1.1.................... moves to amend S.F. No. 2918; H.F. No. 3281, as follows:
1.2Delete everything after the enacting clause and insert:

1.3"ARTICLE 1
1.4FINANCIAL SUSTAINABILITY PROVISIONS

1.5    Section 1. Minnesota Statutes 2008, section 3A.02, subdivision 4, is amended to read:
1.6    Subd. 4. Deferred annuities augmentation. (a) The deferred retirement allowance
1.7of any former legislator must be augmented as provided herein.
1.8    (b) The required reserves applicable to the deferred retirement allowance,
1.9determined as of the date the benefit begins to accrue using an appropriate mortality table
1.10and an interest assumption of six percent, must be augmented from the first of the month
1.11following the termination of active service, or July 1, 1973, whichever is later, to the first
1.12day of the month in which the allowance begins to accrue, at the following annually
1.13compounded rate or rates:
1.14(1) five percent until January 1, 1981;
1.15(2) three percent from January 1, 1981, or from the first day of the month following
1.16the termination of active service, whichever is later, until January 1 of the year in which
1.17the former legislator attains age 55 or until January 1, 2011, whichever is earlier; and
1.18(3) five percent from the period end date under clause (2) to until the effective date
1.19of retirement or until January 1, 2011, whichever is earlier; and
1.20(4) two percent after December 31, 2010.
1.21EFFECTIVE DATE.This section is effective the day following final enactment.

1.22    Sec. 2. Minnesota Statutes 2008, section 352.113, subdivision 1, is amended to read:
1.23    Subdivision 1. Age and service requirements. (a) An employee covered by the
1.24system, who is less than normal retirement age and who becomes totally and permanently
1.25disabled after three or more years of allowable service if employed before July 1, 2010, or
1.26after five or more years of allowable service if employed after June 30, 2010, is entitled to
1.27a disability benefit in an amount provided in subdivision 3.
1.28(b) If the disabled employee's state service has terminated at any time, the employee
1.29must have at least two years of allowable service after last becoming a state employee
1.30covered by the system.
1.31(c) Refunds may be repaid under section 352.23 before the effective accrual date of
1.32the disability benefit under subdivision 2.
1.33EFFECTIVE DATE.This section is effective the day following final enactment.

2.1    Sec. 3. Minnesota Statutes 2008, section 352.115, subdivision 1, is amended to read:
2.2    Subdivision 1. Age and service requirements. After separation from state service,
2.3any employee (1) who has attained the age of at least 55 years and who is entitled to
2.4credit for at least three years allowable service if employed before July 1, 2010, or after
2.5five or more years of allowable service if employed after June 30, 2010, or (2) who has
2.6received credit for at least 30 years allowable service regardless of age, is entitled upon
2.7application to a retirement annuity.
2.8EFFECTIVE DATE.This section is effective the day following final enactment.

2.9    Sec. 4. Minnesota Statutes 2008, section 352.12, subdivision 2, is amended to read:
2.10    Subd. 2. Surviving spouse benefit. (a) If an employee or former employee has
2.11credit for at least three years allowable service if the employee was employed before July
2.121, 2010, or for at least five years of allowable service if the employee was employed
2.13after June 30, 2010, and dies before an annuity or disability benefit has become payable,
2.14notwithstanding any designation of beneficiary to the contrary, the surviving spouse of the
2.15employee may elect to receive, in lieu of the refund with interest under subdivision 1, an
2.16annuity equal to the joint and 100 percent survivor annuity which the employee or former
2.17employee could have qualified for on the date of death.
2.18    (b) If the employee was under age 55 and has credit for at least 30 years of allowable
2.19service on the date of death, the surviving spouse may elect to receive a 100 percent joint
2.20and survivor annuity based on the age of the employee and surviving spouse on the date
2.21of death. The annuity is payable using the full early retirement reduction under section
2.22352.116, subdivision 1 , paragraph (a), to age 55 and one-half of the early retirement
2.23reduction from age 55 to the age payment begins.
2.24    (c) If the employee was under age 55 and has credit for at least three years of
2.25allowable service credit on the date of death if the employee was employed before July 1,
2.262010, or for at least five years of allowable service if the employee was employed after
2.27June 30, 2010, but did not yet qualify for retirement, the surviving spouse may elect
2.28to receive a 100 percent joint and survivor annuity based on the age of the employee
2.29and surviving spouse at the time of death. The annuity is payable using the full early
2.30retirement reduction under section 352.116, subdivision 1 or 1a, to age 55 and one-half of
2.31the early retirement reduction from age 55 to the age payment begins.
2.32    (d) The surviving spouse eligible for benefits under paragraph (a) may apply for the
2.33annuity at any time after the date on which the employee or former employee would
2.34have attained the required age for retirement based on the allowable service earned.
2.35The surviving spouse eligible for surviving spouse benefits under paragraph (b) or (c)
3.1may apply for the annuity at any time after the employee's death. The annuity must be
3.2computed under sections 352.115, subdivisions 1, 2, and 3, and 352.116, subdivisions 1,
3.31a, and 3
. Sections 352.22, subdivision 3, and 352.72, subdivision 2, apply to a deferred
3.4annuity or surviving spouse benefit payable under this subdivision. The annuity must cease
3.5with the last payment received by the surviving spouse in the lifetime of the surviving
3.6spouse, or upon expiration of a term certain benefit payment to a surviving spouse under
3.7subdivision 2a. An amount equal to the excess, if any, of the accumulated contributions
3.8credited to the account of the deceased employee in excess of the total of the benefits paid
3.9and payable to the surviving spouse must be paid to the deceased employee's or former
3.10employee's last designated beneficiary or, if none, as specified under subdivision 1.
3.11    (e) Any employee or former employee may request in writing, with the signed
3.12consent of the spouse, that this subdivision not apply and that payment be made only to a
3.13designated beneficiary as otherwise provided by this chapter.
3.14EFFECTIVE DATE.This section is effective the day following final enactment.

3.15    Sec. 5. Minnesota Statutes 2008, section 352.22, subdivision 2, is amended to read:
3.16    Subd. 2. Amount of refund. Except as provided in subdivision 3, the refund
3.17payable to a person who ceased to be a state employee by reason of a termination of state
3.18service is an amount equal to employee accumulated contributions plus interest at the rate
3.19of six percent per year compounded daily from the date that the contribution was made
3.20until June 30, 2011, or until the date on which the refund is paid, whichever is earlier, and
3.21at the rate of four percent per year compounded daily from the date that the contribution
3.22was made or from July 1, 2011, whichever is later, until the date on which the refund is
3.23paid. Included with the refund is any interest paid as part of repayment of a past refund,
3.24plus interest thereon from the date of repayment.
3.25EFFECTIVE DATE.This section is effective the day following final enactment.

3.26    Sec. 6. Minnesota Statutes 2008, section 352.22, subdivision 3, is amended to read:
3.27    Subd. 3. Deferred annuity. (a) An employee who has at least three years of
3.28allowable service if employed before July 1, 2010, or who has at least five years of
3.29allowable service if employed after June 30, 2010, when termination occurs may elect
3.30to leave the accumulated contributions in the fund and thereby be entitled to a deferred
3.31retirement annuity. The annuity must be computed under the law in effect when state
3.32service terminated, on the basis of the allowable service credited to the person before
3.33the termination of service.
4.1(b) An employee on layoff or on leave of absence without pay, except a leave of
4.2absence for health reasons, and who does not return to state service must have an annuity,
4.3deferred annuity, or other benefit to which the employee may become entitled computed
4.4under the law in effect on the employee's last working day.
4.5(c) No application for a deferred annuity may be made more than 60 days before
4.6the time the former employee reaches the required age for entitlement to the payment of
4.7the annuity. The deferred annuity begins to accrue no earlier than 60 days before the date
4.8the application is filed in the office of the system, but not (1) before the date on which
4.9the employee reaches the required age for entitlement to the annuity nor (2) before the
4.10day following the termination of state service in a position which is not covered by the
4.11retirement system.
4.12(d) Application for the accumulated contributions left on deposit with the fund may
4.13be made at any time following the date of the termination of service.
4.14EFFECTIVE DATE.This section is effective the day following final enactment.

4.15    Sec. 7. Minnesota Statutes 2008, section 352.72, subdivision 1, is amended to read:
4.16    Subdivision 1. Entitlement to annuity. (a) Any person who has been an employee
4.17covered by a retirement system listed in paragraph (b) is entitled when qualified to an
4.18annuity from each fund if total allowable service in all funds or in any two of these funds
4.19totals three or more years if employed before July 1, 2010, or totals five or more years
4.20if employed after June 30, 2010.
4.21(b) This section applies to the Minnesota State Retirement System, the Public
4.22Employees Retirement Association including the Public Employees Retirement
4.23Association police and fire fund, the Teachers Retirement Association, the State Patrol
4.24Retirement Association, or any other public employee retirement system in the state with
4.25a similar provision, except as noted in paragraph (c).
4.26(c) This section does not apply to other funds providing benefits for police officers
4.27or firefighters.
4.28(d) No portion of the allowable service upon which the retirement annuity from
4.29one fund is based shall be again used in the computation for benefits from another fund.
4.30No refund may have been taken from any one of these funds since service entitling the
4.31employee to coverage under the system or the employee's membership in any of the
4.32associations last terminated. The annuity from each fund must be determined by the
4.33appropriate provisions of the law except that the requirement that a person must have at
4.34least three a specific number of years of allowable service in the respective system or
4.35association does not apply for the purposes of this section if the combined service in two
5.1or more of these funds equals three or more years at least the longest period of allowable
5.2service of any of the applicable retirement plans.
5.3EFFECTIVE DATE.This section is effective the day following final enactment.

5.4    Sec. 8. Minnesota Statutes 2008, section 352.72, subdivision 2, is amended to read:
5.5    Subd. 2. Computation of deferred annuity. (a) The deferred annuity, if any,
5.6accruing under subdivision 1, or section 352.22, subdivision 3, must be computed as
5.7provided in section 352.22, subdivision 3, on the basis of allowable service before
5.8termination of state service and augmented as provided herein. The required reserves
5.9applicable to a deferred annuity or to an annuity for which a former employee was eligible
5.10but had not applied or to any deferred segment of an annuity must be determined as of
5.11the date the benefit begins to accrue and augmented by interest compounded annually
5.12from the first day of the month following the month in which the employee ceased to be
5.13a state employee, or July 1, 1971, whichever is later, to the first day of the month in
5.14which the annuity begins to accrue. The rates of interest used for this purpose must be
5.15five percent compounded annually until January 1, 1981, and three percent compounded
5.16annually thereafter until January 1 of the year following the year in which the former
5.17employee attains age 55 or until January 1, 2011, whichever is earlier, and from that date
5.18the January 1 next following the attainment of age 55 to the effective date of retirement or
5.19until January 1, 2011, whichever is earlier, the rate is five percent compounded annually if
5.20the employee became an employee before July 1, 2006, and at 2.5 percent compounded
5.21annually until January 1, 2011, if the employee becomes an employee after June 30, 2006,
5.22and two percent compounded annually after December 31, 2010, irrespective of when the
5.23employee became a state employee. If a person has more than one period of uninterrupted
5.24service, the required reserves related to each period must be augmented by interest under
5.25this subdivision. The sum of the augmented required reserves so determined is the present
5.26value of the annuity. "Uninterrupted service" for the purpose of this subdivision means
5.27periods of covered employment during which the employee has not been separated from
5.28state service for more than two years. If a person repays a refund, the service restored by
5.29the repayment must be considered continuous with the next period of service for which the
5.30employee has credit with this system. The formula percentages used for each period of
5.31uninterrupted service must be those applicable to a new employee. The mortality table
5.32and interest assumption used to compute the annuity must be those in effect when the
5.33employee files application for annuity. This section does not reduce the annuity otherwise
5.34payable under this chapter.
6.1(b) The retirement annuity or disability benefit of, or the survivor benefit payable on
6.2behalf of, a former state employee who terminated service before July 1, 1997, which is
6.3not first payable until after June 30, 1997, must be increased on an actuarial equivalent
6.4basis to reflect the change in the postretirement interest rate actuarial assumption under
6.5section 356.215, subdivision 8, from five percent to six percent under a calculation
6.6procedure and the tables adopted by the board and approved by the actuary retained under
6.7section 356.214.
6.8EFFECTIVE DATE.This section is effective the day following final enactment.

6.9    Sec. 9. Minnesota Statutes 2009 Supplement, section 352.75, subdivision 4, is
6.10amended to read:
6.11    Subd. 4. Existing deferred retirees. Any former member of the former
6.12Metropolitan Transit Commission-Transit Operating Division employees retirement
6.13fund is entitled to a retirement annuity from the Minnesota State Retirement System if
6.14the employee:
6.15(1) is not an active employee of the Transit Operating Division of the former
6.16Metropolitan Transit Commission on July 1, 1978; (2) has at least ten years of active
6.17continuous service with the Transit Operating Division of the former Metropolitan
6.18Transit Commission as defined by the former Metropolitan Transit Commission-Transit
6.19Operating Division employees retirement plan document in effect on December 31, 1977;
6.20(3) has not received a refund of contributions; (4) has not retired or begun receiving an
6.21annuity or benefit from the former Metropolitan Transit Commission-Transit Operating
6.22Division employees retirement fund; (5) is at least 55 years old; and (6) submits a valid
6.23application for a retirement annuity to the executive director of the Minnesota State
6.24Retirement System.
6.25The person is entitled to a retirement annuity in an amount equal to the normal
6.26old age retirement allowance calculated under the former Metropolitan Transit
6.27Commission-Transit Operating Division employees retirement fund plan document in
6.28effect on December 31, 1977, subject to an early retirement reduction or adjustment in
6.29amount on account of retirement before the normal retirement age specified in that former
6.30Metropolitan Transit Commission-Transit Operating Division employees retirement fund
6.31plan document.
6.32The deferred retirement annuity of any person to whom this subdivision applies
6.33must be augmented. The required reserves applicable to the deferred retirement annuity,
6.34determined as of the date the allowance begins to accrue using an appropriate mortality
6.35table and an interest assumption of five percent, must be augmented by interest at the
7.1rate of five percent per year compounded annually from January 1, 1978, to January 1,
7.21981, and three percent per year compounded annually from January 1, 1981, until the
7.3date that the annuity begins to accrue or June 30, 2010, whichever is earlier, and two
7.4percent after June 30, 2010, to the first day of the month in which the annuity begins to
7.5accrue. After the commencement of the retirement annuity, the annuity is eligible for
7.6postretirement adjustments under section 356.415. On applying for a retirement annuity
7.7under this subdivision, the person is entitled to elect a joint and survivor optional annuity
7.8under section 352.116, subdivision 3.
7.9EFFECTIVE DATE.This section is effective the day following final enactment.

7.10    Sec. 10. Minnesota Statutes 2008, section 352.93, subdivision 1, is amended to read:
7.11    Subdivision 1. Basis of annuity; when to apply. After separation from state
7.12service, an employee covered under section 352.91 who has reached age 55 years and has
7.13credit for at least three years of covered correctional service or a combination of covered
7.14correctional service and general state employees state retirement plan allowable service
7.15if first employed as a state employee before July 1, 2010, or has credit for at least ten
7.16years of covered correctional service or a combination of covered correctional service
7.17and general state employees retirement plan allowable service if first employed as a state
7.18employee after June 30, 2010, is entitled upon application to a retirement annuity under
7.19this section, based only on covered correctional employees' service. Application may be
7.20made no earlier than 60 days before the date the employee is eligible to retire by reason of
7.21both age and service requirements.
7.22EFFECTIVE DATE.This section is effective the day following final enactment.

7.23    Sec. 11. Minnesota Statutes 2008, section 352.93, subdivision 2a, is amended to read:
7.24    Subd. 2a. Early retirement. Any covered correctional employee who becomes at
7.25least 50 years old and who has at least three years of allowable service if first employed
7.26as a correctional state employee before July 1, 2010, or has credit for at least ten years
7.27of allowable service if first employed as a correctional state employee after June 30,
7.282010, is entitled upon application to a reduced retirement annuity equal to the annuity
7.29calculated under subdivision 2, reduced by two-tenths of one percent for each month that
7.30the correctional employee is under age 55 at the time of retirement if first employed as
7.31a correctional state employee before July 1, 2010, and if retired before July 1, 2015, or
7.32reduced by 0.417 percent for each month that the correctional employee is under age 55
7.33at the time of retirement if first employed as a correctional state employee after June 30,
8.12010, or if first employed as a correctional state employee before July 1, 2010, and if
8.2retired after June 30, 2015.
8.3EFFECTIVE DATE.This section is effective the day following final enactment.

8.4    Sec. 12. Minnesota Statutes 2008, section 352.93, subdivision 3a, is amended to read:
8.5    Subd. 3a. Optional annuities. The board may establish optional annuity forms to
8.6pay a higher amount from the date of retirement until an employee is first eligible to draw
8.7Social Security benefits, reaches age 65, or up to reaches the age the employee is eligible
8.8to receive unreduced Social Security benefits, at which time the monthly benefits must be
8.9reduced. The optional annuity forms must be actuarially equivalent to the normal single
8.10life annuity form provided in subdivision 2. The optional annuity forms must be approved
8.11certified as actuarially equivalent by the actuary retained under section 356.214.
8.12EFFECTIVE DATE.This section is effective the day following final enactment.

8.13    Sec. 13. Minnesota Statutes 2008, section 352.931, subdivision 1, is amended to read:
8.14    Subdivision 1. Surviving spouse benefit. (a) If the correctional employee was at
8.15least age 50, has credit for at least three years of allowable service if first employed as
8.16a correctional state employee before July 1, 2010, or has credit for at least ten years of
8.17allowable service if first employed as a correctional state employee after June 30, 2010,
8.18and dies before an annuity or disability benefit has become payable, notwithstanding any
8.19designation of beneficiary to the contrary, the surviving spouse of the employee may
8.20elect to receive, in lieu of the refund under section 352.12, subdivision 1, an annuity for
8.21life equal to the joint and 100 percent survivor annuity which the employee could have
8.22qualified for had the employee terminated service on the date of death. The election
8.23may be made at any time after the date of death of the employee. The surviving spouse
8.24benefit begins to accrue as of the first of the month next following the date on which
8.25the application for the benefit was filed.
8.26    (b) If the employee was under age 50, dies, and had credit for at least three years
8.27of allowable service credit on the date of death if first employed as a correctional state
8.28employee before July 1, 2010, or had credit for at least ten years of allowable service on
8.29the date of death if first employed as a correctional state employee after June 30, 2010, but
8.30did not yet qualify for retirement, the surviving spouse may elect to receive a 100 percent
8.31joint and survivor annuity based on the age of the employee and surviving spouse at the
8.32time of death. The annuity is payable using the early retirement reduction under section
8.33352.93, subdivision 2a , to age 50, and one-half of the early retirement reduction from age
9.150 to the age payment begins. The surviving spouse eligible for surviving spouse benefits
9.2under this paragraph may apply for the annuity at any time after the employee's death.
9.3Sections 352.22, subdivision 3, and 352.72, subdivision 2, apply to a deferred annuity or
9.4surviving spouse benefit payable under this subdivision.
9.5    (c) The annuity must cease with the last payment received by the surviving spouse
9.6in the lifetime of the surviving spouse. Any employee may request in writing, with the
9.7signed consent of the spouse, that this subdivision not apply and that payment be made
9.8only to a designated beneficiary as otherwise provided by this chapter.
9.9EFFECTIVE DATE.This section is effective the day following final enactment.

9.10    Sec. 14. Minnesota Statutes 2009 Supplement, section 352.95, subdivision 2, is
9.11amended to read:
9.12    Subd. 2. Regular disability; computation of benefit. A covered correctional
9.13employee who was hired before July 1, 2009, after rendering at least one year of covered
9.14correctional service, or a covered correctional employee who was first hired after June
9.1530, 2009, after rendering at least three years of covered correctional plan service if first
9.16employed as a correctional state employee before July 1, 2010, or after rendering at least
9.17ten years of covered correctional plan service if first employed as a correctional state
9.18employee after June 30, 2010, and who is determined to have a regular disability, physical
9.19or psychological, as defined under section 352.01, subdivision 17c, is entitled to a regular
9.20disability benefit. The regular disability benefit must be based on covered correctional
9.21service only. The regular disability benefit must be computed as provided in section
9.22352.93, subdivisions 1 and 2 . The regular disability benefit of a covered correctional
9.23employee who was first hired before July 1, 2009, and who is determined to have a regular
9.24disability, physical or psychological, under this subdivision must be computed as though
9.25the employee had at least 15 years of covered correctional service.
9.26EFFECTIVE DATE.This section is effective the day following final enactment.

9.27    Sec. 15. Minnesota Statutes 2008, section 352B.02, as amended by Laws 2009, chapter
9.28101, article 2, section 109; and chapter 169, article 1, section 23; article 2, section 16; and
9.29article 4, sections 3 and 4, is amended to read:
9.30352B.02 STATE PATROL RETIREMENT FUND.
9.31    Subdivision 1. Fund created; membership. A State Patrol retirement fund
9.32is established. Its membership consists of all persons defined in section 352B.011,
9.33subdivision 10
.
10.1    Subd. 1a. Member contributions. (a) The member contribution is 10.40 percent
10.2the following percentage of the member's salary.:
10.3
10.4
(1) before the first day of the first pay
period beginning after July 1, 2011
10.40 percent
10.5
10.6
(2) on or after the first day of the first
pay period beginning after July 1, 2011
11.20 percent
10.7(b) These contributions must be made by deduction from salary as provided in
10.8section 352.04, subdivision 4.
10.9    Subd. 1b. Salary deductions. Member contribution amounts must be deducted each
10.10pay period by the department head, who shall have the total amount of the deductions paid
10.11to the commissioner of management and budget for deposit in the State Patrol retirement
10.12fund, and have a detailed report of all deductions made each pay period to the executive
10.13director of the Minnesota State Retirement System.
10.14    Subd. 1c. Employer contributions. (a) In addition to member contributions,
10.15department heads shall pay a sum equal to 15.60 percent the specified percentage of the
10.16salary upon which deductions were made, which constitutes the employer contribution
10.17to the fund. as follows:
10.18
10.19
(1) before the first day of the first pay
period beginning after July 1, 2011
15.60 percent
10.20
10.21
(2) on or after the first day of the first
pay period beginning after July 1, 2011
16.80 percent
10.22(b) Department contributions must be paid out of money appropriated to departments
10.23for this purpose.
10.24    Subd. 1d. Additional employer contributions. (a) In addition to the regular
10.25employer contribution under subdivision 1c, department heads shall pay a sum equal to
10.26ten percent of the salary upon which member contribution deductions were made, which is
10.27the additional employer contribution to the fund.
10.28(b) Department additional employer contributions must be paid from departmental
10.29appropriations or revenue.
10.30    Subd. 1d 1e. Fund revenue and expenses. The amounts provided for in this section
10.31must be credited to the State Patrol retirement fund. All money received must be deposited
10.32by the commissioner of management and budget in the State Patrol retirement fund. The
10.33fund must be used to pay the administrative expenses of the retirement fund, and the
10.34benefits and annuities provided in this chapter.
10.35    Subd. 1e 1f. Audit; regular actuarial valuation; supplemental valuations. (a)
10.36The legislative auditor shall audit the fund.
11.1(b) Any actuarial valuation of the fund required under section 356.215 must be
11.2prepared by the actuary retained under section 356.214.
11.3(c) Any approved actuary retained by the executive director under section 352.03,
11.4subdivision 6
, may perform actuarial valuations and experience studies to supplement
11.5those performed by the actuary retained under section 356.214. Any supplemental
11.6actuarial valuation or experience studies must be filed with the executive director of the
11.7Legislative Commission on Pensions and Retirement.
11.8EFFECTIVE DATE.This section is effective the day following final enactment.

11.9    Sec. 16. Minnesota Statutes 2008, section 352B.08, subdivision 1, is amended to read:
11.10    Subdivision 1. Eligibility; when to apply; accrual. (a) Every member who is
11.11credited with three or more years of allowable service if first employed before July 1,
11.122010, or with at least five years of allowable service if first employed after June 30, 2010,
11.13is entitled to separate from state service and upon becoming 50 years old, is entitled to
11.14receive a life annuity, upon separation from state service.
11.15(b) Members shall must apply for an annuity in a form and manner prescribed by the
11.16executive director.
11.17(c) No application may be made more than 90 days before the date the member is
11.18eligible to retire by reason of both age and service requirements.
11.19(d) An annuity begins to accrue no earlier than 180 days before the date the
11.20application is filed with the executive director.
11.21EFFECTIVE DATE.This section is effective the day following final enactment.

11.22    Sec. 17. Minnesota Statutes 2008, section 352B.08, subdivision 2a, is amended to read:
11.23    Subd. 2a. Early retirement. Any member who has become at least 50 years old and
11.24who has at least three years of allowable service if first employed before July 1, 2010, or
11.25who has at least five years of allowable service if first employed after June 30, 2010, is
11.26entitled upon application to a reduced retirement annuity equal to the annuity calculated
11.27under subdivision 2, reduced by one-tenth of one percent for each month that the member
11.28is under age 55 at the time of retirement if first employed before July 1, 2010, or reduced
11.29by two-tenths of one percent for each month that the member is under age 55 at the time of
11.30retirement if first employed after June 30, 2010.
11.31EFFECTIVE DATE.This section is effective the day following final enactment.

11.32    Sec. 18. Minnesota Statutes 2008, section 352B.11, subdivision 2b, is amended to read:
12.1    Subd. 2b. Surviving spouse benefit eligibility. (a) If an active member with three or
12.2more years of allowable service if first employed before July 1, 2010, or with at least five
12.3years of allowable service if first employed after June 30, 2010, dies before attaining age
12.455, the surviving spouse is entitled to the benefit specified in subdivision 2c, paragraph (b).
12.5(b) If an active member with less than three years of allowable service if first
12.6employed before July 1, 2010, or with fewer than five years of allowable service if first
12.7employed after June 30, 2010, dies at any age, the surviving spouse is entitled to receive
12.8the benefit specified in subdivision 2c, paragraph (c).
12.9(c) If an active member with three or more years of allowable service if first
12.10employed before July 1, 2010, or with at least five years of allowable service if first
12.11employed after June 30, 2010, dies on or after attaining exact age 55, the surviving spouse
12.12is entitled to receive the benefits specified in subdivision 2c, paragraph (d).
12.13(d) If a disabilitant dies while receiving a disability benefit under section 352B.10 or
12.14before the benefit under that section commenced, and an optional annuity was not elected
12.15under section 352B.10, subdivision 5, the surviving spouse is entitled to receive the benefit
12.16specified in subdivision 2c, paragraph (b).
12.17(e) If a former member with three or more years of allowable service if first
12.18employed before July 1, 2010, or with at least five years of allowable service if first
12.19employed after June 30, 2010, who terminated from service and has not received a refund
12.20or commenced receipt of any other benefit provided by this chapter, dies, the surviving
12.21spouse is entitled to receive the benefit specified in subdivision 2c, paragraph (e).
12.22(f) If a former member with less than three years of allowable service if first
12.23employed before July 1, 2010, or with fewer than five years of allowable service if first
12.24employed after June 30, 2010, who terminated from service and has not received a refund
12.25or commenced receipt of any other benefit, if applicable, provided by this chapter, dies, the
12.26surviving spouse is entitled to receive the refund specified in subdivision 2c, paragraph (f).
12.27EFFECTIVE DATE.This section is effective the day following final enactment.

12.28    Sec. 19. Minnesota Statutes 2008, section 352B.30, subdivision 1, is amended to read:
12.29    Subdivision 1. Entitlement to annuity. Any person who has been an employee
12.30covered by the Minnesota State Retirement System, or a member of the Public Employees
12.31Retirement Association including the Public Employees Retirement Association Police
12.32and Fire Fund, or the Teachers Retirement Association, or the State Patrol retirement fund,
12.33or any other public employee retirement system in Minnesota having a like provision but
12.34excluding all other funds providing benefits for police or firefighters is entitled when
12.35qualified to an annuity from each fund if total allowable service in all funds or in any two
13.1of these funds totals three or more the number of years of allowable service required by
13.2the applicable retirement plan with the longest vesting period for the person. No part of
13.3the allowable service upon which the retirement annuity from one fund is based may
13.4again be used in the computation for benefits from another fund. The member must not
13.5have taken a refund from any one of these funds since service entitling the member to
13.6coverage under the system or membership in any of the associations last terminated.
13.7The annuity from each fund must be determined by the appropriate law except that the
13.8requirement that a person must have at least three a specific number of years allowable
13.9service in the respective system or association does not apply for the purposes of this
13.10section if the combined service in two or more of these funds equals three or more the
13.11number of years of allowable service required by the applicable retirement plan with
13.12the longest vesting period for the person.
13.13EFFECTIVE DATE.This section is effective the day following final enactment.

13.14    Sec. 20. Minnesota Statutes 2008, section 352B.30, subdivision 2, is amended to read:
13.15    Subd. 2. Computation of deferred annuity. Deferred annuities must be computed
13.16according to this chapter on the basis of allowable service before termination of service
13.17and augmented as provided in this chapter. The required reserves applicable to a deferred
13.18annuity must be augmented by interest compounded annually from the first day of the
13.19month following the month in which the member terminated service, or July 1, 1971,
13.20whichever is later, to the first day of the month in which the annuity begins to accrue. The
13.21rates of interest used for this purpose shall must be five percent per year compounded
13.22annually until January 1, 1981, and after that date three percent per year compounded
13.23annually after January 1, 1981, until January 1, 2011, if the employee became an employee
13.24before July 1, 2006, and at 2.5 percent compounded annually if the employee becomes
13.25an employee after June 30, 2006, and two percent per year compounded annually after
13.26December 31, 2010, irrespective of when the employee was first employed. The mortality
13.27table and interest assumption used to compute the annuity shall must be those in effect
13.28when the member files application for annuity.
13.29EFFECTIVE DATE.This section is effective the day following final enactment.

13.30    Sec. 21. Minnesota Statutes 2008, section 352F.07, is amended to read:
13.31352F.07 EFFECT ON REFUND.
13.32Notwithstanding any provision of chapter 352 to the contrary, terminated hospital
13.33employees may receive a refund of employee accumulated contributions plus interest
14.1at the rate of six percent per year compounded annually in accordance with Minnesota
14.2Statutes 1994, section 352.22, subdivision 2, at any time after the transfer of employment
14.3to Fairview, University of Minnesota Physicians, or University Affiliated Family
14.4Physicians. If a terminated hospital employee has received a refund from a pension plan
14.5enumerated in section 356.30, subdivision 3, the person may not repay that refund unless
14.6the person again becomes a member of one of those enumerated plans and complies
14.7with section 356.30, subdivision 2.
14.8EFFECTIVE DATE.This section is effective the day following final enactment.

14.9    Sec. 22. Minnesota Statutes 2008, section 353.01, is amended by adding a subdivision
14.10to read:
14.11    Subd. 47. Vesting. (a) "Vesting" means obtaining a nonforfeitable entitlement
14.12to an annuity or benefit from a retirement plan administered by the Public Employees
14.13Retirement Association by having credit for sufficient allowable service under paragraph
14.14(b) or (c), whichever applies.
14.15(b) For purposes of qualifying for an annuity or benefit as a basic or coordinated plan
14.16member of the general employees retirement plan of the Public Employees Retirement
14.17Association:
14.18(1) a member who first became a public employee before July 1, 2010, is vested
14.19when the person has accrued credit for not less than three years of allowable service as
14.20defined under subdivision 16; and
14.21(2) a member who first becomes a public employee after June 30, 2010, is vested
14.22when the person has accrued credit for not less than five years of allowable service
14.23as defined under subdivision 16.
14.24(c) For purposes of qualifying for an annuity or benefit as a member of the police
14.25and fire plan or a member of the local government correctional employees retirement plan:
14.26(1) a member who first became a public employee before July 1, 2010, is vested
14.27when the person has accrued credit for not less than three years of allowable service as
14.28defined under subdivision 16; and
14.29(2) a member who first becomes a public employee after June 30, 2010, is vested
14.30at the following percentages when the person has accrued credited allowable service as
14.31defined under subdivision 16, as follows:
14.32(i) 50 percent after five years;
14.33(ii) 60 percent after six years;
14.34(iii) 70 percent after seven years;
14.35(iv) 80 percent after eight years;
15.1(v) 90 percent after nine years; and
15.2(vi) 100 percent after ten years.
15.3EFFECTIVE DATE.This section is effective the day following final enactment.

15.4    Sec. 23. Minnesota Statutes 2009 Supplement, section 353.27, subdivision 2, is
15.5amended to read:
15.6    Subd. 2. Employee contribution. (a) For a basic member, the employee
15.7contribution is 9.10 percent of salary. For a coordinated member, the employee
15.8contribution is six percent the following percentage of salary plus any contribution rate
15.9adjustment under subdivision 3b.:
15.10
Effective before January 1, 2011
6.00
15.11
Effective after December 31, 2010
6.25
15.12(b) These contributions must be made by deduction from salary as defined in section
15.13353.01, subdivision 10 , in the manner provided in subdivision 4. If any portion of a
15.14member's salary is paid from other than public funds, the member's employee contribution
15.15must be based on the total salary received by the member from all sources.
15.16EFFECTIVE DATE.This section is effective the day following final enactment.

15.17    Sec. 24. Minnesota Statutes 2009 Supplement, section 353.27, subdivision 3, is
15.18amended to read:
15.19    Subd. 3. Employer contribution. (a) For a basic member, the employer
15.20contribution is 9.10 percent of salary. For a coordinated member, the employer
15.21contribution is six percent the following percentage of salary plus any contribution rate
15.22adjustment under subdivision 3b.:
15.23
Effective before January 1, 2011
6.00
15.24
Effective after December 31, 2010
6.25
15.25(b) This contribution must be made from funds available to the employing
15.26subdivision by the means and in the manner provided in section 353.28.
15.27EFFECTIVE DATE.This section is effective the day following final enactment.

15.28    Sec. 25. Minnesota Statutes 2008, section 353.27, subdivision 3b, is amended to read:
15.29    Subd. 3b. Change in employee and employer contributions in certain instances.
15.30(a) For purposes of this section,:
16.1(1) a contribution sufficiency exists if the total of the employee contribution under
16.2subdivision 2, the employer contribution under subdivision 3, the additional employer
16.3contribution under subdivision 3a, and any additional contribution previously imposed
16.4under this subdivision exceeds the total of the normal cost, the administrative expenses,
16.5and the amortization contribution of the retirement plan as reported in the most recent
16.6actuarial valuation of the retirement plan prepared by the actuary retained under section
16.7356.214 and prepared under section 356.215 and the standards for actuarial work of the
16.8Legislative Commission on Pensions and Retirement. For purposes of this section,; and
16.9(2) a contribution deficiency exists if the total of the employee contributions under
16.10subdivision 2, the employer contributions under subdivision 3, the additional employer
16.11contribution under subdivision 3a, and any additional contribution previously imposed
16.12under this subdivision is less than the total of the normal cost, the administrative expenses,
16.13and the amortization contribution of the retirement plan as reported in the most recent
16.14actuarial valuation of the retirement plan prepared by the actuary retained under section
16.15356.214 and prepared under section 356.215 and the standards for actuarial work of the
16.16Legislative Commission on Pensions and Retirement.
16.17(b) Employee and employer contributions under subdivisions 2 and 3 must be
16.18adjusted:
16.19(1) if, on or after July 1, 2010, the regular actuarial valuations valuation of the
16.20general employees retirement plan of the Public Employees Retirement Association under
16.21section 356.215 indicate indicates that there is a contribution sufficiency under paragraph
16.22(a) equal to or greater than 0.5 one percent of covered payroll and that the sufficiency
16.23has existed for at least two consecutive years, the coordinated program employee and
16.24employer contribution rates must be decreased as determined under paragraph (c) to a
16.25level such that the sufficiency equals is no more greater than 0.25 one percent of covered
16.26payroll based on the most recent actuarial valuation; or
16.27(2) if, on or after July 1, 2010, the regular actuarial valuations valuation of the
16.28general employees retirement plan of the Public Employees Retirement Association under
16.29section 356.215 indicate indicates that there is a contribution deficiency equal to or greater
16.30than 0.5 percent of covered payroll and that the deficiency has existed for at least two
16.31consecutive years, the coordinated program employee and employer contribution rates
16.32must be increased as determined under paragraph (c) (d) to a level such that no deficiency
16.33exists based on the most recent actuarial valuation.
16.34(c) The contribution rate increase or decrease must be determined by the executive
16.35director of the Public Employees Retirement Association, must be reported to the chair
16.36and the executive director of the Legislative Commission on Pensions and Retirement
17.1on or before the next February 1, and, if the Legislative Commission on Pensions and
17.2Retirement does not recommend against the rate change or does not recommend a
17.3modification in the rate change, is effective on the next July 1 following the determination
17.4by the executive director that a contribution deficiency or sufficiency has existed for
17.5two consecutive fiscal years based on the most recent actuarial valuations under section
17.6356.215. If the actuarially required contribution exceeds or is less than the total support
17.7provided by the combined employee and employer contribution rates under subdivisions
17.82, 3, and 3a, by more than 0.5 one percent of covered payroll, the coordinated program
17.9employee and employer contribution rates under subdivisions 2 and 3 must be adjusted
17.10decreased incrementally over one or more years by no more than 0.25 percent of pay each
17.11for employee and employer matching contribution rates to a level such that there remains
17.12a contribution sufficiency of no more than 0.25 at least one percent of covered payroll. No
17.13contribution rate decrease may be made until at least two years have elapsed since any
17.14adjustment under this subdivision has been fully implemented.
17.15(d) No If the actuarially required contribution exceeds the total support provided
17.16by the combined employee and employer contribution rates under subdivisions 2, 3, and
17.173a, the employee and matching employer contribution rates must be increased equally to
17.18eliminate that contribution deficiency. If the contribution deficiency is:
17.19(1) less than two percent, the incremental adjustment increase may exceed be up
17.20to 0.25 percent for either the coordinated program employee and matching employer
17.21contribution rates per year in which any adjustment is implemented. A contribution rate
17.22adjustment under this subdivision must not be made until at least two years have passed
17.23since fully implementing a previous adjustment under this subdivision.;
17.24(2) greater than 1.99 percent and less than 4.01 percent, the incremental increase
17.25may be up to 0.5 percent for the employee and matching employer contribution rates; or
17.26(3) greater than four percent, the incremental increase may be up to 0.75 percent for
17.27the employee and matching employer contribution.
17.28(e) Any recommended adjustment to the contribution rates must be reported
17.29to the chair and the executive director of the Legislative Commission on Pensions
17.30and Retirement by January 15 following receipt of the most recent annual actuarial
17.31valuation prepared under section 356.215. If the Legislative Commission on Pensions
17.32and Retirement does not recommend against the rate change or does not recommend a
17.33modification in the rate change, the recommended adjustment becomes effective on the
17.34first day of the first full payroll period in the fiscal year following receipt of the most
17.35recent actuarial valuation that gave rise to the adjustment.
18.1(f) A contribution sufficiency of up to one percent of covered payroll must be held in
18.2reserve to be used to offset any future actuarially required contributions that are more than
18.3the total combined employee and employer contributions under subdivisions 2, 3, and 3a.
18.4(g) Before any reduction in contributions to eliminate a sufficiency in excess of one
18.5percent of covered pay may be recommended, the executive director must review any
18.6need for a change in actuarial assumptions, as recommended by the actuary retained under
18.7section 356.214 in the most recent experience study of the general employees retirement
18.8plan prepared under section 356.215 and the standards for actuarial work promulgated by
18.9the Legislative Commission on Pensions and Retirement that may result in an increase
18.10in the actuarially required contribution and must report to the Legislative Commission
18.11on Pensions and Retirement any recommendation by the board to use the sufficiency
18.12exceeding one percent of covered payroll to offset the impact of an actuarial assumption
18.13change recommended by the actuary retained under section 356.214, subdivision 1, and
18.14reviewed by the actuary retained by the commission under section 356.214, subdivision 4.
18.15(h) No contribution sufficiency in excess of one percent of covered pay may be
18.16proposed to be used to increase benefits, and no benefit increase may be proposed that
18.17would initiate an automatic adjustment to increase contributions under this subdivision.
18.18Any proposed benefit improvement must include a recommendation, prepared by the
18.19actuary retained under section 356.214, subdivision 1, and reviewed by the actuary
18.20retained by the Legislative Commission on Pensions and Retirement as provided under
18.21section 356.214, subdivision 4, on how the benefit modification will be funded.
18.22EFFECTIVE DATE.This section is effective the day following final enactment.

18.23    Sec. 26. Minnesota Statutes 2008, section 353.29, subdivision 1, is amended to read:
18.24    Subdivision 1. Age and allowable service requirements. Upon termination of
18.25membership, a person who has attained normal retirement age and who received credit for
18.26not less than three years of allowable service is vested under section 353.01, subdivision
18.2747, is entitled upon application to a retirement annuity. The retirement annuity is known
18.28as the "normal" retirement annuity.
18.29EFFECTIVE DATE.This section is effective the day following final enactment.

18.30    Sec. 27. Minnesota Statutes 2008, section 353.30, subdivision 1c, is amended to read:
18.31    Subd. 1c. Pre-July 1, 1989, members: early retirement. Upon termination of
18.32public service, a person who first became a public employee or a member of a pension
18.33fund listed in section 356.30, subdivision 3, before July 1, 1989, who has become at least
19.155 years old but not normal retirement age, and has received credit for at least three years
19.2of allowable service is vested under section 353.01, subdivision 47, is entitled, upon
19.3application, to a retirement annuity in an amount equal to the normal annuity provided in
19.4section 353.29, subdivision 3, paragraph (a), reduced by one-quarter of one percent for
19.5each month that the member is under normal retirement age at the time of retirement.
19.6EFFECTIVE DATE.This section is effective the day following final enactment.

19.7    Sec. 28. Minnesota Statutes 2008, section 353.32, subdivision 1, is amended to read:
19.8    Subdivision 1. Before retirement. If a member or former member who terminated
19.9public service dies before retirement or before receiving any retirement annuity and no
19.10other payment of any kind is or may become payable to any person, a refund shall be paid
19.11is payable to the designated beneficiary or, if there be none, to the surviving spouse,
19.12or, if none, to the legal representative of the decedent's estate. Such The refund shall
19.13must be in an amount equal to accumulated deductions plus annual compound interest
19.14thereon at the rate of six percent per annum compounded annually specified in section
19.15353.34, subdivision 2, and less the sum of any disability or survivor benefits, if any, that
19.16may have been paid by the fund; provided that a survivor who has a right to benefits
19.17pursuant to under section 353.31 may waive such benefits in writing, except such benefits
19.18for a dependent child under the age of 18 years may only be waived pursuant to under an
19.19order of the district court.
19.20EFFECTIVE DATE.This section is effective the day following final enactment.

