the death of a 12.34 member of the legislature while serving as a member, or upon the 12.35 death of a former member of the legislature who has rendered at 12.36 leastthe number ofsix full years of serviceas required by13.1section 3A.02, subdivision 1, clause (1)or service in all or 13.2 part of four regular legislative sessions and who was not 13.3 receiving a retirement allowance, each dependent child of the 13.4 member or former legislatorshall beis entitled to receive a 13.5 survivor benefit in the following amount: 13.6 (1) for the first dependent child, a monthlyallowance13.7which equalsbenefit equal to 25 percent of the monthly 13.8 retirement allowance of the member of the legislature or the 13.9 former legislator computed as though the member or the former 13.10 legislator had attained at least the normal retirement age on 13.11 the date of death and based upon the average monthly salary as 13.12 of the date of death or as of the date of termination, whichever 13.13is applicableapplies, and the member's allowable service or 13.14 eight years, whichever is greater; 13.15 (2) for each additional dependent child, a monthly 13.16allowance which equalsbenefit equal to 12-1/2 percent of the 13.17 monthly retirement allowance of the member or the former 13.18 legislator computed as provided inthe case of the first child13.19 clause (1);butand 13.20 (3) the total amount paid to the surviving spouse and to 13.21 the dependent child or childrenshallmay not exceed, in any 13.22 one month, 100 percent of the monthly retirement allowance of 13.23 the member or of the former legislator computed as provided in 13.24the case of the first childclause (1). 13.25 (b) The augmentation provided in section 3A.02, subdivision 13.26 4, if applicable,shall be appliedapplies from the first day of 13.27 the month next following the date of the termination of the 13.28 person from service as a member of the legislature to the month 13.29 of the death of the person. 13.30 (c) Upon the death of a former legislator who was receiving 13.31 a retirement allowance,thea surviving dependent childshall be13.32 is entitled to the applicable percentage specifiedabovein 13.33 paragraph (a), clause (1) or (2), whichever applies, of the 13.34 amount of the allowance which was paid to the former legislator 13.35 for the month immediatelyprior tobefore the date of death of 13.36 the former legislator. 14.1 (d) The payments for dependent childrenshallmust be made 14.2 to the surviving spouse or to the guardian of the estate of the 14.3 dependent children, if there is one. 14.4 Sec. 22. Minnesota Statutes 2004, section 3A.04, 14.5 subdivision 3, is amended to read: 14.6 Subd. 3. [PAYMENT.] The survivingspouse'sspouse and 14.7 dependentchildren'schild or children survivor benefits payable 14.8 under this sectionshall be paidare payable by the director 14.9 monthly in the same manner as retirement allowances are 14.10 authorized to be paid by this chapter. 14.11 Sec. 23. Minnesota Statutes 2004, section 3A.04, 14.12 subdivision 4, is amended to read: 14.13 Subd. 4. [DEATH REFUNDS.] (a) Upon the death of a member 14.14 of the legislature or of a former legislator who was not 14.15 receiving a retirement allowance,without leaving either a 14.16 surviving spouse or a dependent child or dependent children, the 14.17 last designated beneficiary named on a form that was filed with 14.18 the director before the death of the legislator, or if no 14.19 designation is filed, the estate of the member or the former 14.20 legislator, upon application,shall beis entitled to a refund. 14.21 (b) The refund is the amount of contributions credited to 14.22 the person's account plus interest as provided in section 3A.03, 14.23 subdivision 2,clause (2)paragraph (a). 14.24 Sec. 24. Minnesota Statutes 2004, section 3A.04, is 14.25 amended by adding a subdivision to read: 14.26 Subd. 5. [APPROPRIATION.] The survivor benefits and the 14.27 death refunds authorized by this section are appropriated to the 14.28 director from the general fund when they are due and payable. 14.29 Sec. 25. Minnesota Statutes 2004, section 3A.05, is 14.30 amended to read: 14.31 3A.05 [APPLICATION FOR SURVIVOR BENEFIT.] 14.32 (a) Applications for survivor benefitspursuant tounder 14.33 section 3A.04shallmust be filed with the director by the 14.34 surviving spouse and dependent child or children entitled to 14.35 benefitspursuant tounder section 3A.04, or by the guardian of 14.36 the estate, if there is one, of the dependent child or children. 15.1 (b) Survivor benefitsshallaccrue as of the first day of 15.2 the month following the death of the member of the legislature 15.3 or former legislator and paymentsshallcommence as of the first 15.4 of the month next following the filing of the application, 15.5 andshall beare retroactive to the date the benefit accrues;15.6provided, however, that no payment shall be retroactive for more15.7thanor the first of the month occurring 12 monthsprior15.8tobefore the month in which the application is filed with the 15.9 director, whichever is earlier. 15.10 Sec. 26. Minnesota Statutes 2004, section 3A.07, is 15.11 amended to read: 15.12 3A.07 [APPLICATION.] 15.13 (a) Except as provided in paragraph (b), this chapter 15.14 applies to members of the legislature in service after July 1, 15.15 1965, who otherwise meet the requirements of this chapter. 15.16 (b) Members of the legislature who were elected for the 15.17 first time after June 30, 1997, or members of the legislature 15.18 who were elected before July 1, 1997, and who, after July 1, 15.19 1998, elect not to be members of the plan established by this 15.20 chapter are covered by the unclassified employees retirement 15.21 program governed by chapter 352D. 15.22 (c) The post-July 1, 1998, coverage election under 15.23 paragraph (b) is irrevocable and must be made on a form 15.24 prescribed by the director. The second chance referendum 15.25 election under Laws 2002, chapter 392, article 15, also is 15.26 irrevocable. 15.27 Sec. 27. Minnesota Statutes 2004, section 3A.10, 15.28 subdivision 1, is amended to read: 15.29 Subdivision 1. [SERVICE CREDIT FOR LEGISLATIVE TERM.] (a) 15.30 In the case of a member of the house of representatives, one 15.31 full term of officeshallmust be considered two full years of 15.32 service, notwithstanding the fact that the oath of officemay be15.33 was taken on different days each biennium. 15.34 (b) In the case of a member of the senate, one full term of 15.35 officeshallmust be considered four full years of service, 15.36 notwithstanding the fact that the oath of officemay bewas 16.1 taken on different days at the start of each term. 16.2 (c) For purposes of this chapter, a legislative termshall16.3 must be deemed to commence on January1st1 and to end on 16.4 December31st31. 16.5 Sec. 28. Minnesota Statutes 2004, section 3A.12, is 16.6 amended to read: 16.7 3A.12 [COVERAGE BY MORE THAN ONE RETIREMENT SYSTEM OR 16.8 ASSOCIATION.] 16.9 Subdivision 1. [ENTITLEMENT TO ANNUITY.] (a) Any 16.10 legislator who has beenan employee covered bya member of a 16.11 retirement plan listed in paragraph (b) is entitled, when 16.12 otherwise qualified, to a retirement allowance or annuity from 16.13 each plan if the total allowable service in all plans or in any 16.14 two of these plans totals ten or more years. 16.15 (b) This section applies to any retirement plan or program 16.16 administered by the Minnesota State Retirement System, ora16.17member ofany retirement plan administered by the Public 16.18 Employees Retirement Association, including the Public Employees 16.19 Retirement Association police and fire fund, or the Teachers 16.20 Retirement Association, or the Minneapolis employees 16.21 retirementFundplan, or the State Patrol retirementfundplan, 16.22 or any other public employee retirement system in the state of 16.23 Minnesota having a like provisionbut excluding all. 16.24 (c) This section does not apply to otherfundsretirement 16.25 plans providing benefits for police or firefighters, shall be16.26entitled when qualified to an annuity from each fund if the16.27total allowable service for which the legislator has credit in16.28all funds or in any two of these funds totals ten or more years,16.29provided. 16.30 (d) No portion of the allowable service upon which the 16.31 retirement annuity from onefundplan is based is again used in 16.32 the computation for benefits from anotherfundplan. The 16.33 annuity from eachfund shallplan must be determined by the 16.34 appropriate provisions of the law, except that the requirement 16.35 that a person must haveat least tena minimum number of years 16.36 of allowable service in the respective system or 17.1 associationshalldoes not apply for the purposes of this 17.2 sectionprovidedif the combined service in two or more of these 17.3fundsplans equals ten or more years. The augmentation of 17.4 deferred annuities provided in section 3A.02, subdivision 17.5 4,shall applyapplies to the annuities accruinghereunderunder 17.6 this section. 17.7 Subd. 2. [REFUND REPAYMENT.]AnyA former legislator who 17.8 has received a refund as provided in section 3A.03, subdivision 17.9 2, who is a currently contributing member of a retirementfund17.10 plan specified in subdivision 1, paragraph (b), may repay the 17.11 refund as provided in section 3A.03, subdivision 2.AnyA 17.12 member of the legislature who has received a refund from any of 17.13 thefundsretirement plans specified in subdivision 1,may repay 17.14 the refund to the respectivefundplan under such terms and 17.15 conditions consistent with the law governingsuch fundthe 17.16 retirement plan if the law governingsuch fundthe plan permits 17.17 the repayment of refunds. If the total amount to be repaid, 17.18 including principal and interest exceeds $2,000, repayment may 17.19 be made in three equal installments over a period of 18 months, 17.20 with the interest accrued during the period of the repayment 17.21 added to the final installment. 17.22 Sec. 29. Minnesota Statutes 2004, section 3A.13, is 17.23 amended to read: 17.24 3A.13 [EXEMPTION FROM PROCESS AND TAXATION; HEALTH PREMIUM 17.25 DEDUCTION.] 17.26 (a) The provisions of section 352.15shallapply to the 17.27 legislators retirement plan, chapter 3A. 17.28 (b) The executive director of the Minnesota State 17.29 Retirement System must, at the request of a retired legislator 17.30 who is enrolled in a health insurance plan covering state 17.31 employees, deduct the person's health insurance premiums from 17.32 the person's annuity and transfer the amount of the premium to a 17.33 health insurance carrier covering state employees. 17.34 Sec. 30. [352C.001] [RETIREMENT PLAN; APPLICATION.] 17.35 (a) The retirement plan applicable to a former 17.36 constitutional officer who was first elected to a constitutional 18.1 office after July 1, 1967, and before July 1, 1997, is the 18.2 applicable portions of this chapter and chapter 356 in effect on 18.3 the date on which the person terminated active service as a 18.4 constitutional officer. 18.5 (b) Nothing in this section or section 31 or 77, 18.6 subdivision 2, is intended to reduce the benefits of former 18.7 constitutional officers or to adversely modify their eligibility 18.8 for benefits in effect as of the day before the effective date 18.9 of this section. 18.10 Sec. 31. Minnesota Statutes 2004, section 352C.091, 18.11 subdivision 1, is amended to read: 18.12 Subdivision 1. [ADMINISTRATIVE AGENCY AND STANDARDS.]This18.13chapter(a) The elected officers retirement plan must be 18.14 administered by the board of directors and the executive 18.15 director of the Minnesota State Retirement System. 18.16 (b) The elected state officers retirement plan must be 18.17 administered consistent withthis chapterthe applicable 18.18 statutory provisions governing the plan and chapters 356 and 18.19 356A. 18.20 Sec. 32. Minnesota Statutes 2004, section 352C.10, is 18.21 amended to read: 18.22 352C.10 [BENEFIT ADJUSTMENTS.] 18.23 Retirement allowances payable to retired constitutional 18.24 officerspursuant to section 352C.031and surviving spouse 18.25 benefits payablepursuant to section 352C.04, shallmust be 18.26 adjusted in the same manner, at the same times and in the same 18.27 amounts as are benefits payable from the Minnesota 18.28 postretirement investment fund to retirees of a participating 18.29 public pension fund. 18.30 Sec. 33. Minnesota Statutes 2004, section 352D.02, 18.31 subdivision 1, is amended to read: 18.32 Subdivision 1. [COVERAGE.] (a) Employees enumerated in 18.33 paragraph (c), clauses (2), (3), (4), and (6) to (14), if they 18.34 are in the unclassified service of the state or Metropolitan 18.35 Council and are eligible for coverage under the general state 18.36 employees retirement plan under chapter 352, are participants in 19.1 the unclassified plan under this chapter unless the employee 19.2 gives notice to the executive director of the Minnesota State 19.3 Retirement System within one year following the commencement of 19.4 employment in the unclassified service that the employee desires 19.5 coverage under the general state employees retirement plan. For 19.6 the purposes of this chapter, an employee who does not file 19.7 notice with the executive director is deemed to have exercised 19.8 the option to participate in the unclassified plan. 19.9 (b) Persons referenced in paragraph (c),clauses (1) and19.10 clause (5), are participants in the unclassified program under 19.11 this chapter unless the person is eligible to elect different 19.12 coverage under section 3A.07or 352C.011and, after July 1,19.131998, electselected retirement coverage by the applicable 19.14 alternative retirement plan. Persons referenced in paragraph 19.15 (c), clause (15), are participants in the unclassified program 19.16 under this chapter for judicial employment in excess of the 19.17 service credit limit in section 490.121, subdivision 22. 19.18 (c) Enumerated employees and referenced persons are: 19.19 (1) the governor, the lieutenant governor, the secretary of 19.20 state, the state auditor, and the attorney general; 19.21 (2) an employee in the Office of the Governor, Lieutenant 19.22 Governor, Secretary of State, State Auditor, Attorney General; 19.23 (3) an employee of the State Board of Investment; 19.24 (4) the head of a department, division, or agency created 19.25 by statute in the unclassified service, an acting department 19.26 head subsequently appointed to the position, or an employee 19.27 enumerated in section 15A.0815 or 15A.083, subdivision 4; 19.28 (5) a member of the legislature; 19.29 (6) a full-time unclassified employee of the legislature or 19.30 a commission or agency of the legislature who is appointed 19.31 without a limit on the duration of the employment or a temporary 19.32 legislative employee having shares in the supplemental 19.33 retirement fund as a result of former employment covered by this 19.34 chapter, whether or not eligible for coverage under the 19.35 Minnesota State Retirement System; 19.36 (7) a person who is employed in a position established 20.1 under section 43A.08, subdivision 1, clause (3), or in a 20.2 position authorized under a statute creating or establishing a 20.3 department or agency of the state, which is at the deputy or 20.4 assistant head of department or agency or director level; 20.5 (8) the regional administrator, or executive director of 20.6 the Metropolitan Council, general counsel, division directors, 20.7 operations managers, and other positions as designated by the 20.8 council, all of which may not exceed 27 positions at the council 20.9 and the chair; 20.10 (9) the executive director, associate executive director, 20.11 and not to exceed nine positions of the Higher Education 20.12 Services Office in the unclassified service, as designated by 20.13 the Higher Education Services Office before January 1, 1992, or 20.14 subsequently redesignated with the approval of the board of 20.15 directors of the Minnesota State Retirement System, unless the 20.16 person has elected coverage by the individual retirement account 20.17 plan under chapter 354B; 20.18 (10) the clerk of the appellate courts appointed under 20.19 article VI, section 2, of the Constitution of the state of 20.20 Minnesota; 20.21 (11) the chief executive officers of correctional 20.22 facilities operated by the Department of Corrections and of 20.23 hospitals and nursing homes operated by the Department of Human 20.24 Services; 20.25 (12) an employee whose principal employment is at the state 20.26 ceremonial house; 20.27 (13) an employee of the Minnesota Educational Computing 20.28 Corporation; 20.29 (14) an employee of the State Lottery who is covered by the 20.30 managerial plan established under section 43A.18, subdivision 3; 20.31 and 20.32 (15) a judge who has exceeded the service credit limit in 20.33 section 490.121, subdivision 22. 20.34 Sec. 34. Minnesota Statutes 2004, section 355.01, 20.35 subdivision 3e, is amended to read: 20.36 Subd. 3e. [JUDGE.] "Judge" means a judge as defined in 21.1 section 490.121, subdivision321a. 21.2 Sec. 35. Minnesota Statutes 2004, section 356.65, 21.3 subdivision 2, is amended to read: 21.4 Subd. 2. [DISPOSITION OF ABANDONED AMOUNTS.] Any unclaimed 21.5 public pension fund amounts existing in any public pension fund 21.6 are presumed to be abandoned, but are not subject to the 21.7 provisions of sections 345.31 to 345.60. Unless the benefit 21.8 plan of the public pension fund specifically provides for a 21.9 different disposition of unclaimed or abandoned funds or 21.10 amounts, any unclaimed public pension fund amounts cancel and 21.11 must be credited to the public pension fund. If the unclaimed 21.12 public pension fund amount exceeds $25 and the inactive or 21.13 former member again becomes a member of the applicable public 21.14 pension plan or applies for a retirement annuity under section 21.15 3A.12, 352.72, 352B.30,352C.051,353.71, 354.60, 356.30, or 21.16 422A.16, subdivision 8, whichever applies, the canceled amount 21.17 must be restored to the credit of the person. 21.18 Sec. 36. Minnesota Statutes 2004, section 490.121, 21.19 subdivision 1, is amended to read: 21.20 Subdivision 1. [SCOPE.] For purposes of sections 490.121 21.21 to 490.132, unless the context clearly indicates otherwise, each 21.22 of the terms defined in this sectionhavehas themeanings21.23 meaning giventhem unless the context clearly indicates21.24otherwiseit. 21.25 Sec. 37. Minnesota Statutes 2004, section 490.121, is 21.26 amended by adding a subdivision to read: 21.27 Subd. 2a. [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" 21.28 means the condition of one annuity or benefit having an equal 21.29 actuarial present value as another annuity or benefit, 21.30 determined as of a given date with each actuarial present value 21.31 based on the appropriate mortality table adopted by the board of 21.32 directors of the Minnesota State Retirement System based on the 21.33 experience of the fund as recommended by the actuary retained 21.34 under section 356.214 and approved under section 356.215, 21.35 subdivision 18, and using the applicable preretirement or 21.36 postretirement interest rate assumption specified in section 22.1 356.215, subdivision 8. 22.2 Sec. 38. Minnesota Statutes 2004, section 490.121, 22.3 subdivision 4, is amended to read: 22.4 Subd. 4. [ALLOWABLE SERVICE.] (a) "Allowable service" 22.5 means any calendar month, subject to the service credit limit in 22.6 subdivision 22, served as a judge at any time,orduring which 22.7 the judge received compensation for that service from the state, 22.8 municipality, or county, whichever applies, and for which the 22.9 judge made any required member contribution. It also includes 22.10 any month served as a referee in probate for all referees in 22.11 probate who were in officeprior tobefore January 1, 1974. 22.12 (b) "Allowable service" does not mean service as a retired 22.13 judge. 22.14 Sec. 39. Minnesota Statutes 2004, section 490.121, 22.15 subdivision 6, is amended to read: 22.16 Subd. 6. [ANNUITY.] "Annuity" means the payments that are 22.17 made each year to an annuitant from the judges' retirement fund,22.18pursuant to the provisions ofunder sections 490.121 to 490.132. 22.19 Sec. 40. Minnesota Statutes 2004, section 490.121, 22.20 subdivision 7, is amended to read: 22.21 Subd. 7. [ANNUITANT.] "Annuitant" means a former judge, a 22.22 surviving spouse, or a dependent child who is entitled to and is 22.23 receiving an annuity underthe provisions ofsections 490.121 to 22.24 490.132. 22.25 Sec. 41. Minnesota Statutes 2004, section 490.121, is 22.26 amended by adding a subdivision to read: 22.27 Subd. 7a. [APPROVED ACTUARY.] "Approved actuary" means an 22.28 actuary as defined in section 356.215, subdivision 1, paragraph 22.29 (c). 22.30 Sec. 42. Minnesota Statutes 2004, section 490.121, is 22.31 amended by adding a subdivision to read: 22.32 Subd. 7b. [COURT.] "Court" means any court of this state 22.33 that is established by the Minnesota Constitution. 22.34 Sec. 43. Minnesota Statutes 2004, section 490.121, is 22.35 amended by adding a subdivision to read: 22.36 Subd. 7c. [DEPENDENT SURVIVING CHILD.] "Dependent 23.1 surviving child" means any natural or adopted child of a 23.2 deceased judge who has not reached the age of 18 years, or 23.3 having reached the age of 18, is under age 22 and who is a 23.4 full-time student throughout the normal school year, is 23.5 unmarried, and is actually dependent for more than one-half of 23.6 the child's support upon the judge for a period of at least 90 23.7 days before the judge's death. It also includes any natural 23.8 child of the judge who was born after the death of the judge. 23.9 Sec. 44. Minnesota Statutes 2004, section 490.121, 23.10 subdivision 13, is amended to read: 23.11 Subd. 13. [DISABILITY.] "Disability" means the permanent 23.12 inability of a judge to continue to perform the functions of 23.13 judge by reason of a physical or mental impairment resulting 23.14 from a sickness or an injury. 23.15 Sec. 45. Minnesota Statutes 2004, section 490.121, 23.16 subdivision 14, is amended to read: 23.17 Subd. 14. [DISABILITY RETIREMENT DATE.] "Disability 23.18 retirement date" means the last day of the first month after the 23.19 date on which the governor determines, upon receipt of the 23.20 voluntary application by the judge or otherwise, that a judge 23.21 suffers from a disability. 23.22 Sec. 46. Minnesota Statutes 2004, section 490.121, 23.23 subdivision 15, is amended to read: 23.24 Subd. 15. [DISABILITY RETIREMENT ANNUITY.] "Disability 23.25 retirement annuity" means an annuity to which a judge is 23.26 entitled under section 490.124, subdivisions 1 and 4, after the 23.27 retirementfor reasonof the judge because of a disability. 23.28 Sec. 47. Minnesota Statutes 2004, section 490.121, is 23.29 amended by adding a subdivision to read: 23.30 Subd. 15a. [EARLY RETIREMENT DATE.] "Early retirement date" 23.31 means the last day of the month after a judge attains the age of 23.32 60 but before the judge reaches the normal retirement date. 23.33 Sec. 48. Minnesota Statutes 2004, section 490.121, is 23.34 amended by adding a subdivision to read: 23.35 Subd. 15b. [EARLY RETIREMENT ANNUITY.] "Early retirement 23.36 annuity" means an annuity to which a judge is entitled under 24.1 section 490.124, subdivisions 1 and 3, upon retirement by the 24.2 judge at an early retirement date. 24.3 Sec. 49. Minnesota Statutes 2004, section 490.121, 24.4 subdivision 21, is amended to read: 24.5 Subd. 21. [FINAL AVERAGE COMPENSATION.] "Final average 24.6 compensation" means the total amount of the salary payable to a 24.7 judge in the highest five years out of the last ten yearsprior24.8tobefore theevent of maturity of benefitstermination of 24.9 judicial service, divided by five; provided, however, thatif 24.10 the number of years of service by the judge equals or exceeds 24.11 ten. If the number of years of service by the judge is less 24.12 than ten, but more than five, the highest fiveshallyears of 24.13 salary must be counted, and. If the number of years of service 24.14 by the judge is less than five, the aggregate salaryin suchfor 24.15 the periodshallof service must be divided by the number of 24.16 months insuchthe period and multiplied by 12. 24.17 Sec. 50. Minnesota Statutes 2004, section 490.121, is 24.18 amended by adding a subdivision to read: 24.19 Subd. 21a. [JUDGE.] "Judge" means a judge or a justice of 24.20 any court as defined under subdivision 7b. 24.21 Sec. 51. Minnesota Statutes 2004, section 490.121, is 24.22 amended by adding a subdivision to read: 24.23 Subd. 21b. [JUDGES' RETIREMENT FUND; RETIREMENT FUND; 24.24 FUND.] "Judges' retirement fund," "retirement fund," or "fund" 24.25 means the fund created by section 490.123. 24.26 Sec. 52. Minnesota Statutes 2004, section 490.121, is 24.27 amended by adding a subdivision to read: 24.28 Subd. 21c. [MANDATORY RETIREMENT DATE.] "Mandatory 24.29 retirement date" means the last day of the month in which a 24.30 judge has attained 70 years of age. 24.31 Sec. 53. Minnesota Statutes 2004, section 490.121, is 24.32 amended by adding a subdivision to read: 24.33 Subd. 21d. [NORMAL RETIREMENT ANNUITY.] Except as 24.34 otherwise provided in sections 490.121 to 490.132, "normal 24.35 retirement annuity" means an annuity to which a judge is 24.36 entitled under section 490.124, subdivision 1, upon retirement 25.1 on or after the normal retirement date of the judge. 25.2 Sec. 54. Minnesota Statutes 2004, section 490.121, is 25.3 amended by adding a subdivision to read: 25.4 Subd. 21e. [NORMAL RETIREMENT DATE.] "Normal retirement 25.5 date" means the last day of the month in which a judge attains 25.6 the age of 65. 25.7 Sec. 55. Minnesota Statutes 2004, section 490.121, 25.8 subdivision 22, is amended to read: 25.9 Subd. 22. [SERVICE CREDIT LIMIT.] "Service credit limit" 25.10 means the greater of: (1) 24 years of allowable service 25.11 under this chapter490; or (2) for judges with allowable service 25.12 renderedprior tobefore July 1, 1980, the number of years of 25.13 allowable service under chapter 490, which, when multiplied by 25.14 the percentage listed in section 356.315, subdivision 7 or 8, 25.15 whichever is applicable to each year of service, equals 76.8. 25.16 Sec. 56. Minnesota Statutes 2004, section 490.121, is 25.17 amended by adding a subdivision to read: 25.18 Subd. 23. [SURVIVING SPOUSE.] "Surviving spouse" means the 25.19 surviving legally married spouse of a deceased judge. 25.20 Sec. 57. Minnesota Statutes 2004, section 490.121, is 25.21 amended by adding a subdivision to read: 25.22 Subd. 24. [SURVIVOR'S ANNUITY.] "Survivor's annuity" means 25.23 an annuity to which a surviving spouse or dependent child is 25.24 entitled under section 490.124, subdivision 9. 25.25 Sec. 58. Minnesota Statutes 2004, section 490.122, is 25.26 amended to read: 25.27 490.122 [ADMINISTRATION OF JUDGES' RETIREMENT.] 25.28 Subdivision 1. [ADMINISTRATION.] The policy-making, 25.29 management, and administrative functions governing the operation 25.30 of the judges' retirement fund and the administration 25.31 ofsections 490.121 to 490.132this chapter are vested in the 25.32 board of directors and executive director of the Minnesota State 25.33 Retirement Systemwith such. In administering the plan and 25.34 fund, the board and the director have the same duties, 25.35 authority, and responsibility as are provided in chapter 352. 25.36 Subd. 2. [INAPPLICABILITY OF CERTAIN LAWS.] Except as 26.1 otherwise specified, no provision of chapter 352 applies to the 26.2 judges' retirement fund or any judge. 26.3 Subd. 3. [FIDUCIARY RESPONSIBILITY.] Fiduciary 26.4 activitiesofrelating to the uniform judges' retirementand26.5Survivors' Annuities for Judgesplan must be undertaken in a 26.6 manner consistent with chapter 356A. 26.7 Sec. 59. Minnesota Statutes 2004, section 490.123, 26.8 subdivision 1, is amended to read: 26.9 Subdivision 1. [FUND CREATION; REVENUE AND AUTHORIZED 26.10 DISBURSEMENTS.] (a) There is created a special fund to be known 26.11 as the "judges' retirement fund." 26.12 (b) The judges' retirement fund must be credited with all 26.13 contributions,; all interest, dividends, and other investment 26.14 proceeds; and all other income authorized by this chapter or 26.15 other applicable law. 26.16 (c) From this fund there are appropriated the payments 26.17 authorized by sections 490.121 to 490.132, in the amounts and at 26.18 the times provided, including the necessary and reasonable 26.19 expenses of the Minnesota State Retirement System in 26.20 administering the fund and the transfers to the Minnesota 26.21 postretirement investment fund. 26.22 Sec. 60. Minnesota Statutes 2004, section 490.123, 26.23 subdivision 1a, is amended to read: 26.24 Subd. 1a. [MEMBER CONTRIBUTION RATES.] (a) A judge who is 26.25 covered by the federal Old Age, Survivors, Disability, and 26.26 Health Insurance Program and whose service does not exceed the 26.27 service credit limit in section 490.121, subdivision 22, shall 26.28 contribute to the fund from each salary payment a sum equal to 26.29 8.00 percent of salary. 26.30 (b)A judge not so covered whose service does not exceed26.31the service credit limit in section 490.121, subdivision 22,26.32shall contribute to the fund from each salary payment a sum26.33equal to 8.15 percent of salary.26.34(c)The contribution under this subdivision is payable by 26.35 salary deduction. The deduction must be made by the state court 26.36 administrator under section 352.04, subdivisions 4, 5, and 8. 27.1 Sec. 61. Minnesota Statutes 2004, section 490.123, 27.2 subdivision 1b, is amended to read: 27.3 Subd. 1b. [EMPLOYER CONTRIBUTION RATE.] (a) The employer 27.4 contribution rate to the fund on behalf of a judge is 20.5 27.5 percent of salaryand. The employer obligation continues after 27.6 a judge exceeds the service credit limit in section 490.121, 27.7 subdivision 22. 27.8 (b) The employer contribution must be paid by the state 27.9 court administratorand. The employer contribution is payable 27.10 at the same time as member contributions are made under 27.11 subdivision 1a or as employee contributions are made to the 27.12 unclassifiedplan inprogram governed by chapter 352D for judges 27.13 whose service exceeds the limit in section 490.121, subdivision 27.14 22, are remitted. 27.15 Sec. 62. Minnesota Statutes 2004, section 490.123, 27.16 subdivision 1c, is amended to read: 27.17 Subd. 1c. [ADDITIONAL EMPLOYER CONTRIBUTION.]In the event27.18thatIf the employer contribution under subdivision 1b and the 27.19 assets of the judges retirement fund are insufficient to meet 27.20 reserve transfers to the Minnesota postretirement investment 27.21 fund or payments of survivor benefitsbefore July 1, 1993in a 27.22 month, the necessary amount is appropriated from the general 27.23 fund to the executive director of the Minnesota State Retirement 27.24 System, upon the certification of the required amount by the 27.25 executive director to the commissioner of finance. 27.26 Sec. 63. Minnesota Statutes 2004, section 490.123, 27.27 subdivision 2, is amended to read: 27.28 Subd. 2. [COMMISSIONER OF FINANCE.] The commissioner of 27.29 financeshall beis the ex officio treasurer of the judges' 27.30 retirement fundand the. The commissioner's general bond to the 27.31 stateshallmust besoconditionedasto cover all liability for 27.32 acting as the treasurer ofthisthe fund. Allmoneysmoney 27.33 received by the commissionerpursuant tounder this section 27.34shallmust be set aside in the state treasury to the credit of 27.35 the judges' retirement fund.The commissioner shall transmit27.36monthly to the executive director described in section 352.03,28.1subdivision 5, a detailed statement of all amounts so received28.2and credited to the fund. The commissioner shall pay out the28.3fund only upon vouchers signed by said executive director;28.4provided that vouchers for investment may be signed by the28.5secretary of the State Board of Investment.28.6 Sec. 64. Minnesota Statutes 2004, section 490.123, 28.7 subdivision 3, is amended to read: 28.8 Subd. 3. [INVESTMENT.] (a) The executive directorreferred28.9to in subdivision 2of the Minnesota State Retirement System 28.10 shall, from time to time, certify to the State Board of 28.11 Investment such portions of the judges' retirement fund as in 28.12 the director's judgment may not be required for immediate use. 28.13 (b) Assets from the judges' retirement fundshallmust be 28.14 transferred to the Minnesota postretirement investment fund for 28.15 retirement and disability benefits as provided in sections 28.16 11A.18 and 352.119. 28.17 (c) The State Board of Investment shall thereupon invest 28.18 and reinvest sums so transferred, or certified, in such 28.19 securities as are duly authorized legal investments for such 28.20 purposes under section 11A.24 in compliance with sections 28.21 356A.04 and 356A.06. 28.22 Sec. 65. Minnesota Statutes 2004, section 490.124, 28.23 subdivision 1, is amended to read: 28.24 Subdivision 1. [BASIC RETIREMENT ANNUITY.] (a) Except as 28.25 qualified hereinafter from and after the mandatory retirement 28.26 date, the normal retirement date, the early retirement date, or 28.27 one year from the disability retirement date, as the case may 28.28 be, a retiring judge is eligible to receive a retirement annuity 28.29shall be payable to a retiring judgefrom the judges' retirement 28.30 fundin. 28.31 (b) The retirement annuity is an amount equal to: (1) the 28.32 percent specified in section 356.315, subdivision 7, multiplied 28.33 by the judge's final average compensation with that result then 28.34 multiplied by the number of years and fractions of years of 28.35 allowable service renderedprior tobefore July 1, 1980; plus 28.36 (2) the percent specified in section 356.315, subdivision 8, 29.1 multiplied by the judge's final average compensation with that 29.2 result then multiplied by the number of years and fractions of 29.3 years of allowable service rendered after June 30, 1980. 29.4 (c) Service that exceeds the service credit limit in 29.5 section 490.121, subdivision 22, must be excluded in calculating 29.6 the retirement annuity, but the compensation earned by the judge 29.7 during this period of judicial service must be used in 29.8 determining a judge's final average compensation and calculating 29.9 the retirement annuity. 29.10 Sec. 66. Minnesota Statutes 2004, section 490.124, 29.11 subdivision 2, is amended to read: 29.12 Subd. 2. [MINIMUM SERVICE REQUIREMENT; EXTENSION OF TERM.] 29.13No(a) Unless section 356.30 applies, a judgeshall beis not 29.14 eligible for an annuity at the normal retirement date or the 29.15 early retirement date if the judge has less than five years of 29.16 allowable service. 29.17 (b) A judge whoshall retireretires on or, as permitted 29.18 under sections 490.121 to 490.132, after the judge's mandatory 29.19 retirement date,shall beis entitled to a proportionate annuity 29.20 based upon the allowable service of the judge at the date of 29.21 retirement. 29.22A judge who was in office on December 31, 1973, and29.23thereafter and who, by the date on which the current term29.24expires, would not be eligible to retire with full benefits29.25under statutes in effect on December 31, 1973, may apply to the29.26governor for an extension to serve up to three additional years,29.27stating the intention of the judge to retire upon attaining29.28eligibility to receive a retirement allowance. Notwithstanding29.29section 490.125, the governor shall forthwith make a written29.30order accepting the retirement application, and extending the29.31term of office of the judge for the period of time, not to29.32exceed three years, as may be necessary to make the judge29.33eligible for retirement, solely for purposes of computing29.34benefits hereunder.29.35 Sec. 67. Minnesota Statutes 2004, section 490.124, 29.36 subdivision 3, is amended to read: 30.1 Subd. 3. [EARLY REDUCED RETIREMENT.] The retirement 30.2 annuityprovided byunder subdivision 1 of any judgeelecting30.3 who elects to retire at an early retirement dateshallmust be 30.4 reduced by one-half of one percent per month from the retirement 30.5 date to the normal retirement date. 30.6 Sec. 68. Minnesota Statutes 2004, section 490.124, 30.7 subdivision 4, is amended to read: 30.8 Subd. 4. [DISABILITY RETIREMENT.] (a) When the governor 30.9 determines that a judge is disabled under section 490.121, 30.10 subdivision 13, notice of the governor's determination must be 30.11 sent to the judge, the chief justice of the Supreme Court, the 30.12 state court administrator, and the executive director of the 30.13 Minnesota State Retirement System. 30.14 (b) From and after disability retirement date, a disabled 30.15 judgeshall beis entitled to continuation of the judge's full 30.16 salary payable by the judge's employer, as if the judge's office 30.17 were not vacated by retirement, for a period of up to one full 30.18 year, but in no event beyond the judge's mandatory retirement 30.19 date. During this year the judgewillis entitled to earn 30.20 additional service credit in the judges' retirement plan. The 30.21 salaryearned will bepayable to a disabled judge is subject to 30.22 retirement deductions andwillmust be included in computing 30.23 final average compensation of the judge.Thereafter30.24 (c) At the conclusion of the year of continued salary 30.25 following a disability or upon the judge's mandatory retirement 30.26 date, whichever is earlier, the disabled judge is entitled to a 30.27 disability retirement annuity computed as provided in 30.28 subdivision 1shall be paid, provided that. If the computed 30.29 retirement annuity is a smaller amount, the judgeshallis 30.30 entitled to receive a minimum annuity of 25 percent of the 30.31 judge's final average compensation. 30.32 Sec. 69. Minnesota Statutes 2004, section 490.124, 30.33 subdivision 5, is amended to read: 30.34 Subd. 5. [DEFERRED BENEFITS.] (a)AnyA benefit to which a 30.35 judge is entitled under this section may be deferred until the 30.36 early or normal retirement date or later, notwithstanding the 31.1 termination ofsuchthe judge's service prior thereto. 31.2 (b) The retirement annuity of, or the survivor benefit 31.3 payable on behalf of, a former judge, who terminated service 31.4 before July 1, 1997, which is not first payable until after June 31.5 30, 1997, must be increased on an actuarial equivalent basis to 31.6 reflect the change in the postretirement interest rate actuarial 31.7 assumption under section 356.215, subdivision 8, from five 31.8 percent to six percent under a calculation procedure and tables 31.9 adopted by the board of directors of the Minnesota State 31.10 Retirement System and approved by the actuary retainedby the31.11Legislative Commission on Pensions and Retirementunder section 31.12 356.214. 31.13 Sec. 70. Minnesota Statutes 2004, section 490.124, 31.14 subdivision 8, is amended to read: 31.15 Subd. 8. [EXCLUSIVE NORMAL RETIREMENT BENEFITS.]Any(a) 31.16 Except as provided in paragraph (b), a judge who retires after 31.17 December 31, 1973,shall beis entitled to a retirement pension, 31.18 retirement compensation or other retirement payment under 31.19 statutes applicable solely to judgespursuant tounder this 31.20 section only, except that any such. 31.21 (b) A judge who was in officeprior tobefore January 1, 31.22 1974, who retires at or after normal retirement age may then 31.23 elect to receive during the judge's lifetime a normal retirement 31.24 annuity computed on the basis of retirement compensation 31.25 provided for such judge under statutes in effect on December 31, 31.26 1973, in lieu of the amount of normal retirement annuity 31.27 otherwise computed under sections 490.121 to 490.132. 31.28For purposes of this subdivision, the Conciliation Court of31.29the city of Duluth shall be deemed to have been a court of31.30record by the statutes in effect on December 31, 1973.31.31 Sec. 71. Minnesota Statutes 2004, section 490.124, 31.32 subdivision 9, is amended to read: 31.33 Subd. 9. [SURVIVORS' ANNUITY.] (a) Upon the death of a 31.34 judgeprior tobefore retirement, or upon the death of a person 31.35 who has qualified for an annuity under this section but who 31.36 ceases to be a judgeprior tobefore retirement and has who not 32.1 received a refund of contributionspursuant tounder subdivision 32.2 12, a surviving spouse is entitled to, or, if there be no 32.3 surviving spouse, dependent children,shallare entitled to 32.4 receive an annuity, payable monthly, equal in total to 60 32.5 percent of the normal retirement annuity which would have been 32.6 payable to the judge or former judge had the date of death been 32.7 the normal retirement date, provided that the. 32.8 (b) The annuity payable to a surviving spouse or to 32.9 dependent childrenshall receive an annuityis an amount of not 32.10 less than 25 percent of the judge's or the former judge's final 32.11 average compensation. 32.12If a judge, whose surviving spouse was not entitled to32.13survivors benefits provided solely for judges under statutes in32.14effect prior to January 1, 1974, shall have died prior to32.15retirement on or after May 23, 1973 and before January 1, 1974,32.16a surviving spouse and dependent children, if any, shall be32.17entitled to survivors benefits as provided hereunder as if such32.18judge had died on January 1, 1974.32.19 Sec. 72. Minnesota Statutes 2004, section 490.124, 32.20 subdivision 10, is amended to read: 32.21 Subd. 10. [PRIOR SURVIVORS' BENEFITS; LIMITATION.] (a) 32.22 Benefits providedpursuant tounder Minnesota Statutes 2004, 32.23 section 490.102, subdivision 6, or 490.1091, for a surviving 32.24 spouse of a retired judge, payable after the death of the judge, 32.25shall beare limited to:32.26(a)spouses of judges who have retiredprior tobefore 32.27 January 1, 1974; and. 32.28 (b)spouses of judges in office on December 31, 1973 and32.29thereafter who elect to continue contributions pursuant to32.30section 490.102, subdivision 6 or 490.109. The contributions32.31shall be in addition to contributions pursuant to section32.32490.123, and upon retirement the judge may not elect to receive32.33any optional annuity pursuant to subdivision 11 unless the judge32.34and the spouse shall waive any benefits pursuant to section32.35490.102, subdivision 6 or 490.1091.32.36 No other judge in office on or after January 1, 1974,shall33.1beis required to contributepursuant tounder Minnesota 33.2 Statutes 2004, section 490.102, subdivision 6, or 490.109. 33.3 Sec. 73. Minnesota Statutes 2004, section 490.124, 33.4 subdivision 11, is amended to read: 33.5 Subd. 11. [LIMITATION ON SURVIVOR BENEFITS; OPTIONAL 33.6 ANNUITIES.] (a) No survivor or death benefits may be paid in 33.7 connection with the death of a judge who retires after December 33.8 31, 1973, except as otherwise provided in sections 490.121 to 33.9 490.132. 33.10 (b) Except as provided in subdivision 10, a judge may elect 33.11 to receive, instead of the normal retirement annuity, an 33.12 optional retirement annuity in the form of either (1) an annuity 33.13 payable for a period certain and for life after that period, (2) 33.14 a joint and survivor annuity without reinstatementin the event33.15ofif the designated beneficiarypredeceasingpredeceases the 33.16 retired judge, or (3) a joint and survivor annuity with 33.17 reinstatementin the event ofif the designated beneficiary 33.18predeceasingpredeceases the retired judge. 33.19 (c) An optional retirement annuity must be actuarially 33.20 equivalent to a single-life annuity with no term certain and 33.21 must be established by the board of directors of the Minnesota 33.22 State Retirement System. In establishing these optional 33.23 retirement annuity forms, the board shall obtain the written 33.24 recommendation of the actuary retainedby the Legislative33.25Commission on Pensions and Retirementunder section 356.214. 33.26 The recommendations must be retained as a part of the permanent 33.27 records of the board. 33.28 Sec. 74. Minnesota Statutes 2004, section 490.124, 33.29 subdivision 12, is amended to read: 33.30 Subd. 12. [REFUND.] (a) A person who ceases to be a 33.31 judgebut who does not qualify for a retirement annuity or other33.32benefit under section 490.121is entitled to a refund in an 33.33 amount that is equal to all of the member's employee 33.34 contributions to the judges' retirement fund plus interest 33.35 computed under section 352.22, subdivision 2. 33.36 (b) A refund of contributions under paragraph (a) 34.1 terminates all service credits and all rights and benefits of 34.2 the judge and the judge's survivors under this chapter. 34.3 (c) A person who becomes a judge again after taking a 34.4 refund under paragraph (a) may reinstate the previously 34.5 terminated allowable servicecreditscredit, rights, and 34.6 benefits by repaying the total amount of the previously received 34.7 refund. The refund repayment must include interest on the total 34.8 amount previously received at an annual rate of 8.5 percent, 34.9 compounded annually, from the date on which the refund was 34.10 received until the date on which the refund is repaid. 34.11 Sec. 75. Minnesota Statutes 2004, section 490.124, 34.12 subdivision 13, is amended to read: 34.13 Subd. 13. [DEATH REFUND.] If a judge who has not received 34.14 other benefits under this chapter dies and there are no survivor 34.15 benefits payable under this chapter, a refund plus interest as 34.16 provided in subdivision 12 is payable to the last designated 34.17 beneficiary named on a form filed with the director before the 34.18 death of the judge, or, if no designation is on file,the refund34.19is payableto the estate of the deceased judge. 34.20 Sec. 76. Minnesota Statutes 2004, section 490.125, 34.21 subdivision 1, is amended to read: 34.22 Subdivision 1. [MANDATORY RETIREMENT AGE.] Except as 34.23 otherwise provided in sections 490.121 to 490.132,eacha judge 34.24 shallretireterminate active service as a judge on the judge's 34.25 mandatory retirement date. 34.26 Sec. 77. Minnesota Statutes 2004, section 490.125, 34.27 subdivision 2, is amended to read: 34.28 Subd. 2. [EXCEPTION.]Except as provided by sections34.29490.025, subdivision 3, 490.102, subdivisions 3 and 3a and34.30490.12, subdivision 2,Any judge in office on December 31, 1973 34.31 who shall have attained 70 years of age on or prior to such date 34.32 shall retire upon the expiration of the term of office of such 34.33 judge. 34.34 Sec. 78. Minnesota Statutes 2004, section 490.126, is 34.35 amended to read: 34.36 490.126 [PROCEDURES.] 35.1 Subdivision 1. [COMPULSORY RETIREMENT.] Proceedings for 35.2 compulsory retirement of a judge, if necessary,shallmust be 35.3 conducted in accordance with rules issued by the Supreme Court 35.4pursuant tounder section490.16490A.02. 35.5 Subd. 2. [VACANCIES.] Any judge may make written 35.6 application to the governor for retirement. The governor 35.7 thereupon shall direct the judge's retirement by written order 35.8 which, when filed in the Office of the Secretary of State,shall35.9effecteffects a vacancy in the office to be filled as provided 35.10 by law. 35.11 Subd. 3. [APPLICATION FOR ANNUITY OR REFUND.] An 35.12 application for an annuity or a refund under sections 490.121 to 35.13 490.132 may be made by the potential annuitant or by someone 35.14 authorized to act for the potential annuitant. Every 35.15 application for an annuity or refund,withaccompanied by a 35.16 proof of age and by a record of years of service when 35.17 required,shallmust be submitted to thegoverning35.18bodyexecutive director of the Minnesota State Retirement System 35.19 in a form prescribed byitthe director. 35.20 Subd. 4. [MANNER OF PAYMENT.] Unless otherwise 35.21 specifically provided by statute or agreed upon by the annuitant 35.22 and thegoverning bodyboard of directors of the Minnesota State 35.23 Retirement System, annuities payable under sections 490.121 to 35.24 490.132shallmust be paid in the manner and at the intervals as 35.25 prescribed by the executive director of the Minnesota State 35.26 Retirement System. The annuityshall ceaseceases with the last 35.27 payment received by the annuitant while living. 35.28 Subd. 5. [EXEMPTION FROM PROCESS; NO ASSIGNMENT.] None of 35.29 the money, annuities, or other benefits provided in this chapter 35.30 is assignable either in law or equity or is subject to state 35.31 estate tax, or to execution, levy, attachment, garnishment, or 35.32 other legal process, except as provided in section 518.58, 35.33 518.581, or 518.6111. 35.34 Sec. 79. Minnesota Statutes 2004, section 490.133, is 35.35 amended to read: 35.36 490.133 [RETIREMENT; TRANSITION PROVISIONS; TRANSFER TO 36.1 COURT OF APPEALS.] 36.2 (a) If a judge to whom or to whose survivors benefits would 36.3 be payable under Minnesota Statutes 2004, sections 490.101 to 36.4 490.12,is elected or appointed to the Court of Appeals, that 36.5 judge and the judge's survivors, shallcontinue to be eligible 36.6 for benefits under those sections and not under sections 490.121 36.7 to 490.132. 36.8 (b) Inthatthe case of a judge to whom paragraph (a) 36.9 applies, the service of the judge in the Court of Appealsshall36.10 must be added to the prior service as district judge, probate 36.11 judge, or judge of any other court of record in determining 36.12 eligibility and the compensation of a judge of the Court of 36.13 Appeals at the time of the judge's death, disability, or 36.14 retirementshall beis the "compensation allotted to the office" 36.15 for the purposes of calculating benefit amounts. 36.16 (c) All other judges of the Court of Appeals and their 36.17 survivorsshall beare subject to the retirement and survivor's 36.18 annuity provisions of sections 490.121 to 490.132. 36.19 Sec. 80. [490A.01] [BOARD OF JUDICIAL STANDARDS; 36.20 ESTABLISHMENT.] 36.21 Subdivision 1. [ESTABLISHMENT; COMPOSITION.] The Board on 36.22 Judicial Standards is established. The Board on Judicial 36.23 Standards is a continuation of the board established by Laws 36.24 1971, chapter 909, sections 1 and 2, as amended. For the 36.25 purposes of this chapter, "board" means the Board on Judicial 36.26 Standards. 36.27 Subd. 2. [COMPOSITION; APPOINTMENT.] (a) The board 36.28 consists of one judge of the Court of Appeals, three trial court 36.29 judges, two lawyers who have practiced law in the state for at 36.30 least ten years, and four citizens who are not judges, retired 36.31 judges, or lawyers. 36.32 (b) All members must be appointed by the governor with the 36.33 advice and consent of the senate. Senate confirmation is not 36.34 required for judicial members. 36.35 Subd. 3. [TERM MAXIMUM; MEMBERSHIP TERMINATION.] No member 36.36 may serve more than two full four-year terms or their equivalent. 37.1 Membership terminates if a member ceases to hold the position 37.2 that qualified the member for appointment. 37.3 Subd. 4. [MEMBER TERMS; COMPENSATION; REMOVAL.] The 37.4 membership terms, compensation, removal of members, and filling 37.5 of vacancies on the board are as provided in section 15.0575. 37.6 Subd. 5. [EXECUTIVE SECRETARY APPOINTMENT; SALARY.] (a) 37.7 The board shall appoint the executive secretary. 37.8 (b) The salary of the executive secretary of the board is 37.9 85 percent of the maximum salary provided for an administrative 37.10 law judge under section 15A.083, subdivision 6a. 37.11 Sec. 81. [490A.02] [JUDICIAL STANDARDS BOARD; POWERS.] 37.12 Subdivision 1. [JUDICIAL DISQUALIFICATION.] A judge is 37.13 disqualified from acting as a judge, without a loss of salary, 37.14 while there is pending an indictment or any information charging 37.15 the judge with a crime that is punishable as a felony under 37.16 either Minnesota law or federal law, or while there is pending a 37.17 recommendation to the Supreme Court by the Board on Judicial 37.18 Standards for the judge's removal or retirement. 37.19 Subd. 2. [JUDICIAL SUSPENSION.] On receipt of a 37.20 recommendation of the Board on Judicial Standards or on its own 37.21 motion, the Supreme Court may suspend a judge from office 37.22 without salary when the judge pleads guilty to or no contest to 37.23 or is found guilty of a crime that is punishable as a felony 37.24 under either Minnesota law or federal law or any other crime 37.25 that involves moral turpitude. If the conviction is reversed, 37.26 the suspension terminates and the judge must be paid a salary 37.27 for the period of suspension. If the judge is suspended and the 37.28 conviction becomes final, the Supreme Court shall remove the 37.29 judge from office. 37.30 Subd. 3. [JUDICIAL DISABILITY.] On receipt of a 37.31 recommendation of the Board on Judicial Standards, the Supreme 37.32 Court may retire a judge for a disability that the court 37.33 determines seriously interferes with the performance of the 37.34 judge's duties and is or is likely to become permanent, and 37.35 censure or remove a judge for an action or inaction that may 37.36 constitute persistent failure to perform the judge's duties, 38.1 incompetence in performing the judge's duties, habitual 38.2 intemperance, or conduct prejudicial to the administration of 38.3 justice that brings the judicial office into disrepute. 38.4 Subd. 4. [AUTHORITY TO REOPEN MATTERS.] The board is 38.5 specifically empowered to reopen any matter wherein any 38.6 information or evidence was previously precluded by a statute of 38.7 limitations or by a previously existing provision of time 38.8 limitation. 38.9 Subd. 5. [RETIREMENT STATUS.] (a) A judge who is retired 38.10 by the Supreme Court must be considered to have retired 38.11 voluntarily. 38.12 (b) This section and section 490A.01 must not affect the 38.13 right of a judge who is suspended, retired, or removed under 38.14 this section from qualifying for any pension or other retirement 38.15 benefits to which the judge would otherwise be entitled by law 38.16 to receive. 38.17 Subd. 6. [ELIGIBILITY FOR JUDICIAL OFFICE; PRACTICE 38.18 LAW.] A judge removed by the Supreme Court is ineligible for any 38.19 future service in a judicial office. The question of the right 38.20 of a removed judge to practice law in this state must be 38.21 referred to the proper authority for review. 38.22 Subd. 7. [SUPREME COURT RULES.] The Supreme Court shall 38.23 make rules to implement this section. 38.24 Sec. 82. [490A.03] [PERSONS AFFECTED.] 38.25 The provisions of sections 490A.01 and 490A.02 apply to all 38.26 judges, judicial officers, and referees. 38.27 Sec. 83. Minnesota Statutes 2004, section 525.05, is 38.28 amended to read: 38.29 525.05 [JUDGE OR REFEREE; GROUNDS FOR DISQUALIFICATION.] 38.30 The following shall be grounds for disqualification of any 38.31 judge or referee from acting in any matter: (1) That the judge 38.32 or the judge's spouse or any of either of their kin nearer than 38.33 first cousin is interested as representative, heir, devisee, 38.34 legatee, ward, or creditor in the estate involved therein; (2) 38.35 that it involves the validity or interpretation of a will drawn 38.36 or witnessed by the judge; (3) that the judge may be a necessary 39.1 witness in the matter; (4) that it involves a property right in 39.2 respect to which the judge has been engaged or is engaged as an 39.3 attorney; or (5) that the judge was engaged in a joint 39.4 enterprise for profit with the decedent at the time of death or 39.5 that the judge is then engaged in a joint enterprise for profit 39.6 with any person interested in the matter as representative, 39.7 heir, devisee, legatee, ward, or creditor. When grounds for 39.8 disqualification exist, the judge may, and upon proper petition 39.9 of any person interested in the estate must, request another 39.10 judge or a judge who has retiredas provided in section 490.12,39.11subdivision 2,to act in the judge's stead in the matter. 39.12 Sec. 84. [REPEALER; EFFECT ON BENEFIT COVERAGE.] 39.13 Subdivision 1. [LEGISLATORS RETIREMENT PLAN; REPEALED AS 39.14 OBSOLETE.] Minnesota Statutes 2004, sections 3A.01, subdivisions 39.15 3, 4, 6a, and 7; 3A.02, subdivision 2; 3A.04, subdivision 1a; 39.16 and 3A.09, are repealed. 39.17 Subd. 2. [ELECTIVE STATE OFFICERS RETIREMENT PLAN; 39.18 REPEALED AS OBSOLETE.] Minnesota Statutes 2004, sections 39.19 352C.01; 352C.011; 352C.021; 352C.031; 352C.033; 352C.04; 39.20 352C.051; 352C.09; and 352C.091, subdivisions 2 and 3, are 39.21 repealed. 39.22 Subd. 3. [JUDICIAL RETIREMENT PLANS; REPEALED AS 39.23 OBSOLETE.] Minnesota Statutes 2004, sections 490.021; 490.025; 39.24 490.101; 490.102; 490.103; 490.105; 490.106; 490.107; 490.108; 39.25 490.109; 490.1091; 490.12; 490.121, subdivisions 2, 3, 5, 8, 9, 39.26 10, 11, 12, 16, 17, 18, 19, and 20; 490.124, subdivision 6; and 39.27 490.132, are repealed. 39.28 Subd. 4. [JUDICIAL STANDARDS BOARD; REPEALED FOR 39.29 RELOCATION AS MINNESOTA STATUTES, CHAPTER 490A.] Minnesota 39.30 Statutes 2004, sections 490.15, 490.16, and 490.18, are repealed. 39.31 Subd. 5. [UNIFORM JUDICIAL RETIREMENT PLAN; NO BENEFIT 39.32 DIMINISHMENT INTENDED; PROCEDURE.] Sections 32 to 76 are not 39.33 intended to reduce or increase the entitlement of active, 39.34 deferred, or retired judges to retirement annuities or benefits 39.35 as of July 1, 2005, as reflected in the records of the Minnesota 39.36 State Retirement System. If the executive director of the 40.1 Minnesota State Retirement System determines that any provisions 40.2 of sections 32 to 76 functions to modify, impair, or diminish 40.3 the retirement annuity or benefit entitlement of any judge that 40.4 had accrued or earned before July 1, 2005, the executive 40.5 director shall certify that determination and a recommendation 40.6 as to the required legislative correction to the chair of the 40.7 Legislative Commission on Pensions and Retirement, the chair of 40.8 the senate State and Local Governmental Operations Committee, 40.9 the chair of the house Governmental Operations and Veterans 40.10 Affairs Policy Committee, and the executive director of the 40.11 Legislative Commission on Pensions and Retirement on or before 40.12 the October 1 next following that determination. 40.13 Sec. 85. [REVISOR INSTRUCTIONS.] 40.14 (a) In Minnesota Statutes, chapters 352, 352D, 355, 356, 40.15 and 487, the revisor of statutes shall change references to 40.16 "sections 490.121 to 490.132" to "chapter 490". 40.17 (b) In Minnesota Statutes, chapter 490, the revisor of 40.18 statutes shall change references to "sections 490.121 to 40.19 490.132" to "this chapter". 40.20 (c) In Minnesota Statutes, sections 175A.01, subdivision 4, 40.21 and 271.01, subdivision 1, the revisor of statutes shall change 40.22 references to "sections 490.15 and 490.16" to "sections 490A.01 40.23 and 490A.02". 40.24 Sec. 86. [EFFECTIVE DATE.] 40.25 This article is effective on July 1, 2005. 40.26 ARTICLE 2 40.27 COVERED SALARY; AVERAGE SALARY 40.28 Section 1. Minnesota Statutes 2004, section 352.01, 40.29 subdivision 13, is amended to read: 40.30 Subd. 13. [SALARY.] (a) Subject to the limitations of 40.31 section 356.611, "salary" means wages, or other periodic 40.32 compensation, paid to an employee before deductions for deferred 40.33 compensation, supplemental retirement plans, or other voluntary 40.34 salary reduction programs. 40.35 (b) "Salary" does not include: 40.36 (1) lump sum sick leave payments; 41.1 (2) severance payments; 41.2 (3) lump sum annual leave payments and overtime payments 41.3 made at the time of separation from state service; 41.4 (4) payments in lieu of any employer-paid group insurance 41.5 coverage, including the difference between single and family 41.6 rates that may be paid to an employee with single coverage; 41.7 (5) payments made as an employer-paid fringe benefit; 41.8 (6) workers' compensation payments; 41.9 (7) employer contributions to a deferred compensation or 41.10 tax sheltered annuity program; and 41.11 (8) amounts contributed under a benevolent vacation and 41.12 sick leave donation program. 41.13 (c) Amounts provided to an employee by the employer through 41.14 a grievance proceeding or a legal settlement are salary only if 41.15 the settlement is reviewed by the executive director and the 41.16 amounts are determined by the executive director to be 41.17 consistent with paragraph (a) and prior determinations. 41.18 Sec. 2. Minnesota Statutes 2004, section 352.01, is 41.19 amended by adding a subdivision to read: 41.20 Subd. 14a. [AVERAGE SALARY.] (a) "Average salary" means 41.21 the average of the highest five successive years of salary upon 41.22 which the employee has made contributions to the retirement fund 41.23 by payroll deductions. Average salary must be based upon all 41.24 allowable service if this service is less than five years. 41.25 (b) "Average salary" does not include the payment of 41.26 accrued unused annual leave or overtime paid at time of final 41.27 separation from state service if paid in a lump sum nor does it 41.28 include the reduced salary, if any, paid during the period the 41.29 employee is entitled to workers' compensation benefit payments 41.30 for temporary disability. 41.31 (c) For an employee covered by the correctional state 41.32 employees retirement plan, "average salary" means the average of 41.33 the monthly salary during the employee's highest five successive 41.34 years of salary as an employee covered by the general state 41.35 employees retirement plan, or the correctional state employees 41.36 retirement plan, or by a combination of the two. If the total 42.1 of the covered service is less than five years, the 42.2 determination of average salary must be based on all allowable 42.3 service. 42.4 Sec. 3. Minnesota Statutes 2004, section 352.115, 42.5 subdivision 2, is amended to read: 42.6 Subd. 2. [AVERAGE SALARYNORMAL RETIREMENT ANNUITY.] The 42.7 retirement annuity hereunder payable at normal retirement age or 42.8 thereafter must be computed in accordance with the applicable 42.9 provisions of the formula stated in subdivision 3, on the basis 42.10 of the employee's average salary for the period of allowable 42.11 service. This retirement annuity is known as the "normal" 42.12 retirement annuity. 42.13For each year of allowable service, "average salary" of an42.14employee in determining a retirement annuity means the average42.15of the highest five successive years of salary upon which the42.16employee has made contributions to the retirement fund by42.17payroll deductions. Average salary must be based upon all42.18allowable service if this service is less than five years.42.19"Average salary" does not include the payment of accrued42.20unused annual leave or overtime paid at time of final separation42.21from state service if paid in a lump sum nor does it include the42.22reduced salary, if any, paid during the period the employee is42.23entitled to workers' compensation benefit payments for temporary42.24disability.42.25 Sec. 4. Minnesota Statutes 2004, section 352.115, 42.26 subdivision 3, is amended to read: 42.27 Subd. 3. [RETIREMENT ANNUITY FORMULA.] (a) This paragraph, 42.28 in conjunction with section 352.116, subdivision 1, applies to a 42.29 person who became a covered employee or a member of a pension 42.30 fund listed in section 356.30, subdivision 3, before July 1, 42.31 1989, unless paragraph (b), in conjunction with section 352.116, 42.32 subdivision 1a, produces a higher annuity amount, in which case 42.33 paragraph (b) will apply. The employee's average salary, as 42.34 defined in section 352.01, subdivision214a, multiplied by the 42.35 percent specified in section 356.315, subdivision 1, per year of 42.36 allowable service for the first ten years and the percent 43.1 specified in section 356.315, subdivision 2, for each later year 43.2 of allowable service and pro rata for completed months less than 43.3 a full year shall determine the amount of the retirement annuity 43.4 to which the employee is entitled. 43.5 (b) This paragraph applies to a person who has become at 43.6 least 55 years old and first became a covered employee after 43.7 June 30, 1989, and to any other covered employee who has become 43.8 at least 55 years old and whose annuity amount, when calculated 43.9 under this paragraph and in conjunction with section 352.116, 43.10 subdivision 1a, is higher than it is when calculated under 43.11 paragraph (a), in conjunction with section 352.116, subdivision 43.12 1. The employee's average salary, as defined in section 352.01, 43.13 subdivision214a, multiplied by the percent specified in 43.14 section 356.315, subdivision 2, for each year of allowable 43.15 service and pro rata for months less than a full year shall 43.16 determine the amount of the retirement annuity to which the 43.17 employee is entitled. 43.18 Sec. 5. Minnesota Statutes 2004, section 352.87, 43.19 subdivision 3, is amended to read: 43.20 Subd. 3. [RETIREMENT ANNUITY FORMULA.] A person specified 43.21 in subdivision 1will haveis entitled to receive a retirement 43.22 annuity applicable for allowable service credit under this 43.23 section calculated by multiplying the employee's average salary, 43.24 as defined in section352.115352.01, subdivision214a, by the 43.25 percent specified in section 356.315, subdivision 2a, for each 43.26 year or portions of a year of allowable service credit. No 43.27 reduction for retirementprior tobefore the normal retirement 43.28 age, as specified in section 352.01, subdivision 25, applies to 43.29 service to which this section applies. 43.30 Sec. 6. Minnesota Statutes 2004, section 352.93, 43.31 subdivision 1, is amended to read: 43.32 Subdivision 1. [BASIS OF ANNUITY; WHEN TO APPLY.] After 43.33 separation from state service, an employee covered under section 43.34 352.91 who has reached age 55 years and has credit for at least 43.35 three years of covered correctional service or a combination of 43.36 covered correctional service andregular Minnesotageneral 44.1 employees state retirementSystemplan service is entitled upon 44.2 application to a retirement annuity under this section, based 44.3 only on covered correctional employees' service. Application 44.4 may be made no earlier than 60 days before the date the employee 44.5 is eligible to retire by reason of both age and service 44.6 requirements. 44.7In this section, "average salary" means the average of the44.8monthly salary during the employee's highest five successive44.9years of salary as an employee covered by the Minnesota State44.10Retirement System. Average salary must be based upon all44.11allowable service if this service is less than five years.44.12 Sec. 7. Minnesota Statutes 2004, section 352B.01, 44.13 subdivision 11, is amended to read: 44.14 Subd. 11. [AVERAGE MONTHLY SALARY.] (a) Subject to the 44.15 limitations of section 356.611, "average monthly salary" means 44.16 the average of the highest monthly salaries for five years of 44.17 service as a member upon which contributions were deducted from 44.18 pay under section 352B.02, or upon which appropriate 44.19 contributions or payments were made to the fund to receive 44.20 allowable service and salary credit as specified under the 44.21 applicable law. Average monthly salary must be based upon all 44.22 allowable service if this service is less than five years. 44.23 (b) "Average monthly salary" means the salary of the member 44.24 as defined in section 352.01, subdivision 13. "Average monthly 44.25 salary" does not include any lump-sum annual leave payments and 44.26 overtime payments made at the time of separation from state 44.27 service, any amounts of severance pay, or any reduced salary 44.28 paid during the period the person is entitled to workers' 44.29 compensation benefit payments for temporary disability. 44.30 (c) A member on leave of absence receiving temporary 44.31 workers' compensation payments and a reduced salary or no salary 44.32 from the employer who is entitled to allowable service credit 44.33 for the period of absence may make payment to the fund for the 44.34 difference between salary received, if any, and the salary the 44.35 member would normally receive if not on leave of absence during 44.36 the period. The member shall pay an amount equal to the member 45.1 and employer contribution rate under section 352B.02, 45.2 subdivisions 1b and 1c, on the differential salary amount for 45.3 the period of the leave of absence. The employing department, 45.4 at its option, may pay the employer amount on behalf of the 45.5 member. Payment made under this subdivision must include 45.6 interest at the rate of 8.5 percent per year, and must be 45.7 completed within one year of the return from the leave of 45.8 absence. 45.9 Sec. 8. Minnesota Statutes 2004, section 352C.021, is 45.10 amended by adding a subdivision to read: 45.11 Subd. 1a. [AVERAGE SALARY.] "Average salary," for purposes 45.12 of calculating the normal retirement annuity under section 45.13 352C.031, subdivision 4, means the average of the highest five 45.14 successive years of salary upon which contributions have been 45.15 made under section 352C.09. 45.16 Sec. 9. Minnesota Statutes 2004, section 353.01, 45.17 subdivision 10, is amended to read: 45.18 Subd. 10. [SALARY.] (a) Subject to the limitations of 45.19 section 356.611, "salary" means: 45.20 (1) the periodic compensation of a public employee, before 45.21 deductions for deferred compensation, supplemental retirement 45.22 plans, or other voluntary salary reduction programs, and also 45.23 means "wages" and includes net income from fees; 45.24 (2) for a public employee who is covered by a supplemental 45.25 retirement plan under section 356.24, subdivision 1, clause (8), 45.26 (9), or (10), which require all plan contributions be made by 45.27 the employer, the contribution to the applicable supplemental 45.28 retirement plan when the contribution is from mandatory 45.29 withholdings from employees' wages; and 45.30(2)(3) for a public employee who has prior service covered 45.31 by a local police or firefighters relief association that has 45.32 consolidated with the Public Employees Retirement Association or 45.33 to which section 353.665 applies and who has elected coverage 45.34 either under the public employees police and fire fund benefit 45.35 plan under section 353A.08 following the consolidation or under 45.36 section 353.665, subdivision 4, the rate of salary upon which 46.1 member contributions to the special fund of the relief 46.2 association were made prior to the effective date of the 46.3 consolidation as specified by law and by bylaw provisions 46.4 governing the relief association on the date of the initiation 46.5 of the consolidation procedure and the actual periodic 46.6 compensation of the public employee after the effective date of 46.7 consolidation. 46.8 (b) Salary does not mean: 46.9 (1) the fees paid to district court reporters, unused 46.10 annual vacation or sick leave payments, in lump-sum or periodic 46.11 payments, severance payments, reimbursement of expenses, 46.12 lump-sum settlements not attached to a specific earnings period, 46.13 or workers' compensation payments; 46.14 (2) employer-paid amounts used by an employee toward the 46.15 cost of insurance coverage, employer-paid fringe benefits, 46.16 flexible spending accounts, cafeteria plans, health care expense 46.17 accounts, day care expenses, or any payments in lieu of any 46.18 employer-paid group insurance coverage, including the difference 46.19 between single and family rates that may be paid to a member 46.20 with single coverage and certain amounts determined by the 46.21 executive director to be ineligible; 46.22 (3) the amount equal to that which the employing 46.23 governmental subdivision would otherwise pay toward single or 46.24 family insurance coverage for a covered employee when, through a 46.25 contract or agreement with some but not all employees, the 46.26 employer: 46.27 (i) discontinues, or for new hires does not provide, 46.28 payment toward the cost of the employee's selected insurance 46.29 coverages under a group plan offered by the employer; 46.30 (ii) makes the employee solely responsible for all 46.31 contributions toward the cost of the employee's selected 46.32 insurance coverages under a group plan offered by the employer, 46.33 including any amount the employer makes toward other employees' 46.34 selected insurance coverages under a group plan offered by the 46.35 employer; and 46.36 (iii) provides increased salary rates for employees who do 47.1 not have any employer-paid group insurance coverages; 47.2 (4) except as provided in section 353.86 or 353.87, 47.3 compensation of any kind paid to volunteer ambulance service 47.4 personnel or volunteer firefighters, as defined in subdivision 47.5 35 or 36; and 47.6 (5) the amount of compensation that exceeds the limitation 47.7 provided in section 356.611. 47.8 (c) Amounts provided to an employee by the employer through 47.9 a grievance proceeding or a legal settlement are salary only if 47.10 the settlement is reviewed by the executive director and the 47.11 amounts are determined by the executive director to be 47.12 consistent with paragraph (a) and prior determinations. 47.13 Sec. 10. Minnesota Statutes 2004, section 353.01, is 47.14 amended by adding a subdivision to read: 47.15 Subd. 17a. [AVERAGE SALARY.] (a) "Average salary," for 47.16 purposes of calculating a retirement annuity under section 47.17 353.29, subdivision 3, means an amount equivalent to the average 47.18 of the highest salary of the member, police officer, or 47.19 firefighter, whichever applies, upon which employee 47.20 contributions were paid for any five successive years of 47.21 allowable service, based on dates of salary periods as listed on 47.22 salary deduction reports. Average salary must be based upon all 47.23 allowable service if this service is less than five years. 47.24 (b) "Average salary" may not include any reduced salary 47.25 paid during a period in which the employee is entitled to 47.26 benefit payments from workers' compensation for temporary 47.27 disability, unless the average salary is higher, including this 47.28 period. 47.29 Sec. 11. Minnesota Statutes 2004, section 353.29, 47.30 subdivision 3, is amended to read: 47.31 Subd. 3. [RETIREMENT ANNUITY FORMULA.] (a) This paragraph, 47.32 in conjunction with section 353.30, subdivisions 1, 1a, 1b, and 47.33 1c, applies to any member who first became a public employee or 47.34 a member of a pension fund listed in section 356.30, subdivision 47.35 3, before July 1, 1989, unless paragraph (b), in conjunction 47.36 with section 353.30, subdivision 5, produces a higher annuity 48.1 amount, in which case paragraph (b) will apply. The average 48.2 salary as defined in section 353.01, subdivision217a, 48.3 multiplied by the percent specified in section 356.315, 48.4 subdivision 3, for each year of allowable service for the first 48.5 ten years and thereafter by the percent specified in section 48.6 356.315, subdivision 4, per year of allowable service and 48.7 completed months less than a full year for the "basic member," 48.8 and the percent specified in section 356.315, subdivision 1, for 48.9 each year of allowable service for the first ten years and 48.10 thereafter by the percent specified in section 356.315, 48.11 subdivision 2, per year of allowable service and completed 48.12 months less than a full year for the "coordinated member," shall 48.13 determine the amount of the "normal" retirement annuity. 48.14 (b) This paragraph applies to a member who has become at 48.15 least 55 years old and first became a public employee after June 48.16 30, 1989, and to any other member whose annuity amount, when 48.17 calculated under this paragraph and in conjunction with section 48.18 353.30, subdivision 5, is higher than it is when calculated 48.19 under paragraph (a), in conjunction with section 353.30, 48.20 subdivisions 1, 1a, 1b, and 1c. The average salary, as defined 48.21 in section 353.01, subdivision217a, multiplied by the percent 48.22 specified in section 356.315, subdivision 4, for each year of 48.23 allowable service and completed months less than a full year for 48.24 a basic member and the percent specified in section 356.315, 48.25 subdivision 2, per year of allowable service and completed 48.26 months less than a full year for a coordinated member, shall 48.27 determine the amount of the normal retirement annuity. 48.28 Sec. 12. Minnesota Statutes 2004, section 353.33, 48.29 subdivision 3, is amended to read: 48.30 Subd. 3. [COMPUTATION OF BENEFITS.] This disability 48.31 benefit is an amount equal to the normal annuity payable to a 48.32 member who has reached normal retirement age with the same 48.33 number of years of allowable service and the same average 48.34 salary, as provided in section 353.01, subdivision 17a, and 48.35 section 353.29,subdivisions 2 andsubdivision 3. 48.36 A basic member shall receive a supplementary monthly 49.1 benefit of $25 to age 65 or the five-year anniversary of the 49.2 effective date of the disability benefit, whichever is later. 49.3 If the disability benefits under this subdivision exceed 49.4 the average salary as defined in section353.29353.01, 49.5 subdivision217a, the disability benefits must be reduced to an 49.6 amount equal tosaidthe average salary. 49.7 Sec. 13. Minnesota Statutes 2004, section 353.651, 49.8 subdivision 3, is amended to read: 49.9 Subd. 3. [RETIREMENT ANNUITY FORMULA.] The average salary 49.10 as defined in section 353.01, subdivision217a, multiplied by 49.11 the percent specified in section 356.315, subdivision 6, per 49.12 year of allowable service determines the amount of the normal 49.13 retirement annuity. If the member has earned allowable service 49.14 for performing services other than those of a police officer or 49.15 firefighter, the annuity representingsuchthat serviceismust 49.16 be computed under sections 353.29 and 353.30. 49.17 Sec. 14. Minnesota Statutes 2004, section 353.656, 49.18 subdivision 1, is amended to read: 49.19 Subdivision 1. [IN LINE OF DUTY; COMPUTATION OF BENEFITS.] 49.20 A member of the police and fire plan who becomes disabled and 49.21 physically unfit to perform duties as a police officer, 49.22 firefighter, or paramedic as defined under section 353.64, 49.23 subdivision 10, as a direct result of an injury, sickness, or 49.24 other disability incurred in or arising out of any act of duty, 49.25 which has or is expected to render the member physically or 49.26 mentally unable to perform the duties as a police officer, 49.27 firefighter, or paramedic as defined under section 353.64, 49.28 subdivision 10, for a period of at least one year, shall receive 49.29 disability benefits during the period of such disability. The 49.30 benefits must be in an amount equal to 60 percent of the 49.31 "average salary" as defined in section353.651353.01, 49.32 subdivision217a, plus an additional percent specified in 49.33 section 356.315, subdivision 6, of that average salary for each 49.34 year of service in excess of 20 years. If the disability under 49.35 this subdivision occurs before the member has at least five 49.36 years of allowable service credit in the police and fire plan, 50.1 the disability benefit must be computed on the "average salary" 50.2 from which deductions were made for contribution to the police 50.3 and fire fund. 50.4 Sec. 15. Minnesota Statutes 2004, section 353B.02, 50.5 subdivision 10, is amended to read: 50.6 Subd. 10. [SALARY.] (a) "Salary" under this chapter is 50.7 subject to the limitations of section 356.611. 50.8 (b) "Salary" for benefit computation and contribution 50.9 purposes means the salary of a first class or first grade 50.10 firefighter or patrol officer, whichever applies, for the former 50.11 members of the following consolidating relief associations: 50.12 (1) Anoka Police Relief Association; 50.13 (2) Austin Firefighters Relief Association; 50.14 (3) Austin Police Relief Association; 50.15 (4) Columbia Heights Fire Department Relief Association, 50.16 Paid Division; 50.17 (5) Fairmont Police Benefit Association; 50.18 (6) Faribault Fire Department Relief Association; 50.19 (7) Mankato Fire Department Relief Association; 50.20 (8) Minneapolis Fire Department Relief Association; 50.21 (9) Minneapolis Police Relief Association; 50.22 (10) Richfield Fire Department Relief Association; 50.23 (11) Rochester Fire Department Relief Association; 50.24 (12) Rochester Police Relief Association; 50.25 (13) St. Cloud Fire Department Relief Association; 50.26 (14) St. Cloud Police Relief Association; 50.27 (15) St. Paul Fire Department Relief Association; 50.28 (16) South St. Paul Firefighters Relief Association; 50.29 (17) West St. Paul Firefighters Relief Association; 50.30 (18) West St. Paul Police Relief Association; and 50.31 (19) Winona Fire Department Relief Association. 50.32(b)(c) "Salary" for benefit computation purposes means the 50.33 salary of a first grade patrol officer for the second month of 50.34 the previous fiscal year and for contribution purposes means the 50.35 current salary of a first grade patrol officer, for the former 50.36 members of the following consolidating relief associations: 51.1 (1) Bloomington Police Relief Association; 51.2 (2) Crystal Police Relief Association; 51.3 (3) Fridley Police Pension Association; 51.4 (4) Richfield Police Relief Association; 51.5 (5) St. Louis Park Police Relief Association; and 51.6 (6) Winona Police Relief Association. 51.7(c)(d) "Salary" for benefit computation purposes means the 51.8 final salary and for contribution purposes means the current 51.9 salary for the former members of the following consolidating 51.10 relief associations: 51.11 (1) Albert Lea Firefighters Relief Association; 51.12 (2) Albert Lea Police Relief Association; 51.13 (3) Buhl Police Relief Association; 51.14 (4) Chisholm Firefighters Relief Association; 51.15 (5) Crookston Fire Department Relief Association; 51.16 (6) Crookston Police Relief Association; 51.17 (7) Faribault Police Benefit Association; 51.18 (8) Red Wing Police Relief Association; and 51.19 (9) Virginia Fire Department Relief Association. 51.20(d)(e) "Salary" for benefit computation purposes means the 51.21 average earnings or salary for the final six months of 51.22 employment before retirement and for contribution purposes means 51.23 the current salary for the former members of the following 51.24 consolidating relief associations: 51.25 (1) Chisholm Police Relief Association; 51.26 (2) Hibbing Firefighters Relief Association; and 51.27 (3) Hibbing Police Relief Association. 51.28(e)(f) "Salary" for benefit computation purposes means the 51.29 greater of the final salary at retirement or the highest salary 51.30 of a patrol officer and for contribution purposes means the 51.31 greater of the current salary or the current highest salary of a 51.32 patrol officer for the former members of the following 51.33 consolidating relief associations: 51.34 (1) Brainerd Police Benefit Association; and 51.35 (2) New Ulm Police Relief Association. 51.36(f)(g) "Salary" for benefit computation and contribution 52.1 purposes means the following for the former members of the 52.2 consolidating relief associations as indicated: 52.3 (1) salary of a top grade patrol officer, including 52.4 longevity pay and education incentive pay in an amount not to 52.5 exceed $235 per month, Columbia Heights Police Relief 52.6 Association; 52.7 (2) maximum pay of a firefighter, including overtime 52.8 payments for a regular workweek of a firefighter mandated by the 52.9 federal Fair Labor Standards Act of 1938, as amended, Duluth 52.10 Firefighters Relief Association; 52.11 (3) salary of a first class patrol officer with 16 years of 52.12 service, Duluth Police Pension Association; 52.13 (4) base salary for the rank currently held, plus longevity 52.14 pay, pay for eligibility for next higher rank and pay for first 52.15 aid care, Mankato Police Benefit Association; 52.16 (5) average annual salary for highest three paid years for 52.17 benefit computation purposes and current salary for contribution 52.18 purposes, Red Wing Fire Department Relief Association; 52.19 (6) pay of the highest grade full-time firefighter, St. 52.20 Louis Park Fire Department Relief Association; 52.21 (7) maximum monthly pay of a patrol officer, St. Paul 52.22 Police Relief Association; 52.23 (8) prevailing base pay of rank held at retirement for 52.24 benefit computation purposes and current salary for contribution 52.25 purposes, South St. Paul Police Relief Association; and 52.26 (9) prevailing pay for rank held for at least six months 52.27 before retirement for benefit computation purposes and current 52.28 salary for contribution purposes, Virginia Police Relief 52.29 Association. 52.30 Sec. 16. Minnesota Statutes 2004, section 354.05, is 52.31 amended by adding a subdivision to read: 52.32 Subd. 13a. [AVERAGE SALARY.] (a) "Average salary," for the 52.33 purpose of determining the member's retirement annuity, means 52.34 the average salary upon which contributions were made for the 52.35 highest five successive years of formula service credit. 52.36 (b) "Average salary" may not include any more than the 53.1 equivalent of 60 monthly salary payments. 53.2 (c) "Average salary" must be based upon all years of 53.3 formula service credit if this service credit is less than five 53.4 years. 53.5 Sec. 17. Minnesota Statutes 2004, section 354.05, 53.6 subdivision 35, is amended to read: 53.7 Subd. 35. [SALARY.] (a) Subject to the limitations of 53.8 section 356.611, "salary" means the periodic compensation, upon 53.9 which member contributions are required before deductions for 53.10 deferred compensation, supplemental retirement plans, or other 53.11 voluntary salary reduction programs. 53.12 (b) "Salary" does not mean: 53.13 (1) lump sum annual leave payments; 53.14 (2) lump sum wellness and sick leave payments; 53.15 (3) employer-paid amounts used by an employee toward the 53.16 cost of insurance coverage, employer-paid fringe benefits, 53.17 flexible spending accounts, cafeteria plans, health care expense 53.18 accounts, day care expenses, or any payments in lieu of any 53.19 employer-paid group insurance coverage, including the difference 53.20 between single and family rates that may be paid to a member 53.21 with single coverage and certain amounts determined by the 53.22 executive director to be ineligible; 53.23 (4) any form of payment made in lieu of any other 53.24 employer-paid fringe benefit or expense; 53.25 (5) any form of severance payments; 53.26 (6) workers' compensation payments; 53.27 (7) disability insurance payments, including self-insured 53.28 disability payments; 53.29 (8) payments to school principals and all other 53.30 administrators for services that are in addition to the normal 53.31 work year contract if these additional services are performed on 53.32 an extended duty day, Saturday, Sunday, holiday, annual leave 53.33 day, sick leave day, or any other nonduty day; 53.34 (9) payments under section 356.24, subdivision 1, clause 53.35 (4); and 53.36 (10) payments made under section 122A.40, subdivision 12, 54.1 except for payments for sick leave that are accumulated under 54.2 the provisions of a uniform school district policy that applies 54.3 equally to all similarly situated persons in the district. 54.4 (c) Amounts provided to an employee by the employer through 54.5 a grievance proceeding or a legal settlement are salary only if 54.6 the settlement is reviewed by the executive director and the 54.7 amounts are determined by the executive director to be 54.8 consistent with paragraph (a) and prior determinations. 54.9 Sec. 18. Minnesota Statutes 2004, section 354.44, 54.10 subdivision 6, is amended to read: 54.11 Subd. 6. [COMPUTATION OF FORMULA PROGRAM RETIREMENT 54.12 ANNUITY.] (a) The formula retirement annuity must be computed in 54.13 accordance with the applicable provisions of the formulas stated 54.14 in paragraph (b) or (d) on the basis of each member's average 54.15 salary under section 354.05, subdivision 13a, for the period of 54.16 the member's formula service credit. 54.17For all years of formula service credit, "average salary,"54.18for the purpose of determining the member's retirement annuity,54.19means the average salary upon which contributions were made and54.20upon which payments were made to increase the salary limitation54.21provided in Minnesota Statutes 1971, section 354.511, for the54.22highest five successive years of formula service credit54.23provided, however, that such "average salary" shall not include54.24any more than the equivalent of 60 monthly salary payments.54.25Average salary must be based upon all years of formula service54.26credit if this service credit is less than five years.54.27 (b) This paragraph, in conjunction with paragraph (c), 54.28 applies to a person who first became a member of the association 54.29 or a member of a pension fund listed in section 356.30, 54.30 subdivision 3, before July 1, 1989, unless paragraph (d), in 54.31 conjunction with paragraph (e), produces a higher annuity 54.32 amount, in which case paragraph (d) applies. The average salary 54.33 as defined inparagraph (a)section 354.05, subdivision 13a, 54.34 multiplied by the following percentages per year of formula 54.35 service credit shall determine the amount of the annuity to 54.36 which the member qualifying therefor is entitled: 55.1 Coordinated Member Basic Member 55.2 Each year of service the percent the percent 55.3 during first ten specified in specified in 55.4 section 356.315, section 356.315, 55.5 subdivision 1, subdivision 3, 55.6 per year per year 55.7 Each year of service the percent the percent 55.8 thereafter specified in specified in 55.9 section 356.315, section 356.315, 55.10 subdivision 2, subdivision 4, 55.11 per year per year 55.12 (c)(i) This paragraph applies only to a person who first 55.13 became a member of the association or a member of a pension fund 55.14 listed in section 356.30, subdivision 3, before July 1, 1989, 55.15 and whose annuity is higher when calculated under paragraph (b), 55.16 in conjunction with this paragraph than when calculated under 55.17 paragraph (d), in conjunction with paragraph (e). 55.18 (ii) Where any member retires prior to normal retirement 55.19 age under a formula annuity, the member shall be paid a 55.20 retirement annuity in an amount equal to the normal annuity 55.21 provided in paragraph (b) reduced by one-quarter of one percent 55.22 for each month that the member is under normal retirement age at 55.23 the time of retirement except that for any member who has 30 or 55.24 more years of allowable service credit, the reduction shall be 55.25 applied only for each month that the member is under age 62. 55.26 (iii) Any member whose attained age plus credited allowable 55.27 service totals 90 years is entitled, upon application, to a 55.28 retirement annuity in an amount equal to the normal annuity 55.29 provided in paragraph (b), without any reduction by reason of 55.30 early retirement. 55.31 (d) This paragraph applies to a member who has become at 55.32 least 55 years old and first became a member of the association 55.33 after June 30, 1989, and to any other member who has become at 55.34 least 55 years old and whose annuity amount when calculated 55.35 under this paragraph and in conjunction with paragraph (e), is 55.36 higher than it is when calculated under paragraph (b), in 56.1 conjunction with paragraph (c). The average salary, as defined 56.2 inparagraph (a)section 354.05, subdivision 13a, multiplied by 56.3 the percent specified by section 356.315, subdivision 4, for 56.4 each year of service for a basic member and by the percent 56.5 specified in section 356.315, subdivision 2, for each year of 56.6 service for a coordinated member shall determine the amount of 56.7 the retirement annuity to which the member is entitled. 56.8 (e) This paragraph applies to a person who has become at 56.9 least 55 years old and first becomes a member of the association 56.10 after June 30, 1989, and to any other member who has become at 56.11 least 55 years old and whose annuity is higher when calculated 56.12 under paragraph (d) in conjunction with this paragraph than when 56.13 calculated under paragraph (b), in conjunction with paragraph 56.14 (c). An employee who retires under the formula annuity before 56.15 the normal retirement age shall be paid the normal annuity 56.16 provided in paragraph (d) reduced so that the reduced annuity is 56.17 the actuarial equivalent of the annuity that would be payable to 56.18 the employee if the employee deferred receipt of the annuity and 56.19 the annuity amount were augmented at an annual rate of three 56.20 percent compounded annually from the day the annuity begins to 56.21 accrue until the normal retirement age. 56.22 (f) No retirement annuity is payable to a former employee 56.23 with a salary that exceeds 95 percent of the governor's salary 56.24 unless and until the salary figures used in computing the 56.25 highest five successive years average salary under paragraph (a) 56.26 have been audited by the Teachers Retirement Association and 56.27 determined by the executive director to comply with the 56.28 requirements and limitations of section 354.05, subdivisions 35 56.29 and 35a. 56.30 Sec. 19. Minnesota Statutes 2004, section 354A.011, is 56.31 amended by adding a subdivision to read: 56.32 Subd. 7a. [AVERAGE SALARY.] "Average salary," for purposes 56.33 of computing a normal coordinated program retirement annuity 56.34 under section 354A.31, subdivision 4 or 4a, means an amount 56.35 equal to the average salary upon which contributions were made 56.36 for the highest five successive years of service credit but may 57.1 not, in any event, include any more than the equivalent of 60 57.2 monthly salary payments. Average salary must be based upon all 57.3 years of service credit if this service credit is less than five 57.4 years. 57.5 Sec. 20. Minnesota Statutes 2004, section 354A.011, 57.6 subdivision 24, is amended to read: 57.7 Subd. 24. [SALARY; COVERED SALARY.] (a) Subject to the 57.8 limitations of section 356.611, "salary" or "covered salary" 57.9 means the entire compensation, upon which member contributions 57.10 are required and made, that is paid to a teacher before 57.11 deductions for deferred compensation, supplemental retirement 57.12 plans, or other voluntary salary reduction programs. 57.13 (b) "Salary" does not mean: 57.14 (1) lump sum annual leave payments; 57.15 (2) lump sum wellness and sick leave payments; 57.16 (3) employer-paid amounts used by an employee toward the 57.17 cost of insurance coverage, employer-paid fringe benefits, 57.18 flexible spending accounts, cafeteria plans, health care expense 57.19 accounts, day care expenses, or any payments in lieu of any 57.20 employer-paid group insurance coverage, including the difference 57.21 between single and family rates that may be paid to a member 57.22 with single coverage, and certain amounts determined by the 57.23 executive secretary or director to be ineligible; 57.24 (4) any form of payment that is made in lieu of any other 57.25 employer-paid fringe benefit or expense; 57.26 (5) any form of severance payments; 57.27 (6) workers' compensation payments; 57.28 (7) disability insurance payments, including self-insured 57.29 disability payments; 57.30 (8) payments to school principals and all other 57.31 administrators for services that are in addition to the normal 57.32 work year contract if these additional services are performed on 57.33 an extended duty day, Saturday, Sunday, holiday, annual leave 57.34 day, sick leave day, or any other nonduty day; 57.35 (9) payments under section 356.24, subdivision 1, clause 57.36 (4)(ii); and 58.1 (10) payments made under section 122A.40, subdivision 12, 58.2 except for payments for sick leave that are accumulated under 58.3 the provisions of a uniform school district policy that applies 58.4 equally to all similarly situated persons in the district. 58.5 (c) Amounts provided to an employee by the employer through 58.6 a grievance proceeding or a legal settlement are salary only if 58.7 the settlement is reviewed by the executive director and the 58.8 amounts are determined by the executive director to be 58.9 consistent with paragraph (a) and prior determinations. 58.10 Sec. 21. Minnesota Statutes 2004, section 354A.31, 58.11 subdivision 4, is amended to read: 58.12 Subd. 4. [COMPUTATION OF THE NORMAL COORDINATED RETIREMENT 58.13 ANNUITY; MINNEAPOLIS AND ST. PAUL FUNDS.] (a) This subdivision 58.14 applies to the coordinated programs of the Minneapolis Teachers 58.15 Retirement Fund Association and the St. Paul Teachers Retirement 58.16 Fund Association. 58.17 (b) The normal coordinated retirement annuityshall beis 58.18 an amount equal to a retiring coordinated member's average 58.19 salary under section 354A.011, subdivision 7a, multiplied by the 58.20 retirement annuity formula percentage.Average salary for58.21purposes of this section shall mean an amount equal to the58.22average salary upon which contributions were made for the58.23highest five successive years of service credit, but which shall58.24not in any event include any more than the equivalent of 6058.25monthly salary payments. Average salary must be based upon all58.26years of service credit if this service credit is less than five58.27years.58.28 (c) This paragraph, in conjunction with subdivision 6, 58.29 applies to a person who first became a member or a member in a 58.30 pension fund listed in section 356.30, subdivision 3, before 58.31 July 1, 1989, unless paragraph (d), in conjunction with 58.32 subdivision 7, produces a higher annuity amount, in which case 58.33 paragraph (d) will apply. The retirement annuity formula 58.34 percentage for purposes of this paragraph is the percent 58.35 specified in section 356.315, subdivision 1, per year for each 58.36 year of coordinated service for the first ten years and the 59.1 percent specified in section 356.315, subdivision 2, for each 59.2 year of coordinated service thereafter. 59.3 (d) This paragraph applies to a person who has become at 59.4 least 55 years old and who first becomes a member after June 30, 59.5 1989, and to any other member who has become at least 55 years 59.6 old and whose annuity amount, when calculated under this 59.7 paragraph and in conjunction with subdivision 7 is higher than 59.8 it is when calculated under paragraph (c), in conjunction with 59.9 the provisions of subdivision 6. The retirement annuity formula 59.10 percentage for purposes of this paragraph is the percent 59.11 specified in section 356.315, subdivision 2, for each year of 59.12 coordinated service. 59.13 Sec. 22. Minnesota Statutes 2004, section 354A.31, 59.14 subdivision 4a, is amended to read: 59.15 Subd. 4a. [COMPUTATION OF THE NORMAL COORDINATED 59.16 RETIREMENT ANNUITY; DULUTH FUND.] (a) This subdivision applies 59.17 to the new law coordinated program of the Duluth Teachers 59.18 Retirement Fund Association. 59.19 (b) The normal coordinated retirement annuity is an amount 59.20 equal to a retiring coordinated member's average salary under 59.21 section 354A.011, subdivision 7a, multiplied by the retirement 59.22 annuity formula percentage.Average salary for purposes of this59.23section means an amount equal to the average salary upon which59.24contributions were made for the highest five successive years of59.25service credit, but may not in any event include any more than59.26the equivalent of 60 monthly salary payments. Average salary59.27must be based upon all years of service credit if this service59.28credit is less than five years.59.29 (c) This paragraph, in conjunction with subdivision 6, 59.30 applies to a person who first became a member or a member in a 59.31 pension fund listed in section 356.30, subdivision 3, before 59.32 July 1, 1989, unless paragraph (d), in conjunction with 59.33 subdivision 7, produces a higher annuity amount, in which case 59.34 paragraph (d) applies. The retirement annuity formula 59.35 percentage for purposes of this paragraph is the percent 59.36 specified in section 356.315, subdivision 1, per year for each 60.1 year of coordinated service for the first ten years and the 60.2 percent specified in section 356.315, subdivision 2, for each 60.3 subsequent year of coordinated service. 60.4 (d) This paragraph applies to a person who is at least 55 60.5 years old and who first becomes a member after June 30, 1989, 60.6 and to any other member who is at least 55 years old and whose 60.7 annuity amount, when calculated under this paragraph and in 60.8 conjunction with subdivision 7, is higher than it is when 60.9 calculated under paragraph (c) in conjunction with subdivision 60.10 6. The retirement annuity formula percentage for purposes of 60.11 this paragraph is the percent specified in section 356.315, 60.12 subdivision 2, for each year of coordinated service. 60.13 Sec. 23. Minnesota Statutes 2004, section 356.611, 60.14 subdivision 1, is amended to read: 60.15 Subdivision 1. [STATE SALARY LIMITATIONS.] (a) 60.16 Notwithstanding any provision of law, bylaws, articles of 60.17 incorporation, retirement and disability allowance plan 60.18 agreements, or retirement plan contracts to the contrary, the 60.19 covered salary for pension purposes for a plan participant of a 60.20 covered retirement fund enumerated in section 356.30, 60.21 subdivision 3, may not exceed95110 percent of the salary 60.22 established for the governor under section 15A.082 at the time 60.23 the person received the salary. 60.24 (b) This section does not apply to a salary paid: 60.25 (1) to the governor or to a judge; 60.26 (2) to an employee or an elected official who is not 60.27 subject to the limit as specified under section 43A.17, 60.28 subdivision 9; 60.29 (3) to an employee of a political subdivision in a position 60.30 that is excluded from the limit as specified under section 60.31 43A.17, subdivision 9; 60.32(3)(4) to a state employee as defined under section 60.33 43A.02, subdivision 21; 60.34(4)(5) to an employee of Gillette Hospital who is covered 60.35 by the general state employees retirement plan of the Minnesota 60.36 State Retirement System; 61.1(5)(6) to an employee of the Minnesota Crop Improvement 61.2 Council;or61.3(6)(7) to an employee of the Minnesota Historical Society; 61.4 (8) to an employee of the Southern Minnesota Municipal 61.5 Power Association; or 61.6 (9) to the director of the Duluth Port Authority. 61.7 (c) The limited covered salary determined under this 61.8 section must be used in determining employee and employer 61.9 contributions and in determining retirement annuities and other 61.10 benefits under the respective covered retirement fund and under 61.11 this chapter. 61.12 Sec. 24. Minnesota Statutes 2004, section 422A.01, is 61.13 amended by adding a subdivision to read: 61.14 Subd. 4a. [AVERAGE SALARY.] (a) "Average salary" means the 61.15 arithmetic average annual salary, wages, or compensation of the 61.16 member from the city for any five calendar years out of the last 61.17 ten calendar years of service, except as provided for in section 61.18 422A.16, which may include the year in which the employee 61.19 retires, as selected by the employee. 61.20 (b) A member with more than five calendar years of service, 61.21 but less than ten calendar years, may select any five calendar 61.22 years of service to determine the average salary. A member with 61.23 less than five years of service with the city shall use all 61.24 earnings to determine the average salary. 61.25 Sec. 25. Minnesota Statutes 2004, section 422A.01, is 61.26 amended by adding a subdivision to read: 61.27 Subd. 13a. [COVERED SALARY.] "Salary" is subject to the 61.28 limitations of section 356.611. 61.29 Sec. 26. Minnesota Statutes 2004, section 422A.15, 61.30 subdivision 1, is amended to read: 61.31 Subdivision 1. [FORMULA PENSION AND ANNUITY.] Except as 61.32 otherwise provided in subdivision 3, each contributing member 61.33 who, at the time of retirement, fulfills the conditions 61.34 necessary to enable the member to retire, shallis entitled to 61.35 receivewhat shall be known asa "formula pension and annuity" 61.36 equal to two percent for each year of allowable service for the 62.1 first ten years and thereafter 2.5 percent per year of allowable 62.2 service of thearithmeticaverageannualsalary, wages or62.3compensation of the member from the city for any five calendar62.4years out of the last ten calendar years of service except as62.5provided for in section 422A.16, which may include the year in62.6which the employee retires, as selected by the employee, 62.7 multiplied by the years of service credited by the retirement 62.8 fund. The formula pension and annuityshallmust be computed on 62.9 the single life plan but subject to the option selections 62.10 provided for in section 422A.17. 62.11 In order to be entitled to the formula pension and annuity 62.12 herein provided for, the retiring employee at the time of 62.13 cessation of employment and of actual retirementshallmust have 62.14 attained the age of 60 years or have been employed by the city 62.15 not less than 30 years, or meet the qualifications provided for 62.16 in section 422A.16, and in addition thereto have contributed to 62.17 the retirement fund at the percentage rate prescribed by the 62.18 retirement law applicable when the salary, wages or compensation 62.19 was paid on all salaries, wages, or compensation received from 62.20 the city or from an applicable employing unit. The years of 62.21 service to be applied in the formula pension and annuityshall62.22 must be found and determined by the retirement board, except 62.23 that no creditshallmay be allowed for any year in which a back 62.24 charge is owing at time of retirement and the earnings from any 62.25 year in which a back charge is owingshallmay not be used in 62.26 determining the averageannualsalary. 62.27 Sec. 27. Minnesota Statutes 2004, section 422A.16, 62.28 subdivision 9, is amended to read: 62.29 Subd. 9. [INCOMPETENCY OR DEATH OF MEMBER.] Any member of 62.30 the contributing class who becomes permanently separated from 62.31 the service of the city under subdivision 8, may, by an 62.32 instrument in writing, filed with the municipal employees 62.33 retirement board within 30 days aftersuchthe separation 62.34 becomes permanent, elect to allow the member contributions 62.35 tosuchthe fund to the date of separation to remain on deposit 62.36 insuchthe fund, and insuchthe event the membershall be63.1 is entitled to receive a retirement allowance at age 65, 63.2 provided the member, or someone acting in the member's behalf if 63.3 the member be incompetent,shallmust make a written application 63.4 forsuchthe retirement allowance in the same manner provided 63.5 for in section 422A.17 and in accordance with the provisions of 63.6 section 422A.15, subdivision 1, except for determining 63.7 averageannualsalary.A member with more than five calendar63.8years of service but less than ten calendar years may select any63.9five calendar years of service to determine the average annual63.10salary. A member with less than five years of service with the63.11city shall use all earnings to determine the average annual63.12salary.63.13 If the contributing member dies before reaching the age of 63.14 65 years, or having attained the age of 65 years without having 63.15 made the election provided for herein, the net accumulated 63.16 amount of deductions from the member's salary, pay or 63.17 compensation, plus interest, to the member's credit on date of 63.18 deathshall be paidis payable tosuchthe person or persons as 63.19 have been nominated by written designation filed with the 63.20 retirement board, insuchthe formasthat the retirement board 63.21shall requirerequires. 63.22 If the employee fails to make a designation, or if the 63.23 person or persons designated bysuchthe employee predeceases 63.24suchthe employee, the net accumulated credit tosuchthe 63.25 employee's account on date of deathshall be paidis payable to 63.26suchthe employee's estate. 63.27 The provisions of subdivisions 4, 5, and 6shallalso apply 63.28 to any member qualifying for benefits under this subdivision, 63.29 except for purposes of this subdivision the age referred to in 63.30 subdivision 4shall beis 65 years. 63.31 Sec. 28. Minnesota Statutes 2004, section 423B.01, is 63.32 amended by adding a subdivision to read: 63.33 Subd. 22. [COVERED SALARY.] "Salary" is subject to the 63.34 limitations of section 356.611. 63.35 Sec. 29. Minnesota Statutes 2004, section 423C.01, is 63.36 amended by adding a subdivision to read: 64.1 Subd. 29. [COVERED SALARY.] "Salary" is subject to the 64.2 limitations of section 356.611. 64.3 Sec. 30. Minnesota Statutes 2004, section 490.121, 64.4 subdivision 21, is amended to read: 64.5 Subd. 21. [FINAL AVERAGE COMPENSATION.] "Final average 64.6 compensation" means the total amount of salary payable to a 64.7 judge in the highest five years out of the last ten yearsprior64.8tobefore theevent of maturity of benefitstermination of 64.9 judicial service, divided by five; provided, however, thatif 64.10 the number of years of service by the judge equals or exceeds 64.11 ten. If the number of years of service by the judge is less 64.12 than ten, but more than five, the highest fiveshallyears of 64.13 salary must be counted, and. If the number of years of service 64.14 by the judge is less than five, the aggregate salaryin suchfor 64.15 the periodshallof service must be divided by the number of 64.16 months insuchthe period and multiplied by 12. 64.17 Sec. 31. Minnesota Statutes 2004, section 490.121, is 64.18 amended by adding a subdivision to read: 64.19 Subd. 21a. [COVERED SALARY LIMITATION.] "Final average 64.20 compensation" is subject to the limitations of section 356.611. 64.21 Sec. 32. [REPEALER.] 