19.21    Sec. 29. Minnesota Statutes 2008, section 353.32, subdivision 1a, is amended to read:
19.22    Subd. 1a. Surviving spouse optional annuity. (a) If a member or former member
19.23who has credit for not less than three years of allowable service is vested under section
19.24353.01, subdivision 47, and who dies before the annuity or disability benefit begins to
19.25accrue under section 353.29, subdivision 7, or 353.33, subdivision 2, notwithstanding any
19.26designation of beneficiary to the contrary, the surviving spouse may elect to receive,
19.27instead of a refund with interest under subdivision 1, or surviving spouse benefits otherwise
19.28payable under section 353.31, an annuity equal to a 100 percent joint and survivor annuity
19.29computed consistent with section 353.30, subdivision 1a, 1c, or 5, whichever is applicable.
19.30    (b) If a member first became a public employee or a member of a pension fund listed
19.31in section 356.30, subdivision 3, before July 1, 1989, and has credit for at least 30 years
19.32of allowable service on the date of death, the surviving spouse may elect to receive a
19.33100 percent joint and survivor annuity computed using section 353.30, subdivision 1b,
20.1except that the early retirement reduction under that provision will be applied from age
20.262 back to age 55 and one-half of the early retirement reduction from age 55 back to
20.3the age payment begins.
20.4    (c) If a member who was under age 55 and has credit for at least three years of
20.5allowable service who is vested under section 353.01, subdivision 47, dies, but did not
20.6qualify for retirement on the date of death, the surviving spouse may elect to receive a
20.7100 percent joint and survivor annuity computed using section 353.30, subdivision 1c or
20.85, as applicable, except that the early retirement reduction specified in the applicable
20.9subdivision will be applied to age 55 and one-half of the early retirement reduction from
20.10age 55 back to the age payment begins.
20.11    (d) Notwithstanding the definition of surviving spouse in section 353.01, subdivision
20.1220
, a former spouse of the member, if any, is entitled to a portion of the monthly surviving
20.13spouse optional annuity if stipulated under the terms of a marriage dissolution decree filed
20.14with the association. If there is no surviving spouse or child or children, a former spouse
20.15may be entitled to a lump-sum refund payment under subdivision 1, if provided for in a
20.16marriage dissolution decree, but not a monthly surviving spouse optional annuity, despite
20.17the terms of a marriage dissolution decree filed with the association.
20.18    (e) The surviving spouse eligible for surviving spouse benefits under paragraph (a)
20.19may apply for the annuity at any time after the date on which the deceased employee
20.20would have attained the required age for retirement based on the employee's allowable
20.21service. The surviving spouse eligible for surviving spouse benefits under paragraph (b) or
20.22(c) may apply for an annuity any time after the member's death.
20.23    (f) Sections 353.34, subdivision 3, and 353.71, subdivision 2, apply to a deferred
20.24annuity or surviving spouse benefit payable under this subdivision.
20.25    (g) An amount equal to any excess of the accumulated contributions that were
20.26credited to the account of the deceased employee over and above the total of the annuities
20.27paid and payable to the surviving spouse must be paid to the surviving spouse's estate.
20.28    (h) A member may specify in writing, with the signed consent of the spouse, that
20.29this subdivision does not apply and that payment may be made only to the designated
20.30beneficiary as otherwise provided by this chapter. The waiver of a surviving spouse
20.31annuity under this section does not make a dependent child eligible for benefits under
20.32subdivision 1c.
20.33    (i) If the deceased member or former member first became a public employee or a
20.34member of a public pension plan listed in section 356.30, subdivision 3, on or after July
20.351, 1989, a survivor annuity computed under paragraph (a) or (c) must be computed as
21.1specified in section 353.30, subdivision 5, except for the revised early retirement reduction
21.2specified in paragraph (c), if paragraph (c) is the applicable provision.
21.3    (j) For any survivor annuity determined under this subdivision, the payment is to be
21.4based on the total allowable service that the member had accrued as of the date of death
21.5and the age of the member and surviving spouse on that date.
21.6EFFECTIVE DATE.This section is effective the day following final enactment.

21.7    Sec. 30. Minnesota Statutes 2009 Supplement, section 353.33, subdivision 1, is
21.8amended to read:
21.9    Subdivision 1. Age, service, and salary requirements. (a) A coordinated or
21.10basic member who has at least three years of allowable service is vested under section
21.11353.01, subdivision 47, and who becomes totally and permanently disabled before normal
21.12retirement age, upon application as defined under section 353.031, is entitled to a disability
21.13benefit in an amount determined under subdivision 3.
21.14(b) If the disabled person's public service has terminated at any time, at least two of
21.15the required three years of allowable service required to be vested under section 353.01,
21.16subdivision 47, must have been rendered after last becoming an active member.
21.17EFFECTIVE DATE.This section is effective the day following final enactment.

21.18    Sec. 31. Minnesota Statutes 2008, section 353.34, subdivision 1, is amended to read:
21.19    Subdivision 1. Refund or deferred annuity. (a) A former member is entitled to
21.20either a refund of accumulated employee deductions under subdivision 2, or to a deferred
21.21annuity under subdivision 3. Application for a refund may not be made before the date of
21.22termination of public service. Except as specified in paragraph (b), a refund must be paid
21.23within 120 days following receipt of the application unless the applicant has again become
21.24a public employee required to be covered by the association.
21.25(b) If an individual was placed on layoff under section 353.01, subdivision 12 or 12c,
21.26a refund is not payable before termination of service under section 353.01, subdivision 11a.
21.27(c) An individual who terminates public service covered by the Public Employees
21.28Retirement Association general employees retirement plan, the Public Employees
21.29Retirement Association police and fire retirement plan, or the public employees local
21.30government corrections correctional service retirement plan, and who is employed by a
21.31different employer and who becomes an active member covered by one of the other two
21.32plans, may receive a refund of employee contributions plus six percent annual compound
22.1interest compounded annually from the plan from which the member terminated service at
22.2the applicable rate specified in subdivision 2.
22.3EFFECTIVE DATE.This section is effective the day following final enactment.

22.4    Sec. 32. Minnesota Statutes 2008, section 353.34, subdivision 2, is amended to read:
22.5    Subd. 2. Refund with interest. (a) Except as provided in subdivision 1, any person
22.6who ceases to be a public employee shall is entitled to receive a refund in an amount equal
22.7to accumulated deductions with annual compound interest to the first day of the month
22.8in which the refund is processed at the rate of six percent compounded annually based
22.9on fiscal year balances.
22.10(b) For a person who ceases to be a public employee before July 1, 2011, the refund
22.11interest is at the rate of six percent to June 30, 2011, and at the rate of four percent after
22.12June 30, 2011. For a person who ceases to be a public employee after July 1, 2011, the
22.13refund interest is at the rate of four percent.
22.14(c) If a person repays a refund and subsequently applies for another refund, the
22.15repayment amount, including interest, is added to the fiscal year balance in which the
22.16repayment was made.
22.17EFFECTIVE DATE.This section is effective the day following final enactment.

22.18    Sec. 33. Minnesota Statutes 2008, section 353.34, subdivision 3, is amended to read:
22.19    Subd. 3. Deferred annuity; eligibility; computation. (a) A member with at least
22.20three years of allowable service who is vested under section 353.01, subdivision 47, when
22.21termination of public service or termination of membership occurs has the option of
22.22leaving the accumulated deductions in the fund and being entitled to a deferred retirement
22.23annuity commencing at normal retirement age or to a deferred early retirement annuity
22.24under section 353.30, subdivision 1a, 1b, 1c, or 5.
22.25(b) The deferred annuity must be computed under section 353.29, subdivision 3, on
22.26the basis of the law in effect on the date of termination of public service or termination of
22.27membership, whichever is earlier, and must be augmented as provided in section 353.71,
22.28subdivision 2
.
22.29(c) A former member qualified to apply for a deferred retirement annuity may
22.30revoke this option at any time before the commencement of deferred annuity payments
22.31by making application for a refund. The person is entitled to a refund of accumulated
22.32member contributions within 30 days following date of receipt of the application by the
22.33executive director.
23.1EFFECTIVE DATE.This section is effective the day following final enactment.

23.2    Sec. 34. Minnesota Statutes 2009 Supplement, section 353.65, subdivision 2, is
23.3amended to read:
23.4    Subd. 2. Employee contribution. The employee contribution is 9.4 percent of the
23.5salary of the member in calendar year 2010 and is 9.6 percent of the salary of the member
23.6in each calendar year after 2010. This contribution must be made by deduction from
23.7salary in the manner provided in subdivision 4. Where any portion of a member's salary
23.8is paid from other than public funds, the member's employee contribution is based on
23.9the total salary received from all sources.
23.10EFFECTIVE DATE.This section is effective the day following final enactment.

23.11    Sec. 35. Minnesota Statutes 2009 Supplement, section 353.65, subdivision 3, is
23.12amended to read:
23.13    Subd. 3. Employer contribution. The employer contribution is 14.1 percent of the
23.14salary of the member in calendar year 2010 and is 14.4 percent of the salary of the member
23.15in each calendar year after 2010. This contribution must be made from funds available to
23.16the employing subdivision by the means and in the manner provided in section 353.28.
23.17EFFECTIVE DATE.This section is effective the day following final enactment.

23.18    Sec. 36. Minnesota Statutes 2008, section 353.651, subdivision 1, is amended to read:
23.19    Subdivision 1. Age and allowable service requirements. Upon separation from
23.20public service, any police officer or firefighter member who has attained the age of at
23.21least 55 years and who received credit for not less than three years of allowable service
23.22is vested under section 353.01, subdivision 47, is entitled upon application to a retirement
23.23annuity. Such retirement annuity is, known as the "normal" retirement annuity.
23.24EFFECTIVE DATE.This section is effective the day following final enactment.

23.25    Sec. 37. Minnesota Statutes 2008, section 353.651, subdivision 4, is amended to read:
23.26    Subd. 4. Early retirement. (a) A person who becomes a police and fire plan
23.27member after June 30, 2007, or a former member who is reinstated as a member of the
23.28plan after that date, who is at least 50 years of age with at least three years of allowable
23.29service and who is vested under section 353.01, subdivision 47, upon the termination of
23.30public service is entitled upon application to a retirement annuity equal to the normal
24.1annuity calculated under subdivision 3, reduced by two-tenths of one percent for each
24.2month that the member is under age 55 at the time of retirement.
24.3    (b) Upon the termination of public service, any police and fire plan member not
24.4specified in paragraph (a), upon attaining at least 50 years of age with at least three years
24.5of allowable service is entitled upon application to a retirement annuity equal to the
24.6normal annuity calculated under subdivision 3, reduced by one-tenth of one percent for
24.7each month that the member is under age 55 at the time of retirement.
24.8EFFECTIVE DATE.This section is effective the day following final enactment.

24.9    Sec. 38. Minnesota Statutes 2008, section 353.657, subdivision 1, is amended to read:
24.10    Subdivision 1. Generally. (a) In the event that a member of the police and fire
24.11fund dies from any cause before retirement or before becoming disabled and receiving
24.12disability benefits, the association shall grant survivor benefits to a surviving spouse, as
24.13defined in section 353.01, subdivision 20, and to a dependent child or children, as defined
24.14in section 353.01, subdivision 15, except that if the death is not a line of duty death, the
24.15member must have accrued at least three years of credited service be vested under section
24.16353.01, subdivision 47.
24.17    (b) Notwithstanding the definition of surviving spouse, a former spouse of the
24.18member, if any, is entitled to a portion of the monthly surviving spouse benefit if
24.19stipulated under the terms of a marriage dissolution decree filed with the association. If
24.20there is no surviving spouse or child or children, a former spouse may be entitled to
24.21a lump-sum refund payment under section 353.32, subdivision 1, if provided for in a
24.22marriage dissolution decree but not a monthly surviving spouse benefit despite the terms
24.23of a marriage dissolution decree filed with the association.
24.24    (c) The spouse and child or children are entitled to monthly benefits as provided in
24.25subdivisions 2 to 4.
24.26EFFECTIVE DATE.This section is effective the day following final enactment.

24.27    Sec. 39. Minnesota Statutes 2008, section 353.657, subdivision 2a, is amended to read:
24.28    Subd. 2a. Death while eligible survivor benefit. (a) If a member or former member
24.29who has attained the age of at least 50 years and has credit for not less than three years
24.30allowable service either who is vested under section 353.01, subdivision 47, or who has
24.31credit for at least 30 years of allowable service, regardless of age attained, dies before
24.32the annuity or disability benefit becomes payable, notwithstanding any designation of
25.1beneficiary to the contrary, the surviving spouse may elect to receive a death while
25.2eligible survivor benefit.
25.3    (b) Notwithstanding the definition of surviving spouse in section 353.01, subdivision
25.420
, a former spouse of the member, if any, is entitled to a portion of the death while
25.5eligible survivor benefit if stipulated under the terms of a marriage dissolution decree
25.6filed with the association. If there is no surviving spouse or child or children, a former
25.7spouse may be entitled to a lump-sum refund payment under section 353.32, subdivision
25.81
, if provided for in a marriage dissolution decree but not a death while eligible survivor
25.9benefit despite the terms of a marriage dissolution decree filed with the association.
25.10    (c) The benefit may be elected instead of a refund with interest under section 353.32,
25.11subdivision 1
, or surviving spouse benefits otherwise payable under subdivisions 1 and
25.122. The benefit must be an annuity equal to the 100 percent joint and survivor annuity
25.13which the member could have qualified for on the date of death, computed as provided in
25.14sections 353.651, subdivisions 2 and 3, and 353.30, subdivision 3.
25.15    (d) The surviving spouse may apply for the annuity at any time after the date
25.16on which the deceased employee would have attained the required age for retirement
25.17based on the employee's allowable service. Sections 353.34, subdivision 3, and 353.71,
25.18subdivision 2
, apply to a deferred annuity payable under this subdivision.
25.19    (e) No payment accrues beyond the end of the month in which entitlement to
25.20such annuity has terminated. An amount equal to the excess, if any, of the accumulated
25.21contributions which were credited to the account of the deceased employee over and
25.22above the total of the annuities paid and payable to the surviving spouse must be paid to
25.23the deceased member's last designated beneficiary or, if none, to the legal representative of
25.24the estate of such deceased member.
25.25    (f) Any member may request in writing, with the signed consent of the spouse, that
25.26this subdivision not apply and that payment be made only to the designated beneficiary, as
25.27otherwise provided by this chapter.
25.28    (g) For a member who is employed as a full-time firefighter by the Department of
25.29Military Affairs of the state of Minnesota, allowable service as a full-time state Military
25.30Affairs Department firefighter credited by the Minnesota State Retirement System may be
25.31used in meeting the minimum allowable service requirement of this subdivision.
25.32EFFECTIVE DATE.This section is effective the day following final enactment.

25.33    Sec. 40. Minnesota Statutes 2008, section 353.71, subdivision 1, is amended to read:
25.34    Subdivision 1. Eligibility. Any person who has been a member of a defined benefit
25.35retirement plan administered by the Public Employees Retirement Association, or a
26.1retirement plan administered by the Minnesota State Retirement System, or the Teachers
26.2Retirement Association, or any other public retirement system in the state of Minnesota
26.3having a like provision, except a fund retirement plan providing benefits for police officers
26.4or firefighters governed by sections 69.77 or 69.771 to 69.776, shall be is entitled, when
26.5qualified, to an annuity from each fund retirement plan if the total allowable service in all
26.6funds retirement plans or in any two of these funds retirement plans totals three or more
26.7years the number of years of allowable service required to receive a normal retirement
26.8annuity for that retirement plan, provided that no portion of the allowable service upon
26.9which the retirement annuity from one fund retirement plan is based is again used in the
26.10computation for benefits from another fund retirement plan and provided further that the
26.11person has not taken a refund from any one of these funds retirement plans since the
26.12person's membership in that association or system last terminated. The annuity from
26.13each fund shall must be determined by the appropriate provisions of the law except that
26.14the requirement that a person must have at least three years a specific minimum period
26.15of allowable service in the respective association or system shall does not apply for the
26.16purposes of this section provided if the combined service in two or more of these funds
26.17retirement plans equals three or more the number of years of allowable service required to
26.18receive a normal retirement annuity for that retirement plan.
26.19EFFECTIVE DATE.This section is effective the day following final enactment.

26.20    Sec. 41. Minnesota Statutes 2008, section 353.71, subdivision 2, is amended to read:
26.21    Subd. 2. Deferred annuity computation; augmentation. (a) The deferred annuity
26.22accruing under subdivision 1, or under sections 353.34, subdivision 3, and 353.68,
26.23subdivision 4
, must be computed on the basis of allowable service prior to the termination
26.24of public service and augmented as provided in this paragraph subdivision. The required
26.25reserves applicable to a deferred annuity, or to any deferred segment of an annuity must
26.26be determined as of the first day of the month following the month in which the former
26.27member ceased to be a public employee, or July 1, 1971, whichever is later. These
26.28(b) For a person who became a public employee before July 1, 2006, whose period
26.29of deferral began after June 30, 1971, and who terminated public employment before
26.30January 1, 2011, the required reserves of the deferred annuity must be augmented at
26.31the following applicable rate of or rates:
26.32(1) five percent annually compounded annually annual compound interest until
26.33January 1, 1981, and at the rate of;
26.34(2) three percent thereafter annual compound interest after January 1, 1981, or until
26.35the earlier of December 31, 2010, or after the date of the termination of public service or
27.1the termination of membership, whichever is later, until January 1 of the year following
27.2the year in which the former member attains age 55 and;
27.3(3) five percent annual compound interest from that date to the effective date of
27.4retirement, the rate is five percent compounded annually if the employee became an
27.5employee before July 1, 2006, and at 2.5 percent compounded annually if the employee
27.6becomes an January 1 of the year following the year in which the former member attains
27.7age 55, or until December 31, 2010, whichever is earlier; and
27.8(4) one percent annual compound interest from January 1, 2011.
27.9(c) For a person who became a public employee after June 30, 2006, and who
27.10terminated public employment before January 1, 2011, the required reserves of the
27.11deferred annuity must be augmented at 2.5 percent annual compound interest from the date
27.12of termination of public service or termination of membership, whichever is earlier, until
27.13December 31, 2010, and one percent annual compound interest after December 31, 2010.
27.14(d) For a person who terminates public employment after December 31, 2010, the
27.15required reserves of the deferred annuity must not be augmented.
27.16(e) If a person has more than one period of uninterrupted service, the required
27.17reserves related to each period must be augmented as specified in this paragraph. The sum
27.18of the augmented required reserves is the present value of the annuity. Uninterrupted
27.19service for the purpose of this subdivision means periods of covered employment during
27.20which the employee has not been separated from public service for more than two years.
27.21If a person repays a refund, the restored service must be considered as continuous with the
27.22next period of service for which the employee has credit with this association. This section
27.23must not reduce the annuity otherwise payable under this chapter. This paragraph applies
27.24to individuals who become deferred annuitants on or after July 1, 1971. For a member
27.25who became a deferred annuitant before July 1, 1971, the paragraph applies from July 1,
27.261971, if the former active member applies for an annuity after July 1, 1973.
27.27(b) (f) The retirement annuity or disability benefit of, or the survivor benefit payable
27.28on behalf of, a former member who terminated service before July 1, 1997, or the
27.29survivor benefit payable on behalf of a basic or police and fire member who was receiving
27.30disability benefits before July 1, 1997, which is first payable after June 30, 1997, must
27.31be increased on an actuarial equivalent basis to reflect the change in the postretirement
27.32interest rate actuarial assumption under section 356.215, subdivision 8, from five percent
27.33to six percent under a calculation procedure and tables adopted by the board and approved
27.34by the actuary retained under section 356.214.
27.35EFFECTIVE DATE.This section is effective the day following final enactment.

28.1    Sec. 42. Minnesota Statutes 2008, section 353E.04, subdivision 1, is amended to read:
28.2    Subdivision 1. Eligibility requirements. After termination of public employment,
28.3an employee covered under section 353E.02 who has attained the age of at least 55 years
28.4and has credit for not less than three years of coverage who is vested under section
28.5353.01, subdivision 47, in the local government correctional service plan is entitled, upon
28.6application, to a normal retirement annuity. Instead of a normal retirement annuity, a
28.7retiring employee may elect to receive the optional annuity provided in section 353.30,
28.8subdivision 3
.
28.9EFFECTIVE DATE.This section is effective the day following final enactment.

28.10    Sec. 43. Minnesota Statutes 2008, section 353E.04, subdivision 4, is amended to read:
28.11    Subd. 4. Early retirement. An employee covered under section 353E.02 who has
28.12attained the age of at least 50 years and has credit for not less than three years of coverage
28.13who is vested under section 353.01, subdivision 47, in the local government correctional
28.14service plan is entitled, upon application, to a reduced retirement annuity equal to the
28.15annuity calculated under subdivision 3, reduced so that the reduced annuity is the actuarial
28.16equivalent of the annuity that would be payable if the employee deferred receipt of the
28.17annuity from the day the annuity begins to accrue until age 55.
28.18EFFECTIVE DATE.This section is effective the day following final enactment.

28.19    Sec. 44. Minnesota Statutes 2008, section 353E.07, subdivision 1, is amended to read:
28.20    Subdivision 1. Member at least age 50. If a member or former member of the local
28.21government correctional service retirement plan who has attained the age of at least 50
28.22years and has credit for not less than three years of allowable service who is vested under
28.23section 353.01, subdivision 47, dies before the annuity or disability benefit has become
28.24payable, notwithstanding any designation of beneficiary to the contrary, the surviving
28.25spouse may elect to receive, in lieu of a refund with interest provided in section 353.32,
28.26subdivision 1
, a surviving spouse annuity equal to the 100 percent joint and survivor
28.27annuity for which the member could have qualified had the member terminated service
28.28on the date of death.
28.29EFFECTIVE DATE.This section is effective the day following final enactment.

28.30    Sec. 45. Minnesota Statutes 2008, section 353E.07, subdivision 2, is amended to read:
28.31    Subd. 2. Member not yet age 50. If the member was under age 50, dies, and had
28.32credit for not less than three years of allowable service was vested under section 353.01,
29.1subdivision 47, on the date of death but did not yet qualify for retirement, the surviving
29.2spouse may elect to receive a 100 percent joint and survivor annuity based on the age
29.3of the employee and the surviving spouse at the time of death. The annuity is payable
29.4using the early retirement reduction under section 353E.04, subdivision 4, to age 50 and
29.5one-half the early retirement reduction from age 50 to the age payment begins. Sections
29.6353.34, subdivision 3 , and 353.71, subdivision 2, apply to a deferred annuity or surviving
29.7spouse benefit payable under this subdivision.
29.8EFFECTIVE DATE.This section is effective the day following final enactment.

29.9    Sec. 46. Minnesota Statutes 2008, section 353F.03, is amended to read:
29.10353F.03 VESTING RULE FOR CERTAIN EMPLOYEES.
29.11Notwithstanding any provision of chapter 353 to the contrary, a terminated medical
29.12facility or other public employing unit employee is eligible to receive a retirement annuity
29.13under section 353.29 of the edition of Minnesota Statutes published in the year before the
29.14year in which the privatization occurred, without regard to the requirement for three years
29.15of allowable service specified in section 353.01, subdivision 47.
29.16EFFECTIVE DATE.This section is effective the day following final enactment.

29.17    Sec. 47. Minnesota Statutes 2009 Supplement, section 354.42, subdivision 2, is
29.18amended to read:
29.19    Subd. 2. Employee contribution. (a) For a basic member, the employee
29.20contribution to the fund is 9.0 percent the following percentage of the member's salary.:
29.21
before July 1, 2011
9.0 percent
29.22
from July 1, 2011, until June 30, 2012
9.5 percent
29.23
from July 1, 2012, until June 30, 2013
10.0 percent
29.24
from July 1, 2013, until June 30, 2014
10.5 percent
29.25
after June 30, 2014
11.0 percent
29.26(b) For a coordinated member, the employee contribution is 5.5 percent the following
29.27percentage of the member's salary.:
29.28
before July 1, 2011
5.5 percent
29.29
from July 1, 2011, until June 30, 2012
6.0 percent
29.30
from July 1, 2012, until June 30, 2013
6.5 percent
29.31
from July 1, 2013, until June 30, 2014
7.0 percent
29.32
after June 30, 2014
7.5 percent
30.1(c) When an employee contribution rate changes for a fiscal year, the new
30.2contribution rate is effective for the entire salary paid for each employer unit with the
30.3first payroll cycle reported.
30.4(d) After June 30, 2015, if a contribution rate revision is required under subdivisions
30.54a, 4b, and 4c, the employee contributions under paragraphs (a) and (b) must be adjusted
30.6accordingly.
30.7(b) (e) This contribution must be made by deduction from salary. Where any portion
30.8of a member's salary is paid from other than public funds, the member's employee
30.9contribution must be based on the entire salary received.
30.10EFFECTIVE DATE.This section is effective the day following final enactment.

30.11    Sec. 48. Minnesota Statutes 2008, section 354.42, subdivision 3, is amended to read:
30.12    Subd. 3. Employer. (a) The regular employer contribution to the fund by Special
30.13School District No. 1, Minneapolis, after July 1, 2006, and before July 1, 2007, is an
30.14amount equal to 5.0 percent of the salary of each of its teachers who is a coordinated
30.15member and 9.0 percent of the salary of each of its teachers who is a basic member. After
30.16July 1, 2007, the regular employer contribution to the fund by Special School District No.
30.171, Minneapolis, is an amount equal to 5.5 percent the applicable following percentage of
30.18salary of each coordinated member and 9.5 percent the applicable following percentage
30.19of salary of each basic member.:
30.20
Period
Coordinated Member
Basic Member
30.21
before July 1, 2011
5.5 percent
9.5 percent
30.22
from July 1, 2011, until June 30, 2012
6.0 percent
10.0 percent
30.23
from July 1, 2012, until June 30, 2013
6.5 percent
10.5 percent
30.24
from July 1, 2013, until June 30, 2014
7.0 percent
11.0 percent
30.25
after June 30, 2014
7.5 percent
11.5 percent
30.26 The additional employer contribution to the fund by Special School District No. 1,
30.27Minneapolis, after July 1, 2006, is an amount equal to 3.64 percent of the salary of each
30.28teacher who is a coordinated member or is a basic member.
30.29(b) The employer contribution to the fund for every other employer is an amount
30.30equal to 5.0 percent the applicable following percentage of the salary of each coordinated
30.31member and 9.0 percent the applicable following percentage of the salary of each basic
30.32member before July 1, 2007, and 5.5 percent of the salary of each coordinated member
30.33and 9.5 percent of the salary of each basic member after June 30, 2007.:
30.34
Period
Coordinated Member
Basic Member
30.35
before July 1, 2011
5.5 percent
9.5 percent
31.1
from July 1, 2011, until June 30, 2012
6.0 percent
10.0 percent
31.2
from July 1, 2012, until June 30, 2013
6.5 percent
10.5 percent
31.3
from July 1, 2013, until June 30, 2014
7.0 percent
11.0 percent
31.4
after June 30, 2014
7.5 percent
11.5 percent
31.5(c) When an employer contribution rate changes for a fiscal year, the new
31.6contribution rate is effective for the entire salary paid for each employer unit with the
31.7first payroll cycle reported.
31.8(d) After June 30, 2015, if a contribution rate revision is made under subdivisions
31.94a, 4b, and 4c, the employer contributions under paragraphs (a) and (b) must be adjusted
31.10accordingly.
31.11EFFECTIVE DATE.This section is effective the day following final enactment.

31.12    Sec. 49. Minnesota Statutes 2008, section 354.42, is amended by adding a subdivision
31.13to read:
31.14    Subd. 4a. Determination. (a) For purposes of this section, a contribution
31.15sufficiency exists if the total of the employee contributions, the employer contributions,
31.16and any additional employer contributions, if applicable, exceeds the total of the normal
31.17cost, the administrative expenses, and the amortization contribution of the retirement plan
31.18as reported in the most recent actuarial valuation of the retirement plan prepared by the
31.19approved actuary retained under section 356.214 and prepared under section 356.215
31.20and the standards for actuarial work of the Legislative Commission on Pensions and
31.21Retirement.
31.22(b) For purposes of this section, a contribution deficiency exists if the total of
31.23the employee contributions, the employer contributions, and any additional employer
31.24contributions are less than the total of the normal cost, the administrative expenses, and
31.25the amortization contribution of the retirement plan as reported in the most recent actuarial
31.26valuation of the retirement plan prepared by the approved actuary retained under section
31.27356.214 and prepared under section 356.215 and the standards for actuarial work of the
31.28Legislative Commission on Pensions and Retirement.
31.29EFFECTIVE DATE.This section is effective the day following final enactment.

31.30    Sec. 50. Minnesota Statutes 2008, section 354.42, is amended by adding a subdivision
31.31to read:
32.1    Subd. 4b. Contribution rate revision. Notwithstanding the contribution rate
32.2provisions under subdivisions 2 and 3, the employee and employer contribution rates
32.3may be adjusted as follows:
32.4(1) if, after June 30, 2015, the regular actuarial valuation of the plan under section
32.5356.215 indicates that there is a contribution sufficiency under subdivision 4a equal to
32.6or greater than one percent of covered payroll and the sufficiency has existed for at least
32.7two consecutive years, the employee and employer contribution rates for the plan may
32.8each be decreased to a level such that the sufficiency equals no more than one percent of
32.9covered payroll based on the most recent actuarial valuation; or
32.10(2) if, after June 30, 2015, the regular valuation of the plan under section 356.215
32.11indicates that there is a deficiency equal to or greater than 0.25 percent of covered payroll
32.12and the deficiency has existed for at least two consecutive years, the employee and
32.13employer contribution rates for the applicable plan may each be increased by:
32.14(i) 0.25 percent if the deficiency is less than 2.00 percent of covered payroll;
32.15(ii) 0.5 percent if the deficiency is equal to or greater than 2.00 percent of covered
32.16payroll and less than or equal to four percent; and
32.17(iii) 0.75 percent if the deficiency is greater than four percent.
32.18EFFECTIVE DATE.This section is effective the day following final enactment.

32.19    Sec. 51. Minnesota Statutes 2008, section 354.42, is amended by adding a subdivision
32.20to read:
32.21    Subd. 4c. Contribution sufficiency measures. (a) A contribution sufficiency of up
32.22to one percent of covered payroll must be held in reserve to be used to offset any future
32.23actuarially required contributions that are more than the total combined employee and
32.24employer contributions being collected.
32.25(b) Before any reduction in contributions to eliminate a sufficiency in excess of one
32.26percent of covered pay may be recommended, the executive director must review any
32.27need for a change in actuarial assumptions, as recommended by the actuary retained
32.28under section 356.214 in the most recent experience study of the retirement plan, that
32.29may result in an increase in the actuarially required contribution and must report to the
32.30Legislative Commission on Pensions and Retirement any recommendation by the board
32.31to use the sufficiency exceeding one percent of covered payroll to offset the impact of
32.32an actuarial assumption change recommended by the actuary retained under section
32.33356.214, subdivision 1, and reviewed by the actuary retained by the commission under
32.34section 356.214, subdivision 4.
33.1(c) A contribution sufficiency in excess of one percent of covered pay must not be
33.2used to increase benefits, and a benefit increase must not be proposed that would initiate
33.3an automatic adjustment under this section to increase contributions. A proposed benefit
33.4improvement must include a recommendation, prepared by the actuary retained under
33.5section 356.214, subdivision 1, and reviewed by the actuary retained by the Legislative
33.6Commission on Pensions and Retirement, as provided under section 356.214, subdivision
33.74, on the manner in which the benefit modification is to be funded.
33.8EFFECTIVE DATE.This section is effective the day following final enactment.

33.9    Sec. 52. Minnesota Statutes 2008, section 354.42, is amended by adding a subdivision
33.10to read:
33.11    Subd. 4d. Reporting; commission review. A contribution rate increase or decrease
33.12under subdivision 4b, as determined by the executive director of the Teachers Retirement
33.13Association, must be reported to the chair and the executive director of the Legislative
33.14Commission on Pensions and Retirement on or before the next February 1 and, if the
33.15Legislative Commission on Pensions and Retirement does not recommend against the rate
33.16change or does not recommend a modification in the rate change, is effective on the next
33.17July 1 following the determination by the executive director that a contribution deficiency
33.18or sufficiency exists based on the most recent actuarial valuation under section 356.215.
33.19EFFECTIVE DATE.This section is effective the day following final enactment.

33.20    Sec. 53. Minnesota Statutes 2009 Supplement, section 354.47, subdivision 1, is
33.21amended to read:
33.22    Subdivision 1. Death before retirement. (a) If a member dies before retirement
33.23and is covered under section 354.44, subdivision 2, and neither an optional annuity, nor a
33.24reversionary annuity, nor a benefit under section 354.46, subdivision 1, is payable to the
33.25survivors if the member was a basic member, then the surviving spouse, or if there is no
33.26surviving spouse, the designated beneficiary is entitled to an amount equal to the member's
33.27accumulated deductions with interest credited to the account of the member to the date of
33.28death of the member. If the designated beneficiary is a minor, interest must be credited to
33.29the date the beneficiary reaches legal age, or the date of receipt, whichever is earlier.
33.30(b) If a member dies before retirement and is covered under section 354.44,
33.31subdivision 6
, and neither an optional annuity, nor reversionary annuity, nor the benefit
33.32described in section 354.46, subdivision 1, is payable to the survivors if the member
33.33was a basic member, then the surviving spouse, or if there is no surviving spouse, then
34.1the designated beneficiary is entitled to an amount equal to the member's accumulated
34.2deductions credited to the account of the member as of June 30, 1957, and from July 1,
34.31957, to the date of death of the member, the member's accumulated deductions plus six
34.4percent interest compounded annually. a refund equal to the accumulated deductions
34.5credited to the member's account plus interest compounded annually until the member's
34.6date of death using the following interest rates:
34.7(1) before July 1, 1957, no interest accrues;
34.8(2) July 1, 1957, to June 30, 2011, six percent; and
34.9(3) after June 30, 2011, four percent.
34.10(c) If the designated beneficiary under paragraph (b) is a minor, any interest credited
34.11under that paragraph must be credited to the date the beneficiary reaches legal age, or
34.12the date of receipt, whichever is earlier.
34.13(d) The amount of any refund payable under this subdivision must be reduced by
34.14any permanent disability payment under section 354.48 received by the member.
34.15EFFECTIVE DATE.This section is effective the day following final enactment.

34.16    Sec. 54. Minnesota Statutes 2009 Supplement, section 354.49, subdivision 2, is
34.17amended to read:
34.18    Subd. 2. Calculation. (a) Except as provided in section 354.44, subdivision 1,
34.19any person who ceases to be a member by reason of termination of teaching service, is
34.20entitled to receive a refund in an amount equal to the accumulated deductions credited
34.21to the account as of June 30, 1957, and after July 1, 1957, the accumulated deductions
34.22with interest at the rate of six percent per annum compounded annually. plus interest
34.23compounded annually using the following interest rates:
34.24(1) before July 1, 1957, no interest accrues;
34.25(2) July 1, 1957, to June 30, 2011, six percent; and
34.26(3) after June 30, 2011, four percent.
34.27For the purpose of this subdivision, interest must be computed on fiscal year end
34.28balances to the first day of the month in which the refund is issued.
34.29(b) If the person has received permanent disability payments under section 354.48,
34.30the refund amount must be reduced by the amount of those payments.
34.31EFFECTIVE DATE.This section is effective the day following final enactment.

34.32    Sec. 55. Minnesota Statutes 2009 Supplement, section 354.55, subdivision 11, is
34.33amended to read:
35.1    Subd. 11. Deferred annuity; augmentation. (a) Any person covered under section
35.2354.44, subdivision 6 , who ceases to render teaching service, may leave the person's
35.3accumulated deductions in the fund for the purpose of receiving a deferred annuity
35.4at retirement.
35.5(b) The amount of the deferred retirement annuity is determined by section 354.44,
35.6subdivision 6
, and augmented as provided in this subdivision. The required reserves for
35.7the annuity which had accrued when the member ceased to render teaching service must
35.8be augmented, as further specified in this subdivision, by the applicable interest rate
35.9compounded annually from the first day of the month following the month during which
35.10the member ceased to render teaching service to the effective date of retirement.
35.11(c) No augmentation is not creditable if the deferral period is less than three months
35.12or if deferral commenced before July 1, 1971.
35.13(d) For persons who became covered employees before July 1, 2006, with a deferral
35.14period commencing after June 30, 1971, the annuity must be augmented using as follows:
35.15(1) five percent interest compounded annually until January 1, 1981, and;
35.16(2) three percent interest compounded annually thereafter from January 1, 1981, until
35.17January 1 of the year following the year in which the deferred annuitant attains age 55.;
35.18 From that date (3) five percent interest compounded annually from the date
35.19established in clause (2) to the effective date of retirement, the rate is five percent
35.20compounded annually. or until June 30, 2011, whichever is earlier; and
35.21(4) two percent interest compounded annually after June 30, 2011.
35.22(e) For persons who become covered employees after June 30, 2006, the interest
35.23rate used to augment the deferred annuity is 2.5 percent interest compounded annually
35.24until June 30, 2011, or until the effective date of retirement, whichever is earlier, and two
35.25percent interest compounded annually after June 30, 2011.
35.26(f) If a person has more than one period of uninterrupted service, a separate average
35.27salary determined under section 354.44, subdivision 6, must be used for each period
35.28and the required reserves related to each period must be augmented as specified in this
35.29subdivision. The sum of the augmented required reserves is the present value of the
35.30annuity. For the purposes of this subdivision, "period of uninterrupted service" means a
35.31period of covered teaching service during which the member has not been separated from
35.32active service for more than one fiscal year.
35.33(g) If a person repays a refund, the service restored by the repayment must be
35.34considered as continuous with the next period of service for which the person has
35.35allowable service credit in the Teachers Retirement Association.
36.1(h) If a person does not render teaching service in any one fiscal year or more
36.2consecutive fiscal years and then resumes teaching service, the formula percentages used
36.3from the date of the resumption of teaching service must be those applicable to new
36.4members.
36.5(i) The mortality table and interest rate actuarial assumption used to compute the
36.6annuity must be the applicable mortality table established by the board under section
36.7354.07, subdivision 1 , and the interest rate actuarial assumption under section 356.215 in
36.8effect when the member retires.
36.9(j) In no case may the annuity payable under this subdivision be less than the amount
36.10of annuity payable under section 354.44, subdivision 6.
36.11(k) The requirements and provisions for retirement before normal retirement age
36.12contained in section 354.44, subdivision 6, also apply to an employee fulfilling the
36.13requirements with a combination of service as provided in section 354.60.
36.14(l) The augmentation provided by this subdivision applies to the benefit provided
36.15in section 354.46, subdivision 2.
36.16(m) The augmentation provided by this subdivision does not apply to any period
36.17in which a person is on an approved leave of absence from an employer unit covered
36.18by the provisions of this chapter.
36.19(n) The retirement annuity or disability benefit of, or the survivor benefit payable on
36.20behalf of, a former teacher who terminated service before July 1, 1997, which is not first
36.21payable until after June 30, 1997, must be increased on an actuarial equivalent basis to
36.22reflect the change in the postretirement interest rate actuarial assumption under section
36.23356.215, subdivision 8 , from five percent to six percent under a calculation procedure and
36.24tables adopted by the board as recommended by an approved actuary and approved by the
36.25actuary retained under section 356.214.
36.26EFFECTIVE DATE.This section is effective the day following final enactment.

36.27    Sec. 56. Minnesota Statutes 2008, section 354A.12, subdivision 1, is amended to read:
36.28    Subdivision 1. Employee contributions. (a) The contribution required to be paid
36.29by each member of a teachers retirement fund association shall not be less than is the
36.30percentage of total salary specified below for the applicable association and program:
36.31
Association and Program
Percentage of Total Salary
36.32
Duluth Teachers Retirement Fund Association
36.33
old law and new law
36.34
coordinated programs
5.5 percent
36.35
before July 1, 2011
5.5 percent
37.1
effective July 1, 2011
6.0 percent
37.2
effective July 1, 2012
6.5 percent
37.3
St. Paul Teachers Retirement Fund Association
37.4
basic program before July 1, 2010
8 percent
37.5
basic program after June 30, 2010
8.5 percent
37.6
basic program after June 30, 2011
9.0 percent
37.7
coordinated program before July 1, 2010
5.5 percent
37.8
coordinated program after June 30, 2010
6.0 percent
37.9
coordinated program after June 30, 2011
6.5 percent
37.10(b) Contributions shall be made by deduction from salary and must be remitted
37.11directly to the respective teachers retirement fund association at least once each month.
37.12(c) When an employee contribution rate changes for a fiscal year, the new
37.13contribution rate is effective for the entire salary paid by the employer with the first
37.14payroll cycle reported.
37.15EFFECTIVE DATE.This section is effective July 1, 2010.

37.16    Sec. 57. Minnesota Statutes 2009 Supplement, section 354A.12, subdivision 2a,
37.17is amended to read:
37.18    Subd. 2a. Employer regular and additional contributions. (a) The employing
37.19units shall make the following employer contributions to teachers retirement fund
37.20associations:
37.21(1) for any coordinated member of one of the following teachers retirement fund
37.22associations in a city of the first class, the employing unit shall make a regular employer
37.23contribution to the respective retirement fund association in an amount equal to the
37.24designated percentage of the salary of the coordinated member as provided below:
37.25
Duluth Teachers Retirement Fund Association
4.50 percent
37.26
before July 1, 2011
5.79 percent
37.27
effective July 1, 2011
6.29 percent
37.28
effective July 1, 2012
6.79 percent
37.29
37.30
St. Paul Teachers Retirement Fund Association
before July 1, 2010
4.50 percent
37.31
37.32
St. Paul Teachers Retirement Fund Association
after June 30, 2010
5.0 percent
37.33
37.34
St. Paul Teachers Retirement Fund Association
after June 30, 2011
5.5 percent
37.35
37.36
St. Paul Teachers Retirement Fund Association
after June 30, 2013
6.5 percent
37.37(2) for any basic member of the St. Paul Teachers Retirement Fund Association, the
37.38employing unit shall make a regular employer contribution to the respective retirement
38.1fund in an amount equal to 8.00 percent of the salary of the basic member; according to
38.2the schedule below:
38.3
before July 1, 2010
8.0 percent of the salary of the basic member
38.4
before July 1, 2011
8.5 percent of the salary of the basic member
38.5
before July 1, 2012
9.0 percent of the salary of the basic member
38.6
before July 1, 2013
9.5 percent of the salary of the basic member
38.7
before July 1, 2014
10.0 percent of the salary of the basic member
38.8(3) for a basic member of the St. Paul Teachers Retirement Fund Association, the
38.9employing unit shall make an additional employer contribution to the respective fund in
38.10an amount equal to 3.64 percent of the salary of the basic member;
38.11(4) for a coordinated member of a teachers retirement fund association in a city of
38.12the first class the St. Paul Teachers Retirement Fund Association, the employing unit shall
38.13make an additional employer contribution to the respective fund in an amount equal to the
38.14applicable percentage of the coordinated member's salary, as provided below:
38.15
38.16
Duluth Teachers Retirement
Fund Association
1.29 percent
38.17
38.18
St. Paul Teachers Retirement
Fund Association
3.84 percent
38.19(b) The regular and additional employer contributions must be remitted directly to
38.20the respective teachers retirement fund association at least once each month. Delinquent
38.21amounts are payable with interest under the procedure in subdivision 1a.
38.22(c) Payments of regular and additional employer contributions for school district
38.23or technical college employees who are paid from normal operating funds must be made
38.24from the appropriate fund of the district or technical college.
38.25(d) When an employer contribution rate changes for a fiscal year, the new
38.26contribution rate is effective for the entire salary paid by the employer with the first
38.27payroll cycle reported.
38.28EFFECTIVE DATE.This section is effective July 1, 2010.

38.29    Sec. 58. Minnesota Statutes 2008, section 354A.12, subdivision 3c, is amended to read:
38.30    Subd. 3c. Termination of supplemental contributions and direct matching
38.31and state aid. (a) The supplemental contributions payable to the Minneapolis Teachers
38.32Retirement Fund Association by Special School District No. 1 and the city of Minneapolis
38.33under section 423A.02, subdivision 3, must be paid to the Teachers Retirement
38.34Association and must continue until the current assets of the fund equal or exceed the
38.35actuarial accrued liability of the fund as determined in the most recent actuarial report
38.36for the fund by the actuary retained under section 356.214, or 2037, whichever occurs
39.1earlier. The supplemental contributions payable to the St. Paul Teachers Retirement Fund
39.2Association by Independent School District No. 625 under section 423A.02, subdivision
39.33
, or the direct state aid under subdivision 3a to the St. Paul Teachers Retirement Fund
39.4Association terminate at the end of the fiscal year in which the accrued liability funding
39.5ratio for that fund, as determined in the most recent actuarial report for that fund by the
39.6actuary retained under section 356.214, equals or exceeds the accrued liability funding
39.7ratio for the Teachers Retirement Association, as determined in the most recent actuarial
39.8report for the Teachers Retirement Association by the actuary retained under section
39.9356.214. must continue until the current assets of the fund equal or exceed the actuarial
39.10accrued liability of the fund as determined in the most recent actuarial report for the fund
39.11by the actuary retained under section 356.214 or until 2037, whichever occurs earlier.
39.12    (b) If the St. Paul Teachers Retirement Fund Association is funded at an amount
39.13equal to or greater than the funding ratio applicable to the Teachers Retirement
39.14Association, then any future state aid under subdivision 3a is payable to the Teachers
39.15Retirement Association.
39.16EFFECTIVE DATE.This section is effective July 1, 2010.

39.17    Sec. 59. Minnesota Statutes 2008, section 354A.27, subdivision 5, is amended to read:
39.18    Subd. 5. Calculation Eligibility for and payment of postretirement adjustments.
39.19(a) Annually, after June 30, the board of trustees of the Duluth Teachers Retirement Fund
39.20Association determines the amount of any postretirement adjustment using the procedures
39.21in this subdivision and subdivision 6 or 7, whichever is applicable.
39.22(b) Each person who has been receiving an annuity or benefit under the articles
39.23of incorporation, bylaws, or under this section for at least 12 months as of the date of
39.24the postretirement adjustment shall be eligible for a postretirement adjustment. The
39.25postretirement adjustment shall be payable each January 1. The postretirement adjustment
39.26shall be equal to two percent of a permanent percentage increase as specified under
39.27subdivision 6 or 7, whichever is applicable, applied to the annuity or benefit to which the
39.28person is entitled one month prior to the payment of the postretirement adjustment.
39.29EFFECTIVE DATE.This section is effective July 1, 2010.