64.22 Minnesota Statutes 2004, sections 352C.031, subdivision 3; 64.23 353.29, subdivision 2; and 353.651, subdivision 2, are repealed. 64.24 Sec. 33. [EFFECTIVE DATE.] 64.25 This article is effective on the day following final 64.26 enactment except that section 23 applies retroactively from 64.27 April 28, 1994. 64.28 ARTICLE 3 64.29 ALLOWABLE SERVICE CREDIT 64.30 Section 1. [356.195] [SERVICE CREDIT PURCHASE PROCEDURES 64.31 FOR STRIKE PERIODS.] 64.32 Subdivision 1. [COVERED PLANS.] This section applies to 64.33 all defined benefit plans specified in section 356.30, 64.34 subdivision 3. 64.35 Subd. 2. [PURCHASE PROCEDURE FOR STRIKE PERIODS.] (a) An 64.36 employee covered by a plan specified in subdivision 1 may 65.1 purchase allowable service credit in the applicable plan for any 65.2 period of time during which the employee was on a public 65.3 employee strike without pay, not to exceed a period of one year, 65.4 if the employee makes a payment in lieu of salary deductions as 65.5 specified in paragraph (b) or (c), whichever applies. The 65.6 employing unit, at its option, may pay the employer portion of 65.7 the amount specified in paragraph (b) on behalf of its employees. 65.8 (b) If payment is received by the applicable pension plan 65.9 executive director within one year from the end of the strike, 65.10 the payment amount is equal to the applicable employee and 65.11 employer contribution rates specified in law for the applicable 65.12 plan during the strike period, applied to the employee's rate of 65.13 salary in effect at the conclusion of the strike for the period 65.14 of the strike without pay, plus compound interest at a monthly 65.15 rate of 0.71 percent from the last day of the strike period 65.16 until the date payment is received. 65.17 (c) If payment is received by the applicable pension fund 65.18 director after one year and before five years from the end of 65.19 the strike, the payment amount is the amount determined under 65.20 section 356.551. 65.21 (d) Payments may not be made more than five years after the 65.22 end of the strike. 65.23 Sec. 2. Minnesota Statutes 2004, section 490.121, 65.24 subdivision 4, is amended to read: 65.25 Subd. 4. [ALLOWABLE SERVICE.] (a) "Allowable service" 65.26 means any calendar month, subject to the service credit limit in 65.27 subdivision 22, served as a judge at any time, or served as a 65.28 referee in probate for all referees in probate who were in 65.29 office prior to January 1, 1974. 65.30 (b) "Allowable service" also means a period of authorized 65.31 leave of absence for which the judge has made a payment in lieu 65.32 of contributions, not in an amount in excess of the service 65.33 credit limit under subdivision 22. To obtain the service 65.34 credit, the judge shall pay an amount equal to the normal cost 65.35 of the judges retirement plan on the date of return from the 65.36 leave of absence, as determined in the most recent actuarial 66.1 report for the plan filed with the Legislative Commission on 66.2 Pensions and Retirement, multiplied by the judge's average 66.3 monthly salary rate during the authorized leave of absence and 66.4 multiplied by the number of months of the authorized leave of 66.5 absence, plus annual compound interest at the rate of 8.5 66.6 percent from the date of the termination of the leave to the 66.7 date on which payment is made. The payment must be made within 66.8 one year of the date on which the authorized leave of absence 66.9 terminated. Service credit for an authorized leave of absence 66.10 is in addition to a uniformed service leave under section 66.11 490.1211. 66.12 Sec. 3. Laws 1999, chapter 222, article 16, section 16, as 66.13 amended by Laws 2002, chapter 392, article 7, section 1, and 66.14 Laws 2003, First Special Session chapter 12, article 6, section 66.15 2, and Laws 2004, chapter 267, article 17, section 6, is amended 66.16 to read: 66.17 Sec. 16. [REPEALER.] 66.18 (a) Sections 2 to 6 and 8 to 13 are repealed on May 16, 66.19 2004. 66.20 (b) Sections 1 and 7 are repealed on May 16,20062007. 66.21 Sec. 4. Laws 2000, chapter 461, article 4, section 4, as 66.22 amended by Laws 2003, First Special Session chapter 12, article 66.23 6, section 3, and Laws 2004, chapter 267, article 17, section 7, 66.24 is amended to read: 66.25 Sec. 4. [EFFECTIVE DATE; SUNSET REPEALER.] 66.26 (a) Sections 1, 2, and 3 are effectiveonthe day following 66.27 final enactment. 66.28 (b) Sections 1, 2, and 3, are repealed on May 16,20062007. 66.29 Sec. 5. [METRO TRANSIT STRIKE PROVISION.] 66.30 Notwithstanding the payment deadline specified in Minnesota 66.31 Statutes, section 356.195, subdivision 2, paragraph (b), a Metro 66.32 Transit employee covered by the general state employees 66.33 retirement plan of the Minnesota State Retirement System who was 66.34 on strike on or after January 1, 2004, and before the effective 66.35 date of this section, is authorized to make a payment under that 66.36 paragraph on or before one year after the effective date of this 67.1 section. 67.2 Sec. 6. [CROSBY-IRONTON PUBLIC SCHOOL STRIKE PROVISION.] 67.3 Notwithstanding the payment deadline specified in Minnesota 67.4 Statutes, section 356.195, subdivision 2, paragraph (b), a 67.5 Crosby-Ironton public school teacher covered by the Teachers 67.6 Retirement Association who was on strike during a period that 67.7 included April 1, 2005, and before the effective date of this 67.8 section, is authorized to make a payment under that paragraph on 67.9 or before one year after the effective date of this section. 67.10 Sec. 7. [UNIVERSITY OF MINNESOTA STRIKE PROVISION.] 67.11 Notwithstanding the payment deadline specified in Minnesota 67.12 Statutes, section 356.195, subdivision 2, paragraph (b), a 67.13 University of Minnesota employee covered by the Minnesota State 67.14 Retirement System who was on strike on or after October 21, 2003 67.15 and before the effective date of this section, is authorized to 67.16 make a payment under that paragraph on or before one year after 67.17 the effective date of this section. 67.18 Sec. 8. [EFFECTIVE DATE.] 67.19 (a) Sections 1 and 3 to 7 are effective the day following 67.20 final enactment. 67.21 (b) Section 2 is effective retroactively from January 1, 67.22 2005, and applies to any person who was in active service as a 67.23 judge on or after that date and applies to an authorized leave 67.24 of absence that occurred before or after that date. For a 67.25 person for whom section 2 is retroactive, the equivalent 67.26 contribution payment must be made on or before July 1, 2006. 67.27 ARTICLE 4 67.28 ACTUARIAL FINANCIAL REPORTING AND OTHER 67.29 GENERALLY APPLICABLE ADMINISTRATIVE CHANGES 67.30 Section 1. Minnesota Statutes 2004, section 352.01, 67.31 subdivision 12, is amended to read: 67.32 Subd. 12. [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" 67.33 means the condition of one annuity or benefit having an equal 67.34 actuarial present value as another annuity or benefit, 67.35 determined as of a given date at a specified age with each 67.36 actuarial present value based on the appropriate mortality table 68.1 adopted by the board of directors based on the experience of the 68.2 fund as recommended by the actuary retainedby the Legislative68.3Commission on Pensions and Retirementunder section 356.214, and 68.4 approved under section 356.215, subdivision 18, and using the 68.5 applicable preretirement or postretirement interest rate 68.6 assumption specified in section 356.215, subdivision 8. 68.7 Sec. 2. Minnesota Statutes 2004, section 353.01, 68.8 subdivision 14, is amended to read: 68.9 Subd. 14. [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" 68.10 means the condition of one annuity or benefit having an equal 68.11 actuarial present value as another annuity or benefit, 68.12 determined as of a given date with each actuarial present value 68.13 based on the appropriate mortality table adopted by the board of 68.14 trustees based on the experience of the fund as recommended by 68.15 the actuary retainedby the Legislative Commission on Pensions68.16and Retirementunder section 356.214, and approved under section 68.17 356.215, subdivision 18, and using the applicable preretirement 68.18 or postretirement interest rate assumption specified in section 68.19 356.215, subdivision 8. 68.20 Sec. 3. Minnesota Statutes 2004, section 354.05, 68.21 subdivision 7, is amended to read: 68.22 Subd. 7. [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" 68.23 means the condition of one annuity or benefit having an equal 68.24 actuarial present value as another annuity or benefit, 68.25 determined as of a given date with each actuarial present value 68.26 based on the appropriate mortality table adopted by the board of 68.27 trustees based on the experience of the association as 68.28 recommended by the actuary retainedby the Legislative68.29Commission on Pensions and Retirementunder section 356.214, and 68.30 approved under section 356.215, subdivision 18, and using the 68.31 applicable preretirement or postretirement interest rate 68.32 assumption specified in section 356.215, subdivision 8. 68.33 Sec. 4. Minnesota Statutes 2004, section 354.094, 68.34 subdivision 1, is amended to read: 68.35 Subdivision 1. [SERVICE CREDIT CONTRIBUTIONS.] (a) Upon 68.36 granting any extended leave of absence under section 122A.46 or 69.1 136F.43, the employing unit granting the leave must certify the 69.2 leave to the association on a form specified by the executive 69.3 director. A member granted an extended leave of absence under 69.4 section 122A.46 or 136F.43 may pay employee contributions and 69.5 receive allowable service credit toward annuities and other 69.6 benefits under this chapter, for each year of the leave, 69.7 provided that the member and the employing board make the 69.8 required employer contribution in any proportion they may agree 69.9 upon, during the period of the leave. The employer may enter 69.10 into an agreement with the exclusive bargaining representative 69.11 of the teachers in the district under which, for an individual 69.12 teacher, all or a portion of the employee's contribution is paid 69.13 by the employer. Any such agreement must include a sunset of 69.14 eligibility to qualify for the payment and must not be a part of 69.15 the collective bargaining agreement. The leave period must not 69.16 exceed five years. A member may not receive more than five 69.17 years of allowable service credit under this section. The 69.18 employee and employer contributions must be based upon the rates 69.19 of contribution prescribed by section 354.42 for the salary 69.20 received during the year immediately preceding the extended 69.21 leave. 69.22 (b) Employee contribution payments for the years for which 69.23 a member is receiving service credit while on extended leave 69.24 must be made on or beforethe later ofJune 30 of each fiscal 69.25 year for which service credit is to be receivedor within 3069.26days after first notification of the amount due, if requested by69.27the member, is given by the association. If payment is to be 69.28 made by a transfer of pretax assets authorized under section 69.29 356.441, payment is authorized after June 30 of the fiscal year 69.30 providing that authorization for the asset transfer has been 69.31 received by the applicable third party administrator by June 30, 69.32 and the payment must include interest at a rate of .708 percent 69.33 per month from June 30 through the end of the month in which 69.34 payment is received. No payment is permitted after the 69.35 following September 30.Payments received after June 30 must69.36include interest at an annual rate of 8.5 percent from June 3070.1through the end of the month in which payment is received.70.2 (c) Notwithstanding the provisions of any agreements to the 70.3 contrary, employee and employer contributions may not be made to 70.4 receive allowable service credit if the member does not have 70.5 full reinstatement rights as provided in section 122A.46 or 70.6 136F.43, both during and at the end of the extended leave. 70.7 (d) Any school district paying the employee's retirement 70.8 contributions under this section shall forward to the applicable 70.9 retirement association or retirement fund a copy of the 70.10 agreement executed by the school district and the employee. 70.11 Sec. 5. Minnesota Statutes 2004, section 354A.011, 70.12 subdivision 3a, is amended to read: 70.13 Subd. 3a. [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" 70.14 means the condition of one annuity or benefit having an equal 70.15 actuarial present value as another annuity or benefit, 70.16 determined as of a given date with each actuarial present value 70.17 based on the appropriate mortality table adopted by the 70.18 appropriate board of trustees based on the experience of that 70.19 retirement fund association as recommended by the actuary 70.20 retainedby the Legislative Commission on Pensions and70.21Retirementunder section 356.214, and approved under section 70.22 356.215, subdivision 18, and using the applicable preretirement 70.23 or postretirement interest rate assumption specified in section 70.24 356.215, subdivision 8. 70.25 Sec. 6. Minnesota Statutes 2004, section 356.20, 70.26 subdivision 4, is amended to read: 70.27 Subd. 4. [CONTENTS OF FINANCIAL REPORT.] (a) The financial 70.28 report required by this section must contain financial 70.29 statements and disclosures that indicate the financial 70.30 operations and position of the retirement plan and fund. The 70.31 report must conform with generally accepted governmental 70.32 accounting principles, applied on a consistent basis. The 70.33 report must be audited. The report must include, as part of its 70.34 exhibits or its footnotes, an actuarial disclosure item based on 70.35 the actuarial valuation calculations prepared by the 70.36commission-retainedactuary retained under section 356.214 or by 71.1 the actuary retained by the retirement fund or plan,if71.2applicablewhichever applies, according to applicable actuarial 71.3 requirements enumerated in section 356.215, and specified in the 71.4 most recent standards for actuarial work adopted by the 71.5 Legislative Commission on Pensions and Retirement. The accrued 71.6 assets, the accrued liabilities, including accrued reserves, and 71.7 the unfunded actuarial accrued liability of the fund or plan 71.8 must be disclosed. The disclosure item must contain a 71.9 declaration by the actuary retainedby the Legislative71.10Commission on Pensions and Retirementunder section 356.214 or 71.11 the actuary retained by the fund or plan, whichever applies, 71.12 specifying that the required reserves for any retirement, 71.13 disability, or survivor benefits provided under a benefit 71.14 formula are computed in accordance with the entry age actuarial 71.15 cost method and in accordance with the most recent applicable 71.16 standards for actuarial work adopted by the Legislative 71.17 Commission on Pensions and Retirement. 71.18 (b) Assets of the fund or plan contained in the disclosure 71.19 item must include the following statement of the actuarial value 71.20 of current assets as defined in section 356.215, subdivision 1: 71.21 Value Value 71.22 at cost at market 71.23 Cash, cash equivalents, and 71.24 short-term securities ......... ......... 71.25 Accounts receivable ......... ......... 71.26 Accrued investment income ......... ......... 71.27 Fixed income investments ......... ......... 71.28 Equity investments other 71.29 than real estate ......... ......... 71.30 Real estate investments ......... ......... 71.31 Equipment ......... ......... 71.32EquityParticipation in the Minnesota 71.33 postretirement investment 71.34 fund or the retirement 71.35 benefit fund ......... ......... 71.36 Other ......... ......... 72.1 72.2 Total assets 72.3 Value at cost ......... 72.4 Value at market ......... 72.5 Actuarial value of current assets ......... 72.6 (c) The unfunded actuarial accrued liability of the fund or 72.7 plan contained in the disclosure item must include the following 72.8 measures of unfunded actuarial accrued liability, using 72.9 the actuarial value of current assets: 72.10 (1) the unfunded actuarial accrued liability, determined by 72.11 subtracting the current assets and the present value of future 72.12 normal costs from the total current and expected future benefit 72.13 obligations; and 72.14 (2) the unfunded pension benefit obligation, determined by 72.15 subtracting the current assets from the actuarial present value 72.16 of credited projected benefits. 72.17 If the current assets of the fund or plan exceed the 72.18 actuarial accrued liabilities, the excess must be disclosed and 72.19 indicated as a surplus. 72.20 (d) The pension benefit obligations schedule included in 72.21 the disclosure must contain the following information on the 72.22 benefit obligations: 72.23 (1) the pension benefit obligation, determined as the 72.24 actuarial present value of credited projected benefits on 72.25 account of service rendered to date, separately identified as 72.26 follows: 72.27 (i) for annuitants; 72.28 retirement annuities; 72.29 disability benefits; 72.30 surviving spouse and child benefits; 72.31 (ii) for former members without vested rights; 72.32 (iii) for deferred annuitants' benefits, including 72.33 any augmentation; 72.34 (iv) for active employees; 72.35 accumulated employee contributions, 72.36 including allocated investment income; 73.1 employer-financed benefits vested; 73.2 employer-financed benefits nonvested; 73.3 total pension benefit obligation; and 73.4 (2) if there are additional benefits not appropriately 73.5 covered by the foregoing items of benefit obligations, a 73.6 separate identification of the obligation. 73.7 (e) The report must contain an itemized exhibit describing 73.8 the administrative expenses of the plan, including, but not 73.9 limited to, the following items, classified on a consistent 73.10 basis from year to year, and with any further meaningful detail: 73.11 (1) personnel expenses; 73.12 (2) communication-related expenses; 73.13 (3) office building and maintenance expenses; 73.14 (4) professional services fees; and 73.15 (5) other expenses. 73.16 (f) The report must contain an itemized exhibit describing 73.17 the investment expenses of the plan, including, but not limited 73.18 to, the following items, classified on a consistent basis from 73.19 year to year, and with any further meaningful detail: 73.20 (1) internal investment-related expenses; and 73.21 (2) external investment-related expenses. 73.22 (g) Any additional statements or exhibits or more detailed 73.23 or subdivided itemization of a disclosure item that will enable 73.24 the management of the fund to portray a true interpretation of 73.25 the fund's financial condition must be included in the 73.26 additional statements or exhibits. 73.27 Sec. 7. Minnesota Statutes 2004, section 356.47, 73.28 subdivision 3, is amended to read: 73.29 Subd. 3. [PAYMENT.] (a) Upon the retired member attaining 73.30 the age of 65 years or upon the first day of the month next 73.31 following the month occurring one year after the termination of 73.32 the reemployment that gave rise to the limitation, whichever is 73.33 later, and the filing of a written application, the retired 73.34 member is entitled to the payment, in a lump sum, of the value 73.35 of the person's amount under subdivision 2, plus interest at the 73.36 compound annual rate of six percent from the date that the 74.1 amount was deducted from the retirement annuity to the date of 74.2 payment. 74.3 (b) The written application must be on a form prescribed by 74.4 the chief administrative officer of the applicable retirement 74.5 plan. 74.6 (c) If the retired member dies before the payment provided 74.7 for in paragraph (a) is made, the amount is payable, upon 74.8 written application, to the deceased person's surviving spouse, 74.9 or if none, to the deceased person's designated beneficiary, or 74.10 if none, to the deceased person's estate. 74.11 (d) In lieu of the direct payment of the person's amount 74.12 under subdivision 2, on or after the payment date under 74.13 paragraph (a), if the federal Internal Revenue Code so permits, 74.14 the retired member may elect to have all or any portion of the 74.15 payment amount under this section paid in the form of a direct 74.16 rollover to an eligible retirement plan as defined in section 74.17 402(c) of the federal Internal Revenue Code that is specified by 74.18 the retired member. If the retired member dies with a balance 74.19 remaining payable under this section, the surviving spouse of 74.20 the retired member, or if none, the deceased person's designated 74.21 beneficiary, or if none, the administrator of the deceased 74.22 person's estate may elect a direct rollover under this paragraph. 74.23 Sec. 8. Minnesota Statutes 2004, section 422A.01, 74.24 subdivision 6, is amended to read: 74.25 Subd. 6. [PRESENT WORTH OR PRESENT VALUE.] "Present worth" 74.26 or "present value" means that the present amount of money if 74.27 increased at the applicable postretirement or preretirement 74.28 interest rate assumption specified in section 356.215, 74.29 subdivision 8, and based on the mortality table adopted by the 74.30 board of trustees based on the experience of the fund as 74.31 recommended by the actuary retainedby the Legislative74.32Commission on Pensions and Retirementunder section 356.214, and 74.33 approved under section 356.215, subdivision 18, will at 74.34 retirement equal the actuarial accrued liability of the annuity 74.35 already earned. 74.36 Sec. 9. Minnesota Statutes 2004, section 490.121, 75.1 subdivision 20, is amended to read: 75.2 Subd. 20. [ACTUARIAL EQUIVALENT.] "Actuarial equivalent" 75.3 means the condition of one annuity or benefit having an equal 75.4 actuarial present value as another annuity or benefit, 75.5 determined as of a given date with each actuarial present value 75.6 based on the appropriate mortality table adopted by the board of 75.7trusteesdirectors of the Minnesota State Retirement System 75.8 based on the experience of the fund as recommended by 75.9 thecommission-retainedactuary retained under section 356.214, 75.10 and approved under section 356.215, subdivision 18, and using 75.11 the applicable preretirement or postretirement interest rate 75.12 assumption specified in section 356.215, subdivision 8. 75.13 Sec. 10. [EFFECTIVE DATE.] 75.14 (a) Sections 1 to 5, 8, and 9 are effective on July 1, 2005. 75.15 (b) Section 6 is effective the day following final 75.16 enactment and applies to annual financial reporting occurring on 75.17 or after June 30, 2005. 75.18 (c) Section 4 is effective on the day following final 75.19 enactment. 75.20 (d) Section 7 is effective on July 1, 2005, and applies to 75.21 retired members with an amount in a reemployed annuitant's 75.22 account on or after that date. 75.23 ARTICLE 5 75.24 MEMBERSHIP INCLUSIONS 75.25 AND EXCLUSIONS 75.26 Section 1. Minnesota Statutes 2004, section 69.011, is 75.27 amended by adding a subdivision to read: 75.28 Subd. 2c. [INELIGIBILITY OF CERTAIN POLICE OFFICERS.] A 75.29 police officer employed by the University of Minnesota who is 75.30 required by the Board of Regents to be a member of the 75.31 University of Minnesota faculty retirement plan is not eligible 75.32 to be included in any police state-aid certification under this 75.33 section. 75.34 Sec. 2. Minnesota Statutes 2004, section 352.01, 75.35 subdivision 2a, is amended to read: 75.36 Subd. 2a. [INCLUDED EMPLOYEES.] (a) "State employee" 76.1 includes: 76.2 (1) employees of the Minnesota Historical Society; 76.3 (2) employees of the State Horticultural Society; 76.4 (3) employees of the Disabled American Veterans, Department 76.5 of Minnesota, Veterans of Foreign Wars, Department of Minnesota, 76.6 if employed before July 1, 1963; 76.7 (4) employees of the Minnesota Crop Improvement 76.8 Association; 76.9 (5) employees of the adjutant general who are paid from 76.10 federal funds and who are not covered by any federal civilian 76.11 employees retirement system; 76.12 (6) employees of the Minnesota State Colleges and 76.13 Universities employed under the university or college activities 76.14 program; 76.15 (7) currently contributing employees covered by the system 76.16 who are temporarily employed by the legislature during a 76.17 legislative session or any currently contributing employee 76.18 employed for any special service as defined in subdivision 2b, 76.19 clause (8); 76.20 (8) employees of the Armory Building Commission; 76.21 (9) employees of the legislature appointed without a limit 76.22 on the duration of their employment and persons employed or 76.23 designated by the legislature or by a legislative committee or 76.24 commission or other competent authority to conduct a special 76.25 inquiry, investigation, examination, or installation; 76.26 (10) trainees who are employed on a full-time established 76.27 training program performing the duties of the classified 76.28 position for which they will be eligible to receive immediate 76.29 appointment at the completion of the training period; 76.30 (11) employees of the Minnesota Safety Council; 76.31 (12) any employees on authorized leave of absence from the 76.32 Transit Operating Division of the former Metropolitan Transit 76.33 Commission who are employed by the labor organization which is 76.34 the exclusive bargaining agent representing employees of the 76.35 Transit Operating Division; 76.36 (13) employees of the Metropolitan Council, Metropolitan 77.1 Parks and Open Space Commission, Metropolitan Sports Facilities 77.2 Commission, Metropolitan Mosquito Control Commission, or 77.3 Metropolitan Radio Board unless excluded or covered by another 77.4 public pension fund or plan under section 473.415, subdivision 77.5 3; 77.6 (14) judges of the Tax Court; 77.7 (15) personnel employed on June 30, 1992, by the University 77.8 of Minnesota in the management, operation, or maintenance of its 77.9 heating plant facilities, whose employment transfers to an 77.10 employer assuming operation of the heating plant facilities, so 77.11 long as the person is employed at the University of Minnesota 77.12 heating plant by that employer or by its successor organization; 77.13and77.14 (16) seasonal help in the classified service employed by 77.15 the Department of Revenue; and 77.16 (17) persons employed by the Department of Commerce as a 77.17 peace officer in the Insurance Fraud Prevention Division under 77.18 section 45.0135 who have attained the mandatory retirement age 77.19 specified in section 43A.34, subdivision 4. 77.20 (b) Employees specified in paragraph (a), clause (15), are 77.21 included employees under paragraph (a) if employer and employee 77.22 contributions are made in a timely manner in the amounts 77.23 required by section 352.04. Employee contributions must be 77.24 deducted from salary. Employer contributions are the sole 77.25 obligation of the employer assuming operation of the University 77.26 of Minnesota heating plant facilities or any successor 77.27 organizations to that employer. 77.28 Sec. 3. Minnesota Statutes 2004, section 352.91, is 77.29 amended by adding a subdivision to read: 77.30 Subd. 4a. [PROCESS FOR EVALUATING AND RECOMMENDING 77.31 POTENTIAL EMPLOYMENT POSITIONS FOR MEMBERSHIP INCLUSION.] (a) 77.32 The Department of Corrections and the Department of Human 77.33 Services must establish a procedure for evaluating periodic 77.34 requests by department employees for qualification for 77.35 recommendation by the commissioner for inclusion of the 77.36 employment position in the correctional facility or human 78.1 services facility in the correctional retirement plan and for 78.2 periodically determining employment positions that no longer 78.3 qualify for continued correctional retirement plan coverage. 78.4 (b) The procedure must provide for an evaluation of the 78.5 extent of the employee's working time spent in direct contact 78.6 with patients or inmates, the extent of the physical hazard that 78.7 the employee is routinely subjected to in the course of 78.8 employment, and the extent of intervention routinely expected of 78.9 the employee in the event of a facility incident. The 78.10 percentage of routine direct contact with inmates or patients 78.11 may not be less than 75 percent. 78.12 (c) The applicable commissioner shall notify the employee 78.13 of the determination of the appropriateness of recommending the 78.14 employment position for inclusion in the correctional retirement 78.15 plan, if the evaluation procedure results in a finding that the 78.16 employee: 78.17 (1) routinely spends 75 percent of the employee's time in 78.18 direct contact with inmates or patients; and 78.19 (2) is regularly engaged in the rehabilitation, treatment, 78.20 custody, or supervision of inmates or patients. 78.21 (d) After providing the affected employee an opportunity to 78.22 dispute or clarify any evaluation determinations, if the 78.23 commissioner determines that the employment position is 78.24 appropriate for inclusion in the correctional retirement plan, 78.25 the commissioner shall forward that recommendation and 78.26 supporting documentation to the chair of the Legislative 78.27 Commission on Pensions and Retirement, the chair of the State 78.28 and Local Governmental Operations Committee of the senate, the 78.29 chair of the Governmental Operations and Veterans Affairs Policy 78.30 Committee of the house of representatives, and the executive 78.31 director of the Legislative Commission on Pensions and 78.32 Retirement in the form of the appropriate proposed legislation. 78.33 The recommendation must be forwarded to the legislature before 78.34 January 15 for the recommendation to be considered in that 78.35 year's legislative session. 78.36 Sec. 4. Minnesota Statutes 2004, section 352B.01, 79.1 subdivision 2, is amended to read: 79.2 Subd. 2. [MEMBER.] "Member" means: 79.3 (1) a State Patrol member currently employed after June 30, 79.4 1943, under section 299D.03 by the state, who is a peace officer 79.5 under section 626.84, and whose salary or compensation is paid 79.6 out of state funds; 79.7 (2) a conservation officer employed under section 97A.201, 79.8 currently employed by the state, whose salary or compensation is 79.9 paid out of state funds; 79.10 (3) a crime bureau officer who was employed by the crime 79.11 bureau and was a member of the Highway Patrolmen's retirement 79.12 fund on July 1, 1978, whether or not that person has the power 79.13 of arrest by warrant after that date, or who is employed as 79.14 police personnel, with powers of arrest by warrant under section 79.15 299C.04, and who is currently employed by the state, and whose 79.16 salary or compensation is paid out of state funds; 79.17 (4) a person who is employed by the state in the Department 79.18 of Public Safety in a data processing management position with 79.19 salary or compensation paid from state funds, who was a crime 79.20 bureau officer covered by the State Patrol retirement plan on 79.21 August 15, 1987, and who was initially hired in the data 79.22 processing management position within the department during 79.23 September 1987, or January 1988, with membership continuing for 79.24 the duration of the person's employment in that position, 79.25 whether or not the person has the power of arrest by warrant 79.26 after August 15, 1987; 79.27 (5) a public safety employee defined as a peace officer in 79.28 section 626.84, subdivision 1, paragraph (c), and employed with 79.29 the Division of Alcohol and Gambling Enforcement under section 79.30 299L.01;and79.31 (6) a Fugitive Apprehension Unit officer after October 31, 79.32 2000, employed by the Office of Special Investigations of the 79.33 Department of Corrections who is a peace officer under section 79.34 626.84; and 79.35 (7) an employee of the Department of Commerce defined as a 79.36 peace officer in section 626.84, subdivision 1, paragraph (c), 80.1 who is employed by the Division of Insurance Fraud Prevention 80.2 under section 45.0135 after January 1, 2005, and who has not 80.3 attained the mandatory retirement age specified in section 80.4 43A.34, subdivision 4. 80.5 Sec. 5. Minnesota Statutes 2004, section 353.01, 80.6 subdivision 6, is amended to read: 80.7 Subd. 6. [GOVERNMENTAL SUBDIVISION.] (a) "Governmental 80.8 subdivision" means a county, city, town, school district within 80.9 this state, or a department or unit of state government, or any 80.10 public body whose revenues are derived from taxation, fees, 80.11 assessments or from other sources. 80.12 (b) Governmental subdivision also means the Public 80.13 Employees Retirement Association, the League of Minnesota 80.14 Cities, the Association of Metropolitan Municipalities, public 80.15 hospitals owned or operated by, or an integral part of, a 80.16 governmental subdivision or governmental subdivisions, the 80.17 Association of Minnesota Counties, the Metropolitan Intercounty 80.18 Association, the Minnesota Municipal Utilities Association, the 80.19 Metropolitan Airports Commission, the University of Minnesota 80.20 with respect to police officers covered by the public employees 80.21 police and fire retirement plan, the Minneapolis Employees 80.22 Retirement Fund for employment initially commenced after June 80.23 30, 1979, the Range Association of Municipalities and Schools, 80.24 soil and water conservation districts, economic development 80.25 authorities created or operating under sections 469.090 to 80.26 469.108, the Port Authority of the city of St. Paul, the Spring 80.27 Lake Park Fire Department, incorporated, the Lake Johanna 80.28 Volunteer Fire Department, incorporated, the Red Wing 80.29 Environmental Learning Center, and the Dakota County 80.30 Agricultural Society. 80.31 (c) Governmental subdivision does not mean any municipal 80.32 housing and redevelopment authority organized under the 80.33 provisions of sections 469.001 to 469.047; or any port authority 80.34 organized under sections 469.048 to 469.089 other than the Port 80.35 Authority of the city of St. Paul; or any hospital district 80.36 organized or reorganized prior to July 1, 1975, under sections 81.1 447.31 to 447.37 or the successor of the district, nor the 81.2 Minneapolis Community Development Agency. 81.3 Sec. 6. Minnesota Statutes 2004, section 353.64, is 81.4 amended by adding a subdivision to read: 81.5 Subd. 6a. [UNIVERSITY OF MINNESOTA POLICE OFFICERS; 81.6 INCLUSIONS AND EXCLUSIONS.] (a) Unless paragraph (b) applies, a 81.7 person who is employed as a peace officer by the University of 81.8 Minnesota at any campus or facility of the university, who is 81.9 required by the university to be and is licensed as a peace 81.10 officer by the Minnesota Peace Officer Standards and Training 81.11 Board under sections 626.84 to 626.863, and who has the full 81.12 power of arrest is a member of the public employees police and 81.13 fire retirement plan. 81.14 (b) A police officer employed by the University of 81.15 Minnesota who is required by the Board of Regents to contribute 81.16 to the University of Minnesota faculty retirement plan is not 81.17 eligible to be a member of the public employees police and fire 81.18 retirement plan. 81.19 Sec. 7. Minnesota Statutes 2004, section 354B.21, 81.20 subdivision 2, is amended to read: 81.21 Subd. 2. [COVERAGE; ELECTION.] (a)An eligible person is81.22entitled to elect coverage by the plan. If the eligible person81.23does not make a timely election of coverage by the plan, the81.24person has the coverage specified in subdivision 3.81.25(b)For eligible persons who were employed by the former 81.26 state university system or the former community college system 81.27 before May 1, 1995, the person has the retirement coverage that 81.28 the person had for employment immediately before May 1, 1995. 81.29(c)(b) For all other eligible persons,the election of81.30coverage must be made within 90 days of May 10, 1995, or 90 days81.31of receiving notice from the employer of the options available81.32under this section, whichever occurs laterunless otherwise 81.33 specified in this section, the eligible person is authorized to 81.34 elect prospective Teachers Retirement Association plan coverage 81.35 rather than coverage by the plan established by this chapter. 81.36 The election of prospective Teachers Retirement Association plan 82.1 coverage shall be made within one year of commencing eligible 82.2 Minnesota State Colleges and Universities system employment. If 82.3 an election is not made within the specified election period due 82.4 to a termination of Minnesota State Colleges and Universities 82.5 system employment, an election may be made within 90 days of 82.6 returning to eligible Minnesota State Colleges and Universities 82.7 system employment. All elections are irrevocable. Prior to 82.8 making an election the eligible person shall be covered by the 82.9 plan indicated as default coverage under subdivision 3. 82.10 (c) A purchase of service credit in the Teachers Retirement 82.11 Association plan for any period or periods of Minnesota State 82.12 Colleges and Universities system employment occurring prior to 82.13 the election under paragraph (b) is prohibited. 82.14 Sec. 8. Minnesota Statutes 2004, section 354B.21, 82.15 subdivision 3, is amended to read: 82.16 Subd. 3. [DEFAULT COVERAGE.] (a) Prior to making an 82.17 election under subdivision 2, or if an eligible person fails to 82.18 elect coverage by the plan under subdivision 2 or if the person 82.19 fails to make a timely election, the following retirement 82.20 coverage applies: 82.21 (1) for employees of the board who are employed in faculty 82.22 positions in the technical colleges, in the state universities 82.23 or in the community colleges, the retirement coverage is by the 82.24 plan established by this chapter; 82.25 (2) for employees of the board who are employed in faculty 82.26 positions in the technical colleges, the retirement coverage is 82.27 by the plan established by this chapter unless on June 30, 1997, 82.28 the employee was a member of the Teachers Retirement Association 82.29 established under chapter 354 and then the retirement coverage 82.30 is by the Teachers Retirement Association, or, unless the 82.31 employee was a member of a first class city teacher retirement 82.32 fund established under chapter 354A on June 30, 1995, and then 82.33 the retirement coverage is by the Duluth Teachers Retirement 82.34 Fund Association if the person was a member of that plan on June 82.35 30, 1995, or the Minneapolis Teachers Retirement Fund 82.36 Association if the person was a member of that plan on June 30, 83.1 1995, or the St. Paul Teachers Retirement Fund Association if 83.2 the person was a member of that plan on June 30, 1995; and 83.3 (3) for employees of the board who are employed in eligible 83.4 unclassified administrative positions, the retirement coverage 83.5 is by the plan established by this chapter. 83.6 (b) If an employee fails to correctly certify prior 83.7 membership in the Teachers Retirement Association to the 83.8 Minnesota State colleges and Universities system, the system 83.9 shall not pay interest on employee contributions, employer 83.10 contributions, and additional employer contributions to the 83.11 Teachers Retirement Association under section 354.52, 83.12 subdivision 4. 83.13 Sec. 9. [EFFECTIVE DATE.] 83.14 (a) Sections 1, 3, 5, and 6 are effective July 1, 2005. 83.15 (b) Sections 2 and 4 are effective retroactively from 83.16 January 1, 2005. 83.17 (c) Sections 7 and 8 are effective on the day following 83.18 final enactment. 83.19 ARTICLE 6 83.20 RETIREMENT CONTRIBUTIONS 83.21 Section 1. Minnesota Statutes 2004, section 353.27, 83.22 subdivision 2, is amended to read: 83.23 Subd. 2. [EMPLOYEE CONTRIBUTION.] (a) The employee 83.24 contribution is the following applicable percentage of the total 83.25 salary amount for a "basic member" and for a "coordinated 83.26 member": 83.27 Basic Coordinated 83.28 Program Program 83.29Before January 1, 20028.754.7583.30Effective January 1, 200283.31 Effective before January 1, 2006 9.10 5.10 83.32 Effective January 1, 2006 9.10 5.50 83.33 Effective January 1, 2007 9.10 5.75 83.34 Effective January 1, 2008 9.10 6.00 plus any 83.35 contribution 83.36 rate adjustment 84.1 under 84.2 subdivision 3b 84.3 (b) These contributions must be made by deduction from 84.4 salary as defined in section 353.01, subdivision 10, in the 84.5 manner provided in subdivision 4.WhereIf any portion of a 84.6 member's salary is paid from other than public funds,suchthe 84.7 member's employee contribution must be based on the total salary 84.8 received by the member from all sources. 84.9 Sec. 2. Minnesota Statutes 2004, section 353.27, 84.10 subdivision 3, is amended to read: 84.11 Subd. 3. [EMPLOYER CONTRIBUTION.] (a) The employer 84.12 contribution is the following applicable percentage of the total 84.13 salary amount for "basic members" and for "coordinated members": 84.14 Basic Coordinated 84.15 Program Program 84.16Before January 1, 20028.754.7584.17Effective January 1, 200284.18 Effective before January 1, 2006 9.10 5.10 84.19 Effective January 1, 2006 9.10 5.50 84.20 Effective January 1, 2007 9.10 5.75 84.21 Effective January 1, 2008 9.10 6.00 plus any 84.22 contribution 84.23 rate adjustment 84.24 under 84.25 subdivision 3b 84.26 (b) This contribution must be made from funds available to 84.27 the employing subdivision by the means and in the manner 84.28 provided in section 353.28. 84.29 Sec. 3. Minnesota Statutes 2004, section 353.27, 84.30 subdivision 3a, is amended to read: 84.31 Subd. 3a. [ADDITIONAL EMPLOYER CONTRIBUTION.] (a) An 84.32 additional employer contribution must be made equal to(1) 2.6884.33percent ofthe following applicable percentage of the total 84.34 salaryof eachamount for "basicmembermembers";and(2)84.35.43 percent of the total salary of eachfor "coordinatedmember.84.36 members": 85.1 Basic Coordinated 85.2 Program Program 85.3 Effective before January 1, 2006 2.68 .43 85.4 Effective January 1, 2006 2.68 .50 85.5 Effective January 1, 2009 2.68 .75 85.6 Effective January 1, 2010 2.68 1.00 85.7 These contributions must be made from funds available to 85.8 the employing subdivision by the means and in the manner 85.9 provided in section 353.28. 85.10 (b) The coordinated program contribution rates set forth in 85.11 paragraph (a) effective for January 1, 2009, or January 1, 2010, 85.12 must not be implemented if, following receipt of the July 1, 85.13 2008, or July 1, 2009, annual actuarial valuation reports under 85.14 section 356.215, respectively, the actuarially required 85.15 contributions are equal to or less than the total rates under 85.16 this section in effect as of January 1, 2008. 85.17 (c) This subdivision is repealed once the actuarial value 85.18 of the assets of the plan equal or exceed the actuarial accrued 85.19 liability of the plan as determined by the actuary retained by 85.20 the Legislative Commission on Pensions and Retirement under 85.21 section 356.215. The repeal is effective on the first day of 85.22 the first full pay period occurring after March 31 of the 85.23 calendar year following the issuance of the actuarial valuation 85.24 upon which the repeal is based. 85.25 Sec. 4. Minnesota Statutes 2004, section 353.27, is 85.26 amended by adding a subdivision to read: 85.27 Subd. 3b. [CHANGE IN EMPLOYEE AND EMPLOYER CONTRIBUTIONS 85.28 IN CERTAIN INSTANCES.] (a) For purposes of this section, a 85.29 contribution sufficiency exists if the total of the employee 85.30 contribution under subdivision 2, the employer contribution 85.31 under subdivision 3, the additional employer contribution under 85.32 subdivision 3a, and any additional contribution previously 85.33 imposed under this subdivision exceeds the total of the normal 85.34 cost, the administrative expenses, and the amortization 85.35 contribution of the retirement plan as reported in the most 85.36 recent actuarial valuation of the retirement plan prepared by 86.1 the actuary retained under section 356.214 and prepared under 86.2 section 356.215 and the standards for actuarial work of the 86.3 Legislative Commission on Pensions and Retirement. For purposes 86.4 of this section, a contribution deficiency exists if the total 86.5 of the employee contributions under subdivision 2, the employer 86.6 contributions under subdivision 3, the additional employer 86.7 contribution under subdivision 3a, and any additional 86.8 contribution previously imposed under this subdivision is less 86.9 than the total of the normal cost, the administrative expenses, 86.10 and the amortization contribution of the retirement plan as 86.11 reported in the most recent actuarial valuation of the 86.12 retirement plan prepared by the actuary retained under section 86.13 356.214 and prepared under section 356.215 and the standards for 86.14 actuarial work of the Legislative Commission on Pensions and 86.15 Retirement. 86.16 (b) Employee and employer contributions under subdivisions 86.17 2 and 3 must be adjusted: 86.18 (1) if, after July 1, 2010, the regular actuarial 86.19 valuations of the general employees retirement plan of the 86.20 Public Employees Retirement Association under section 356.215 86.21 indicate that there is a contribution sufficiency under 86.22 paragraph (a) equal to or greater than 0.5 percent of covered 86.23 payroll for two consecutive years, the coordinated program 86.24 employee and employer contribution rates must be decreased as 86.25 determined under paragraph (c) to a level such that the 86.26 sufficiency equals no more than 0.25 percent of covered payroll 86.27 based on the most recent actuarial valuation; or 86.28 (2) if, after July 1, 2010, the regular actuarial 86.29 valuations of the general employees retirement plan of the 86.30 Public Employees Retirement Association under section 356.215 86.31 indicate that there is a deficiency equal to or greater than 0.5 86.32 percent of covered payroll for two consecutive years, the 86.33 coordinated program employee and employer contribution rates 86.34 must be increased as determined under paragraph (c) to a level 86.35 such that no deficiency exists based on the most recent 86.36 actuarial valuation. 87.1 (c) The contribution rate increase or decrease must be 87.2 determined by the executive director of the Public Employees 87.3 Retirement Association, must be reported to the chair and the 87.4 executive director of the Legislative Commission on Pensions and 87.5 Retirement on or before the next February 1, and, if the 87.6 Legislative Commission on Pensions and Retirement does not 87.7 recommend against the rate change or does not recommend a 87.8 modification in the rate change, is effective on the next July 1 87.9 following the determination by the executive director that a 87.10 contribution deficiency or sufficiency has existed for two 87.11 consecutive fiscal years based on the most recent actuarial 87.12 valuations under section 356.215. If the actuarially required 87.13 contribution exceeds or is less than the total support provided 87.14 by the combined employee and employer contribution rates by more 87.15 than 0.5 percent of covered payroll, the coordinated program 87.16 employee and employer contribution rates must be adjusted 87.17 incrementally over one or more years to a level such that there 87.18 remains a contribution sufficiency of no more than 0.25 percent 87.19 of covered payroll. 87.20 (d) No incremental adjustment may exceed 0.25 percent for 87.21 either the coordinated program employee and employer 87.22 contribution rates per year in which any adjustment is 87.23 implemented. A contribution rate adjustment under this 87.24 subdivision must not be made until at least two years have 87.25 passed since fully implementing a previous adjustment under this 87.26 subdivision. 87.27 Sec. 5. Minnesota Statutes 2004, section 353.28, 87.28 subdivision 5, is amended to read: 87.29 Subd. 5. [INTERESTCHARGESCHARGEABLE ON AMOUNTS DUE.] Any 87.30 amount due under this section or section 353.27, subdivision 4, 87.31 is payable with interest at an annual compound rate of 8.5 87.32 percentcompounded annuallyfrom the date due until the date 87.33 payment is received by the association, with a minimum interest 87.34 charge of $10.Interest for past due payments of excess police87.35state aid under section 69.031, subdivision 5, must be charged87.36at an annual rate of 8.5 percent compounded annually.88.1 Sec. 6. Minnesota Statutes 2004, section 353.28, 88.2 subdivision 6, is amended to read: 88.3 Subd. 6. [FAILURE TO PAYCOLLECTION OF UNPAID AMOUNTS.] (a) 88.4 Ifthea governmental subdivision which receives the direct 88.5 proceeds of property taxation fails to payamountsan amount due 88.6 underchapterschapter 353, 353A, 353B, 353C,andor 353Dor88.7fails to make payments of excess police state aid to the public88.8employees police and fire fund under section 69.031, subdivision88.95, the executive director shall certifythose amountsthe amount 88.10 to the governmental subdivision for payment. If the 88.11 governmental subdivision fails to remit the sum so due in a 88.12 timely fashion, the executive director shall certifyamountsthe 88.13 amount to the applicable county auditor for collection. The 88.14 county auditor shall collectsuch amountsthe amount out of the 88.15 revenue of the governmental subdivision, or shall addthemthe 88.16 amount to the levy of the governmental subdivision and make 88.17 payment directly to the association. This taxshallmust be 88.18 levied, collected, and apportioned in the manner that other 88.19 taxes are levied, collected, and apportioned. 88.20 (b) If a governmental subdivision which is not funded 88.21 directly from the proceeds of property taxation fails to pay an 88.22 amount due under this chapter, the executive director shall 88.23 certify the amount to the governmental subdivision for payment. 88.24 If the governmental subdivision fails to pay the amount for a 88.25 period of 60 days after certification, the executive director 88.26 shall certify the amount to the commissioner of finance, who 88.27 shall deduct the amount from any subsequent state-aid payment or 88.28 state appropriation amount applicable to the governmental 88.29 subdivision. 88.30 Sec. 7. Minnesota Statutes 2004, section 353.65, 88.31 subdivision 2, is amended to read: 88.32 Subd. 2. [EMPLOYEE CONTRIBUTION RATE.] (a) The employee 88.33 contribution is an amount equal to6.2the percent of the total 88.34 salary of the member specified in paragraph (b). This 88.35 contribution must be made by deduction from salary in the manner 88.36 provided in subdivision 4. Where any portion of a member's 89.1 salary is paid from other than public funds, the member's 89.2 employee contribution is based on the total salary received from 89.3 all sources. 89.4 (b) For calendar year 2006, the employee contribution rate 89.5 is 7.0 percent. For calendar year 2007, the employee 89.6 contribution rate is 7.8 percent. For calendar year 2008, the 89.7 employee contribution rate is 8.6 percent. For calendar year 89.8 2009 and thereafter, the employee contribution rate is 9.4 89.9 percent. 89.10 Sec. 8. Minnesota Statutes 2004, section 353.65, 89.11 subdivision 3, is amended to read: 89.12 Subd. 3. [EMPLOYER CONTRIBUTION RATE.] (a) The employer 89.13 contribution shall be an amount equal to9.3the percent of the 89.14 total salary of every member as specified in paragraph (b). 89.15 This contribution shall be made from funds available to the 89.16 employing subdivision by the means and in the manner provided in 89.17 section 353.28. 89.18 (b) For calendar year 2006, the employer contribution rate 89.19 is 10.5 percent. For calendar year 2007, the employer 89.20 contribution rate is 11.7 percent. For calendar year 2008, the 89.21 employer contribution rate is 12.9 percent. For calendar year 89.22 2009 and thereafter, the employer contribution rate is 14.1 89.23 percent. 89.24 Sec. 9. [PUBLIC EMPLOYEES RETIREMENT ASSOCIATION; INTEREST 89.25 ON SERVICE CREDIT PURCHASE PAYMENT RETURN.] 89.26 If a former employee of the Minneapolis Community 89.27 Development Agency made a prior service credit purchase payment 89.28 under Minnesota Statutes 2002, section 356.55, in an amount that 89.29 is greater than the actually required payment amount because of 89.30 the use of an inaccurate salary figure or other similar 89.31 reporting or clerical error, the general employees retirement 89.32 plan of the Public Employees Retirement Association may pay 89.33 interest on the overage amount at an annual compound rate of six 89.34 percent per year. 89.35 Sec. 10. [RETURN OF PRIOR SERVICE CREDIT PURCHASE PAYMENT 89.36 FOR CERTAIN MINNEAPOLIS CITY EMPLOYEES.] 90.1 (a) An eligible person, upon written application, may 90.2 receive a return of a prior service credit purchase payment 90.3 under Minnesota Statutes 2002, section 356.55, plus interest on 90.4 the amount at an annual compound rate of six percent per year. 90.5 The return amount and interest must be made in an 90.6 institution-to-institution transfer to a federal tax qualified 90.7 retirement plan or account and may not be paid directly to an 90.8 individual. 90.9 (b) An eligible person is a person who was an employee of 90.10 the Minneapolis Community Development Agency and made a payment 90.11 for the purchase of prior service credit under Laws 2003, 90.12 chapter 127, article 12, section 31, subdivision 4, and 90.13 Minnesota Statutes 2002, section 356.55, in an erroneous amount 90.14 because of an inaccurate salary figure supplied by the employing 90.15 agency. 90.16 Sec. 11. [EFFECTIVE DATE.] 90.17 (a) Sections 5 and 6 are effective July 1, 2005. 90.18 (b) Sections 9 and 10 are effective on the day following 90.19 final enactment. 90.20 (c) Sections 1 to 4 and 7 and 8 are effective on January 1, 90.21 2006. 90.22 (d) Section 10 expires on June 30, 2005. 90.23 ARTICLE 7 90.24 PENSION BENEFITS UPON PRIVATIZATION 90.25 Section 1. Minnesota Statutes 2004, section 353F.02, 90.26 subdivision 4, is amended to read: 90.27 Subd. 4. [MEDICAL FACILITY.] "Medical facility" means: 90.28 (1) Bridges Medical Services; 90.29 (2) the Fair Oaks Lodge, Wadena; 90.30(2)(3) the Glencoe Area Health Center; 90.31(3)(4) the Hutchinson Area Health Care; 90.32 (5) the Kanabec Hospital; 90.33(4)(6) the Luverne Public Hospital; 90.34 (7) the Northfield Hospital; 90.35(5)(8) the RenVilla Nursing Home; 90.36(6)(9) the Renville County Hospital in Olivia; 91.1(7)(10) the St. Peter Community Healthcare Center; and 91.2(8)(11) the Waconia-Ridgeview Medical Center. 91.3 Sec. 2. Minnesota Statutes 2004, section 471A.10, is 91.4 amended to read: 91.5 471A.10 [PUBLIC EMPLOYEE LAWS; SALE OR LEASE OF EXISTING 91.6 FACILITY.] 91.7 (a) Unless expressly provided therein, and except as 91.8 provided in this section, no state law, charter provision, or 91.9 ordinance of a municipality relating to public employees shall 91.10 apply to a person solely by reason of that person's employment 91.11 by a private vendor in connection with services rendered under a 91.12 service contract. 91.13 (b) A private vendor purchasing or leasing existing related 91.14 facilities from a municipality or operating or maintaining the 91.15 facility shall recognize all exclusive bargaining 91.16 representatives and existing labor agreements and those 91.17 agreements shall remain in force until they expire by their 91.18 terms. Personswho are notwho were employed by a municipality 91.19 in a related facilityat the time ofand who were members of the 91.20 Public Employees Retirement Association general plan due to that 91.21 employment are not permitted to remain as active members of the 91.22 plan following a lease or purchase of the facility bythea 91.23 private vendorare not "public employees" within the meaning of91.24the Public Employees Retirement Act, chapter 353. Persons91.25employed by a municipality in a related facility at the time of91.26a lease or purchase of the facility by a private vendor shall91.27continue to be considered to be "public employees" within the91.28meaning of the Public Employees Retirement Act, chapter 353, but91.29may elect to terminate their participation in the Public91.30Employees Retirement Association as provided in this section.91.31Each such employee may exercise the election annually on the91.32anniversary of the person's initial employment by the91.33municipality. An employee electing to terminate participation91.34in the association is entitled to benefits that the employee91.35would be entitled to if terminating public employment and may91.36participate in a retirement program established by the private92.1vendor. 92.2 Sec. 3. Laws 2004, chapter 267, article 12, section 4, is 92.3 amended to read: 92.4 Sec. 4. [EFFECTIVE DATE.] 92.5 (a) Section 1, relating to the Fair Oaks Lodge, Wadena, is 92.6 effective upon the latter of: 92.7 (1) the day after the governing body of Todd County and its 92.8 chief clerical officer timely complete their compliance with 92.9 Minnesota Statutes, section 645.021, subdivisions 2 and 3; and 92.10 (2) the day after the governing body of Wadena County and 92.11 its chief clerical officer timely complete their compliance with 92.12 Minnesota Statutes, section 645.021, subdivisions 2 and 3. 92.13 (b) Section 1, relating to the RenVilla Nursing Home, is 92.14 effective upon the latter of: 92.15 (1) the day after the governing body of the city of 92.16 Renville and its chief clerical officer timely complete their 92.17 compliance with Minnesota Statutes, section 645.021, 92.18 subdivisions 2 and 3, except that the certificate of approval 92.19 must be filed before January 1, 2006; and 92.20 (2) the first day of the month next following certification 92.21 to the governing body of the city of Renville by the executive 92.22 director of the Public Employees Retirement Association that the 92.23 actuarial accrued liability of the special benefit coverage 92.24 proposed for extension to the privatized RenVilla Nursing Home 92.25 employees under section 1 does not exceed the actuarial gain 92.26 otherwise to be accrued by the Public Employees Retirement 92.27 Association, as calculated by the consulting actuary retained by 92.28 the Legislative Commission on Pensions and Retirement, or the 92.29 actuary retained under Minnesota Statutes, section 356.214, 92.30 whichever is applicable. 92.31 (c) The cost of the actuarial calculations must be borne by 92.32 the city of Renville or the purchaser of the RenVilla Nursing 92.33 Home. 92.34 (d) Section 1, relating to the St. Peter Community 92.35 Healthcare Center, is effective upon the latter of: 92.36 (1) the day after the governing body of the city of St. 93.1 Peter and its chief clerical officer timely complete their 93.2 compliance with Minnesota Statutes, section 645.021, 93.3 subdivisions 2 and 3; and 93.4 (2) the first day of the month next following certification 93.5 to the governing body of the city of St. Peter by the executive 93.6 director of the Public Employees Retirement Association that the 93.7 actuarial accrued liability of the special benefit coverage 93.8 proposed for extension to the privatized St. Peter Community 93.9 Healthcare Center employees under section 1 does not exceed the 93.10 actuarial gain otherwise to be accrued by the Public Employees 93.11 Retirement Association, as calculated by the consulting actuary 93.12 retained by the Legislative Commission on Pensions and 93.13 Retirement, or the actuary retained under Minnesota Statutes, 93.14 section 356.214, whichever is applicable. 93.15 (e) The cost of the actuarial calculations must be borne by 93.16 the city of St. Peter or the purchaser of the St. Peter 93.17 Community Healthcare Center. 93.18 (f) If the required actions under paragraphs (b) and (c) 93.19 occur, section 1 applies retroactively to the RenVilla Nursing 93.20 Home as of the date of privatization. 93.21 (g) If the required actions under paragraph (a) occur, 93.22 section 1 applies retroactively to Fair Oaks Lodge, Wadena, as 93.23 of January 1, 2004. 93.24 (h) Sections 2 and 3 are effective on the day following 93.25 final enactment. 93.26 Sec. 4. [EFFECTIVE DATE.] 93.27 (a) Section 1, relating to Bridges Medical Services, is 93.28 effective upon the later of: 93.29 (1) the day after the governing body of the city of Ada and 93.30 its chief clerical officer timely complete their compliance with 93.31 Minnesota Statutes, section 645.021, subdivisions 2 and 3; and 93.32 (2) the first day of the month next following certification 93.33 to the governing body of the city of Ada by the executive 93.34 director of the Public Employees Retirement Association that the 93.35 actuarial accrued liability of the special benefit coverage 93.36 proposed for extension to the privatized Bridges Medical 94.1 Services employees under section 1 does not exceed the actuarial 94.2 gain otherwise to be accrued by the Public Employees Retirement 94.3 Association, as calculated by the consulting actuary retained 94.4 under Minnesota Statutes, section 356.214. 94.5 (b) Section 1, relating to the Hutchinson Area Health Care, 94.6 is effective upon the later of: 94.7 (1) the day after the governing body of the city of 94.8 Hutchinson and its chief clerical officer timely complete their 94.9 compliance with Minnesota Statutes, section 645.021, 94.10 subdivisions 2 and 3; and 94.11 (2) the first day of the month next following certification 94.12 to the governing body of the city of Hutchinson by the executive 94.13 director of the Public Employees Retirement Association that the 94.14 actuarial accrued liability of the special benefit coverage 94.15 proposed for extension to the privatized Hutchinson Area Health 94.16 Care employees under section 1 does not exceed the actuarial 94.17 gain otherwise to be accrued by the Public Employees Retirement 94.18 Association, as calculated by the consulting actuary retained by 94.19 the Legislative Commission on Pensions and Retirement. 94.20 (c) Section 1, relating to the Northfield Hospital, is 94.21 effective upon the later of: 94.22 (1) the day after the governing body of the city of 94.23 Northfield and its chief clerical officer timely complete their 94.24 compliance with Minnesota Statutes, section 645.021, 94.25 subdivisions 2 and 3; and 94.26 (2) the first day of the month next following certification 94.27 to the governing body of the city of Northfield by the executive 94.28 director of the Public Employees Retirement Association that the 94.29 actuarial accrued liability of the special benefit coverage 94.30 proposed for extension to the privatized Northfield Hospital 94.31 employees under section 1 does not exceed the actuarial gain 94.32 otherwise to be accrued by the Public Employees Retirement 94.33 Association, as calculated by the consulting actuary retained by 94.34 the Legislative Commission on Pensions and Retirement. 94.35 (d) The cost of the actuarial calculations must be borne by 94.36 the facility, the city in which the facility is located, or the 95.1 purchaser of the facility. 95.2 (e) If the required actions in paragraphs (a), (b), or (c) 95.3 and (d) occur, section 1 applies retroactively to the date of 95.4 privatization. 95.5 (f) Section 3 is effective the day following final 95.6 enactment. 95.7 (g) Section 2 is effective on the day following final 95.8 enactment and applies to privatizations occurring on or after 95.9 the effective date. 95.10 ARTICLE 8 95.11 FIRST CLASS CITY TEACHER 95.12 RETIREMENT FUND ASSOCIATIONS 95.13 Section 1. Minnesota Statutes 2004, section 354A.021, is 95.14 amended by adding a subdivision to read: 95.15 Subd. 9. [UPDATED ARTICLES OF INCORPORATION AND BYLAWS; 95.16 FILING.] (a) On or before July 1, 2006, and within six months of 95.17 the date of the approval of any amendment to the articles of 95.18 incorporation or bylaws, the chief administrative officer of 95.19 each first class city teacher retirement fund association shall 95.20 prepare and publish an updated compilation of the articles of 95.21 incorporation and the bylaws of the association. 95.22 (b) The chief administrative officer of the first class 95.23 city teacher retirement fund association must certify the 95.24 accuracy and the completeness of the compilation. 95.25 (c) The compilation of the articles of incorporation and 95.26 bylaws of a first class city teacher retirement fund association 95.27 must contain an index. 95.28 (d) The compilation must be made available to association 95.29 members and other interested parties. The association may 95.30 charge a fee for a copy that reflects the price of printing or 95.31 otherwise producing the copy. Two copies of the compilation 95.32 must be filed, without charge, by each retirement fund 95.33 association with the Legislation Commission on Pensions and 95.34 Retirement, the Legislative Reference Library, the state 95.35 auditor, the commissioner of education, the chancellor of the 95.36 Minnesota State Colleges and Universities system, and the 96.1 superintendent of the applicable school district. 96.2 (e) A first class city teacher retirement fund association 96.3 may contract with the revisor of statutes for the preparation of 96.4 the compilation. 96.5 (f) If a first class city teacher retirement fund 96.6 association makes an updated copy of its articles of 96.7 incorporation and bylaws available on its Web site, the 96.8 retirement fund association is not obligated to file a hard copy 96.9 of the documents under paragraph (d) for the applicable filing 96.10 period. 96.11 Sec. 2. [EFFECTIVE DATE.] 96.12 Section 1 is effective July 1, 2005. 96.13 ARTICLE 9 96.14 MINNESOTA STATE COLLEGES AND UNIVERSITIES 96.15 INDIVIDUAL RETIREMENT ACCOUNT PLAN CHANGES 96.16 Section 1. Minnesota Statutes 2004, section 354B.25, 96.17 subdivision 2, is amended to read: 96.18 Subd. 2. [INVESTMENT OPTIONS.] (a) The plan administrator 96.19 shall arrange for the purchase of investment products. 96.20 (b) The investment products must be purchased with 96.21 contributions under section 354B.23 or with money or assets 96.22 otherwise provided by law by authority of the board. 96.23 (c) Various investment accounts offered through the 96.24 Minnesota supplemental investment fund established under section 96.25 11A.17 and administered by the State Board of Investmentis one96.26of themay be included as investment products for the individual 96.27 retirement account plan. Direct access must also be provided to 96.28 lower expense and no-load mutual funds, as those terms are 96.29 defined by the federal Securities and Exchange Commission, 96.30 including stock funds, bond funds, and balanced funds. Other 96.31 investment products or combination of investment products which 96.32 may be included are: 96.33 (1) savings accounts at federally insured financial 96.34 institutions; 96.35 (2) life insurance contracts, fixed and variable annuity 96.36 contracts from companies that are subject to regulation by the 97.1 commerce commissioner; 97.2 (3) investment options from open-ended investment companies 97.3 registered under the federal Investment Company Act of 1940, 97.4 United States Code, title 15, sections 80a-1 to 80a-64; 97.5 (4) investment options from a firm that is a registered 97.6 investment advisor under the federal Investment Advisers Act of 97.7 1940, United States Code, title 15, sections 80b-1 to 80b-21; 97.8 and 97.9 (5) investment options of a bank as defined in United 97.10 States Code, title 15, section 80b-2, subsection (a), paragraph 97.11 2, or a bank holding company as defined in the Bank Holding 97.12 Company Act of 1956, United States Code, title 12, section 1841, 97.13 subsection (a), paragraph (1). 97.14 Sec. 2. [EFFECTIVE DATE.] 97.15 Section 1 is effective the day following final enactment. 97.16 ARTICLE 10 97.17 SUPPLEMENTAL RETIREMENT PLANS 97.18 Section 1. Minnesota Statutes 2004, section 356.24, 97.19 subdivision 1, is amended to read: 97.20 Subdivision 1. [RESTRICTION; EXCEPTIONS.] It is unlawful 97.21 for a school district or other governmental subdivision or state 97.22 agency to levy taxes for, or to contribute public funds to a 97.23 supplemental pension or deferred compensation plan that is 97.24 established, maintained, and operated in addition to a primary 97.25 pension program for the benefit of the governmental subdivision 97.26 employees other than: 97.27 (1) to a supplemental pension plan that was established, 97.28 maintained, and operated before May 6, 1971; 97.29 (2) to a plan that provides solely for group health, 97.30 hospital, disability, or death benefits; 97.31 (3) to the individual retirement account plan established 97.32 by chapter 354B; 97.33 (4) to a plan that provides solely for severance pay under 97.34 section 465.72 to a retiring or terminating employee; 97.35 (5) for employees other than personnel employed by the 97.36 Board of Trustees of the Minnesota State Colleges and 98.1 Universities and covered under the Higher Education Supplemental 98.2 Retirement Plan under chapter 354C, if the supplemental plan 98.3 coverage is provided for in a personnel policy of the public 98.4 employer or in the collective bargaining agreement between the 98.5 public employer and the exclusive representative of public 98.6 employees in an appropriate unit, in an amount matching employee 98.7 contributions on a dollar for dollar basis, but not to exceed an 98.8 employer contribution of $2,000 a year per employee; 98.9 (i) to the state of Minnesota deferred compensation plan 98.10 under section 352.96; or 98.11 (ii) in payment of the applicable portion of the 98.12 contribution made to any investment eligible under section 98.13 403(b) of the Internal Revenue Code, if the employing unit has 98.14 complied with any applicable pension plan provisions of the 98.15 Internal Revenue Code with respect to the tax-sheltered annuity 98.16 program during the preceding calendar year; 98.17 (6) for personnel employed by the Board of Trustees of the 98.18 Minnesota State Colleges and Universities and not covered by 98.19 clause (5), to the supplemental retirement plan under chapter 98.20 354C, if the supplemental plan coverage is provided for in a 98.21 personnel policy or in the collective bargaining agreement of 98.22 the public employer with the exclusive representative of the 98.23 covered employees in an appropriate unit, in an amount matching 98.24 employee contributions on a dollar for dollar basis, but not to 98.25 exceed an employer contribution of $2,700 a year for each 98.26 employee; 98.27 (7) to a supplemental plan or to a governmental trust to 98.28 save for postretirement health care expenses qualified for 98.29 tax-preferred treatment under the Internal Revenue Code, if the 98.30 supplemental plan coverage is provided for in a personnel policy 98.31 or in the collective bargaining agreement of a public employer 98.32 with the exclusive representative of the covered employees in an 98.33 appropriate unit; 98.34 (8) to the laborer's national industrial pension fund or to 98.35 a laborer's local pension fund for the employees of a 98.36 governmental subdivision who are covered by a collective 99.1 bargaining agreement that provides for coverage by that fund and 99.2 that sets forth a fund contribution rate, but not to exceed an 99.3 employer contribution of$2,000$5,000 per year per employee; 99.4 (9) to the plumbers' and pipefitters' national pension fund 99.5 or to a plumbers' and pipefitters' local pension fund for the 99.6 employees of a governmental subdivision who are covered by a 99.7 collective bargaining agreement that provides for coverage by 99.8 that fund and that sets forth a fund contribution rate, but not 99.9 to exceed an employer contribution of$2,000$5,000 per year per 99.10 employee; 99.11 (10) to the international union of operating engineers 99.12 pension fund for the employees of a governmental subdivision who 99.13 are covered by a collective bargaining agreement that provides 99.14 for coverage by that fund and that sets forth a fund 99.15 contribution rate, but not to exceed an employer contribution of 99.16$2,000$5,000 per year per employee; or 99.17 (11) to a supplemental plan organized and operated under 99.18 the federal Internal Revenue Code, as amended, that is wholly 99.19 and solely funded by the employee's accumulated sick leave, 99.20 accumulated vacation leave, and accumulated severance pay at the 99.21 date of retirement or the termination of active employment. 99.22 Sec. 2. [EFFECTIVE DATE.] 99.23 Section 1 is effective the day following final enactment. 99.24 ARTICLE 11 99.25 VOLUNTEER FIREFIGHTER RELIEF 99.26 ASSOCIATION CHANGES 99.27 Section 1. Minnesota Statutes 2004, section 69.051, 99.28 subdivision 1, is amended to read: 99.29 Subdivision 1. [FINANCIAL REPORT AND AUDIT.] The board of 99.30 each salaried firefighters relief association, police relief 99.31 association, and volunteer firefighters relief association as 99.32 defined in section 424A.001, subdivision 4, with assets of at 99.33 least $200,000 or liabilities of at least $200,000 in the prior 99.34 year or in any previous year, according to themost recent99.35 applicable actuarial valuation or financial report if no 99.36 valuation is required, shall: 100.1 (1) prepare a financial report covering the special and 100.2 general funds of the relief association for the preceding fiscal 100.3 year on a form prescribed by the state auditor. The financial 100.4 reportshallmust contain financial statements and disclosures 100.5 which present the true financial condition of the relief 100.6 association and the results of relief association operations in 100.7 conformity with generally accepted accounting principles and in 100.8 compliance with the regulatory, financing and funding provisions 100.9 of this chapter and any other applicable laws. The financial 100.10 reportshallmust be countersigned by the municipal clerk or 100.11 clerk-treasurer of the municipality in which the relief 100.12 association is located if the relief association is a 100.13 firefighters relief association which is directly associated 100.14 with a municipal fire department or is a police relief 100.15 association, or countersigned by the secretary of the 100.16 independent nonprofit firefighting corporation and by the 100.17 municipal clerk or clerk-treasurer of the largest municipality 100.18 in population which contracts with the independent nonprofit 100.19 firefighting corporation if the volunteer firefighter relief 100.20 association is a subsidiary of an independent nonprofit 100.21 firefighting corporation; 100.22 (2) file the financial report in its office for public 100.23 inspection and present it to the city council after the close of 100.24 the fiscal year. One copy of the financial reportshallmust be 100.25 furnished to the state auditor after the close of the fiscal 100.26 year; and 100.27 (3) submit to the state auditor audited financial 100.28 statements which have been attested to by a certified public 100.29 accountant, public accountant, or the state auditor within 180 100.30 days after the close of the fiscal year. The state auditor may 100.31 accept this report in lieu of the report required in clause (2). 100.32 Sec. 2. Minnesota Statutes 2004, section 69.051, 100.33 subdivision 1a, is amended to read: 100.34 Subd. 1a. [FINANCIAL STATEMENT.] (a) The board of each 100.35 volunteer firefighters relief association, as defined in section 100.36 424A.001, subdivision 4,with assets of less than $200,000 and101.1liabilities less than $200,000, according to the most recent101.2financial report, shallthat is not required to file a financial 101.3 report and audit under subdivision 1 must prepare a detailed 101.4 statement of the financial affairs for the preceding fiscal year 101.5 of the relief association's special and general funds in the 101.6 style and form prescribed by the state auditor. The detailed 101.7 statement must show the sources and amounts of all money 101.8 received; all disbursements, accounts payable and accounts 101.9 receivable; the amount of money remaining in the treasury; total 101.10 assets including a listing of all investments; the accrued 101.11 liabilities; and all items necessary to show accurately the 101.12 revenues and expenditures and financial position of the relief 101.13 association. 101.14 (b) The detailed financial statement required under 101.15 paragraph (a) must be certified by an independent public 101.16 accountant or auditor or by the auditor or accountant who 101.17 regularly examines or audits the financial transactions of the 101.18 municipality. In addition to certifying the financial condition 101.19 of the special and general funds of the relief association, the 101.20 accountant or auditor conducting the examination shall give an 101.21 opinion as to the condition of the special and general funds of 101.22 the relief association, and shall comment upon any exceptions to 101.23 the report. The independent accountant or auditorshallmust 101.24 have at least five years of public accounting, auditing, or 101.25 similar experience, andshallmust not be an active, inactive, 101.26 or retired member of the relief association or the fire or 101.27 police department. 101.28 (c) The detailed statement required under paragraph (a) 101.29 must be countersigned by the municipal clerk or clerk-treasurer 101.30 of the municipality, or, where applicable, by the secretary of 101.31 the independent nonprofit firefighting corporation and by the 101.32 municipal clerk or clerk-treasurer of the largest municipality 101.33 in population which contracts with the independent nonprofit 101.34 firefighting corporation if the relief association is a 101.35 subsidiary of an independent nonprofit firefighting corporation. 101.36 (d) The volunteer firefighters' relief association board 102.1 must file the detailed statement required under paragraph (a) in 102.2 the relief association office for public inspection and present 102.3 it to the city council within 45 days after the close of the 102.4 fiscal year, and must submit a copy of the detailed statement to 102.5 the state auditor within 90 days of the close of the fiscal year. 102.6 Sec. 3. Minnesota Statutes 2004, section 69.771, is 102.7 amended to read: 102.8 69.771 [VOLUNTEER FIREFIGHTERS' RELIEF ASSOCIATION 102.9 FINANCING GUIDELINES ACT; APPLICATION.] 102.10 Subdivision 1. [COVERED RELIEF ASSOCIATIONS.] The 102.11 applicable provisions of sections 69.771 to 69.776shallapply 102.12 to any firefighters' relief association other than a relief 102.13 association enumerated in section 69.77, subdivision 1a, which 102.14 is organized under any laws of this state, which is composed of 102.15 volunteer firefighters or is composed partially of volunteer 102.16 firefighters and partially of salaried firefighters with 102.17 retirement coverage provided by the public employees police and 102.18 fire fund and which, in either case, operates subject to the 102.19 service pension minimum requirements for entitlement and 102.20 maximums contained in section 424A.02, or subject to a special 102.21 law modifying those requirements or maximums. 102.22 Subd. 2. [AUTHORIZED EMPLOYER SUPPORT FOR A RELIEF 102.23 ASSOCIATION.] Notwithstanding any law to the contrary, a 102.24 municipality may lawfully contribute public funds, including the 102.25 transfer of any applicable fire state aid, or may levy property 102.26 taxes for the support of a firefighters' relief association 102.27 specified in subdivision 1, however organized, which provides 102.28 retirement coverage or pays a service pension to retired 102.29 firefighter or a retirement benefit to a disabled firefighter or 102.30 a surviving dependent of either an active or retired firefighter 102.31 for the operation and maintenance of the relief association only 102.32 if the municipality and the relief association both comply with 102.33 the applicable provisions of sections 69.771 to 69.776. 102.34 Subd. 3. [REMEDY FOR NONCOMPLIANCE; DETERMINATION.] 102.35Any(a) A municipality in which there exists a firefighters' 102.36 relief association as specified in subdivision 1 which does not 103.1 comply with the applicable provisions of sections 69.771 to 103.2 69.776 or the provisions of any applicable special law relating 103.3 to the funding or financing of the associationshalldoes not 103.4 qualify initially to receive,or beand is not entitled 103.5 subsequently to retain, fire state aidpursuant tounder 103.6 sections 69.011 to 69.051 until the reason for the 103.7 disqualification specified by the state auditor is remedied, 103.8 whereupon the municipality or relief association, if otherwise 103.9 qualified,shall beis entitled to again receive fire state aid 103.10 for the year occurring immediately subsequent to the year in 103.11 which the disqualification is remedied. 103.12 (b) The state auditor shall determine if a municipality to 103.13 which a firefighters' relief association is directly associated 103.14 or a firefighters' relief association fails to comply with the 103.15 provisions of sections 69.771 to 69.776 or the funding or 103.16 financing provisions of any applicable special law based upon 103.17 the information contained in the annual financial report of the 103.18 firefighters' relief association requiredpursuant tounder 103.19 section 69.051., the actuarial valuation of the relief 103.20 association, if applicable, the relief association officers' 103.21 financial requirements of the relief association and minimum 103.22 municipal obligation determination documentation under section 103.23 69.772, subdivisions 3 and 4; 69.773, subdivisions 4 and 5; or 103.24 69.774, subdivision 2, if requested to be filed by the state 103.25 auditor, the applicable municipal or nonprofit firefighting 103.26 corporation budget, if requested to be filed by the state 103.27 auditor, and any other relevant documents or reports obtained by 103.28 the state auditor. 103.29 (c) The municipality or nonprofit firefighting corporation 103.30 and the associated relief association are not eligible to 103.31 receive or to retain fire state aid if: 103.32 (1) the relief association fails to prepare or to file the 103.33 financial report or financial statement under section 69.051; 103.34 (2) the relief association treasurer is not bonded in the 103.35 manner and in the amount required by section 69.051, subdivision 103.36 2; 104.1 (3) the relief association officers fail to determine or 104.2 improperly determine the accrued liability and the annual 104.3 accruing liability of the relief association under section 104.4 69.772, subdivisions 2, 2a, and 3, paragraph (c), clause (2), if 104.5 applicable; 104.6 (4) if applicable, the relief association officers fail to 104.7 obtain and file a required actuarial valuation or the officers 104.8 file an actuarial valuation that does not contain the special 104.9 fund actuarial liability calculated under the entry age normal 104.10 actuarial cost method, the special fund current assets, the 104.11 special fund unfunded actuarial accrued liability, the special 104.12 fund normal cost under the entry age normal actuarial cost 104.13 method, the amortization requirement for the special fund 104.14 unfunded actuarial accrued liability by the applicable target 104.15 date, a summary of the applicable benefit plan, a summary of the 104.16 membership of the relief association, a summary of the actuarial 104.17 assumptions used in preparing the valuation, and a signed 104.18 statement by the actuary attesting to its results and certifying 104.19 to the qualifications of the actuary as an approved actuary 104.20 under section 356.215, subdivision 1, paragraph (c); 104.21 (5) the municipality failed to provide a municipal 104.22 contribution, or the nonprofit firefighting corporation failed 104.23 to provide a corporate contribution, in the amount equal to the 104.24 minimum municipal obligation if the relief association is 104.25 governed under section 69.772, or the amount necessary, when 104.26 added to the fire state aid actually received in the plan year 104.27 in question, to at least equal in total the calculated annual 104.28 financial requirements of the special fund of the relief 104.29 association if the relief association is governed under section 104.30 69.773, and, if the municipal or corporate contribution is 104.31 deficient, the municipality failed to include the minimum 104.32 municipal obligation certified under section 69.772, subdivision 104.33 3, or 69.773, subdivision 5, in its budget and tax levy or the 104.34 nonprofit firefighting corporation failed to include the minimum 104.35 corporate obligation certified under section 69.774, subdivision 104.36 2, in the corporate budget; 105.1 (6) the relief association did not receive municipal 105.2 ratification for the most recent plan amendment when municipal 105.3 ratification was required under section 69.772, subdivision 6; 105.4 69.773, subdivision 6; or 424A.02, subdivision 10; 105.5 (7) the relief association invested special fund assets in 105.6 an investment security that is not authorized under section 105.7 69.775; 105.8 (8) the relief association had an administrative expense 105.9 that is not authorized under section 69.80 or 424A.05, 105.10 subdivision 3, or the municipality had an expenditure that is 105.11 not authorized under section 424A.08; 105.12 (9) the relief association officers fail to provide a 105.13 complete and accurate public pension plan investment portfolio 105.14 and performance disclosure under section 356.219; 105.15 (10) the relief association fails to obtain the 105.16 acknowledgment from a broker of the statement of investment 105.17 restrictions under section 356A.06, subdivision 8b; 105.18 (11) the relief association officers permitted to occur a 105.19 prohibited transaction under section 356A.06, subdivision 9, or 105.20 424A.001, subdivision 7, or failed to undertake correction of a 105.21 prohibited transaction that did occur; or 105.22 (12) the relief association pays a defined benefit service 105.23 pension in an amount that is in excess of the applicable service 105.24 pension maximum under section 424A.02, subdivision 3. 105.25 Sec. 4. Minnesota Statutes 2004, section 69.772, 105.26 subdivision 3, is amended to read: 105.27 Subd. 3. [FINANCIAL REQUIREMENTS OF RELIEF ASSOCIATION; 105.28 MINIMUM OBLIGATION OF MUNICIPALITY.] (a) During the month of 105.29 July, the officers of the relief association shall determine the 105.30 overall funding balance of the special fund for the current 105.31 calendar year, the financial requirements of the special fund 105.32 for the following calendar year and the minimum obligation of 105.33 the municipality with respect to the special fund for the 105.34 following calendar year in accordance with the requirements of 105.35 this subdivision. 105.36(1)(b) The overall funding balance of the special fund for 106.1 the current calendar yearshallmust be determined in the 106.2 following manner: 106.3(a)(1) The total accrued liability of the special fund for 106.4 all active and deferred members of the relief association as of 106.5 December 31 of the current yearshallmust be calculated 106.6pursuant tounder subdivisions 2 and 2a, if applicable. 106.7(b)(2) The total present assets of the special fund 106.8 projected to December 31 of the current year, including receipts 106.9 by and disbursements from the special fund anticipated to occur 106.10 on or before December 31shall, must be calculated. To the 106.11 extent possible, for those assets for which a market value is 106.12 readily ascertainable, the current market value as of the date 106.13 of the calculation for those assetsshallmust be utilized in 106.14 making this calculation. For any asset for which no market 106.15 value is readily ascertainable, the cost value or the book 106.16 value, whichever is applicable,shallmust be utilized in making 106.17 this calculation. 106.18(c)(3) The amount of the total present assets of the 106.19 special fund calculatedpursuant tounder clause(b) shall(2) 106.20 must be subtracted from the amount of the total accrued 106.21 liability of the special fund calculatedpursuant tounder 106.22 clause(a)(1). If the amount of total present assets exceeds 106.23 the amount of the total accrued liability, then the special fund 106.24shall beis considered to have a surplus over full funding. If 106.25 the amount of the total present assets is less than the amount 106.26 of the total accrued liability, then the special fundshall be106.27 is considered to have a deficit from full funding. If the 106.28 amount of total present assets is equal to the amount of the 106.29 total accrued liability, then the special fundshall beis 106.30 considered to be fully funded. 106.31(2)(c) The financial requirements of the special fund for 106.32 the following calendar yearshallmust be determined in the 106.33 following manner: 106.34(a)(1) The total accrued liability of the special fund for 106.35 all active and deferred members of the relief association as of 106.36 December 31 of the calendar year next following the current 107.1 calendar yearshallmust be calculatedpursuant tounder 107.2 subdivisions 2 and 2a, if applicable. 107.3(b)(2) The increase in the total accrued liability of the 107.4 special fund for the following calendar year over the total 107.5 accrued liability of the special fund for the current yearshall107.6 must be calculated. 107.7(c)(3) The amount of anticipated future administrative 107.8 expenses of the special fundshallmust be calculated by 107.9 multiplying the dollar amount of the administrative expenses of 107.10 the special fund for the most recent prior calendar year by the 107.11 factor of 1.035. 107.12(d)(4) If the special fund is fully funded, the financial 107.13requirementrequirements of the special fund for the following 107.14 calendar yearshall beare thefigure which represents the107.15increase in thetotalaccrued liabilityof thespecial fund as107.16 amounts calculatedpursuant to subclause (b)under clauses (2) 107.17 and (3). 107.18(e)(5) If the special fund has a deficit from full 107.19 funding, the financial requirements of the special fund for the 107.20 following calendar yearshall beare the financial requirements 107.21 of the special fund calculated as though the special fund were 107.22 fully fundedpursuant to subclause (d)under clause (4) plus an 107.23 amount equal to one-tenth of the original amount of the deficit 107.24 from full funding of the special fund as determinedpursuant to107.25this section for the calendar year 1971 until that deficit from107.26full funding is fully retired, and plus an amount equal to107.27one-tenth of the increase in the deficit from full funding of107.28the special fundunder clause (2) resulting either from an 107.29 increase in the amount of the service pensionaccruing after107.30December 31, 1971occurring in the last ten years or from a net 107.31 annual investment loss occurring during the last ten years until 107.32 each increase in the deficit from full funding is fully 107.33 retired. The annual amortization contribution under this clause 107.34 may not exceed the amount of the deficit from full funding. 107.35(f)(6) If the special fund has a surplus over full 107.36 funding, the financial requirements of the special fund for the 108.1 following calendar yearshall beare the financial requirements 108.2 of the special fund calculated as though the special fund were 108.3 fully fundedpursuant to subclause (d)under clause (4) reduced 108.4 by an amount equal to one-tenth of the amount of the surplus 108.5 over full funding of the special fund. 108.6(3)(d) The minimum obligation of the municipality with 108.7 respect to the special fundshall beis the financial 108.8 requirements of the special fund reduced by the amount of any 108.9 fire state aid payablepursuant tounder sections 69.011 to 108.10 69.051 reasonably anticipated to be received by the municipality 108.11 for transmittal to the special fund during the following 108.12 calendar year, an amount of interest on the assets of the 108.13 special fund projected to the beginning of the following 108.14 calendar year calculated at the rate of five percent per annum, 108.15 and the amount of anyanticipatedcontributions to the special 108.16 fund required by the relief association bylaws from the active 108.17 members of the relief association reasonably anticipated to be 108.18 received during the following calendar year. A reasonable 108.19 amount of anticipated fire state aid is an amount that does not 108.20 exceed the fire state aid actually received in the prior year 108.21 multiplied by the factor 1.035. 108.22 Sec. 5. Minnesota Statutes 2004, section 69.772, 108.23 subdivision 4, is amended to read: 108.24 Subd. 4. [CERTIFICATION OF FINANCIAL REQUIREMENTS AND 108.25 MINIMUM MUNICIPAL OBLIGATION; LEVY.] (a) The officers of the 108.26 relief association shall certify the financial requirements of 108.27 the special fund of the relief association and the minimum 108.28 obligation of the municipality with respect to the special fund 108.29 of the relief association as determinedpursuant tounder 108.30 subdivision 3 to the governing body of the municipality on or 108.31 before August 1 of each year. The financial requirements of the 108.32 relief association and the minimum municipal obligation must be 108.33 included in the financial report or financial statement under 108.34 section 69.051. 108.35 (b) The municipality shall provide for at least the minimum 108.36 obligation of the municipality with respect to the special fund 109.1 of the relief association by tax levy or from any other source 109.2 of public revenue. 109.3 (c) The municipality may levy taxes for the payment of the 109.4 minimum municipal obligation without any limitation as to rate 109.5 or amount and irrespective of any limitations imposed by other 109.6 provisions of law upon the rate or amount of taxation until the 109.7 balance of the special fund or any fund of the relief 109.8 association has attained a specified level. In addition, any 109.9 taxes leviedpursuant tounder this sectionshallmust not cause 109.10 the amount or rate of any other taxes levied in that year or to 109.11 be levied in a subsequent year by the municipality which are 109.12 subject to a limitation as to rate or amount to be reduced. 109.13 (d) If the municipality does not include the full amount of 109.14 the minimum municipal obligations in its levy for any year, the 109.15 officers of the relief association shall certify that amount to 109.16 the county auditor, who shall spread a levy in the amount of the 109.17 certified minimum municipal obligation on the taxable property 109.18 of the municipality. 109.19 (e) If the state auditor determines that a municipal 109.20 contribution actually made in a plan year was insufficient under 109.21 section 69.771, subdivision 3, paragraph (c), clause (5), the 109.22 state auditor may request a copy of the certifications under 109.23 this subdivision from the relief association or from the city. 109.24 The relief association or the city, whichever applies, must 109.25 provide the certifications within 14 days of the date of the 109.26 request from the state auditor. 109.27 Sec. 6. Minnesota Statutes 2004, section 69.773, 109.28 subdivision 4, is amended to read: 109.29 Subd. 4. [FINANCIAL REQUIREMENTS OF SPECIAL FUND.]Prior109.30to(a) On or before August 1 of each year, the officers of the 109.31 relief association shall determine the financial requirements of 109.32 the special fund of the relief association in accordance with 109.33 the requirements of this subdivision. 109.34 (b) The financial requirements of the relief 109.35 associationshallmust be based on the most recent actuarial 109.36 valuation of the special fund prepared in accordance with 110.1 subdivision 2. If the relief association has an unfunded 110.2 actuarial accrued liability as reported in the most recent 110.3 actuarial valuation, the financial requirementsshallmust be 110.4 determined by adding the figures calculatedpursuant tounder 110.5 paragraph (d), clauses(a)(1),(b)(2), and(c)(3). If 110.6 the relief association does not have an unfunded actuarial 110.7 accrued liability as reported in the most recent actuarial 110.8 valuation, the financial requirementsshallmust be an amount 110.9 equal to the figure calculatedpursuant tounder paragraph (d), 110.10 clauses(a)(1) and(b)(2), reduced by an amount equal to 110.11 one-tenth of the amount of any assets in excess of the actuarial 110.12 accrued liability of the relief association. 110.13 (c) The determination of whether or not the relief 110.14 association has an unfunded actuarial accrued liability 110.15shallmust be based on the current market value of assets for 110.16 which a market value is readily ascertainable and the cost or 110.17 book value, whichever is applicable, for assets for which no 110.18 market value is readily ascertainable. 110.19(a)(d) The components of the financial requirements of the 110.20 relief association are the following: 110.21 (1) The normal level cost requirement for the following 110.22 year, expressed as a dollar amount,shall beis the figure for 110.23 the normal level cost of the relief association as reported in 110.24 the actuarial valuation. 110.25(b)(2) The amount of anticipated future administrative 110.26 expenses of the special fundshallmust be calculated by 110.27 multiplying the dollar amount of the administrative expenses of 110.28 the special fund for the most recent prior calendar year by the 110.29 factor of 1.035. 110.30(c)(3) The amortization contribution requirement to retire 110.31 the current unfunded actuarial accrued liability by the 110.32 established date for full fundingshall beis the figure for the 110.33 amortization contribution as reported in the actuarial 110.34 valuation. If there has not been a change in the actuarial 110.35 assumptions used for calculating the actuarial accrued liability 110.36 of the special fund, a change in the bylaws of the relief 111.1 association governing the service pensions, retirement benefits, 111.2 or both, payable from the special fund, or a change in the 111.3 actuarial cost method used to value all or a portion of the 111.4 special fund which change or changes, which by themselves, 111.5 without inclusion of any other items of increase or decrease, 111.6 produce a net increase in the unfunded actuarial accrued 111.7 liability of the special fundsince December 31, 1970, the 111.8 established date for full fundingshall beis the December 31,111.91990occurring ten years later. If there has been a change in 111.10 the actuarial assumptions used for calculating the actuarial 111.11 accrued liability of the special fund, a change in the bylaws of 111.12 the relief association governing the service pensions, 111.13 retirement benefits, or both payable from the special fund or a 111.14 change in the actuarial cost method used to value all or a 111.15 portion of the special fund and the change or changes, by 111.16 themselves and without inclusion of any other items of increase 111.17 or decrease, produce a net increase in the unfunded actuarial 111.18 accrued liability of the special fundsince December 31, 1970,111.19but prior to January 1, 1979within the past 20 years, the 111.20 established date for full fundingshall be December 31, 1998,111.21and if there has been a change since December 31, 1978, the111.22established date for full funding shallmust be determined using 111.23 the following procedure: 111.24 (i) the unfunded actuarial accrued liability of the special 111.25 fund attributable to experience losses that have occurred since 111.26 the most recent prior actuarial valuation must be determined and 111.27 the level annual dollar contribution needed to amortize the 111.28 experience loss over a period of ten years ending on the 111.29 December 31 occurring ten years later must be calculated; 111.30 (ii) the unfunded actuarial accrued liability of the 111.31 special fundshallmust be determined in accordance with the 111.32 provisions governing service pensions, retirement benefits, and 111.33 actuarial assumptions in effect before an applicable change; 111.34(ii)(iii) the level annual dollar contribution needed to 111.35 amortize this unfunded actuarial accrued liability amount by the 111.36 date for full funding in effectprior tobefore the changeshall112.1 must be calculated using the interest assumption specified in 112.2 section 356.215, subdivision 8, in effect before any applicable 112.3 change; 112.4(iii)(iv) the unfunded actuarial accrued liability of the 112.5 special fundshallmust be determined in accordance with any new 112.6 provisions governing service pensions, retirement benefits, and 112.7 actuarial assumptions and the remaining provisions governing 112.8 service pensions, retirement benefits, and actuarial assumptions 112.9 in effect before an applicable change; 112.10(iv)(v) the level annual dollar contribution needed to 112.11 amortize the difference between the unfunded actuarial accrued 112.12 liability amount calculatedpursuant to subclause (i)under item 112.13 (ii) and the unfunded actuarial accrued liability amount 112.14 calculatedpursuant to subclause (iii)under item (iv) over a 112.15 period of 20 years starting December 31 of the year in which the 112.16 change is effectiveshallmust be calculated using the interest 112.17 assumption specified in section 356.215, subdivision 8, in 112.18 effect after any applicable change; 112.19(v)(vi) the annual amortization contribution calculated 112.20pursuant to subclause (iv) shallunder item (v) must be added to 112.21 the annual amortization contribution calculatedpursuant to112.22subclause (ii)under items (i) and (iii); 112.23(vi)(vii) the period in which the unfunded actuarial 112.24 accrued liability amount determined insubclause (iii)item (iv) 112.25 will be amortized by the total annual amortization contribution 112.26 computedpursuant to subclause (v) shallunder item (vi) must be 112.27 calculated using the interest assumption specified in section 112.28 356.215, subdivision 8, in effect after any applicable change, 112.29 rounded to the nearest integral number of years, but whichshall112.30 must not exceed a period of 20 years from the end of the year in 112.31 which the determination of the date for full funding using this 112.32 procedure is made and whichshallmust not be less than the 112.33 period of years beginning in the year in which the determination 112.34 of the date for full funding using this procedure is made and 112.35 ending by the date for full funding in effect before the change; 112.36(vii)(viii) the period determinedpursuant to subclause113.1(vi) shallunder item (vii) must be added to the date as of 113.2 which the actuarial valuation was prepared and the resulting 113.3 dateshall beis the new date for full funding. 113.4 Sec. 7. Minnesota Statutes 2004, section 69.773, 113.5 subdivision 5, is amended to read: 113.6 Subd. 5. [MINIMUM MUNICIPAL OBLIGATION.] (a) The officers 113.7 of the relief association shall determine the minimum obligation 113.8 of the municipality with respect to the special fund of the 113.9 relief association for the following calendar yearprior toon 113.10 or before August 1 of each year in accordance with the 113.11 requirements of this subdivision. 113.12 (b) The minimum obligation of the municipality with respect 113.13 to the special fundshall beis an amount equal to the financial 113.14 requirements of the special fund of the relief association 113.15 determinedpursuant tounder subdivision 4, reduced by the 113.16 estimated amount of any fire state aid payablepursuant tounder 113.17 sections 69.011 to 69.051 reasonably anticipated to be received 113.18 by the municipality for transmittal to the special fund of the 113.19 relief association during the following year and the amount of 113.20 any anticipated contributions to the special fund required by 113.21 the relief association bylaws from the active members of the 113.22 relief association reasonably anticipated to be received during 113.23 the following calendar year. A reasonable amount of anticipated 113.24 fire state aid is an amount that does not exceed the fire state 113.25 aid actually received in the prior year multiplied by the factor 113.26 1.035. 113.27 (c) The officers of the relief association shall certify 113.28 the financial requirements of the special fund of the relief 113.29 association and the minimum obligation of the municipality with 113.30 respect to the special fund of the relief association as 113.31 determinedpursuant tounder subdivision 4 and this subdivision 113.32 to the governing body of the municipality by August 1 of each 113.33 year. The financial requirements of the relief association and 113.34 the minimum municipal obligation must be included in the 113.35 financial report or financial statement under section 69.051. 113.36 (d) The municipality shall provide for at least the minimum 114.1 obligation of the municipality with respect to the special fund 114.2 of the relief association by tax levy or from any other source 114.3 of public revenue. The municipality may levy taxes for the 114.4 payment of the minimum municipal obligation without any 114.5 limitation as to rate or amount and irrespective of any 114.6 limitations imposed by other provisions of law or charter upon 114.7 the rate or amount of taxation until the balance of the special 114.8 fund or any fund of the relief association has attained a 114.9 specified level. In addition, any taxes leviedpursuant to114.10 under this sectionshallmust not cause the amount or rate of 114.11 any other taxes levied in that year or to be levied in a 114.12 subsequent year by the municipality which are subject to a 114.13 limitation as to rate or amount to be reduced. 114.14 (e) If the municipality does not include the full amount of 114.15 the minimum municipal obligation in its levy for any year, the 114.16 officers of the relief association shall certify that amount to 114.17 the county auditor, who shall spread a levy in the amount of the 114.18 minimum municipal obligation on the taxable property of the 114.19 municipality. 114.20 (f) If the state auditor determines that a municipal 114.21 contribution actually made in a plan year was insufficient under 114.22 section 69.771, subdivision 3, paragraph (c), clause (5), the 114.23 state auditor may request from the relief association or from 114.24 the city a copy of the certifications under this subdivision. 114.25 The relief association or the city, whichever applies, must 114.26 provide the certifications within 14 days of the date of the 114.27 request from the state auditor. 114.28 Sec. 8. Minnesota Statutes 2004, section 69.775, is 114.29 amended to read: 114.30 69.775 [INVESTMENTS.] 114.31 (a) The special fund assets ofthea reliefassociations114.32 association governed by sections 69.771 to 69.776 must be 114.33 invested in securities that are authorized investments under 114.34 section 356A.06, subdivision 6 or 7. 114.35 (b) Notwithstanding the foregoing, up to 75 percent of the 114.36 market value of the assets of the special fund, not including 115.1 any money market mutual funds, may be invested in open-end 115.2 investment companies registered under the federal Investment 115.3 Company Act of 1940, if the portfolio investments of the 115.4 investment companies comply with the type of securities 115.5 authorized for investment under section 356A.06, subdivision 7. 115.6 (c) Securities held by the associations before June 2, 115.7 1989, that do not meet the requirements of this section may be 115.8 retained after that date if they were proper investments for the 115.9 association on that date. 115.10 (d) The governing board of the association may select and 115.11 appoint investment agencies to act for and in its behalf or may 115.12 certify special fund assets for investment by the State Board of 115.13 Investment under section 11A.17. 115.14 (e) The governing board of the association may certify 115.15 general fund assets of the relief association for investment by 115.16 the State Board of Investment in fixed income pools or in a 115.17 separately managed account at the discretion of the State Board 115.18 of Investment as provided in section 11A.14. 115.19 (f) The governing board of the association may select and 115.20 appoint a qualified private firm to measure management 115.21 performance and return on investment, and the firm shall use the 115.22 formula or formulas developed by the state board under section 115.23 11A.04, clause (11). 115.24 Sec. 9. Minnesota Statutes 2004, section 356A.06, 115.25 subdivision 7, is amended to read: 115.26 Subd. 7. [EXPANDED LIST OF AUTHORIZED INVESTMENT 115.27 SECURITIES.] (a) [AUTHORITY.] Except to the extent otherwise 115.28 authorized by law or bylaws, a covered pension plan not 115.29 described by subdivision 6, paragraph (a), may invest its assets 115.30 only in accordance with this subdivision. 115.31 (b) [SECURITIES GENERALLY.] The covered pension plan has 115.32 the authority to purchase, sell, lend, or exchange the 115.33 securities specified in paragraphs (c) to(g)(h), including 115.34 puts and call options and future contracts traded on a contract 115.35 market regulated by a governmental agency or by a financial 115.36 institution regulated by a governmental agency. These 116.1 securities may be owned as units in commingled trusts that own 116.2 the securities described in paragraphs (c) to(g)(h). 