39.30    Sec. 60. Minnesota Statutes 2008, section 354A.27, subdivision 6, is amended to read:
39.31    Subd. 6. Additional increase Calculation of postretirement adjustments;
39.32transitional provision. (a) In addition to the postretirement increases granted under
40.1subdivision 5, an additional percentage increase must be computed and paid under this
40.2subdivision.
40.3(b) The board of trustees shall determine the number of annuitants or benefit
40.4recipients who have been receiving an annuity or benefit for at least 12 months as of the
40.5current June 30. These recipients are entitled to receive the surplus investment earnings
40.6additional postretirement increase.
40.7(c) Annually, as of each June 30, the board shall determine the five-year annualized
40.8rate of return attributable to the assets of the Duluth Teachers Retirement Fund Association
40.9under the formula or formulas specified in section 11A.04, clause (11).
40.10(d) The board shall determine the amount of excess five-year annualized rate of
40.11return over the preretirement interest assumption as specified in section 356.215.
40.12(e) The additional percentage increase must be determined by multiplying the
40.13quantity one minus the rate of contribution deficiency, as specified in the most recent
40.14actuarial report of the actuary retained under section 356.214, times the rate of return
40.15excess as determined in paragraph (d).
40.16(f) The additional increase is payable to all eligible annuitants or benefit recipients
40.17on the following January 1.
40.18(a) For purposes of computing postretirement adjustments after the effective date
40.19of this section for eligible benefit recipients of the Duluth Teachers Retirement Fund
40.20Association, the funding ratio of the plan, as determined by dividing the market value of
40.21assets by the actuarial accrued liability as reported in the most recent actuarial valuation
40.22prepared under sections 356.214 and 356.215, determines the postretirement increase
40.23as follows:
40.24
Funding Ratio
Postretirement Increase
40.25
less than 80 percent
0 percent
40.26
40.27
at least 80 percent but less than 90
percent
1 percent
40.28
at least 90 percent
2 percent
40.29(b) If the funding ratio of the plan based on actuarial value, rather than market value,
40.30is at least 90 percent as reported in the most recent actuarial valuation prepared under
40.31sections 356.214 and 356.215, this subdivision expires and subsequent postretirement
40.32increases must be paid as specified under subdivision 7.
40.33EFFECTIVE DATE.This section is effective July 1, 2010.

40.34    Sec. 61. Minnesota Statutes 2008, section 354A.27, is amended by adding a
40.35subdivision to read:
41.1    Subd. 7. Calculation of postretirement adjustments. (a) This subdivision applies
41.2if subdivision 6 has expired.
41.3(b) A percentage adjustment must be computed and paid under this subdivision
41.4to eligible persons in subdivision 5. This adjustment is determined by reference to the
41.5Consumer Price Index for urban wage earners and clerical workers all items index as
41.6reported by the Bureau of Labor Statistics within the United States Department of Labor
41.7each year as part of the determination of annual cost-of-living adjustments to recipients
41.8of federal old-age, survivors, and disability insurance. For calculations of cost-of-living
41.9adjustments under paragraph (c), the term "average third quarter Consumer Price Index
41.10value" means the sum of the monthly index values as initially reported by the Bureau of
41.11Labor Statistics for the months of July, August, and September, divided by 3.
41.12(c) Before January 1 of each year, the executive director must calculate the amount
41.13of the cost-of-living adjustment by dividing the most recent average third quarter index
41.14value by the same average third quarter index value from the previous year, subtract one
41.15from the resulting quotient, and express the result as a percentage amount, which must be
41.16rounded to the nearest one-tenth of one percent.
41.17(d) The amount calculated under paragraph (c) is the full cost-of-living adjustment
41.18to be applied as a permanent increase to the regular payment of each eligible member
41.19on January 1 of the next calendar year. For any eligible member whose effective date
41.20of benefit commencement occurred during the calendar year before the cost-of-living
41.21adjustment is applied, the full increase amount must be prorated on the basis of whole
41.22calendar quarters in benefit payment status in the calendar year prior to the January 1 on
41.23which the cost-of-living adjustment is applied, calculated to the third decimal place.
41.24(e) The adjustment must not be less than zero nor greater than five percent.
41.25(f) If the funding ratio of the plan as determined in the most recent actuarial
41.26valuation using the actuarial value of assets is less than 80 percent there will be no
41.27postretirement adjustment the following January 1.
41.28EFFECTIVE DATE.This section is effective July 1, 2010.

41.29    Sec. 62. Minnesota Statutes 2008, section 354A.31, subdivision 1, is amended to read:
41.30    Subdivision 1. Age and service requirements. Any coordinated member or former
41.31coordinated member of the St. Paul Teachers Retirement Fund Association who has
41.32ceased to render teaching service for the school district in which the teachers retirement
41.33fund association exists and who has either attained the age of at least 55 years with not
41.34less than three years of allowable service credit or received credit for not less than 30
41.35years of allowable service regardless of age, shall be entitled upon written application to a
42.1retirement annuity. Any coordinated member or former coordinated member of the Duluth
42.2Teachers Retirement Fund Association who has ceased to render teaching service for the
42.3school district in which the teacher retirement fund association exists and who has either
42.4attained the age of at least 55 years with not less than three years of allowable service
42.5credit if the member became an employee before July 1, 2010, or not less than five years
42.6of allowable service credit if the member became an employee after June 30, 2010, or
42.7received service credit for not less than 30 years of allowable service regardless of age,
42.8shall be entitled upon written application to a retirement annuity.
42.9EFFECTIVE DATE.This section is effective July 1, 2010.

42.10    Sec. 63. Minnesota Statutes 2008, section 354A.35, subdivision 1, is amended to read:
42.11    Subdivision 1. Death before retirement; refund. If a coordinated member
42.12or former coordinated member dies prior to retirement or prior to the receipt of any
42.13retirement annuity or other benefit payment which is or may be payable and a surviving
42.14spouse optional annuity is not payable pursuant to subdivision 2, a refund shall be paid to
42.15the person's surviving spouse, or if there is none, to the person's designated beneficiary,
42.16or if there is none, to the legal representative of the person's estate. For a coordinated
42.17member or former coordinated member of the St. Paul Teachers Retirement Fund
42.18Association, the refund shall be in an amount equal to the person's accumulated employee
42.19contributions plus interest at the rate of six percent per annum compounded annually. For
42.20a coordinated member or former coordinated member of the Duluth Teachers Retirement
42.21Fund Association, the refund shall be in an amount equal to the person's accumulated
42.22employee contributions plus interest at the rate of six percent per annum compounded
42.23annually to July 1, 2010, and four percent per annum compounded annually thereafter.
42.24EFFECTIVE DATE.This section is effective July 1, 2010.

42.25    Sec. 64. Minnesota Statutes 2008, section 354A.37, subdivision 2, is amended to read:
42.26    Subd. 2. Eligibility for deferred retirement annuity. (a) Any coordinated member
42.27who ceases to render teaching services for the school district in which the teachers
42.28retirement fund association is located, with sufficient allowable service credit to meet
42.29the minimum service requirements specified in section 354A.31, subdivision 1, shall be
42.30entitled to a deferred retirement annuity in lieu of a refund pursuant to subdivision 1. The
42.31deferred retirement annuity shall be computed pursuant to section 354A.31 and shall be
42.32augmented as provided in this subdivision. The deferred annuity shall commence upon
43.1application after the person on deferred status attains at least the minimum age specified in
43.2section 354A.31, subdivision 1.
43.3(b) The monthly annuity amount that had accrued when the member ceased to
43.4render teaching service must be augmented from the first day of the month following the
43.5month during which the member ceased to render teaching service to the effective date
43.6of retirement. There is no augmentation if this period is less than three months. For a
43.7member of the St. Paul Teachers Retirement Fund Association, the rate of augmentation
43.8is three percent compounded annually until January 1 of the year following the year in
43.9which the former member attains age 55, and five percent compounded annually after that
43.10date to the effective date of retirement if the employee became an employee before July
43.111, 2006, and at 2.5 percent compounded annually if the employee becomes an employee
43.12after June 30, 2006. For a member of the Duluth Teachers Retirement Fund Association,
43.13the rate of augmentation is three percent compounded annually until January 1 of the year
43.14following the year in which the former member attains age 55, five percent compounded
43.15annually after that date to July 1, 2010, and two percent compounded annually after that
43.16date to the effective date of retirement if the employee became an employee before
43.17July 1, 2006, and at 2.5 percent compounded annually to July 1, 2010, and two percent
43.18compounded annually after that date to the effective date of retirement if the employee
43.19becomes an employee after June 30, 2006. If a person has more than one period of
43.20uninterrupted service, a separate average salary determined under section 354A.31 must
43.21be used for each period, and the monthly annuity amount related to each period must be
43.22augmented as provided in this subdivision. The sum of the augmented monthly annuity
43.23amounts determines the total deferred annuity payable. If a person repays a refund, the
43.24service restored by the repayment must be considered as continuous with the next period
43.25of service for which the person has credit with the fund. If a person does not render
43.26teaching services in any one fiscal year or more consecutive fiscal years and then resumes
43.27teaching service, the formula percentages used from the date of resumption of teaching
43.28service are those applicable to new members. The mortality table and interest assumption
43.29used to compute the annuity are the table established by the fund to compute other
43.30annuities, and the interest assumption under section 356.215 in effect when the member
43.31retires. A period of uninterrupted service for the purpose of this subdivision means a
43.32period of covered teaching service during which the member has not been separated from
43.33active service for more than one fiscal year.
43.34(c) The augmentation provided by this subdivision applies to the benefit provided
43.35in section 354A.35, subdivision 2. The augmentation provided by this subdivision does
44.1not apply to any period in which a person is on an approved leave of absence from an
44.2employer unit.
44.3EFFECTIVE DATE.This section is effective July 1, 2010.

44.4    Sec. 65. Minnesota Statutes 2008, section 354A.37, subdivision 3, is amended to read:
44.5    Subd. 3. Computation of refund amount. A former coordinated member of the
44.6St. Paul Teachers Retirement Fund Association who qualifies for a refund pursuant to
44.7under subdivision 1 shall receive a refund equal to the amount of the former coordinated
44.8member's accumulated employee contributions with interest at the rate of six percent per
44.9annum compounded annually. A former coordinated member of the Duluth Teachers
44.10Retirement Fund Association who qualifies for a refund under subdivision 1 shall receive
44.11a refund equal to the amount of the former coordinated member's accumulated employee
44.12contributions with interest at the rate of six percent per annum compounded annually to
44.13July 1, 2010, and four percent per annum compounded annually thereafter.
44.14EFFECTIVE DATE.This section is effective July 1, 2010.

44.15    Sec. 66. Minnesota Statutes 2008, section 354A.37, subdivision 4, is amended to read:
44.16    Subd. 4. Certain refunds at normal retirement age. Any coordinated member
44.17who has attained the normal retirement age with less than ten years of allowable service
44.18credit and has terminated active teaching service shall be entitled to a refund in lieu of
44.19a proportionate annuity pursuant to section 356.32. The refund for a member of the St.
44.20Paul Teachers Retirement Fund Association shall be equal to the coordinated member's
44.21accumulated employee contributions plus interest at the rate of six percent compounded
44.22annually. The refund for a member of the Duluth Teachers Retirement Fund Association
44.23shall be equal to the coordinated member's accumulated employee contributions plus
44.24interest at the rate of six percent compounded annually to July 1, 2010, and four percent
44.25per annum compounded annually thereafter.
44.26EFFECTIVE DATE.This section is effective July 1, 2010.

44.27    Sec. 67. Minnesota Statutes 2008, section 356.215, subdivision 8, is amended to read:
44.28    Subd. 8. Interest and salary assumptions. (a) The actuarial valuation must use
44.29the applicable following preretirement interest assumption and the applicable following
44.30postretirement interest assumption:
45.1
45.2
45.3
plan
preretirement
interest rate
assumption
postretirement
interest rate
assumption
45.4
general state employees retirement plan
8.5%
6.0%
45.5
correctional state employees retirement plan
8.5
6.0
45.6
State Patrol retirement plan
8.5
6.0
45.7
legislators retirement plan
8.5
6.0
45.8
elective state officers retirement plan
8.5
6.0
45.9
judges retirement plan
8.5
6.0
45.10
general public employees retirement plan
8.5
6.0
45.11
public employees police and fire retirement plan
8.5
6.0
45.12
45.13
local government correctional service retirement
plan
8.5
6.0
45.14
teachers retirement plan
8.5
6.0
45.15
Minneapolis employees retirement plan
6.0
5.0
45.16
Duluth teachers retirement plan
8.5
8.5
45.17
St. Paul teachers retirement plan
8.5
8.5
45.18
Minneapolis Police Relief Association
6.0
6.0
45.19
Fairmont Police Relief Association
5.0
5.0
45.20
Minneapolis Fire Department Relief Association
6.0
6.0
45.21
Virginia Fire Department Relief Association
5.0
5.0
45.22
Bloomington Fire Department Relief Association
6.0
6.0
45.23
45.24
local monthly benefit volunteer firefighters relief
associations
5.0
5.0
45.25    (b) Before July 1, 2010, the actuarial valuation must use the applicable following
45.26single rate future salary increase assumption, the applicable following modified single
45.27rate future salary increase assumption, or the applicable following graded rate future
45.28salary increase assumption:
45.29    (1) single rate future salary increase assumption
45.30
45.31
plan
future salary
increase assumption
45.32
legislators retirement plan
5.0%
45.33
judges retirement plan
4.0
45.34
Minneapolis Police Relief Association
4.0
45.35
Fairmont Police Relief Association
3.5
45.36
45.37
Minneapolis Fire Department Relief
Association
4.0
45.38
Virginia Fire Department Relief Association
3.5
45.39
45.40
Bloomington Fire Department Relief
Association
4.0
45.41    (2) modified single rate future salary increase assumption
46.1
46.2
plan
future salary
increase assumption
46.3
46.4
46.5
46.6
Minneapolis employees
retirement plan
the prior calendar year amount increased
first by 1.0198 percent to prior fiscal year
date and then increased by 4.0 percent
annually for each future year
46.7    (3) age-related select and ultimate future salary increase assumption or graded rate
46.8future salary increase assumption
46.9
46.10
plan
future salary
increase assumption
46.11
46.12
general state employees retirement plan
select calculation and
assumption A
46.13
correctional state employees retirement plan
assumption H G
46.14
State Patrol retirement plan
assumption G F
46.15
46.16
general public employees retirement plan
select calculation and
assumption B
46.17
public employees police and fire fund retirement plan
assumption C B
46.18
local government correctional service retirement plan
assumption G F
46.19
teachers retirement plan
assumption D C
46.20
Duluth teachers retirement plan
assumption E D
46.21
St. Paul teachers retirement plan
assumption F E
46.22The select calculation is: during the
46.23designated select period, a designated
46.24percentage rate is multiplied by the result of
46.25the designated integer minus T, where T is the
46.26number of completed years of service, and is
46.27added to the applicable future salary increase
46.28assumption. The designated select period is
46.29five years and the designated integer is five
46.30for the general state employees retirement
46.31plan and the general public employees
46.32retirement plan. The designated select period
46.33is ten years and the designated integer is ten
46.34for all other retirement plans covered by
46.35this clause. The designated percentage rate
46.36is: (1) 0.2 percent for the correctional state
46.37employees retirement plan, the State Patrol
46.38retirement plan, the public employees police
46.39and fire plan, and the local government
46.40correctional service plan; (2) 0.6 percent
47.1for the general state employees retirement
47.2plan and the general public employees
47.3retirement plan; and (3) 0.3 percent for the
47.4teachers retirement plan, the Duluth Teachers
47.5Retirement Fund Association, and the St.
47.6Paul Teachers Retirement Fund Association.
47.7The select calculation for the Duluth Teachers
47.8Retirement Fund Association is 8.00 percent
47.9per year for service years one through seven,
47.107.25 percent per year for service years seven
47.11and eight, and 6.50 percent per year for
47.12service years eight and nine.
47.13    The ultimate future salary increase assumption is:
47.14
age
A
B
CB
DC
ED
FE
GF
HG
47.15
16
5.95%
5.95%
11.00%
7.70%
8.00%
6.90%
7.7500%
7.2500%
47.16
17
5.90
5.90
11.00
7.65
8.00
6.90
7.7500
7.2500
47.17
18
5.85
5.85
11.00
7.60
8.00
6.90
7.7500
7.2500
47.18
19
5.80
5.80
11.00
7.55
8.00
6.90
7.7500
7.2500
47.19
20
5.75
5.40
11.00
5.50
6.90
6.90
7.7500
7.2500
47.20
21
5.75
5.40
11.00
5.50
6.90
6.90
7.1454
6.6454
47.21
22
5.75
5.40
10.50
5.50
6.90
6.90
7.0725
6.5725
47.22
23
5.75
5.40
10.00
5.50
6.85
6.85
7.0544
6.5544
47.23
24
5.75
5.40
9.50
5.50
6.80
6.80
7.0363
6.5363
47.24
25
5.75
5.40
9.00
5.50
6.75
6.75
7.0000
6.5000
47.25
26
5.75
5.36
8.70
5.50
6.70
6.70
7.0000
6.5000
47.26
27
5.75
5.32
8.40
5.50
6.65
6.65
7.0000
6.5000
47.27
28
5.75
5.28
8.10
5.50
6.60
6.60
7.0000
6.5000
47.28
29
5.75
5.24
7.80
5.50
6.55
6.55
7.0000
6.5000
47.29
30
5.75
5.20
7.50
5.50
6.50
6.50
7.0000
6.5000
47.30
31
5.75
5.16
7.30
5.50
6.45
6.45
7.0000
6.5000
47.31
32
5.75
5.12
7.10
5.50
6.40
6.40
7.0000
6.5000
47.32
33
5.75
5.08
6.90
5.50
6.35
6.35
7.0000
6.5000
47.33
34
5.75
5.04
6.70
5.50
6.30
6.30
7.0000
6.5000
47.34
35
5.75
5.00
6.50
5.50
6.25
6.25
7.0000
6.5000
47.35
36
5.75
4.96
6.30
5.50
6.20
6.20
6.9019
6.4019
47.36
37
5.75
4.92
6.10
5.50
6.15
6.15
6.8074
6.3074
47.37
38
5.75
4.88
5.90
5.40
6.10
6.10
6.7125
6.2125
47.38
39
5.75
4.84
5.70
5.30
6.05
6.05
6.6054
6.1054
47.39
40
5.75
4.80
5.50
5.20
6.00
6.00
6.5000
6.0000
47.40
41
5.75
4.76
5.40
5.10
5.90
5.95
6.3540
5.8540
47.41
42
5.75
4.72
5.30
5.00
5.80
5.90
6.2087
5.7087
48.1
43
5.65
4.68
5.20
4.90
5.70
5.85
6.0622
5.5622
48.2
44
5.55
4.64
5.10
4.80
5.60
5.80
5.9048
5.4078
48.3
45
5.45
4.60
5.00
4.70
5.50
5.75
5.7500
5.2500
48.4
46
5.35
4.56
4.95
4.60
5.40
5.70
5.6940
5.1940
48.5
47
5.25
4.52
4.90
4.50
5.30
5.65
5.6375
5.1375
48.6
48
5.15
4.48
4.85
4.50
5.20
5.60
5.5822
5.0822
48.7
49
5.05
4.44
4.80
4.50
5.10
5.55
5.5404
5.0404
48.8
50
4.95
4.40
4.75
4.50
5.00
5.50
5.5000
5.0000
48.9
51
4.85
4.36
4.75
4.50
4.90
5.45
5.4384
4.9384
48.10
52
4.75
4.32
4.75
4.50
4.80
5.40
5.3776
4.8776
48.11
53
4.65
4.28
4.75
4.50
4.70
5.35
5.3167
4.8167
48.12
54
4.55
4.24
4.75
4.50
4.60
5.30
5.2826
4.7826
48.13
55
4.45
4.20
4.75
4.50
4.50
5.25
5.2500
4.7500
48.14
56
4.35
4.16
4.75
4.50
4.40
5.20
5.2500
4.7500
48.15
57
4.25
4.12
4.75
4.50
4.30
5.15
5.2500
4.7500
48.16
58
4.25
4.08
4.75
4.60
4.20
5.10
5.2500
4.7500
48.17
59
4.25
4.04
4.75
4.70
4.10
5.05
5.2500
4.7500
48.18
60
4.25
4.00
4.75
4.80
4.00
5.00
5.2500
4.7500
48.19
61
4.25
4.00
4.75
4.90
3.90
5.00
5.2500
4.7500
48.20
62
4.25
4.00
4.75
5.00
3.80
5.00
5.2500
4.7500
48.21
63
4.25
4.00
4.75
5.10
3.70
5.00
5.2500
4.7500
48.22
64
4.25
4.00
4.75
5.20
3.60
5.00
5.2500
4.7500
48.23
65
4.25
4.00
4.75
5.20
3.50
5.00
5.2500
4.7500
48.24
66
4.25
4.00
4.75
5.20
3.50
5.00
5.2500
4.7500
48.25
67
4.25
4.00
4.75
5.20
3.50
5.00
5.2500
4.7500
48.26
68
4.25
4.00
4.75
5.20
3.50
5.00
5.2500
4.7500
48.27
69
4.25
4.00
4.75
5.20
3.50
5.00
5.2500
4.7500
48.28
70
4.25
4.00
4.75
5.20
3.50
5.00
5.2500
4.7500
48.29
71
4.25
4.00
5.20
48.30(4) service-related ultimate future salary increase assumption
48.31
48.32
service length
general employees retirement plan of the Public
Employees Retirement Association
48.33
1
12.03%
48.34
2
8.90
48.35
3
7.46
48.36
4
6.58
48.37
5
5.97
48.38
6
5.52
48.39
7
5.16
48.40
8
4.87
48.41
9
4.63
48.42
10
4.42
48.43
11
4.24
49.1
12
4.08
49.2
13
3.94
49.3
14
3.82
49.4
15
3.70
49.5
16
3.60
49.6
17
3.51
49.7
18
3.50
49.8
19
3.50
49.9
20
3.50
49.10
21
3.50
49.11
22
3.50
49.12
23
3.50
49.13
24
3.50
49.14
25
3.50
49.15
26
3.50
49.16
27
3.50
49.17
28
3.50
49.18
29
3.50
49.19
30 or more
3.50
49.20    (c) Before July 2, 2010, the actuarial valuation must use the applicable following
49.21payroll growth assumption for calculating the amortization requirement for the unfunded
49.22actuarial accrued liability where the amortization retirement is calculated as a level
49.23percentage of an increasing payroll:
49.24
49.25
plan
payroll growth
assumption
49.26
general state employees retirement plan
4.50%
49.27
correctional state employees retirement plan
4.50
49.28
State Patrol retirement plan
4.50
49.29
legislators retirement plan
4.50
49.30
judges retirement plan
4.00
49.31
49.32
general public employees retirement plan of the
Public Employees Retirement Association
4.504.00
49.33
public employees police and fire retirement plan
4.50
49.34
49.35
local government correctional service retirement
plan
4.50
49.36
teachers retirement plan
4.50
49.37
Duluth teachers retirement plan
4.50
49.38
St. Paul teachers retirement plan
5.00
49.39    (d) After July 1, 2010, the assumptions set forth in paragraphs (b) and (c) continue to
49.40apply, unless a different salary assumption or a different payroll increase assumption:
49.41    (1) has been proposed by the governing board of the applicable retirement plan;
50.1    (2) is accompanied by the concurring recommendation of the actuary retained under
50.2section 356.214, subdivision 1, if applicable, or by the approved actuary preparing the
50.3most recent actuarial valuation report if section 356.214 does not apply; and
50.4    (3) has been approved or deemed approved under subdivision 18.
50.5EFFECTIVE DATE.This section is effective the day following final enactment.

50.6    Sec. 68. Minnesota Statutes 2009 Supplement, section 356.215, subdivision 11,
50.7is amended to read:
50.8    Subd. 11. Amortization contributions. (a) In addition to the exhibit indicating
50.9the level normal cost, the actuarial valuation of the retirement plan must contain an
50.10exhibit for financial reporting purposes indicating the additional annual contribution
50.11sufficient to amortize the unfunded actuarial accrued liability and must contain an exhibit
50.12for contribution determination purposes indicating the additional contribution sufficient
50.13to amortize the unfunded actuarial accrued liability. For the retirement plans listed in
50.14subdivision 8, paragraph (c), the additional contribution must be calculated on a level
50.15percentage of covered payroll basis by the established date for full funding in effect when
50.16the valuation is prepared, assuming annual payroll growth at the applicable percentage
50.17rate set forth in subdivision 8, paragraph (c). For all other retirement plans, the additional
50.18annual contribution must be calculated on a level annual dollar amount basis.
50.19    (b) For any retirement plan other than the Minneapolis Employees Retirement Fund,
50.20the general employees retirement plan of the Public Employees Retirement Association,
50.21the general state employees retirement plan of the Minnesota State Retirement System,
50.22and the St. Paul Teachers Retirement Fund Association, if there has not been a change in
50.23the actuarial assumptions used for calculating the actuarial accrued liability of the fund, a
50.24change in the benefit plan governing annuities and benefits payable from the fund, a
50.25change in the actuarial cost method used in calculating the actuarial accrued liability of all
50.26or a portion of the fund, or a combination of the three, which change or changes by itself
50.27or by themselves without inclusion of any other items of increase or decrease produce a
50.28net increase in the unfunded actuarial accrued liability of the fund, the established date for
50.29full funding is the first actuarial valuation date occurring after June 1, 2020.
50.30    (c) For any retirement plan other than the Minneapolis Employees Retirement
50.31Fund and the general employees retirement plan of the Public Employees Retirement
50.32Association, if there has been a change in any or all of the actuarial assumptions used
50.33for calculating the actuarial accrued liability of the fund, a change in the benefit plan
50.34governing annuities and benefits payable from the fund, a change in the actuarial cost
50.35method used in calculating the actuarial accrued liability of all or a portion of the fund,
51.1or a combination of the three, and the change or changes, by itself or by themselves and
51.2without inclusion of any other items of increase or decrease, produce a net increase in the
51.3unfunded actuarial accrued liability in the fund, the established date for full funding must
51.4be determined using the following procedure:
51.5    (i) the unfunded actuarial accrued liability of the fund must be determined in
51.6accordance with the plan provisions governing annuities and retirement benefits and the
51.7actuarial assumptions in effect before an applicable change;
51.8    (ii) the level annual dollar contribution or level percentage, whichever is applicable,
51.9needed to amortize the unfunded actuarial accrued liability amount determined under item
51.10(i) by the established date for full funding in effect before the change must be calculated
51.11using the interest assumption specified in subdivision 8 in effect before the change;
51.12    (iii) the unfunded actuarial accrued liability of the fund must be determined in
51.13accordance with any new plan provisions governing annuities and benefits payable from
51.14the fund and any new actuarial assumptions and the remaining plan provisions governing
51.15annuities and benefits payable from the fund and actuarial assumptions in effect before
51.16the change;
51.17    (iv) the level annual dollar contribution or level percentage, whichever is applicable,
51.18needed to amortize the difference between the unfunded actuarial accrued liability amount
51.19calculated under item (i) and the unfunded actuarial accrued liability amount calculated
51.20under item (iii) over a period of 30 years from the end of the plan year in which the
51.21applicable change is effective must be calculated using the applicable interest assumption
51.22specified in subdivision 8 in effect after any applicable change;
51.23    (v) the level annual dollar or level percentage amortization contribution under item
51.24(iv) must be added to the level annual dollar amortization contribution or level percentage
51.25calculated under item (ii);
51.26    (vi) the period in which the unfunded actuarial accrued liability amount determined
51.27in item (iii) is amortized by the total level annual dollar or level percentage amortization
51.28contribution computed under item (v) must be calculated using the interest assumption
51.29specified in subdivision 8 in effect after any applicable change, rounded to the nearest
51.30integral number of years, but not to exceed 30 years from the end of the plan year in
51.31which the determination of the established date for full funding using the procedure set
51.32forth in this clause is made and not to be less than the period of years beginning in the
51.33plan year in which the determination of the established date for full funding using the
51.34procedure set forth in this clause is made and ending by the date for full funding in effect
51.35before the change; and
52.1    (vii) the period determined under item (vi) must be added to the date as of which
52.2the actuarial valuation was prepared and the date obtained is the new established date
52.3for full funding.
52.4    (d) For the Minneapolis Employees Retirement Fund, the established date for full
52.5funding is June 30, 2020.
52.6    (e) For the general employees retirement plan of the Public Employees Retirement
52.7Association, the established date for full funding is June 30, 2031.
52.8    (f) For the Teachers Retirement Association, the established date for full funding is
52.9June 30, 2037.
52.10    (g) For the correctional state employees retirement plan of the Minnesota State
52.11Retirement System, the established date for full funding is June 30, 2038.
52.12    (h) For the judges retirement plan, the established date for full funding is June
52.1330, 2038.
52.14    (i) For the public employees police and fire retirement plan, the established date
52.15for full funding is June 30, 2038.
52.16    (j) For the St. Paul Teachers Retirement Fund Association, the established date for
52.17full funding is June 30 of the 25th year from the valuation date. In addition to other
52.18requirements of this chapter, the annual actuarial valuation shall contain an exhibit
52.19indicating the funded ratio and the deficiency or sufficiency in annual contributions when
52.20comparing liabilities to the market value of the assets of the fund as of the close of the
52.21most recent fiscal year.
52.22    (k) For the general state employees retirement plan of the Minnesota State
52.23Retirement System, the established date for full funding is June 30, 2040.
52.24(l) For the retirement plans for which the annual actuarial valuation indicates an
52.25excess of valuation assets over the actuarial accrued liability, the valuation assets in
52.26excess of the actuarial accrued liability must be recognized as a reduction in the current
52.27contribution requirements by an amount equal to the amortization of the excess expressed
52.28as a level percentage of pay over a 30-year period beginning anew with each annual
52.29actuarial valuation of the plan.
52.30EFFECTIVE DATE.This section is effective the day following final enactment.

52.31    Sec. 69. Minnesota Statutes 2008, section 356.30, subdivision 1, is amended to read:
52.32    Subdivision 1. Eligibility; computation of annuity. (a) Notwithstanding any
52.33provisions of the laws governing the retirement plans enumerated in subdivision 3, a
52.34person who has met the qualifications of paragraph (b) may elect to receive a retirement
52.35annuity from each enumerated retirement plan in which the person has at least one-half
53.1year of allowable service, based on the allowable service in each plan, subject to the
53.2provisions of paragraph (c).
53.3(b) A person may receive, upon retirement, a retirement annuity from each
53.4enumerated retirement plan in which the person has at least one-half year of allowable
53.5service, and augmentation of a deferred annuity calculated at the appropriate rate under
53.6the laws governing each public pension plan or fund named in subdivision 3, based on
53.7the date of the person's initial entry into public employment from the date the person
53.8terminated all public service if:
53.9(1) the person has allowable service totaling an amount that allows the person to
53.10receive an annuity in any two or more of the enumerated plans;
53.11(2) the person has sufficient allowable service in total that equals or exceeds the
53.12applicable service credit vesting requirement of the retirement plan with the longest
53.13applicable service credit vesting requirement; and
53.14(2) (3) the person has not begun to receive an annuity from any enumerated plan or
53.15the person has made application for benefits from each applicable plan and the effective
53.16dates of the retirement annuity with each plan under which the person chooses to receive
53.17an annuity are within a one-year period.
53.18(c) The retirement annuity from each plan must be based upon the allowable service,
53.19accrual rates, and average salary in the applicable plan except as further specified or
53.20modified in the following clauses:
53.21(1) the laws governing annuities must be the law in effect on the date of termination
53.22from the last period of public service under a covered retirement plan with which the
53.23person earned a minimum of one-half year of allowable service credit during that
53.24employment;
53.25(2) the "average salary" on which the annuity from each covered plan in which
53.26the employee has credit in a formula plan must be based on the employee's highest five
53.27successive years of covered salary during the entire service in covered plans;
53.28(3) the accrual rates to be used by each plan must be those percentages prescribed by
53.29each plan's formula as continued for the respective years of allowable service from one
53.30plan to the next, recognizing all previous allowable service with the other covered plans;
53.31(4) the allowable service in all the plans must be combined in determining eligibility
53.32for and the application of each plan's provisions in respect to reduction in the annuity
53.33amount for retirement prior to normal retirement age; and
53.34(5) the annuity amount payable for any allowable service under a nonformula plan
53.35of a covered plan must not be affected, but such service and covered salary must be used
53.36in the above calculation.
54.1(d) This section does not apply to any person whose final termination from the last
54.2public service under a covered plan was before May 1, 1975.
54.3(e) For the purpose of computing annuities under this section, the accrual rates
54.4used by any covered plan, except the public employees police and fire plan, the judges
54.5retirement fund, and the State Patrol retirement plan, must not exceed the percent specified
54.6in section 356.315, subdivision 4, per year of service for any year of service or fraction
54.7thereof. The formula percentage used by the judges retirement fund must not exceed the
54.8percentage rate specified in section 356.315, subdivision 8, per year of service for any
54.9year of service or fraction thereof. The accrual rate used by the public employees police
54.10and fire plan and the State Patrol retirement plan must not exceed the percentage rate
54.11specified in section 356.315, subdivision 6, per year of service for any year of service or
54.12fraction thereof. The accrual rate or rates used by the legislators retirement plan must not
54.13exceed 2.5 percent, but this limit does not apply to the adjustment provided under section
54.143A.02, subdivision 1 , paragraph (c).
54.15(f) Any period of time for which a person has credit in more than one of the covered
54.16plans must be used only once for the purpose of determining total allowable service.
54.17(g) If the period of duplicated service credit is more than one-half year, or the person
54.18has credit for more than one-half year, with each of the plans, each plan must apply its
54.19formula to a prorated service credit for the period of duplicated service based on a fraction
54.20of the salary on which deductions were paid to that fund for the period divided by the total
54.21salary on which deductions were paid to all plans for the period.
54.22(h) If the period of duplicated service credit is less than one-half year, or when
54.23added to other service credit with that plan is less than one-half year, the service credit
54.24must be ignored and a refund of contributions made to the person in accord with that
54.25plan's refund provisions.
54.26EFFECTIVE DATE.This section is effective the day following final enactment.

54.27    Sec. 70. Minnesota Statutes 2008, section 356.302, subdivision 3, is amended to read:
54.28    Subd. 3. General employee plan eligibility requirements. A disabled member
54.29of a covered retirement plan who has credit for allowable service in a combination of
54.30general employee retirement plans is entitled to a combined service disability benefit
54.31if the member:
54.32(1) is less than the normal retirement age on the date of the application for the
54.33disability benefit;
54.34(2) has become totally and permanently disabled;
55.1(3) has credit for allowable service in any combination of general employee
55.2retirement plans totaling at least three years the number of years required by the applicable
55.3retirement plan with the longest service credit requirement for disability benefit receipt;
55.4(4) has credit for at least one-half year of allowable service with the current general
55.5employee retirement plan before the commencement of the disability;
55.6(5) has at least three continuous years of allowable service credit by the general
55.7employee retirement plan or has at least a total of three years of allowable service credit
55.8by a combination of general employee retirement plans in a 72-month period during
55.9which no interruption of allowable service credit from a termination of employment
55.10exceeded 29 days; and
55.11(6) was not receiving a retirement annuity or disability benefit from any covered
55.12general employee retirement plan at the time of the commencement of the disability.
55.13EFFECTIVE DATE.This section is effective the day following final enactment.

55.14    Sec. 71. Minnesota Statutes 2008, section 356.302, subdivision 4, is amended to read:
55.15    Subd. 4. Public safety plan eligibility requirements. A disabled member of a
55.16covered retirement plan who has credit for allowable service in a combination of public
55.17safety employee retirement plans is entitled to a combined service disability benefit if the
55.18member:
55.19(1) has become occupationally disabled;
55.20(2) has credit for allowable service in any combination of public safety employee
55.21retirement plans totaling at least one year the minimum period of service credit required by
55.22the applicable retirement plan with the longest service credit eligibility requirement for the
55.23receipt of a duty-related disability benefit if the disability is duty-related or totaling at least
55.24three years the minimum period of service credit required by the applicable retirement
55.25plan with the longest service credit eligibility requirement for a disability benefit that is
55.26not duty-related if the disability is not duty-related;
55.27(3) has credit for at least one-half year of allowable service with the current public
55.28safety employee retirement plan before the commencement of the disability; and
55.29(4) was not receiving a retirement annuity or disability benefit from any covered
55.30public safety employee retirement plan at the time of the commencement of the disability.
55.31EFFECTIVE DATE.This section is effective the day following final enactment.

55.32    Sec. 72. Minnesota Statutes 2008, section 356.302, subdivision 5, is amended to read:
56.1    Subd. 5. General and public safety plan eligibility requirements. A disabled
56.2member of a covered retirement plan who has credit for allowable service in a combination
56.3of both a public safety employee retirement plan and general employee retirement plan
56.4must meet the qualifying requirements in subdivisions 3 and 4 to receive a combined
56.5service disability benefit from the applicable general employee and public safety
56.6employee retirement plans, except that the person need only be a member of a covered
56.7retirement plan at the time of the commencement of the disability, that the person must
56.8have allowable service credit for the applicable retirement plan with the longest service
56.9credit eligibility requirement for the receipt of a disability benefit, and that the minimum
56.10allowable service requirements of subdivisions 3, clauses (3) and (5), and 4, clauses (3)
56.11and (4), may be met in any combination of covered retirement plans.
56.12EFFECTIVE DATE.This section is effective the day following final enactment.

56.13    Sec. 73. Minnesota Statutes 2008, section 356.303, subdivision 2, is amended to read:
56.14    Subd. 2. Entitlement; eligibility. Notwithstanding any provision of law to the
56.15contrary governing a covered retirement plan, a person who is the survivor of a deceased
56.16member of a covered retirement plan may receive a combined service survivor benefit
56.17from each covered retirement plan in which the deceased member had credit for at least
56.18one-half year of allowable service if the deceased member:
56.19(1) had credit for sufficient allowable service in any combination of covered
56.20retirement plans to meet any the minimum allowable service credit requirement of the
56.21applicable covered retirement fund with the longest allowable service credit requirement
56.22for qualification for a survivor benefit or annuity;
56.23(2) had credit for at least one-half year of allowable service with the most recent
56.24covered retirement plan before the date of death and was an active member of that covered
56.25retirement plan on the date of death; and
56.26(3) was not receiving a retirement annuity from any covered retirement plan on the
56.27date of death.
56.28EFFECTIVE DATE.This section is effective the day following final enactment.

56.29    Sec. 74. Minnesota Statutes 2008, section 356.315, subdivision 5, is amended to read:
56.30    Subd. 5. Correctional plan members. The applicable benefit accrual rate is 2.4
56.31percent if employed as a correctional state employee before July 1, 2010, or 2.2 percent if
56.32employed as a correctional state employee after June 30, 2010.
56.33EFFECTIVE DATE.This section is effective the day following final enactment.

57.1    Sec. 75. Minnesota Statutes 2009 Supplement, section 356.415, subdivision 1, is
57.2amended to read:
57.3    Subdivision 1. Annual postretirement adjustments; generally. (a) Except as
57.4otherwise provided in subdivisions 1a, 1b, 1c, or 1d, retirement annuity, disability benefit,
57.5or survivor benefit recipients of a covered retirement plan are entitled to a postretirement
57.6adjustment annually on January 1, as follows:
57.7(1) a postretirement increase of 2.5 percent must be applied each year, effective
57.8January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who has
57.9been receiving an annuity or a benefit for at least 12 full months prior to the January 1
57.10increase; and
57.11(2) for each annuitant or benefit recipient who has been receiving an annuity or a
57.12benefit amount for at least one full month, an annual postretirement increase of 1/12 of 2.5
57.13percent for each month that the person has been receiving an annuity or benefit must be
57.14applied, effective on January 1 following the calendar year in which the person has been
57.15retired for less than 12 months.
57.16(b) The increases provided by this section subdivision commence on January 1, 2010.
57.17(c) An increase in annuity or benefit payments under this section must be made
57.18automatically unless written notice is filed by the annuitant or benefit recipient with the
57.19executive director of the covered retirement plan requesting that the increase not be made.
57.20(d) The retirement annuity payable to a person who retires before becoming eligible
57.21for Social Security benefits and who has elected the optional payment as provided in
57.22section 353.29, subdivision 6, or 354.35 must be treated as the sum of a period certain
57.23retirement annuity and a life retirement annuity for the purposes of any postretirement
57.24adjustment. The period certain retirement annuity plus the life retirement annuity must be
57.25the annuity amount payable until age 62 for section 353.29, subdivision 6, or age 62, 65,
57.26or normal retirement age, as selected by the member at retirement, for an annuity amount
57.27payable under section 354.35. A postretirement adjustment granted on the period certain
57.28retirement annuity must terminate when the period certain retirement annuity terminates.
57.29EFFECTIVE DATE.This section is effective the day following final enactment.

57.30    Sec. 76. Minnesota Statutes 2009 Supplement, section 356.415, is amended by adding
57.31subdivisions to read:
57.32    Subd. 1a. Annual postretirement adjustments; Minnesota State Retirement
57.33System-administered plans. (a) Retirement annuity, disability benefit, or survivor benefit
57.34recipients of the legislators retirement plan, the general state employees retirement plan,
57.35the correctional state employees retirement plan, the State Patrol retirement plan, the
58.1elected state officers retirement plan, the unclassified state employees retirement program,
58.2and the judges retirement plan are entitled to a postretirement adjustment annually on
58.3January 1, as follows:
58.4(1) a postretirement increase of two percent must be applied each year, effective on
58.5January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who
58.6has been receiving an annuity or a benefit for at least 18 full months before the January 1
58.7increase; and
58.8(2) for each annuitant or benefit recipient who has been receiving an annuity or
58.9a benefit for at least six full months, an annual postretirement increase of 1/12 of two
58.10percent for each month that the person has been receiving an annuity or benefit must be
58.11applied, effective January 1, following the calendar year in which the person has been
58.12retired for at least six months, but has been retired for less than 18 months.
58.13(b) The increases provided by this subdivision commence on January 1, 2011.
58.14Increases under this subdivision for the general state employees retirement plan, the
58.15correctional state employees retirement plan, the State Patrol retirement plan, or the judges
58.16retirement plan terminate on December 31 of the calendar year in which the actuarial
58.17valuation prepared by the approved actuary under sections 356.214 and 356.215 and the
58.18standards for actuarial work promulgated by the Legislative Commission on Pensions
58.19and Retirement indicates that the market value of assets of the retirement plan equals or
58.20exceeds 90 percent of the actuarial accrued liability of the retirement plan and increases
58.21under subdivision 1 recommence after that date. Increases under this subdivision for
58.22the legislators retirement plan or the elected state officers retirement plan terminate
58.23on December 31 of the calendar year in which the actuarial valuation prepared by the
58.24approved actuary under sections 356.214 and 356.215 and the standards for actuarial work
58.25promulgated by the Legislative Commission on Pensions and Retirement indicates that the
58.26market value of assets of the general state employees retirement plan equals or exceeds
58.2790 percent of the actuarial accrued liability of the retirement plan and increases under
58.28subdivision 1 recommence after that date.
58.29(c) An increase in annuity or benefit payments under this subdivision must be made
58.30automatically unless written notice is filed by the annuitant or benefit recipient with the
58.31executive director of the applicable covered retirement plan requesting that the increase
58.32not be made.
58.33    Subd. 1b. Annual postretirement adjustments; general employees retirement
58.34plan and local government correctional retirement plan of the Public Employees
58.35Retirement Association. (a) Retirement annuity, disability benefit or survivor benefit
58.36recipients of the general employees retirement plan of the Public Employees Retirement
59.1Association and the local government correctional service retirement plan are entitled to a
59.2postretirement adjustment annually on January 1, as follows:
59.3(1) for January 1, 2011, and each successive January 1 until funding stability is
59.4restored for the applicable retirement plan, a postretirement increase of one percent must
59.5be applied each year, effective on January 1, to the monthly annuity or benefit amount of
59.6each annuitant or benefit recipient who has been receiving an annuity or benefit for at least
59.712 full months as of the current June 30;
59.8(2) for January 1, 2011, and each successive January 1 until funding stability is
59.9restored for the applicable retirement plan, for each annuitant or benefit recipient who has
59.10been receiving an annuity or a benefit for at least one full month, but less than 12 full
59.11months as of the current June 30, an annual postretirement increase of 1/12 of one percent
59.12for each month the person has been receiving an annuity or benefit must be applied;
59.13(3) for each January 1 following the restoration of funding stability for the applicable
59.14retirement plan, a postretirement increase of 2.5 percent must be applied each year,
59.15effective January 1, to the monthly annuity or benefit amount of each annuitant or benefit
59.16recipient who has been receiving an annuity or benefit for at least 12 full months as of
59.17the current June 30; and
59.18(4) for each January 1 following restoration of funding stability for the applicable
59.19retirement plan, for each annuity or benefit recipient who has been receiving an annuity or
59.20a benefit for at least one full month, but less than 12 full months as of the current June
59.2130, an annual postretirement increase of 1/12 of 2.5 percent for each month the person
59.22has been receiving an annuity or benefit must be applied.
59.23(b) Funding stability is restored when the market value of assets of the applicable
59.24retirement plan equals or exceeds 90 percent of the actuarial accrued liabilities of the
59.25applicable plan in the most recent prior actuarial valuation prepared under section 356.215
59.26and the standards for actuarial work by the approved actuary retained by the Public
59.27Employees Retirement Association under section 356.214.
59.28(c) If, after applying the increase as provided for in clauses (3) and (4) of this
59.29subdivision, the market value of the applicable retirement plan is determined in the next
59.30subsequent actuarial valuation prepared under section 356.215 to be less than 90 percent
59.31of the actuarial accrued liability of any of the applicable Public Employees Retirement
59.32Association plans, the increase provided in clauses (1) and (2) are to be applied as of the
59.33next successive January until funding stability is again restored.
59.34(d) An increase in annuity or benefit payments under this section must be made
59.35automatically unless written notice is filed by the annuitant or benefit recipient with the
60.1executive director of the Public Employees Retirement Association requesting that the
60.2increase not be made.
60.3(e) The retirement annuity payable to a person who retires before becoming eligible
60.4for Social Security benefits and who has elected the optional payment, as provided in
60.5section 353.29, subdivision 6, must be treated as the sum of a period-certain retirement
60.6annuity and a life retirement annuity for the purposes of any postretirement adjustment.
60.7The period-certain retirement annuity plus the life retirement annuity must be the
60.8annuity amount payable until age 62 for section 353.29, subdivision 6. A postretirement
60.9adjustment granted on the period-certain retirement annuity must terminate when the
60.10period-certain retirement annuity terminates.
60.11    Subd. 1c. Annual postretirement adjustments; PERA-P&F. (a) Retirement
60.12annuity, disability benefit, or survivor benefit recipients of the public employees police
60.13and fire retirement plan are entitled to a postretirement adjustment annually on January
60.141, as follows:
60.15(1) for January 1, 2011, and for January 1, 2012, for each annuitant or benefit
60.16recipient who has been receiving the annuity or benefit for at least 12 full months as of the
60.17immediate preceding June 30, an amount equal to one percent in each year;
60.18(2) for January 1, 2011, and for January 1, 2012, for each annuitant or benefit
60.19recipient who has been receiving the annuity or benefit for at least one full month as of the
60.20immediate preceding June 30, an amount equal to 1/12 of one percent in each year;
60.21(3) for January 1, 2013, and each successive January 1 that follows the loss of
60.22funding stability as defined under paragraph (b) until funding stability as defined under
60.23paragraph (b) is again restored, for each annuitant or benefit recipient who has been
60.24receiving the annuity or benefit for at least 12 full months as of the immediate preceding
60.25June 30, an amount equal to the percentage increase in the Consumer Price Index for urban
60.26wage earners and clerical workers-all items published by the Bureau of Labor Statistics of
60.27the United States Department of Labor between the immediate preceding June 30 and the
60.28June 30 occurring 12 months previous, but not to exceed 1.5 percent;
60.29(4) for January 1, 2013, and each successive January 1 that follows the loss of
60.30funding stability as defined under paragraph (b) until funding stability as defined under
60.31paragraph (b) is again restored, for each annuitant or benefit recipient who has been
60.32receiving the annuity or benefit for at least one full month as of the immediate preceding
60.33June 30, an amount equal to 1/12 of the percentage increase in the Consumer Price Index
60.34for urban wage earners and clerical workers-all items published by the Bureau of Labor
60.35Statistics of the United States Department of Labor between the immediate preceding
60.36June 30 and the June 30 occurring 12 months previous for each full month of annuity
61.1or benefit receipt, but not to exceed 1/12 of 1.5 percent for each full month of annuity
61.2or benefit receipt;
61.3(5) for each January 1 following the restoration of funding stability as defined
61.4under paragraph (b) and during the continuation of funding stability as defined under
61.5paragraph (b), for each annuitant or benefit recipient who has been receiving the annuity
61.6or benefit for at least 12 full months as of the immediate preceding June 30, an amount
61.7equal to the percentage increase in the Consumer Price Index for urban wage earners and
61.8clerical workers-all items published by the Bureau of Labor Statistics of the United States
61.9Department of Labor between the immediate preceding June 30 and the June 30 occurring
61.1012 months previous, but not to exceed 2.5 percent; and
61.11(6) for each January 1 following the restoration of funding stability as defined under
61.12paragraph (b) and during the continuation of funding stability as defined under paragraph
61.13(b), for each annuitant or benefit recipient who has been receiving the annuity or benefit
61.14for at least one full month as of the immediate preceding June 30, an amount equal to
61.151/12 of the percentage increase in the Consumer Price Index for urban wage earners and
61.16clerical workers-all items published by the Bureau of Labor Statistics of the United States
61.17Department of Labor between the immediate preceding June 30 and the June 30 occurring
61.1812 months previous for each full month of annuity or benefit receipt, but not to exceed
61.191/12 of 2.5 percent for each full month of annuity or benefit receipt.
61.20(b) Funding stability is restored when the market value of assets of the public
61.21employees police and fire retirement plan equal or exceed 90 percent of the actuarial
61.22accrued liabilities of the applicable plan in the most recent prior actuarial valuation
61.23prepared under section 356.215 and under the standards for actuarial work of the
61.24Legislative Commission and Pensions and Retirement by the approved actuary retained by
61.25the Public Employees Retirement Association under section 356.214.
61.26(c) An increase in annuity or benefit payments under this section must be made
61.27automatically unless written notice is filed by the annuitant or benefit recipient with the
61.28executive director of the Public Employees Retirement Association requesting that the
61.29increase not be made.
61.30    Subd. 1d. Teachers Retirement Association annual postretirement adjustments.
61.31(a) Retirement annuity, disability benefit, or survivor benefit recipients of the Teachers
61.32Retirement Association are entitled to a postretirement adjustment annually on January
61.331, as follows:
61.34(1) for January 1, 2011, and January 1, 2012, no postretirement increase is payable;
61.35(2) for January 1, 2013, and each successive January 1 until funding stability is
61.36restored, a postretirement increase of two percent must be applied each year, effective on
62.1January 1, to the monthly annuity or benefit amount of each annuitant or benefit recipient
62.2who has been receiving an annuity or a benefit for at least 18 full months prior to the
62.3January 1 increase;
62.4(3) for January 1, 2013, and each successive January 1 until funding stability is
62.5restored, for each annuitant or benefit recipient who has been receiving an annuity or
62.6a benefit for at least six full months, an annual postretirement increase of 1/12 of two
62.7percent for each month the person has been receiving an annuity or benefit must be
62.8applied, effective January 1, following the year in which the person has been retired
62.9for less than 12 months;
62.10(4) for each January 1 following the restoration of funding stability, a postretirement
62.11increase of 2.5 percent must be applied each year, effective January 1, to the monthly
62.12annuity or benefit amount of each annuitant or benefit recipient who has been receiving an
62.13annuity or a benefit for at least 18 full months prior to the January 1 increase; and
62.14(5) for each January 1 following the restoration of funding stability, for each
62.15annuitant or benefit recipient who has been receiving an annuity or a benefit for at least
62.16six full months, an annual postretirement increase of 1/12 of 2.5 percent for each month
62.17the person has been receiving an annuity or benefit must be applied, effective January 1,
62.18following the year in which the person has been retired for less than 12 months.
62.19(b) Funding stability is restored when the market value of assets of the Teachers
62.20Retirement Association equals or exceeds 90 percent of the actuarial accrued liabilities of
62.21the Teachers Retirement Association in the most recent prior actuarial valuation prepared
62.22under section 356.215 and the standards for actuarial work by the approved actuary
62.23retained by the Teachers Retirement Association under section 356.214.
62.24(c) An increase in annuity or benefit payments under this section must be made
62.25automatically unless written notice is filed by the annuitant or benefit recipient with the
62.26executive director of the Teachers Retirement Association requesting that the increase
62.27not be made.
62.28(d) The retirement annuity payable to a person who retires before becoming eligible
62.29for Social Security benefits and who has elected the optional payment as provided in
62.30section 354.35 must be treated as the sum of a period-certain retirement annuity and a life
62.31retirement annuity for the purposes of any postretirement adjustment. The period-certain
62.32retirement annuity plus the life retirement annuity must be the annuity amount payable
62.33until age 62, 65, or normal retirement age, as selected by the member at retirement, for an
62.34annuity amount payable under section 354.35. A postretirement adjustment granted on
62.35the period-certain retirement annuity must terminate when the period-certain retirement
62.36annuity terminates.
63.1EFFECTIVE DATE.This section is effective the day following final enactment.

63.2    Sec. 77. Minnesota Statutes 2008, section 356.47, subdivision 3, is amended to read:
63.3    Subd. 3. Payment. (a) Beginning one year after the reemployment withholding
63.4period ends relating to the reemployment that gave rise to the limitation, and the filing of a
63.5written application, the retired member is entitled to the payment, in a lump sum, of the
63.6value of the person's amount under subdivision 2, plus annual compound interest at. For
63.7the general state employees retirement plan, for the correctional state employees retirement
63.8plan, the general employees retirement plan of the Public Employees Retirement
63.9Association, the public employees police and fire retirement plan, the local government
63.10correctional employees retirement plan, and the teachers retirement plan, the annual
63.11interest rate is six percent from the date on which the amount was deducted from the
63.12retirement annuity to the date of payment or until January 1, 2011, whichever is earlier, and
63.13no interest after January 1, 2011. For the Duluth Teachers Retirement Fund Association,
63.14the annual interest is six percent from the date on which the amount was deducted from the
63.15retirement annuity to the date of payment or until June 30, 2010, whichever is earlier, and
63.16no interest after June 30, 2010. For the St. Paul Teachers Retirement Fund Association,
63.17the annual interest is the compound annual rate of six percent from the date that the
63.18amount was deducted from the retirement annuity to the date of payment.
63.19    (b) The written application must be on a form prescribed by the chief administrative
63.20officer of the applicable retirement plan.
63.21    (c) If the retired member dies before the payment provided for in paragraph (a) is
63.22made, the amount is payable, upon written application, to the deceased person's surviving
63.23spouse, or if none, to the deceased person's designated beneficiary, or if none, to the
63.24deceased person's estate.
63.25    (d) In lieu of the direct payment of the person's amount under subdivision 2, on
63.26or after the payment date under paragraph (a), if the federal Internal Revenue Code so
63.27permits, the retired member may elect to have all or any portion of the payment amount
63.28under this section paid in the form of a direct rollover to an eligible retirement plan as
63.29defined in section 402(c) of the federal Internal Revenue Code that is specified by the
63.30retired member. If the retired member dies with a balance remaining payable under this
63.31section, the surviving spouse of the retired member, or if none, the deceased person's
63.32designated beneficiary, or if none, the administrator of the deceased person's estate may
63.33elect a direct rollover under this paragraph.
63.34EFFECTIVE DATE.This section is effective the day following final enactment.

64.1    Sec. 78. Minnesota Statutes 2009 Supplement, section 423A.02, subdivision 3, is
64.2amended to read:
64.3    Subd. 3. Reallocation of amortization or supplementary amortization state
64.4aid. (a) Seventy percent of the difference between $5,720,000 and the current year
64.5amortization aid and supplemental amortization aid distributed under subdivisions 1
64.6and 1a that is not distributed for any reason to a municipality for use by a local police
64.7or salaried fire relief association must be distributed by the commissioner of revenue
64.8according to this paragraph. The commissioner shall distribute 50 percent of the amounts
64.9derived under this paragraph to the Teachers Retirement Association, ten percent to the
64.10Duluth Teachers Retirement Fund Association, and 40 percent to the St. Paul Teachers
64.11Retirement Fund Association to fund the unfunded actuarial accrued liabilities of the
64.12respective funds. These payments shall be made on or before June 30 each fiscal year. If
64.13the St. Paul Teachers Retirement Fund Association becomes fully funded, its eligibility
64.14for this aid ceases. Amounts remaining in the undistributed balance account at the end of
64.15the biennium if aid eligibility ceases cancel to the general fund.
64.16    (b) In order to receive amortization and supplementary amortization aid under
64.17paragraph (a), Independent School District No. 625, St. Paul, must make contributions
64.18to the St. Paul Teachers Retirement Fund Association in accordance with the following
64.19schedule:
64.20
Fiscal Year
Amount
64.21
1996
$
0
64.22
1997
$
0
64.23
1998
$
200,000
64.24
1999
$
400,000
64.25
2000
$
600,000
64.26
2001 and thereafter
$
800,000
64.27    (c) Special School District No. 1, Minneapolis, and the city of Minneapolis must
64.28each make contributions to the Teachers Retirement Association in accordance with the
64.29following schedule:
64.30
64.31
Fiscal Year
City amount
School district
amount
64.32
1996
$
0
$
0
64.33
1997
$
0
$
0
64.34
1998
$
250,000
$
250,000
64.35
1999
$
400,000
$
400,000
64.36
2000
$
550,000
$
550,000
64.37
2001
$
700,000
$
700,000
65.1
2002
$
850,000
$
850,000
65.2
2003 and thereafter
$
1,000,000
$
1,000,000
65.3    (d) Money contributed under paragraph (a) and either paragraph (b) or (c), as
65.4applicable, must be credited to a separate account in the applicable teachers retirement
65.5fund and may not be used in determining any benefit increases. The separate account
65.6terminates for a fund when the aid payments to the fund under paragraph (a) cease.
65.7    (e) (d) Thirty percent of the difference between $5,720,000 and the current year
65.8amortization aid and supplemental amortization aid under subdivisions 1 and 1a that is not
65.9distributed for any reason to a municipality for use by a local police or salaried firefighter
65.10relief association must be distributed under section 69.021, subdivision 7, paragraph (d),
65.11as additional funding to support a minimum fire state aid amount for volunteer firefighter
65.12relief associations.
65.13EFFECTIVE DATE.This section is effective the day following final enactment.

65.14    Sec. 79. LOCAL RETIREMENT FUND INVESTMENT AUTHORITIES
65.15STUDY.
65.16A study group consisting of representatives from pension plans subject to Minnesota
65.17Statutes, section 356A.06, subdivision 6 or 7, shall be convened by the State Auditor to
65.18study investment-related provisions, authorities, and limitations under Minnesota Statutes,
65.19chapter 356A, and related sections of other chapters. Administrative support for the study
65.20group shall be provided by the State Auditor. The study group shall prepare a report to
65.21include an assessment of the effectiveness of current statutory prescriptions, options for
65.22change, and recommendations for consideration by the governor and the legislature during
65.23the 2011 legislative session. The report will be provided no later than January 15, 2011, to
65.24the executive director of the Legislative Commission on Pensions and Retirement, the
65.25chair and ranking minority caucus member of the Senate State and Local Government
65.26Operations and Oversight Committee, and the chair and ranking minority caucus member
65.27of the House State and Local Government Operations Reform, Technology and Elections
65.28Committee.
65.29EFFECTIVE DATE.This section is effective the day following final enactment.

65.30    Sec. 80. BYLAW AUTHORIZATION.
65.31Consistent with the requirements of Minnesota Statutes, section 354A.12,
65.32subdivision 4, the board of the Duluth Teachers Retirement Fund Association is authorized
66.1to revise the bylaws or articles of incorporation so that the requirements of this act apply
66.2to the old law coordinated program.
66.3EFFECTIVE DATE.This section is effective the day following final enactment.

66.4    Sec. 81. REPEALER.
66.5Minnesota Statutes 2008, section 354A.27, subdivision 1, is repealed.
66.6EFFECTIVE DATE.This section is effective July 1, 2010.

66.7ARTICLE 2
66.8MSRS ADMINISTRATIVE PROVISIONS

66.9    Section 1. Minnesota Statutes 2008, section 352.01, subdivision 2a, is amended to read:
66.10    Subd. 2a. Included employees. (a) "State employee" includes:
66.11    (1) employees of the Minnesota Historical Society;
66.12    (2) employees of the State Horticultural Society;
66.13    (3) employees of the Minnesota Crop Improvement Association;
66.14    (4) employees of the adjutant general who whose salaries are paid from federal funds
66.15and who are not covered by any federal civilian employees retirement system;
66.16    (5) employees of the Minnesota State Colleges and Universities who are employed
66.17under the university or college activities program;
66.18    (6) currently contributing employees covered by the system who are temporarily
66.19employed by the legislature during a legislative session or any currently contributing
66.20employee employed for any special service as defined in subdivision 2b, clause (8);
66.21    (7) employees of the legislature who are appointed without a limit on the duration
66.22of their employment and persons employed or designated by the legislature or by a
66.23legislative committee or commission or other competent authority to conduct a special
66.24inquiry, investigation, examination, or installation;
66.25    (8) trainees who are employed on a full-time established training program
66.26performing the duties of the classified position for which they will be eligible to receive
66.27immediate appointment at the completion of the training period;
66.28    (9) employees of the Minnesota Safety Council;
66.29    (10) any employees who are on authorized leave of absence from the Transit
66.30Operating Division of the former Metropolitan Transit Commission and who are employed
66.31by the labor organization which is the exclusive bargaining agent representing employees
66.32of the Transit Operating Division;
67.1    (11) employees of the Metropolitan Council, Metropolitan Parks and Open Space
67.2Commission, Metropolitan Sports Facilities Commission, or Metropolitan Mosquito
67.3Control Commission, or Metropolitan Radio Board unless excluded under subdivision 2b
67.4or are covered by another public pension fund or plan under section 473.415, subdivision 3;
67.5    (12) judges of the Tax Court;
67.6    (13) personnel who were employed on June 30, 1992, by the University of
67.7Minnesota in the management, operation, or maintenance of its heating plant facilities,
67.8whose employment transfers to an employer assuming operation of the heating plant
67.9facilities, so long as the person is employed at the University of Minnesota heating plant
67.10by that employer or by its successor organization;
67.11    (14) personnel who are employed as seasonal help employees in the classified or
67.12unclassified service employed by the Department of Revenue;
67.13    (15) persons who are employed by the Department of Commerce as a peace officer
67.14in the Insurance Fraud Prevention Division under section 45.0135 who have attained the
67.15mandatory retirement age specified in section 43A.34, subdivision 4;
67.16    (16) employees of the University of Minnesota unless excluded under subdivision
67.172b, clause (3);
67.18    (17) employees of the Middle Management Association whose employment began
67.19after July 1, 2007, and to whom section 352.029 does not apply; and
67.20    (18) employees of the Minnesota Government Engineers Council to whom section
67.21352.029 does not apply.
67.22    (b) Employees specified in paragraph (a), clause (13), are included employees under
67.23paragraph (a) if employer and employee contributions are made in a timely manner in the
67.24amounts required by section 352.04. Employee contributions must be deducted from
67.25salary. Employer contributions are the sole obligation of the employer assuming operation
67.26of the University of Minnesota heating plant facilities or any successor organizations to
67.27that employer.
67.28EFFECTIVE DATE.This section is effective the day following final enactment.

67.29    Sec. 2. Minnesota Statutes 2008, section 352.03, subdivision 4, is amended to read:
67.30    Subd. 4. Duties and powers of board of directors. (a) The board shall:
67.31    (1) elect a chair;
67.32    (2) appoint an executive director;
67.33    (3) establish rules to administer this chapter and chapters 3A, 352B, 352C, 352D,
67.34and 490 and transact the business of the system, subject to the limitations of law;
68.1    (4) consider and dispose of, or take any other action the board of directors deems
68.2appropriate concerning, denials of applications for annuities or disability benefits under
68.3this chapter, chapter 3A, 352B, 352C, 352D, or 490, and complaints of employees and
68.4others pertaining to the retirement of employees and the operation of the system;
68.5    (5) oversee the administration of the state deferred compensation plan established
68.6in section 352.965; and
68.7    (6) oversee the administration of the health care savings plan established in section
68.8352.98 .
68.9    (b) The board shall advise the director on any matters relating to the system and
68.10carrying out functions and purposes of this chapter. The board's advice shall control.
68.11EFFECTIVE DATE.This section is effective the day following final enactment.

68.12    Sec. 3. Minnesota Statutes 2008, section 352.04, subdivision 9, is amended to read:
68.13    Subd. 9. Erroneous deductions, canceled warrants. (a) Deductions taken from the
68.14salary of an employee for the retirement fund in error excess of required amounts must,
68.15upon discovery and verification by the department making the deduction, be refunded to
68.16the employee.
68.17(b) If a deduction for the retirement fund is taken from a salary warrant or check,
68.18and the check is canceled or the amount of the warrant or check returned to the funds of
68.19the department making the payment, the sum deducted, or the part of it required to adjust
68.20the deductions, must be refunded to the department or institution if the department applies
68.21for the refund on a form furnished by the director. The department's payments must
68.22likewise be refunded to the department.
68.23(c) Employee deductions and employer contributions taken in error may be directly
68.24transferred, without interest, to another Minnesota public employee retirement plan by
68.25which the employee is actually covered.
68.26For purposes of this subdivision, a Minnesota public pension plan means a plan
68.27specified in section 356.30, subdivision 3, or the plan governed by chapter 354B.
68.28(c) If erroneous employee deductions and employer contributions are caused by an
68.29error in plan coverage involving the plan and any other plans specified in section 356.99,
68.30that section applies. If the employee should have been covered by the plan governed by
68.31chapter 352D, 353D, 354B or 354D, the employee deductions and employer contributions
68.32taken in error must be directly transferred to the applicable employee's account in the
68.33correct retirement plan, with interest at the rate of 0.71 percent per month, compounded
68.34annually, from the first day of the month following the month in which coverage should
69.1have commenced in the correct defined contribution plan until the end of the month in
69.2which the transfer occurs.
69.3EFFECTIVE DATE.This section is effective July 1, 2010.

69.4    Sec. 4. Minnesota Statutes 2008, section 352.115, subdivision 10, is amended to read:
69.5    Subd. 10. Reemployment of annuitant. (a) Except for salary or wages received
69.6as a temporary employee of the legislature during a legislative session, if any retired
69.7employee again becomes entitled to receive salary or wages from the state, or any
69.8employer who employs state employees as that term is defined in section 352.01,
69.9subdivision 2
, other than salary or wages received as a temporary employee of the
69.10legislature during a legislative session in a position covered by this chapter, the annuity or
69.11retirement allowance shall must cease when the retired employee has earned an amount
69.12equal to the annual maximum earnings allowable for that age for the continued receipt of
69.13full benefit amounts monthly under the federal old age, survivors, and disability insurance
69.14program as set by the secretary of health and human services under United States Code,
69.15title 42, section 403, in any calendar year. If the retired employee has not yet reached the
69.16minimum age for the receipt of Social Security benefits, the maximum earnings for the
69.17retired employee shall be are equal to the annual maximum earnings allowable for the
69.18minimum age for the receipt of Social Security benefits.
69.19(b) The balance of the annual retirement annuity after cessation must be handled or
69.20disposed of as provided in section 356.47.
69.21(c) The annuity must be resumed when state service ends, or, if the retired employee
69.22is still employed at the beginning of the next calendar year, at the beginning of that
69.23calendar year, and payment must again end when the retired employee has earned the
69.24applicable reemployment earnings maximum specified in this subdivision. If the retired
69.25employee is granted a sick leave without pay, but not otherwise, the annuity or retirement
69.26allowance must be resumed during the period of sick leave.
69.27(d) No payroll deductions for the retirement fund may be made from the earnings of
69.28a reemployed retired employee.
69.29(e) No change shall may be made in the monthly amount of an annuity or retirement
69.30allowance because of the reemployment of an annuitant.
69.31(f) If a reemployed annuitant whose annuity is suspended under paragraph (a)
69.32is having insurance premium amounts withheld under section 356.87, subdivision 2,
69.33insurance premium amounts must continue to be withheld and transferred from the
69.34suspended portion of the annuity. The balance of the annual retirement annuity after
70.1cessation, after deduction of the insurance premium amounts, must be treated as specified
70.2in paragraph (b).
70.3EFFECTIVE DATE.This section is effective January 1, 2010.

70.4    Sec. 5. Minnesota Statutes 2008, section 352.91, is amended by adding a subdivision
70.5to read:
70.6    Subd. 6. Correction of plan coverage errors. If erroneous employee deductions
70.7and employer contributions are caused by an error in plan coverage involving the
70.8correctional state employees retirement plan and any other plan specified in section
70.9356.99, that section applies.
70.10EFFECTIVE DATE.This section is effective July 1, 2010.

70.11    Sec. 6. Minnesota Statutes 2008, section 352.965, subdivision 1, is amended to read:
70.12    Subdivision 1. Establishment. (a) The Minnesota state deferred compensation plan
70.13is established. For purposes of this section, "plan" means the Minnesota state deferred
70.14compensation plan, unless the context clearly indicates otherwise. The Minnesota State
70.15Retirement System shall administer the plan.
70.16    (b) The purpose of the plan is to provide a means for a public employee to contribute
70.17a portion of the employee's compensation to a tax-deferred investment account. The plan
70.18is an eligible tax-deferred compensation plan under section 457(b) of the Internal Revenue
70.19Code, United States Code, title 26, section 457(b), and the applicable regulations under
70.20Code of Federal Regulations, title 26, parts 1.457-3 to 1.457-10.
70.21    (c) The board of directors of the Minnesota State Retirement System is the plan
70.22trustee and plan sponsor. The board's executive director is the plan administrator. Fiduciary
70.23activities of the plan must be undertaken in a manner consistent with chapter 356A.
70.24    (d) The executive director, with the approval of the board of directors, shall
70.25adopt and amend, as required to maintain tax-qualified status, a written plan document
70.26specifying the material terms and conditions for eligibility, benefits, applicable limitations,
70.27and the time and form under which benefit distributions can be made. With the approval
70.28of the board of directors, the executive director may also establish policies and procedures
70.29necessary for the administration of the deferred compensation plan.
70.30    (e) The plan document shall must include provisions that are necessary to cause the
70.31plan to be an eligible deferred compensation plan within the meaning of section 457(b) of
70.32the Internal Revenue Code. The plan document may provide additional administrative and
70.33substantive provisions consistent with state law, provided that those provisions will do
71.1not cause the plan to fail to be an eligible deferred compensation plan within the meaning
71.2of section 457(b) of the Internal Revenue Code and may include provisions for certain
71.3optional features and services.
71.4    (f) The board of directors may authorize the executive director to establish and
71.5administer a Roth 457 plan if authorized by the Internal Revenue Code or a Roth
71.6individual retirement account as defined under section 408A of the Internal Revenue Code.
71.7    (g) All amounts contributed to the deferred compensation plan and all earnings
71.8on those amounts must be held in trust, in custodial accounts, or in qualifying annuity
71.9contracts for the exclusive benefit of the plan participants and beneficiaries, as required by
71.10section 457(g) of the Internal Revenue Code and in accordance with sections 356.001 and
71.11356A.06, subdivision 1 .
71.12    (h) The information and data maintained in the accounts of the participants and
71.13beneficiaries are private data and shall must not be disclosed to anyone other than the
71.14participant or beneficiary pursuant to a court order or pursuant to under section 356.49.
71.15    (i) The plan document is not subject to the rule adoption process under the
71.16Administrative Procedures Act, including section 14.386, but must conform with
71.17applicable federal and state laws.
71.18EFFECTIVE DATE.This section is effective the day following final enactment.

71.19    Sec. 7. Minnesota Statutes 2008, section 352.965, subdivision 2, is amended to read:
71.20    Subd. 2. Right to participate in deferred compensation plan. (a) At the request
71.21of an officer or employee of the state, an officer or employee of a political subdivision, or
71.22an employee covered by a retirement fund in section 356.20, subdivision 2, the appointing
71.23authority shall defer the payment of part of the compensation of the public officer or
71.24employee through payroll deduction.
71.25(b) The amount to be deferred must be as provided in a written an agreement
71.26between the officer or employee and the public employer plan sponsor. The agreement
71.27must be in a form specified by the executive director of the Minnesota State Retirement
71.28System and must be consistent with the requirements for an eligible plan under federal
71.29and state tax laws, regulations, and rulings.
71.30EFFECTIVE DATE.This section is effective the day following final enactment.

71.31    Sec. 8. Minnesota Statutes 2009 Supplement, section 352B.011, subdivision 3, is
71.32amended to read:
71.33    Subd. 3. Allowable service. (a) "Allowable service" means:
72.1(1) service in a month during which a member is paid a salary from which a member
72.2contribution is deducted, deposited, and credited in the State Patrol retirement fund;
72.3(2) for members defined in subdivision 10, clause (1), service in any month for
72.4which payments have been made to the State Patrol retirement fund under law; and
72.5(3) for members defined in subdivision 10, clauses (2) and (3), service for which
72.6payments have been made to the State Patrol retirement fund under law, service for which
72.7payments were made to the State Police officers retirement fund under law after June
72.830, 1961, and all prior service which was credited to a member for service on or before
72.9June 30, 1961.;
72.10(4) any period of authorized leave of absence without pay that does not exceed one
72.11year and for which the employee obtains credit by payment to the fund under section
72.12352B.013; and
72.13(5) eligible periods of uniformed service for which the member obtained service
72.14credit by payment under section 352B.086 to the fund.
72.15(b) Allowable service also includes any period of absence from duty by a member
72.16who, by reason of injury incurred in the performance of duty, is temporarily disabled and
72.17for which disability the state is liable under the workers' compensation law, until the date
72.18authorized by the executive director for commencement of payment of a disability benefit
72.19or until the date of a return to employment.
72.20EFFECTIVE DATE.This section is effective the day following final enactment.

72.21    Sec. 9. [352B.013] AUTHORIZED LEAVE OF ABSENCE SERVICE CREDIT
72.22PURCHASE PROCEDURE.
72.23    Subdivision 1. Application. This section specifies the procedure for purchasing
72.24service credit in the state patrol retirement plan for authorized leaves of absence under
72.25section 352B.011, subdivision 3, unless an alternative payment procedure is specified in
72.26law for a particular form of leave or break in service.
72.27    Subd. 2. Purchase procedure. (a) An employee covered by the plan specified in
72.28this chapter may purchase credit for allowable service in the plan for a period specified
72.29in subdivision 1 if the employee makes a payment as specified in paragraph (b) or (c),
72.30whichever applies. The employing unit, at its option, may pay the employer portion of the
72.31amount specified in paragraph (b) on behalf of its employees.
72.32(b) If payment is received by the executive director within one year from the date
72.33the employee returned to work following the authorized leave, the payment amount is
72.34equal to the employee and employer contribution rates specified in section 352B.02 at the
72.35end of the leave period multiplied by the employee's hourly rate of salary on the date of
73.1return from the leave of absence and by the days and months of the leave of absence for
73.2which the employee is eligible for allowable service credit. The payment must include
73.3compound interest at a monthly rate of 0.71 percent from the last day of the leave period
73.4until the last day of the month in which payment is received. If payment is received by the
73.5executive director after one year from the date the employee returned to work following
73.6the authorized leave, the payment amount is the amount determined under section
73.7356.551. Payment under this paragraph must be made before the date of termination from
73.8public employment covered under this chapter.
73.9(c) If the employee terminates employment covered by this chapter during the leave
73.10or following the leave rather than returning to covered employment, payment must
73.11be received by the executive director within 30 days after the termination date. The
73.12payment amount is equal to the employee and employer contribution rates specified in
73.13section 352B.02 on the day prior to the termination date, multiplied by the employee's
73.14hourly rate of salary on that date and by the days and months of the leave of absence
73.15prior to termination.
73.16EFFECTIVE DATE.This section is effective the day following final enactment.

73.17    Sec. 10. Minnesota Statutes 2008, section 352B.02, is amended by adding a
73.18subdivision to read:
73.19    Subd. 3. Correction of plan coverage errors. If erroneous employee deductions
73.20and employer contributions are caused by an error in plan coverage involving the state
73.21patrol retirement plan and any other plan specified in section 356.99, that section applies.
73.22EFFECTIVE DATE.This section is effective July 1, 2010.

73.23    Sec. 11. Minnesota Statutes 2008, section 353.27, subdivision 7a, is amended to read:
73.24    Subd. 7a. Deductions or contributions transmitted by error. (a) If employee
73.25deductions and employer contributions were erroneously transmitted to the association,
73.26but should have been transmitted to another Minnesota public pension a plan covered by
73.27chapter 352D, 353D, 354B, or 354D, the executive director shall transfer the erroneous
73.28employee deductions and employer contributions to the appropriate retirement fund or
73.29individual account, as applicable, without interest. The time limitations specified in
73.30subdivisions 7 and 12 do not apply. The transfer to the applicable defined contribution
73.31plan account must include interest at the rate of 0.71 percent per month, compounded
73.32annually, from the first day of the month following the month in which coverage should
74.1have commenced in the defined contribution plan until the end of the month in which
74.2the transfer occurs.
74.3(b) For purposes of this subdivision, a Minnesota public pension plan means a
74.4plan specified in section 356.30, subdivision 3, or the plans governed by chapters 353D
74.5and 354B.
74.6(c) (b) A potential transfer under paragraph (a) that is reasonably determined to
74.7cause the plan to fail to be a qualified plan under section 401(a) of the federal Internal
74.8Revenue Code, as amended, must not be made by the executive director of the association.
74.9Within 30 days after being notified by the Public Employees Retirement Association of
74.10an unmade potential transfer under this paragraph, the employer of the affected person
74.11must transmit an amount representing the applicable salary deductions and employer
74.12contributions, without interest, to the retirement fund of the appropriate Minnesota public
74.13pension plan, or to the applicable individual account if the proper coverage is by a defined
74.14contribution plan. The association must provide the employing unit a credit for the amount
74.15of the erroneous salary deductions and employer contributions against future contributions
74.16from the employer. If the employing unit receives a credit under this paragraph, the
74.17employing unit is responsible for refunding to the applicable employee any amount that
74.18had been erroneously deducted from the person's salary.
74.19(c) If erroneous employee deductions and employer contributions reflect a plan
74.20coverage error involving any Public Employees Retirement Association plan specified in
74.21section 356.99 and any other plan specified in that section, section 356.99 applies.
74.22EFFECTIVE DATE.This section is effective July 1, 2010.

74.23    Sec. 12. Minnesota Statutes 2008, section 353.37, subdivision 3a, is amended to read:
74.24    Subd. 3a. Disposition of suspension or reduction amount. (a) The balance of
74.25the annual retirement annuity after suspension or the amount of the retirement annuity
74.26reduction must be handled or disposed of as provided in section 356.47.
74.27(b) If a reemployed annuitant whose annuity is suspended is having insurance
74.28premium amounts withheld under section 356.87, subdivision 2, insurance premium
74.29amounts must continue to be withheld and transferred from the suspended portion of the
74.30annuity. The balance of the annual retirement annuity after cessation, after deduction of
74.31the insurance premium amounts, must be treated as specified in paragraph (a).
74.32EFFECTIVE DATE.This section is effective January 1, 2010.

74.33    Sec. 13. Minnesota Statutes 2008, section 354.42, subdivision 7, is amended to read:
75.1    Subd. 7. Erroneous salary deductions or direct payments. (a) Any deductions
75.2taken from the salary of an employee for the retirement fund in error excess of amounts
75.3required must be refunded to the employee upon the discovery of the error and after the
75.4verification of the error by the employing unit making the deduction. The corresponding
75.5excess employer contribution and excess additional employer contribution amounts
75.6attributable to the erroneous salary deduction must be refunded to the employing unit.
75.7(b) If salary deductions and employer contributions were erroneously transmitted
75.8to the retirement fund and should have been transmitted to another Minnesota public
75.9pension the plan covered by chapter 352D, 353D, 354B, or 354D, the executive director
75.10must transfer these salary deductions and employer contributions to the account of the
75.11appropriate public pension fund without interest. For purposes of this paragraph, a
75.12Minnesota public pension plan means a plan specified in section 356.30, subdivision 3,
75.13or the plan governed by chapter 354B. person under the applicable plan. The transfer to
75.14the applicable defined contribution plan account must include interest at the rate of 0.71
75.15percent per month, compounded annually, from the first day of the month following the
75.16month in which coverage should have commenced in the defined contribution plan until
75.17the end of the month in which the transfer occurs.
75.18(c) A potential transfer under paragraph (b) that would cause the plan to fail to
75.19be a qualified plan under section 401(a) of the Internal Revenue Code, as amended,
75.20must not be made by the executive director. Within 30 days after being notified by the
75.21Teachers Retirement Association of an unmade potential transfer under this paragraph,
75.22the employer of the affected person must transmit an amount representing the applicable
75.23salary deductions and employer contributions, without interest, to the retirement fund of
75.24the appropriate Minnesota public pension plan fund account of the applicable person under
75.25the appropriate plan. The retirement association must provide a credit for the amount of
75.26the erroneous salary deductions and employer contributions against future contributions
75.27from the employer.
75.28(d) If a salary warrant or check from which a deduction for the retirement fund was
75.29taken has been canceled or the amount of the warrant or if a check has been returned to
75.30the funds of the employing unit making the payment, a refund of the amount deducted,
75.31or any portion of it that is required to adjust the salary deductions, must be made to the
75.32employing unit.
75.33(e) Erroneous direct payments of member-paid contributions or erroneous salary
75.34deductions that were not refunded during the regular payroll cycle processing must be
75.35refunded to the member, plus interest computed using the rate and method specified in
75.36section 354.49, subdivision 2.
76.1(f) Any refund under this subdivision that would cause the plan to fail to be a
76.2qualified plan under section 401(a) of the Internal Revenue Code, as amended, may not
76.3be refunded and instead must be credited against future contributions payable by the
76.4employer. The employer is responsible for refunding to the applicable employee any
76.5amount that was erroneously deducted from the salary of the employee, with interest as
76.6specified in paragraph (e).
76.7(g) If erroneous employee deductions and employer contributions are caused by an
76.8error in plan coverage involving the plan and any other plan specified in section 356.99,
76.9that section applies.
76.10EFFECTIVE DATE.This section is effective July 1, 2010.

76.11    Sec. 14. Minnesota Statutes 2008, section 354A.12, is amended by adding a
76.12subdivision to read:
76.13    Subd. 6a. Erroneous salary deductions or direct payments. If erroneous
76.14employee deductions and employer contributions reflect a plan coverage error involving
76.15any plan covered by the this chapter and any plan specified in section 356.99, that section
76.16applies.
76.17EFFECTIVE DATE.This section is effective July 1, 2010.

76.18    Sec. 15. Minnesota Statutes 2008, section 356.24, subdivision 1, is amended to read:
76.19    Subdivision 1. Restriction; exceptions. (a) It is unlawful for a school district
76.20or other governmental subdivision or state agency to levy taxes for, or to contribute
76.21public funds to a supplemental pension or deferred compensation plan that is established,
76.22maintained, and operated in addition to a primary pension program for the benefit of the
76.23governmental subdivision employees other than:
76.24    (1) to a supplemental pension plan that was established, maintained, and operated
76.25before May 6, 1971;
76.26    (2) to a plan that provides solely for group health, hospital, disability, or death
76.27benefits;
76.28    (3) to the individual retirement account plan established by chapter 354B;
76.29    (4) to a plan that provides solely for severance pay under section 465.72 to a retiring
76.30or terminating employee;
76.31    (5) for employees other than personnel employed by the Board of Trustees of the
76.32Minnesota State Colleges and Universities and covered under the Higher Education
76.33Supplemental Retirement Plan under chapter 354C, but including city managers covered
77.1by an alternative retirement arrangement under section 353.028, subdivision 3, paragraph
77.2(a), or by the defined contribution plan of the Public Employees Retirement Association
77.3under section 353.028, subdivision 3, paragraph (b), if the supplemental plan coverage is
77.4provided for in a personnel policy of the public employer or in the collective bargaining
77.5agreement between the public employer and the exclusive representative of public
77.6employees in an appropriate unit or in the individual employment contract between a city
77.7and a city manager, and if for each available investment all fees and historic rates of return
77.8for the prior one-, three-, five-, and ten-year periods, or since inception, are disclosed in an
77.9easily comprehended document not to exceed two pages, in an amount matching employee
77.10contributions on a dollar for dollar basis, but not to exceed an employer contribution of
77.11one-half of the available elective deferral permitted per year per employee, under the
77.12Internal Revenue Code:
77.13    (i) to the state of Minnesota deferred compensation plan under section 352.965;
77.14    (ii) in payment of the applicable portion of the contribution made to any investment
77.15eligible under section 403(b) of the Internal Revenue Code, if the employing unit has
77.16complied with any applicable pension plan provisions of the Internal Revenue Code with
77.17respect to the tax-sheltered annuity program during the preceding calendar year; or
77.18    (iii) any other deferred compensation plan offered by the employer under section
77.19457 of the Internal Revenue Code;
77.20    (6) for personnel employed by the Board of Trustees of the Minnesota State Colleges
77.21and Universities and not covered by clause (5), to the supplemental retirement plan under
77.22chapter 354C, if the supplemental plan coverage is provided for in a personnel policy
77.23or in the collective bargaining agreement of the public employer with the exclusive
77.24representative of the covered employees in an appropriate unit, in an amount matching
77.25employee contributions on a dollar for dollar basis, but not to exceed an employer
77.26contribution of $2,700 a year for each employee;
77.27    (7) to a supplemental plan or to a governmental trust to save for postretirement
77.28health care expenses qualified for tax-preferred treatment under the Internal Revenue
77.29Code, if the supplemental plan coverage is provided for in a personnel policy or in the
77.30collective bargaining agreement of a public employer with the exclusive representative of
77.31the covered employees in an appropriate unit;
77.32    (8) to the laborers national industrial pension fund or to a laborers local pension
77.33fund for the employees of a governmental subdivision who are covered by a collective
77.34bargaining agreement that provides for coverage by that fund and that sets forth a fund
77.35contribution rate, but not to exceed an employer contribution of $5,000 per year per
77.36employee;
78.1    (9) to the plumbers and pipefitters national pension fund or to a plumbers and
78.2pipefitters local pension fund for the employees of a governmental subdivision who are
78.3covered by a collective bargaining agreement that provides for coverage by that fund and
78.4that sets forth a fund contribution rate, but not to exceed an employer contribution of
78.5$5,000 per year per employee;
78.6    (10) to the international union of operating engineers pension fund for the employees
78.7of a governmental subdivision who are covered by a collective bargaining agreement that
78.8provides for coverage by that fund and that sets forth a fund contribution rate, but not to
78.9exceed an employer contribution of $5,000 per year per employee;
78.10    (11) to a supplemental plan organized and operated under the federal Internal
78.11Revenue Code, as amended, that is wholly and solely funded by the employee's
78.12accumulated sick leave, accumulated vacation leave, and accumulated severance pay;
78.13    (12) to the International Association of Machinists national pension fund for the
78.14employees of a governmental subdivision who are covered by a collective bargaining
78.15agreement that provides for coverage by that fund and that sets forth a fund contribution
78.16rate, but not to exceed an employer contribution of $5,000 per year per employee; or
78.17    (13) for employees of United Hospital District, Blue Earth, to the state of Minnesota
78.18deferred compensation program, if the employee makes a contribution, in an amount that
78.19does not exceed the total percentage of covered salary under section 353.27, subdivisions
78.203 and 3a.
78.21    (b) No governmental subdivision may make a contribution to a deferred
78.22compensation plan operating under section 457 of the Internal Revenue Code for volunteer
78.23or emergency on-call firefighters in lieu of providing retirement coverage under the federal
78.24Old Age, Survivors, and Disability Insurance Program.
78.25EFFECTIVE DATE.This section is effective the day following final enactment.