116.3 (c) [GOVERNMENT OBLIGATIONS.] The covered pension plan may 116.4 invest funds in governmental bonds, notes, bills, mortgages, and 116.5 other evidences of indebtedness provided the issue is backed by 116.6 the full faith and credit of the issuer or the issue is rated 116.7 among the top four quality rating categories by a nationally 116.8 recognized rating agency. The obligations in which funds may be 116.9 invested under this paragraph include guaranteed or insured 116.10 issues of (1) the United States, its agencies, its 116.11 instrumentalities, or organizations created and regulated by an 116.12 act of Congress; (2) Canada and its provinces, provided the 116.13 principal and interest is payable in United States dollars; (3) 116.14 the states and their municipalities, political subdivisions, 116.15 agencies, or instrumentalities; (4) the International Bank for 116.16 Reconstruction and Development, the Inter-American Development 116.17 Bank, the Asian Development Bank, the African Development Bank, 116.18 or any other United States government sponsored organization of 116.19 which the United States is a member, provided the principal and 116.20 interest is payable in United States dollars. 116.21 (d) [CORPORATE OBLIGATIONS.] The covered pension plan may 116.22 invest funds in bonds, notes, debentures, transportation 116.23 equipment obligations, or any other longer term evidences of 116.24 indebtedness issued or guaranteed by a corporation organized 116.25 under the laws of the United States or any state thereof, or the 116.26 Dominion of Canada or any province thereof if they conform to 116.27 the following provisions: 116.28 (1) the principal and interest of obligations of 116.29 corporations incorporated or organized under the laws of the 116.30 Dominion of Canada or any province thereof must be payable in 116.31 United States dollars; and 116.32 (2) obligations must be rated among the top four quality 116.33 categories by a nationally recognized rating agency. 116.34 (e) [OTHER OBLIGATIONS.] (1) The covered pension plan may 116.35 invest funds in bankers acceptances, certificates of deposit, 116.36 deposit notes, commercial paper, mortgage participation 117.1 certificates and pools, asset backed securities, repurchase 117.2 agreements and reverse repurchase agreements, guaranteed 117.3 investment contracts, savings accounts, and guaranty fund 117.4 certificates, surplus notes, or debentures of domestic mutual 117.5 insurance companies if they conform to the following provisions: 117.6 (i) bankers acceptances and deposit notes of United States 117.7 banks are limited to those issued by banks rated in the highest 117.8 four quality categories by a nationally recognized rating 117.9 agency; 117.10 (ii) certificates of deposit are limited to those issued by 117.11 (A) United States banks and savings institutions that are rated 117.12 in the highest four quality categories by a nationally 117.13 recognized rating agency or whose certificates of deposit are 117.14 fully insured by federal agencies; or (B) credit unions in 117.15 amounts up to the limit of insurance coverage provided by the 117.16 National Credit Union Administration; 117.17 (iii) commercial paper is limited to those issued by United 117.18 States corporations or their Canadian subsidiaries and rated in 117.19 the highest two quality categories by a nationally recognized 117.20 rating agency; 117.21 (iv) mortgage participation or pass through certificates 117.22 evidencing interests in pools of first mortgages or trust deeds 117.23 on improved real estate located in the United States where the 117.24 loan to value ratio for each loan as calculated in accordance 117.25 with section 61A.28, subdivision 3, does not exceed 80 percent 117.26 for fully amortizable residential properties and in all other 117.27 respects meets the requirements of section 61A.28, subdivision 117.28 3; 117.29 (v) collateral for repurchase agreements and reverse 117.30 repurchase agreements is limited to letters of credit and 117.31 securities authorized in this section; 117.32 (vi) guaranteed investment contracts are limited to those 117.33 issued by insurance companies or banks rated in the top four 117.34 quality categories by a nationally recognized rating agency or 117.35 to alternative guaranteed investment contracts where the 117.36 underlying assets comply with the requirements of this 118.1 subdivision; 118.2 (vii) savings accounts are limited to those fully insured 118.3 by federal agencies; and 118.4 (viii) asset backed securities must be rated in the top 118.5 four quality categories by a nationally recognized rating agency. 118.6 (2) Sections 16A.58, 16C.03, subdivision 4, and 16C.05 do 118.7 not apply to certificates of deposit and collateralization 118.8 agreements executed by the covered pension plan under clause 118.9 (1), item (ii). 118.10 (3) In addition to investments authorized by clause (1), 118.11 item (iv), the covered pension plan may purchase from the 118.12 Minnesota Housing Finance Agency all or any part of a pool of 118.13 residential mortgages, not in default, that has previously been 118.14 financed by the issuance of bonds or notes of the agency. The 118.15 covered pension plan may also enter into a commitment with the 118.16 agency, at the time of any issue of bonds or notes, to purchase 118.17 at a specified future date, not exceeding 12 years from the date 118.18 of the issue, the amount of mortgage loans then outstanding and 118.19 not in default that have been made or purchased from the 118.20 proceeds of the bonds or notes. The covered pension plan may 118.21 charge reasonable fees for any such commitment and may agree to 118.22 purchase the mortgage loans at a price sufficient to produce a 118.23 yield to the covered pension plan comparable, in its judgment, 118.24 to the yield available on similar mortgage loans at the date of 118.25 the bonds or notes. The covered pension plan may also enter 118.26 into agreements with the agency for the investment of any 118.27 portion of the funds of the agency. The agreement must cover 118.28 the period of the investment, withdrawal privileges, and any 118.29 guaranteed rate of return. 118.30 (f) [CORPORATE STOCKS.] The covered pension plan may 118.31 invest funds in stocks or convertible issues of any corporation 118.32 organized under the laws of the United States or the states 118.33 thereof, any corporation organized under the laws of the 118.34 Dominion of Canada or its provinces, or any corporation listed 118.35 onthe New York Stock Exchange or the American Stock Exchangean 118.36 exchange regulated by an agency of the United States or of the 119.1 Canadian national government, if they conform to the following 119.2 provisions: 119.3 (1) the aggregate value of corporate stock investments, as 119.4 adjusted for realized profits and losses, must not exceed 85 119.5 percent of the market or book value, whichever is less, of a 119.6 fund, less the aggregate value of investments according to 119.7subdivision 6paragraph (h); 119.8 (2) investments must not exceed five percent of the total 119.9 outstanding shares of any one corporation. 119.10 (g) [EXCHANGE TRADED FUNDS.] The covered pension plan may 119.11 invest funds in exchange traded funds, subject to the maximums, 119.12 the requirements, and the limitations set forth in paragraph 119.13 (d), (e), (f), or (h), whichever applies. 119.14 (h) [OTHER INVESTMENTS.] (1) In addition to the 119.15 investments authorized in paragraphs (b) to(f)(g), and subject 119.16 to the provisions in clause (2), the covered pension plan may 119.17 invest funds in: 119.18 (i) venture capital investment businesses through 119.19 participation in limited partnerships and corporations; 119.20 (ii) real estate ownership interests or loans secured by 119.21 mortgages or deeds of trust through investment in limited 119.22 partnerships, bank sponsored collective funds, trusts, and 119.23 insurance company commingled accounts, including separate 119.24 accounts; 119.25 (iii) regional and mutual funds through bank sponsored 119.26 collective funds and open-end investment companies registered 119.27 under the Federal Investment Company Act of 1940; 119.28 (iv) resource investments through limited partnerships, 119.29 private placements, and corporations; and 119.30 (v) international securities. 119.31 (2) The investments authorized in clause (1) must conform 119.32 to the following provisions: 119.33 (i) the aggregate value of all investments made according 119.34 to clause (1) may not exceed 35 percent of the market value of 119.35 the fund for which the covered pension plan is investing; 119.36 (ii) there must be at least four unrelated owners of the 120.1 investment other than thestate boardcovered pension plan for 120.2 investments made under clause (1), item (i), (ii), (iii), or 120.3 (iv); 120.4 (iii) covered pension plan participation in an investment 120.5 vehicle is limited to 20 percent thereof for investments made 120.6 under clause (1), item (i), (ii), (iii), or (iv); and 120.7 (iv) covered pension plan participation in a limited 120.8 partnership does not include a general partnership interest or 120.9 other interest involving general liability. The covered pension 120.10 plan may not engage in any activity as a limited partner which 120.11 creates general liability. 120.12 Sec. 10. Minnesota Statutes 2004, section 424A.02, 120.13 subdivision 3, is amended to read: 120.14 Subd. 3. [FLEXIBLE SERVICE PENSION MAXIMUMS.] (a) Annually 120.15 on or before August 1 as part of the certification of the 120.16 financial requirements and minimum municipal obligation 120.17 determined under section 69.772, subdivision 4, or 69.773, 120.18 subdivision 5, as applicable, the secretary or some other 120.19 official of the relief association designated in the bylaws of 120.20 each relief association shall calculate and certify to the 120.21 governing body of the applicable qualified municipality the 120.22 average amount of available financing per active covered 120.23 firefighter for the most recent three-year period. The amount 120.24 of available financing shall include any amounts of fire state 120.25 aid received or receivable by the relief association, any 120.26 amounts of municipal contributions to the relief association 120.27 raised from levies on real estate or from other available 120.28 revenue sources exclusive of fire state aid, and one-tenth of 120.29 the amount of assets in excess of the accrued liabilities of the 120.30 relief association calculated under section 69.772, subdivision 120.31 2; 69.773, subdivisions 2 and 4; or 69.774, subdivision 2, if 120.32 any. 120.33 (b) The maximum service pension which the relief 120.34 association has authority to provide for in its bylaws for 120.35 payment to a member retiring after the calculation date when the 120.36 minimum age and service requirements specified in subdivision 1 121.1 are met must be determined using the table in paragraph (c) or 121.2 (d), whichever applies. 121.3 (c) For a relief association where the governing bylaws 121.4 provide for a monthly service pension to a retiring member, the 121.5 maximum monthly service pension amount per month for each year 121.6 of service credited that may be provided for in the bylaws is 121.7 the greater of the service pension amount provided for in the 121.8 bylaws on the date of the calculation of the average amount of 121.9 the available financing per active covered firefighter or the 121.10 maximum service pension figure corresponding to the average 121.11 amount of available financing per active covered firefighter: 121.12 Minimum Average Amount of Maximum Service Pension 121.13 Available Financing per Amount Payable per Month 121.14 Firefighter for Each Year of Service 121.15 $... $ .25 121.164241 .50 121.178481 1.00 121.18126122 1.50 121.19168162 2.00 121.20209203 2.50 121.21252243 3.00 121.22294284 3.50 121.23335324 4.00 121.24378365 4.50 121.25420405 5.00 121.26503486 6.00 121.27587567 7.00 121.28672648 8.00 121.29755729 9.00 121.30839810 10.00 121.31923891 11.00 121.321007972 12.00 121.3310901053 13.00 121.3411751134 14.00 121.3512591215 15.00 121.3613421296 16.00 122.114271377 17.00 122.215101458 18.00 122.315941539 19.00 122.416771620 20.00 122.517621701 21.00 122.618451782 22.00 122.718881823 22.50 122.819291863 23.00 122.920141944 24.00 122.1020982025 25.00 122.1121832106 26.00 122.1222672187 27.00 122.1323512268 28.00 122.1424362349 29.00 122.1525202430 30.00 122.1626042511 31.00 122.1726892592 32.00 122.1827732673 33.00 122.1928572754 34.00 122.2029422834 35.00 122.2130262916 36.00 122.2231102997 37.00 122.2331943078 38.00 122.2432783159 39.00 122.2533623240 40.00 122.2634463321 41.00 122.2735303402 42.00 122.2836143483 43.00 122.2936983564 44.00 122.3037823645 45.00 122.3138663726 46.00 122.3239503807 47.00 122.3340343888 48.00 122.3441183969 49.00 122.3542024050 50.00 122.3642864131 51.00 123.143704212 52.00 123.2Effective beginning December 31, 2003:123.344544293 53.00 123.445384374 54.00 123.546224455 55.00 123.647064536 56.00 123.7 (d) For a relief association in which the governing bylaws 123.8 provide for a lump sum service pension to a retiring member, the 123.9 maximum lump sum service pension amount for each year of service 123.10 credited that may be provided for in the bylaws is the greater 123.11 of the service pension amount provided for in the bylaws on the 123.12 date of the calculation of the average amount of the available 123.13 financing per active covered firefighter or the maximum service 123.14 pension figure corresponding to the average amount of available 123.15 financing per active covered firefighter for the applicable 123.16 specified period: 123.17 Minimum Average Amount Maximum Lump Sum Service 123.18 of Available Financing Pension Amount Payable 123.19 per Firefighter for Each Year of Service 123.20 $.. $10 123.21 11 20 123.22 16 30 123.23 23 40 123.24 27 50 123.25 32 60 123.26 43 80 123.27 54 100 123.28 65 120 123.29 77 140 123.30 86 160 123.31 97 180 123.32 108 200 123.33 131 240 123.34 151 280 123.35 173 320 123.36 194 360 124.1 216 400 124.2 239 440 124.3 259 480 124.4 281 520 124.5 302 560 124.6 324 600 124.7 347 640 124.8 367 680 124.9 389 720 124.10 410 760 124.11 432 800 124.12 486 900 124.13 540 1000 124.14 594 1100 124.15 648 1200 124.16 702 1300 124.17 756 1400 124.18 810 1500 124.19 864 1600 124.20 918 1700 124.21 972 1800 124.22 1026 1900 124.23 1080 2000 124.24 1134 2100 124.25 1188 2200 124.26 1242 2300 124.27 1296 2400 124.28 1350 2500 124.29 1404 2600 124.30 1458 2700 124.31 1512 2800 124.32 1566 2900 124.33 1620 3000 124.34 1672 3100 124.35 1726 3200 124.36 1753 3250 125.1 1780 3300 125.2 1820 3375 125.3 1834 3400 125.4 1888 3500 125.5 1942 3600 125.6 1996 3700 125.7 2023 3750 125.8 2050 3800 125.9 2104 3900 125.10 2158 4000 125.11 2212 4100 125.12 2265 4200 125.13 2319 4300 125.14 2373 4400 125.15 2427 4500 125.16 2481 4600 125.17 2535 4700 125.18 2589 4800 125.19 2643 4900 125.20 2697 5000 125.21 2751 5100 125.22 2805 5200 125.23 2859 5300 125.24 2913 5400 125.25 2967 5500 125.26 3021 5600 125.27 3075 5700 125.28 3129 5800 125.29 3183 5900 125.30 3237 6000 125.31 3291 6100 125.32 3345 6200 125.33 3399 6300 125.34 3453 6400 125.35 3507 6500 125.36 3561 6600 126.1 3615 6700 126.2 3669 6800 126.3 3723 6900 126.4 3777 7000 126.5Effective beginning December 31, 2003:126.6 3831 7100 126.7 3885 7200 126.8 3939 7300 126.9 3993 7400 126.10 4047 7500 126.11 (e) For a relief association in which the governing bylaws 126.12 provide for a monthly benefit service pension as an alternative 126.13 form of service pension payment to a lump sum service pension, 126.14 the maximum service pension amount for each pension payment type 126.15 must be determined using the applicable table contained in this 126.16 subdivision. 126.17 (f) If a relief association establishes a service pension 126.18 in compliance with the applicable maximum contained in paragraph 126.19 (c) or (d) and the minimum average amount of available financing 126.20 per active covered firefighter is subsequently reduced because 126.21 of a reduction in fire state aid or because of an increase in 126.22 the number of active firefighters, the relief association may 126.23 continue to provide the prior service pension amount specified 126.24 in its bylaws, but may not increase the service pension amount 126.25 until the minimum average amount of available financing per 126.26 firefighter under the table in paragraph (c) or (d), whichever 126.27 applies, permits. 126.28 (g) No relief association is authorized to provide a 126.29 service pension in an amount greater than the largest applicable 126.30 flexible service pension maximum amount even if the amount of 126.31 available financing per firefighter is greater than the 126.32 financing amount associated with the largest applicable flexible 126.33 service pension maximum. 126.34 Sec. 11. Minnesota Statutes 2004, section 424A.02, 126.35 subdivision 4, is amended to read: 126.36 Subd. 4. [DEFINED CONTRIBUTION LUMP SUM SERVICE 127.1 PENSIONS.] (a) If the bylaws governing the relief association so 127.2 provide exclusively, the relief association may pay a defined 127.3 contribution lump sum service pension in lieu of any defined 127.4 benefit service pension governed by subdivision 2. 127.5 (b) An individual account for each firefighter who is a 127.6 member of the relief associationshallmust be established. To 127.7 each individual active member accountshallmust be crediteda127.8right toan equal share of:(a)(1) any amounts of fire state 127.9 aid received by the relief association;(b)(2) any amounts of 127.10 municipal contributions to the relief association raised from 127.11 levies on real estate or from other available revenue sources 127.12 exclusive of fire state aid; and(c)(3) any amounts equal to 127.13 the share of the assets of the special fund to the credit 127.14 of:(1)(i) any former member who terminated active service 127.15 with the fire department to which the relief association is 127.16 associatedprior tobefore meeting the minimum service 127.17 requirement provided for in subdivision 1 and has not returned 127.18 to active service with the fire department for a period no 127.19 shorter than five years; or(2)(ii) any retired member who 127.20 retiredprior tobefore obtaining a full nonforfeitable interest 127.21 in the amounts credited to the individual member 127.22 accountpursuant tounder subdivision 2 and any applicable 127.23 provision of the bylaws of the relief association. In addition, 127.24 anyinterest orinvestmentincome earnedreturn on the assets of 127.25 the special fundshallmust be credited in proportion to the 127.26 share of the assets of the special fund to the credit of each 127.27 individual active member account through the date on which the 127.28 investment return is recognized by and credited to the special 127.29 fund. 127.30 (c) At the time of retirementpursuant tounder subdivision 127.31 1 and any applicable provision of the bylaws of the relief 127.32 association, a retiring membershall beis entitled to that 127.33 portion of the assets of the special fund to the credit of the 127.34 member in the individual member account which is 127.35 nonforfeitablepursuant tounder subdivision 2 and any 127.36 applicable provision of the bylaws of the relief association 128.1 based on the number of years of service to the credit of the 128.2 retiring member. 128.3 Sec. 12. Minnesota Statutes 2004, section 424A.02, 128.4 subdivision 7, is amended to read: 128.5 Subd. 7. [DEFERRED SERVICE PENSIONS.] (a) A member of a 128.6 relief associationto which this section appliesis entitled to 128.7 a deferred service pension if the member: 128.8 (1) has completed the lesser of the minimum period of 128.9 active service with the fire department specified in the bylaws 128.10 or 20 years of active service with the fire department; 128.11 (2) has completed at least five years of active membership 128.12 in the relief association; and 128.13 (3) separates from active service and membership before 128.14 reaching age 50 or the minimum age for retirement and 128.15 commencement of a service pension specified in the bylaws 128.16 governing the relief association if that age is greater than age 128.17 50. 128.18 (b) The deferred service pensionstartsis payable when the 128.19 former member reaches age 50, or the minimum age specified in 128.20 the bylaws governing the relief association if that age is 128.21 greater than age 50, and when the former member makes a valid 128.22 written application. 128.23 (c) A relief association that provides a lump sum service 128.24 pension governed by subdivision 3 may, when its governing bylaws 128.25 so provide, pay interest on the deferred lump sum service 128.26 pension during the period of deferral. If provided for in the 128.27 bylaws, interest must be paid in one of the following manners: 128.28 (1) at the investment performance rate actually earned on 128.29 that portion of the assets if the deferred benefit amount is 128.30 invested by the relief association in a separate account 128.31 established and maintained by the relief association or if the 128.32 deferred benefit amount is invested in a separate investment 128.33 vehicle held by the relief association; 128.34 (2) atthean interest rate of up to five percent, 128.35 compounded annually, as set by the board of directors and 128.36 approved as provided in subdivision 10; or 129.1 (3) at a rate equal to the actual time weighted total rate 129.2 of return investment performance of the special fund as reported 129.3 by the Office of the State Auditor under section 356.219, up to 129.4 five percent, compounded annually, and applied consistently for 129.5 all deferred service pensioners. 129.6(d)A relief association may not use the method provided 129.7 for inparagraph (c),clause (3), until it has modified its 129.8 bylaws to be consistent with that clause. 129.9 (d) Interest under paragraph (c), clause (2) or (3), is 129.10 payable from the first day of the month next following the date 129.11 on which the municipality has approved the deferred service 129.12 pension interest rate established by the board of trustees or 129.13 from the first day of the month next following the date on which 129.14 the member separated from active fire department service and 129.15 relief association membership, whichever is later, to the last 129.16 day of the month immediately before the month in which the 129.17 deferred member becomes eligible to begin receipt of the service 129.18 pension and applies for the deferred service pension. 129.19 (e) A relief association that provides a defined 129.20 contribution service pension may, if its governing bylaws so 129.21 provide, credit interest or additional investment performance on 129.22 the deferred lump sum service pension during the period of 129.23 deferral. If provided for in the bylaws, the interest must be 129.24 paid in one of the manners specified in paragraph (c) or 129.25 alternatively the relief association may credit any investment 129.26 return on the assets of the special fund of the defined 129.27 contribution volunteer firefighter relief association in 129.28 proportion to the share of the assets of the special fund to the 129.29 credit of each individual deferred member account through the 129.30 date on which the investment return is recognized by and 129.31 credited to the special fund. 129.32 (f) For a deferred service pension that is transferred to a 129.33 separate account established and maintained by the relief 129.34 association or separate investment vehicle held by the relief 129.35 association, the deferred member bears the full investment risk 129.36 subsequent to transfer and in calculating the accrued liability 130.1 of the volunteer firefighters relief association that pays a 130.2 lump sum service pension, the accrued liability for deferred 130.3 service pensions is equal to the separate relief association 130.4 account balance or the fair market value of the separate 130.5 investment vehicle held by the relief association. 130.6(f)(g) The deferred service pension is governed by and 130.7 must be calculated under the general statute, special law, 130.8 relief association articles of incorporation, and relief 130.9 association bylaw provisions applicable on the date on which the 130.10 member separated from active service with the fire department 130.11 and active membership in the relief association. 130.12 Sec. 13. [424A.021] [CREDIT FOR BREAK IN SERVICE TO 130.13 PROVIDE UNIFORMED SERVICE.] 130.14 Subdivision 1. [AUTHORIZATION.] Subject to restrictions 130.15 stated in this section, a volunteer firefighter who is absent 130.16 from firefighting service due to service in the uniformed 130.17 services, as defined in United States Code, title 38, section 130.18 4303(13), may obtain service credit if the relief association is 130.19 a defined benefit plan or an allocation of any fire state aid, 130.20 any municipal contributions, and any investment return received 130.21 by the relief association if the relief association is a defined 130.22 contribution plan for the period of the uniformed service, not 130.23 to exceed five years, unless a longer period is required under 130.24 United States Code, title 38, section 4312. 130.25 Subd. 2. [LIMITATIONS.] (a) To be eligible for service 130.26 credit or an investment return allocation under this section, 130.27 the volunteer firefighter must return to firefighting service 130.28 with coverage by the same relief association or by the successor 130.29 to that relief association upon discharge from service in the 130.30 uniformed service within the time frame required in United 130.31 States Code, title 38, section 4312(e). 130.32 (b) Service credit or an investment return allocation is 130.33 not authorized if the firefighter separates from uniformed 130.34 service with a dishonorable or bad conduct discharge or under 130.35 other than honorable conditions. 130.36 (c) Service credit or an investment return allocation is 131.1 not authorized if the firefighter fails to provide notice to the 131.2 fire department that the individual is leaving to provide 131.3 service in the uniformed service, unless it is not feasible to 131.4 provide that notice due to the emergency nature of the situation. 131.5 Sec. 14. Minnesota Statutes 2004, section 424A.04, 131.6 subdivision 1, is amended to read: 131.7 Subdivision 1. [MEMBERSHIP.] (a)EveryA relief 131.8 association that is directly associated with a municipal fire 131.9 departmentshallmust be managed by a board of trustees 131.10 consisting of nine members. Six trusteesshallmust be elected 131.11 from the membership of the relief association and three trustees 131.12shallmust be drawn from the officials of the municipalities 131.13 served by the fire department to which the relief association is 131.14 directly associated. The bylaws of a relief association which 131.15 provides a monthly benefit service pension may provide that one 131.16 of the six trustees elected from the relief 131.17 association membership may be a retired member receiving a 131.18 monthly pension who is elected by the membership of the relief 131.19 association. The threeex officiomunicipal trusteesshall be131.20the mayor, the clerk, clerk-treasurer or finance director,must 131.21 be one elected municipal official and one elected or appointed 131.22 municipal official who are designated as municipal 131.23 representatives by the municipal governing board annually and 131.24 the chief of the municipal fire department. 131.25 (b)EveryA relief association that is a subsidiary of an 131.26 independent nonprofit firefighting corporationshallmust be 131.27 managed by a board of trustees consisting oftennine members. 131.28 Six trusteesshallmust be elected from the membership of the 131.29 relief association,threetwo trusteesshallmust be drawn from 131.30 the officials of the municipalities served by the fire 131.31 department to which the relief association is directly 131.32 associated, and one trustee shall be the fire chief serving with 131.33 the independent nonprofit firefighting corporation. The bylaws 131.34 of a relief association may provide that one of the six trustees 131.35 elected from the relief association membership may be a retired 131.36 member receiving a monthly pension who is elected by the 132.1 membership of the relief association. Thethree ex officiotwo 132.2 municipal trusteeswho are the elected officials shallmust 132.3 be elected or appointed municipal officials, selected as follows: 132.4 (1) if only one municipality contracts with the independent 132.5 nonprofit firefighting corporation, theex officiomunicipal 132.6 trusteesshallmust bethree electedtwo officials of the 132.7 contracting municipality who are designated annually by the 132.8 governing body of the municipality; 132.9(2) if two municipalities contract with the independent132.10nonprofit firefighting corporation, the ex officio trustees132.11shall be two elected officials of the largest municipality in132.12population and one elected official of the next largest132.13municipality in population who are designated by the governing132.14bodies of the applicable municipalities;or 132.15(3)(2) ifthreetwo or more municipalities contract with 132.16 the independent nonprofit corporation, theex officiomunicipal 132.17 trusteesshallmust be oneelectedofficialoffrom each of 132.18 thethreetwo largest municipalities in population who are 132.19 designated annually by the governing bodies of the applicable 132.20 municipalities. 132.21 (c) The municipal trustees for a relief association that is 132.22 directly associated with a fire department operated as or by a 132.23 joint powers entity must be designated annually by the joint 132.24 powers board. The municipal trustees for a relief association 132.25 that is directly associated with a fire department service area 132.26 township must be designated by the township board. 132.27 (d) If a relief association lacks theex officiomunicipal 132.28 board members provided for in paragraph (a), (b), or(b)(c) 132.29 because the fire department is not located in or associated with 132.30 an organized municipality, joint powers entity, or township, the 132.31ex officiomunicipal board members must be appointed from the 132.32 fire department service area by the board of commissioners of 132.33 the applicable county. 132.34 (e) The term of these appointedex officiomunicipal board 132.35 members isthree yearsone year or until the person's successor 132.36 is qualified, whichever is later. 133.1(d) An ex officio(f) A municipal trustee under paragraph 133.2 (a), (b),or(c)shall have, or (d) has all the rights and 133.3 duties accorded to any other trustee, except the right to be an 133.4 officer of the relief association board of trustees. 133.5(e)(g) A boardshallmust have at least three officers, 133.6which shall bewho are a president, a secretary and a treasurer. 133.7 These officersshallmust be elected from among the elected 133.8 trustees by either the full board of trustees or by the 133.9 membership, as specified in the bylaws, and. In no eventshall133.10 may any trustee hold more than one officer position at any one 133.11 time. The terms of the elected trustees and of the officers of 133.12 the boardshallmust be specified in the bylaws of the relief 133.13 association, butshallmay not exceed three years. If the term 133.14 of the elected trustees exceeds one year, the election of the 133.15 various trustees elected from the membershipshall initially and133.16shall thereafter continue tomust be staggered on as equal a 133.17 basis as is practicable. 133.18 Sec. 15. Minnesota Statutes 2004, section 424B.10, 133.19 subdivision 1, is amended to read: 133.20 Subdivision 1. [BENEFITS.] (a) Notwithstanding any 133.21 provision of section 424A.02, subdivision 3, to the contrary, 133.22 the service pension of the subsequent relief association as of 133.23 the effective date of consolidation is either the service 133.24 pension amount specified in clause (1) or the service pension 133.25 amounts specified in clause (2), as provided for in the 133.26 consolidated relief association's articles of incorporation or 133.27 bylaws: 133.28 (1) the highest dollar amount service pension amount of any 133.29 prior volunteer firefighters relief association in effect 133.30 immediately before the consolidation initiation if the pension 133.31 amount was implemented consistent with section 424A.02; or 133.32 (2) for service rendered by each individual volunteer 133.33 firefighter before consolidation, the service pension amount 133.34 under the consolidating volunteer firefighters relief 133.35 association that the firefighter belonged to immediately before 133.36 the consolidation if the pension amount was implemented 134.1 consistent with section 424A.02 and for service rendered after 134.2 the effective date of the consolidation, the highest dollar 134.3 amount service pension of any of the consolidating volunteer 134.4 firefighters relief associations in effect immediately before 134.5 the consolidation if the pension amount was implemented 134.6 consistent with section 424A.02. 134.7 (b) Any increase in the service pension amount beyond the 134.8 amount implemented under paragraph (a) must conform with the 134.9 requirements and limitations of sections 69.771 to 69.775 and 134.10 424A.02. 134.11 Sec. 16. [STUDY OF STATEWIDE LUMP-SUM VOLUNTEER 134.12 FIREFIGHTER RETIREMENT PLAN; CREATION OF TASK FORCE.] 134.13 Subdivision 1. [TASK FORCE MEMBERSHIP.] (a) A statewide 134.14 Volunteer Firefighter Retirement Plan Study Task Force is 134.15 created. 134.16 (b) The task force members are: 134.17 (1) four members who are appointed by the president of the 134.18 Minnesota Area Relief Association coalition; 134.19 (2) four members who are appointed by the president of the 134.20 Minnesota State Fire Department Association; 134.21 (3) four members who are appointed by the president of the 134.22 Minnesota State Fire Chiefs Association; 134.23 (4) four members who are appointed by the board of 134.24 directors of the League of Minnesota Cities; 134.25 (5) two members who are appointed by the board of directors 134.26 of the Insurance Federation of Minnesota; 134.27 (6) two members who are appointed by the board of directors 134.28 of the Minnesota Association of Farm Mutual Insurance Companies; 134.29 and 134.30 (7) the Minnesota state auditor or the auditor's designee. 134.31 (c) Appointments must be made on or before July 1, 2005. 134.32 If the appointment is not made in a timely manner, or if there 134.33 is a vacancy, the state auditor shall appoint the task force 134.34 member or the replacement member. 134.35 (d) The chair of the task force shall be selected by the 134.36 task force. 135.1 (e) Administrative services for the task force must be 135.2 provided by the Department of Public Safety. 135.3 Subd. 2. [TASK FORCE DUTIES.] (a) The task force shall 135.4 conduct fact finding regarding the creation of a statewide 135.5 volunteer firefighter retirement plan. 135.6 (b) The task force shall recommend whether or not a 135.7 statewide volunteer firefighter retirement plan should be 135.8 created. If the task force concludes a statewide volunteer 135.9 firefighter retirement plan has merit, the task force shall 135.10 recommend the investment vehicle or vehicles to be utilized by 135.11 the plan, the administration and corporate governance structure 135.12 of the plan, the incentives needed to formulate the plan, the 135.13 limitations applicable to the plan, and the state resources 135.14 needed to be dedicated to the plan. The task force may also 135.15 consider creation of regional volunteer firefighter retirement 135.16 plans. 135.17 Subd. 3. [REPORT.] The task force shall prepare a report 135.18 detailing its findings about a potential statewide or regional 135.19 volunteer firefighter retirement plan or plans. The report is 135.20 due January 15, 2006, and must be filed with the Legislative 135.21 Reference Library; the chair of the Legislative Commission on 135.22 Pensions and Retirement; the chair of the State and Local 135.23 Governmental Operations Committee of the senate; the chair of 135.24 the State Government Budget Division of the senate Finance 135.25 Committee; the chair of the Governmental Operations and Veterans 135.26 Affairs Committee of the house of representatives; and the chair 135.27 of the State Government Finance Committee of the house of 135.28 representatives. 135.29 Sec. 17. [EFFECTIVE DATE.] 135.30 (a) Sections 1 to 12, 14, and 15 are effective July 1, 2005. 135.31 (b) Section 13 is effective July 1, 2005, and applies to 135.32 breaks in service that end on or after that date. 135.33 (c) Section 16 is effective the day following final 135.34 enactment. 135.35 ARTICLE 12 135.36 VARIOUS CORRECTIONS 136.1 AND CLARIFICATIONS 136.2 Section 1. Minnesota Statutes 2004, section 3A.13, is 136.3 amended to read: 136.4 3A.13 [EXEMPTION FROM PROCESS AND TAXATION; HEALTH PREMIUM 136.5 DEDUCTION.] 136.6 (a) The provisions of section352.15 shall356.401 apply to 136.7 the legislators retirement plan, chapter 3A. 136.8 (b) The executive director of the Minnesota State 136.9 Retirement System must, at the request of a retired legislator 136.10 who is enrolled in a health insurance plan covering state 136.11 employees, deduct the person's health insurance premiums from 136.12 the person's annuity and transfer the amount of the premium to a 136.13 health insurance carrier covering state employees. 136.14 Sec. 2. Minnesota Statutes 2004, section 69.011, 136.15 subdivision 2b, is amended to read: 136.16 Subd. 2b. [DEPARTMENTS OF NATURAL RESOURCES AND PUBLIC 136.17 SAFETY.] (a)On or before July 1, 1997, the commissioner of136.18natural resources shall certify one-half of the number of peace136.19officers as defined in subdivision 1, clause (g), employed by136.20the Enforcement Division during calendar year 1996 and the136.21commissioner of public safety shall certify one-half of the136.22number of peace officers as defined in subdivision 1, clause136.23(g), employed by the Bureau of Criminal Apprehension, the136.24Gambling Enforcement Division, and the State Patrol Division136.25during calendar year 1996.136.26(b) On or before March 15, 1998, the commissioner of136.27natural resources shall certify seven-tenths of the number of136.28peace officers as defined in subdivision 1, clause (g), employed136.29by the Enforcement Division and the commissioner of public136.30safety shall certify seven-tenths of the number of peace136.31officers as defined in subdivision 1, clause (g), employed by136.32the Bureau of Criminal Apprehension, the Gambling Enforcement136.33Division, and the State Patrol Division.136.34(c)On or beforeMarch 15, 1999, and annually on or before136.35 each March 15thereafter, the commissioner of natural resources 136.36 shall certify the number of peace officers as defined in 137.1 subdivision 1, clause (g), employed by the Enforcement Division 137.2 and the commissioner of public safety shall certify the number 137.3 of peace officers as defined in subdivision 1, clause (g), 137.4 employed by the Bureau of Criminal Apprehension, the Gambling 137.5 Enforcement Division, and the State Patrol Division. 137.6(d)(b) The certification must be on a form prescribed by 137.7 the commissioner. Peace officers certified under this paragraph 137.8 must be included in the total certifications under subdivision 2. 137.9 Sec. 3. Minnesota Statutes 2004, section 69.021, 137.10 subdivision 5, is amended to read: 137.11 Subd. 5. [CALCULATION OF STATE AID.] (a) The amount of 137.12 fire state aid available for apportionment, before the addition 137.13 of the minimum fire state aid allocation amount under 137.14 subdivision 7, is equal to 107 percent of the amount of premium 137.15 taxes paid to the state upon the fire, lightning, sprinkler 137.16 leakage, and extended coverage premiums reported to the 137.17 commissioner by insurers on the Minnesota Firetown Premium 137.18 Report. This amountshallmust be reduced by the amount 137.19 required to pay the state auditor's costs and expenses of the 137.20 audits or exams of the firefighters relief associations. 137.21 The total amount for apportionment in respect to fire state 137.22 aid must not be less than two percent of the premiums reported 137.23 to the commissioner by insurers on the Minnesota Firetown 137.24 Premium Report after subtracting the following amounts: 137.25 (1) the amount required to pay the state auditor's costs 137.26 and expenses of the audits or exams of the firefighters relief 137.27 associations; and 137.28 (2) one percent of the premiums reported by town and 137.29 farmers' mutual insurance companies and mutual property and 137.30 casualty companies with total assets of $5,000,000 or less. 137.31 (b) The total amount for apportionment as police state aid 137.32 is equal to 104 percent of the amount of premium taxes paid to 137.33 the state on the premiums reported to the commissioner by 137.34 insurers on the Minnesota Aid to Police Premium Report, reduced 137.35 by the amount required to pay the costs and expenses of the 137.36 state auditor for audits or exams of police relief 138.1 associations. The total amount for apportionment in respect to 138.2 the police state aid program must not be less than two percent 138.3 of the amount of premiums reported to the commissioner by 138.4 insurers on the Minnesota Aid to Police Premium Report after 138.5 subtracting the amount required to pay the state auditor's cost 138.6 and expenses of the audits or exams of the police relief 138.7 associations. 138.8 (c) The commissioner shall calculate the percentage of 138.9 increase or decrease reflected in the apportionment over or 138.10 under the previous year's available state aid using the same 138.11 premiums as a basis for comparison. 138.12 (d)The amount for apportionment in respect to peace138.13officer state aid under paragraph (b) must be further reduced by138.14$1,779,000 in fiscal year 1999, $2,077,000 in fiscal year 2000,138.15and $2,404,000 in fiscal year 2001. These reductions in this138.16paragraph cancel to the general fund.138.17(e)In addition to the amount for apportionment of police 138.18 state aid under paragraph (b), each year $100,000shallmust be 138.19 apportioned for police state aid. An amount sufficient to pay 138.20 this increase is annually appropriated from the general fund. 138.21 Sec. 4. Minnesota Statutes 2004, section 69.021, 138.22 subdivision 11, is amended to read: 138.23 Subd. 11. [EXCESS POLICE STATE-AID HOLDING ACCOUNT.] (a) 138.24 The excess police state-aid holding account is established in 138.25 the general fund. The excess police state-aid holding account 138.26 must be administered by the commissioner. 138.27 (b) Excess police state aid determined according to 138.28 subdivision 10, must be deposited in the excess police state-aid 138.29 holding account. 138.30 (c) From the balance in the excess police state-aid holding 138.31 account, $900,000 is appropriated to and must be transferred 138.32 annually to the ambulance service personnel longevity award and 138.33 incentive suspense account established by section 144E.42, 138.34 subdivision 2. 138.35 (d) If a police officer stress reduction program is created 138.36 by law and money is appropriated for that program, an amount 139.1 equal to that appropriation must be transferred to the 139.2 administrator of that program from the balance in the excess 139.3 police state-aid holding account. 139.4 (e) On October 1, 1997, and annually on each subsequent139.5October 1of each year, one-half of the balance of the excess 139.6 police state-aid holding account remaining after the deductions 139.7 under paragraphs (c) and (d) is appropriated for additional 139.8 amortization aid under section 423A.02, subdivision 1b. 139.9 (f) Annually, the remaining balance in the excess police 139.10 state-aid holding account, after the deductions under paragraphs 139.11 (c), (d), and (e), cancels to the general fund. 139.12 Sec. 5. Minnesota Statutes 2004, section 69.33, is amended 139.13 to read: 139.14 69.33 [NAMES OF ASSOCIATIONS REPORTED TO INSURANCE 139.15 COMPANIES.] 139.16 The commissioner shall enclose in the annual statement 139.17 blank that is sent to all fire insurance companies doing 139.18 business in this state a blank form containing the names ofall139.19firefighters' relief associations inall cities of the first 139.20 classand the names of the citiesand require these companies, 139.21 at the time of making their annual statements to the 139.22 commissioner, to state on these blanks the amount of premiums 139.23 received by them upon properties insured within the corporate 139.24 limits of the cities named thereon during the year ending 139.25 December 31st last past. Thereafter, before July first each 139.26 year, the commissioner shall certify to the commissioner of 139.27 finance the information thus obtained, together with the amount 139.28 of the tax for the benefit of therelief associationpension 139.29 plans covering firefighters in cities of the first class paid in 139.30 such year by these companies upon these insurance premiums. 139.31 Sec. 6. Minnesota Statutes 2004, section 69.773, 139.32 subdivision 4, is amended to read: 139.33 Subd. 4. [FINANCIAL REQUIREMENTS OF SPECIAL FUND.]Prior139.34toBefore August 1 of each year, the officers of the relief 139.35 association shall determine the financial requirements of the 139.36 special fund of the relief association in accordance with the 140.1 requirements of this subdivision. The financial requirements of 140.2 the relief associationshallmust be based on the most recent 140.3 actuarial valuation of the special fund prepared in accordance 140.4 with subdivision 2. If the relief association has an unfunded 140.5 actuarial accrued liability as reported in the most recent 140.6 actuarial valuation, the financial requirementsshallmust be 140.7 determined by adding the figures calculatedpursuant tounder 140.8 clauses (a), (b), and (c). If the relief association does not 140.9 have an unfunded actuarial accrued liability as reported in the 140.10 most recent actuarial valuation, the financial requirements 140.11shallmust be an amount equal to the figure calculatedpursuant140.12tounder clauses (a) and (b), reduced by an amount equal to 140.13 one-tenth of the amount of any assets in excess of the actuarial 140.14 accrued liability of the relief association. The determination 140.15 of whether or not the relief association has an unfunded 140.16 actuarial accrued liabilityshallmust be based on the current 140.17 market value of assets for which a market value is readily 140.18 ascertainable and the cost or book value, whichever is 140.19 applicable, for assets for which no market value is readily 140.20 ascertainable. 140.21 (a) The normal level cost requirement for the following 140.22 year, expressed as a dollar amount,shall beis the figure for 140.23 the normal level cost of the relief association as reported in 140.24 the actuarial valuation. 140.25 (b) The amount of anticipated future administrative 140.26 expenses of the special fundshallmust be calculated by 140.27 multiplying the dollar amount of the administrative expenses of 140.28 the special fund for the most recent year by the factor of 1.035. 140.29 (c) The amortization contribution requirement to retire the 140.30 current unfunded actuarial accrued liability by the established 140.31 date for full fundingshall beis the figure for the 140.32 amortization contribution as reported in the actuarial 140.33 valuation.If there has not been a change in the actuarial140.34assumptions used for calculating the actuarial accrued liability140.35of the special fund, a change in the bylaws of the relief140.36association governing the service pensions, retirement benefits,141.1or both payable from the special fund or a change in the141.2actuarial cost method used to value all or a portion of the141.3special fund which change or changes, which by themselves141.4without inclusion of any other items of increase or decrease,141.5produce a net increase in the unfunded actuarial accrued141.6liability of the special fund since December 31, 1970, the141.7established date for full funding shall be December 31, 1990.141.8 If there has been a change in the actuarial assumptions used for 141.9 calculating the actuarial accrued liability of the special fund, 141.10 a change in the bylaws of the relief association governing the 141.11 service pensions, retirement benefits, or both payable from the 141.12 special fund or a change in the actuarial cost method used to 141.13 value all or a portion of the special fund and the change or 141.14 changes, by themselves and without inclusion of any other items 141.15 of increase or decrease, produce a net increase in the unfunded 141.16 actuarial accrued liability of the special fundsince December141.1731, 1970, but prior to January 1, 1979, the established date for141.18full funding shall be December 31, 1998, and if there has been a141.19change since December 31, 1978, the established date for full 141.20 fundingshallmust be determined using the following procedure: 141.21 (i) the unfunded actuarial accrued liability of the special 141.22 fundshallmust be determined in accordance with the provisions 141.23 governing service pensions, retirement benefits, and actuarial 141.24 assumptions in effect before an applicable change; 141.25 (ii) the level annual dollar contribution needed to 141.26 amortize this unfunded actuarial accrued liability amount by the 141.27 date for full funding in effectprior tobefore the changeshall141.28 must be calculated using the interest assumption specified in 141.29 section 356.215, subdivision 8, in effect before any applicable 141.30 change; 141.31 (iii) the unfunded actuarial accrued liability of the 141.32 special fundshallmust be determined in accordance with any new 141.33 provisions governing service pensions, retirement benefits, and 141.34 actuarial assumptions and the remaining provisions governing 141.35 service pensions, retirement benefits, and actuarial assumptions 141.36 in effect before an applicable change; 142.1 (iv) the level annual dollar contribution needed to 142.2 amortize the difference between the unfunded actuarial accrued 142.3 liability amount calculatedpursuant tounder subclause (i) and 142.4 the unfunded actuarial accrued liability amount 142.5 calculatedpursuant tounder subclause (iii) over a period of 20 142.6 years starting December 31 of the year in which the change is 142.7 effectiveshallmust be calculated using the interest assumption 142.8 specified in section 356.215, subdivision 8, in effect after any 142.9 applicable change; 142.10 (v) the annual amortization contribution calculated 142.11pursuant tounder subclause (iv)shallmust be added to the 142.12 annual amortization contribution calculatedpursuant tounder 142.13 subclause (ii); 142.14 (vi) the period in which the unfunded actuarial accrued 142.15 liability amount determined in subclause (iii) will be amortized 142.16 by the total annual amortization contribution computedpursuant142.17tounder subclause (v)shallmust be calculated using the 142.18 interest assumption specified in section 356.215, subdivision 8, 142.19 in effect after any applicable change, rounded to the nearest 142.20 integral number of years, but whichshalldoes not exceed a 142.21 period of 20 years from the end of the year in which the 142.22 determination of the date for full funding using this procedure 142.23 is made and whichshallis notbeless than the period of years 142.24 beginning in the year in which the determination of the date for 142.25 full funding using this procedure is made and ending by the date 142.26 for full funding in effect before the change; 142.27 (vii) the period determinedpursuant tounder subclause (vi) 142.28shallmust be added to the date as of which the actuarial 142.29 valuation was prepared and the resulting dateshall beis the 142.30 new date for full funding. 142.31 Sec. 7. Minnesota Statutes 2004, section 352.01, 142.32 subdivision 4, is amended to read: 142.33 Subd. 4. [ACCUMULATED CONTRIBUTIONS.] "Accumulated 142.34 contributions" means the total, exclusive of interest, of (1) 142.35 the sums deducted from the salary of an employee, (2) the amount 142.36 of payments, including assessments, paid by the employee in lieu 143.1 of salary deductions and all other payments made underLaws143.21929, chapter 191, as amended,this chapter and credited to the 143.3 employee's individual account in the retirement fund. 143.4 Sec. 8. Minnesota Statutes 2004, section 352.01, 143.5 subdivision 5, is amended to read: 143.6 Subd. 5. [RETIREMENT FUND.] (a) "Retirement fund" means 143.7 the general state employees retirement fund created by section 143.8 352.04, subdivision 1, with respect to the general state 143.9 employees retirement plan or the correctional state employees 143.10 retirement fund created by section 352.911, subdivision 1, with 143.11 respect to the correctional state employees retirement plan. 143.12 (b)"The retirement fund"includes the aggregate of 143.13 accumulated contributions of employees covered by the applicable 143.14 plan, and all other funds paid into the state treasury or 143.15 received by the director underLaws 1929, chapter 191, as143.16amendedthis chapter, together with all income and profits from 143.17 the money and interest on it, including contributions on the 143.18 part of the federal government, the state, and state departments. 143.19 Sec. 9. Minnesota Statutes 2004, section 352.01, 143.20 subdivision 21, is amended to read: 143.21 Subd. 21. [ACCRUED ANNUITIES.] (a) In this chapter and 143.22 chapters 3A, 352B, 352C, and 490, "accrued annuity" means an 143.23 annuity that had become payable to a retired employee in the 143.24 lifetime of the employee. 143.25 (b) An annuity or benefit authorized as provided in this 143.26 chapter and chapters 3A, 352B, 352C, and 490 becomes payable on 143.27 the first day of each calendar month for that calendar month and 143.28is tomust be paid on the first day of each calendar month 143.29beginning with benefits payable on and after December 1, 1977. 143.30 (c) Notwithstanding any provision to the contrary in this 143.31 chapter and chapters 3A, 352B, 352C, and 490, benefit payment 143.32 authorized as "payable for life" is payable for the entire month 143.33 in which death occurs, and the benefit payment for the month of 143.34 death is payable to the surviving spouse or other beneficiary 143.35 only if the annuitant dies before negotiating the benefit check. 143.36 Sec. 10. Minnesota Statutes 2004, section 352.01, 144.1 subdivision 23, is amended to read: 144.2 Subd. 23. [COVERAGE OR COVERED BY THE SYSTEM.] "Coverage" 144.3 or "covered by the system" means that a stateemployeesemployee 144.4 whoserveserves the state of Minnesota andmakemakes the 144.5 required employee contributions to the retirement fundwillis, 144.6 by reason of these contributionsbecome, entitled to either (1) 144.7 a retirement annuity, or (2) a disability benefit, or (3) a 144.8 refund of accumulated contributions, as provided in this chapter. 