78.26    Sec. 16. Minnesota Statutes 2008, section 356.50, subdivision 4, is amended to read:
78.27    Subd. 4. Annuity repayment. Notwithstanding subdivisions 1 and 2, if after being
78.28discharged, the person commences receipt of an annuity from the applicable plan, and it is
78.29later determined that the person was wrongfully discharged, the person shall repay the
78.30annuity received in a lump sum within 60 days of receipt of the back pay award. If the
78.31annuity is not repaid, the person is not entitled to reinstatement in the applicable plan as
78.32an active member, the person is not authorized to make payments under subdivision 2,
78.33paragraph (a), and, for subsequent employment with the employer, the person shall be
78.34treated as a reemployed annuitant.
79.1EFFECTIVE DATE.This section is effective the day following final enactment.
79.2CORRECTION OF PLAN COVERAGE ERRORS

79.3    Sec. 17. [356.99] CORRECTION OF ERRONEOUS DEFINED BENEFIT PLAN
79.4COVERAGE.
79.5    Subdivision 1. Definitions. (a) For purposes of this section, the terms in paragraphs
79.6(b) to (e) have the meanings given them.
79.7(b) "Chief administrative officer" means the person selected or elected by the
79.8governing board of a covered pension plan with primary responsibility to administer the
79.9covered pension plan, or that person's designee or representative.
79.10(c) "Covered pension plan" means a plan enumerated in section 356.30, subdivision
79.113, except clauses (3), (5), (6), and (11).
79.12(d) "Governing board" means the governing board of the Minnesota State Retirement
79.13System, the Public Employees Retirement Association, the Teachers Retirement
79.14Association, the Duluth Teachers Retirement Fund Association, or the St. Paul Teachers
79.15Retirement Fund Association.
79.16(e) "Member" means an active plan member in a covered pension plan.
79.17    Subd. 2. Treatment of terminated employee coverage error. Any person
79.18who terminated the erroneously covered service before a chief administrative officer
79.19determined the covered pension plan coverage was in error retains the coverage with the
79.20plan that originally credited the service.
79.21    Subd. 3. Active employee correction of prospective service coverage. Upon
79.22determination by a chief administrative officer that a member is covered by the wrong
79.23pension plan, the employer must stop remitting the erroneous employee deductions and
79.24employer contributions and report the employee to the correct covered pension plan for all
79.25subsequent service.
79.26    Subd. 4. Active employee treatment of past service. Any plan member, with past
79.27service credited in an erroneous plan, retains the coverage for that past service with the
79.28plan that originally credited that service if the reporting error began earlier than two
79.29fiscal years prior to the current fiscal year in which the error was determined by the chief
79.30administrative officer. If the reporting error began within two fiscal years prior to the
79.31current fiscal year, the pension plan coverage for that past service must be corrected as
79.32provided in subdivision 5.
79.33    Subd. 5. Past service transfer procedure. (a) For cases under subdivision 4
79.34requiring correction of prior service coverage, on behalf of the applicable member the
79.35chief administrative officer of the covered pension plan fund that has received erroneous
80.1employee deductions and employer contributions must transfer to the appropriate covered
80.2retirement plan fund an amount which is the lesser of all contributions made by or on
80.3behalf of the member for the period of erroneous membership, or the specific amount
80.4requested by the chief administrative officer of the other covered pension plan which
80.5represents the employee deductions and employer contributions that would have been
80.6made had the member been properly reported.
80.7(b) If excess employee deductions remain in the member's account after the transfer
80.8of funds, the remaining erroneous amount must be refunded to the person with interest
80.9at the rate provided under the general refund law of the applicable covered pension
80.10plan. The chief administrative officer must also return any remaining excess employer
80.11contributions by providing to the employer a credit against future contributions payable by
80.12that employer.
80.13(c) If the contributions transferred to the correct covered pension plan fund are less
80.14than the amounts required for the period being corrected, the chief administrative officer
80.15of the correct covered pension plan fund must collect the remaining employee deductions
80.16and employer contributions from the employer under laws for recovering deficient
80.17contributions applicable to the correct covered pension plan, except that no interest is
80.18chargeable if the additional amounts due under this paragraph are received by the chief
80.19administrative officer within 30 days of notifying the employer of the amount due.
80.20(d) A potential transfer under this section that would cause a plan to fail to be a
80.21qualified plan under section 401(a) of the Internal Revenue Code, as amended, must not be
80.22made. Within 30 days after being notified by a chief administrative officer of an unmade
80.23potential transfer under this section, the employer of the member must transmit an amount
80.24representing the applicable salary deductions and employer contributions, without interest,
80.25to the fund of the appropriate covered pension plan. The chief administrative officer of the
80.26covered pension plan which erroneously provided coverage must provide to the employer
80.27a credit for the amount of the erroneous salary deductions and employer contributions
80.28against future contributions from that employer.
80.29(e) Upon transfer of the required assets, or payment from the employer under
80.30paragraph (d), whichever is applicable, allowable service and salary credit for the period
80.31being transferred is forfeited in the erroneous plan and is granted in the correct plan.
80.32EFFECTIVE DATE.This section is effective July 1, 2010.

80.33    Sec. 18. Minnesota Statutes 2008, section 490.123, is amended by adding a subdivision
80.34to read:
81.1    Subd. 4. Correction of contribution errors. (a) If erroneous employee deductions
81.2and employer contributions are caused by an error in plan coverage involving the judges
81.3retirement plan and any other plan specified in section 356.99, that section applies.
81.4(b) The provisions of section 352.04, subdivisions 8 and 9, apply to the judges'
81.5retirement plan, except that if employee deductions or contributions are erroneously
81.6transmitted to the judges' retirement fund for service rendered after the service credit limit
81.7under section 490.121, subdivision 22, has been attained, consistent with section 352D.04,
81.8subdivision 2, no employer contributions may be transferred.
81.9EFFECTIVE DATE.This section is effective July 1, 2010.

81.10    Sec. 19. REPEALER.
81.11Minnesota Statutes 2008, sections 352.91, subdivision 5; and 353.88, are repealed.
81.12EFFECTIVE DATE.This section is effective July 1, 2010.

81.13ARTICLE 3
81.14MINNESOTA STATE DEFERRED COMPENSATION PLAN AMENDMENTS

81.15    Section 1. Minnesota Statutes 2008, section 352.965, subdivision 6, is amended to read:
81.16    Subd. 6. Plan administrative expenses. (a) The reasonable and necessary
81.17administrative expenses of the deferred compensation plan may be charged to plan
81.18participants in the form of an annual fee, an asset-based fee, a percentage of the
81.19contributions to the plan, or a combination thereof, as set forth in the plan document. The
81.20executive director of the system at the direction of the board of directors shall establish
81.21procedures to carry out this section including allocation of administrative costs of the plan
81.22to participants. Processes and procedures shall be set forth in the plan document. Fees
81.23cannot be charged on contributions and investment returns attributable to contributions
81.24made to the Minnesota supplemental investment funds before July 1, 1992.
81.25    (b) The plan document must conform to federal and state tax laws, regulations, and
81.26rulings, and is not subject to the Administrative Procedure Act.
81.27    (c) The executive director may contract with a third party to perform administrative
81.28and record keeping functions. The executive director may solicit bids and negotiate such
81.29contracts. Participating employers must provide the necessary data to the third-party
81.30administrator as determined by the executive director. The third-party record keeper and
81.31the Minnesota State Retirement System shall follow the data privacy provisions under
81.32chapter 13. The third-party record keeper may not solicit participants for any product or
81.33services not related to the deferred compensation plan.
82.1    (d) The board of directors may authorize a third-party investment consultant
82.2to provide investment information and advice, provided that if the offering of such
82.3information and advice is consistent with the investment advice requirements applicable
82.4to private plans under Title VI, subtitle A, of the Pension Protection Act of 2006, Public
82.5Law 109-280, section 601.
82.6EFFECTIVE DATE.This section is effective July 1, 2010.

82.7ARTICLE 4
82.8MSRS UNCLASSIFIED STATE EMPLOYEES RETIREMENT
82.9PROGRAM AMENDMENTS

82.10    Section 1. Minnesota Statutes 2008, section 3A.07, is amended to read:
82.113A.07 APPLICATION.
82.12    (a) Except as provided in paragraph (b) or (d), this chapter applies to members
82.13of the legislature in service after July 1, 1965, who otherwise meet the requirements
82.14of this chapter.
82.15    (b) Members of the legislature who were elected for the first time after June 30,
82.161997, or members of the legislature who were elected before July 1, 1997, and who, after
82.17July 1, 1998, elect not to be members of the plan established by this chapter are covered
82.18by the unclassified employees retirement program governed by chapter 352D.
82.19    (c) The post-July 1, 1998, coverage election under paragraph (b) is irrevocable
82.20and must be made on a form prescribed by the director. The second chance referendum
82.21election under Laws 2002, chapter 392, article 15, also is irrevocable.
82.22(d) Members of the legislature who are covered by the retirement plan governed by
82.23this chapter on July 1, 2010, may, on or before the end of the member's seventh year of
82.24legislative service or January 1, 2011, whichever is later, elect to have future retirement
82.25coverage by either the general state employees retirement plan governed by chapter 352
82.26or the unclassified state employees retirement program governed by chapter 352D. The
82.27election must be made on a form prescribed by the director and is irrevocable.

82.28    Sec. 2. Minnesota Statutes 2008, section 352.01, subdivision 2a, is amended to read:
82.29    Subd. 2a. Included employees. (a) "State employee" includes:
82.30    (1) employees of the Minnesota Historical Society;
82.31    (2) employees of the State Horticultural Society;
82.32    (3) employees of the Minnesota Crop Improvement Association;
82.33    (4) employees of the adjutant general who are paid from federal funds and who are
82.34not covered by any federal civilian employees retirement system;
83.1    (5) employees of the Minnesota State Colleges and Universities employed under the
83.2university or college activities program;
83.3    (6) currently contributing employees covered by the system who are temporarily
83.4employed by the legislature during a legislative session or any currently contributing
83.5employee employed for any special service as defined in subdivision 2b, clause (8);
83.6    (7) employees of the legislature appointed without a limit on the duration of their
83.7employment and persons employed or designated by the legislature or by a legislative
83.8committee or commission or other competent authority to conduct a special inquiry,
83.9investigation, examination, or installation;
83.10    (8) trainees who are employed on a full-time established training program
83.11performing the duties of the classified position for which they will be eligible to receive
83.12immediate appointment at the completion of the training period;
83.13    (9) employees of the Minnesota Safety Council;
83.14    (10) any employees on authorized leave of absence from the Transit Operating
83.15Division of the former Metropolitan Transit Commission who are employed by the
83.16labor organization which is the exclusive bargaining agent representing employees of
83.17the Transit Operating Division;
83.18    (11) employees of the Metropolitan Council, Metropolitan Parks and Open Space
83.19Commission, Metropolitan Sports Facilities Commission, Metropolitan Mosquito Control
83.20Commission, or Metropolitan Radio Board unless excluded or covered by another public
83.21pension fund or plan under section 473.415, subdivision 3;
83.22    (12) judges of the Tax Court;
83.23    (13) personnel employed on June 30, 1992, by the University of Minnesota in the
83.24management, operation, or maintenance of its heating plant facilities, whose employment
83.25transfers to an employer assuming operation of the heating plant facilities, so long as the
83.26person is employed at the University of Minnesota heating plant by that employer or by its
83.27successor organization;
83.28    (14) seasonal help in the classified service employed by the Department of Revenue;
83.29    (15) persons employed by the Department of Commerce as a peace officer in
83.30the Insurance Fraud Prevention Division under section 45.0135 who have attained the
83.31mandatory retirement age specified in section 43A.34, subdivision 4;
83.32    (16) employees of the University of Minnesota unless excluded under subdivision
83.332b, clause (3);
83.34    (17) employees of the Middle Management Association whose employment began
83.35after July 1, 2007, and to whom section 352.029 does not apply; and
84.1    (18) employees of the Minnesota Government Engineers Council to whom section
84.2352.029 does not apply.; and
84.3(19) employees who have elected to transfer past service to the general employees
84.4retirement plan under section 352D.02, subdivision 1d, paragraph (a), or who have not
84.5elected to transfer to the unclassified program under section 352D.02, subdivision 1d,
84.6paragraph (b).
84.7    (b) Employees specified in paragraph (a), clause (13), are included employees under
84.8paragraph (a) if employer and employee contributions are made in a timely manner in the
84.9amounts required by section 352.04. Employee contributions must be deducted from
84.10salary. Employer contributions are the sole obligation of the employer assuming operation
84.11of the University of Minnesota heating plant facilities or any successor organizations to
84.12that employer.
84.13EFFECTIVE DATE.This section is effective June 30, 2010.

84.14    Sec. 3. Minnesota Statutes 2009 Supplement, section 352.01, subdivision 2b, is
84.15amended to read:
84.16    Subd. 2b. Excluded employees. "State employee" does not include:
84.17    (1) students who are employed by the University of Minnesota, or the state colleges
84.18and universities, unless approved for coverage by the Board of Regents of the University
84.19of Minnesota or the Board of Trustees of the Minnesota State Colleges and Universities,
84.20whichever is applicable;
84.21    (2) employees who are eligible for membership in the state Teachers Retirement
84.22Association, except employees of the Department of Education who have chosen or may
84.23choose to be covered by the general state employees retirement plan of the Minnesota
84.24State Retirement System instead of the Teachers Retirement Association;
84.25    (3) employees of the University of Minnesota who are excluded from coverage by
84.26action of the Board of Regents;
84.27    (4) officers and enlisted personnel in the National Guard and the naval militia who
84.28are assigned to permanent peacetime duty and who under federal law are or are required to
84.29be members of a federal retirement system;
84.30    (5) election officers;
84.31    (6) persons who are engaged in public work for the state but who are employed
84.32by contractors when the performance of the contract is authorized by the legislature or
84.33other competent authority;
84.34    (7) officers and employees of the senate, or of the house of representatives, or of a
84.35legislative committee or commission who are temporarily employed;
85.1    (8) receivers, jurors, notaries public, and court employees who are not in the judicial
85.2branch as defined in section 43A.02, subdivision 25, except referees and adjusters
85.3employed by the Department of Labor and Industry;
85.4    (9) patient and inmate help who perform services in state charitable, penal, and
85.5correctional institutions including the Minnesota Veterans Home;
85.6    (10) persons who are employed for professional services where the service is
85.7incidental to their regular professional duties and whose compensation is paid on a per
85.8diem basis;
85.9    (11) employees of the Sibley House Association;
85.10    (12) the members of any state board or commission who serve the state intermittently
85.11and are paid on a per diem basis; the secretary, secretary-treasurer, and treasurer of those
85.12boards if their compensation is $5,000 or less per year, or, if they are legally prohibited
85.13from serving more than three years; and the board of managers of the State Agricultural
85.14Society and its treasurer unless the treasurer is also its full-time secretary;
85.15    (13) state troopers and persons who are described in section 352B.011, subdivision
85.1610
, clauses (2) to (8);
85.17    (14) temporary employees of the Minnesota State Fair who are employed on or
85.18after July 1 for a period not to extend beyond October 15 of that year; and persons who
85.19are employed at any time by the state fair administration for special events held on the
85.20fairgrounds;
85.21    (15) emergency employees who are in the classified service; except that if an
85.22emergency employee, within the same pay period, becomes a provisional or probationary
85.23employee on other than a temporary basis, the employee must be considered a "state
85.24employee" retroactively to the beginning of the pay period;
85.25    (16) temporary employees in the classified service, and temporary employees in the
85.26unclassified service who are appointed for a definite period of not more than six months
85.27and who are employed less than six months in any one-year period;
85.28    (17) interns who are hired for six months or less and trainee employees, except
85.29those listed in subdivision 2a, clause (8);
85.30    (18) persons whose compensation is paid on a fee basis or as an independent
85.31contractor;
85.32    (19) state employees who are employed by the Board of Trustees of the Minnesota
85.33State Colleges and Universities in unclassified positions enumerated in section 43A.08,
85.34subdivision 1
, clause (9);
85.35    (20) state employees who in any year have credit for 12 months service as teachers
85.36in the public schools of the state and as teachers are members of the Teachers Retirement
86.1Association or a retirement system in St. Paul, Minneapolis, or Duluth, except for
86.2incidental employment as a state employee that is not covered by one of the teacher
86.3retirement associations or systems;
86.4    (21) employees of the adjutant general who are employed on an unlimited
86.5intermittent or temporary basis in the classified or unclassified service for the support of
86.6Army and Air National Guard training facilities;
86.7    (22) chaplains and nuns who are excluded from coverage under the federal Old
86.8Age, Survivors, Disability, and Health Insurance Program for the performance of service
86.9as specified in United States Code, title 42, section 410(a)(8)(A), as amended, if no
86.10irrevocable election of coverage has been made under section 3121(r) of the Internal
86.11Revenue Code of 1986, as amended through December 31, 1992;
86.12    (23) examination monitors who are employed by departments, agencies,
86.13commissions, and boards to conduct examinations required by law;
86.14    (24) persons who are appointed to serve as members of fact-finding commissions or
86.15adjustment panels, arbitrators, or labor referees under chapter 179;
86.16    (25) temporary employees who are employed for limited periods under any state or
86.17federal program for training or rehabilitation, including persons who are employed for
86.18limited periods from areas of economic distress, but not including skilled and supervisory
86.19personnel and persons having civil service status covered by the system;
86.20    (26) full-time students who are employed by the Minnesota Historical Society
86.21intermittently during part of the year and full-time during the summer months;
86.22    (27) temporary employees who are appointed for not more than six months, of
86.23the Metropolitan Council and of any of its statutory boards, if the board members are
86.24appointed by the Metropolitan Council;
86.25    (28) persons who are employed in positions designated by the Department of
86.26Management and Budget as student workers;
86.27    (29) members of trades who are employed by the successor to the Metropolitan
86.28Waste Control Commission, who have trade union pension plan coverage under a
86.29collective bargaining agreement, and who are first employed after June 1, 1977;
86.30    (30) off-duty peace officers while employed by the Metropolitan Council;
86.31    (31) persons who are employed as full-time police officers by the Metropolitan
86.32Council and as police officers are members of the public employees police and fire fund;
86.33    (32) persons who are employed as full-time firefighters by the Department of Military
86.34Affairs and as firefighters are members of the public employees police and fire fund;
86.35    (33) foreign citizens with who are employed under a work permit of less than three
86.36years, or an H-1b/JV visa valid for less than three years of employment, unless notice of
87.1extension is supplied which allows them to work for three or more years as of the date
87.2thatthe extension is granted, in which case they are eligible for coverage from the date
87.3extended; and
87.4    (34) persons who are employed by the Board of Trustees of the Minnesota State
87.5Colleges and Universities and who elected to remain members of the Public Employees
87.6Retirement Association or the Minneapolis Employees Retirement Fund, whichever
87.7applies, under Minnesota Statutes 1994, section 136C.75.; and
87.8(35) employees who have elected to transfer service to the unclassified program
87.9under section 352D.02, subdivision 1d, paragraph (b).
87.10EFFECTIVE DATE.This section is effective June 30, 2010.

87.11    Sec. 4. Minnesota Statutes 2008, section 352D.015, subdivision 4, is amended to read:
87.12    Subd. 4. General fund. "General fund" means the general state employees
87.13retirement fund under chapter 352 except the moneys for the unclassified program.
87.14    Subd. 4a. General employees retirement plan. "General employees retirement
87.15plan" means the general state employees retirement plan under chapter 352.
87.16EFFECTIVE DATE.This section is effective June 30, 2010.

87.17    Sec. 5. Minnesota Statutes 2008, section 352D.015, subdivision 9, is amended to read:
87.18    Subd. 9. Value. "Value" means cash value at the end of the month following receipt
87.19of an application. If no application is required, "value" means the cash value at the end
87.20of the month in which the event necessitating the transfer occurs the market value of the
87.21account at the end of the United States investment market day.
87.22EFFECTIVE DATE.This section is effective July 1, 2010.

87.23    Sec. 6. Minnesota Statutes 2008, section 352D.02, subdivision 1, is amended to read:
87.24    Subdivision 1. Coverage. (a) Employees enumerated in paragraph (b), clause
87.25(1), are participants in the unclassified program under this chapter. Persons referenced
87.26in paragraph (b), clause (15) are participants in the unclassified program under this
87.27chapter for judicial employment in excess of the service credit limit in section 490.121,
87.28subdivision 22. Employees enumerated in paragraph (c) (b), clauses (2), (3), (4), (6) to
87.29(14), and (16) to (18), clauses (2) to (14) and (16) to (18), if they are in the unclassified
87.30service of the state or Metropolitan Council and are eligible for coverage under the general
87.31state employees retirement plan under chapter 352, are participants in the unclassified
87.32program under this chapter unless the employee gives notice to the executive director of
88.1the Minnesota State Retirement System within one year following the commencement
88.2of employment in the unclassified service that the employee desires coverage under the
88.3general state employees retirement plan. For the purposes of this chapter, an employee
88.4who does not file notice with the executive director is deemed to have exercised the option
88.5to participate in the unclassified program.
88.6    (b) Persons referenced in paragraph (c), clause (5), are participants in the unclassified
88.7program under this chapter unless the person was eligible to elect different coverage under
88.8section 3A.07 and elected retirement coverage by the applicable alternative retirement
88.9plan. Persons referenced in paragraph (c), clause (15), are participants in the unclassified
88.10program under this chapter for judicial employment in excess of the service credit limit in
88.11section 490.121, subdivision 22.
88.12    (c) (b) Enumerated employees and referenced persons are:
88.13    (1) the governor, the lieutenant governor, the secretary of state, the state auditor,
88.14and the attorney general;
88.15    (2) an employee in the Office of the Governor, Lieutenant Governor, Secretary
88.16of State, State Auditor, Attorney General;
88.17    (3) an employee of the State Board of Investment;
88.18    (4) the head of a department, division, or agency created by statute in the unclassified
88.19service, an acting department head subsequently appointed to the position, or an employee
88.20enumerated in section 15A.0815 or 15A.083, subdivision 4;
88.21    (5) a member of the legislature;
88.22    (6) a full-time unclassified employee of the legislature or a commission or agency of
88.23the legislature who is appointed without a limit on the duration of the employment or a
88.24temporary legislative employee having shares in the supplemental retirement fund as a
88.25result of former employment covered by this chapter, whether or not eligible for coverage
88.26under the Minnesota State Retirement System;
88.27    (7) a person who is employed in a position established under section 43A.08,
88.28subdivision 1
, clause (3), or in a position authorized under a statute creating or establishing
88.29a department or agency of the state, which is at the deputy or assistant head of department
88.30or agency or director level;
88.31    (8) the regional administrator, or executive director of the Metropolitan Council,
88.32general counsel, division directors, operations managers, and other positions as designated
88.33by the council, all of which may not exceed 27 positions at the council and the chair;
88.34    (9) the executive director, associate executive director, and not to exceed nine
88.35positions of the Minnesota Office of Higher Education in the unclassified service, as
88.36designated by the Minnesota Office of Higher Education before January 1, 1992, or
89.1subsequently redesignated with the approval of the board of directors of the Minnesota
89.2State Retirement System, unless the person has elected coverage by the individual
89.3retirement account plan under chapter 354B;
89.4    (10) the clerk of the appellate courts appointed under article VI, section 2, of the
89.5Constitution of the state of Minnesota, the state court administrator and judicial district
89.6administrators;
89.7    (11) the chief executive officers of correctional facilities operated by the Department
89.8of Corrections and of hospitals and nursing homes operated by the Department of Human
89.9Services;
89.10    (12) an employee whose principal employment is at the state ceremonial house;
89.11    (13) an employee of the Agricultural Utilization Research Institute;
89.12    (14) an employee of the State Lottery who is covered by the managerial plan
89.13established under section 43A.18, subdivision 3;
89.14    (15) a judge who has exceeded the service credit limit in section 490.121,
89.15subdivision 22
;
89.16    (16) an employee of Enterprise Minnesota, Inc.;
89.17    (17) a person employed by the Minnesota State Colleges and Universities as faculty
89.18or in an eligible unclassified administrative position as defined in section 354B.20,
89.19subdivision 6, who was employed by the former state university or the former community
89.20college system before May 1, 1995, and elected unclassified program coverage prior to
89.21May 1, 1995; and
89.22    (18) a person employed by the Minnesota State Colleges and Universities who
89.23was employed in state service before July 1, 1995, who subsequently is employed in an
89.24eligible unclassified administrative position as defined in section 354B.20, subdivision
89.256, and who elects coverage by the unclassified program.

89.26    Sec. 7. Minnesota Statutes 2008, section 352D.02, subdivision 1c, is amended to read:
89.27    Subd. 1c. Transfer of contributions. An employee covered by the regular general
89.28employees retirement plan who is subsequently employed as a full-time unclassified
89.29employee of the legislature or any commission or agency of the legislature without a
89.30limit on the duration of the employment may elect to transfer accumulated employee and
89.31matching employer contributions, as provided in section 352D.03.
89.32EFFECTIVE DATE.This section is effective June 30, 2010.

89.33    Sec. 8. Minnesota Statutes 2008, section 352D.02, subdivision 2, is amended to read:
90.1    Subd. 2. Coverage upon employment change. A person becoming a participant
90.2in the unclassified program prior to July 1, 2010, by virtue of employment in a position
90.3specified in subdivision 1, clause (4), and remaining in the unclassified service shall
90.4remain a participant in the program even though the position the person occupies is
90.5deleted from any of the sections referenced in subdivision 1, clause (4), by subsequent
90.6amendment, except that a person shall is not be eligible to elect the unclassified program
90.7after separation from unclassified service if on the return of the person to service, that
90.8position is not specified in subdivision 1, clause (4). Any person employed in a position
90.9specified in subdivision 1 shall cease to participate in the unclassified program in the event
90.10that the position is placed in the classified service.
90.11EFFECTIVE DATE.This section is effective June 30, 2010.

90.12    Sec. 9. Minnesota Statutes 2008, section 352D.02, subdivision 3, is amended to read:
90.13    Subd. 3. Transfer to general employees retirement plan. (a) An employee
90.14referred to in subdivision 1, paragraph (b), clauses (2) to (4), (6) to (14), and (16) to
90.15(18), who is credited with employee shares in the unclassified program, after acquiring
90.16and who has credit for ten years of allowable service and, not later than one month
90.17following the termination of covered employment, may elect to terminate participation
90.18in the unclassified program and be covered by the general employees retirement plan by
90.19filing a written election with the executive director. if the employee was employed before
90.20July 1, 2010, and has at least ten years of allowable service as of the date of the election or
90.21if the employee was employed after June 30, 2010, and has no more than seven years of
90.22allowable service as of the date of the election.
90.23(b) A person referred to in subdivision 1, paragraph (b), clause (5), who is credited
90.24with employee shares in the unclassified program, and who has credit for allowable
90.25service, prior to the termination of service, may elect to terminate participation in the
90.26unclassified program and be covered by the general employees retirement plan by filing
90.27a written election with the executive director if the person first became covered by the
90.28unclassified program after June 30, 2010, and has no more than seven years of allowable
90.29service or if the person first became covered by the unclassified program before July 1,
90.302010, and makes the election to transfer on or before January 1, 2011.
90.31(c) If the transfer election is made, the executive director shall then redeem the
90.32employee's total shares and shall credit to the employee's account in the general employees
90.33retirement plan the amount of contributions that would have been so credited had the
90.34employee been covered by the general employees retirement plan during the employee's
90.35entire covered employment or elective state service. The balance of money so redeemed
91.1and not credited to the employee's account shall must be transferred to the general
91.2employees retirement plan retirement fund, except that (1) the employee contribution paid
91.3to the unclassified program must be compared to (2) the employee contributions that
91.4would have been paid to the general employees retirement plan for the comparable period,
91.5if the individual had been covered by that plan. If clause (1) is greater than clause (2),
91.6the difference must be refunded to the employee as provided in section 352.22. If clause
91.7(2) is greater than clause (1), the difference must be paid by the employee within six
91.8months of electing general employees retirement plan coverage or before the effective
91.9date of the annuity, whichever is sooner.
91.10    (b) (d) An election under paragraph (a) or (b) to transfer coverage to the general
91.11employees retirement plan is irrevocable during any period of covered employment.
91.12(e) A person referenced to in subdivision 1, paragraph (b), clause (1) or (15), who is
91.13credited with employee shares in the unclassified program is not permitted to terminate
91.14participation in the unclassified program and be covered by the general employees
91.15retirement plan.
91.16EFFECTIVE DATE.This section is effective June 30, 2010.

91.17    Sec. 10. Minnesota Statutes 2008, section 352D.03, is amended to read:
91.18352D.03 TRANSFER OF ASSETS.
91.19Unless an eligible employee enumerated in section 352D.02, subdivision 1, has
91.20elected coverage under the individual retirement account plan under chapter 354B, a
91.21sum of money representing the assets credited to each employee exercising the option
91.22contained in section 352D.02, plus an equal employer contribution together with interest
91.23for an employee exercising an option under section 352D.02, an amount equal to the
91.24employee and employer contributions for the employment period at the applicable
91.25preretirement interest actuarial assumption rate during this period plus six percent interest,
91.26compounded annually, must be used for the purchase of shares on behalf of each employee
91.27in the accounts of the supplemental retirement fund established by section 11A.17.
91.28EFFECTIVE DATE.This section is effective June 30, 2010.

91.29    Sec. 11. Minnesota Statutes 2008, section 352D.04, subdivision 1, is amended to read:
91.30    Subdivision 1. Investment options. (a) A person exercising an option to participate
91.31in the retirement program provided by this chapter may elect to purchase shares in one or
91.32a combination of the income share account, the growth share account, the international
91.33share account, the money market account, the bond market account, the fixed interest
92.1account, or the common stock index account established in section 11A.17. The person
92.2may elect to participate in one or more of the investment accounts in the fund by
92.3specifying, on a form provided in a manner prescribed by the executive director, the
92.4percentage of the person's contributions provided in subdivision 2 to be used to purchase
92.5shares in each of the accounts.
92.6(b) A participant may indicate in writing on forms provided , in a manner prescribed
92.7by the Minnesota State Retirement System a choice of options executive director, choose
92.8their investment allocation for subsequent purchases of shares. Until a different written
92.9indication is made by the participant, the executive director shall purchase shares in the
92.10supplemental fund as selected by the participant. If no initial option is chosen, 100 percent
92.11income shares must be purchased for a participant. A change in choice of investment
92.12option is effective no later than the first pay date first occurring after 30 days following the
92.13receipt of the request for a change at the end of the most recent United States investment
92.14market day.
92.15(c) Shares in the fixed interest account attributable to any guaranteed investment
92.16contract as of July 1, 1994, may not be withdrawn from the fund or transferred to another
92.17account until the guaranteed investment contract has expired, unless the participant
92.18qualifies for withdrawal under section 352D.05 or for benefit payments under sections
92.19352D.06 to 352D.075.
92.20(d) (c) A participant or former participant may also change the investment options
92.21selected for all or a portion of the participant's shares previously purchased in accounts,
92.22subject to the provisions of paragraph (c) concerning the fixed interest account. Changes
92.23in investment options for the participant's shares must be effected as soon as cash flow to
92.24an account practically permits, but not later than six months after the requested change
92.25trading restrictions imposed on the investment option.
92.26EFFECTIVE DATE.This section is effective July 1, 2010.

92.27    Sec. 12. Minnesota Statutes 2008, section 352D.04, subdivision 2, is amended to read:
92.28     Subd. 2. Contribution rates. (a) The money used to purchase shares under this
92.29section is the employee and employer contributions provided in this subdivision.
92.30     (b) The employee contribution is an amount equal to four the percent of salary
92.31specified in section 352.04, subdivision 2, or 352.045, subdivision 3.
92.32     (c) The employer contribution is an amount equal to six percent of salary.
92.33     (d) For members of the legislature, the contributions under this subdivision also must
92.34be made on per diem payments received during a regular or special legislative session, but
92.35may not be made on per diem payments received outside of a regular or special legislative
93.1session, on the additional compensation attributable to a leadership position under section
93.23.099 , subdivision 3, living expense payments under section 3.101, or special session
93.3living expense payments under section 3.103.
93.4    (e) For a judge who is a member of the unclassified plan under section 352D.02,
93.5subdivision 1, paragraph (c), clause (16), the employee contribution rate is eight percent
93.6of salary, and there is no employer contribution.
93.7(f) These contributions must be made in the manner provided in section 352.04,
93.8subdivisions 4, 5, and 6.
93.9EFFECTIVE DATE.This section is effective the first day of the first full pay
93.10period beginning after July 1, 2010.

93.11    Sec. 13. Minnesota Statutes 2008, section 352D.05, subdivision 3, is amended to read:
93.12    Subd. 3. Full or partial withdrawal. After termination of covered employment
93.13or at any time thereafter, a participant is entitled, upon application, to withdraw the cash
93.14value of the participant's total shares or leave such shares on deposit with the supplemental
93.15retirement fund. The account is valued at the end of the month in which most recent
93.16United States investment market day following receipt of the application for withdrawal is
93.17made. Shares not withdrawn remain on deposit with the supplemental retirement fund
93.18until the former participant becomes at least 55 years old, and applies for an annuity under
93.19section 352D.06, subdivision 1.
93.20EFFECTIVE DATE.This section is effective July 1, 2010.

93.21    Sec. 14. Minnesota Statutes 2008, section 352D.05, subdivision 4, is amended to read:
93.22    Subd. 4. Repayment of refund. (a) A participant in the unclassified program may
93.23repay regular refunds taken under section 352.22, as provided in section 352.23.
93.24(b) A participant in the unclassified program or an employee covered by the general
93.25employees retirement plan who has withdrawn the value of the total shares may repay
93.26the refund taken and thereupon restore the service credit, rights and benefits forfeited by
93.27paying into the fund the amount refunded plus interest at an annual rate of 8.5 percent
93.28compounded annually from the date that the refund was taken until the date that the refund
93.29is repaid. If the participant had withdrawn only the employee shares as permitted under
93.30prior laws, repayment must be pro rata.
93.31(c) Except as provided in section 356.441, the repayment of a refund under this
93.32section must be made in a lump sum.
93.33EFFECTIVE DATE.This section is effective June 30, 2010.

94.1    Sec. 15. Minnesota Statutes 2008, section 352D.06, subdivision 3, is amended to read:
94.2    Subd. 3. Accrual date. An annuity under this section accrues the first day of the
94.3first full month after an application is received or the day following termination of state
94.4service, whichever is later. The account must be valued and redeemed on the later of the
94.5end of the month of termination of covered employment, or the end of the month of receipt
94.6of the annuity application for the purpose of computing the annuity day following receipt
94.7of the application or the day following termination, whichever is later. The benefit must be
94.8based on the value of the account the day following receipt of the application or the date of
94.9termination, whichever is later, plus any contributions and interest received after that date.
94.10EFFECTIVE DATE.This section is effective July 1, 2010.

94.11    Sec. 16. Minnesota Statutes 2008, section 352D.065, subdivision 3, is amended to read:
94.12    Subd. 3. Annuity payment. The annuity payable under this section shall begin
94.13begins to accrue the first day of the month following the date of disability receipt of the
94.14application or the day after termination, whichever is later, plus any contributions and
94.15interest received after that date, and shall must be based on the participant's age when the
94.16annuity begins to accrue. The shares shall must be valued as of the end of the month
94.17following authorization of payments day on which the benefit accrues.
94.18EFFECTIVE DATE.This section is effective July 1, 2010.

94.19    Sec. 17. Minnesota Statutes 2008, section 352D.09, subdivision 3, is amended to read:
94.20    Subd. 3. Prospectus. (a) The executive director shall annually distribute make
94.21available by electronic means to each participant the prospectus prepared by the
94.22supplemental fund, by July 1 or when received from such fund, whichever is later, to
94.23each participant in covered employment.
94.24(b) Any participant may contact the Minnesota State Retirement System and request
94.25a copy of the prospectus.
94.26EFFECTIVE DATE.This section is effective July 1, 2010.

94.27    Sec. 18. Minnesota Statutes 2008, section 352D.09, subdivision 7, is amended to read:
94.28    Subd. 7. Administrative fees. The board of directors shall establish a budget and
94.29charge participants a reasonable fee to pay the administrative expenses of the unclassified
94.30program. Fees cannot may not be charged on contributions and investment returns
94.31attributable to contributions made before July 1, 1992. Annual total fees charged for plan
95.1administration cannot exceed 10/100 of one percent of the contributions and investment
95.2returns attributable to contributions made on or after July 1, 1992.
95.3EFFECTIVE DATE.This section is effective July 1, 2010.

95.4ARTICLE 5
95.5PUBLIC EMPLOYEES RETIREMENT ASSOCIATION
95.6ADMINISTRATIVE PROVISIONS

95.7    Section 1. Minnesota Statutes 2009 Supplement, section 353.01, subdivision 2, is
95.8amended to read:
95.9    Subd. 2. Public employee. "Public employee" means a governmental employee
95.10or a public officer performing personal services for a governmental subdivision defined
95.11in subdivision 6, whose salary is paid, in whole or in part, from revenue derived from
95.12taxation, fees, assessments, or from other sources. For purposes of membership in the
95.13association, the term includes the classes of persons described or listed in subdivision
95.142a and excludes the classes of persons listed in subdivision 2b. The term also includes
95.15persons who elect association membership under subdivision 2d, paragraph (a), and
95.16persons for whom the applicable governmental subdivision had elected association
95.17membership under subdivision 2d, paragraph (b). The term excludes the classes of persons
95.18listed in subdivision 2b for purposes of membership in the association.
95.19EFFECTIVE DATE.This section is effective July 1, 2010.

95.20    Sec. 2. Minnesota Statutes 2009 Supplement, section 353.01, subdivision 2a, is
95.21amended to read:
95.22    Subd. 2a. Included employees; mandatory membership. (a) Public employees
95.23whose salary from employment in one or more positions within one governmental
95.24subdivision exceeds $425 in any month shall participate as members of the association.
95.25If the salary is less than $425 in a subsequent month, the employee retains membership
95.26eligibility. Eligible Public employees shall whose salary exceeds $425 in any month and
95.27who are not specifically excluded under subdivision 2b or who have not been provided
95.28an option to participate under subdivision 2d, whether individually or by action of the
95.29governmental subdivision, must participate as members of the association with retirement
95.30coverage by the public employees retirement plan or the public employees police and
95.31fire retirement plan under this chapter, or the local government correctional employees
95.32retirement plan under chapter 353E, whichever applies,. Membership commences as a
95.33condition of their employment on the first day of their employment unless they or on the
96.1first day that the eligibility criteria are met, whichever is later. Public employees include
96.2but are not limited to:
96.3    (1) are specifically excluded under subdivision 2b;
96.4    (2) do not exercise their option to elect retirement coverage in the association as
96.5provided in subdivision 2d, paragraph (a); or
96.6    (3) are employees of the governmental subdivisions listed in subdivision 2d,
96.7paragraph (b), where the governmental subdivision has not elected to participate as a
96.8governmental subdivision covered by the association.
96.9(1) persons whose salary meets the threshold in paragraph (a) from employment in
96.10one or more positions within one governmental subdivision;
96.11(2) elected county sheriffs;
96.12(3) persons who are appointed, employed, or contracted to perform governmental
96.13functions that by law or local ordinance are required of a public officer, including, but
96.14not limited to:
96.15(i) town and city clerk or treasurer;
96.16(ii) county auditor, treasurer, or recorder;
96.17(iii) city manager as defined in section 353.028 who does not exercise the option
96.18provided under subdivision 2d; or
96.19(iv) emergency management director, as provided under section 12.25;
96.20(4) physicians under section 353D.01, subdivision 2, who do not elect public
96.21employees defined contribution plan coverage under section 353D.02, subdivision 2;
96.22(5) full-time employees of the Dakota County Agricultural Society; and
96.23(6) employees of the Minneapolis Firefighters Relief Association or Minneapolis
96.24Police Relief Association who are not excluded employees under subdivision 2b due
96.25to coverage by the relief association pension plan and who elected general employee
96.26retirement plan coverage before August 20, 2009.
96.27    (b) A public employee or elected official who was a member of the association on
96.28June 30, 2002, based on employment that qualified for membership coverage by the public
96.29employees retirement plan or the public employees police and fire plan under this chapter,
96.30or the local government correctional employees retirement plan under chapter 353E as of
96.31June 30, 2002, retains that membership for the duration of the person's employment in that
96.32position or incumbency in elected office. Except as provided in subdivision 28, the person
96.33shall participate as a member until the employee or elected official terminates public
96.34employment under subdivision 11a or terminates membership under subdivision 11b.
96.35    (c) Public employees under paragraph (a) include:
97.1(1) physicians under section 353D.01, subdivision 2, who do not elect public
97.2employees defined contribution plan coverage under section 353D.02, subdivision 2;
97.3(2) full-time employees of the Dakota County Agricultural Society; and
97.4(3) employees of the Minneapolis Firefighters Relief Association or Minneapolis
97.5Police Relief Association who are not excluded employees under subdivision 2b due to
97.6coverage by the relief association pension plan and who elect Public Employee Retirement
97.7Association general plan coverage under Laws 2009, chapter 169, article 12, section 10.
97.8(c) If the salary of an included public employee is less than $425 in any subsequent
97.9month, the member retains membership eligibility.
97.10EFFECTIVE DATE.This section is effective July 1, 2010, except that the
97.11amendment to paragraph (a), clause (3) applies to any person first appointed, elected or
97.12contracted after June 30, 2010.