144.9 Sec. 11. Minnesota Statutes 2004, section 352.021, 144.10 subdivision 1, is amended to read: 144.11 Subdivision 1. [ESTABLISHMENT.] (a) There is established 144.12 the general state employees retirement plan of the Minnesota 144.13 State Retirement System for state employees. 144.14 (b) Thesystemgeneral state employees retirement plan is a 144.15 continuation of the State Employees Retirement Association. 144.16 (c) Any person who was a member of the State Employees 144.17 Retirement Association on June 30, 1967, is covered by 144.18 thesystemgeneral state employees retirement plan and is 144.19 entitled to all benefits provided by thesystemplan upon 144.20 fulfilling the age, service, contribution, and other 144.21 requirements of this chapter. 144.22 Sec. 12. Minnesota Statutes 2004, section 352.021, 144.23 subdivision 2, is amended to read: 144.24 Subd. 2. [STATE EMPLOYEES COVERED.] Every person whois a144.25state employee, as defined in section 352.01, on July 1, 1967,144.26orbecomes a state employeeafter that dateas defined in 144.27 section 352.01 is covered by thesystemgeneral state employees 144.28 retirement plan. Acceptance of state employment or continuance 144.29 in state service is deemed to be consent to have deductions made 144.30 from salary for deposit to the credit of the account of the 144.31 state employee in the retirement fund. 144.32 Sec. 13. Minnesota Statutes 2004, section 352.021, 144.33 subdivision 3, is amended to read: 144.34 Subd. 3. [OPTIONAL EXEMPTIONS.] Any person who is 144.35 appointed by the governor or lieutenant governor may request 144.36 exemption from coverage by the general state employees 145.1 retirement plan under this chapter if the appointee is notso145.2 coveredatby the plan on the date of appointment. To qualify 145.3 for this exemption, a written request must be made within 90 145.4 days from the date of entering upon the duties of the position 145.5 to which the person is appointed. After making the request, a 145.6 person requesting the exemption is not entitled to coverage by 145.7 the general state employees retirement plan while employed in 145.8 the position that entitled that person to an exemption from 145.9 coverage. 145.10 Sec. 14. Minnesota Statutes 2004, section 352.021, 145.11 subdivision 4, is amended to read: 145.12 Subd. 4. [REENTERING SERVICE AFTER REFUND.] When a former 145.13 employee who has withdrawn accumulated contributions reenters 145.14 employment in a position entitled to coverage under the 145.15systemgeneral state employees retirement plan, the employee 145.16shallmust be covered by thesystemplan on the same basis as a 145.17 new employee and is not entitled to credit for any former 145.18 service. The annuity rights forfeited when taking a refund can 145.19 only be restored as provided in this chapter. 145.20 Sec. 15. Minnesota Statutes 2004, section 352.04, 145.21 subdivision 1, is amended to read: 145.22 Subdivision 1. [FUND CREATED.] (a) There is created a 145.23 special fund to be known as the general state employees 145.24 retirement fund. In that fundthere shall be deposited145.25employees, employee contributions,employersemployer 145.26 contributions, and other amounts authorized by law must be 145.27 deposited. 145.28 (b)Effective July 1, 1969,The general state employees 145.29 retirement plan of the Minnesota State Retirement Systemshall145.30 must participate in the Minnesota postretirement investment fund. 145.31In that fund there shall be depositedThe amounts provided in 145.32 section 352.119 must be deposited in the Minnesota 145.33 postretirement investment fund. 145.34 Sec. 16. Minnesota Statutes 2004, section 352.04, 145.35 subdivision 12, is amended to read: 145.36 Subd. 12. [FUND DISBURSEMENT RESTRICTED.] The general 146.1 state employees retirement fund and the participation in the 146.2 Minnesota postretirement investment fund must be disbursed only 146.3 for the purposes provided by law. The expenses of the system 146.4 and any benefits provided by law, other than benefits payable 146.5 from the Minnesota postretirement investment fund, must be paid 146.6 from the general state employees retirement fund. The 146.7 retirement allowances, retirement annuities, and disability 146.8 benefits, as well as refunds of any sum remaining to the credit 146.9 of a deceased retired employee or a disabled employee must be 146.10 paid only from the general state employees retirement fund after 146.11 the needs have been certified and the amounts withdrawn from the 146.12 participation in the Minnesota postretirement investment fund 146.13 under section 11A.18. The amounts necessary to make the 146.14 payments from the general state employees retirement fund and 146.15 the participation in the Minnesota postretirement investment 146.16 fund are annually appropriated from these funds for those 146.17 purposes. 146.18 Sec. 17. Minnesota Statutes 2004, section 352.041, 146.19 subdivision 1, is amended to read: 146.20 Subdivision 1. [ALLOWABLE SERVICE CREDIT.]Any(a) An 146.21 employee covered by thesystemgeneral state employees 146.22 retirement plan who is given a leave of absence for employment 146.23 by a political subdivision of the stateshallremains a member 146.24 of the plan and must continue to pay member contributions into 146.25 the general state employees retirement fund for the period of 146.26 leave. 146.27 (b) Upon payment of member contributions, the employee must 146.28 be given allowable service credit as a state employee on the 146.29 records of thesystemretirement plan as though the employee had 146.30 received salary from the state during the leave. Payments into 146.31 the retirement fundshallmust be at the rate required in 146.32 section 352.04, subdivision 2, and must be based upon the salary 146.33 received from the political subdivisionsubject to the maximum146.34amount, if any. 146.35 Sec. 18. Minnesota Statutes 2004, section 352.041, 146.36 subdivision 2, is amended to read: 147.1 Subd. 2. [EMPLOYEE CONTRIBUTIONS, PROCEDURE.] The officer 147.2 or employee who is authorized by law to pay salaries to 147.3 employees of the political subdivision which is employing a 147.4 state employeeshall havemust deduct employee contributions 147.5deductedfor the general state employees retirement plan under 147.6 section 352.04, subdivision 2, from the salary of each employee 147.7 who is on leave of absence from state service on each payroll 147.8 abstract andshallmust pay the sum to the director following 147.9 the conclusion of each pay period. 147.10 Sec. 19. Minnesota Statutes 2004, section 352.041, 147.11 subdivision 3, is amended to read: 147.12 Subd. 3. [EMPLOYER CONTRIBUTIONS, PROCEDURE.] The officer 147.13 or employee who is authorized by law to pay salaries to 147.14 employees of the political subdivision which is employing a 147.15 state employee covered by thesystem shallgeneral state 147.16 employees retirement plan also must have employer contributions 147.17 made to the general state employees retirement fundonfollowing 147.18 the conclusion of each payroll abstract in the amount required 147.19 by section 352.04, subdivision 3. These contributionsare to147.20 must be charged to the political subdivision as an 147.21 administrative cost. 147.22 Sec. 20. Minnesota Statutes 2004, section 352.041, 147.23 subdivision 5, is amended to read: 147.24 Subd. 5. [EMPLOYER CONTRIBUTIONS, LEAVES OF ABSENCE; TAX 147.25 LEVIES.] (a) Every political subdivision which is employing a 147.26 state employee covered by the system on leave of absence from 147.27 state service for employment by a political subdivision of the 147.28 stateshallmust pay into the general state employees retirement 147.29 fund the amount of the employer contribution required by law for 147.30 state employees covered by the system under section 352.04, 147.31 subdivision 3. 147.32 (b) Employing political subdivisions, exceptother than 147.33 school districts,may levy taxes necessary for the payment of 147.34 employer contributions without limitation as to rate or amount. 147.35 The levy of the taxes does not reduce the amount of other 147.36 taxestothat may be levied by political subdivisions,148.1exceptother than school districts,which are subject to any 148.2 limitation. 148.3 Sec. 21. Minnesota Statutes 2004, section 352.15, 148.4 subdivision 1, is amended to read: 148.5 Subdivision 1. [EXEMPTION; EXCEPTIONS.]None of the money,148.6annuities, or other benefits mentioned in this chapter is148.7assignable either in law or in equity or subject to execution,148.8levy, attachment, garnishment, or other legal process, except as148.9provided in subdivision 1a or section 518.58, 518.581, or148.10518.6111.The provisions of section 356.401 apply to the general 148.11 state employees retirement plan and to the correctional state 148.12 employees retirement plan. 148.13 Sec. 22. Minnesota Statutes 2004, section 352.15, 148.14 subdivision 3, is amended to read: 148.15 Subd. 3. [DEDUCTING HEALTH OR DENTAL INSURANCE PREMIUMS.] 148.16 The board maydirectauthorize, at its discretion, the deduction 148.17 of a retiree's health or dental insurance premiums and transfer 148.18 of the amounts to a health or dental insurance carrier covering 148.19 state employees. The insurance carrier must certify that the 148.20 retired employee has signed an authorization for the deduction 148.21 and provide a computer readable roster of covered retirees and 148.22 amounts. The health or dental insurance carrier must refund 148.23 deductions withheld from a retiree's check in error directly to 148.24 the retiree. The board shall require that the insurance carrier 148.25toreimburse the fund for the administrative expense of 148.26 withholding the premium amounts. The insurance carrier shall 148.27 assume liability for any failure of the system to properly 148.28 withhold the premium amounts. 148.29 Sec. 23. Minnesota Statutes 2004, section 352.15, 148.30 subdivision 4, is amended to read: 148.31 Subd. 4. [DIRECT TRANSFER OF REFUNDS.] A direct transfer 148.32 ofaccountrefunds under this chapter may be made to an 148.33 individual retirement savingsaccountsaccount or a qualified 148.34 retirementplansplan of the person upon the receipt of an 148.35 application for transfer by a former employee, on forms 148.36 acceptable to the executive director. 149.1 Sec. 24. Minnesota Statutes 2004, section 352.22, 149.2 subdivision 10, is amended to read: 149.3 Subd. 10. [OTHER REFUNDS.] Former employees covered by the 149.4 system are entitled to apply for refunds if they are or become 149.5 members of the State Patrol retirement fund, the state Teachers 149.6 Retirement Association, or employees of the University of 149.7 Minnesota excluded from coverage under the system by action of 149.8 the Board of Regents;or labor service employees, excluded from149.9coverage under section 352.01, subdivision 2b, clause (25);or 149.10 employees of the adjutant general who under federal law 149.11 effectually elect membership in a federal retirement system; or 149.12 officers or employees of the senate or house of representatives, 149.13 excluded from coverage under section 352.01, subdivision 2b, 149.14 clause(8)(7). The refunds must include accumulated 149.15 contributions plus interest as provided in subdivision 2. These 149.16 employees may apply for a refund once 30 days or more have 149.17 elapsed after their coverage ceases, even if they continue in 149.18 state service but in positions not covered by this chapter. 149.19 Sec. 25. Minnesota Statutes 2004, section 352B.01, 149.20 subdivision 1, is amended to read: 149.21 Subdivision 1. [SCOPE.] In this chapter, each of the terms 149.22 defined in this sectionhavehas themeaningsmeaning given 149.23themto it. 149.24 Sec. 26. Minnesota Statutes 2004, section 352B.01, 149.25 subdivision 2, is amended to read: 149.26 Subd. 2. [MEMBER.] "Member" means: 149.27 (1) a State Patrol member currently employedafter June 30,149.281943,under section 299D.03 by the state, who is a peace officer 149.29 under section 626.84, and whose salary or compensation is paid 149.30 out of state funds; 149.31 (2) a conservation officer employed under section 97A.201, 149.32 currently employed by the state, whose salary or compensation is 149.33 paid out of state funds; 149.34 (3) a crime bureau officer who was employed by the crime 149.35 bureau and was a member of the Highway Patrolmen's retirement 149.36 fund on July 1, 1978, whether or not that person has the power 150.1 of arrest by warrant after that date, or who is employed as 150.2 police personnel, with powers of arrest by warrant under section 150.3 299C.04, and who is currently employed by the state, and whose 150.4 salary or compensation is paid out of state funds; 150.5 (4) a person who is employed by the state in the Department 150.6 of Public Safety in a data processing management position with 150.7 salary or compensation paid from state funds, who was a crime 150.8 bureau officer covered by the State Patrol retirement plan on 150.9 August 15, 1987, and who was initially hired in the data 150.10 processing management position within the department during 150.11 September 1987, or January 1988, with membership continuing for 150.12 the duration of the person's employment in that position, 150.13 whether or not the person has the power of arrest by warrant 150.14 after August 15, 1987; 150.15 (5) a public safety employeedefined aswho is a peace 150.16 officerinunder section 626.84, subdivision 1, paragraph (c), 150.17 and who is employedwithby the Division of Alcohol and Gambling 150.18 Enforcement under section 299L.01; and 150.19 (6) a Fugitive Apprehension Unit officer after October 31, 150.20 2000, who is employed by the Office of Special Investigations of 150.21 the Department of Corrections and who is a peace officer under 150.22 section 626.84. 150.23 Sec. 27. Minnesota Statutes 2004, section 352B.01, 150.24 subdivision 3, is amended to read: 150.25 Subd. 3. [ALLOWABLE SERVICE.] (a) "Allowable service" 150.26 means: 150.27 (1) for members defined in subdivision 2, clause(a)(1), 150.28monthlyserviceis granted forin any month for which payments 150.29 have been made to the State Patrol retirement fund, and 150.30 (2) for members defined in subdivision 2, clauses(b)(2) 150.31 and(c)(3), service for which payments have been made to the 150.32 State Patrol retirement fund, service for which payments were 150.33 made to the State Police officers retirement fund after June 30, 150.34 1961, and all prior service which was credited to a member for 150.35 service on or before June 30, 1961. 150.36 (b) Allowable service also includes any period of absence 151.1 from duty by a member who, by reason of injury incurred in the 151.2 performance of duty, is temporarily disabled and for which 151.3 disability the state is liable under the workers' compensation 151.4 law, until the date authorized by the executive director for 151.5 commencement of payment of a disability benefit or return to 151.6 employment. 151.7 (c) MS 2002 (Expired) 151.8 (d) Allowable service means service in a month during which 151.9 a member is paid a salary from which a member contribution is 151.10 deducted, deposited, and credited in the State Patrol retirement 151.11 plan. 151.12 Sec. 28. Minnesota Statutes 2004, section 352B.02, 151.13 subdivision 1e, is amended to read: 151.14 Subd. 1e. [AUDIT; ACTUARIAL VALUATION.] The legislative 151.15 auditor shall audit the fund. Any actuarial valuation of the 151.16 fund required under section 356.215 must be prepared by the 151.17 actuary retained under section 356.214. Any approved actuary 151.18 retained by the executive director under section 352.03, 151.19 subdivision 6, may perform actuarial valuations and experience 151.20 studies to supplement those performed by thecommission-retained151.21 actuary retained under section 356.214. Any supplemental 151.22 actuarial valuation or experience studiesshallmust be filed 151.23 with the executive director of the Legislative Commission on 151.24 Pensions and Retirement. 151.25 Sec. 29. Minnesota Statutes 2004, section 352B.071, is 151.26 amended to read: 151.27 352B.071 [EXEMPTION FROM PROCESS.] 151.28None of the money, annuities, or other benefits provided151.29for in this chapter is assignable either in law or in equity or151.30be subject to execution, levy, attachment, garnishment, or other151.31legal process, except as provided in section 518.58, 518.581, or151.32518.6111.The provisions of section 356.401 apply to the State 151.33 Patrol retirement plan. 151.34 Sec. 30. Minnesota Statutes 2004, section 352D.01, is 151.35 amended to read: 151.36 352D.01 [ESTABLISHMENT.] 152.1 There is hereby established within the Minnesota State 152.2 Retirement System a retirement program for certain public 152.3 employees to be known as the Minnesota unclassified employees 152.4 retirement program, which shall be. The program must be 152.5 administered by the Minnesota State Retirement System. 152.6 Sec. 31. Minnesota Statutes 2004, section 352D.015, 152.7 subdivision 3, is amended to read: 152.8 Subd. 3. [SUPPLEMENTAL INVESTMENT FUND.] "Supplemental 152.9 investment fund" means the fund established and governed by 152.10 section 11A.17. 152.11 Sec. 32. Minnesota Statutes 2004, section 352D.015, 152.12 subdivision 4, is amended to read: 152.13 Subd. 4. [GENERAL FUND.] "General fund" means the general 152.14 state employees retirement fund except the moneys for the 152.15 unclassified program. 152.16 Sec. 33. Minnesota Statutes 2004, section 352D.03, is 152.17 amended to read: 152.18 352D.03 [TRANSFER OF ASSETS.] 152.19 Unless an eligible employee enumerated in section 352D.02, 152.20 subdivision 1or 1a, has elected coverage under the individual 152.21 retirement account plan under chapter 354B, a sum of money 152.22 representing the assets credited to each employee exercising the 152.23 option contained in section 352D.02, plus an equal employer 152.24 contribution together with interest for the employment period at 152.25 theactuarially assumed ratesapplicable preretirement interest 152.26 actuarial assumption rate during this period, compounded 152.27 annually,shallmust be used for the purchase of shares on 152.28 behalf of each employee in the accounts of the supplemental 152.29 retirement fund established by section 11A.17.Any employer's152.30contribution to amortize the deficit in the state employee's152.31retirement fund shall not, however, be used for the purchase of152.32shares.152.33 Sec. 34. Minnesota Statutes 2004, section 352D.05, 152.34 subdivision 4, is amended to read: 152.35 Subd. 4. [REPAYMENT OF REFUND.] (a) A participant in the 152.36 unclassified program may repay regular refunds takenpursuant to153.1 under section 352.22, as provided in section 352.23. 153.2 (b) A participant in the unclassified program or an 153.3 employee covered by the general plan who has withdrawn the value 153.4 of the total shares may repay the refund taken and thereupon 153.5 restore the service credit, rights and benefits forfeited by 153.6 paying into the fund the amount refunded plus interest at an 153.7 annual rate of 8.5 percent compounded annually from the date 153.8 that the refund was taken until the date that the refund is 153.9 repaid. If the participant had withdrawn only the employee 153.10 shares as permitted under prior laws, repaymentshallmust be 153.11 pro rata.Payment shall153.12 (c) Except as provided in section 356.441, the repayment of 153.13 a refund under this section must be made in a lump sum. 153.14 Sec. 35. Minnesota Statutes 2004, section 352D.085, 153.15 subdivision 1, is amended to read: 153.16 Subdivision 1. [COMBINED SERVICE.] Except as provided in 153.17 section 356.30, 356.302, or 356.303, service under the 153.18 unclassified program for which the employee has been credited 153.19 with employee shares may be used for the limited purpose of 153.20 qualifying for benefits under sections 352.115, 352.72, 153.21 subdivision 1, 352.113, 354.44, 354.45, 354.48, and 354.60;153.22provided such. The service also may not be used to qualify for 153.23 a disability benefit under section 352.113 or 354.48 if a 153.24 participant was under the unclassified program at the time of 153.25 the disability, and provided further that. Also, the years of 153.26 service and salary paid while the participant was in the 153.27 unclassified programshallmay not be used in determining the 153.28 amount of benefits. 153.29 Sec. 36. Minnesota Statutes 2004, section 352D.09, 153.30 subdivision 5, is amended to read: 153.31 Subd. 5. [UNCLAIMED BENEFITS.] If the beneficiary, 153.32 surviving spouse or estate has not made application for benefits 153.33 within ten years after the date of the death of a participant, 153.34 the value of the sharesshall beis appropriated to theregular153.35 general state employees retirement fund and the provisions of 153.36 section 352.12, subdivision 12shall, govern. If a former 154.1 participant fails to make a claim for benefits within five years 154.2 after the termination of covered service or by age 70, whichever 154.3 is later, the value of the sharesshall beis appropriated to 154.4 the general state employees retirement fund and the provisions 154.5 of section 352.22, subdivision 8,shallapply. 154.6 Sec. 37. Minnesota Statutes 2004, section 352D.12, is 154.7 amended to read: 154.8 352D.12 [TRANSFER OF PRIOR SERVICE CONTRIBUTIONS.] 154.9 (a) An employee who is a participant in the unclassified 154.10 program and who has prior service credit in a covered plan under 154.11chapters 3A,chapter 352,352C,353, 354, 354A,andor 422A 154.12 may, within the time limits specified in this section, elect to 154.13 transfer to the unclassified program prior service contributions 154.14 to one or more of those plans.Participants with six or more154.15years of prior service credit in a plan governed by chapter 3A154.16or 352C on July 1, 1998, may not transfer prior service154.17contributions. Participants with less than six years of prior154.18service credit in a plan governed by chapter 3A or 352C on July154.191, 1998, must be contributing to the unclassified plan on or154.20after January 5, 1999, in order to transfer prior contributions.154.21 (b) For participants with prior service credit in a plan 154.22 governed by chapter 352, 353, 354, 354A, or 422A, "prior service 154.23 contributions" means the accumulated employee and equal employer 154.24 contributions with interest at an annual rate of 8.5 percent 154.25 compounded annually, based on fiscal year balances.For154.26participants with less than six years of service credit as of154.27July 1, 1998, and with prior service credit in a plan governed154.28by chapter 3A or 352C, "prior service contributions" means an154.29amount equal to twice the amount of the accumulated member154.30contributions plus annual compound interest at the rate of 8.5154.31percent, computed on fiscal year balances.154.32 (c) If a participant has taken a refund from a retirement 154.33 plan listed in this section, the participant may repay the 154.34 refund to that plan, notwithstanding any restrictions on 154.35 repayment to that plan, plus 8.5 percent interest compounded 154.36 annually and have the accumulated employee and equal employer 155.1 contributions transferred to the unclassified program with 155.2 interest at an annual rate of 8.5 percent compounded annually 155.3 based on fiscal year balances. If a person repays a refund and 155.4 subsequently elects to have the money transferred to the 155.5 unclassified program, the repayment amount, including interest, 155.6 is added to the fiscal year balance in the year which the 155.7 repayment was made. 155.8 (d) A participant electing to transfer prior service 155.9 contributions credited to a retirement plan governed by chapter 155.10 352, 353, 354, 354A, or 422A as provided under this section must 155.11 completethea written application for the transfer and repay 155.12 any refund within one year of the commencement of the employee's 155.13 participation in the unclassified program.A participant155.14electing to transfer prior service contributions credited to a155.15retirement plan governed by chapter 3A or 352C as provided under155.16this section must complete the application for the transfer and155.17repay any refund between January 5, 1999, and June 1, 1999, if155.18the employee commenced participation in the unclassified program155.19before January 5, 1999, or within one year of the commencement155.20of the employee's participation in the unclassified program if155.21the employee commenced participation in the unclassified program155.22after January 4, 1999.155.23 Sec. 38. Minnesota Statutes 2004, section 353.01, 155.24 subdivision 32, is amended to read: 155.25 Subd. 32. [COORDINATED MEMBER.] "Coordinated member" means 155.26anya public employee, includinganya public hospital employee, 155.27 who is covered byanyan agreement or modification made between 155.28 the state and the Secretary of Health, EducationandWelfare155.29 Human Services, making the provisions of the federal Old Age, 155.30 Survivors and Disability Insurance Act applicable to the member 155.31 if the membership eligibility criteria are met under this 155.32 chapter. A coordinated member also is a former basic member who 155.33 has a complete and continuous separation for at least 30 days 155.34 from employment as a public employee meeting the requirements 155.35 specified in subdivision 28, paragraphs (a) and (b), and who 155.36 reenters public service as a public employee and meets the 156.1 membership eligibility criteria under this chapter. 156.2 Sec. 39. Minnesota Statutes 2004, section 353.01, 156.3 subdivision 33, is amended to read: 156.4 Subd. 33. [BASIC MEMBER.] "Basic member" meansanya 156.5 public employee, includinganya public hospital employee, who 156.6 is not covered by any agreement or modification made between the 156.7 state and the Secretary of Health, EducationandWelfareHuman 156.8 Services. 156.9 Sec. 40. Minnesota Statutes 2004, section 353.025, is 156.10 amended to read: 156.11 353.025 [RANGE ASSOCIATION OF MUNICIPALITIES AND SCHOOLS.] 156.12From and after January 1, 1982,Employees of the Range 156.13 Association of Municipalities and Schoolshereinafter referred156.14to as the association, shall becomeare coordinated members of 156.15 the general employees retirement plan of the Public Employees 156.16 Retirement Association unless specifically exempt under section 156.17 353.01, subdivision 2b, and. The Range Associationshall be156.18deemed to beof Municipalities and Schools is a governmental 156.19 subdivision for the purposes of this chapter. 156.20 Sec. 41. Minnesota Statutes 2004, section 353.026, is 156.21 amended to read: 156.22 353.026 [COVERAGE FOR CERTAIN MUNICIPAL AND SCHOOL DISTRICT 156.23 EMPLOYEES.] 156.24 Any person who was employed by the city of Minneapolis, 156.25 Special School District No. 1, or public corporation as defined 156.26 in section 422A.01, subdivision 9, on or after July 1, 1978, and 156.27prior tobefore July 1, 1979, and who was excluded from 156.28 retirement coverage by the coordinated program of the 156.29 Minneapolis municipal employees retirement fundpursuant to156.30 under section 422A.09, subdivision 3,shall beis entitled to 156.31 retirement coverage by the general employees retirement plan of 156.32 the Public Employees Retirement Association unless specifically 156.33 excludedpursuant tounder section 353.01, subdivision 2b, from 156.34 and after May 19, 1981. 156.35 Sec. 42. Minnesota Statutes 2004, section 353.027, is 156.36 amended to read: 157.1 353.027 [RETENTION OF COVERAGE FOR CERTAIN MUNICIPAL COURT 157.2 EMPLOYEES.] 157.3 Any person employed on January 1, 1975, by a municipal 157.4 court establishedpursuant tounder Minnesota Statutes 1957, 157.5 section 488.03, and located in the cities of New Brighton, 157.6 Roseville, Maplewood, North Saint Paul, White Bear Lake, or St. 157.7 Paulshall beis eligible for membership in the general 157.8 employees retirement plan of the Public Employees Retirement 157.9 Association andshall retainretains any rights or benefits the 157.10 person had attained as a member of the general employees 157.11 retirement plan of the association on January 1, 1975, so long 157.12 as the person remains an employee of the municipal court of 157.13 Ramsey County. 157.14 Sec. 43. Minnesota Statutes 2004, section 353.028, is 157.15 amended to read: 157.16 353.028 [CITY MANAGERS; ELECTION; DEFERRED COMPENSATION.] 157.17 Subdivision 1. [DEFINITIONS.] (a) For purposes of this 157.18 section, each of the terms in this subdivision has the meaning 157.19 indicated. 157.20 (b) "City manager" means (1) a person who is duly appointed 157.21 to and is holding the position of city manager in a Plan B 157.22 statutory city or in a home rule city operating under the 157.23 "council-manager" form of government, or (2) a person who is 157.24 appointed to and is holding the position of chief administrative 157.25 officer of a home rule charter city or a statutory citypursuant157.26tounder a charter provision, ordinance, or resolution 157.27 establishing such a position and prescribing its duties and 157.28 responsibilities. 157.29 (c) "Governing body" means the city council of the city 157.30 employing the city manager. 157.31 (d) "Election" means the election described in subdivision 157.32 2. 157.33 Subd. 2. [ELECTION.] (a) A city manager may elect to be 157.34 excluded from membership in the general employees retirement 157.35 plan of the Public Employees Retirement Association. The 157.36 election of exclusion must be made within six months following 158.1 the commencement of employment, must be made in writing on a 158.2 form prescribed by the executive director, and must be approved 158.3 by a resolutionofadopted by the governing body of the city. 158.4 The election of exclusion is not effective until it is filed 158.5 with the executive director. Membership of a city manager in 158.6 theassociationgeneral employees retirement plan ceases on the 158.7 date the written election is received by the executive director 158.8 or upon a later date specified. Employee and employer 158.9 contributions made on behalf of a person exercising the option 158.10 to be excluded from membership under this section must be 158.11 refunded in accordance with section 353.27, subdivision 7. 158.12 (b) A city manager who has elected exclusion under this 158.13 subdivision may elect to revoke that action by filing a written 158.14 notice with the executive director. The notice must be on a 158.15 form prescribed by the executive director and must be approved 158.16 by a resolution of the governing body of the city. Membership 158.17 of the city manager in the association resumes prospectively 158.18 from the date of the first day of the pay period for which 158.19 contributions were deducted or, if pay period coverage dates are 158.20 not provided, the date on which the notice of revocation or 158.21 contributions are received in the office of the association, 158.22 provided that the notice of revocation is received by the 158.23 association within 60 days of the receipt of contributions. 158.24 (c) An election under paragraph (b) is irrevocable. Any 158.25 election under paragraph (a) or (b) must include a statement 158.26 that the individual will not seek authorization to purchase 158.27 service credit for any period of excluded service. 158.28 Subd. 3. [DEFERRED COMPENSATION; CITY CONTRIBUTION.] If an 158.29 election of exclusion is made, and if the city manager and the 158.30 governing body of the city additionally agree in writing that 158.31 the additional compensation is to be deferred andshallis to be 158.32 contributed on behalf of the city manager to a deferred 158.33 compensation program which meets the requirements of section 457 158.34 of the Internal Revenue Code of19541986, as amendedthrough158.35December 31, 1980, the governing body may compensate the city 158.36 manager, in addition to the salary allowed under any limitation 159.1 imposed on salaries by law or charter, in an amount equal to the 159.2 employer contribution which would be required by section 353.27, 159.3 subdivision 3, if the city manager were a member of the 159.4associationgeneral employees retirement plan. 159.5 Subd. 4. [REFUNDS; DEFERRED ANNUITY.] A city manager who 159.6 makes an election to be excluded from membership is entitled to 159.7 a refund of accumulated deductions or, if otherwise qualified, a 159.8 deferred annuityin the manner provided byunder section 353.34, 159.9 at the option of the manager. 159.10 Subd. 5. [ELECTION; OTHER EMPLOYMENT.] If a city manager 159.11 who has made an election to be excluded subsequently accepts 159.12 employment in another governmental subdivision or subsequently 159.13 accepts employment other than as a city manager in the same 159.14 city, the electionshall be deemed to have beenis rescinded on 159.15 the effective date of employment. 159.16 Sec. 44. Minnesota Statutes 2004, section 353.14, is 159.17 amended to read: 159.18 353.14 [BENEFITS FROM OTHER FUNDS.] 159.19 No annuity or benefit provided by this chaptershallmay be 159.20 affected, diminished, or impaired by any pension, benefit, or 159.21 annuity which any member or survivor is entitled to receive from 159.22 a tax supported public retirement plan or system authorized by 159.23 any other law, forbased on service that is different service 159.24 than the service for which the member or survivor is entitled to 159.25 receive benefit or annuity from a retirement plan administered 159.26 by the Public Employees Retirement Association. 159.27 Sec. 45. Minnesota Statutes 2004, section 353.15, 159.28 subdivision 1, is amended to read: 159.29 Subdivision 1. [EXEMPTION; EXCEPTIONS.]No money, annuity,159.30or benefit provided for in this chapter is assignable or subject159.31to execution, levy, attachment, garnishment, or legal process,159.32except as provided in subdivision 2 or section 518.58, 518.581,159.33or 518.6111.The provisions of section 356.401 apply to the 159.34 general employees retirement plan, to the public employees 159.35 police and fire retirement plan, and to the local government 159.36 correctional service retirement plan. 160.1 Sec. 46. Minnesota Statutes 2004, section 353.15, 160.2 subdivision 3, is amended to read: 160.3 Subd. 3. [PAYMENT TO PUBLIC BODIES.] If, in the judgment 160.4 of the executive director, conditions so warrant, payment of an 160.5 annuity, a retirement benefit, or a refund may be made to a 160.6 public body in behalf of an annuitant, disabilitant, or survivor 160.7 upon such terms as the executive director may prescribe. 160.8 Sec. 47. Minnesota Statutes 2004, section 353.27, 160.9 subdivision 11, is amended to read: 160.10 Subd. 11. [EMPLOYERS; REQUIRED TO FURNISH REQUESTED 160.11 INFORMATION.] (a) All governmental subdivisions shall furnish 160.12 promptly such other information relative to the employment 160.13 status of all employees or former employees, including, but not 160.14 limited to, payroll abstracts pertaining to all past and present 160.15 employees, as may be requested by theassociation or its160.16 executive director, including schedules of salaries applicable 160.17 to various categories of employment. 160.18 (b) In the event payroll abstract records have been lost or 160.19 destroyed, for whatever reason or in whatever manner, so that 160.20 such schedules of salaries cannot be furnished therefrom, the 160.21 employing governmental subdivision, in lieu thereof, shall 160.22 furnish to the association an estimate of the earnings of any 160.23 employee or former employee for any period as may be requested 160.24 by theassociation or itsexecutive director.ShouldIf the 160.25 associationreceive such schedulesis provided a schedule of 160.26 estimated earnings, the executive director isherebyauthorized 160.27 to use the same as a basis for making whatever computations 160.28 might be necessary for determining obligations of the employee 160.29 and employer to the retirement fund. If estimates are not 160.30 furnished by the employerpursuant toat the request of the 160.31association or itsexecutive director, theassociationexecutive 160.32 director may estimate the obligations of the employee and 160.33 employer to the retirement fund based uponsuchthose recordsas160.34 that are in its possession.Where payroll abstracts have been160.35lost or destroyed, the governmental agency need not furnish any160.36information pertaining to employment prior to July 1, 1963. The161.1association shall make no estimate of any obligation of any161.2employee, former employee, or employer covering employment prior161.3to July 1, 1963.161.4 Sec. 48. Minnesota Statutes 2004, section 353.271, is 161.5 amended to read: 161.6 353.271 [PARTICIPATION IN MINNESOTA POSTRETIREMENT 161.7 INVESTMENT FUND.] 161.8 Subdivision 1. [AUTHORIZATION.] The general employees 161.9 retirement plan of the Public Employees Retirement Association, 161.10includingthe public employees police and firefund but161.11excluding the various local relief association consolidation161.12accounts, isretirement plan, and the local government 161.13 correctional service retirement plan are authorized to 161.14 participate in the Minnesota postretirement investment fund. 161.15 Thereshall beis one general participation in the Minnesota 161.16 postretirement investment fund forall purposes byeach plan of 161.17 the Public Employees Retirementfund and one general161.18participation in the Minnesota postretirement investment fund161.19for all purposes by the public employees police and fire161.20fundAssociation. 161.21 Subd. 2. [VALUATION OF ASSETS; ADJUSTMENT OF BENEFITS.] 161.22(1)(a) The required reserves for retirement annuities payable 161.23 as provided in this chapter other than those payable from the 161.24 various local relief association consolidation accounts, as 161.25 determined in accordance with the appropriate mortality table 161.26 adopted by the board of trustees based on the experience of the 161.27 fund as recommended by the actuary retainedby the Legislative161.28Commission on Pensions and Retirementunder section 356.214, and 161.29 approved under section 356.215, subdivision 18, and using the 161.30 postretirement interest assumption specified in section 356.215, 161.31 subdivision 8,shallmust be transferred to the Minnesota 161.32 postretirement investment fund as of the last business day of 161.33 the month in which the retirement annuity begins. 161.34(2)(b) Annuity paymentsother than those payable from the161.35various local relief association consolidation accounts161.36shallmust be adjusted in accordance with the provisions of 162.1 section 11A.18. 162.2(3)(c) Increases in paymentspursuant tounder this 162.3 sectionor from the various local relief association162.4consolidation accounts, if applicable, willmust be made 162.5 automatically unless the intended recipient files written notice 162.6 with the executive director of the Public Employees Retirement 162.7 Association requesting that the increaseshallnot be made. 162.8 Sec. 49. Minnesota Statutes 2004, section 353.31, 162.9 subdivision 1c, is amended to read: 162.10 Subd. 1c. [COORDINATED MEMBERS.] Except for benefits 162.11 provided under section 353.32,subdivisions 1 and 1a,no 162.12 survivor benefits are payable to the surviving spouse or 162.13 dependent children of a deceased coordinated member. 162.14 Sec. 50. Minnesota Statutes 2004, section 353.32, 162.15 subdivision 9, is amended to read: 162.16 Subd. 9. [PAYMENT TO A MINOR.] If a member or former 162.17 member dies having named as beneficiary a person who is a minor 162.18 at the time of the application for refund, the board may make 162.19 the payment(a)(1) directly to the minor,(b)(2) toany162.20 a person who has legally qualified and is acting as guardian of 162.21 the minor's person or property in any jurisdiction, or(c)(3) 162.22 to either parent of the minor or toanyan adult person with 162.23 whom the minor may at the time be living, provided only that. 162.24 The parent or other person to whom any amount is to be 162.25 paidshall have advisedmust advise the board in writing that 162.26 the amount will be held or used in trust for the benefit of such 162.27 minor. Any annuity or disability benefit payable at the time of 162.28 death of an annuitant or recipient of a disability benefit, 162.29 which is payable to a beneficiary who is a minor, may be paid in 162.30 the same manner.SuchThe paymentshall beis a bar to recovery 162.31 by any other person or persons. 162.32 Sec. 51. Minnesota Statutes 2004, section 353.33, 162.33 subdivision 12, is amended to read: 162.34 Subd. 12. [BASIC DISABILITY SURVIVOR BENEFITS.] If a basic 162.35 member who is receiving a disability benefit under subdivision 3: 162.36(a)(1) dies before attaining age 65 or within five years 163.1 of the effective date of the disability, whichever is later, the 163.2 surviving spouseshallis entitled to receive a survivor benefit 163.3 under section 353.31, unless the surviving spouse elected to 163.4 receive a refund under section 353.32, subdivision 1.; 163.5(b)(2) is living at age 65 or five years after the 163.6 effective date of the disability, whichever is later, the basic 163.7 member may continue to receive a normal disability benefit, or 163.8 elect a joint and survivor optional annuity under section 163.9 353.31, subdivision 1b. The election of the joint and survivor 163.10 optional annuity must occur within 90 days of attaining age 65 163.11 or of reaching the five-year anniversary of the effective date 163.12 of the disability benefit, whichever is later. The optional 163.13 annuity takes effect on the first day of the month following the 163.14 month in which the person attains age 65 or reaches the 163.15 five-year anniversary of the effective date of the disability 163.16 benefit, whichever is later.; or 163.17(c)(3) if there is a dependent child or children under 163.18paragraph (a) or (b)clause (1) or (2), theassociation shall163.19grantdependent child is entitled to a dependent child benefit 163.20 under section 353.31, subdivision 1b, paragraph (b). 163.21 Sec. 52. Minnesota Statutes 2004, section 354.091, is 163.22 amended to read: 163.23 354.091 [SERVICE CREDIT.] 163.24 (a) In computing service credit, no teachershallmay 163.25 receive credit for more than one year of teaching service for 163.26 any fiscal year.Commencing July 1, 1961Additionally, in 163.27 crediting allowable service: 163.28 (1) if a teacher teaches less than five hours in a day, 163.29 service credit must be given for the fractional part of the day 163.30 as the term of service performed bears to five hours; 163.31 (2) if a teacher teaches five or more hours in a day, 163.32 service credit must be given for only one day; 163.33 (3) if a teacher teaches at least 170 full days in any 163.34 fiscal year, service credit must be given for a full year of 163.35 teaching service; and 163.36 (4) if a teacher teaches for only a fractional part of the 164.1 year, service credit must be given for such fractional part of 164.2 the year in the same relationship as the period of service 164.3 performed bears to 170 days. 164.4 (b) A teachershallmust receive a full year of service 164.5 credit based on the number of days in the employer's full school 164.6 year ifitthat school year is less than 170 days. Teaching 164.7 service performed before July 1, 1961, must be computed under 164.8 the law in effect at the time it was performed. 164.9 (c) A teacher must not lose or gain retirement service 164.10 credit as a result of the employer converting to a flexible or 164.11 alternate work schedule. If the employer converts to a flexible 164.12 or alternate work schedule, the forms for reporting teaching 164.13 service and the procedures for determining service credit must 164.14 be determined by the executive director with the approval of the 164.15 board of trustees. 164.16 (d) For all services rendered on or after July 1, 2003, 164.17 service credit for all members employed by the Minnesota State 164.18 Colleges and Universities system must be determined: 164.19 (1) for full-time employees, by the definition of full-time 164.20 employment contained in the collective bargaining agreement for 164.21 those units listed in section 179A.10, subdivision 2, or 164.22 contained in the applicable personnel or salary plan for those 164.23 positions designated in section 179A.10, subdivision 1; 164.24 (2) for part-time employees, by the appropriate proration 164.25 of full-time equivalency based on the provisions contained in 164.26 the collective bargaining agreement for those units listed in 164.27 section 179A.10, subdivision 2, or contained in the applicable 164.28 personnel or salary plan for those positions designated in 164.29 section 179A.10, subdivision 1, and the applicable procedures of 164.30 the Minnesota State Colleges and Universities system; and 164.31 (3) in no case may a member receive more than one year of 164.32 service credit for any fiscal year. 164.33 Sec. 53. Minnesota Statutes 2004, section 354.10, 164.34 subdivision 1, is amended to read: 164.35 Subdivision 1. [EXEMPTION; EXCEPTIONS.] (a) The provisions 164.36 of section 356.401 apply to the teachers retirement plan. 165.1 (b) The right of a teacher to take advantage of the 165.2 benefits provided by this chapter, is a personal right only and 165.3 is not assignable. All money to the credit of a teacher's 165.4 account in the fund or any money payable to the teacher from the 165.5 fund belongs to the state of Minnesota until actually paid to 165.6 the teacher or a beneficiary under this chapter. 165.7 (c) The association may acknowledge a properly completed 165.8 power of attorney form.An assignment or attempted assignment165.9of a teacher's interest in the fund, or of the beneficiary's165.10interest in the fund, by a teacher or a beneficiary is void and165.11exempt from garnishment or levy under attachment or execution,165.12except as provided in subdivision 2 or 3, or section 518.58,165.13518.581, or 518.6111.165.14 Sec. 54. Minnesota Statutes 2004, section 354.10, 165.15 subdivision 3, is amended to read: 165.16 Subd. 3. [PAYMENT TO PUBLIC BODIES.] If, in the judgment 165.17 of the executive director, conditions so warrant, payment of an 165.18 annuity, a retirement benefit, or a refund may be made to a 165.19 public body in behalf of an annuitant, disabilitant, or survivor 165.20 upon such terms as the executive director may prescribe. 165.21 Sec. 55. Minnesota Statutes 2004, section 354.10, 165.22 subdivision 4, is amended to read: 165.23 Subd. 4. [CHANGES IN DESIGNATED BENEFICIARIES.]Any(a) A 165.24 beneficiary designated by a retiree or member under section 165.25 354.05, subdivision 22, may be changed or revoked by the retiree 165.26 or member on a form provided by the executive director. 165.27 (b) A change or revocation made under this subdivision is 165.28 valid only if the properly completed form is received by the 165.29 association on or before the date of death of the retiree or the 165.30 member. 165.31 (c) If a designated beneficiary dies before the retiree or 165.32 member designating the beneficiary,and a new beneficiary is not 165.33 designated, the retiree's or member's estate is the beneficiary. 165.34 Sec. 56. Minnesota Statutes 2004, section 354.33, 165.35 subdivision 5, is amended to read: 165.36 Subd. 5. [RETIREES NOT ELIGIBLE FOR FEDERAL BENEFITS.] 166.1 Notwithstanding the provisions of section 354.55, subdivision 3, 166.2 when any person retires after July 1, 1973, who(a)(1) has ten 166.3 or more years of allowable service, and(b)(2) does not have 166.4 any retroactive Social Security coverage by reason of the 166.5 person's position in the retirement system, and(c)(3) does not 166.6 qualify for federal old age and survivor primary benefits at the 166.7 time of retirement, the annuityshallmust be computed under 166.8 section 354.44, subdivision 2, of the law in effect on June 30, 166.9 1969, except that accumulations after June 30, 1957,shallmust 166.10 be calculated using the same mortality table and interest 166.11 assumption as are used to transfer the required reserves to the 166.12 Minnesota postretirement investment fund. 166.13 Sec. 57. Minnesota Statutes 2004, section 354.39, is 166.14 amended to read: 166.15 354.39 [EFFECTIVE DATE; APPLICATION.] 166.16After July 1, 1971, anyA member of the Teachers Retirement 166.17 Association who is employed in a new state universityandor any 166.18 other newinstitutionsinstitution of higher learning not 166.19 included in any agreement or modification made between the state 166.20 and the federal Secretary of Health, EducationandWelfareHuman 166.21 Services, making the provisions of the federal Old Ageand, 166.22 Survivors and Disability Insurance Act applicable to such 166.23 members,shallmust be covered under the provisions of this 166.24 chapter applicable to coordinated members. 166.25 Sec. 58. Minnesota Statutes 2004, section 354.41, 166.26 subdivision 2, is amended to read: 166.27 Subd. 2. [TEACHERS.] Every teacherafter June 30, 1957,in 166.28the service or enteringthe service of the state or one of its 166.29 governmentalsubdivisionsubdivisions as a teacher, except 166.30 personsspeciallyspecifically excluded,shallmust become a 166.31 member of the association by the acceptance of such employment. 166.32 Sec. 59. Minnesota Statutes 2004, section 354.42, is 166.33 amended by adding a subdivision to read: 166.34 Subd. 1a. [TEACHERS RETIREMENT FUND.] (a) Within the 166.35 Teachers Retirement Association and the state treasury is 166.36 created a special retirement fund, which must include all the 167.1 assets of the Teachers Retirement Association and all revenue of 167.2 the association. The fund is the continuation of the fund 167.3 established under Laws 1931, chapter 406, section 2, 167.4 notwithstanding the repeal of Minnesota Statutes 1973, section 167.5 354.42, subdivision 1, by Laws 1974, chapter 289, section 59. 167.6 (b) The teachers retirement fund must be credited with all 167.7 employee and employer contributions, all investment revenue and 167.8 gains, and all other income authorized by law. 167.9 (c) From the teachers retirement fund is appropriated the 167.10 payments of annuities and benefits authorized by this chapter, 167.11 the transfers to the Minnesota postretirement investment fund, 167.12 and the reasonable and necessary expenses of administering the 167.13 fund and the association. 167.14 Sec. 60. Minnesota Statutes 2004, section 354.44, 167.15 subdivision 2, is amended to read: 167.16 Subd. 2. [COMPUTATION OF MONEY PURCHASE ANNUITY.] (a) The 167.17 amount of retirement annuity is an amount equal to double the 167.18 annuity which could be purchased by the member's accumulated 167.19 deductions plus interest thereon. The annuityshallmust be 167.20 determined by the member's age, sex, double the amount of 167.21 accumulated deductions, double the amount of interest earned on 167.22 the accumulated deductions, and the appropriate mortality tables 167.23 and interest rates. To determine the amount of the annuity for 167.24 a basic member, the accumulated deductionsprior tobefore July 167.25 1, 1957, and the accumulated deductionssubsequent toafter July 167.26 1, 1957,shallmust be considered separately. 167.27(1)(b) For service renderedprior tobefore July 1, 1957, 167.28 the accumulated deductions foranya membershallmust be 167.29 carried forward at a fixed amount which is shown credited to the 167.30 member's account as of that date. That fixed amountshallmust 167.31 also include any payments in lieu of salary deductions whichare167.32to be made in the future and arewere actually so madepursuant167.33tounder an agreement executed between the member and the board 167.34 as authorized by section 354.50 or any other authorized payments 167.35 made by the member to the fund. The annuity granted with 167.36 respect to the periodshallmust be determined as follows: 168.1(a)(1) the fixed amount of the accumulated deductions for 168.2 the period including the interest credited on the amount as 168.3 earned up to July 1, 1957.; and 168.4(b)(2) annuity purchase rates based on the applicable 168.5 mortality table established by the board and the interest rate 168.6 assumption in effectprior tobefore July 1, 1957, in the case 168.7 of basic members and an annuity purchase rate based on an 168.8 appropriate annuity table of mortality established by the board 168.9 as provided in section 354.07, subdivision 1, and using the 168.10 applicable postretirement interest rate assumption specified in 168.11 section 356.215, subdivision 8, in the case of coordinated 168.12 members. 168.13(2)(c) For service renderedsubsequent toafter July 1, 168.14 1957, the accumulated deductions foranya membershallmust 168.15 consist of the amounts actually credited to the member's account 168.16 by reason of salary deductions. The annuity granted with 168.17 respect to the periodshallmust be determined by the following: 168.18(a)(1) accumulated deductions for the period; 168.19(b)(2) interest credited on these accumulated deductions 168.20 from July 1, 1957, to the date of retirement; 168.21(c)(3) interest credited on accumulated deductions 168.22 including prior credited interest provided in paragraph(1)(b) 168.23 from July 1, 1957, to the date of retirement; 168.24(d)(4) after the amount available for an annuity granted 168.25 with respect to the person is determined in accordance with the 168.26 provisions of this subdivision, an additional amount equal to 20 168.27 percent of the sum of clause(2)(a)(1) plus interest credited 168.28 tomembersa member's account from July 1, 1957, to date of 168.29 retirement is to be added. This added amount is not to be 168.30 doubled as provided for other amounts determined in this 168.31 subdivision; and 168.32(e)(5) the annuity purchase rate based on an appropriate 168.33 annuity table of mortality established by the board as provided 168.34 in section 354.07, subdivision 1, and using the applicable 168.35 postretirement interest rate assumption specified in section 168.36 356.215, subdivision 8. 169.1 Sec. 61. Minnesota Statutes 2004, section 354A.021, 169.2 subdivision 5, is amended to read: 169.3 Subd. 5. [TAX SHELTERED ANNUITY PROGRAM AND FUND.]AnyA 169.4 teachers retirement fund association may establish a tax 169.5 sheltered annuity program and fund meeting the requirements of 169.6 section 403(b) of the Internal Revenue Code of 1986, as amended 169.7through December 31, 1992, whichshallmust include all assets 169.8 which were acquired for the specific purpose of being credited 169.9 to the program and fund and to whichshallmust be credited all 169.10 employee contributions,and employer contributions, if 169.11 negotiated under a collective bargaining agreement, designated 169.12 for this purpose and all interest income attributable to the 169.13 assets of the program and fund. 169.14 Sec. 62. Minnesota Statutes 2004, section 354A.097, 169.15 subdivision 1, is amended to read: 169.16 Subdivision 1. [SERVICE CREDIT PURCHASE AUTHORIZED.] A 169.17 teacher who has at least three years of allowable service credit 169.18 with the teachers retirement fund association and who performed 169.19 service in the United States armed forces before becoming a 169.20 teacher as defined in section 354A.011, subdivision 27, or who 169.21 failed to obtain service credit for a military leave of absence 169.22 period under section 354A.093, is entitled to purchase allowable 169.23 service credit for the initial period of enlistment, induction, 169.24 or call to active duty without any voluntary extension by making 169.25 payment under section356.55 provided356.551 if the teacher has 169.26 not purchased service credit from another Minnesota defined 169.27 benefit public employee pension plan for the same period of 169.28 service. 169.29 Sec. 63. Minnesota Statutes 2004, section 354A.31, 169.30 subdivision 5, is amended to read: 169.31 Subd. 5. [UNREDUCED NORMAL RETIREMENT ANNUITY.] Upon 169.32 retirement at normal retirement age with at least three years of 169.33 service credit, a coordinated membershall beis entitled to a 169.34 normal retirement annuity calculatedpursuant tounder 169.35 subdivision 4 or 4a, whichever applies. 169.36 Sec. 64. [356.401] [EXEMPTION FROM PROCESS.] 170.1 Subdivision 1. [EXEMPTION; EXCEPTIONS.] None of the money, 170.2 annuities, or other benefits provided for in the governing law 170.3 of a covered retirement plan is assignable either in law or in 170.4 equity or subject to state estate tax, or to execution, levy, 170.5 attachment, garnishment, or other legal process, except as 170.6 provided in subdivision 2 or section 518.58, 518.581, or 170.7 518.6111. 170.8 Subd. 2. [AUTOMATIC DEPOSITS.] (a) The chief 170.9 administrative officer of a covered retirement plan may remit, 170.10 through an automatic deposit system, annuity, benefit, or refund 170.11 payments only to a financial institution associated with the 170.12 National Automated Clearinghouse Association or a comparable 170.13 successor organization that is trustee for a person who is 170.14 eligible to receive the annuity, benefit, or refund. 170.15 (b) Upon the request of a retiree, disabilitant, survivor, 170.16 or former member, the chief administrative officer of a covered 170.17 retirement plan may remit the annuity, benefit, or refund check 170.18 to the applicable financial institution for deposit in the 170.19 person's individual account or the person's joint account. An 170.20 overpayment to a joint account after the death of the annuitant 170.21 or benefit recipient must be repaid to the fund of the 170.22 applicable covered retirement plan by the joint tenant if the 170.23 overpayment is not repaid to that fund by the financial 170.24 institution associated with the National Automated Clearinghouse 170.25 Association or its successor. The governing board of the 170.26 covered retirement plan may prescribe the conditions under which 170.27 these payments may be made. 170.28 Subd. 3. [COVERED RETIREMENT PLANS.] The provisions of 170.29 this section apply to the following retirement plans: 170.30 (1) the legislators retirement plan, established by chapter 170.31 3A; 170.32 (2) the general state employees retirement plan of the 170.33 Minnesota State Retirement System, established by chapter 352; 170.34 (3) the correctional state employees retirement plan of the 170.35 Minnesota State Retirement System, established by chapter 352; 170.36 (4) the State Patrol retirement plan, established by 171.1 chapter 352B; 171.2 (5) the elective state officers retirement plan, 171.3 established by chapter 352C; 171.4 (6) the unclassified state employees retirement program, 171.5 established by chapter 352D; 171.6 (7) the general employees retirement plan of the Public 171.7 Employees Retirement Association, established by chapter 353; 171.8 (8) the public employees police and fire plan of the Public 171.9 Employees Retirement Association, established by chapter 353; 171.10 (9) the public employees defined contribution plan, 171.11 established by chapter 353D; 171.12 (10) the local government correctional service retirement 171.13 plan of the Public Employees Retirement Association, established 171.14 by chapter 353E; 171.15 (11) the Teachers Retirement Association, established by 171.16 chapter 354; 171.17 (12) the Duluth Teachers Retirement Fund Association, 171.18 established by chapter 354A; 171.19 (13) the Minneapolis Teachers Retirement Fund Association, 171.20 established by chapter 354A; 171.21 (14) the St. Paul Teachers Retirement Fund Association, 171.22 established by chapter 354A; 171.23 (15) the individual retirement account plan, established by 171.24 chapter 354B; 171.25 (16) the higher education supplemental retirement plan, 171.26 established by chapter 354C; 171.27 (17) the Minneapolis employees retirement fund, established 171.28 by chapter 422A; 171.29 (18) the Minneapolis Police Relief Association, established 171.30 by chapter 423B; 171.31 (19) the Minneapolis Firefighters Relief Association, 171.32 established by chapter 423C; and 171.33 (20) the judges retirement fund, established by sections 171.34 490.121 to 490.132. 171.35 Sec. 65. Minnesota Statutes 2004, section 356.551, is 171.36 amended to read: 172.1 356.551 [POST JULY 1,20032004, PRIOR SERVICE CREDIT 172.2 PURCHASE PAYMENT AMOUNT DETERMINATION PROCEDURE.] 172.3 Subdivision 1. [APPLICATION.] (a) Unless the prior service 172.4 credit purchase authorization special law or general statute 172.5 provision explicitly specifies a different purchase payment 172.6 amount determination procedure,and if section 356.55 has172.7expired,this section governs the determination of the prior 172.8 service credit purchase payment amount of any prior service 172.9 credit purchase. 172.10 (b) The purchase payment amount determination procedure 172.11 must recognize any service credit accrued to the purchaser in a 172.12 pension plan enumerated in section 356.30, subdivision 3. 172.13 (c) Any service credit in a Minnesota defined benefit 172.14 public employee pension plan available to be reinstated by the 172.15 purchaser through the repayment of a refund of member or 172.16 employee contributions previously received must be repaid in 172.17 full before any purchase of prior service credit payment is made 172.18 under this section. 172.19 Subd. 2. [DETERMINATION.] (a) Unless the minimum purchase 172.20 amount set forth in paragraph (c) applies, the prior service 172.21 credit purchase amount is an amount equal to the actuarial 172.22 present value, on the date of payment, as calculated by the 172.23 chief administrative officer of the pension plan and reviewed by 172.24 the actuary retainedby the Legislative Commission on Pensions172.25and Retirementunder section 356.214, of the amount of the 172.26 additional retirement annuity obtained by the acquisition of the 172.27 additional service credit in this section. 172.28 (b) Calculation of this amount must be made using the 172.29 preretirement interest rate applicable to the public pension 172.30 plan specified in section 356.215, subdivision4d8, and the 172.31 mortality table adopted for the public pension plan. The 172.32 calculation must assume continuous future service in the public 172.33 pension plan until, and retirement at, the age at which the 172.34 minimum requirements of the fund for normal retirement or 172.35 retirement with an annuity unreduced for retirement at an early 172.36 age, including section 356.30, are met with the additional 173.1 service credit purchased. The calculation must also assume a 173.2 full-time equivalent salary, or actual salary, whichever is 173.3 greater, and a future salary history that includes annual salary 173.4 increases at the applicable salary increase rate for the plan 173.5 specified in section 356.215, subdivision 4d. 173.6 (c) The prior service credit purchase amount may not be 173.7 less than the amount determined by applying the current employee 173.8 or member contribution rate, the employer contribution rate, and 173.9 the additional employer contribution rate, if any, to the 173.10 person's current annual salary and multiplying that result by 173.11 the number of whole and fraction years of service to be 173.12 purchased. 173.13 (d) Payment must be made in one lump sum within one year of 173.14 the prior service credit authorization. Payment of the amount 173.15 calculated under this section must be made by the applicable 173.16 eligible person. 173.17 (e) However, the current employer or the prior employer 173.18 may, at its discretion, pay all or any portion of the payment 173.19 amount that exceeds an amount equal to the employee contribution 173.20 rates in effect during the period or periods of prior service 173.21 applied to the actual salary rates in effect during the period 173.22 or periods of prior service, plus interest at the rate of 8.5 173.23 percent a year compounded annually from the date on which the 173.24 contributions would otherwise have been made to the date on 173.25 which the payment is made. If the employer agrees to payments 173.26 under this subdivision, the purchaser must make the employee 173.27 payments required under this subdivision within29090 days of 173.28 the prior service credit authorization. If that employee 173.29 payment is made, the employer payment under this subdivision 173.30 must be remitted to the chief administrative officer of the 173.31 public pension plan within 60 days of receipt by the chief 173.32 administrative officer of the employee payments specified under 173.33 this subdivision. 173.34 Subd. 3. [DOCUMENTATION.] The prospective prior service 173.35 credit purchaser must provide any relevant documentation 173.36 required by the chief administrative officer of the applicable 174.1 public pension plan to determine eligibility for the prior 174.2 service credit under this section. 174.3 Subd. 4. [PAYMENT PRECONDITION FOR CREDIT GRANT.] Service 174.4 credit for the purchase period must be granted by the public 174.5 pension plan to the purchaser upon receipt of the full purchase 174.6 payment amount specified in subdivision 2. 174.7 Sec. 66. Minnesota Statutes 2004, section 356A.06, 174.8 subdivision 7, is amended to read: 174.9 Subd. 7. [EXPANDED LIST OF AUTHORIZED INVESTMENT 174.10 SECURITIES.] (a) [AUTHORITY.] Except to the extent otherwise 174.11 authorized by law or bylaws, a covered pension plan not 174.12 described by subdivision 6, paragraph (a), may invest its assets 174.13 only in accordance with this subdivision. 174.14 (b) [SECURITIES GENERALLY.] The covered pension plan has 174.15 the authority to purchase, sell, lend, or exchange the 174.16 securities specified in paragraphs (c) to (g), including puts 174.17 and call options and future contracts traded on a contract 174.18 market regulated by a governmental agency or by a financial 174.19 institution regulated by a governmental agency. These 174.20 securities may be owned as units in commingled trusts that own 174.21 the securities described in paragraphs (c) to (g). 174.22 (c) [GOVERNMENT OBLIGATIONS.] The covered pension plan may 174.23 invest funds in governmental bonds, notes, bills, mortgages, and 174.24 other evidences of indebtedness provided the issue is backed by 174.25 the full faith and credit of the issuer or the issue is rated 174.26 among the top four quality rating categories by a nationally 174.27 recognized rating agency. The obligations in which funds may be 174.28 invested under this paragraph include guaranteed or insured 174.29 issues of (1) the United States, its agencies, its 174.30 instrumentalities, or organizations created and regulated by an 174.31 act of Congress; (2) Canada and its provinces, provided the 174.32 principal and interest is payable in United States dollars; (3) 174.33 the states and their municipalities, political subdivisions, 174.34 agencies, or instrumentalities; (4) the International Bank for 174.35 Reconstruction and Development, the Inter-American Development 174.36 Bank, the Asian Development Bank, the African Development Bank, 175.1 or any other United States government sponsored organization of 175.2 which the United States is a member, provided the principal and 175.3 interest is payable in United States dollars. 175.4 (d) [CORPORATE OBLIGATIONS.] The covered pension plan may 175.5 invest funds in bonds, notes, debentures, transportation 175.6 equipment obligations, or any other longer term evidences of 175.7 indebtedness issued or guaranteed by a corporation organized 175.8 under the laws of the United States or any state thereof, or the 175.9 Dominion of Canada or any province thereof if they conform to 175.10 the following provisions: 175.11 (1) the principal and interest of obligations of 175.12 corporations incorporated or organized under the laws of the 175.13 Dominion of Canada or any province thereof must be payable in 175.14 United States dollars; and 175.15 (2) obligations must be rated among the top four quality 175.16 categories by a nationally recognized rating agency. 175.17 (e) [OTHER OBLIGATIONS.] (1) The covered pension plan may 175.18 invest funds in bankers acceptances, certificates of deposit, 175.19 deposit notes, commercial paper, mortgage participation 175.20 certificates and pools, asset backed securities, repurchase 175.21 agreements and reverse repurchase agreements, guaranteed 175.22 investment contracts, savings accounts, and guaranty fund 175.23 certificates, surplus notes, or debentures of domestic mutual 175.24 insurance companies if they conform to the following provisions: 175.25 (i) bankers acceptances and deposit notes of United States 175.26 banks are limited to those issued by banks rated in the highest 175.27 four quality categories by a nationally recognized rating 175.28 agency; 175.29 (ii) certificates of deposit are limited to those issued by 175.30 (A) United States banks and savings institutions that are rated 175.31 in the highest four quality categories by a nationally 175.32 recognized rating agency or whose certificates of deposit are 175.33 fully insured by federal agencies; or (B) credit unions in 175.34 amounts up to the limit of insurance coverage provided by the 175.35 National Credit Union Administration; 175.36 (iii) commercial paper is limited to those issued by United 176.1 States corporations or their Canadian subsidiaries and rated in 176.2 the highest two quality categories by a nationally recognized 176.3 rating agency; 176.4 (iv) mortgage participation or pass through certificates 176.5 evidencing interests in pools of first mortgages or trust deeds 176.6 on improved real estate located in the United States where the 176.7 loan to value ratio for each loan as calculated in accordance 176.8 with section 61A.28, subdivision 3, does not exceed 80 percent 176.9 for fully amortizable residential properties and in all other 176.10 respects meets the requirements of section 61A.28, subdivision 176.11 3; 176.12 (v) collateral for repurchase agreements and reverse 176.13 repurchase agreements is limited to letters of credit and 176.14 securities authorized in this section; 176.15 (vi) guaranteed investment contracts are limited to those 176.16 issued by insurance companies or banks rated in the top four 176.17 quality categories by a nationally recognized rating agency or 176.18 to alternative guaranteed investment contracts where the 176.19 underlying assets comply with the requirements of this 176.20 subdivision; 176.21 (vii) savings accounts are limited to those fully insured 176.22 by federal agencies; and 176.23 (viii) asset backed securities must be rated in the top 176.24 four quality categories by a nationally recognized rating agency. 176.25 (2) Sections 16A.58, 16C.03, subdivision 4, and 16C.05 do 176.26 not apply to certificates of deposit and collateralization 176.27 agreements executed by the covered pension plan under clause 176.28 (1), item (ii). 176.29 (3) In addition to investments authorized by clause (1), 176.30 item (iv), the covered pension plan may purchase from the 176.31 Minnesota Housing Finance Agency all or any part of a pool of 176.32 residential mortgages, not in default, that has previously been 176.33 financed by the issuance of bonds or notes of the agency. The 176.34 covered pension plan may also enter into a commitment with the 176.35 agency, at the time of any issue of bonds or notes, to purchase 176.36 at a specified future date, not exceeding 12 years from the date 177.1 of the issue, the amount of mortgage loans then outstanding and 177.2 not in default that have been made or purchased from the 177.3 proceeds of the bonds or notes. The covered pension plan may 177.4 charge reasonable fees for any such commitment and may agree to 177.5 purchase the mortgage loans at a price sufficient to produce a 177.6 yield to the covered pension plan comparable, in its judgment, 177.7 to the yield available on similar mortgage loans at the date of 177.8 the bonds or notes. The covered pension plan may also enter 177.9 into agreements with the agency for the investment of any 177.10 portion of the funds of the agency. The agreement must cover 177.11 the period of the investment, withdrawal privileges, and any 177.12 guaranteed rate of return. 177.13 (f) [CORPORATE STOCKS.] The covered pension plan may 177.14 invest funds in stocks or convertible issues of any corporation 177.15 organized under the laws of the United States or the states 177.16 thereof, the Dominion of Canada or its provinces, or any 177.17 corporation listed on the New York Stock Exchange or the 177.18 American Stock Exchange, if they conform to the following 177.19 provisions: 177.20 (1) the aggregate value of corporate stock investments, as 177.21 adjusted for realized profits and losses, must not exceed 85 177.22 percent of the market or book value, whichever is less, of a 177.23 fund, less the aggregate value of investments according to 177.24subdivision 6paragraph (g); 177.25 (2) investments must not exceed five percent of the total 177.26 outstanding shares of any one corporation. 177.27 (g) [OTHER INVESTMENTS.] (1) In addition to the 177.28 investments authorized in paragraphs (b) to (f), and subject to 177.29 the provisions in clause (2), the covered pension plan may 177.30 invest funds in: 177.31 (i) venture capital investment businesses through 177.32 participation in limited partnerships and corporations; 177.33 (ii) real estate ownership interests or loans secured by 177.34 mortgages or deeds of trust through investment in limited 177.35 partnerships, bank sponsored collective funds, trusts, and 177.36 insurance company commingled accounts, including separate 178.1 accounts; 178.2 (iii) regional and mutual funds through bank sponsored 178.3 collective funds and open-end investment companies registered 178.4 under the Federal Investment Company Act of 1940; 178.5 (iv) resource investments through limited partnerships, 178.6 private placements, and corporations; and 178.7 (v) international securities. 178.8 (2) The investments authorized in clause (1) must conform 178.9 to the following provisions: 178.10 (i) the aggregate value of all investments made according 178.11 to clause (1) may not exceed 35 percent of the market value of 178.12 the fund for which the covered pension plan is investing; 178.13 (ii) there must be at least four unrelated owners of the 178.14 investment other than thestate boardcovered pension plan for 178.15 investments made under clause (1), item (i), (ii), (iii), or 178.16 (iv); 178.17 (iii) covered pension plan participation in an investment 178.18 vehicle is limited to 20 percent thereof for investments made 178.19 under clause (1), item (i), (ii), (iii), or (iv); and 178.20 (iv) covered pension plan participation in a limited 178.21 partnership does not include a general partnership interest or 178.22 other interest involving general liability. The covered pension 178.23 plan may not engage in any activity as a limited partner which 178.24 creates general liability. 178.25 Sec. 67. Minnesota Statutes 2004, section 422A.01, 178.26 subdivision 11, is amended to read: 178.27 Subd. 11. [EMPLOYEE.] "Employee" meansanya person who is 178.28 not exempted from the contributing classpursuant tounder 178.29 section 422A.09, subdivision 3, whoiswas employed before July 178.30 1, 1979, by and paid, in whole or in part, by the city or any of 178.31 its boards, departments, or commissions, operated as a 178.32 department of city government or independently if financed in 178.33 whole or in part by city funds, includinganya person who was 178.34 employed by a public corporation as herein defined,and178.35including anya person who was employed before July 1, 1979, by 178.36 Special School District No. 1, and who is not a member of any 179.1 other retirement system, andalso including anya person whois179.2 was employed before July 1, 1973, by the county of Hennepin, who 179.3 was entitled by law to elect and has elected to retain 179.4 membership in themunicipalMinneapolis Employees Retirement 179.5 Fund and who makes any required member contributions to the fund 179.6 and who remains so employed. 179.7 Sec. 68. Minnesota Statutes 2004, section 422A.06, 179.8 subdivision 7, is amended to read: 179.9 Subd. 7. [DISABILITY BENEFIT FUND.] (a)The required179.10reserves for disability allowances which become effective after179.11December 31, 1973, shall be transferred from the deposit179.12accumulation fund to theA disability benefit fund is 179.13 established, containing the required reserves for disability 179.14 allowances under this chapter. A proportionate share of income 179.15 from investmentsshallmust be allocated to this fund. 179.16 Thereshallmust be paid from this fund the disability 179.17 allowanceswhich become effective after December 31, 1973179.18 payable under this chapter. 179.19 (b) In the event of the termination of any disability 179.20 allowance for any reason other than the death of the recipient, 179.21 the balance of the required reserves for the disability 179.22 allowance as of the date of the terminationshallmust be 179.23 transferred from the disability benefit fund to the deposit 179.24 accumulation fund. 179.25 (c) At the end of each fiscal year, as part of the annual 179.26 actuarial valuation, a determinationshallmust be made of the 179.27 required reserves for all disability allowances being paid from 179.28 the disability benefit fund. Any excess of assets over 179.29 actuarial required reserves in the disability benefit fundshall179.30 must be transferred to the deposit accumulation fund. Any 179.31 excess of actuarial reserves over assets in the disability 179.32 benefit fundshallmust be funded by a transfer of the 179.33 appropriate amount of assets from the deposit accumulation fund. 179.34 Sec. 69. Minnesota Statutes 2004, section 422A.10, 179.35 subdivision 1, is amended to read: 179.36 Subdivision 1. [MEMBER CONTRIBUTIONRATE; DEDUCTIONS.] (a) 180.1 Thereshallmust be deducted and withheld from the basic salary, 180.2 pay or compensation of each employee in the contributing class,180.3prior to January 1, 1980 an amount equal to 7-1/4 percent, after180.4December 31, 1979 but prior to January 1, 1981 an amount equal180.5to 8-1/4 percent and after December 31, 1980an amount equal to 180.6 9-1/4 percent of such salary, pay or compensation, except as 180.7 hereinafter provided. 180.8 (b) The retirement board may increase the percentage rate 180.9 of contribution to the retirement fund of any employee or 180.10 employees for the purpose of establishing and maintaining on an 180.11 actuarial basis a plan of insurance, survivors' benefits, or 180.12 other type of benefit or benefits, the cost of whichshallmust 180.13 be paid out of such extra percentage so authorized and deducted 180.14 from the employee's compensation, except as hereinafter 180.15 provided. Any plan or plans so established and placed in 180.16 operation may be amended from time to time, or may be abandoned, 180.17 but if abandoned, any surplus remaining from the operation of a 180.18 planshallmust be the property of the fund, andshallmust be 180.19 credited to the reserve for loss in investment account. 180.20 Sec. 70. Minnesota Statutes 2004, section 422A.10, 180.21 subdivision 2, is amended to read: 180.22 Subd. 2. [CONSENT TO DEDUCTIONSMANDATORY MEMBER 180.23 CONTRIBUTIONS.] Every employee to whomsections 422A.01 to180.24422A.25this chapter applieswho shall continue in the service180.25after the passage of Laws 1919, chapter 522, as well as every180.26person to whom sections 422A.01 to 422A.25 applies who may180.27hereafter be appointed to a position or place, shall beis 180.28 deemed to consent and agree to the deductions made and provided 180.29 for herein, and payment with such reductions, for service,shall180.30beare a full and complete discharge and acquittance of all 180.31 claims and demands for all services rendered by such person 180.32 during the period covered by such payment; except the person's 180.33 claim to the benefits to which the person may be entitled under 180.34 the provisions ofsections 422A.01 to 422A.25this chapter. 180.35 Sec. 71. Minnesota Statutes 2004, section 422A.22, 180.36 subdivision 1, is amended to read: 181.1 Subdivision 1. [RETENTION; TRANSFER.] (a) If an employee 181.2 to whomsections 422A.01 to 422A.25this chapter applies becomes 181.3 absolutely separated fromtheactive serviceprior tobefore 181.4 attaining the minimum retirement age established in section 181.5 422A.13, the employee is entitled to a refund of the net 181.6 accumulated amount of deduction from salary, pay, or 181.7 compensation, made for the purpose of accumulating a fund from 181.8 which to pay retirement allowances,shall be returned to such181.9employee,with interest at the annual compound rate of six 181.10 percent. 181.11 (b) Any contributing employee who separates from a 181.12 department, board or commission of the city whose employees are 181.13 covered by a fund organized undersections 422A.01 to 422A.25181.14 this chapter, and becomes an employee of a department or board 181.15 of the same city, whose employees are covered by a retirement 181.16 fund or relief association by whatever name known, organized 181.17 under any other law and supported in whole or in part by taxes 181.18 on the same city,shall havehas the option of: 181.19 (1) retaining their membership in the fund organized under 181.20sections 422A.01 to 422A.25this chapter, regardless of the 181.21 provisions of any law, rule, bylaw or other action requiring 181.22 membership in any other retirement fund or relief association 181.23 however organized.; or 181.24 (2) transferring to the fund or association covering the 181.25 employees of the department or board to which they are 181.26 transferring, providing they are eligible for membership therein. 181.27 (c) Any contributing employee who elects to transfer to 181.28 another fund or association ashereinprovided in paragraph (b), 181.29 clause (2),shallmust make such election within one year from 181.30 the date of separation from the city service covered by this 181.31 fund. If the contributing employee elects to transfer to 181.32 another fundas herein provided, the employee is entitled to a 181.33 refund of the net accumulated contributions made by such 181.34 employee to the fund organized undersections 422A.01 to181.35422A.25, shall be returned to the employeethis chapter with 181.36 interest at the annual compound rate of six percent. 182.1 Sec. 72. Minnesota Statutes 2004, section 422A.22, 182.2 subdivision 3, is amended to read: 182.3 Subd. 3. [LIMITATION ON ELIGIBILITY.] No employee of the 182.4 cityshall beis eligible to be a member of, or receive benefits 182.5 from, more than one retirement plan or fund of the city for the 182.6 same period of service. 182.7 Sec. 73. Minnesota Statutes 2004, section 422A.22, 182.8 subdivision 4, is amended to read: 182.9 Subd. 4. [DEATH-WHILE-ACTIVE REFUND.] (a) Upon the death 182.10 of an active memberprior tobefore the employee's termination 182.11 of active service,there shall be paid tothe beneficiary or 182.12 beneficiaries designated by the member on a form specified by 182.13 the executive director and filed with the retirement board,are 182.14 entitled to receive the net accumulated employee deductions from 182.15 salary, pay, or compensation, including interest under 182.16 subdivision 1, paragraph (a), compounded annually to the date of 182.17 the member's death. The amount must not include any 182.18 contributions made by the employee or on the employee's behalf, 182.19 or any interest or investment earnings on those contributions, 182.20 which were allocated to the survivor benefit fund under section 182.21 422A.06, subdivision 6. 182.22 (b) If the employee fails to make a designation, or if the 182.23 beneficiary or beneficiaries designated by the employee 182.24 predeceases the employee,the benefit specified in paragraph (a)182.25must be paid tothe deceased employee's estate is entitled to 182.26 the benefit specified in paragraph (a). 182.27 (c) A benefit payable under this subdivision is in addition 182.28 to any applicable survivor benefit under section 422A.23. 182.29 Sec. 74. Minnesota Statutes 2004, section 422A.22, 182.30 subdivision 6, is amended to read: 182.31 Subd. 6. [REFUND; MUNICIPAL EMPLOYEES RETIREMENT FUND.] 182.32AnyA person who has received a refund from themunicipal182.33 Minneapolis Employees Retirement Fund, and who is a member of a 182.34 public retirement system included in section 422A.16, 182.35 subdivision 8, may repay such refund with interest at a compound 182.36 annual rate of 8.5 percent to themunicipalMinneapolis 183.1 Employees Retirement Fund. If a refund is repaid to the fund 183.2 and if more than one refund has been received from the fund, all 183.3 refunds must be repaid. Repaymentshallmust be made as 183.4 provided insections 422A.01 to 422A.25this chapter. 183.5 Sec. 75. Minnesota Statutes 2004, section 422A.231, is 183.6 amended to read: 183.7 422A.231 [COST ALLOCATION.] 183.8 (a) Notwithstanding any law to the contrary, all current 183.9 and future contribution requirements due to this article are 183.10 payable by the participating contributing employing units other 183.11 than the state of Minnesota. 183.12 (b) In each actuarial valuation of the retirement fund, the 183.13 actuary retainedby the Legislative Commission on Pensions and183.14Retirementunder section 356.214 shall include an exhibit on the 183.15 impact of the benefit increases contained in this article on the 183.16 survivor benefit fund. The actuary shall calculate the expected 183.17 change in the present value of the future benefits payable from 183.18 the survivor benefit fund attributable to this article, using 183.19 the actuarial method and assumptions applicable to the 183.20 Minneapolis Employees Retirement Fund, from the prior actuarial 183.21 valuation and shall compare that result with the actual change 183.22 in the present value of future benefits payable from the 183.23 survivor benefit fund attributable to this article from the 183.24 prior actuarial valuation. 183.25 (c) The executive director shall assess each participating 183.26 employer, other than the state of Minnesota, its proportional 183.27 share of the net increase amount calculated under paragraph 183.28 (b). The assessment must be made on the first business day of 183.29 the following February, plus compound interest at an annual rate 183.30 of six percent on the amount from the actuarial valuation date 183.31 to the date of payment. 183.32 Sec. 76. Minnesota Statutes 2004, section 422A.24, is 183.33 amended to read: 183.34 422A.24 [ALLOWANCES NOT ASSIGNABLE OR SUBJECT TO PROCESS.] 183.35No money payable pursuant to this chapter shall be183.36assignable either in law or equity or be subject to execution,184.1levy, attachment, garnishment, or other legal process, except as184.2provided in section 518.58, 518.581, or 518.6111, nor shall any184.3of the proceeds of payments due pursuant to this chapter be184.4subject to the inheritance tax provisions of this state upon184.5transfer to a surviving spouse or minor or dependent child of184.6the decedent or a trust for their benefit.The provisions of 184.7 section 356.401 apply to the Minneapolis employees retirement 184.8 plan. 184.9 Sec. 77. Minnesota Statutes 2004, section 423B.17, is 184.10 amended to read: 184.11 423B.17 [PAYMENTS EXEMPT FROM PROCESS.] 184.12A payment made by the association under a provision of184.13sections 423B.01 to 423B.18, as amended, is exempt from legal184.14process except as provided in section 518.58, 518.581, or184.15518.6111. No person entitled to a payment may assign the same.184.16The association may not recognize an assignment or pay a sum on184.17account of an assignment.The provisions of section 356.401 184.18 apply to the Minneapolis Police Relief Association. 184.19 Sec. 78. Minnesota Statutes 2004, section 423C.09, is 184.20 amended to read: 184.21 423C.09 [PAYMENTS EXEMPT FROM PROCESS.] 184.22All payments made, or to be made, by the association under184.23this chapter shall be totally exempt from garnishment,184.24execution, or other legal process, except as provided in section184.25518.58, 518.581, or 518.6111. No person entitled to a payment184.26shall have the right to assign the name, nor shall the184.27association have authority to recognize any assignment or to pay184.28any sum on account thereof. Any attempt to transfer any right184.29or claim, or any part thereof, shall be void.The provisions of 184.30 section 356.401 apply to the Minneapolis Firefighters Relief 184.31 Association. 184.32 Sec. 79. Minnesota Statutes 2004, section 490.126, 184.33 subdivision 5, is amended to read: 184.34 Subd. 5. [EXEMPTION FROM PROCESS; NO ASSIGNMENT.]None of184.35the money, annuities, or other benefits provided in this chapter184.36is assignable either in law or equity or is subject to185.1execution, levy, attachment, garnishment, or other legal185.2process, except as provided in section 518.58, 518.581, or185.3518.6111.The provisions of section 356.401 apply to the judges 185.4 retirement plan. 185.5 Sec. 80. [REVISOR'S INSTRUCTION.] 185.6 In the next edition and subsequent editions of Minnesota 185.7 Statutes, the revisor of statutes shall replace the reference to 185.8 "sections 422A.01 to 422A.25" with the reference to "this 185.9 chapter" wherever the reference appears in Minnesota Statutes, 185.10 chapter 422A. 185.11 Sec. 81. [REPEALER.] 185.12 (a) Minnesota Statutes 2004, section 352.119, subdivision 185.13 1, is repealed. 185.14 (b) Minnesota Statutes 2004, sections 353.34, subdivision 185.15 3b; 353.36, subdivisions 2, 2a, 2b, and 2c; 353.46, subdivision 185.16 4; 353.663; 353.74; and 353.75, are repealed. 185.17 (c) Minnesota Statutes 2004, section 354.59, is repealed. 185.18 (d) Minnesota Statutes 2004, sections 422A.22, subdivisions 185.19 2 and 5; and 422A.221, are repealed. 185.20 (e) Minnesota Statutes 2004, sections 352.15, subdivision 185.21 1a; 353.15, subdivision 2; and 354.10, subdivision 2, are 185.22 repealed. 185.23 Sec. 82. [EFFECTIVE DATE.] 185.24 (a) Sections 1 to 73 and 75 to 81 are effective July 1, 185.25 2005. 185.26 (b) Section 74 is effective January 1, 2006. 185.27 (c) Sections 1, 21, 22, 23, 29, 45, 46, 53, 64, 76, 77, 78, 185.28 79, and 81, paragraph (e), do not apply to any cause of action 185.29 that is proceeding on the date of enactment or to any cause of 185.30 action for which the applicable statute of limitations has not 185.31 expired as of the date of enactment. 185.32 ARTICLE 13 185.33 LOCAL RETIREMENT PLANS 185.34 Section 1. Minnesota Statutes 2004, section 69.77, 185.35 subdivision 4, is amended to read: 185.36 Subd. 4. [RELIEF ASSOCIATION FINANCIAL REQUIREMENTS; 186.1 MINIMUM MUNICIPAL OBLIGATION.] (a) The officers of the relief 186.2 association shall determine the financial requirements of the 186.3 relief association and minimum obligation of the municipality 186.4 for the following calendar year in accordance with the 186.5 requirements of this subdivision. The financial requirements of 186.6 the relief association and the minimum obligation of the 186.7 municipality must be determined on or before the submission date 186.8 established by the municipality under subdivision 5. 186.9 (b) The financial requirements of the relief association 186.10 for the following calendar year must be based on the most recent 186.11 actuarial valuation or survey of the special fund of the 186.12 association if more than one fund is maintained by the 186.13 association, or of the association, if only one fund is 186.14 maintained, prepared in accordance with sections 356.215, 186.15 subdivisions 4 to 15, and 356.216, as required under subdivision 186.16 10. If an actuarial estimate is prepared by the actuary of the 186.17 relief association as part of obtaining a modification of the 186.18 benefit plan of the relief association and the modification is 186.19 implemented, the actuarial estimate must be used in calculating 186.20 the subsequent financial requirements of the relief association. 186.21 (c) If the relief association has an unfunded actuarial 186.22 accrued liability as reported in the most recent actuarial 186.23 valuation or survey, the total of the amounts calculated under 186.24 clauses (1), (2), and (3), constitute the financial requirements 186.25 of the relief association for the following year. If the relief 186.26 association does not have an unfunded actuarial accrued 186.27 liability as reported in the most recent actuarial valuation or 186.28 survey, the amount calculated under clauses (1) and (2) 186.29 constitute the financial requirements of the relief association 186.30 for the following year. The financial requirement elements are: 186.31 (1) the normal level cost requirement for the following 186.32 year, expressed as a dollar amount, which must be determined by 186.33 applying the normal level cost of the relief association as 186.34 reported in the actuarial valuation or survey and expressed as a 186.35 percentage of covered payroll to the estimated covered payroll 186.36 of the active membership of the relief association, including 187.1 any projected change in the active membership, for the following 187.2 year; 187.3 (2) for the Bloomington Fire Department Relief Association, 187.4 the Fairmont Police Relief Association, and the Virginia Fire 187.5 Department Relief Association, to the dollar amount of normal 187.6 cost determined under clause (1) must be added an amount equal 187.7 to the dollar amount of the administrative expenses of the 187.8 special fund of the association if more than one fund is 187.9 maintained by the association, or of the association if only one 187.10 fund is maintained, for the most recent year, multiplied by the 187.11 factor of 1.035. The administrative expenses are those 187.12 authorized under section 69.80. No amount of administrative 187.13 expenses under this clause are to be included in the financial 187.14 requirements of the Minneapolis Firefighters Relief Association 187.15 or the Minneapolis Police Relief Association; and 187.16 (3) to the dollar amount of normal cost and expenses 187.17 determined under clauses (1) and (2) must be added an amount 187.18 equal to the level annual dollar amount which is sufficient to 187.19 amortize the unfunded actuarial accrued liability by December 187.20 31, 2010, the Fairmont Police Relief Association, the 187.21 Minneapolis Firefighters Relief Association, and the Virginia 187.22 Fire Department Relief Association, by the date determined under 187.23 section 356.216, paragraph (a), clause (2), for the Bloomington 187.24 Fire Department Relief Association, and by December 31, 2020, 187.25 for the Minneapolis Police Relief Association, as determined 187.26 from the actuarial valuation or survey of the fund, using an 187.27 interest assumption set at the applicable rate specified in 187.28 section 356.215, subdivision 8. The amortization date specified 187.29 in this clause applies to all local police or salaried 187.30 firefighters' relief associations and that date supersedes any 187.31 amortization date specified in any applicable special law. 187.32 (d) The minimum obligation of the municipality is an amount 187.33 equal to the financial requirements of the relief association 187.34 reduced by the estimated amount of member contributions from 187.35 covered salary anticipated for the following calendar year and 187.36 the estimated amounts anticipated for the following calendar 188.1 year from the applicable state aid program established under 188.2 sections 69.011 to 69.051 receivable by the relief association 188.3 after any allocation made under section 69.031, subdivision 5, 188.4 paragraph (b), clause (2), or 423A.01, subdivision 2, clause 188.5 (6), from the local police and salaried firefighters' relief 188.6 association amortization aid program established under section 188.7 423A.02, subdivision 1, from the supplementary amortization 188.8 state-aid program established under section 423A.02, subdivision 188.9 1a, and from the additional amortization state aid under section 188.10 423A.02, subdivision 1b. 188.11 Sec. 2. Minnesota Statutes 2004, section 356.215, 188.12 subdivision 8, is amended to read: 188.13 Subd. 8. [INTEREST AND SALARY ASSUMPTIONS.] (a) The 188.14 actuarial valuation must use the applicable following 188.15 preretirement interest assumption and the applicable following 188.16 postretirement interest assumption: 188.17 preretirement postretirement 188.18 interest rate interest rate 188.19 plan assumption assumption 188.20 general state employees 188.21 retirement plan 8.5% 6.0% 188.22 correctional state employees 188.23 retirement plan 8.5 6.0 188.24 State Patrol retirement plan 8.5 6.0 188.25 legislators retirement plan 8.5 6.0 188.26 elective state officers 188.27 retirement plan 8.5 6.0 188.28 judges retirement plan 8.5 6.0 188.29 general public employees 188.30 retirement plan 8.5 6.0 188.31 public employees police and fire 188.32 retirement plan 8.5 6.0 188.33 local government correctional 188.34 service retirement plan 8.5 6.0 188.35 teachers retirement plan 8.5 6.0 188.36 Minneapolis employees 188.37 retirement plan 6.0 5.0 188.38 Duluth teachers retirement plan 8.5 8.5 188.39 Minneapolis teachers retirement 188.40 plan 8.5 8.5 188.41 St. Paul teachers retirement 188.42 plan 8.5 8.5 188.43 Minneapolis Police Relief 188.44 Association 6.0 6.0 188.45 Fairmont Police Relief 188.46 Association 5.0 5.0 188.47 Minneapolis Fire Department 188.48 Relief Association 6.0 6.0 188.49 Virginia Fire Department 188.50 Relief Association 5.0 5.0 188.51 Bloomington Fire Department 188.52 Relief Association 6.0 6.0 188.53 local monthly benefit volunteer 188.54 firefighters relief associations 5.0 5.0 189.1 (b) The actuarial valuation must use the applicable 189.2 following single rate future salary increase assumption, the 189.3 applicable following modified single rate future salary increase 189.4 assumption, or the applicable following graded rate future 189.5 salary increase assumption: 189.6 (1) single rate future salary increase assumption 189.7 future salary 189.8 plan increase assumption 189.9 legislators retirement plan 5.0% 189.10 elective state officers retirement 189.11 plan 5.0 189.12 judges retirement plan 5.0 189.13 Minneapolis Police Relief Association 4.0 189.14 Fairmont Police Relief 189.15 Association 3.5 189.16 Minneapolis Fire Department Relief 189.17 Association 4.0 189.18 Virginia Fire Department 189.19 Relief Association 3.5 189.20 Bloomington Fire Department Relief 189.21 Association 4.0 189.22 (2) modified single rate future salary increase assumption 189.23 future salary 189.24 plan increase assumption 189.25 Minneapolis employees the prior calendar year 189.26 retirement plan amount increased first by 189.27 1.0198 percent to prior 189.28 fiscal year date and 189.29 then increased by 4.0 189.30 percent annually for 189.31 each future year 189.32 (3) select and ultimate future salary increase assumption 189.33 or graded rate future salary increase assumption 189.34 future salary 189.35 plan increase assumption 189.36 general state employees select calculation and 189.37 retirement plan assumption A 189.38 correctional state employees 189.39 retirement plan assumption H 189.40 State Patrol retirement plan assumption H 189.41 general public employees select calculation and 189.42 retirement plan assumption B 189.43 public employees police and fire 189.44 fund retirement plan assumption C 189.45 local government correctional service 189.46 retirement plan assumption H 189.47 teachers retirement plan assumption D 189.48 Duluth teachers retirement plan assumption E 189.49 Minneapolis teachers retirement plan assumption F 189.50 St. Paul teachers retirement plan assumption G 189.51 189.52 The select calculation is: 189.53 during the ten-year select period, a designated percent 189.54 is multiplied by the result of ten minus T, where T is 189.55 the number of completed years of service, and is added 189.56 to the applicable future salary increase assumption. The 189.57 designated percent is 0.2 percent for the correctional state 189.58 employees retirement plan, the State Patrol retirement 190.1 plan, the public employees police and fire plan, and the 190.2 local government correctional service plan; 0.3 percent 190.3 for the general state employees retirement plan, the 190.4 general public employees retirement plan, the teachers 190.5 retirement plan, the Duluth Teachers Retirement Fund 190.6 Association, and the St. Paul Teachers Retirement Fund 190.7 Association; and 0.4 percent for the Minneapolis Teachers 190.8 Retirement Fund Association. 190.9 190.10 The ultimate future salary increase assumption is: 190.11 190.12 age A B C D E F G H 190.13 16 6.95% 6.95% 11.50% 8.20% 8.00% 6.50% 6.90% 7.7500 190.14 17 6.90 6.90 11.50 8.15 8.00 6.50 6.90 7.7500 190.15 18 6.85 6.85 11.50 8.10 8.00 6.50 6.90 7.7500 190.16 19 6.80 6.80 11.50 8.05 8.00 6.50 6.90 7.7500 190.17 20 6.75 6.40 11.50 6.00 6.90 6.50 6.90 7.7500 190.18 21 6.75 6.40 11.50 6.00 6.90 6.50 6.90 7.1454 190.19 22 6.75 6.40 11.00 6.00 6.90 6.50 6.90 7.0725 190.20 23 6.75 6.40 10.50 6.00 6.85 6.50 6.85 7.0544 190.21 24 6.75 6.40 10.00 6.00 6.80 6.50 6.80 7.0363 190.22 25 6.75 6.40 9.50 6.00 6.75 6.50 6.75 7.0000 190.23 26 6.75 6.36 9.20 6.00 6.70 6.50 6.70 7.0000 190.24 27 6.75 6.32 8.90 6.00 6.65 6.50 6.65 7.0000 190.25 28 6.75 6.28 8.60 6.00 6.60 6.50 6.60 7.0000 190.26 29 6.75 6.24 8.30 6.00 6.55 6.50 6.55 7.0000 190.27 30 6.75 6.20 8.00 6.00 6.50 6.50 6.50 7.0000 190.28 31 6.75 6.16 7.80 6.00 6.45 6.50 6.45 7.0000 190.29 32 6.75 6.12 7.60 6.00 6.40 6.50 6.40 7.0000 190.30 33 6.75 6.08 7.40 6.00 6.35 6.50 6.35 7.0000 190.31 34 6.75 6.04 7.20 6.00 6.30 6.50 6.30 7.0000 190.32 35 6.75 6.00 7.00 6.00 6.25 6.50 6.25 7.0000 190.33 36 6.75 5.96 6.80 6.00 6.20 6.50 6.20 6.9019 190.34 37 6.75 5.92 6.60 6.00 6.15 6.50 6.15 6.8074 190.35 38 6.75 5.88 6.40 5.90 6.10 6.50 6.10 6.7125 190.36 39 6.75 5.84 6.20 5.80 6.05 6.50 6.05 6.6054 190.37 40 6.75 5.80 6.00 5.70 6.00 6.50 6.00 6.5000 190.38 41 6.75 5.76 5.90 5.60 5.90 6.50 5.95 6.3540 190.39 42 6.75 5.72 5.80 5.50 5.80 6.50 5.90 6.2087 190.40 43 6.65 5.68 5.70 5.40 5.70 6.50 5.85 6.0622 190.41 44 6.55 5.64 5.60 5.30 5.60 6.50 5.80 5.9048 190.42 45 6.45 5.60 5.50 5.20 5.50 6.50 5.75 5.7500 190.43 46 6.35 5.56 5.45 5.10 5.40 6.40 5.70 5.6940 190.44 47 6.25 5.52 5.40 5.00 5.30 6.30 5.65 5.6375 190.45 48 6.15 5.48 5.35 5.00 5.20 6.20 5.60 5.5822 190.46 49 6.05 5.44 5.30 5.00 5.10 6.10 5.55 5.5404 190.47 50 5.95 5.40 5.25 5.00 5.00 6.00 5.50 5.5000 190.48 51 5.85 5.36 5.25 5.00 5.00 5.90 5.45 5.4384 190.49 52 5.75 5.32 5.25 5.00 5.00 5.80 5.40 5.3776 190.50 53 5.65 5.28 5.25 5.00 5.00 5.70 5.35 5.3167 190.51 54 5.55 5.24 5.25 5.00 5.00 5.60 5.30 5.2826 190.52 55 5.45 5.20 5.25 5.00 5.00 5.50 5.25 5.2500 190.53 56 5.35 5.16 5.25 5.00 5.00 5.40 5.20 5.2500 190.54 57 5.25 5.12 5.25 5.00 5.00 5.30 5.15 5.2500 190.55 58 5.25 5.08 5.25 5.10 5.00 5.20 5.10 5.2500 190.56 59 5.25 5.04 5.25 5.20 5.00 5.10 5.05 5.2500 190.57 60 5.25 5.00 5.25 5.30 5.00 5.00 5.00 5.2500 190.58 61 5.25 5.00 5.25 5.40 5.00 5.00 5.00 5.2500 190.59 62 5.25 5.00 5.25 5.50 5.00 5.00 5.00 5.2500 190.60 63 5.25 5.00 5.25 5.60 5.00 5.00 5.00 5.2500 190.61 64 5.25 5.00 5.25 5.70 5.00 5.00 5.00 5.2500 190.62 65 5.25 5.00 5.25 5.70 5.00 5.00 5.00 5.2500 190.63 66 5.25 5.00 5.25 5.70 5.00 5.00 5.00 5.2500 190.64 67 5.25 5.00 5.25 5.70 5.00 5.00 5.00 5.2500 190.65 68 5.25 5.00 5.25 5.70 5.00 5.00 5.00 5.2500 190.66 69 5.25 5.00 5.25 5.70 5.00 5.00 5.00 5.2500 190.67 70 5.25 5.00 5.25 5.70 5.00 5.00 5.00 5.2500 190.68 71 5.25 5.00 5.70 190.69 (c) The actuarial valuation must use the applicable 191.1 following payroll growth assumption for calculating the 191.2 amortization requirement for the unfunded actuarial accrued 191.3 liability where the amortization retirement is calculated as a 191.4 level percentage of an increasing payroll: 191.5 payroll growth 191.6 plan assumption 191.7 general state employees retirement plan 5.00% 191.8 correctional state employees retirement plan 5.00 191.9 State Patrol retirement plan 5.00 191.10 legislators retirement plan 5.00 191.11 elective state officers retirement plan 5.00 191.12 judges retirement plan 5.00 191.13 general public employees retirement plan 6.00 191.14 public employees police and fire 191.15 retirement plan 6.00 191.16 local government correctional service 191.17 retirement plan 6.00 191.18 teachers retirement plan 5.00 191.19 Duluth teachers retirement plan 5.00 191.20 Minneapolis teachers retirement plan 5.00 191.21 St. Paul teachers retirement plan 5.00 191.22 Sec. 3. Minnesota Statutes 2004, section 356.216, is 191.23 amended to read: 191.24 356.216 [CONTENTS OF ACTUARIAL VALUATIONS FOR LOCAL POLICE 191.25 AND FIRE FUNDS.] 191.26 (a) The provisions of section 356.215 that govern the 191.27 contents of actuarial valuations must apply to any local police 191.28 or fire pension fund or relief association required to make an 191.29 actuarial report under this section, except as follows: 191.30 (1) in calculating normal cost and other requirements, if 191.31 required to be expressed as a level percentage of covered 191.32 payroll, the salaries used in computing covered payroll must be 191.33 the maximum rate of salary on which retirement and survivorship 191.34 credits and amounts of benefits are determined and from which 191.35 any member contributions are calculated and deducted; 191.36 (2) in lieu of the amortization date specified in section 191.37 356.215, subdivision 11, the appropriate amortization target 191.38 date specified in section 69.77, subdivision 4, or 69.773, 191.39 subdivision 4, clause (c), must be used in calculating any 191.40 required amortization contribution, except that if the actuarial 191.41 report for the Bloomington Fire Department Relief Association 191.42 indicates an unfunded actuarial accrued liability, the unfunded 191.43 obligation is to be amortized on a level dollar basis by 191.44 December 31 of the year occurring 20 years later, and if 192.1 subsequent actuarial valuations for the Bloomington Fire 192.2 Department Relief Association determine a net actuarial 192.3 experience loss incurred during the year which ended as of the 192.4 day before the most recent actuarial valuation date, any 192.5 unfunded liability due to that loss is to be amortized on a 192.6 level dollar basis by December 31 of the year occurring 20 years 192.7 later and except that the amortization date for the Minneapolis 192.8 Police Relief Association is December 31, 2020; 192.9 (3) in addition to the tabulation of active members and 192.10 annuitants provided for in section 356.215, subdivision 13, the 192.11 member contributions for active members for the calendar year 192.12 and the prospective annual retirement annuities under the 192.13 benefit plan for active members must be reported; 192.14 (4) actuarial valuations required under section 69.773, 192.15 subdivision 2, must be made at least every four years and 192.16 actuarial valuations required under section 69.77 shall be made 192.17 annually; 192.18 (5) the actuarial balance sheet showing accrued assets 192.19 valued at market value if the actuarial valuation is required to 192.20 be prepared at least every four years or valued as current 192.21 assets under section 356.215, subdivision 1, clause (6), or 192.22 paragraph (b), whichever applies, if the actuarial valuation is 192.23 required to be prepared annually, actuarial accrued liabilities, 192.24 and the unfunded actuarial accrued liability must include the 192.25 following required reserves: 192.26 (i) For active members 192.27 1. Retirement benefits 192.28 2. Disability benefits 192.29 3. Refund liability due to death or withdrawal 192.30 4. Survivors' benefits 192.31 (ii) For deferred annuitants' benefits 192.32 (iii) For former members without vested rights 192.33 (iv) For annuitants 192.34 1. Retirement annuities 192.35 2. Disability annuities 192.36 3. Surviving spouses' annuities 193.1 4. Surviving children's annuities 193.2 In addition to those required reserves, separate items must 193.3 be shown for additional benefits, if any, which may not be 193.4 appropriately included in the reserves listed above; and 193.5 (6) actuarial valuations are due by the first day of the 193.6 seventh month after the end of the fiscal year which the 193.7 actuarial valuation covers. 193.8 (b) For the Minneapolis Firefighters Relief Association or 193.9 the Minneapolis Police Relief Association, the following 193.10 provisions additionally apply: 193.11 (1) in calculating the actuarial balance sheet, unfunded 193.12 actuarial accrued liability, and amortization contribution of 193.13 the relief association, "current assets" means the value of all 193.14 assets at cost, including realized capital gains and losses, 193.15 plus or minus, whichever applies, the average value of total 193.16 unrealized capital gains or losses for the most recent 193.17 three-year period ending with the end of the plan year 193.18 immediately preceding the actuarial valuation report 193.19 transmission date; and 193.20 (2) in calculating the applicable portions of the actuarial 193.21 valuation, an annual preretirement interest assumption of six 193.22 percent, an annual postretirement interest assumption of six 193.23 percent, and an annual salary increase assumption of four 193.24 percent must be used. 193.25 Sec. 4. Minnesota Statutes 2004, section 383B.46, 193.26 subdivision 2, is amended to read: 193.27 Subd. 2. [ESTABLISHMENT OF ACCOUNT; CONTRIBUTIONS.] The 193.28 county of Hennepin shall deduct from the salary of every person 193.29 who is eligible for coverage and who elected to retain or obtain 193.30 coverage by the Hennepin County supplemental retirement program 193.31 a sum equal to one percent of the total salary of the person. 