97.13    Sec. 3. Minnesota Statutes 2008, section 353.01, subdivision 2b, is amended to read:
97.14    Subd. 2b. Excluded employees. (a) The following public employees are not eligible
97.15to participate as members of the association with retirement coverage by the public general
97.16employees retirement plan, the local government correctional employees retirement plan
97.17under chapter 353E, or the public employees police and fire retirement plan:
97.18    (1) persons whose salary from one governmental subdivision never exceeds $425 in
97.19a month;
97.20(2) public officers, other than county sheriffs, who are elected to a governing body,
97.21city mayors, or persons who are appointed to fill a vacancy in an elective office of a
97.22governing body, whose term of office commences on or after July 1, 2002, for the service
97.23to be rendered in that elective position;
97.24    (2) (3) election officers or election judges;
97.25    (3) (4) patient and inmate personnel who perform services for a governmental
97.26subdivision;
97.27    (4) (5) except as otherwise specified in subdivision 12a, employees who are hired
97.28for a temporary position as defined under subdivision 12a, and employees who resign
97.29from a nontemporary position and accept a temporary position within 30 days in the
97.30same governmental subdivision;
97.31    (5) (6) employees who are employed by reason of work emergency caused by fire,
97.32flood, storm, or similar disaster;
97.33    (6) (7) employees who by virtue of their employment in one governmental
97.34subdivision are required by law to be a member of and to contribute to any of the plans or
97.35funds administered by the Minnesota State Retirement System, the Teachers Retirement
98.1Association, the Duluth Teachers Retirement Fund Association, the St. Paul Teachers
98.2Retirement Fund Association, the Minneapolis Employees Retirement Fund, or any police
98.3or firefighters relief association governed by section 69.77 that has not consolidated
98.4with the Public Employees Retirement Association, or any local police or firefighters
98.5consolidation account who have not elected the type of benefit coverage provided by the
98.6public employees police and fire fund under sections 353A.01 to 353A.10, or any persons
98.7covered by section 353.665, subdivision 4, 5, or 6, who have not elected public employees
98.8police and fire plan benefit coverage. This clause must not be construed to prevent a person
98.9from being a member of and contributing to the Public Employees Retirement Association
98.10and also belonging to and contributing to another public pension plan or fund for other
98.11service occurring during the same period of time. A person who meets the definition of
98.12"public employee" in subdivision 2 by virtue of other service occurring during the same
98.13period of time becomes a member of the association unless contributions are made to
98.14another public retirement fund on the salary based on the other service or to the Teachers
98.15Retirement Association by a teacher as defined in section 354.05, subdivision 2;
98.16    (7) (8) persons who are members of a religious order and are excluded from coverage
98.17under the federal Old Age, Survivors, Disability, and Health Insurance Program for the
98.18performance of service as specified in United States Code, title 42, section 410(a)(8)(A),
98.19as amended through January 1, 1987, if no irrevocable election of coverage has been made
98.20under section 3121(r) of the Internal Revenue Code of 1954, as amended;
98.21    (8) (9) employees of a governmental subdivision who have not reached the age of
98.2223 and are enrolled on a full-time basis to attend or are attending classes on a full-time
98.23basis at an accredited school, college, or university in an undergraduate, graduate, or
98.24professional-technical program, or a public or charter high school;
98.25    (9) (10) resident physicians, medical interns, and pharmacist residents and
98.26pharmacist interns who are serving in a degree or residency program in public hospitals
98.27or clinics;
98.28    (10) (11) students who are serving in an internship or residency program sponsored
98.29by an accredited educational institution;
98.30    (11) (12) persons who hold a part-time adult supplementary technical college license
98.31who render part-time teaching service in a technical college;
98.32    (12) (13) except for employees of Hennepin County or Hennepin Healthcare System,
98.33Inc., foreign citizens working for who are employed by a governmental subdivision with
98.34under a work permit of less than three years, or an H-1b visa valid initially issued or
98.35extended for a combined period less than three years of employment. Upon notice to the
98.36association that the work permit or visa extends extension of the employment beyond the
99.1three-year period, the foreign citizens must be reported for membership from the date of
99.2the extension beginning the first of the month thereafter provided the monthly earnings
99.3threshold as provided under subdivision 2a is met;
99.4    (13) (14) public hospital employees who elected not to participate as members
99.5of the association before 1972 and who did not elect to participate from July 1, 1988,
99.6to October 1, 1988;
99.7    (14) (15) except as provided in section 353.86, volunteer ambulance service
99.8personnel, as defined in subdivision 35, but persons who serve as volunteer ambulance
99.9service personnel may still qualify as public employees under subdivision 2 and may be
99.10members of the Public Employees Retirement Association and participants in the public
99.11general employees retirement fund plan or the public employees police and fire fund plan,
99.12whichever applies, on the basis of compensation received from public employment service
99.13other than service as volunteer ambulance service personnel;
99.14    (15) (16) except as provided in section 353.87, volunteer firefighters, as defined
99.15in subdivision 36, engaging in activities undertaken as part of volunteer firefighter
99.16duties; provided that, but a person who is a volunteer firefighter may still qualify as a
99.17public employee under subdivision 2 and may be a member of the Public Employees
99.18Retirement Association and a participant in the public general employees retirement
99.19fund plan or the public employees police and fire fund plan, whichever applies, on the
99.20basis of compensation received from public employment activities other than those as a
99.21volunteer firefighter;
99.22    (16) (17) pipefitters and associated trades personnel employed by Independent
99.23School District No. 625, St. Paul, with coverage under a collective bargaining agreement
99.24by the pipefitters local 455 pension plan who were either first employed after May 1,
99.251997, or, if first employed before May 2, 1997, elected to be excluded under Laws 1997,
99.26chapter 241, article 2, section 12;
99.27    (17) (18) electrical workers, plumbers, carpenters, and associated trades personnel
99.28who are employed by Independent School District No. 625, St. Paul, or the city of St.
99.29Paul, who have retirement coverage under a collective bargaining agreement by the
99.30Electrical Workers Local 110 pension plan, the United Association Plumbers Local 34
99.31pension plan, or the pension plan applicable to Carpenters Local 87 pension plan who
99.32were either first employed after May 1, 2000, or, if first employed before May 2, 2000,
99.33elected to be excluded under Laws 2000, chapter 461, article 7, section 5;
99.34    (18) (19) bricklayers, allied craftworkers, cement masons, glaziers, glassworkers,
99.35painters, allied tradesworkers, and plasterers who are employed by the city of St. Paul
99.36or Independent School District No. 625, St. Paul, with coverage under a collective
100.1bargaining agreement by the Bricklayers and Allied Craftworkers Local 1 pension plan,
100.2the Cement Masons Local 633 pension plan, the Glaziers and Glassworkers Local L-1324
100.3pension plan, the Painters and Allied Trades Local 61 pension plan, or the Twin Cities
100.4Plasterers Local 265 pension plan who were either first employed after May 1, 2001, or if
100.5first employed before May 2, 2001, elected to be excluded under Laws 2001, First Special
100.6Session chapter 10, article 10, section 6;
100.7    (19) (20) plumbers who are employed by the Metropolitan Airports Commission,
100.8with coverage under a collective bargaining agreement by the Plumbers Local 34 pension
100.9plan, who either were first employed after May 1, 2001, or if first employed before May 2,
100.102001, elected to be excluded under Laws 2001, First Special Session chapter 10, article
100.1110, section 6;
100.12    (20) (21) employees who are hired after June 30, 2002, to fill seasonal positions
100.13under subdivision 12b which are limited in duration by the employer to 185 consecutive
100.14calendar days or less in each year of employment with the governmental subdivision;
100.15    (21) (22) persons who are provided supported employment or work-study positions
100.16by a governmental subdivision and who participate in an employment or industries
100.17program maintained for the benefit of these persons where the governmental subdivision
100.18limits the position's duration to three years or less, including persons participating in a
100.19federal or state subsidized on-the-job training, work experience, senior citizen, youth, or
100.20unemployment relief program where the training or work experience is not provided as a
100.21part of, or for, future permanent public employment;
100.22    (22) (23) independent contractors and the employees of independent contractors; and
100.23    (23) (24) reemployed annuitants of the association during the course of that
100.24reemployment.; and
100.25(25) persons appointed to serve on a board or commission of a governmental
100.26subdivision or an instrumentality thereof.
100.27(b) Any person performing the duties of a public officer in a position defined in
100.28subdivision 2a, paragraph (a), clause (3), is not an independent contractor and is not an
100.29employee of an independent contractor.
100.30EFFECTIVE DATE.This section is effective July 1, 2010, except that clause (25)
100.31is effective for persons first appointed after June 30, 2010.

100.32    Sec. 4. Minnesota Statutes 2008, section 353.01, subdivision 2d, is amended to read:
100.33    Subd. 2d. Optional membership. (a) Membership in the association is optional
100.34by action of the individual employee for the following public employees who meet the
100.35conditions set forth in subdivision 2a:
101.1(1) members of the coordinated plan who are also employees of labor organizations
101.2as defined in section 353.017, subdivision 1, for their employment by the labor
101.3organization only, if they elect to have membership under section 353.017, subdivision 2;
101.4(2) persons who are elected or persons who are appointed to elected positions other
101.5than local governing body elected positions who elect to participate by filing a written
101.6election for membership;
101.7(3) members of the association who are appointed by the governor to be a state
101.8department head and who elect not to be covered by the general state employees retirement
101.9plan of the Minnesota State Retirement System under section 352.021;
101.10(4) city managers as defined in section 353.028, subdivision 1, who do not elect to be
101.11excluded from membership in the association under section 353.028, subdivision 2; and
101.12(5) employees of the Port Authority of the city of St. Paul on January 1, 2003,
101.13who were at least age 45 on that date, and who elected to participate by filing a written
101.14election for membership.
101.15(b) Membership in the association is optional by action of the governmental
101.16subdivision for the employees of the following governmental subdivisions under the
101.17conditions specified:
101.18(1) the Minnesota Association of Townships if the board of that association, at its
101.19option, certifies to the executive director that its employees who meet the conditions set
101.20forth in subdivision 2a are to be included for purposes of retirement coverage, in which
101.21case the status of the association as a participating employer is permanent;
101.22(2) a county historical society if the county in which the historical society is located,
101.23at its option, certifies to the executive director that the employees of the historical society
101.24who meet the conditions set forth in subdivision 2a are to be considered county employees
101.25for purposes of retirement coverage under this chapter. The status as a county employee
101.26must be accorded to all similarly situated county historical society employees and, once
101.27established, must continue as long as a person is an employee of the county historical
101.28society; and
101.29(3) Hennepin Healthcare System, Inc., a public corporation, with respect to
101.30employees other than paramedics, emergency medical technicians, and protection officers,
101.31if the corporate board establishes alternative retirement plans for certain classes of
101.32employees of the corporation and certifies to the association the applicable employees to
101.33be excluded from future retirement coverage.
101.34(c) For employees who are covered by paragraph (a), clause (1), (2), or (3), or
101.35covered by paragraph (b), clause (1) or (2), if the necessary membership election is
101.36not made, the employee is excluded from retirement coverage under this chapter. For
102.1employees who are covered by paragraph (a), clause (4), if the necessary election is not
102.2made, the employee must become a member and have retirement coverage under the
102.3applicable provisions of this chapter. For employees specified in paragraph (b), clause
102.4(3), membership continues until the exclusion option is exercised for the designated class
102.5of employee.
102.6(d) The option to become a member, once exercised under this subdivision, may not
102.7be withdrawn until the termination of public service as defined under subdivision 11a.
102.8EFFECTIVE DATE.This section is effective July 1, 2010.

102.9    Sec. 5. Minnesota Statutes 2009 Supplement, section 353.01, subdivision 16, is
102.10amended to read:
102.11    Subd. 16. Allowable service; limits and computation. (a) "Allowable service"
102.12means:
102.13    (1) service during years of actual membership in the course of which employee
102.14deductions were withheld from salary and contributions were made at the applicable rates
102.15under section 353.27, 353.65, or 353E.03;
102.16(2) periods of service covered by payments in lieu of salary deductions under
102.17sections 353.27, subdivision 12, and 353.35;
102.18    (3) service in years during which the public employee was not a member but for
102.19which the member later elected, while a member, to obtain credit by making payments to
102.20the fund as permitted by any law then in effect;
102.21    (4) a period of authorized leave of absence with pay from which deductions for
102.22employee contributions are made, deposited, and credited to the fund;
102.23    (5) a period of authorized personal, parental, or medical leave of absence without
102.24pay, including a leave of absence covered under the federal Family Medical Leave Act,
102.25that does not exceed one year, and for which a member obtained service credit for each
102.26month in the leave period by payment under section 353.0161 to the fund made in place of
102.27salary deductions. An employee must return to public service and render a minimum of
102.28three months of allowable service in order to be eligible to make payment under section
102.29353.0161 for a subsequent authorized leave of absence without pay. Upon payment, the
102.30employee must be granted allowable service credit for the purchased period;
102.31    (6) a periodic, repetitive leave that is offered to all employees of a governmental
102.32subdivision. The leave program may not exceed 208 hours per annual normal work cycle
102.33as certified to the association by the employer. A participating member obtains service
102.34credit by making employee contributions in an amount or amounts based on the member's
102.35average salary, excluding overtime pay, that would have been paid if the leave had not
103.1been taken. The employer shall pay the employer and additional employer contributions
103.2on behalf of the participating member. The employee and the employer are responsible
103.3to pay interest on their respective shares at the rate of 8.5 percent a year, compounded
103.4annually, from the end of the normal cycle until full payment is made. An employer shall
103.5also make the employer and additional employer contributions, plus 8.5 percent interest,
103.6compounded annually, on behalf of an employee who makes employee contributions but
103.7terminates public service. The employee contributions must be made within one year
103.8after the end of the annual normal working cycle or within 30 days after termination of
103.9public service, whichever is sooner. The executive director shall prescribe the manner and
103.10forms to be used by a governmental subdivision in administering a periodic, repetitive
103.11leave. Upon payment, the member must be granted allowable service credit for the
103.12purchased period;
103.13    (7) an authorized temporary or seasonal layoff under subdivision 12, limited to three
103.14months allowable service per authorized temporary or seasonal layoff in one calendar year.
103.15An employee who has received the maximum service credit allowed for an authorized
103.16temporary or seasonal layoff must return to public service and must obtain a minimum of
103.17three months of allowable service subsequent to the layoff in order to receive allowable
103.18service for a subsequent authorized temporary or seasonal layoff;
103.19    (8) a period during which a member is absent from employment by a governmental
103.20subdivision by reason of service in the uniformed services, as defined in United States
103.21Code, title 38, section 4303(13), if the member returns to public service with the same
103.22governmental subdivision upon discharge from service in the uniformed service within the
103.23time frames required under United States Code, title 38, section 4312(e), provided that
103.24the member did not separate from uniformed service with a dishonorable or bad conduct
103.25discharge or under other than honorable conditions. The service is must be credited if the
103.26member pays into the fund equivalent employee contributions based upon the contribution
103.27rate or rates in effect at the time that the uniformed service was performed multiplied
103.28by the full and fractional years being purchased and applied to the annual salary rate.
103.29The annual salary rate is the average annual salary, excluding overtime pay, during the
103.30purchase period that the member would have received if the member had continued to
103.31be employed in covered employment rather than to provide uniformed service, or, if
103.32the determination of that rate is not reasonably certain, the annual salary rate is the
103.33member's average salary rate, excluding overtime pay, during the 12-month period of
103.34covered employment rendered immediately preceding the period of the uniformed service.
103.35Payment of the member equivalent contributions must be made during a period that begins
103.36with the date on which the individual returns to public employment and that is three times
104.1the length of the military leave period, or within five years of the date of discharge from
104.2the military service, whichever is less. If the determined payment period is less than
104.3one year, the contributions required under this clause to receive service credit may be
104.4made within one year of the discharge date. Payment may not be accepted following 30
104.5days after termination of public service under subdivision 11a. If the member equivalent
104.6contributions provided for in this clause are not paid in full, the member's allowable
104.7service credit must be prorated by multiplying the full and fractional number of years of
104.8uniformed service eligible for purchase by the ratio obtained by dividing the total member
104.9contributions received by the total member contributions otherwise required under this
104.10clause. The equivalent employer contribution, and, if applicable, the equivalent additional
104.11employer contribution must be paid by the governmental subdivision employing the
104.12member if the member makes the equivalent employee contributions. The employer
104.13payments must be made from funds available to the employing unit, using the employer
104.14and additional employer contribution rate or rates in effect at the time that the uniformed
104.15service was performed, applied to the same annual salary rate or rates used to compute the
104.16equivalent member contribution. The governmental subdivision involved may appropriate
104.17money for those payments. The amount of service credit obtainable under this section may
104.18not exceed five years unless a longer purchase period is required under United States Code,
104.19title 38, section 4312. The employing unit shall pay interest on all equivalent member and
104.20employer contribution amounts payable under this clause. Interest must be computed at a
104.21rate of 8.5 percent compounded annually from the end of each fiscal year of the leave or the
104.22break in service to the end of the month in which the payment is received. Upon payment,
104.23the employee must be granted allowable service credit for the purchased period; or
104.24(9) a period specified under subdivision 40.
104.25    (b) For calculating benefits under sections 353.30, 353.31, 353.32, and 353.33 for
104.26state officers and employees displaced by the Community Corrections Act, chapter 401,
104.27and transferred into county service under section 401.04, "allowable service" means the
104.28combined years of allowable service as defined in paragraph (a), clauses (1) to (6), and
104.29section 352.01, subdivision 11.
104.30    (c) For a public employee who has prior service covered by a local police or
104.31firefighters relief association that has consolidated with the Public Employees Retirement
104.32Association or to which section 353.665 applies, and who has elected the type of benefit
104.33coverage provided by the public employees police and fire fund either under section
104.34353A.08 following the consolidation or under section 353.665, subdivision 4, "applicable
104.35service" is a period of service credited by the local police or firefighters relief association
105.1as of the effective date of the consolidation based on law and on bylaw provisions
105.2governing the relief association on the date of the initiation of the consolidation procedure.
105.3    (d) No member may receive more than 12 months of allowable service credit in a
105.4year either for vesting purposes or for benefit calculation purposes.
105.5    (e) MS 2002 [Expired]
105.6EFFECTIVE DATE.This section is effective the day following final enactment.

105.7    Sec. 6. Minnesota Statutes 2008, section 353.0161, subdivision 2, is amended to read:
105.8    Subd. 2. Purchase procedure. (a) An employee covered by a plan specified in
105.9subdivision 1 may purchase credit for allowable service in that plan for a period specified
105.10in subdivision 1 if the employee makes a payment as specified in paragraph (b) or (c),
105.11whichever applies. The employing unit, at its option, may pay the employer portion of the
105.12amount specified in paragraph (b) on behalf of its employees.
105.13    (b) If payment is received by the executive director within one year from the date the
105.14member returned to work following the authorized leave, or within 30 days after the date
105.15of termination of public service if the member did not return to work, the payment amount
105.16is equal to the employee and employer contribution rates specified in law for the applicable
105.17plan at the end of the leave period, or at termination of public service, whichever is earlier,
105.18multiplied by the employee's average monthly salary, excluding overtime, upon which
105.19deductions were paid during the six months, or portion thereof, before the commencement
105.20of the leave of absence and by the number of months of the leave of absence for which
105.21the employee wants allowable service credit. Payments made under this paragraph must
105.22include compound interest at a monthly rate of 0.71 percent from the last day of the leave
105.23period until the last day of the month in which payment is received.
105.24    (c) If payment is received by the executive director after one year, the payment
105.25amount is the amount determined under section 356.551. Payment under this paragraph
105.26must be made before the date the person terminates public service under section 353.01,
105.27subdivision 11a.
105.28EFFECTIVE DATE.This section is effective the day following final enactment.

105.29    Sec. 7. [353.0162] REDUCED SALARY PERIODS SALARY CREDIT
105.30PURCHASE.
105.31(a) A member may purchase additional salary credit for a period specified in this
105.32section.
106.1(b) The applicable period is a period during which the member is receiving a reduced
106.2salary from the employer while the member is:
106.3(1) receiving temporary workers' compensation payments related to the member's
106.4service to the public employer;
106.5(2) on an authorized medical leave of absence; or
106.6(3) on an authorized partial paid leave of absence as a result of a budgetary or salary
106.7savings program offered or mandated by a governmental subdivision.
106.8(c) The differential salary amount is the difference between the average monthly
106.9salary received by the member during the period of reduced salary under this section and
106.10the average monthly salary of the member, excluding overtime, on which contributions
106.11to the applicable plan were made during the period of the last six months of covered
106.12employment occurring immediately before the period of reduced salary, applied to the
106.13member's normal employment period, measured in hours or otherwise, as applicable.
106.14(d) To receive eligible salary credit, the member shall pay an amount equal to:
106.15(1) the applicable employee contribution rate under section 353.27, subdivision
106.162
; 353.65, subdivision 2; or 353E.03, subdivision 1, as applicable, multiplied by the
106.17differential salary amount;
106.18(2) plus an employer equivalent payment equal to the applicable employer
106.19contribution rate in section 353.27, subdivision 3; 353.65, subdivision 3; or 353E.03,
106.20subdivision 2
, as applicable, multiplied by the differential salary amount;
106.21(3) plus, if applicable, an equivalent employer additional amount equal to the
106.22additional employer contribution rate in section 353.27, subdivision 3a, multiplied by the
106.23differential salary amount.
106.24(e) The employer, by appropriate action of its governing body and documented in its
106.25official records, may pay the employer equivalent contributions and, as applicable, the
106.26equivalent employer additional contributions on behalf of the member.
106.27(f) Payment under this section must include interest on the contribution amount
106.28or amounts, whichever applies, at an 8.5 percent annual rate, prorated for applicable
106.29months from the date on which the period of reduced salary specified under this section
106.30terminates to the date on which the payment or payments are received by the executive
106.31director. Payment under this section must be completed within the earlier of 30 days from
106.32termination of public service by the employee under section 353.01, subdivision 11a, or
106.33one year after the termination of the period specified in paragraph (b), as further restricted
106.34under this section.
106.35(g) The period for which additional allowable salary credit may be purchased is
106.36limited to the period during which the person receives temporary workers' compensation
107.1payments or for those business years in which the governmental subdivision offers or
107.2mandates a budget or salary savings program, as certified to the executive director by a
107.3resolution of the governing body of the governmental subdivision. For an authorized
107.4medical leave of absence, the period for which allowable salary credit may be purchased
107.5may not exceed 12 consecutive months of authorized medical leave.
107.6(h) To purchase salary credit for a subsequent period of temporary workers'
107.7compensation benefits or subsequent authorized medical leave of absence, the member
107.8must return to public service and render a minimum of three months of allowable service.
107.9EFFECTIVE DATE.This section is effective July 1, 2010. Purchase of reduced
107.10salary credit may be made for a period mandated or offered by a governmental subdivision
107.11for purposes of budget or salary savings on or after July 1, 2009.

107.12    Sec. 8. Minnesota Statutes 2008, section 353.03, subdivision 1, is amended to read:
107.13    Subdivision 1. Management; composition; election. (a) The management of the
107.14public employees retirement fund is vested in an 11-member board of trustees consisting
107.15of ten members and the state auditor. The state auditor may designate a deputy auditor
107.16with expertise in pension matters as the auditor's representative on the board. The
107.17governor shall appoint five trustees to four-year terms, one of whom shall be designated to
107.18represent school boards, one to represent cities, one to represent counties, one who is a
107.19retired annuitant, and one who is a public member knowledgeable in pension matters. The
107.20membership of the association, including recipients of retirement annuities and disability
107.21and survivor benefits, shall elect five trustees for terms of four years, one of whom must
107.22be a member of the police and fire fund and one of whom must be a former member who
107.23met the definition of public employee under section 353.01, subdivisions 2 and 2a, for at
107.24least five years prior to terminating membership and who is receiving a retirement annuity
107.25or a member who receives a disability benefit. Terms expire on January 31 of the fourth
107.26year, and positions are vacant until newly elected members are seated. Except as provided
107.27in this subdivision, trustees elected by the membership of the association must be public
107.28employees and members of the association.
107.29(b) For seven days beginning October 1 of each year preceding a year in which
107.30an election is held, the association shall accept at its office filings in person or by mail
107.31of candidates for the board of trustees. A candidate shall submit at the time of filing a
107.32nominating petition signed by 25 or more members of the association. No name may
107.33be withdrawn from nomination by the nominee after October 15. At the request of a
107.34candidate for an elected position on the board of trustees, the board shall mail provide
107.35a statement of up to 300 words prepared by the candidate to all persons eligible to vote
108.1in the election of the candidate. The board may adopt policies, subject to review and
108.2approval by the secretary of state under paragraph (e), and procedures to govern the form
108.3and length of these statements, and the timing of mailings, and deadlines for submitting
108.4materials to be mailed. The secretary of state shall resolve disputes between the board and
108.5a candidate concerning application of these policies to a particular statement distributed to
108.6the eligible voters.
108.7(c) By January 10 of each year in which elections are to be held, the board shall
108.8distribute by mail to the members ballots listing eligible voters the instructions and
108.9materials necessary to vote for the candidates seeking terms on the board of trustees.
108.10Eligible voters are the members, retirees, and other benefit recipients. No member voter
108.11may vote for more than one candidate for each board position to be filled. A ballot
108.12indicating a vote for more than one person for any position is void. No special marking
108.13may be used on the ballot to indicate incumbents. Ballots Votes cast by using paper ballots
108.14mailed to the association must be postmarked no later than January 31. Votes cast by using
108.15phone or other electronic means authorized under the board's procedures must be entered
108.16by the end of the day on January 31. The ballot envelopes must be so designated and the
108.17ballots must be counted in a manner that ensures design of the voting response media
108.18must ensure that each voter's vote is secret.
108.19(d) A candidate who receives contributions or, who makes expenditures in excess
108.20of $100, or who has given implicit or explicit consent for any other person to receive
108.21contributions or make expenditures in excess of $100 for the purpose of bringing about the
108.22candidate's election, shall file a report with the campaign finance and public disclosure
108.23board disclosing the source and amount of all contributions to the candidate's campaign.
108.24The campaign finance and public disclosure board shall prescribe forms governing these
108.25disclosures. Expenditures and contributions have the meaning defined in section 10A.01.
108.26These terms do not include the mailing any distribution made by the association board on
108.27behalf of the candidate. A candidate shall file a report within 30 days from the day that the
108.28results of the election are announced. The Campaign Finance and Public Disclosure Board
108.29shall maintain these reports and make them available for public inspection in the same
108.30manner as the board maintains and makes available other reports filed with it.
108.31(e) The secretary of state shall review and approve comment on the procedures
108.32defined by the board of trustees for conducting the elections specified in this subdivision,
108.33including board policies adopted under paragraph (b).
108.34(f) The board of trustees and the executive director shall undertake their activities
108.35consistent with chapter 356A.
108.36EFFECTIVE DATE.This section is effective the day following final enactment.

109.1    Sec. 9. Minnesota Statutes 2008, section 353.27, subdivision 4, is amended to read:
109.2    Subd. 4. Employer reporting requirements; contributions; member status.
109.3(a) A representative authorized by the head of each department shall deduct employee
109.4contributions from the salary of each public employee who qualifies for membership
109.5under this chapter and or chapter 353D or 353E at the rate under section 353.27, 353.65,
109.6353D.03, or 353E.03, whichever is applicable, that is in effect on the date the salary is
109.7paid. The employer representative must also remit payment in a manner prescribed by
109.8the executive director for the aggregate amount of the employee contributions, and the
109.9required employer contributions and the additional employer contributions to be received
109.10by the association within 14 calendar days after each pay date. If the payment is less than
109.11the amount required, the employer must pay the shortage amount to the association and
109.12collect reimbursement of any employee contribution shortage paid on behalf of a member
109.13through subsequent payroll withholdings from the wages of the employee. Payment of
109.14shortages in employee contributions and associated employer contributions, if applicable,
109.15must include interest at the rate specified in section 353.28, subdivision 5, if not received
109.16within 30 days following the date the amount was initially due under this section.
109.17(b) The head of each department or the person's designee shall submit for each pay
109.18period submit to the association a salary deduction report in the format prescribed by the
109.19executive director. The report must be received by the association within 14 calendar days
109.20after each pay date or the employer may be assessed a fine of $5 per calendar day until
109.21the association receives the required data. Data required to be submitted as part of salary
109.22deduction reporting must include, but are not limited to:
109.23(1) the legal names and Social Security numbers of employees who are members;
109.24(2) the amount of each employee's salary deduction;
109.25(3) the amount of salary defined in section 353.01, subdivision 10, earned in the
109.26pay period from which each deduction was made and the salary amount earned by a
109.27reemployed annuitant under section 353.37, subdivision 1, or 353.371, subdivision 1, or
109.28by a disabled member under section 353.33, subdivision 7 or 7a;
109.29(4) the beginning and ending dates of the payroll period covered and the date of
109.30actual payment; and
109.31(5) adjustments or corrections covering past pay periods as authorized by the
109.32executive director.
109.33(b) (c) Employers must furnish the data required for enrollment for each new
109.34or reinstated employee who qualifies for membership in the format prescribed by the
109.35executive director. The required enrollment data on new employees members must be
109.36submitted to the association prior to or concurrent with the submission of the initial
110.1employee salary deduction. Also, the employer shall also report to the association all
110.2member employment status changes, such as leaves of absence, terminations, and death,
110.3and shall report the effective dates of those changes, on an ongoing basis for the payroll
110.4cycle in which they occur. If an employer fails to comply with the reporting requirements
110.5under this paragraph, the executive director may assess a fine of $25 for each failure if the
110.6association staff has notified the employer of the noncompliance and attempted to obtain
110.7the missing data or form from the employer for a period of more than three months.
110.8(d) The employer shall furnish data, forms, and reports as may be required by
110.9the executive director for proper administration of the retirement system. Before
110.10implementing new or different computerized reporting requirements, the executive
110.11director shall give appropriate advance notice to governmental subdivisions to allow time
110.12for system modifications.
110.13(c) (e) Notwithstanding paragraph (a), the association may provide for less frequent
110.14reporting and payments for small employers.
110.15(f) The executive director may establish reporting procedures and methods as
110.16required to review compliance by employers with the salary and contribution reporting
110.17requirements in this chapter. A review of the payroll records of a participating employer
110.18may be conducted by the association on a periodic basis or as a result of concerns known
110.19to exist within a governmental subdivision. An employer under review must extract
110.20requested data and provide records to the association after receiving reasonable advanced
110.21notice. Failure to provide requested information or materials will result in the employer
110.22being liable to the association for any expenses associated with a field audit, which may
110.23include staff salaries, administrative expenses, and travel expenses.
110.24EFFECTIVE DATE.This section is effective the day following final enactment.

110.25    Sec. 10. Minnesota Statutes 2009 Supplement, section 353.27, subdivision 7, is
110.26amended to read:
110.27    Subd. 7. Adjustment for erroneous receipts or disbursements. (a) Except
110.28as provided in paragraph (b), erroneous employee deductions and erroneous employer
110.29contributions and additional employer contributions for a person, who otherwise does not
110.30qualify for membership under this chapter, are considered:
110.31(1) valid if the initial erroneous deduction began before January 1, 1990. Upon
110.32determination of the error by the association, the person may continue membership in the
110.33association while employed in the same position for which erroneous deductions were
110.34taken, or file a written election to terminate membership and apply for a refund upon
110.35termination of public service or defer an annuity under section 353.34; or
111.1(2) invalid, if the initial erroneous employee deduction began on or after January 1,
111.21990. Upon determination of the error, the association shall refund all erroneous employee
111.3deductions and all erroneous employer contributions as specified in paragraph (e). No
111.4person may claim a right to continued or past membership in the association based on
111.5erroneous deductions which began on or after January 1, 1990.
111.6(b) Erroneous deductions taken from the salary of a person who did not qualify for
111.7membership in the association by virtue of concurrent employment before July 1, 1978,
111.8which required contributions to another retirement fund or relief association established
111.9for the benefit of officers and employees of a governmental subdivision, are invalid. Upon
111.10discovery of the error, the association shall remove allowable service credit for all invalid
111.11service if forfeited and, upon termination of public service, the association shall refund all
111.12erroneous employee deductions to the person, with interest as determined under section
111.13353.34, subdivision 2 , and all erroneous employer contributions without interest to the
111.14employer. This paragraph has both retroactive and prospective application.
111.15(c) Adjustments to correct employer contributions and employee deductions taken
111.16in error from amounts which are not salary under section 353.01, subdivision 10, must
111.17be made as specified in paragraph (e). The period of adjustment must be limited to the
111.18fiscal year in which the error is discovered by the association and the immediate two
111.19preceding fiscal years.
111.20(d) If there is evidence of fraud or other misconduct on the part of the employee or
111.21the employer, the board of trustees may authorize adjustments to the account of a member
111.22or former member to correct erroneous employee deductions and employer contributions
111.23on invalid salary and the recovery of any overpayments for a period longer than provided
111.24for under paragraph (c).
111.25(e) Upon discovery of the receipt of erroneous employee deductions and employer
111.26contributions under paragraph (a), clause (2), or paragraph (c), the association must require
111.27the employer to discontinue the erroneous employee deductions and erroneous employer
111.28contributions reported on behalf of a member. Upon discontinuation, the association must:
111.29(1) for a member, provide a refund or credit to the employer in the amount of the
111.30invalid employee deductions with interest on the invalid employee deductions at the rate
111.31specified under section 353.34, subdivision 2, from the received date of each invalid salary
111.32transaction through the date the credit or refund is made; and the employer must pay the
111.33refunded employee deductions plus interest to the member;
111.34(2) for a former member who:
111.35(i) is not receiving a retirement annuity or benefit, return the erroneous employee
111.36deductions to the former member through a refund with interest at the rate specified under
112.1section 353.34, subdivision 2, from the received date of each invalid salary transaction
112.2through the date the credit or refund is made; or
112.3(ii) is receiving a retirement annuity or disability benefit, or a person who is
112.4receiving an optional annuity or survivor benefit, for whom it has been determined an
112.5overpayment must be recovered, adjust the payment amount and recover the overpayments
112.6as provided under this section; and
112.7(3) return the invalid employer contributions reported on behalf of a member or
112.8former member to the employer by providing a credit against future contributions payable
112.9by the employer.
112.10(f) In the event that a salary warrant or check from which a deduction for the
112.11retirement fund was taken has been canceled or the amount of the warrant or check
112.12returned to the funds of the department making the payment, a refund of the sum
112.13deducted, or any portion of it that is required to adjust the deductions, must be made
112.14to the department or institution.
112.15(g) If the accrual date of any retirement annuity, survivor benefit, or disability benefit
112.16is within the limitation period specified in paragraph (c), and an overpayment has resulted
112.17by using invalid service or salary, or due to any erroneous calculation procedure, the
112.18association must recalculate the annuity or benefit payable and recover any overpayment
112.19as provided under subdivision 7b.
112.20(h) Notwithstanding the provisions of this subdivision, the association may apply
112.21the Revenue Procedures defined in the federal Internal Revenue Service Employee Plans
112.22Compliance Resolution System and not issue a refund of erroneous employee deductions
112.23and employer contributions or not recover a small overpayment of benefits if the cost to
112.24correct the error would exceed the amount of the member refund or overpayment.
112.25(i) Any fees or penalties assessed by the federal Internal Revenue Service for any
112.26failure by an employer to follow the statutory requirements for reporting eligible members
112.27and salary must be paid by the employer.
112.28EFFECTIVE DATE.This section is effective the day following final enactment.

112.29    Sec. 11. Minnesota Statutes 2008, section 353.27, subdivision 10, is amended to read:
112.30    Subd. 10. Employer exclusion reports. (a) The head of a department shall annually
112.31furnish the executive director with an exclusion report listing only those employees in
112.32potentially PERA-eligible positions who were not reported as members of the association
112.33and who worked during the school year for school employees and calendar year for
112.34nonschool employees. The department head must certify the accuracy and completeness
112.35of the exclusion report to the association. The executive director shall prescribe the
113.1manner and forms, including standardized exclusion codes, to be used by a governmental
113.2subdivision in preparing and filing exclusion reports. Also, the executive director shall
113.3also check the exclusion report to ascertain whether any omissions have been made by a
113.4department head in the reporting of new public employees for membership. The executive
113.5director may delegate an association employee under section 353.03, subdivision 3a,
113.6paragraph (b), clause (5), to conduct a field audit to review the payroll records of a
113.7governmental subdivision.
113.8(b) If an employer fails to comply with the reporting requirements under this
113.9subdivision, the executive director may assess a fine of $25 for each failure if the
113.10association staff has notified the employer of the noncompliance and attempted to obtain
113.11the missing data or form from the employer for a period of more than three months.
113.12EFFECTIVE DATE.This section is effective the day following final enactment.

113.13    Sec. 12. Minnesota Statutes 2009 Supplement, section 353.371, subdivision 4, is
113.14amended to read:
113.15    Subd. 4. Duration. Postretirement option employment shall may be for an initial
113.16period not to exceed one year. At the end of the initial period, the governing body has sole
113.17discretion to determine if the offer of a postretirement option position will be renewed,
113.18renewed with modifications, or terminated. Postretirement option employment may be
113.19renewed annually, but may not be renewed after the individual attains retirement age as
113.20defined in United States Code, title 42, section 416(l) no more than four renewals may
113.21occur.
113.22EFFECTIVE DATE.This section is effective the day following final enactment.

113.23    Sec. 13. Minnesota Statutes 2008, section 353D.01, subdivision 2, is amended to read:
113.24    Subd. 2. Eligibility. (a) Eligibility to participate in the defined contribution plan
113.25is available to:
113.26(1) elected local government officials of a governmental subdivision who elect to
113.27participate in the plan under section 353D.02, subdivision 1, and who, for the elected
113.28service rendered to a governmental subdivision, are not members of the Public Employees
113.29Retirement Association within the meaning of section 353.01, subdivision 7;
113.30(2) physicians who, if they did not elect to participate in the plan under section
113.31353D.02, subdivision 2 , would meet the definition of member under section 353.01,
113.32subdivision 7
;
114.1(3) basic and advanced life-support emergency medical service personnel who
114.2are employed by any public ambulance service that elects to participate under section
114.3353D.02, subdivision 3 ;
114.4(4) members of a municipal rescue squad associated with the city of Litchfield
114.5in Meeker County, or of a county rescue squad associated with Kandiyohi County, if
114.6an independent nonprofit rescue squad corporation, incorporated under chapter 317A,
114.7performing emergency management services, and if not affiliated with a fire department
114.8or ambulance service and if its members are not eligible for membership in that fire
114.9department's or ambulance service's relief association or comparable pension plan;
114.10(5) employees of the Port Authority of the city of St. Paul who elect to participate in
114.11the plan under section 353D.02, subdivision 5, and who are not members of the Public
114.12Employees Retirement Association under section 353.01, subdivision 7;
114.13(6) city managers who elected to be excluded from the general employees retirement
114.14plan of the Public Employees Retirement Association under section 353.028 and who
114.15elected to participate in the public employees defined contribution plan under section
114.16353.028 , subdivision 3, paragraph (b); and
114.17(7) volunteer or emergency on-call firefighters serving in a municipal fire department
114.18or an independent nonprofit firefighting corporation who are not covered by the public
114.19employees police and fire retirement plan and who are not covered by a volunteer
114.20firefighters relief association and who elect to participate in the public employees defined
114.21contribution plan.;
114.22(8) elected county sheriffs who are former members of the police and fire plan and
114.23who are receiving a retirement annuity as provided under section 353.651; and
114.24(9) persons who are excluded from membership under section 353.01, subdivision
114.252b, paragraph (a), clause (25).
114.26(b) For purposes of this chapter, an elected local government official includes
114.27a person appointed to fill a vacancy in an elective office. Service as an elected local
114.28government official only includes service for the governmental subdivision for which the
114.29official was elected by the public at large. Service as an elected local government official
114.30ceases and eligibility to participate terminates when the person ceases to be an elected
114.31official. An elected local government official does not include an elected county sheriff
114.32who must be a member of the police and fire plan as provided under chapter 353.
114.33(c) Individuals otherwise eligible to participate in the plan under this subdivision
114.34who are currently covered by a public or private pension plan because of their employment
114.35or provision of services are not eligible to participate in the public employees defined
114.36contribution plan.
115.1(d) A former participant is a person who has terminated eligible employment or
115.2service and has not withdrawn the value of the person's individual account.
115.3EFFECTIVE DATE.This section is effective July 1, 2010.

115.4    Sec. 14. Minnesota Statutes 2008, section 353D.03, subdivision 1, is amended to read:
115.5    Subdivision 1. Local government official contribution Contributions for eligible
115.6participants. An (a) The following classes of eligible elected local government official
115.7participants who elects elect to participate in the public employees defined contribution
115.8plan under section 353D.02 shall contribute an amount equal to five percent of salary as
115.9defined in section 353.01, subdivision 10.:
115.10(1) A participating elected local government official's officials;
115.11(2) physicians; and
115.12(3) persons who are excluded from membership under section 353.01, subdivision
115.132b, clause (25).
115.14(b) A participant's governmental subdivision shall contribute a matching amount.
115.15EFFECTIVE DATE.This section is effective July 1, 2010.

115.16    Sec. 15. Minnesota Statutes 2008, section 353D.04, subdivision 1, is amended to read:
115.17    Subdivision 1. Crediting of account contributions to participant accounts. (a)
115.18Contributions made by or on behalf of a participating elected local government official or
115.19physician participant under section 353D.03, subdivisions 1, 5, and 6, paragraph (a), must
115.20be remitted to the Public Employees Retirement Association and credited to the individual
115.21account established for the participant
115.22(b). Ambulance service Contributions as provided under section 353D.03,
115.23subdivision 3, and subdivision 6, paragraph (b), must be remitted on a regular basis to the
115.24association together with any member contributions paid or withheld. Those contributions
115.25must be credited to the individual account of each participating member.
115.26EFFECTIVE DATE.This section is effective July 1, 2010.

115.27    Sec. 16. Minnesota Statutes 2008, section 353D.04, subdivision 2, is amended to read:
115.28    Subd. 2. Authority to adopt policies correcting erroneous contributions. The
115.29executive director may adopt policies and procedures regarding deductions taken totally
115.30or partially in error by the employer from the salary of an elected official.
115.31EFFECTIVE DATE.This section is effective July 1, 2010.

116.1    Sec. 17. Minnesota Statutes 2009 Supplement, section 353F.02, subdivision 4, is
116.2amended to read:
116.3    Subd. 4. Medical facility. "Medical facility" means:
116.4    (1) Bridges Medical Services;
116.5    (2) the City of Cannon Falls Hospital;
116.6    (3) the Chris Jenson Health and Rehabilitation Center in St. Louis County;
116.7(4) Clearwater County Memorial Hospital doing business as Clearwater Health
116.8Services in Bagley;
116.9    (4) (5) the Dassel Lakeside Community Home;
116.10(6) the Douglas County Hospital, with respect to the Mental Health Unit;
116.11    (5) (7) the Fair Oaks Lodge, Wadena;
116.12    (6) (8) the Glencoe Area Health Center;
116.13    (7) (9) Hutchinson Area Health Care;
116.14    (8) (10) the Lakefield Nursing Home;
116.15    (9) (11) the Lakeview Nursing Home in Gaylord;
116.16    (10) (12) the Luverne Public Hospital;
116.17    (11) (13) the Oakland Park Nursing Home;
116.18    (12) (14) the RenVilla Nursing Home;
116.19    (13) (15) the Rice Memorial Hospital in Willmar, with respect to the Department
116.20of Radiology and the Department of Radiation/Oncology;
116.21(14) (16) the St. Peter Community Health Care Center;
116.22    (15) (17) the Waconia-Ridgeview Medical Center;
116.23(16) (18) the Weiner Memorial Medical Center, Inc.; and
116.24(19) the Wheaton Community Hospital; and
116.25(17) (20) the Worthington Regional Hospital.
116.26EFFECTIVE DATE.This section is effective the day following final enactment.

116.27    Sec. 18. Minnesota Statutes 2008, section 353F.025, subdivision 1, is amended to read:
116.28    Subdivision 1. Eligibility determination. (a) The chief clerical officer of a
116.29governmental subdivision may submit a resolution from the governing body to the
116.30executive director of the Public Employees Retirement Association which supports
116.31providing coverage under this chapter for employees of that governmental subdivision
116.32who are privatized, and which states that the governing body will pay for actuarial
116.33calculations, as further specified in paragraph (c).
116.34    (b) The governing body must also provide a copy of any applicable purchase or
116.35lease agreement and any other information requested by the executive director to allow the
117.1executive director to verify that under the proposed employer change, the new employer
117.2does not qualify as a governmental subdivision under section 353.01, subdivision 6,
117.3making the employees ineligible for continued coverage as active members of the general
117.4employees retirement plan of the Public Employees Retirement Association.
117.5    (c) Following receipt of a resolution and a determination by the executive director
117.6that the new employer is not a governmental subdivision, the executive director shall
117.7direct the consulting actuary retained under section 356.214 to determine whether the
117.8general employees retirement plan of the Public Employees Retirement Association, if
117.9coverage under this chapter is provided, is expected to receive a net gain or a net loss if
117.10privatization occurs, by determining whether . A net gain is expected if the actuarial
117.11liability of the special benefit coverage provided under this chapter, if extended to the
117.12applicable employees under the privatization, is less than the actuarial gain otherwise to
117.13accrue to the plan. A net loss is expected if the actuarial accrued liability of the special
117.14benefit coverage provided under this chapter, if extended to the applicable employees
117.15under the privatization, is more than the actuarial gain otherwise to accrue to the plan. The
117.16date of the actuarial calculations used to make this determination must be within one year
117.17of the effective date, as defined in section 353F.02, subdivision 3.
117.18EFFECTIVE DATE.This section is effective the day following final enactment.

117.19    Sec. 19. Minnesota Statutes 2008, section 353F.025, subdivision 2, is amended to read:
117.20    Subd. 2. Recommendation to legislature. (a) If the actuarial calculations under
117.21subdivision 1, paragraph (c), indicate that a net gain to the general employees retirement
117.22plan of the Public Employees Retirement Association is expected due to the privatization,
117.23or if paragraph (c) applies, the executive director shall forward a recommendation and
117.24supporting documentation to the chair of the Legislative Commission on Pensions and
117.25Retirement, the chair of the Governmental Operations, Reform, Technology and Elections
117.26Committee of the house of representatives, the chair of the State and Local Government
117.27Operations and Oversight Committee of the senate, and the executive director of the
117.28Legislative Commission on Pensions and Retirement. The recommendation must be in
117.29the form of an addition to the definition of "medical facility" under section 353F.02,
117.30subdivision 4
, or to "other public employing unit" under section 353F.02, subdivision 5,
117.31whichever is applicable. The recommendation must be forwarded to the legislature before
117.32January 15 for the recommendation to be considered in that year's legislative session. The
117.33recommendation may be included as part of public pension administrative legislation
117.34under section 356B.05.
118.1    (b) If a medical facility or other public employing unit listed under section 353F.02,
118.2subdivision 4 or 5, fails to privatize within one year of the final enactment date of the
118.3legislation adding the entity to the applicable definition, its inclusion under this chapter is
118.4voided, and the executive director shall include in the subsequent proposed legislation
118.5under paragraph (a) a recommendation that the applicable entity be stricken from the
118.6definition.
118.7(c) If the calculations under subdivision 1, paragraph (c), indicate a net loss, the
118.8executive director shall forward a recommendation that the privatization be included as an
118.9addition under paragraph (a) if the chief clerical officer of the applicable governmental
118.10subdivision submits a resolution from the governing body specifying that a lump sum
118.11payment will be made to the executive director equal to the net loss, plus interest. The
118.12interest must be computed using the applicable preretirement interest rate assumption
118.13under section 356.215, subdivision 8, expressed as a monthly rate, from the date of the
118.14actuarial valuation from which the actuarial accrued liability data was used to determine
118.15the net loss in the actuarial study under subdivision 1, to the date of payment, with annual
118.16compounding. Payment must be made on or after the effective date under section 353F.02.
118.17EFFECTIVE DATE.This section is effective the day following final enactment.