193.32 Any classified or unclassified employee who is employed in 193.33 subsidized on-the-job training, work experience or public 193.34 service employment as an enrollee under the federal 193.35 Comprehensive Employment and Training Act shall not be included 193.36 in the supplemental retirement account from and after March 30, 194.1 1978 unless the employee has as of the later of March 30, 1978 194.2 or the date of employment sufficient service credit in the 194.3 public employees retirement fund or the Minneapolis municipal 194.4 employees retirement fund, whichever is applicable, to meet the 194.5 minimum vesting requirements for a deferred retirement annuity, 194.6 or the county agrees in writing to make the required employer 194.7 contributions on account of the individual from revenue sources 194.8 other than funds provided under the federal Comprehensive 194.9 Employment and Training Act, or the employee agrees in writing 194.10 to make the required employer contribution in addition to the 194.11 employee contribution. The deduction shall be made in the same 194.12 manner as other retirement deductions are made from the salary 194.13 of the person. An amount equal to the amounts deducted during 194.14 each payroll period shall be contributed by the county of 194.15 Hennepin. The total amount deducted and contributed shall be 194.16 deposited to the credit of the supplemental retirement account 194.17 inthe treasury of the county of Hennepina separate account 194.18 administered by the Minnesota State Retirement System on behalf 194.19 of Hennepin County. The Hennepin County supplemental retirement 194.20 account is hereby established as an account separate and 194.21 distinct from other funds, accounts, or assets of the county of 194.22 Hennepin. 194.23 Sec. 5. Minnesota Statutes 2004, section 383B.47, is 194.24 amended to read: 194.25 383B.47 [PARTICIPATION IN MINNESOTA SUPPLEMENTAL INVESTMENT 194.26 FUND.] 194.27 With the moneys deposited to the credit of the supplemental 194.28 retirement accountin the treasury of the county of Hennepin,194.29the county of Hennepin, the Minnesota State Retirement System 194.30 shall purchase shares on behalf of Hennepin County in the 194.31 accounts of the Minnesota supplemental investment fund as 194.32 provided in section 383B.48. 194.33 Sec. 6. Minnesota Statutes 2004, section 383B.48, is 194.34 amended to read: 194.35 383B.48 [BUYING STATE SUPPLEMENTAL INVESTMENT FUND SHARES.] 194.36At the time a person becomes eligible for coverage and195.1elects to obtain coverage by the Hennepin County supplemental195.2retirement program and before November 1 of each subsequent195.3year,A participant in the Hennepin County supplemental 195.4 retirement program shall indicatein writing on a form provided195.5by the county of Hennepinthe account of the Minnesota 195.6 supplemental investment fund in which the participant wishes 195.7 salary deductions and county matching contributions attributable 195.8 to salary deductions to be invested forthe subsequent 12-month195.9periodsuch time as allowed by the Minnesota State Retirement 195.10 System.For that 12-month period,Thecounty of Hennepin195.11 Minnesota State Retirement System shall purchase with the salary 195.12 deductions and county matching funds attributable to the salary 195.13 deductions shares in the appropriate account of the Minnesota 195.14 supplemental investment fund in accordance with the indicated 195.15 preferences of the participant. However, the county of Hennepin 195.16 has the authority to determine which accounts of the Minnesota 195.17 supplemental investment fund will be available for participant 195.18 investment. The shares purchased must stand in the name of the 195.19 county of Hennepin. A record must be kept by thecounty of195.20HennepinMinnesota State Retirement System indicating the number 195.21 of shares in each account of the Minnesota supplemental 195.22 investment fund purchased with the salary deductions and county 195.23 matching funds attributable to the salary deductions of each 195.24 participant. The record must be known as the "participant's 195.25 share account record." The participant's share account record 195.26 must show, in addition to the number of shares in the account, 195.27 any cash balance of salary deductions or county matching funds 195.28 attributable to those deductions which stand uninvested in 195.29 shares. At the option of the county of Hennepin, and subject to 195.30 any terms and conditions established and communicated in writing 195.31 by the county to a participant, the participant may designate no 195.32 more often than once eachcalendar quartermonth that prior 195.33 salary deductions and county matching contributions attributable 195.34 to the salary deductions, together with any interest earned, be 195.35 reinvested in another account of the Minnesota supplemental 195.36 investment fund made available by the county of Hennepin. 196.1 Sec. 7. Minnesota Statutes 2004, section 383B.49, is 196.2 amended to read: 196.3 383B.49 [SUPPLEMENTAL RETIREMENT BENEFITS; REDEMPTION OF 196.4 SHARES.] 196.5 When requested to do so, in writing, on forms provided by 196.6 thecountyMinnesota State Retirement System, by a participant, 196.7 surviving spouse, a guardian of a surviving child or a personal 196.8 representative, whichever is applicable, thecounty of Hennepin196.9 Minnesota State Retirement System shall on behalf of Hennepin 196.10 County redeem shares in the accounts of the Minnesota 196.11 supplemental investment fund standing in a participant's share 196.12 account record under the following circumstances and in 196.13 accordance with the laws and regulations governing the Minnesota 196.14 supplemental investment fund: 196.15 (1) A participant who is no longer employed by the county 196.16 of Hennepin is entitled to receive the cash realized on the 196.17 redemption of the shares to the credit of the participant's 196.18 share account record of the person. The participant may request 196.19 the redemption of all or a portion of the shares in the 196.20 participant's share account record of the person, but may not 196.21 request more than one redemption in any one calendar year. If 196.22 only a portion of the shares in the participant's share account 196.23 record is requested to be redeemed the person may request to 196.24 redeem not less than 20 percent of the shares in any one 196.25 calendar year and the redemption must be completed in no more 196.26 than five years. The person may select annual redemption in a 196.27 single lump sum or in monthly payments. An election is 196.28 irrevocable except that a participant may request an amendment 196.29 of the election to redeem all of the person's remaining shares. 196.30 All requests under this paragraph are subject to application to 196.31 and approval of theHennepin County administrator, in the sole196.32discretion of the administratorMinnesota State Retirement 196.33 System upon verification by Hennepin County through the county 196.34 administrator of the recipient's eligibility to redeem funds. 196.35 (2) In the event of the death of a participant leaving a 196.36 surviving spouse, the surviving spouse is entitled to receive 197.1 the cash realized on the redemption of all or a portion of the 197.2 shares in the participant's share account record of the deceased 197.3 spouse, but in no event may the spouse request more than one 197.4 redemption in each calendar year. If only a portion of the 197.5 shares in the participant's share account record is requested to 197.6 be redeemed, the surviving spouse may request the redemption of 197.7 not less than 20 percent of the shares in any one calendar year. 197.8 The surviving spouse may elect annual redemption in a single 197.9 lump sum payment or in monthly payments. Redemption must be 197.10 completed in no more than five years. An election is 197.11 irrevocable except that the surviving spouse may request an 197.12 amendment of the election to redeem all of the participant's 197.13 remaining shares. All requests under this paragraph are subject 197.14 to application to and approval of theHennepin County197.15administrator, in the sole discretion of the197.16administratorMinnesota State Retirement System upon 197.17 verification by Hennepin County through the county administrator 197.18 of the recipient's eligibility to redeem funds. Upon the death 197.19 of the surviving spouse, any shares remaining in the 197.20 participant's share account record must be redeemed on behalf of 197.21 Hennepin County by thecounty of HennepinMinnesota State 197.22 Retirement System and the cash realized from the redemption 197.23 distributed to the estate of the surviving spouse. 197.24 (3) In the event of the death of a participant leaving no 197.25 surviving spouse, but leaving a minor surviving child or minor 197.26 surviving children, the guardianship estate of the minor child 197.27 is, or the guardianship estates of the minor children are, 197.28 entitled to receive the cash realized on the redemption of all 197.29 shares to the credit of the participant's share account record 197.30 of the deceased participant. In the event of minor surviving 197.31 children, the cash realized must be paid in equal shares to the 197.32 guardianship estates of the minor surviving children. 197.33 (4) In the event of the death of a participant leaving no 197.34 surviving spouse and no minor surviving children, the estate of 197.35 the deceased participant is entitled to receive the cash 197.36 realized on the redemption of all shares to the credit of the 198.1 participant's share account record of the deceased participant. 198.2 Sec. 8. [383B.491] [MINNESOTA STATE RETIREMENT SYSTEM 198.3 BILLING AUTHORITY.] 198.4 The Minnesota State Retirement System executive director is 198.5 authorized to enter into an interagency agreement with Hennepin 198.6 County under which the Minnesota State Retirement System would 198.7 directly bill the county for the cost of the Minnesota State 198.8 Retirement System's administration of the Hennepin County 198.9 Supplemental Retirement Plan. 198.10 Sec. 9. Minnesota Statutes 2004, section 423B.05, 198.11 subdivision 3, is amended to read: 198.12 Subd. 3. [CONTINUATION OF BOARD.] Notwithstanding the 198.13 provisions of section 423A.01, subdivision 2, or any other law, 198.14 the board of trustees and its successors established under 198.15 subdivision 1 shall continue to govern the association until 198.16 there are no more than100350 members of the police pension 198.17 fund. The fund thereafter must become a trust fund in 198.18 accordance with section 423A.01, subdivision 2. 198.19 Sec. 10. Minnesota Statutes 2004, section 423B.09, 198.20 subdivision 1, is amended to read: 198.21 Subdivision 1. [MINNEAPOLIS POLICE; PERSONS ENTITLED TO 198.22 RECEIVE PENSIONS.] The association shall grant pensions payable 198.23 from the police pension fund in monthly installments to persons 198.24 entitled to pensions in the manner and for the following 198.25 purposes. 198.26 (a)When the actuarial value of assets of the fund198.27according to the most recent annual actuarial valuation198.28performed in accordance with sections 356.215 and 356.216 is198.29less than 90 percent of the actuarial accrued liabilities,An 198.30 active member or a deferred pensioner who has performed duty as 198.31 a member of the police department of the city for five years or 198.32 more, upon written application after retiring from duty and 198.33 reaching at least age 50, is entitled to be paid monthly for 198.34 life a service pensionequal to eight units. For full years of198.35service beyond five years, the service pension increases by 1.6198.36units for each full year, to a maximum of 40 units. When the199.1actuarial value of assets of the fund according to the most199.2recent annual actuarial valuation prepared in accordance with199.3sections 356.215 and 356.216 is greater than 90 percent of199.4actuarial accrued liabilities,. Active members, deferred 199.5 members, and service pensioners are entitled to a service 199.6 pension according to the following schedule: 199.7 5 years 8.0 units 199.8 6 years 9.6 units 199.9 7 years 11.2 units 199.10 8 years 12.8 units 199.11 9 years 14.4 units 199.12 10 years 16.0 units 199.13 11 years 17.6 units 199.14 12 years 19.2 units 199.15 13 years 20.8 units 199.16 14 years 22.4 units 199.17 15 years 24.0 units 199.18 16 years 25.6 units 199.19 17 years 27.2 units 199.20 18 years 28.8 units 199.21 19 years 30.4 units 199.22 A B 199.23 20 years34.034.5 units 35.0 units 199.24 21 years35.636.1 units 36.6 units 199.25 22 years37.237.7 units 38.2 units 199.26 23 years38.839.3 units 39.8 units 199.27 24 years40.440.9 units 41.4 units 199.28 25 years42.042.5 units 43.0 units 199.29 Column A is applicable until December 31, 2005, and applies 199.30 retroactively to January 1, 2005, for a service pensioner who 199.31 retired before January 1, 2005. Column B applies on and after 199.32 January 1, 2006. 199.33 Fractional years of service may not be used in computing 199.34 pensions. 199.35 (b) An active member who after five years' service but less 199.36 than 20 years' service with the police department of the city, 200.1 becomes superannuated so as to be permanently unable to perform 200.2 the person's assigned duties, is entitled to be paid monthly for 200.3 life a superannuation pension equal to four units for five years 200.4 of service and an additional two units for each full year of 200.5 service over five years and less than 20 years. 200.6 (c) An active member who is not eligible for a service 200.7 pension and who, while a member of the police department of the 200.8 city, becomes diseased or sustains an injury while in the 200.9 service that permanently unfits the member for the performance 200.10 of police duties is entitled to be paid monthly for life a 200.11 pension equal to 34 units while so disabled. 200.12 Sec. 11. Minnesota Statutes 2004, section 423B.09, is 200.13 amended by adding a subdivision to read: 200.14 Subd. 7. [ADDITIONAL UNIT.] The additional half units 200.15 provided to members by subdivision 1 must also be provided under 200.16 the same terms and at the same time as applicable under 200.17 subdivision 1 to members who selected a joint annuity option 200.18 under subdivision 6 and must be in an amount that is actuarially 200.19 equivalent to the service pension and the automatic survivor 200.20 coverage for that additional unit. 200.21 Sec. 12. Minnesota Statutes 2004, section 423B.10, 200.22 subdivision 1, is amended to read: 200.23 Subdivision 1. [ENTITLEMENT; BENEFIT AMOUNT.] (a) The 200.24 surviving spouse of a deceased service pensioner, disability 200.25 pensioner, deferred pensioner, superannuation pensioner, or 200.26 active member, who was the legally married spouse of the 200.27 decedent, residing with the decedent, and who was married while 200.28 or before the time the decedent was on the payroll of the police 200.29 department, and who, if the deceased member was a service or 200.30 deferred pensioner, was legally married to the member for a 200.31 period of at least one year before retirement from the police 200.32 department, is entitled to a surviving spouse benefit. The 200.33 surviving spouse benefit is equal to2222.5 units per month 200.34 until December 31, 2005, and 23 units per month beginning on 200.35 January 1, 2006, if the person is the surviving spouse of a 200.36 deceased active member or disabilitant. The surviving spouse 201.1 benefit is equal to six units per month, plus an additional one 201.2 unit for each year of service to the credit of the decedent in 201.3 excess of five years, to a maximum of2222.5 units per month 201.4 until December 31, 2005, and 23 units per month beginning on 201.5 January 1, 2006, if the person is the surviving spouse of a 201.6 deceased service pensioner, deferred pensioner, or 201.7 superannuation pensioner. The surviving spouse benefit is 201.8 payable for the life of the surviving spouse. 201.9 (b) A surviving child of a deceased service pensioner, 201.10 disability pensioner, deferred pensioner, superannuation 201.11 pensioner, or active member, who was living while the decedent 201.12 was an active member of the police department or was born within 201.13 nine months after the decedent terminated active service in the 201.14 police department, is entitled to a surviving child benefit. 201.15 The surviving child benefit is equal to eight units per month if 201.16 the person is the surviving child of a deceased active member or 201.17 disabilitant. The surviving child benefit is equal to two units 201.18 per month, plus an additional four-tenths of one unit per month 201.19 for each year of service to the credit of the decedent in excess 201.20 of five years, to a maximum of eight units, if the person is the 201.21 surviving child of a deceased service pensioner, deferred 201.22 pensioner, or superannuation pensioner. The surviving child 201.23 benefit is payable until the person attains age 18, or, if in 201.24 full-time attendance during the normal school year, in a school 201.25 approved by the board of directors, until the person receives a 201.26 bachelor's degree or attains the age of 22 years, whichever 201.27 occurs first. In the event of the death of both parents leaving 201.28 a surviving child or children entitled to a surviving child 201.29 benefit as determined in this paragraph, the surviving child is, 201.30 or the surviving children are, entitled to a surviving child 201.31 benefit in such sums as determined by the board of directors to 201.32 be necessary for the care and education of such surviving child 201.33 or children, but not to exceed the family maximum benefit per 201.34 month, to the children of any one family. 201.35 (c) The surviving spouse and surviving child benefits are 201.36 subject to a family maximum benefit. The family maximum benefit 202.1 is 41 units per month. 202.2 (d) A surviving spouse who is otherwise not qualified may 202.3 receive a benefit if the surviving spouse was married to the 202.4 decedent for a period of five years and was residing with the 202.5 decedent at the time of death. The surviving spouse benefit is 202.6 the same as that provided in paragraph (a), except that if the 202.7 surviving spouse is younger than the decedent, the surviving 202.8 spouse benefit must be actuarially equivalent to a surviving 202.9 spouse benefit that would have been paid to the member's spouse 202.10 had the member been married to a person of the same age or a 202.11 greater age than the member's age before retirement. 202.12 (e) For any surviving spouse who began receiving survivor 202.13 benefits before January 1, 2005, the half-unit increase under 202.14 paragraph (a) is effective retroactive to January 1, 2005. 202.15 Sec. 13. Minnesota Statutes 2004, section 423C.05, 202.16 subdivision 2, is amended to read: 202.17 Subd. 2. [SERVICE PENSION.] (a)An activeA member who has 202.18 performed duty for the fire department for five years or more, 202.19 upon written application after retiring from duty and reaching 202.20 at least age 50, is entitled to be paid monthly for life a 202.21 service pension under paragraph (b). 202.22 (b)Based on the percentage that the actuarial value of202.23assets of the special fund equal to the actuarial accrued202.24liabilities of the special fund according to the most recent202.25annual actuarial valuation of the relief association prepared in202.26accordance with sections 356.215 and 356.216,The amount of the 202.27 service pension is as follows: 202.28 Length ofServiceServiceService202.29 allowablepensionpensionpension202.30 servicepayable ifpayablepayable if202.31 creditunder 90if greatergreater202.32percentthan 89.99than 92.49202.33percent andpercent202.34less thanNumber of 202.3592.5 percentunits 202.36 5 years-8.0 units8.0 units 203.1 6 years-9.6 units9.6 units 203.2 7 years-11.2 units11.2 units 203.3 8 years-12.8 units12.8 units 203.4 9 years-14.4 units14.4 units 203.5 10 years16.0 units16.0 units16.0 units 203.6 11 years17.6 units17.6 units17.6 units 203.7 12 years19.2 units19.2 units19.2 units 203.8 13 years20.8 units20.8 units20.8 units 203.9 14 years22.4 units22.4 units22.4 units 203.10 15 years24.0 units24.0 units24.0 units 203.11 16 years25.6 units25.6 units25.6 units 203.12 17 years27.2 units27.2 units27.2 units 203.13 18 years28.8 units28.8 units28.8 units 203.14 19 years30.4 units30.4 units30.4 units 203.15 20 years33.0 units33.5 units34.0 units 203.16 21 years34.6 units35.1 units35.6 units 203.17 22 years36.2 units37.7 units37.2 units 203.18 23 years37.8 units38.3 units38.8 units 203.19 24 years39.4 units39.9 units40.4 units 203.20 25 years 203.21 or more41.0 units41.5 units42.0 units 203.22 (c) A member entitled to a benefit under this subdivision 203.23 may elect to have it paid as an optional retirement annuity 203.24 pursuant to the conditions set forth in subdivision 8. A member 203.25 receiving a benefit pursuant to subdivision 5 or 6 shall not 203.26 simultaneously be entitled to a benefit under this subdivision. 203.27 Sec. 14. [423C.16] [RECOMPUTATION OF DISABLED BENEFIT 203.28 PROHIBITED.] 203.29 Notwithstanding section 423A.11, the Board of Trustees of 203.30 the Minneapolis Firefighters Relief Association shall not 203.31 recompute the disability benefit of a member who became 203.32 permanently disabled as the result of a service-related disease 203.33 or injury. Any prior recomputation of a disabled member's 203.34 service-related disability pension shall be revoked upon the 203.35 member's request and upon the member's signed and sworn 203.36 agreement to waive any right to a recomputation of the benefit 204.1 in the future. Non-service-related disability pension benefits 204.2 that were recomputed at full 25-year service pensions shall 204.3 remain in effect. 204.4 Sec. 15. [NO REDUCTION OF BENEFITS.] 204.5 When a pension benefit is properly paid in accordance with 204.6 the laws governing the Minneapolis Police Relief Association or 204.7 the Minneapolis Firefighters Relief Association, whichever 204.8 apply, to any member, the dollar amount of the pension a member 204.9 received may not be reduced if the city of Minneapolis and the 204.10 collective bargaining agent representing active police officers 204.11 or firefighters enter into or are required to abide by an 204.12 agreement that would otherwise require the association to reduce 204.13 the dollar amount of a pension that had properly been paid to 204.14 any member. 204.15 Sec. 16. [AURORA, BIWABIK CITY, HOYT LAKES, AND PALO 204.16 VOLUNTEER FIREFIGHTER RELIEF ASSOCIATIONS; CONSOLIDATION.] 204.17 (a) This section applies to consolidation of any 204.18 combination of two or more of the following volunteer 204.19 firefighter relief associations: Aurora, Biwabik City, Hoyt 204.20 Lakes, and Palo. 204.21 (b) Notwithstanding Minnesota Statutes, section 424B.10, 204.22 subdivision 1, paragraph (a), the service pension to be paid by 204.23 the relief association existing after the consolidation is as 204.24 follows: 204.25 (1) for the service rendered by each individual volunteer 204.26 firefighter before the effective date of the consolidation, the 204.27 service pension amount is the amount payable to that volunteer 204.28 firefighter under the articles of incorporation or bylaws of the 204.29 consolidating volunteer firefighters relief association that the 204.30 firefighter was a member of immediately before the 204.31 consolidation; 204.32 (2) for the service rendered after the effective date of 204.33 the consolidation, the service pension amount is the highest 204.34 dollar amount service pension of any of the consolidating 204.35 volunteer firefighters relief associations under the articles of 204.36 incorporation or bylaws in effect immediately before the 205.1 consolidation; and 205.2 (3) after consolidation, increases in the amounts 205.3 established in clauses (1) and (2) may be implemented if 205.4 consistent with applicable requirements of Minnesota Statutes, 205.5 chapters 69 and 424A. 205.6 Sec. 17. [EVELETH RETIRED POLICE AND FIRE TRUST FUND; AD 205.7 HOC POSTRETIREMENT ADJUSTMENT.] 205.8 (a) In addition to the current pensions and other 205.9 retirement benefits payable, the pensions and retirement 205.10 benefits payable to retired police officers and firefighters and 205.11 their surviving spouses by the Eveleth police and fire trust 205.12 fund are increased by $100 per month. Increases are retroactive 205.13 from January 1, 2005. 205.14 (b) Following the January 1, 2005, effective date of the 205.15 benefit increase provided under paragraph (a), every two years 205.16 thereafter, to be effective no earlier than the applicable 205.17 January 1, the city council of the city of Eveleth is authorized 205.18 to provide permanent, uniform benefit increases, not less than 205.19 $10 per month nor to exceed $100 per month, to any remaining 205.20 retirees and survivors receiving benefits from the Eveleth 205.21 police and fire trust fund. Any given benefit improvement under 205.22 this paragraph is not effective unless the city council passes a 205.23 resolution approving the increase. 205.24 (c) Within 30 days following the approval of a resolution 205.25 under paragraph (b), the chief administrative officer of the 205.26 city of Eveleth shall file a copy of the resolution with the 205.27 executive director of the Legislative Commission on Pensions and 205.28 Retirement, with the chair of the house Governmental Operations 205.29 and Veterans Affairs Committee, and with the chair of the senate 205.30 State and Local Government Operations Committee. Along with a 205.31 copy of the resolution, the city's chief administrative officer 205.32 must send a statement indicating the age of each benefit 205.33 recipient and the retirement benefit or survivor benefit being 205.34 received before and after the benefit increase. 205.35 Sec. 18. [MAPLEWOOD AND OAKDALE VOLUNTEER FIREFIGHTER 205.36 RELIEF ASSOCIATIONS; TRANSFER OF ASSETS.] 206.1 Notwithstanding any limitations in Minnesota Statutes, 206.2 section 424A.02, subdivision 13, or any other provision of law 206.3 to the contrary, if an agreement between the affected relief 206.4 associations and cities is reached as provided in this section, 206.5 the Maplewood Firefighters Relief Association may transfer 206.6 assets from its special fund to the Oakdale Fire Department 206.7 Relief Association representing the value of the accumulated 206.8 service credit for the current members of the Oakdale Fire 206.9 Department Relief Association who are currently eligible to 206.10 receive a combined service pension for firefighter service in 206.11 both associations. The transfer of the assets from the 206.12 Maplewood Firefighters Relief Association to the Oakdale Fire 206.13 Department Relief Association must be in an amount representing 206.14 the cumulative value of the service credit earned by the members 206.15 of the Oakdale Fire Department Relief Association who are 206.16 currently eligible to receive a combined service pension for 206.17 firefighting service in both associations for the service credit 206.18 that they accrued while working for the Maplewood Fire 206.19 Department. The amount of the assets, liabilities, and service 206.20 credit to be transferred must be specified in a joint agreement 206.21 negotiated by the secretaries of the two relief associations and 206.22 ratified by the boards of trustees of both relief associations 206.23 and of the cities of Maplewood and Oakdale. The agreement must 206.24 specify by name or other appropriate means the firefighters 206.25 affected by the liability, asset, and service credit transfer. 206.26 The ratification must be expressed in the form of resolutions 206.27 adopted by each entity. The agreements must specify the amount 206.28 of assets to be transferred, the amount of liabilities to be 206.29 transferred, and the amount of service credit each of the 206.30 applicable individuals will receive in the Oakdale Fire 206.31 Department Relief Association. Upon the ratification of the 206.32 agreement by both relief associations and both cities, the 206.33 assets, liabilities, and service credit of the applicable 206.34 individuals must be transferred to the Oakdale Fire Department 206.35 Relief Association, and the Maplewood Firefighters Relief 206.36 Association is relieved of any obligation to the individuals. A 207.1 certified copy of the ratified agreement must be filed with the 207.2 state auditor and with the secretary of state. 207.3 Sec. 19. [EFFECTIVE DATE; LOCAL APPROVAL.] 207.4 (a) Sections 2 and 3 with respect to the Bloomington Fire 207.5 Department Relief Association are effective the day after the 207.6 date on which the city council of the city of Bloomington and 207.7 its chief clerical officer timely complete their compliance with 207.8 Minnesota Statutes, section 645.021, subdivisions 2 and 4. 207.9 (b) Sections 1, 3, with respect to the Minneapolis Police 207.10 Relief Association, 9, 10, 11, 12, 13, and 15 are not severable 207.11 and are effective on the day after the date of the approval by 207.12 the city council of the city of Minneapolis and the timely 207.13 completion by the chief clerical officer of the city of 207.14 Minneapolis of compliance with Minnesota Statutes, section 207.15 645.021, subdivisions 2 and 3. 207.16 (c) Sections 4, 5, 6, 7, and 8 are effective on the day 207.17 after the board of Hennepin County and its chief clerical 207.18 officer complete in a timely manner their compliance with 207.19 Minnesota Statutes, section 645.021, subdivisions 2 and 3. 207.20 (d) Sections 14 and 15 are effective on the day after the 207.21 governing body of the city of Minneapolis and its chief clerical 207.22 officer timely complete their compliance with Minnesota 207.23 Statutes, section 645.021, subdivisions 2 and 3. 207.24 (e) Section 17 is effective the day after the date on which 207.25 the city council of the city of Eveleth and its chief clerical 207.26 officer timely complete their compliance with Minnesota 207.27 Statutes, section 645.021, subdivisions 2 and 3. 207.28 (f) Section 16 is effective with respect to a volunteer 207.29 firefighters relief association listed in column A the day after 207.30 the governing body of the municipality listed in column B and 207.31 its chief clerical officer timely complete compliance with 207.32 Minnesota Statutes, section 645.021, subdivisions 2 and 3. 207.33 A B 207.34 Aurora city of Aurora 207.35 Biwabik city of Biwabik 207.36 Hoyt Lakes city of Hoyt Lakes 208.1 Palo town of White 208.2 (g) Section 18 is effective the day after the governing 208.3 body of the city of Maplewood, the governing body of the city of 208.4 Oakdale, the Maplewood chief clerical officer, and the Oakdale 208.5 chief clerical officer complete their compliance with Minnesota 208.6 Statutes, section 645.021, subdivisions 2 and 3. 208.7 ARTICLE 14 208.8 MINNEAPOLIS EMPLOYEES RETIREMENT 208.9 FUND CHANGES 208.10 Section 1. Minnesota Statutes 2004, section 43A.17, 208.11 subdivision 9, is amended to read: 208.12 Subd. 9. [POLITICAL SUBDIVISION COMPENSATION LIMIT.] (a) 208.13 The salary and the value of all other forms of compensation of a 208.14 person employed by a political subdivision of this state, 208.15 excluding a school district,or employed under section 422A.03208.16 may not exceed 95 percent of the salary of the governor as set 208.17 under section 15A.082, except as provided in this subdivision. 208.18 For purposes of this subdivision, "political subdivision of this 208.19 state" includes a statutory or home rule charter city, county, 208.20 town, metropolitan or regional agency, or other political 208.21 subdivision, but does not include a hospital, clinic, or health 208.22 maintenance organization owned by such a governmental unit or a 208.23 retirement plan governed by chapter 422A. 208.24 (b) Deferred compensation and payroll allocations to 208.25 purchase an individual annuity contract for an employee are 208.26 included in determining the employee's salary. Other forms of 208.27 compensation which shall be included to determine an employee's 208.28 total compensation are all other direct and indirect items of 208.29 compensation which are not specifically excluded by this 208.30 subdivision. Other forms of compensation which shall not be 208.31 included in a determination of an employee's total compensation 208.32 for the purposes of this subdivision are: 208.33 (1) employee benefits that are also provided for the 208.34 majority of all other full-time employees of the political 208.35 subdivision, vacation and sick leave allowances, health and 208.36 dental insurance, disability insurance, term life insurance, and 209.1 pension benefits or like benefits the cost of which is borne by 209.2 the employee or which is not subject to tax as income under the 209.3 Internal Revenue Code of 1986; 209.4 (2) dues paid to organizations that are of a civic, 209.5 professional, educational, or governmental nature; and 209.6 (3) reimbursement for actual expenses incurred by the 209.7 employee which the governing body determines to be directly 209.8 related to the performance of job responsibilities, including 209.9 any relocation expenses paid during the initial year of 209.10 employment. 209.11 The value of other forms of compensation shall be the 209.12 annual cost to the political subdivision for the provision of 209.13 the compensation. 209.14 (c) The salary of a medical doctor or doctor of osteopathy 209.15 occupying a position that the governing body of the political 209.16 subdivision has determined requires an M.D. or D.O. degree is 209.17 excluded from the limitation in this subdivision. 209.18 (d) The commissioner may increase the limitation in this 209.19 subdivision for a position that the commissioner has determined 209.20 requires special expertise necessitating a higher salary to 209.21 attract or retain a qualified person. The commissioner shall 209.22 review each proposed increase giving due consideration to salary 209.23 rates paid to other persons with similar responsibilities in the 209.24 state and nation. The commissioner may not increase the 209.25 limitation until the commissioner has presented the proposed 209.26 increase to the Legislative Coordinating Commission and received 209.27 the commission's recommendation on it. The recommendation is 209.28 advisory only. If the commission does not give its 209.29 recommendation on a proposed increase within 30 days from its 209.30 receipt of the proposal, the commission is deemed to have made 209.31 no recommendation. 209.32 Sec. 2. Minnesota Statutes 2004, section 422A.05, 209.33 subdivision 2c, is amended to read: 209.34 Subd. 2c. [MINNEAPOLIS EMPLOYEES RETIREMENT FUND 209.35 INVESTMENT AUTHORITY.] (a) For investments made on or after July 209.36 1, 1991, the board shall invest funds only in investments 210.1 authorized by section 356A.06, subdivision 7. 210.2 (b) However, in addition to real estate investments 210.3 authorized under paragraph (a), the board may also make loans to 210.4 purchasers of Minnesota situs nonfarm residential real estate 210.5 that is owned by the Minneapolis Employees Retirement Fund. The 210.6 loans must be secured by mortgages or deeds of trust. 210.7 (c) For investments made before July 1, 1991, the board 210.8 may, but is not required to, comply with paragraph (a). 210.9 However, with respect to these investments, the board shall act 210.10 in accordance with subdivision 2a and chapter 356A. 210.11 (d) The board may certify assets for investment by the 210.12 State Board of Investment under sections 11A.14 and 11A.17. 210.13 Sec. 3. Minnesota Statutes 2004, section 422A.06, 210.14 subdivision 3, is amended to read: 210.15 Subd. 3. [DEPOSIT ACCUMULATION FUND.] (a) The deposit 210.16 accumulation fund consists of the assets held in the fund, 210.17 including amounts contributed by or for employees, amounts 210.18 contributed by the city, amounts contributed by municipal 210.19 activities supported in whole or in part by revenues other than 210.20 taxes and amounts contributed by any public corporation, amounts 210.21 paid by the state, and by income from investments. 210.22 (b) There must be paid from the fund the amounts required 210.23 to be transferred to the retirement benefit fund, or the 210.24 disability benefit fund, refunds of contributions, including the 210.25 death-while-active refund specified in section 422A.22, 210.26 subdivision 4, postretirement increases in retirement allowances 210.27 granted under Laws 1965, chapter 688, or Laws 1969, chapter 859, 210.28 and expenses of the administration of the retirement fund which 210.29 were not charged by the retirement board against the income of 210.30 the retirement benefit fund from investments as the cost of 210.31 handling the investments of the retirement benefit fund. 210.32 (c) To the extent that the deposit accumulation fund has 210.33 insufficient assets to transfer the total value of the required 210.34 reserves for retirement annuities to either the disability 210.35 benefit fund under subdivisions 5 and 7 or the retirement 210.36 benefit fund under subdivisions 5 and 8 as required, the deposit 211.1 accumulation fund has a transfer amount payable on which an 211.2 interest charge accrues. The executive director must determine 211.3 the interest charge for the period that transfer amount payable 211.4 remains unpaid at an annual rate equal to five percent plus the 211.5 percentage increase in the amount of the annual Consumer Price 211.6 Index for urban wage earners and clerical workers as calculated 211.7 by the Bureau of Labor Statistics of the United States 211.8 Department of Labor from the previous June 30. The interest 211.9 charge must be reflected in the books of the Minneapolis 211.10 Employees Retirement Fund and assessed against the deposit 211.11 accumulation fund based on the average quarterly transfer amount 211.12 payable balance outstanding. Any revenue received by the 211.13 deposit accumulation fund subsequent to unpaid transfers must be 211.14 transferred from the deposit accumulation fund to the disability 211.15 benefit fund or to the retirement fund, whichever applies, must 211.16 first be applied to any remaining interest charge and then must 211.17 be applied to the principal amount of transfer amount payable 211.18 outstanding. 211.19 Sec. 4. Minnesota Statutes 2004, section 422A.06, 211.20 subdivision 5, is amended to read: 211.21 Subd. 5. [TRANSFER OF RESERVES TO RETIREMENT BENEFIT FUND; 211.22 ADJUSTMENTS OF ANNUITIES AND BENEFITS.] (a) Assets equal to the 211.23 required reserves for retirement annuities as determined in 211.24 accordance with the appropriate mortality table adopted by the 211.25 board of trustees based on the experience of the fund as 211.26 recommended by thecommission-retainedactuary retained under 211.27 section 356.214 and using the postretirement interest assumption 211.28 specified in section 356.215, subdivision 8,shallmust be 211.29 transferred to the disability benefit fund as provided in 211.30 subdivision 7, or the retirement benefit fund, except for any 211.31 amounts payable from the survivor benefit fund, as of date of 211.32 retirement. 211.33 (b) If a full transfer amount is not payable from the 211.34 deposit accumulation fund, the applicable fund must be credited 211.35 with an interest-bearing transfer amount receivable. 211.36(b)(c) Annuity paymentsshallmust be adjusted in 212.1 accordance with this chapter, except that no minimum retirement 212.2 payments described in this chaptershallmust include any 212.3 amounts payable from the survivors' benefit fund or disability 212.4 benefit fund and supplemented benefits specifically financed by 212.5 statute. 212.6(c)(d) Increases in annuity paymentspursuant tounder 212.7 this section shall be made automatically unless written notice 212.8 on a form prescribed by the board is filed with the retirement 212.9 board requesting that the increase not be made. 212.10(d)(e) Any additional annuity which began to accrue on 212.11 July 1, 1973, or which began to accrue on January 1, 1974, 212.12 pursuant to Laws 1973, chapter 770, section 1,shallmust be 212.13 considered as part of the base amount to be used in determining 212.14 any postretirement adjustments payablepursuant tounder the 212.15 provisions of subdivision 8. 212.16 Sec. 5. Minnesota Statutes 2004, section 422A.06, 212.17 subdivision 7, is amended to read: 212.18 Subd. 7. [DISABILITY BENEFIT FUND.] (a) Unless subdivision 212.19 3, paragraph (c), applies, the required reserves for disability 212.20 allowances which become effective after December 31, 1973,shall212.21 must be transferred from the deposit accumulation fund to the 212.22 disability benefit fund. A proportionate share of income from 212.23 investmentsshallmust be allocated to this fund and any 212.24 interest charge under subdivision 3, paragraph (c), must be 212.25 credited to the fund.There shall be paidFrom this fund, the 212.26 disability allowances which become effective after December 31, 212.27 1973, must be paid. 212.28 (b) In the event of termination of any disability allowance 212.29 for any reason other than the death of the recipient, the 212.30 balance of the required reserves for the disability allowance as 212.31 of the date of terminationshallmust be transferred from the 212.32 disability benefit fund to the deposit accumulation fund. 212.33 (c) At the end of each fiscal year, as part of the annual 212.34 actuarial valuation, a determinationshallmust be made of the 212.35 required reserves for all disability allowances being paid from 212.36 the disability benefit fund. Any excess of assets over 213.1 actuarial required reserves in the disability benefit fundshall213.2 must be transferred to the deposit accumulation fund. Unless 213.3 subdivision 3, paragraph (c), applies, any excess of actuarial 213.4 reserves over assets in the disability benefit fundshallmust 213.5 be funded by a transfer of the appropriate amount of assets from 213.6 the deposit accumulation fund. 213.7 Sec. 6. Minnesota Statutes 2004, section 422A.06, 213.8 subdivision 8, is amended to read: 213.9 Subd. 8. [RETIREMENT BENEFIT FUND.] (a) The retirement 213.10 benefit fundshall consistconsists of amounts held for payment 213.11 of retirement allowances for members retiredpursuant tounder 213.12 this chapter, including any transfer amount payable under 213.13 subdivision 3, paragraph (c). 213.14 (b) Unless subdivision 3, paragraph (c), applies, assets 213.15 equal to the required reserves for retirement 213.16 allowancespursuant tounder this chapter determined in 213.17 accordance with the appropriate mortality table adopted by the 213.18 board of trustees based on the experience of the fund as 213.19 recommended by thecommission-retainedactuaryshallretained 213.20 under section 356.214, must be transferred from the deposit 213.21 accumulation fund to the retirement benefit fund as of the last 213.22 business day of the month in which the retirement allowance 213.23 begins. The income from investments of these assetsshallmust 213.24 be allocated to this fund and any interest charge under 213.25 subdivision 3, paragraph (c), must be credited to the fund. 213.26 Thereshallmust be paid from this fund the retirement annuities 213.27 authorized by law. A required reserve calculation for the 213.28 retirement benefit fund must be made by the actuary retainedby213.29the Legislative Commission on Pensions and Retirementunder 213.30 section 356.214 and must be certified to the retirement board by 213.31 thecommission-retainedactuary. 213.32 (c) The retirement benefit fundshallmust be governed by 213.33 the applicable laws governing the accounting and audit 213.34 procedures, investment, actuarial requirements, calculation and 213.35 payment of postretirement benefit adjustments, discharge of any 213.36 deficiency in the assets of the fund when compared to the 214.1 actuarially determined required reserves, and other applicable 214.2 operations and procedures regarding the Minnesota postretirement 214.3 investment fund in effect on June 30, 1997, established under 214.4 Minnesota Statutes 1996, section 11A.18, and any legal or 214.5 administrative interpretations of those laws of the State Board 214.6 of Investment, the legal advisor to the Board of Investment and 214.7 the executive director of the State Board of Investment in 214.8 effect on June 30, 1997. If a deferred yield adjustment account 214.9 is established for the Minnesota postretirement investment fund 214.10 before June 30, 1997, under Minnesota Statutes 1996, section 214.11 11A.18, subdivision 5, the retirement board shall also establish 214.12 and maintain a deferred yield adjustment account within this 214.13 fund. 214.14 (d) Annually, following the calculation of any 214.15 postretirement adjustment payable from the retirement benefit 214.16 fund, the board of trustees shall submit a report to the 214.17 executive director of the Legislative Commission on Pensions and 214.18 Retirement and to the commissioner of finance indicating the 214.19 amount of any postretirement adjustment and the underlying 214.20 calculations on which that postretirement adjustment amount is 214.21 based, including the amount of dividends, the amount of 214.22 interest, and the amount of net realized capital gains or losses 214.23 utilized in the calculations. 214.24 (e) With respect to a former contributing member who began 214.25 receiving a retirement annuity or disability benefit under 214.26 section 422A.151, paragraph (a), clause (2), after June 30, 214.27 1997, or with respect to a survivor of a former contributing 214.28 member who began receiving a survivor benefit under section 214.29 422A.151, paragraph (a), clause (2), after June 30, 1997, the 214.30 reserves attributable to the one percent lower amount of the 214.31 cost-of-living adjustment payable to those annuity or benefit 214.32 recipients annually must be transferred back to the deposit 214.33 accumulation fund to the credit of the Metropolitan Airports 214.34 Commission. The calculation of this annual reduced 214.35 cost-of-living adjustment reserve transfer must be reviewed by 214.36 the actuary retainedby the Legislative Commission on Pensions215.1and Retirementunder section 356.214. 215.2 Sec. 7. Minnesota Statutes 2004, section 422A.101, 215.3 subdivision 3, is amended to read: 215.4 Subd. 3. [STATE CONTRIBUTIONS.] (a) Subject to the 215.5 limitation set forth in paragraph (c), the state shall pay to 215.6 the Minneapolis Employees Retirement Fund annually an amount 215.7 equal to the amount calculated under paragraph (b). 215.8 (b) The payment amount is an amount equal to the financial 215.9 requirements of the Minneapolis Employees Retirement Fund 215.10 reported in the actuarial valuation of the fund prepared by the 215.11 commission-retained actuary pursuant to section 356.215 for the 215.12 most recent year but based on a target date for full 215.13 amortization of the unfunded actuarial accrued liabilities by 215.14 June 30, 2020, less the amount of employee contributions 215.15 required pursuant to section 422A.10, and the amount of employer 215.16 contributions required pursuant to subdivisions 1a, 2, and 2a. 215.17 Payments shall be made September 15 annually. 215.18 (c) The annual state contribution under this subdivision 215.19 may not exceed $9,000,000, plus the cost of the annual 215.20 supplemental benefit determined under section 356.43. 215.21 (d) If the amount determined under paragraph (b) exceeds 215.22$11,910,000$9,000,000, the excess must be allocated to and paid 215.23 to the fund by the employers identified in subdivisions 1a and 215.24 2, other than units of metropolitan government. Each employer's 215.25 share of the excess is proportionate to the employer's share of 215.26 the fund's unfunded actuarial accrued liability as disclosed in 215.27 the annual actuarial valuation prepared by the actuary 215.28 retainedby the Legislative Commission on Pensions and215.29Retirementunder section 356.214 compared to the total unfunded 215.30 actuarial accrued liability attributed to all employers 215.31 identified in subdivisions 1a and 2, other than units of 215.32 metropolitan government. Payments must be made in equal 215.33 installments as set forth in paragraph (b). 215.34 Sec. 8. [REPEALER.] 215.35 Minnesota Statutes 2004, section 422A.101, subdivision 4, 215.36 is repealed. 216.1 Sec. 9. [EFFECTIVE DATE; LOCAL APPROVAL.] 216.2 Sections 1 to 8 are effective on the day after the city 216.3 council of the city of Minneapolis and its chief clerical 216.4 officer timely complete their compliance with Minnesota 216.5 Statutes, section 645.021, subdivisions 2 and 3. 216.6 ARTICLE 15 216.7 ONE PERSON AND SMALL GROUP 216.8 RETIREMENT CHANGES 216.9 Section 1. [SURVIVOR BENEFIT FOR ST. LOUIS PARK POLICE 216.10 OFFICER KILLED IN IRAQ CONFLICT.] 216.11 Subdivision 1. [ELIGIBILITY.] (a) Notwithstanding any 216.12 provision of Minnesota Statutes, section 353.657, subdivision 1, 216.13 regarding required length of marriage, an eligible person 216.14 described in paragraph (b) is authorized to apply for a 216.15 surviving spouse annuity from the public employees police and 216.16 fire retirement plan to be computed under Minnesota Statutes, 216.17 section 353.657, subdivision 2. 216.18 (b) An eligible person for purposes of paragraph (a) is the 216.19 surviving spouse of a deceased public employees police and fire 216.20 retirement plan member who: 216.21 (1) was born on October 29, 1979; 216.22 (2) was a member of the public employees police and fire 216.23 retirement plan commencing on January 24, 2004, due to 216.24 employment as a police officer by the city of St. Louis Park; 216.25 and 216.26 (3) died on February 21, 2005, while providing military 216.27 service in Iraq. 216.28 Subd. 2. [APPLICATION PROCESS.] An eligible person 216.29 described in subdivision 1 is authorized to apply for the 216.30 applicable surviving spouse annuity on a form or forms provided 216.31 by the executive director of the Public Employees Retirement 216.32 Association. The person must provide sufficient documentation 216.33 of eligibility to the executive director, as the executive 216.34 director may prescribe. 216.35 Subd. 3. [REFUND REPAYMENT AUTHORIZATION.] An annuity 216.36 under this section is in lieu of any death refund to which an 217.1 eligible person would otherwise be entitled. If an eligible 217.2 person has received a death refund, that person is authorized to 217.3 repay that refund, under the terms specified in Minnesota 217.4 Statutes, section 353.35, notwithstanding any law to the 217.5 contrary. 217.6 Subd. 4. [RETROACTIVE APPLICATION.] If a valid benefit 217.7 application is made by an eligible person under this section, 217.8 the monthly annuity payments commence retroactive to February 217.9 21, 2005. 217.10 Sec. 2. [PURCHASE OF PRIOR SERVICE CREDIT.] 217.11 (a) An eligible person described in paragraph (b) is 217.12 entitled to purchase up to one year of allowable service credit 217.13 from the Teachers Retirement Association for the 2003-2004 217.14 school year. The service credit purchase under this section 217.15 must be made in accordance with Minnesota Statutes, section 217.16 356.551, except as otherwise stated in this section. 217.17 (b) An eligible person is a person who: 217.18 (1) is currently a member of the Teachers Retirement 217.19 Association; 217.20 (2) was born on April 2, 1949; 217.21 (3) has been employed by Independent School District No. 217.22 11, Anoka-Hennepin, since the 1971-1972 school year; 217.23 (4) applied for and was granted an extended leave of 217.24 absence from Independent School District No. 11, Anoka-Hennepin, 217.25 for the 2002-2003, 2003-2004, and 2004-2005 school years under 217.26 Minnesota Statutes, section 122A.46; 217.27 (5) was unable to make timely payment for the 2003-2004 217.28 school year under Minnesota Statutes, section 354.094, because 217.29 of a problem in transferring funds from the individual's 217.30 tax-sheltered annuity account; and 217.31 (6) was not permitted by the Teachers Retirement 217.32 Association to make payment after June 30, 2004, with interest. 217.33 (c) Notwithstanding Minnesota Statutes, section 356.551, 217.34 payment must be made by September 1, 2005, or prior to 217.35 termination of service, whichever is earlier, and the employee 217.36 payment amount is an amount equal to the employee contribution 218.1 rate in effect during the 2003-2004 school year applied to the 218.2 eligible individual's salary in the year prior to the leave, 218.3 plus .708 percent monthly interest from June 30, 2004, until the 218.4 end of the month in which payment is made. If the full payment 218.5 required under this paragraph is made, then notwithstanding 218.6 Minnesota Statutes, section 354.094, the individual is 218.7 authorized under Minnesota Statutes, section 354.094, to make 218.8 the required contribution for the 2004-2005 school year, and any 218.9 subsequent years of the leave. Notwithstanding payment 218.10 deadlines in Minnesota Statutes, section 354.094, the employee 218.11 contribution for the 2004-2005 school year must be made on or 218.12 before September 30, 2005, with .708 percent monthly interest 218.13 from June 30, 2005, until paid. 218.14 (d) If payment is received under paragraph (c), the 218.15 executive director of the Teachers Retirement Association shall 218.16 bill Independent School District No. 11, Anoka-Hennepin, for the 218.17 employer contribution that would have been made on behalf of the 218.18 eligible person for the 2003-2004 fiscal year under Minnesota 218.19 Statutes, section 354.094. The remainder of the full actuarial 218.20 value payment under Minnesota Statutes, section 356.551, is 218.21 waived. If the school district fails to make payment under this 218.22 paragraph within 30 days of notification of the amount due, the 218.23 executive director shall notify the commissioner of the 218.24 Department of Finance of that fact and the employer payment 218.25 amount shall be deducted from any subsequent state aid to the 218.26 school district. 218.27 Sec. 3. [EFFECTIVE DATE.] 218.28 (a) For purposes of determining whether section 1 becomes 218.29 effective, the board of trustees of the Public Employees 218.30 Retirement Association shall be considered to be comparable to 218.31 the city council of a local government unit. 218.32 (b) Section 1 is effective on the day after the board of 218.33 trustees of the Public Employees Retirement Association and its 218.34 executive director complete in a timely manner their compliance 218.35 with Minnesota Statutes, section 645.021, subdivisions 2 and 3. 218.36 (c) Section 2 is effective on the day following final 219.1 enactment.