118.18    Sec. 20. Minnesota Statutes 2008, section 356.96, subdivision 2, is amended to read:
118.19    Subd. 2. Right to review. A determination made by the administration chief
118.20administrative officer of a covered pension plan regarding a person's eligibility, benefits,
118.21or other rights under the plan with which the person does not agree is subject to review
118.22under this section.
118.23EFFECTIVE DATE.This section is effective the day following final enactment.

118.24    Sec. 21. Minnesota Statutes 2008, section 356.96, subdivision 3, is amended to read:
118.25    Subd. 3. Notice of determination. If the applicable chief administrative officer
118.26denies an application or a written request, modifies a benefit, or terminates a benefit
118.27of a person claiming a right or potential rights under a covered pension plan, the chief
118.28administrative officer shall notify that person through a written notice containing:
118.29    (1) a statement of the reasons for the determination;
118.30    (2) a notice that the person may petition the governing board of the covered pension
118.31plan for a review of the determination and that a person's petition for review must be filed
118.32in the administrative office of the covered pension plan within 60 days of the receipt
118.33of the written notice of the determination;
119.1    (3) a statement indicating that a failure to petition for review within 60 days
119.2precludes the person from contesting in any other administrative review or court procedure
119.3the issues determined by the chief administrative officer;
119.4    (4) a statement indicating that all relevant materials, documents, affidavits, and other
119.5records that the person wishes to be reviewed in support of the petition must be filed with
119.6and received in the administrative office of the covered pension plan at least 30 15 days
119.7before the date of the hearing under subdivision 10; and
119.8    (5) a copy summary of this section, including all filing requirements and deadlines.
119.9EFFECTIVE DATE.This section is effective the day following final enactment.

119.10    Sec. 22. Minnesota Statutes 2009 Supplement, section 356.96, subdivision 5, is
119.11amended to read:
119.12    Subd. 5. Petition for review. (a) A person who claims a right under subdivision 2
119.13may petition for a review of that decision by the governing board of the covered pension
119.14plan.
119.15    (b) A petition under this section must be sent to the chief administrative officer by
119.16mail and must be postmarked no later than 60 days after the person received the notice
119.17required by subdivision 3. The petition must include the person's statement of the reason
119.18or reasons that the person believes the decision of the chief administrative officer should
119.19be reversed or modified. The petition may include all documentation and written materials
119.20that the petitioner deems to be relevant. In developing a record for review by the board
119.21when a decision is appealed, the executive director chief administrative officer may direct
119.22that the applicant participate in a fact-finding session conducted by an administrative law
119.23judge assigned by the Office of Administrative Hearings and, as applicable, participate in
119.24a vocational assessment conducted by a qualified rehabilitation counselor on contract with
119.25the applicable retirement system.
119.26EFFECTIVE DATE.This section is effective the day following final enactment.

119.27    Sec. 23. Minnesota Statutes 2008, section 356.96, subdivision 7, is amended to read:
119.28    Subd. 7. Notice of hearing. (a) After receiving a petition, and not less than 30
119.29calendar days from the date of the next regular board meeting, the chief administrative
119.30officer must schedule a timely review of the petition before the governing board of the
119.31covered pension plan. The review must be scheduled to take into consideration any
119.32necessary accommodations to allow the petitioner to participate in the governing board's
119.33review.
120.1    (b) Not less than 15 30 calendar days before the scheduled hearing date, the chief
120.2administrative officer must provide by mail to the petitioner an acknowledgment of the
120.3receipt of the person's petition and a follow-up notice of the time and place of the meeting
120.4at which the governing board is scheduled to consider the petition and must provide a copy
120.5of all relevant documents, evidence, summaries, and recommendations assembled by or
120.6on behalf of the plan administration to be considered by the governing board.
120.7    (c) Except as provided in subdivision 8, paragraph (c), All documents and materials
120.8that the petitioner wishes to be part of the record for review must be filed with the chief
120.9administrative officer and must be received in the offices of the covered pension plan
120.10at least 30 15 days before the date of the meeting at which the petition is scheduled to
120.11be heard.
120.12    (d) A petitioner, may request a continuance of a scheduled hearing if the request
120.13is received by the chief administrative officer within ten calendar days of the scheduled
120.14date of the applicable board meeting, may request a continuance on a scheduled petition.
120.15The chief administrative officer must reschedule the review within 60 days of the date
120.16of the continuance request a reasonable time. Only one continuance may be granted to
120.17any petitioner.
120.18EFFECTIVE DATE.This section is effective the day following final enactment.

120.19    Sec. 24. Minnesota Statutes 2008, section 356.96, subdivision 8, is amended to read:
120.20    Subd. 8. Record for review. (a) All evidence, including all records, documents, and
120.21affidavits in the possession of the covered pension plan of which the covered pension plan
120.22desires to avail itself and be considered by the governing board, and all evidence which the
120.23petitioner wishes to present to the governing board, including any evidence which would
120.24otherwise be classified by law as "private," must be made part of the hearing record.
120.25    (b) Not later than The chief administrative officer must provide a copy of the record
120.26to each member of the governing board at least seven days before the scheduled hearing
120.27date, the chief administrative officer must provide a copy of the record to each member
120.28of the governing board.
120.29    (c) At least five days before the hearing, the petitioner may submit to the chief
120.30administrative officer, for submission to the governing board, Any additional document,
120.31affidavit, or other relevant information that was not initially submitted with the petition
120.32the petitioner requests be part of the record may be admitted with the consent of the
120.33governing board.
120.34EFFECTIVE DATE.This section is effective the day following final enactment.

121.1    Sec. 25. Laws 2009, chapter 169, article 4, section 49, is amended to read:
121.2    Sec. 49. CITY OF DULUTH AND DULUTH AIRPORT AUTHORITY AND
121.3CITY OF VIRGINIA; CORRECTING ERRONEOUS EMPLOYEE DEDUCTIONS,
121.4EMPLOYER CONTRIBUTIONS AND ADJUSTING OVERPAID BENEFITS.
121.5    Subdivision 1. Application. Notwithstanding any provisions of Minnesota Statutes,
121.6section 353.27, subdivisions 7 and 7b, or Minnesota Statutes 2008, chapters 353 and
121.7356, to the contrary, this section establishes the procedures by which the executive
121.8director of the Public Employees Retirement Association shall adjust erroneous employee
121.9deductions and employer contributions paid on behalf of active employees and former
121.10members by the city of Duluth and, by the Duluth Airport Authority, and by the city
121.11of Virginia on amounts determined by the executive director to be invalid salary under
121.12Minnesota Statutes, section 353.01, subdivision 10, reported between January 1, 1997,
121.13and October 23, 2008, and for adjusting benefits that were paid to former members and
121.14their beneficiaries based upon invalid salary amounts.
121.15    Subd. 2. Refunds of employee deductions. (a) The executive director shall refund
121.16to active employees or former members who are not receiving retirement annuities or
121.17benefits all erroneous employee deductions identified by the city of Duluth or, by the
121.18Duluth Airport Authority, or by the city of Virginia as deductions taken from amounts
121.19determined to be invalid salary. The refunds must include interest at the rate specified in
121.20Minnesota Statutes, section 353.34, subdivision 2, from the date each invalid employee
121.21deduction was received through the date each refund is paid.
121.22(b) The refund payment for active employees must be sent to the applicable
121.23governmental subdivision which must pay the refunded employee deductions plus interest
121.24to the active home addresses of the members who are employees of the city of Duluth
121.25or, who are employees of the Duluth Airport Authority, or who are employees of the city
121.26of Virginia, as applicable.
121.27(c) Refunds to former members must be mailed by the executive director of the
121.28Public Employees Retirement Association to the former member's last known address.
121.29    Subd. 3. Benefit adjustments. (a) For a former member who is receiving a
121.30retirement annuity or disability benefit, or for a person receiving an optional annuity or
121.31survivor benefit, the executive director must:
121.32(1) adjust the annuity or benefit payment to the correct monthly benefit amount
121.33payable by reducing the average salary under Minnesota Statutes, section 353.01,
121.34subdivision 17a
, by the invalid salary amounts;
122.1(2) determine the amount of the overpaid benefits paid from the effective date of
122.2the annuity or benefit payment to the first of the month in which the monthly benefit
122.3amount is corrected;
122.4(3) calculate the amount of employee deductions taken in error on invalid salary,
122.5including interest at the rate specified in Minnesota Statutes, section 353.34, subdivision 2,
122.6from the date each invalid employee deduction was received through the date the annuity
122.7or benefit is adjusted as provided under clause (1); and
122.8(4) determine the net amount of overpaid benefits by reducing the amount of the
122.9overpaid annuity or benefit as determined in clause (2) by the amount of the erroneous
122.10employee deductions with interest as determined in clause (3).
122.11(b) If a former member's erroneous employee deductions plus interest determined
122.12under this section exceeds the amount of the person's overpaid benefits, the balance must
122.13be refunded to the person to whom the annuity or benefit is being paid.
122.14(c) The executive director shall recover the net amount of all overpaid annuities or
122.15benefits as provided under subdivision 4.
122.16    Subd. 4. Employer credits and obligations. (a) The executive director shall
122.17provide a credit without interest to the city of Duluth and, to the Duluth Airport Authority,
122.18and to the city of Virginia, as applicable, for the amount of that governmental subdivision's
122.19erroneous employer contributions. The credit must first be used to offset the net amount of
122.20the overpaid retirement annuities and the disability and survivor benefits that remains after
122.21applying the amount of erroneous employee deductions with interest as provided under
122.22subdivision 3, paragraph (a), clause (4). The remaining erroneous employer contributions,
122.23if any, must be credited against future employer contributions required to be paid by
122.24the applicable governmental subdivision. If the overpaid benefits exceed the employer
122.25contribution credit, the balance of the overpaid benefits is the obligation of the city of
122.26Duluth or, the Duluth Airport Authority, or the city of Virginia, whichever is applicable.
122.27(b) The Public Employees Retirement Association board of trustees shall determine
122.28the period of time and manner for the collection of overpaid retirement annuities and
122.29benefits, if any, from the city of Duluth and, the Duluth Airport Authority, and the city of
122.30Virginia.
122.31EFFECTIVE DATE.(a) This section is effective for the city of Duluth the day after
122.32the Duluth city council and the chief clerical officer of the city of Duluth timely complete
122.33their compliance with Minnesota Statutes, section 645.021, subdivisions 2 and 3, for
122.34members who are, and former members who were, employees of the city of Duluth.
122.35(b) This section is effective for the Duluth Airport Authority the day after the Duluth
122.36Airport Authority and the chief clerical officer of the Duluth Airport Authority timely
123.1complete their compliance with Minnesota Statutes, section 645.021, subdivisions 2
123.2and 3, for members who are, and former members who were, employees of the Duluth
123.3Airport Authority.
123.4(c) This section is effective for the city of Virginia the day after the Virginia
123.5city council and the chief clerical officer of the city of Virginia timely complete their
123.6compliance with Minnesota Statutes, section 645.021, subdivisions 2 and 3, for members
123.7who are, and former members who were, employees of the city of Virginia. If this section
123.8becomes effective for the city of Virginia, it applies retroactively from June 23, 2009.
123.9EFFECTIVE DATE.This section is effective the day following final enactment.

123.10    Sec. 26. Laws 2009, chapter 169, article 5, section 2, the effective date, is amended to
123.11read:
123.12EFFECTIVE DATE.This section is effective the day following final enactment
123.13and expires on June 30, 2011 2014. Individuals must not be appointed to a postretirement
123.14option position after that date.
123.15EFFECTIVE DATE.This section is effective the day following final enactment.

123.16    Sec. 27. REPEALER.
123.17(a) Minnesota Statutes 2008, section 353.01, subdivision 40, is repealed effective
123.18July 1, 2010.
123.19(b) Minnesota Statutes 2008, sections 353.46, subdivision 1a; and 353D.03,
123.20subdivision 2, are repealed the day following final enactment.
123.21(c) Minnesota Statutes 2008, section 353D.12, is repealed effective July 1, 2011.

123.22ARTICLE 6
123.23VOLUNTARY STATEWIDE LUMP-SUM VOLUNTEER FIREFIGHTER
123.24RETIREMENT PLAN

123.25    Section 1. Minnesota Statutes 2008, section 69.051, subdivision 3, is amended to read:
123.26    Subd. 3. Report by certain municipalities. (a) Each municipality which has
123.27an organized fire department but which does not have a firefighters' relief association
123.28governed by section 69.77 or sections 69.771 to 69.775 and which is not exempted
123.29under paragraph (b) shall annually prepare a detailed financial report of the receipts and
123.30disbursements by the municipality for fire protection service during the preceding calendar
123.31year, on a form prescribed by the state auditor. The financial report shall must contain any
123.32information which the state auditor deems necessary to disclose the sources of receipts
124.1and the purpose of disbursements for fire protection service. The financial report shall
124.2must be signed by the municipal clerk or clerk-treasurer of the municipality. The financial
124.3report shall must be filed by the municipal clerk or clerk-treasurer with the state auditor on
124.4or before July 1 annually. The state auditor shall forward one copy to the county auditor of
124.5the county wherein the municipality is located. The municipality shall not qualify initially
124.6to receive, or be entitled subsequently to retain, state aid pursuant to under this chapter if
124.7the financial reporting requirement or the applicable requirements of this chapter or any
124.8other statute or special law have not been complied with or are not fulfilled.
124.9(b) Each municipality which has an organized fire department and which provides
124.10retirement coverage to its firefighters through the voluntary statewide lump-sum volunteer
124.11firefighter retirement plan under chapter 353G qualifies to have fire state aid transmitted
124.12to and retained in the statewide lump-sum volunteer firefighter retirement fund without
124.13filing a detailed financial report if the executive director of the Public Employees
124.14Retirement Association certifies compliance by the municipality with the requirements of
124.15sections 353G.04 and 353G.08, paragraph (e), and by the applicable fire chief with the
124.16requirements of section 353G.07.
124.17EFFECTIVE DATE.This section is effective retroactively from January 1, 2010.

124.18    Sec. 2. Minnesota Statutes 2009 Supplement, section 353G.05, subdivision 2, is
124.19amended to read:
124.20    Subd. 2. Election of coverage. (a) The process for electing coverage of volunteer
124.21firefighters by the retirement plan is initiated by a request to the executive director for a
124.22cost analysis of the prospective retirement coverage.
124.23(b) If the volunteer firefighters are currently covered by a volunteer firefighters' relief
124.24association governed by chapter 424A, the cost analysis of the prospective retirement
124.25coverage must be requested jointly by the secretary of the volunteer firefighters' relief
124.26association, following approval of the request by the board of the volunteer firefighters'
124.27relief association, and the chief administrative officer of the entity associated with the
124.28relief association, following approval of the request by the governing body of the entity
124.29associated with the relief association. If the relief association is associated with more than
124.30one entity, the chief administrative officer of each associated entity must execute the
124.31request. If the volunteer firefighters are not currently covered by a volunteer firefighters'
124.32relief association, the cost analysis of the prospective retirement coverage must be
124.33requested by the chief administrative officer of the entity operating the fire department.
124.34The request must be made in writing and must be made on a form prescribed by the
124.35executive director.
125.1(c) The cost analysis of the prospective retirement coverage by the statewide
125.2retirement plan must be based on the service pension amount under section 353G.11
125.3closest to the service pension amount provided by the volunteer firefighters' relief
125.4association, if there is one the relief association is a lump-sum defined benefit plan, or
125.5the amount equal to 95 percent of the most current average account balance per relief
125.6association member if the relief association is a defined contribution plan, or to the
125.7lowest service pension amount under section 353G.11 if there is no volunteer firefighters'
125.8relief association, rounded up, and any other service pension amount designated by
125.9the requester or requesters. The cost analysis must be prepared using a mathematical
125.10procedure certified as accurate by an approved actuary retained by the Public Employees
125.11Retirement Association.
125.12(d) If a cost analysis is requested and a volunteer firefighters' relief association exists
125.13that has filed the information required under section 69.051 in a timely fashion, upon
125.14request by the executive director, the state auditor shall provide the most recent data
125.15available on the financial condition of the volunteer firefighters' relief association, the most
125.16recent firefighter demographic data available, and a copy of the current relief association
125.17bylaws. If a cost analysis is requested, but no volunteer firefighters' relief association
125.18exists, the chief administrative officer of the entity operating the fire department shall
125.19provide the demographic information on the volunteer firefighters serving as members
125.20of the fire department requested by the executive director.
125.21(e) If a cost analysis is requested, the executive director of the State Board of
125.22Investment shall review the investment portfolio of the relief association, if applicable,
125.23for compliance with the applicable provisions of chapter 11A and for appropriateness
125.24for retention under the established investment objectives and investment policies of the
125.25State Board of Investment. If the prospective retirement coverage change is approved
125.26under paragraph (f), the State Board of Investment may require that the relief association
125.27liquidate any investment security or other asset which the executive director of the State
125.28Board of Investment has determined to be an ineligible or inappropriate investment for
125.29retention by the State Board of Investment. The security or asset liquidation must occur
125.30before the effective date of the transfer of retirement plan coverage. If requested to do
125.31so by the chief administrative officer of the relief association, the executive director of
125.32the State Board of Investment shall provide advice about the best means to conduct the
125.33liquidation.
125.34(f) Upon receipt of the cost analysis, the governing body of the municipality
125.35or independent nonprofit firefighting corporation associated with the fire department
125.36shall either approve or disapprove the retirement coverage change within 90 days. If
126.1the retirement coverage change is not acted upon within 90 days, it is deemed to be
126.2disapproved. If the retirement coverage change is approved by the applicable governing
126.3body, coverage by the voluntary statewide lump-sum volunteer firefighter retirement plan
126.4is effective on the next following January 1.
126.5EFFECTIVE DATE.This section is effective retroactively from January 1, 2010.

126.6    Sec. 3. Minnesota Statutes 2009 Supplement, section 353G.06, subdivision 1, is
126.7amended to read:
126.8    Subdivision 1. Special fund disestablishment. (a) On the date immediately prior
126.9to the effective date of the coverage change, the special fund of the applicable volunteer
126.10firefighters' relief association, if one exists, ceases to exist as a pension fund of the
126.11association and legal title to the assets of the special fund transfers to the State Board of
126.12Investment, with the beneficial title to the assets of the special fund remaining in the
126.13applicable volunteer firefighters.
126.14(b) If the market value of the special fund of the volunteer firefighters' relief
126.15association for which retirement coverage changed under this chapter declines in the
126.16interval between the date of the most recent financial report or statement, and the special
126.17fund disestablishment date, the applicable municipality shall transfer an additional amount
126.18to the State Board of Investment equal to that decline. If more than one municipality is
126.19responsible for the direct management of the fire department, the municipalities shall
126.20allocate the additional transfer amount among the various applicable municipalities
126.21one-half in proportion to the population of each municipality and one-half in proportion
126.22to the market value of each municipality.
126.23EFFECTIVE DATE.This section is effective retroactively from January 1, 2010.

126.24    Sec. 4. Minnesota Statutes 2009 Supplement, section 353G.08, is amended to read:
126.25353G.08 RETIREMENT PLAN FUNDING; DISBURSEMENTS.
126.26    Subdivision 1. Annual funding requirements. (a) Annually, the executive director
126.27shall determine the funding requirements of each account in the voluntary statewide
126.28lump-sum volunteer firefighter retirement plan on or before August 1. The funding
126.29requirements as directed under this section, must be determined using a mathematical
126.30procedure developed and certified as accurate by an approved actuary retained by the
126.31Public Employees Retirement Association and based on present value factors using a six
126.32percent interest rate, without any decrement assumptions. The funding requirements
127.1must be certified to the entity or entities associated with the fire department whose active
127.2firefighters are covered by the retirement plan.
127.3(b) The overall funding balance of each account for the current calendar year must
127.4be determined in the following manner:
127.5(1) The total accrued liability for all active and deferred members of the account as
127.6of December 31 of the current year must be calculated based on the good time service
127.7credit of active and deferred members as of that date.
127.8(2) The total present assets of the account projected to December 31 of the current
127.9year, including receipts by and disbursements from the account anticipated to occur on or
127.10before December 31, must be calculated. To the extent possible, the market value of assets
127.11must be utilized in making this calculation.
127.12(3) The amount of the total present assets calculated under clause (2) must be
127.13subtracted from the amount of the total accrued liability calculated under clause (1). If the
127.14amount of total present assets exceeds the amount of the total accrued liability, then the
127.15account is considered to have a surplus over full funding. If the amount of the total present
127.16assets is less than the amount of the total accrued liability, then the account is considered
127.17to have a deficit from full funding. If the amount of total present assets is equal to the
127.18amount of the total accrued liability, then the special fund is considered to be fully funded.
127.19(c) The financial requirements of each account for the following calendar year must
127.20be determined in the following manner:
127.21(1) The total accrued liability for all active and deferred members of the account
127.22as of December 31 of the calendar year next following the current calendar year must be
127.23calculated based on the good time service used in the calculation under paragraph (b),
127.24clause (1), increased by one year.
127.25(2) The increase in the total accrued liability of the account for the following calendar
127.26year over the total accrued liability of the account for the current year must be calculated.
127.27(3) The amount of anticipated future administrative expenses of the account must be
127.28calculated by multiplying the dollar amount of the administrative expenses for the most
127.29recent prior calendar year by the factor of 1.035.
127.30(4) If the account is fully funded, the financial requirement of the account for the
127.31following calendar year is the total of the amounts calculated under clauses (2) and (3).
127.32(5) If the account has a deficit from full funding, the financial requirement of the
127.33account for the following calendar year is the total of the amounts calculated under clauses
127.34(2) and (3) plus an amount equal to one-tenth of the amount of the deficit from full
127.35funding of the account.
128.1(6) If the account has a surplus over full funding, the financial requirement of
128.2the account for the following calendar year is the financial requirement of the account
128.3calculated as though the account was fully funded under clause (4) and, if the account has
128.4also had a surplus over full funding during the prior two years, additionally reduced by an
128.5amount equal to one-tenth of the amount of the surplus over full funding of the account.
128.6(d) The required contribution of the entity or entities associated with the fire
128.7department whose active firefighters are covered by the retirement plan is the annual
128.8financial requirements of the account of the retirement plan under paragraph (c) reduced
128.9by the amount of any fire state aid payable under sections 69.011 to 69.051 reasonably
128.10anticipated to be received by the retirement plan attributable to the entity or entities during
128.11the following calendar year, and an amount of interest on the assets projected to be
128.12received during the following calendar year calculated at the rate of six percent per annum.
128.13The required contribution must be allocated between the entities if more than one entity
128.14is involved. A reasonable amount of anticipated fire state aid is an amount that does not
128.15exceed the fire state aid actually received in the prior year multiplied by the factor 1.035.
128.16(e) The required contribution calculated in paragraph (d) must be paid to the
128.17retirement plan on or before December 31 of the year for which it was calculated. If
128.18the contribution is not received by the retirement plan by December 31, it is payable
128.19with interest at an annual compound rate of six percent from the date due until the date
128.20payment is received by the retirement plan. If the entity does not pay the full amount of
128.21the required contribution, the executive director shall collect the unpaid amount under
128.22section 353.28, subdivision 6.
128.23(f)
128.24    Subd. 2. Cash flow funding requirement. If the executive director determines that
128.25an account in the voluntary statewide lump-sum volunteer firefighter retirement plan has
128.26insufficient assets to meet the service pensions determined payable from the account,
128.27the executive director shall certify the amount of the potential service pension shortfall
128.28to the municipality or municipalities and the municipality or municipalities shall make
128.29an additional employer contribution to the account within ten days of the certification.
128.30If more than one municipality is associated with the account, unless the municipalities
128.31agree to a different allocation, the municipalities shall allocate the additional employer
128.32contribution one-half in proportion to the population of each municipality and one-half in
128.33proportion to the market value of the property of each municipality.
128.34    Subd. 3. Authorized Account Disbursements. The assets of the retirement fund
128.35may only be disbursed for:
128.36(1) the administrative expenses of the retirement plan;
129.1(2) the investment expenses of the retirement fund;
129.2(3) the service pensions payable under section 353G.10, 353G.11, 353G.14, or
129.3353G.15 ; and
129.4(4) the survivor benefits payable under section 353G.12; and
129.5(5) the disability benefit coverage insurance premiums under section 353G.115.
129.6EFFECTIVE DATE.This section is effective retroactively from January 1, 2010.

129.7    Sec. 5. Minnesota Statutes 2009 Supplement, section 353G.09, subdivision 3, as added
129.8by Laws 2009, chapter 169, article 9, section 18, is amended to read:
129.9    Subd. 3. Alternative pension eligibility and computation. (a) An active member
129.10of the retirement plan is entitled to an alternative lump-sum service pension from the
129.11retirement plan if the person:
129.12(1) has separated from active service with the fire department for at least 30 days;
129.13(2) has attained the age of at least 50 years or the age for receipt of a service pension
129.14under the benefit plan of the applicable former volunteer firefighters' relief association
129.15as of the date immediately prior to the election of the retirement coverage change,
129.16whichever is later;
129.17(3) has completed at least five years of active service with the fire department and at
129.18least five years in total as a member of the applicable former volunteer firefighters' relief
129.19association or of the retirement plan, but has not rendered at least five years of good time
129.20service credit as a member of the retirement plan; and
129.21(4) applies in a manner prescribed by the executive director for the service pension.
129.22(b) If retirement coverage prior to statewide retirement plan coverage was provided
129.23by a defined benefit plan volunteer firefighters relief association, the alternative lump-sum
129.24service pension is the service pension amount specified in the bylaws of the applicable
129.25former volunteer firefighters' relief association either as of the date immediately prior to
129.26the election of the retirement coverage change or as of the date immediately before the
129.27termination of firefighting services, whichever is earlier, multiplied by the total number
129.28of years of service as a member of that volunteer firefighters' relief association and as
129.29a member of the retirement plan. If retirement coverage prior to statewide retirement
129.30plan coverage was provided by a defined contribution plan volunteer firefighters relief
129.31association, the alternative lump-sum service pension is an amount equal to the person's
129.32account balance as of the date immediately prior to the date on which statewide retirement
129.33plan coverage was first provided to the person plus six percent annual compound interest
129.34from that date until the date immediately prior to the date of retirement.
130.1EFFECTIVE DATE.This section is effective retroactively from January 1, 2010.

130.2    Sec. 6. Minnesota Statutes 2009 Supplement, section 353G.11, subdivision 1, is
130.3amended to read:
130.4    Subdivision 1. Levels. The retirement plan provides the following levels of service
130.5pension amounts to be selected at the election of coverage, or, if fully funded, thereafter:
130.6
Level A
$500 per year of good time service credit
130.7
Level B
$750 $600 per year of good time service credit
130.8
Level C
$700 per year of good time service credit
130.9
Level D
$800 per year of good time service credit
130.10
Level E
$900 per year of good time service credit
130.11
Level CF
$1,000 per year of good time service credit
130.12
Level G
$1,250 per year of good time service credit
130.13
Level DH
$1,500 per year of good time service credit
130.14
Level EI
$2,000 per year of good time service credit
130.15
Level FJ
$2,500 per year of good time service credit
130.16
Level GK
$3,000 per year of good time service credit
130.17
Level HL
$3,500 per year of good time service credit
130.18
Level IM
$4,000 per year of good time service credit
130.19
Level JN
$4,500 per year of good time service credit
130.20
Level KO
$5,000 per year of good time service credit
130.21
Level LP
$5,500 per year of good time service credit
130.22
Level MQ
$6,000 per year of good time service credit
130.23
Level NR
$6,500 per year of good time service credit
130.24
Level OS
$7,000 per year of good time service credit
130.25
Level PT
$7,500 per year of good time service credit
130.26EFFECTIVE DATE.This section is effective July 1, 2010.

130.27    Sec. 7. Minnesota Statutes 2009 Supplement, section 353G.11, is amended by adding a
130.28subdivision to read:
130.29    Subd. 1a. Continuation of prior service pension levels. If a municipality or
130.30independent nonprofit firefighting corporation elects to be covered by the retirement
130.31plan prior to January 1, 2010, and selects the $750 per year of good time service credit
130.32service pension amount effective for January 1, 2010, that level continues for the volunteer
130.33firefighters of that municipality or independent nonprofit firefighting corporation until a
130.34different service pension amount is selected under subdivision 2 after January 1, 2010.
130.35EFFECTIVE DATE.This section is effective July 1, 2010.

131.1    Sec. 8. [353G.115] DISABILITY BENEFIT COVERAGE; AUTHORITY FOR
131.2CASUALTY INSURANCE.
131.3(a) Except as provided in paragraph (b), no disability benefit is payable from the
131.4statewide retirement plan.
131.5(b) If the board approves the arrangement, disability coverage for statewide
131.6retirement plan members may be provided through a group disability insurance policy
131.7obtained from an insurance company licensed to do business in this state. The voluntary
131.8statewide lump-sum volunteer retirement plan is authorized to pay the premium for the
131.9disability insurance authorized by this paragraph. The proportional amount of the total
131.10annual disability insurance premium must be added to the required contribution amount
131.11determined under section 353G.08.
131.12EFFECTIVE DATE.This section is effective retroactively from January 1, 2010.

131.13    Sec. 9. Minnesota Statutes 2009 Supplement, section 424A.08, is amended to read:
131.14424A.08 MUNICIPALITY WITHOUT RELIEF ASSOCIATION;
131.15AUTHORIZED DISBURSEMENTS.
131.16(a) Any qualified municipality which is entitled to receive fire state aid but which
131.17has no volunteer firefighters' relief association directly associated with its fire department
131.18and which has no full-time firefighters with retirement coverage by the public employees
131.19police and fire retirement plan shall deposit the fire state aid in a special account
131.20established for that purpose in the municipal treasury. Disbursement from the special
131.21account may not be made for any purpose except:
131.22(1) payment of the fees, dues and assessments to the Minnesota State Fire
131.23Department Association and to the state Volunteer Firefighters' Benefit Association in
131.24order to entitle its firefighters to membership in and the benefits of these state associations;
131.25(2) payment of the cost of purchasing and maintaining needed equipment for the
131.26fire department; and
131.27(3) payment of the cost of construction, acquisition, repair, or maintenance of
131.28buildings or other premises to house the equipment of the fire department.
131.29(b) A qualified municipality which is entitled to receive fire state aid, which has no
131.30volunteer firefighters' relief association directly associated with its fire department, which
131.31does not participate in the voluntary statewide lump-sum volunteer firefighter retirement
131.32plan under chapter 353G, and which has full-time firefighters with retirement coverage
131.33by the public employees police and fire retirement plan may disburse the fire state aid as
131.34provided in paragraph (a), for the payment of the employer contribution requirement with
132.1respect to firefighters covered by the public employees police and fire retirement plan under
132.2section 353.65, subdivision 3, or for a combination of the two types of disbursements.
132.3(c) A municipality which has no volunteer firefighters' relief association directly
132.4associated with it and which participates in the voluntary statewide lump-sum volunteer
132.5firefighter retirement plan under chapter 353G shall transmit any fire state aid that it
132.6receives to the voluntary statewide lump-sum volunteer firefighter retirement fund.
132.7EFFECTIVE DATE.This section is effective retroactively from January 1, 2010.

132.8ARTICLE 7
132.9TEACHERS RETIREMENT ASSOCIATION SERVICE CREDIT
132.10PROCEDURE REVISIONS

132.11    Section 1. Minnesota Statutes 2008, section 354.05, is amended by adding a
132.12subdivision to read:
132.13    Subd. 41. Annual base salary. (a) "Annual base salary" means:
132.14(1) for an independent school district or educational cooperative, the lowest full-time
132.15Bachelor of Arts (BA) base contract salary for the previous fiscal year for that employing
132.16unit;
132.17(2) for a charter school, the lowest starting annual salary for a full-time licensed
132.18teacher employed during the previous fiscal year for that employing unit; and
132.19(3) for a state agency or professional organization, the lowest starting annual salary
132.20for a full-time Teachers Retirement Association covered position for the previous fiscal
132.21year for that employing unit.
132.22(b) If there is no previous fiscal year data because an employer unit is new and
132.23paragraph (c) does not apply, the annual base salary for the first year of operation will be
132.24as provided in paragraph (a), except that the base contract salary for the current fiscal year,
132.25rather than the previous fiscal year, must be used.
132.26(c) For a new employer unit created as a result of a merger or consolidation, the
132.27annual base salary must be the lowest annual base salary as specified in paragraph (a) for
132.28any of the employer units involved in the merger or consolidation.
132.29EFFECTIVE DATE.This section is effective July 1, 2012.

132.30    Sec. 2. Minnesota Statutes 2008, section 354.07, subdivision 5, is amended to read:
132.31    Subd. 5. Records; accounts; interest. The board shall keep a record of the
132.32receipts and disbursements of the fund and a separate account with each member of
132.33the association. The board shall also keep separate accounts for annuity payments, for
132.34employer contributions and all other necessary accounts and reserves. It shall determine
133.1annually the annual interest earnings of the fund which shall include realized capital gains
133.2and losses. Any amount in the capital reserve account on July 1, 1973 shall be transferred
133.3to the employer contribution's account. The annual interest earnings shall be apportioned
133.4and credited to the separate members' accounts except those covered under the provisions
133.5of section 354.44, subdivision 6 or 7. The rate to be used in this distribution computed to
133.6the last full quarter percent shall be determined by dividing the interest earnings by the
133.7total invested assets of the fund. The excess of the annual interest earnings in the excess
133.8earnings reserve which was not credited to the various accounts shall be credited to the
133.9gross interest earnings for the next succeeding year.

133.10    Sec. 3. Minnesota Statutes 2008, section 354.091, is amended to read:
133.11354.091 SERVICE CREDIT.
133.12    Subdivision 1. Definition; monthly base salary. For purposes of this section,
133.13"monthly base salary" means the annual base salary, as defined in section 354.05,
133.14subdivision 41, divided by 12.
133.15    Subd. 2. Service credit annual limit. (a) In computing service credit, No teacher
133.16may receive credit for more than one year of teaching service for any fiscal year.
133.17Additionally, in crediting allowable service:
133.18(1) if a teacher teaches less than five hours in a day, service credit must be given for
133.19the fractional part of the day as the term of service performed bears to five hours;
133.20(2) if a teacher teaches five or more hours in a day, service credit must be given for
133.21only one day;
133.22(3) if a teacher teaches at least 170 full days in any fiscal year, service credit must be
133.23given for a full year of teaching service; and
133.24(4) if a teacher teaches for only a fractional part of the year, service credit must be
133.25given for such fractional part of the year in the same relationship as the period of service
133.26performed bears to 170 days.
133.27(b) A teacher must receive a full year of service credit based on the number of days
133.28in the employer's full school year if that school year is less than 170 days. Teaching
133.29service performed before July 1, 1961, must be computed under the law in effect at the
133.30time it was performed.
133.31(c) A teacher must not lose or gain retirement service credit as a result of the
133.32employer converting to a flexible or alternate work schedule. If the employer converts
133.33to a flexible or alternate work schedule, the forms for reporting teaching service and the
133.34procedures for determining service credit must be determined by the executive director
133.35with the approval of the board of trustees.
134.1    Subd. 3. Service credit calculation. (a) Except as specified in subdivisions 4 and
134.25, service credit must be calculated monthly by dividing the teacher's monthly salary by
134.3the monthly base salary for the teacher's employing unit and multiplying the result by
134.411.1 percent.
134.5(b) For purposes of computing service credit, salary must be allocated to each
134.6calendar month based on the pay period begin and end dates. If the pay period covers
134.7more than one calendar month, the salary must be allocated based on the number of days
134.8in each calendar month.
134.9(c) A teacher may not receive more than 11.1 percent of a year's service credit in
134.10a calendar month.
134.11(d) Annual service credit must be calculated by adding the allowable monthly
134.12service credit for all 12 months of the fiscal year, with the result rounded to two decimal
134.13places, subject to the annual limit specified in subdivision 2.
134.14    Subd. 4. Service credit determination for Minnesota State Colleges and
134.15Universities system teachers. (d) For all services rendered on or after July 1, 2003,
134.16service credit for all members employed by the Minnesota State Colleges and Universities
134.17system must be determined:
134.18(1) for full-time employees, by the definition of full-time employment contained in
134.19the collective bargaining agreement for those units listed in section 179A.10, subdivision
134.202
, or contained in the applicable personnel or salary plan for those positions designated in
134.21section 179A.10, subdivision 1; and
134.22(2) for part-time employees, by the appropriate proration of full-time equivalency
134.23based on the provisions contained in the collective bargaining agreement for those units
134.24listed in section 179A.10, subdivision 2, or contained in the applicable personnel or salary
134.25plan for those positions designated in section 179A.10, subdivision 1, and the applicable
134.26procedures of the Minnesota State Colleges and Universities system; and.
134.27(3) in no case may a member receive more than one year of service credit for any
134.28fiscal year.
134.29    Subd. 5. Service credit procedure, nontraditional schedules. For employer units
134.30that have nontraditional work schedules or pay schedules, the procedure for determining
134.31service credit must be specified by the executive director with the approval of the board of
134.32trustees.
134.33EFFECTIVE DATE.This section is effective for teaching service performed after
134.34June 30, 2012.

135.1    Sec. 4. Minnesota Statutes 2009 Supplement, section 354.52, subdivision 4b, is
135.2amended to read:
135.3    Subd. 4b. Payroll cycle reporting requirements. An employing unit shall provide
135.4the following data to the association for payroll warrants on an ongoing basis within 14
135.5calendar days after the date of the payroll warrant in a format prescribed by the executive
135.6director:
135.7(1) association member number;
135.8(2) employer-assigned employee number;
135.9(3) Social Security number;
135.10(4) amount of each salary deduction;
135.11(5) amount of salary as defined in section 354.05, subdivision 35, from which each
135.12deduction was made;
135.13(6) reason for payment;
135.14(7) service credit;
135.15(8) (7) the beginning and ending dates of the payroll period covered and the date
135.16of actual payment;
135.17(9) (8) fiscal year of salary earnings;
135.18(10) (9) total remittance amount including employee, employer, and additional
135.19employer contributions;
135.20(11) (10) reemployed annuitant salary under section 354.44, subdivision 5; and
135.21(12) (11) other information as may be required by the executive director.
135.22EFFECTIVE DATE.This section is effective July 1, 2012.

135.23    Sec. 5. Minnesota Statutes 2008, section 354.52, is amended by adding a subdivision
135.24to read:
135.25    Subd. 4d. Annual base salary reporting. An employing unit must provide the
135.26following data to the association on or before June 30 of each fiscal year:
135.27(1) annual base salary, as defined in section 354.05, subdivision 41; and
135.28(2) beginning and ending dates for the regular school work year.
135.29EFFECTIVE DATE.This section is effective July 1, 2011.

135.30    Sec. 6. Minnesota Statutes 2008, section 354.52, subdivision 6, is amended to read:
135.31    Subd. 6. Noncompliance consequences. (a) An employing unit that does not
135.32comply with the reporting requirements under subdivision 2a, 4a, or 4b, or 4d, must pay a
135.33fine of $5 per calendar day until the association receives the required data.
136.1(b) If the annual base salary required to be reported under subdivision 4d has not
136.2been settled or determined as of June 16, the fine commences if the annual base salary has
136.3not been reported to the association within 14 days following the settlement date.
136.4EFFECTIVE DATE.This section is effective July 1, 2011.

136.5    Sec. 7. Minnesota Statutes 2008, section 354.66, subdivision 3, is amended to read:
136.6    Subd. 3. Part-time teaching position, defined. (a) For purposes of this section,
136.7the term "part-time teaching position" means a teaching position within the district in
136.8which the teacher is employed for at least 50 full days or a fractional equivalent thereof as
136.9prescribed in section 354.091, and for which the teacher is compensated in for an amount
136.10of at least 30 percent, but not exceeding 80 percent of the compensation established by the
136.11board for a full-time teacher with identical education and experience with the employing
136.12unit.
136.13(b) For a teacher to which subdivision 1c, paragraph (b), applies, the term "part-time
136.14teaching position" means a teaching position within the district in which the teacher is
136.15employed for at least 25 full days or a fractional equivalent thereof as prescribed in section
136.16354.091, and for which the teacher is compensated in for an amount of at least 15 percent,
136.17but not exceeding 40 percent of the compensation established by the board for a full-time
136.18teacher, with identical education and experience with the employing unit.
136.19EFFECTIVE DATE.This section is effective for service provided after June 30,
136.202012.

136.21ARTICLE 8
136.22MnSCU IRAP ADMINISTRATIVE PROVISIONS

136.23    Section 1. Minnesota Statutes 2008, section 11A.04, is amended to read:
136.2411A.04 DUTIES AND POWERS.
136.25The state board shall:
136.26(1) Act as trustees for each fund for which it invests or manages money in
136.27accordance with the standard of care set forth in section 11A.09 if state assets are involved
136.28and in accordance with chapter 356A if pension assets are involved.
136.29(2) Formulate policies and procedures deemed necessary and appropriate to carry
136.30out its functions. Procedures adopted by the board must allow fund beneficiaries and
136.31members of the public to become informed of proposed board actions. Procedures and
136.32policies of the board are not subject to the Administrative Procedure Act.
136.33(3) Employ an executive director as provided in section 11A.07.
137.1(4) Employ investment advisors and consultants as it deems necessary.
137.2(5) Prescribe policies concerning personal investments of all employees of the board
137.3to prevent conflicts of interest.
137.4(6) Maintain a record of its proceedings.
137.5(7) As it deems necessary, establish advisory committees subject to section 15.059 to
137.6assist the board in carrying out its duties.
137.7(8) Not permit state funds to be used for the underwriting or direct purchase of
137.8municipal securities from the issuer or the issuer's agent.
137.9(9) Direct the commissioner of management and budget to sell property other than
137.10money that has escheated to the state when the board determines that sale of the property
137.11is in the best interest of the state. Escheated property must be sold to the highest bidder in
137.12the manner and upon terms and conditions prescribed by the board.
137.13(10) Undertake any other activities necessary to implement the duties and powers
137.14set forth in this section.
137.15(11) Establish a formula or formulas to measure management performance and
137.16return on investment. Public pension funds in the state shall utilize the formula or
137.17formulas developed by the state board.
137.18(12) Except as otherwise provided in article XI, section 8, of the Constitution of the
137.19state of Minnesota, employ, at its discretion, qualified private firms to invest and manage
137.20the assets of funds over which the state board has investment management responsibility.
137.21There is annually appropriated to the state board, from the assets of the funds for which
137.22the state board utilizes a private investment manager, sums sufficient to pay the costs of
137.23employing private firms. Each year, by January 15, the board shall report to the governor
137.24and legislature on the cost and the investment performance of each investment manager
137.25employed by the board.
137.26(13) Adopt an investment policy statement that includes investment objectives, asset
137.27allocation, and the investment management structure for the retirement fund assets under
137.28its control. The statement may be revised at the discretion of the state board. The state
137.29board shall seek the advice of the council regarding its investment policy statement.
137.30Adoption of the statement is not subject to chapter 14.
137.31(14) Adopt a compensation plan setting the terms and conditions of employment for
137.32unclassified board employees who are not covered by a collective bargaining agreement.
137.33(15) Contract, as necessary, with the board of trustees of the Minnesota State
137.34Universities and Colleges System for the provision of investment review and selection
137.35services under section 354B.25, subdivision 3, and arrange for the receipt of payment
137.36for those services.
138.1There is annually appropriated to the state board, from the assets of the funds for
138.2which the state board provides investment services, sums sufficient to pay the costs of
138.3all necessary expenses for the administration of the board. These sums will be deposited
138.4in the State Board of Investment operating account, which must be established by the
138.5commissioner of management and budget.

138.6    Sec. 2. Minnesota Statutes 2008, section 354B.25, subdivision 1, is amended to read:
138.7    Subdivision 1. General governance. The individual retirement account plan is the
138.8administrative responsibility of the Board of Trustees of the Minnesota State Colleges
138.9and Universities. The Board of Trustees of the Minnesota State Colleges and Universities
138.10may administer the plan directly or may contract out for administrative services with a
138.11qualified third-party plan administrative entity and may contract out for investment review
138.12and selection service.
138.13EFFECTIVE DATE.This section is effective the day following final enactment.

138.14    Sec. 3. Minnesota Statutes 2008, section 354B.25, subdivision 3, is amended to read:
138.15    Subd. 3. Selection of financial institutions. (a) The investment options provided
138.16under subdivision 2 must be selected by the board. The board may contract with the State
138.17Board of Investment or with a third party to provide the investment review and selection
138.18services. The board must not contract with a third party to provide the investment option
138.19review and selection services if the third party markets, offers, or has other material
138.20interest in investment products. The board must require any third party contracted to
138.21provide investment review and selection services to disclose to the board any contracts
138.22for services and any financial relationships it has with vendors under consideration to
138.23provide investment products under the plan.
138.24In making its selection, at a minimum, the State board of Investment shall consider
138.25the following:
138.26(1) the experience and ability of the financial institution to provide benefits and
138.27products that are suited to meet the needs of plan participants;
138.28(2) the relationship of those benefits and products provided by the financial
138.29institution to their cost;
138.30(3) the financial strength and stability of the financial institution; and
138.31(4) the fees and expenses associated with the investment products in comparison to
138.32other products of similar risk and rates of return.
138.33(b) After selecting a financial institution, the State board of Investment must
138.34periodically review each financial institution and the offered products. The periodic
139.1review must occur at least every three years. In making its review, the State board of
139.2Investment may retain appropriate consulting services to assist it in its periodic review,
139.3establish a budget for the cost of the periodic review process, and charge a proportional
139.4share of these costs to the reviewed financial institution.
139.5(c) Contracts with financial institutions under this section must be executed by the
139.6board and must be approved by the State Board of Investment before execution.
139.7(d) The State Board of Investment shall also establish policies and procedures under
139.8section 11A.04, clause (2), to carry out the provisions of this subdivision.
139.9EFFECTIVE DATE.This section is effective the day following final enactment.

139.10    Sec. 4. Minnesota Statutes 2008, section 354C.14, is amended to read:
139.11354C.14 INVESTMENT OF DEDUCTIONS AND CONTRIBUTIONS.
139.12(a) The Board of Trustees of the Minnesota State Colleges and Universities shall
139.13invest the deductions and contributions under section 354C.12, after deduction of
139.14administrative expenses under section 354C.12, subdivision 4, in annuity contracts or
139.15custodial accounts from financial institutions selected by the State Board of Investment
139.16under section 354B.25, subdivision 3.
139.17(b) The retirement contributions and death benefits provided by annuity contracts or
139.18custodial accounts purchased by the Board of Trustees of the Minnesota State Colleges
139.19and Universities are owned by the supplemental retirement plan and must be paid in
139.20accordance with those annuity contracts or custodial account agreements.
139.21EFFECTIVE DATE.This section is effective the day following final enactment.

139.22    Sec. 5. REPEALER.
139.23Minnesota Statutes 2008, section 354C.15, is repealed.
139.24EFFECTIVE DATE.This section is effective the day following final enactment.

139.25ARTICLE 9
139.26ACTUARIAL VALUATION REPORTING DEADLINE DATES

139.27    Section 1. Minnesota Statutes 2008, section 356.215, subdivision 3, is amended to read:
139.28    Subd. 3. Reports. (a) The actuarial valuations required annually must be made as of
139.29the beginning of each fiscal year.
139.30    (b) Two copies of the completed valuation must be delivered to the executive
139.31director of the Legislative Commission on Pensions and Retirement, to the commissioner
139.32of management and budget, and to the Legislative Reference Library. The copies of the
140.1actuarial valuation must be filed with the executive director of the Legislative Commission
140.2on Pensions and Retirement, the commissioner of management and budget, and the
140.3Legislative Reference Library no later than the last day of the sixth month occurring
140.4after the end of the previous fiscal year.
140.5    (c) Two copies of a quadrennial experience study must be filed with the
140.6executive director of the Legislative Commission on Pensions and Retirement, with the
140.7commissioner of management and budget, and with the Legislative Reference Library, not
140.8later than the first last day of the 11th 12th month occurring after the end of the last fiscal
140.9year of the four-year period which the experience study covers.
140.10    (d) For actuarial valuations and experience studies prepared at the direction of
140.11the Legislative Commission on Pensions and Retirement, two copies one copy of the
140.12document must be delivered to the governing or managing board or administrative officials
140.13of the applicable public pension and retirement fund or plan.
140.14EFFECTIVE DATE.This section is effective July 1, 2010.

140.15ARTICLE 10
140.16EARLY RETIREMENT INCENTIVE MODIFICATIONS

140.17    Section 1. Minnesota Statutes 2008, section 356.351, subdivision 1, is amended to read:
140.18    Subdivision 1. Eligibility. (a) An eligible appointing authority may offer the early
140.19retirement incentive in this section to an employee who:
140.20    (1) has at least 15 years of allowable service in one or more of the funds listed
140.21in section 356.30, subdivision 3, or has at least 15 years of coverage by the individual
140.22retirement account plan governed by chapter 354B employment as indicated in the
140.23personnel records of the applicable employing unit and upon retirement is immediately
140.24eligible for a retirement annuity or benefit from one or more of these funds retirement plan
140.25governed by Minnesota Statutes, chapter 354B, or Minnesota Statutes, section 356.30;
140.26    (2) terminates service after the effective date of this section, and before July 15,
140.272009 October 1, 2012; and
140.28    (3) is not in receipt of a public retirement plan retirement annuity, retirement
140.29allowance, or service pension during the month preceding the termination of qualified
140.30employment.; and
140.31(4) has not been eligible to receive a retirement annuity for a period longer than
140.3210 years.
140.33    (b) An eligible appointing authority is any Minnesota governmental employing unit
140.34which employs one or more employees with retirement coverage by a retirement plan
140.35listed in section 356.30 by virtue of that employment.
141.1    (c) An elected official is not eligible to receive an incentive under this section.
141.2(d) Employees of the Minnesota State Colleges and Universities System who
141.3participate in the incentive program under section 136F.481 are not eligible for the
141.4incentive under this section.
141.5EFFECTIVE DATE.This section is effective the day following final enactment.

141.6    Sec. 2. Minnesota Statutes 2008, section 356.351, subdivision 2, as amended by Laws
141.72009, chapter 169, article 1, section 72, is amended to read:
141.8    Subd. 2. Incentive. (a) For an employee who is eligible under subdivision 1, if for
141.9whom an early retirement incentive is approved under paragraph (b), and who terminates
141.10employment as provided for in the agreement, the employer may provide an amount up to
141.11$17,000, to an employee who terminates service, to:
141.12(1) a severance amount in lieu of and not to exceed the maximum amount of regular
141.13state-provided unemployment compensation for that particular person if the person had
141.14been laid off; and
141.15(2) an additional severance amount not to exceed the amount of the employer's
141.16contribution for health insurance, dental insurance, and basic life insurance that would
141.17have been payable to the particular person under the applicable collective bargaining
141.18agreement or personnel policy at the time of termination.
141.19(b) The severance amounts under paragraph (a) must be used:
141.20    (1) (i) unless the appointing authority has designated the use under clause (2)
141.21(ii) or the use under clause (3) (iii) for the initial retirement incentive applicable to that
141.22employing entity under Laws 2007, chapter 134, after May 26, 2007, for deposit in the
141.23employee's account in the health care savings plan established by section 352.98;
141.24    (2) (ii) notwithstanding section 352.01, subdivision 11, or 354.05, subdivision 13,
141.25whichever applies, if the appointing authority has designated the use under this clause
141.26for the initial retirement incentive applicable to that employing entity under Laws 2007,
141.27chapter 134, after May 26, 2007, for purchase of service credit for unperformed service
141.28sufficient to enable the employee to retire under section 352.116, subdivision 1, paragraph
141.29(b); 353.30; 354.44, subdivision 6, paragraph (b), or 354A.31, subdivision 6, paragraph
141.30(b), whichever applies; or
141.31    (3) (iii) if the appointing authority has designated the use under this clause for the
141.32initial retirement incentive applicable to the employing entity under Laws 2007, chapter
141.33134, after May 26, 2007, for purchase of a lifetime annuity or an annuity for a specific
141.34number of years from the applicable retirement plan to provide additional benefits, as
141.35provided in paragraph (d).
142.1    (b) (c) Approval to provide the incentive must be obtained from the commissioner
142.2of finance if the eligible employee is a state employee and must be obtained from the
142.3applicable governing board with respect to any other employing entity. An employee is
142.4eligible for the payment under paragraph (a), clause (2) (ii), if the employee uses money
142.5from a deferred compensation account that, combined with the payment under paragraph
142.6(a), clause (2) (ii), would be sufficient to purchase enough service credit to qualify for
142.7retirement under section 352.116, subdivision 1, paragraph (b); 353.30, subdivision 1a;
142.8354.44, subdivision 6 , paragraph (b), or 354A.31, subdivision 6, paragraph (b), whichever
142.9applies.
142.10    (c) (d) The cost to purchase service credit under paragraph (a), clause (2) (ii), must
142.11be made in accordance with section 356.551.
142.12    (d) The (e) An annuity purchase under paragraph (a), clause (3) (iii), must be made
142.13using annuity factors, as determined by the actuary retained under section 356.214,
142.14derived from the applicable factors used by the applicable retirement plan to calculate
142.15optional annuity forms. The purchased annuity must be the actuarial equivalent of the
142.16incentive amount.
142.17EFFECTIVE DATE.This section is effective the day following final enactment.

142.18ARTICLE 11
142.19OPTIONAL ANNUITY REVOCATION FOLLOWING CERTAIN
142.20MARRIAGE DISSOLUTIONS

142.21    Section 1. [356.48] REVOCATION OF OPTIONAL ANNUITY DUE TO
142.22MARRIAGE DISSOLUTION OR ANNULMENT.
142.23    Subdivision 1. Covered plans. This section applies to the following retirement
142.24plans:
142.25(1) the general state employees retirement plan of the Minnesota State Retirement
142.26System established under chapter 352;
142.27(2) the correctional state employees retirement plan of the Minnesota State
142.28Retirement System established under chapter 352;
142.29(3) the state patrol retirement plan established under chapter 352B;
142.30(4) the unclassified state employees retirement program of the Minnesota State
142.31Retirement System established under chapter 352D;
142.32(5) the general employee retirement plan of the Public Employees Retirement
142.33Association established under chapter 353;
142.34(6) the public employees police and fire retirement plan established under chapter
142.35353;
143.1(7) the local government correctional employees retirement plan of the Public
143.2Employees Retirement Association established under chapter 353E;
143.3(8) the Teachers Retirement Association established under chapter 354; and
143.4(9) the uniform judicial retirement plan established under chapter 490.
143.5    Subd. 2. Treatment. (a) The treatment specified in this section applies if, after
143.6the accrual date of an annuity or benefit from an applicable plan or plans, a marriage
143.7dissolution decree or annulment decree is rendered that specifies that the designation
143.8of an optional annuity must be revoked and if the other requirements specified in this
143.9section are satisfied.
143.10(b) Notwithstanding any law to the contrary, if the applicable pension plan or plans
143.11have provisions of law that revise the monthly benefit amount payable to the primary
143.12annuitant upon the death of the individual named as the optional joint annuitant, the
143.13monthly benefit amount must be recomputed as though the individual that had been named
143.14as the optional joint annuitant died on the date a certified copy of the marriage dissolution
143.15or annulment decree is received by the chief administrative officer. Payment of any benefit
143.16adjustment under this section is prospective only.
143.17    Subd. 3. Restrictions. (a) This section does not apply if the marriage dissolution
143.18decree or annulment decree is not consistent with the requirements under section 518.58.
143.19(b) The pension plan benefit recipient must not designate, and the court may not
143.20require that the member designate, a subsequent optional annuity beneficiary.
143.21(c) This section does not apply if more than one surviving individual was named as
143.22an optional joint annuitant.
143.23    Subd. 4. Submission of documentation. To receive the treatment provided in
143.24this section, an eligible retiree or disabilitant must provide, to the chief administrative
143.25officer of the applicable pension plan, a certified copy of the marriage dissolution or
143.26annulment decree. The retiree or disabilitant and the joint annuitant must also submit a
143.27form, prescribed by the chief administrative officer of the applicable pension plan and
143.28signed by both individuals, requesting the annuity bounce back as provided in subdivision
143.292. The individuals must also provide any other documentation the chief administrative
143.30officer may request.
143.31EFFECTIVE DATE.This section is effective the day following final enactment and
143.32applies retroactively to any marriage dissolution decree or annulment decree requiring the
143.33revocation of an optional annuity form granted at any time prior to the date of enactment.

143.34    Sec. 2. Minnesota Statutes 2008, section 518.58, subdivision 3, is amended to read:
144.1    Subd. 3. Sale or distribution while proceeding pending. (a) If the court finds
144.2that it is necessary to preserve the marital assets of the parties, the court may order the
144.3sale of the homestead of the parties or the sale of other marital assets, as the individual
144.4circumstances may require, during the pendency of a proceeding for a dissolution of
144.5marriage or an annulment. If the court orders a sale, it may further provide for the
144.6disposition of the funds received from the sale during the pendency of the proceeding.
144.7If liquid or readily liquidated marital property other than property representing vested
144.8pension benefits or rights is available, the court, so far as possible, shall divide the property
144.9representing vested pension benefits or rights by the disposition of an equivalent amount
144.10of the liquid or readily liquidated property.
144.11(b) The court may order a partial distribution of marital assets during the pendency
144.12of a proceeding for a dissolution of marriage or an annulment for good cause shown or
144.13upon the request of both parties, provided that the court shall fully protect the interests
144.14of the other party.
144.15EFFECTIVE DATE.This section is effective the day following final enactment.

144.16    Sec. 3. Minnesota Statutes 2008, section 518.58, subdivision 4, is amended to read:
144.17    Subd. 4. Pension plans. (a) The division of marital property that represents pension
144.18plan benefits or rights in the form of future pension plan payments:
144.19    (1) is payable only to the extent of the amount of the pension plan benefit payable
144.20under the terms of the plan;
144.21    (2) is not payable for a period that exceeds the time that pension plan benefits are
144.22payable to the pension plan benefit recipient;
144.23    (3) is not payable in a lump-sum amount from defined benefit pension plan assets
144.24attributable in any fashion to a spouse with the status of an active member, deferred
144.25retiree, or benefit recipient of a pension plan;
144.26    (4) if the former spouse to whom the payments are to be made dies prior to the end
144.27of the specified payment period with the right to any remaining payments accruing to an
144.28estate or to more than one survivor, is payable only to a trustee on behalf of the estate or
144.29the group of survivors for subsequent apportionment by the trustee; and
144.30    (5) in the case of defined benefit public pension plan benefits or rights, may not
144.31commence until the public plan member submits a valid application for a public pension
144.32plan benefit and the benefit becomes payable.
144.33    (b) The individual retirement account plans established under chapter 354B may
144.34provide in its plan document, if published and made generally available, for an alternative
144.35marital property division or distribution of individual retirement account plan assets. If an
145.1alternative division or distribution procedure is provided, it applies in place of paragraph
145.2(a), clause (5).
145.3(c) If liquid or readily liquidated marital property other than property representing
145.4vested pension benefits or rights is available, the court, so far as possible, shall divide the
145.5property representing vested pension benefits or rights by the disposition of an equivalent
145.6amount of the liquid or readily liquidated property.
145.7(d) If sufficient liquid or readily liquidated marital property other than property
145.8representing vested pension benefits or rights is not available, the court may order the
145.9revocation of the designation of an optional annuity beneficiary in pension plans specified
145.10in section 356.48 or in any other pension plan in which plan-governing law or governing
145.11documents allow revocation of an optional annuity in marital dissolution or annulment
145.12situations.
145.13EFFECTIVE DATE.(a) This section is effective the day following final enactment.
145.14(b) This section applies retroactively, for plans specified in section 1, to any marriage
145.15dissolution decree or annulment decree requiring the revocation of an optional annuity
145.16form granted at any time prior to the date of enactment.

145.17ARTICLE 12
145.18ADMINISTRATIVE CONSOLIDATION OF THE MINNEAPOLIS
145.19EMPLOYEES RETIREMENT FUND INTO THE PUBLIC EMPLOYEES
145.20RETIREMENT ASSOCIATION

145.21    Section 1. Minnesota Statutes 2009 Supplement, section 353.01, subdivision 2a,
145.22is amended to read:
145.23    Subd. 2a. Included employees. (a) Public employees whose salary from
145.24employment in one or more positions within one governmental subdivision exceeds $425
145.25in any month shall participate as members of the association. If the salary is less than
145.26$425 in a subsequent month, the employee retains membership eligibility. Eligible public
145.27employees shall participate as members of the association with retirement coverage by
145.28the public general employees retirement plan or under this chapter, the public employees
145.29police and fire retirement plan under this chapter, or the local government correctional
145.30employees retirement plan under chapter 353E, whichever applies, as a condition of their
145.31employment on the first day of employment unless they:
145.32    (1) are specifically excluded under subdivision 2b;
145.33    (2) do not exercise their option to elect retirement coverage in the association as
145.34provided in subdivision 2d, paragraph (a); or
146.1    (3) are employees of the governmental subdivisions listed in subdivision 2d,
146.2paragraph (b), where the governmental subdivision has not elected to participate as a
146.3governmental subdivision covered by the association.
146.4    (b) A public employee who was a member of the association on June 30, 2002,
146.5based on employment that qualified for membership coverage by the public employees
146.6retirement plan or the public employees police and fire plan under this chapter, or the
146.7local government correctional employees retirement plan under chapter 353E as of June
146.830, 2002, retains that membership for the duration of the person's employment in that
146.9position or incumbency in elected office. Except as provided in subdivision 28, the person
146.10shall participate as a member until the employee or elected official terminates public
146.11employment under subdivision 11a or terminates membership under subdivision 11b.
146.12    (c) Public employees under paragraph (a) include:
146.13(1) physicians under section 353D.01, subdivision 2, who do not elect public
146.14employees defined contribution plan coverage under section 353D.02, subdivision 2;
146.15(2) full-time employees of the Dakota County Agricultural Society; and
146.16(3) employees of the Minneapolis Firefighters Relief Association or Minneapolis
146.17Police Relief Association who are not excluded employees under subdivision 2b due to
146.18coverage by the relief association pension plan and who elect Public Employee Retirement
146.19Association general plan coverage under Laws 2009, chapter 169, article 12, section 10.
146.20(d) For the purpose of participation in the MERF division of the general employees
146.21retirement plan, public employees include employees who were members of the former
146.22Minneapolis Employees Retirement Fund on June 29, 2010, and who participate as
146.23members of the MERF division of the association.

146.24    Sec. 2. Minnesota Statutes 2008, section 353.01, subdivision 2b, is amended to read:
146.25    Subd. 2b. Excluded employees. The following public employees are not eligible to
146.26participate as members of the association with retirement coverage by the public general
146.27employees retirement plan, the local government correctional employees retirement plan
146.28under chapter 353E, or the public employees police and fire retirement plan:
146.29    (1) public officers, other than county sheriffs, who are elected to a governing body,
146.30or persons who are appointed to fill a vacancy in an elective office of a governing body,
146.31whose term of office commences on or after July 1, 2002, for the service to be rendered
146.32in that elective position;
146.33    (2) election officers or election judges;
146.34    (3) patient and inmate personnel who perform services for a governmental
146.35subdivision;
147.1    (4) except as otherwise specified in subdivision 12a, employees who are hired for
147.2a temporary position as defined under subdivision 12a, and employees who resign from
147.3a nontemporary position and accept a temporary position within 30 days in the same
147.4governmental subdivision;
147.5    (5) employees who are employed by reason of work emergency caused by fire,
147.6flood, storm, or similar disaster;
147.7    (6) employees who by virtue of their employment in one governmental subdivision
147.8are required by law to be a member of and to contribute to any of the plans or funds
147.9administered by the Minnesota State Retirement System, the Teachers Retirement
147.10Association, the Duluth Teachers Retirement Fund Association, the St. Paul Teachers
147.11Retirement Fund Association, the Minneapolis Employees Retirement Fund, or any police
147.12or firefighters relief association governed by section 69.77 that has not consolidated
147.13with the Public Employees Retirement Association, or any local police or firefighters
147.14consolidation account who have not elected the type of benefit coverage provided by the
147.15public employees police and fire fund under sections 353A.01 to 353A.10, or any persons
147.16covered by section 353.665, subdivision 4, 5, or 6, who have not elected public employees
147.17police and fire plan benefit coverage. This clause must not be construed to prevent a person
147.18from being a member of and contributing to the Public Employees Retirement Association
147.19and also belonging to and contributing to another public pension plan or fund for other
147.20service occurring during the same period of time. A person who meets the definition of
147.21"public employee" in subdivision 2 by virtue of other service occurring during the same
147.22period of time becomes a member of the association unless contributions are made to
147.23another public retirement fund on the salary based on the other service or to the Teachers
147.24Retirement Association by a teacher as defined in section 354.05, subdivision 2;
147.25    (7) persons who are members of a religious order and are excluded from coverage
147.26under the federal Old Age, Survivors, Disability, and Health Insurance Program for the
147.27performance of service as specified in United States Code, title 42, section 410(a)(8)(A),
147.28as amended through January 1, 1987, if no irrevocable election of coverage has been made
147.29under section 3121(r) of the Internal Revenue Code of 1954, as amended;
147.30    (8) employees of a governmental subdivision who have not reached the age of
147.3123 and are enrolled on a full-time basis to attend or are attending classes on a full-time
147.32basis at an accredited school, college, or university in an undergraduate, graduate, or
147.33professional-technical program, or a public or charter high school;
147.34    (9) resident physicians, medical interns, and pharmacist residents and pharmacist
147.35interns who are serving in a degree or residency program in public hospitals or clinics;
148.1    (10) students who are serving in an internship or residency program sponsored
148.2by an accredited educational institution;
148.3    (11) persons who hold a part-time adult supplementary technical college license who
148.4render part-time teaching service in a technical college;
148.5    (12) except for employees of Hennepin County or Hennepin Healthcare System,
148.6Inc., foreign citizens working for a governmental subdivision with a work permit of less
148.7than three years, or an H-1b visa valid for less than three years of employment. Upon
148.8notice to the association that the work permit or visa extends beyond the three-year period,
148.9the foreign citizens must be reported for membership from the date of the extension;
148.10    (13) public hospital employees who elected not to participate as members of the
148.11association before 1972 and who did not elect to participate from July 1, 1988, to October
148.121, 1988;
148.13    (14) except as provided in section 353.86, volunteer ambulance service personnel,
148.14as defined in subdivision 35, but persons who serve as volunteer ambulance service
148.15personnel may still qualify as public employees under subdivision 2 and may be members
148.16of the Public Employees Retirement Association and participants in the public general
148.17employees retirement fund or the public employees police and fire fund, whichever
148.18applies, on the basis of compensation received from public employment service other than
148.19service as volunteer ambulance service personnel;
148.20    (15) except as provided in section 353.87, volunteer firefighters, as defined in
148.21subdivision 36, engaging in activities undertaken as part of volunteer firefighter duties;
148.22provided that a person who is a volunteer firefighter may still qualify as a public
148.23employee under subdivision 2 and may be a member of the Public Employees Retirement
148.24Association and a participant in the public general employees retirement fund or the public
148.25employees police and fire fund, whichever applies, on the basis of compensation received
148.26from public employment activities other than those as a volunteer firefighter;
148.27    (16) pipefitters and associated trades personnel employed by Independent School
148.28District No. 625, St. Paul, with coverage under a collective bargaining agreement by the
148.29pipefitters local 455 pension plan who were either first employed after May 1, 1997, or,
148.30if first employed before May 2, 1997, elected to be excluded under Laws 1997, chapter
148.31241, article 2, section 12;
148.32    (17) electrical workers, plumbers, carpenters, and associated trades personnel
148.33employed by Independent School District No. 625, St. Paul, or the city of St. Paul,
148.34who have retirement coverage under a collective bargaining agreement by the Electrical
148.35Workers Local 110 pension plan, the United Association Plumbers Local 34 pension plan,
148.36or the Carpenters Local 87 pension plan who were either first employed after May 1,
149.12000, or, if first employed before May 2, 2000, elected to be excluded under Laws 2000,
149.2chapter 461, article 7, section 5;
149.3    (18) bricklayers, allied craftworkers, cement masons, glaziers, glassworkers,
149.4painters, allied tradesworkers, and plasterers employed by the city of St. Paul or
149.5Independent School District No. 625, St. Paul, with coverage under a collective
149.6bargaining agreement by the Bricklayers and Allied Craftworkers Local 1 pension plan,
149.7the Cement Masons Local 633 pension plan, the Glaziers and Glassworkers Local L-1324
149.8pension plan, the Painters and Allied Trades Local 61 pension plan, or the Twin Cities
149.9Plasterers Local 265 pension plan who were either first employed after May 1, 2001, or if
149.10first employed before May 2, 2001, elected to be excluded under Laws 2001, First Special
149.11Session chapter 10, article 10, section 6;
149.12    (19) plumbers employed by the Metropolitan Airports Commission, with coverage
149.13under a collective bargaining agreement by the Plumbers Local 34 pension plan, who either
149.14were first employed after May 1, 2001, or if first employed before May 2, 2001, elected to
149.15be excluded under Laws 2001, First Special Session chapter 10, article 10, section 6;
149.16    (20) employees who are hired after June 30, 2002, to fill seasonal positions under
149.17subdivision 12b which are limited in duration by the employer to 185 consecutive calendar
149.18days or less in each year of employment with the governmental subdivision;
149.19    (21) persons who are provided supported employment or work-study positions
149.20by a governmental subdivision and who participate in an employment or industries
149.21program maintained for the benefit of these persons where the governmental subdivision
149.22limits the position's duration to three years or less, including persons participating in a
149.23federal or state subsidized on-the-job training, work experience, senior citizen, youth, or
149.24unemployment relief program where the training or work experience is not provided as a
149.25part of, or for, future permanent public employment;
149.26    (22) independent contractors and the employees of independent contractors; and
149.27    (23) reemployed annuitants of the association during the course of that
149.28reemployment.

149.29    Sec. 3. Minnesota Statutes 2008, section 353.01, is amended by adding a subdivision
149.30to read:
149.31    Subd. 47. MERF division. "MERF division" means the separate retirement plan
149.32within the general employees retirement plan of the Public Employees Retirement
149.33Association containing the applicable provisions of Minnesota Statutes 2008, chapter
149.34422A.

150.1    Sec. 4. Minnesota Statutes 2008, section 353.01, is amended by adding a subdivision
150.2to read:
150.3    Subd. 48. MERF division account. "MERF division account" means the separate
150.4account within the retirement fund of the general employees retirement fund of the
150.5Public Employees Retirement Association in which the actuarial liabilities of the former
150.6Minneapolis Employees Retirement Fund are held, and in which the assets of the former
150.7Minneapolis Employees Retirement Fund are credited.

150.8    Sec. 5. Minnesota Statutes 2008, section 353.05, is amended to read:
150.9353.05 CUSTODIAN OF FUNDS.
150.10The commissioner of management and budget shall be ex officio treasurer of the
150.11retirement funds of the association, including the MERF division, and the general bond of
150.12the commissioner of management and budget to the state shall must be so conditioned
150.13as to cover all liability for acts as treasurer of these funds. All moneys money of the
150.14association received by the commissioner of management and budget shall must be set
150.15aside in the state treasury to the credit of the proper fund or account. The commissioner
150.16of management and budget shall transmit monthly to the executive director a detailed
150.17statement of all amounts so received and credited to the fund funds, including the MERF
150.18division. Payments out of the fund shall funds, including the MERF division, may only
150.19be made only on warrants issued by the commissioner of management and budget, upon
150.20abstracts signed by the executive director; provided that abstracts for investment may be
150.21signed by the secretary executive director of the State Board of Investment.

150.22    Sec. 6. Minnesota Statutes 2009 Supplement, section 353.06, is amended to read:
150.23353.06 STATE BOARD OF INVESTMENT TO INVEST FUNDS.
150.24The executive director shall from time to time certify to the State Board of
150.25Investment for investment such portions of the retirement fund funds of the association,
150.26including the MERF division, as in its the director's judgment may not be required for
150.27immediate use. The State Board of Investment shall thereupon invest and reinvest the sum
150.28so certified, or transferred, in such securities as are duly authorized as legal investments
150.29for state employees retirement fund under section 11A.24 and shall have has authority to
150.30sell, convey, and exchange such securities and invest and reinvest the securities when it
150.31deems it desirable to do so and shall sell securities upon request of the board of trustees
150.32executive director when such funds are needed for its purposes. All of the provisions
150.33regarding accounting procedures and restrictions and conditions for the purchase and
150.34sale of securities under chapter 11A must apply to the accounting, purchase and sale of
151.1securities for the funds of the Public Employees Retirement fund Association, including
151.2the MERF division.

151.3    Sec. 7. Minnesota Statutes 2008, section 353.27, as amended by Laws 2009, chapter
151.4169, article 1, section 32, and article 4, sections 9, 10, 11, and 12, is amended to read:
151.5353.27 PUBLIC GENERAL EMPLOYEES RETIREMENT FUND.
151.6    Subdivision 1. Income; disbursements. There is a special fund known as the
151.7"public general employees retirement fund," the "retirement fund," or the "fund," which
151.8must include all the assets of the general employees retirement plan of the association.
151.9This fund must be credited with all contributions, all interest and all other income of the
151.10general employees retirement plan of the Public Employees Retirement Association that
151.11are authorized by law. From this fund there is appropriated the payments authorized by
151.12this chapter sections 353.01 to 353.46 in the amounts and at such time provided herein,
151.13including the expenses of administering the general employees retirement plan and fund.
151.14    Subd. 1a. MERF division account established; revenue and disbursements. The
151.15MERF division account is established as a special account. The MERF division account
151.16includes all of the assets of the former Minneapolis Employees Retirement Fund that
151.17were transferred to the administration of the Public Employees Retirement Association
151.18under section 353.50. The special account is credited with the contributions under
151.19section 353.50, subdivision 7, state aid under sections 356.43 and 422A.101, subdivision
151.203, investment performance on the special account assets, and all other income of the
151.21MERF division authorized by law. The payments of annuities and benefits authorized
151.22by Minnesota Statutes 2008, chapter 422A in the amounts and at the times provided in
151.23that chapter, and the administrative expenses of the MERF division are appropriated
151.24from the special account.
151.25    Subd. 2. General employees retirement plan; employee contribution. (a) For
151.26a basic member of the general employees retirement plan of the Public Employees
151.27Retirement Association, the employee contribution is 9.10 percent of salary. For a
151.28coordinated member of the general employees retirement plan of the Public Employees
151.29Retirement Association, the employee contribution is six percent of salary plus any
151.30contribution rate adjustment under subdivision 3b.
151.31(b) These contributions must be made by deduction from salary as defined in section
151.32353.01, subdivision 10 , in the manner provided in subdivision 4. If any portion of a
151.33member's salary is paid from other than public funds, the member's employee contribution
151.34must be based on the total salary received by the member from all sources.
152.1    Subd. 3. General employees retirement plan; employer contribution. (a) For
152.2a basic member of the general employees retirement plan of the Public Employees
152.3Retirement Association, the employer contribution is 9.10 percent of salary. For a
152.4coordinated member of the general employees retirement plan of the Public Employees
152.5Retirement Association, the employer contribution is six percent of salary plus any
152.6contribution rate adjustment under subdivision 3b.
152.7(b) This contribution must be made from funds available to the employing
152.8subdivision by the means and in the manner provided in section 353.28.
152.9    Subd. 3a. Additional employer contribution. (a) An additional employer
152.10contribution to the general employees retirement fund of the Public Employees Retirement
152.11Association must be made equal to the following applicable percentage of the total salary
152.12amount for "basic members" and for "coordinated members":
152.13
Basic Program
Coordinated Program
152.14
Effective before January 1, 2006
2.68
.43
152.15
Effective January 1, 2006
2.68
.50
152.16
Effective January 1, 2009
2.68
.75
152.17
Effective January 1, 2010
2.68
1.00
152.18These contributions must be made from funds available to the employing subdivision
152.19by the means and in the manner provided in section 353.28.
152.20(b) The coordinated program contribution rates set forth in paragraph (a) effective
152.21for January 1, 2009, or January 1, 2010, must not be implemented if, following receipt of
152.22the July 1, 2008, or July 1, 2009, annual actuarial valuation reports report under section
152.23356.215 , respectively, the actuarially required contributions are equal to or less than the
152.24total rates under this section in effect as of January 1, 2008.
152.25(c) This subdivision is repealed once the actuarial value of the assets of the general
152.26employees retirement plan of the Public Employees Retirement Association equal or
152.27exceed the actuarial accrued liability of the plan as determined by the actuary retained
152.28under sections 356.214 and 356.215. The repeal is effective on the first day of the first full
152.29pay period occurring after March 31 of the calendar year following the issuance of the
152.30actuarial valuation upon which the repeal is based.
152.31    Subd. 3b. Change in employee and employer contributions in certain instances.
152.32(a) For purposes of this section, a contribution sufficiency exists if the total of the
152.33employee contribution under subdivision 2, the employer contribution under subdivision
152.343, the additional employer contribution under subdivision 3a, and any additional
152.35contribution previously imposed under this subdivision exceeds the total of the normal
152.36cost, the administrative expenses, and the amortization contribution of the general
152.37employees retirement plan as reported in the most recent actuarial valuation of the
153.1retirement plan prepared by the actuary retained under section 356.214 and prepared under
153.2section 356.215 and the standards for actuarial work of the Legislative Commission on
153.3Pensions and Retirement. For purposes of this section, a contribution deficiency exists if
153.4the total of the employee contributions under subdivision 2, the employer contributions
153.5under subdivision 3, the additional employer contribution under subdivision 3a, and any
153.6additional contribution previously imposed under this subdivision is less than the total
153.7of the normal cost, the administrative expenses, and the amortization contribution of the
153.8general employees retirement plan as reported in the most recent actuarial valuation of the
153.9retirement plan prepared by the actuary retained under section 356.214 and prepared under
153.10section 356.215 and the standards for actuarial work of the Legislative Commission on
153.11Pensions and Retirement.
153.12(b) Employee and employer contributions to the general employees retirement plan
153.13under subdivisions 2 and 3 must be adjusted:
153.14(1) if, after July 1, 2010, the regular actuarial valuations of the general employees
153.15retirement plan of the Public Employees Retirement Association under section 356.215
153.16indicate that there is a contribution sufficiency under paragraph (a) equal to or greater
153.17than 0.5 percent of covered payroll for two consecutive years, the coordinated program
153.18employee and employer contribution rates must be decreased as determined under
153.19paragraph (c) to a level such that the sufficiency equals no more than 0.25 percent of
153.20covered payroll based on the most recent actuarial valuation; or
153.21(2) if, after July 1, 2010, the regular actuarial valuations of the general employees
153.22retirement plan of the Public Employees Retirement Association under section 356.215
153.23indicate that there is a deficiency equal to or greater than 0.5 percent of covered payroll for
153.24two consecutive years, the coordinated program employee and employer contribution rates
153.25must be increased as determined under paragraph (c) to a level such that no deficiency
153.26exists based on the most recent actuarial valuation.
153.27(c) The general employees retirement plan contribution rate increase or decrease
153.28must be determined by the executive director of the Public Employees Retirement
153.29Association, must be reported to the chair and the executive director of the Legislative
153.30Commission on Pensions and Retirement on or before the next February 1, and, if the
153.31Legislative Commission on Pensions and Retirement does not recommend against the rate
153.32change or does not recommend a modification in the rate change, is effective on the
153.33next July 1 following the determination by the executive director that a contribution
153.34deficiency or sufficiency has existed for two consecutive fiscal years based on the most
153.35recent actuarial valuations under section 356.215. If the actuarially required contribution
153.36of the general employees retirement plan exceeds or is less than the total support provided
154.1by the combined employee and employer contribution rates by more than 0.5 percent of
154.2covered payroll, the general employees retirement plan coordinated program employee
154.3and employer contribution rates must be adjusted incrementally over one or more years to
154.4a level such that there remains a contribution sufficiency of no more than 0.25 percent
154.5of covered payroll.
154.6(d) No incremental adjustment may exceed 0.25 percent for either the general
154.7employees retirement plan coordinated program employee and employer contribution rates
154.8per year in which any adjustment is implemented. A general employees retirement plan
154.9contribution rate adjustment under this subdivision must not be made until at least two
154.10years have passed since fully implementing a previous adjustment under this subdivision.
154.11(e) The general employees retirement plan contribution sufficiency or deficiency
154.12determination under paragraphs (a) through (d) must be made without the inclusion of
154.13the contributions to, the funded condition of, or the actuarial funding requirements of
154.14the MERF division.
154.15    Subd. 4. Employer reporting requirements; contributions; member status.
154.16(a) A representative authorized by the head of each department shall deduct employee
154.17contributions from the salary of each employee who qualifies for membership in the
154.18general employees retirement plan of the Public Employees Retirement Association or in
154.19the public employees police and fire retirement plan under this chapter and remit payment
154.20in a manner prescribed by the executive director for the aggregate amount of the employee
154.21contributions, the employer contributions and the additional employer contributions to be
154.22received within 14 calendar days. The head of each department or the person's designee
154.23shall for each pay period submit to the association a salary deduction report in the format
154.24prescribed by the executive director. Data required to be submitted as part of salary
154.25deduction reporting must include, but are not limited to:
154.26(1) the legal names and Social Security numbers of employees who are members;
154.27(2) the amount of each employee's salary deduction;
154.28(3) the amount of salary from which each deduction was made;
154.29(4) the beginning and ending dates of the payroll period covered and the date of
154.30actual payment; and
154.31(5) adjustments or corrections covering past pay periods.
154.32(b) Employers must furnish the data required for enrollment for each new employee
154.33who qualifies for membership in the general employees retirement plan of the Public
154.34Employees Retirement Association or in the public employees police and fire retirement
154.35plan in the format prescribed by the executive director. The required enrollment data
154.36on new employees must be submitted to the association prior to or concurrent with the
155.1submission of the initial employee salary deduction. The employer shall also report
155.2to the association all member employment status changes, such as leaves of absence,
155.3terminations, and death, and shall report the effective dates of those changes, on an
155.4ongoing basis for the payroll cycle in which they occur. The employer shall furnish data,
155.5forms, and reports as may be required by the executive director for proper administration
155.6of the retirement system. Before implementing new or different computerized reporting
155.7requirements, the executive director shall give appropriate advance notice to governmental
155.8subdivisions to allow time for system modifications.
155.9(c) Notwithstanding paragraph (a), the association executive director may provide
155.10for less frequent reporting and payments for small employers.
155.11    Subd. 7. Adjustment for erroneous receipts or disbursements. (a) Except
155.12as provided in paragraph (b), erroneous employee deductions and erroneous employer
155.13contributions and additional employer contributions to the general employees retirement
155.14plan of the Public Employees Retirement Association or to the public employees police
155.15and fire retirement plan for a person, who otherwise does not qualify for membership
155.16under this chapter, are considered:
155.17(1) valid if the initial erroneous deduction began before January 1, 1990. Upon
155.18determination of the error by the association, the person may continue membership in the
155.19association while employed in the same position for which erroneous deductions were
155.20taken, or file a written election to terminate membership and apply for a refund upon
155.21termination of public service or defer an annuity under section 353.34; or
155.22(2) invalid, if the initial erroneous employee deduction began on or after January 1,
155.231990. Upon determination of the error, the association shall refund all erroneous employee
155.24deductions and all erroneous employer contributions as specified in paragraph (e). No
155.25person may claim a right to continued or past membership in the association based on
155.26erroneous deductions which began on or after January 1, 1990.
155.27(b) Erroneous deductions taken from the salary of a person who did not qualify for
155.28membership in the general employees retirement plan of the Public Employees Retirement
155.29Association or in the public employees police and fire retirement plan by virtue of
155.30concurrent employment before July 1, 1978, which required contributions to another
155.31retirement fund or relief association established for the benefit of officers and employees
155.32of a governmental subdivision, are invalid. Upon discovery of the error, the association
155.33shall remove all invalid service and, upon termination of public service, the association
155.34shall refund all erroneous employee deductions to the person, with interest as determined
155.35under section 353.34, subdivision 2, and all erroneous employer contributions without
155.36interest to the employer. This paragraph has both retroactive and prospective application.
156.1(c) Adjustments to correct employer contributions and employee deductions taken
156.2in error from amounts which are not salary under section 353.01, subdivision 10, must
156.3be made as specified in paragraph (e). The period of adjustment must be limited to the
156.4fiscal year in which the error is discovered by the association and the immediate two
156.5preceding fiscal years.
156.6(d) If there is evidence of fraud or other misconduct on the part of the employee or
156.7the employer, the board of trustees may authorize adjustments to the account of a member
156.8or former member to correct erroneous employee deductions and employer contributions
156.9on invalid salary and the recovery of any overpayments for a period longer than provided
156.10for under paragraph (c).
156.11(e) Upon discovery of the receipt of erroneous employee deductions and employer
156.12contributions under paragraph (a), clause (2), or paragraph (c), the association must require
156.13the employer to discontinue the erroneous employee deductions and erroneous employer
156.14contributions reported on behalf of a member. Upon discontinuation, the association must:
156.15(1) for a member, provide a refund or credit to the employer in the amount of the
156.16invalid employee deductions with interest on the invalid employee deductions at the rate
156.17specified under section 353.34, subdivision 2, from the received date of each invalid salary
156.18transaction through the date the credit or refund is made; and the employer must pay the
156.19refunded employee deductions plus interest to the member;
156.20(2) for a former member who:
156.21(i) is not receiving a retirement annuity or benefit, return the erroneous employee
156.22deductions to the former member through a refund with interest at the rate specified under
156.23section 353.34, subdivision 2, from the received date of each invalid salary transaction
156.24through the date the credit or refund is made; or
156.25(ii) is receiving a retirement annuity or disability benefit, or a person who is
156.26receiving an optional annuity or survivor benefit, for whom it has been determined an
156.27overpayment must be recovered, adjust the payment amount and recover the overpayments
156.28as provided under this section; and
156.29(3) return the invalid employer contributions reported on behalf of a member or
156.30former member to the employer by providing a credit against future contributions payable
156.31by the employer.
156.32(f) In the event that a salary warrant or check from which a deduction for the
156.33retirement fund was taken has been canceled or the amount of the warrant or check
156.34returned to the funds of the department making the payment, a refund of the sum
156.35deducted, or any portion of it that is required to adjust the deductions, must be made
156.36to the department or institution.
157.1(g) If the accrual date of any retirement annuity, survivor benefit, or disability benefit
157.2is within the limitation period specified in paragraph (c), and an overpayment has resulted
157.3by using invalid service or salary, or due to any erroneous calculation procedure, the
157.4association must recalculate the annuity or benefit payable and recover any overpayment
157.5as provided under subdivision 7b.
157.6(h) Notwithstanding the provisions of this subdivision, the association may apply
157.7the Revenue Procedures defined in the federal Internal Revenue Service Employee Plans
157.8Compliance Resolution System and not issue a refund of erroneous employee deductions
157.9and employer contributions or not recover a small overpayment of benefits if the cost to
157.10correct the error would exceed the amount of the member refund or overpayment.
157.11(i) Any fees or penalties assessed by the federal Internal Revenue Service for any
157.12failure by an employer to follow the statutory requirements for reporting eligible members
157.13and salary must be paid by the employer.
157.14    Subd. 7a. Deductions or contributions transmitted by error. (a) If employee
157.15deductions and employer contributions under this section, section 353.50, 353.65, or
157.16353E.03 were erroneously transmitted to the association, but should have been transmitted
157.17to another Minnesota public pension plan, the executive director shall transfer the
157.18erroneous employee deductions and employer contributions to the appropriate retirement
157.19fund or individual account, as applicable, without interest. The time limitations specified
157.20in subdivisions 7 and 12 do not apply.
157.21(b) For purposes of this subdivision, a Minnesota public pension plan means a
157.22plan specified in section 356.30, subdivision 3, or the plans governed by chapters 353D
157.23and 354B.
157.24(c) A potential transfer under paragraph (a) that is reasonably determined to cause
157.25the plan to fail to be a qualified plan under section 401(a) of the federal Internal Revenue
157.26Code, as amended, must not be made by the executive director of the association. Within
157.2730 days after being notified by the Public Employees Retirement Association of an
157.28unmade potential transfer under this paragraph, the employer of the affected person
157.29must transmit an amount representing the applicable salary deductions and employer
157.30contributions, without interest, to the retirement fund of the appropriate Minnesota public
157.31pension plan, or to the applicable individual account if the proper coverage is by a defined
157.32contribution plan. The association must provide the employing unit a credit for the amount
157.33of the erroneous salary deductions and employer contributions against future contributions
157.34from the employer. If the employing unit receives a credit under this paragraph, the
157.35employing unit is responsible for refunding to the applicable employee any amount that
157.36had been erroneously deducted from the person's salary.
158.1    Subd. 7b. Recovery of overpayments. (a) In the event the executive director
158.2determines that an overpaid annuity or benefit that from the general employees retirement
158.3plan of the Public Employees Retirement Association, the public employees police and
158.4fire retirement plan, or the local government correctional employees retirement plan is
158.5the result of invalid salary included in the average salary used to calculate the payment
158.6amount must be recovered, the association must determine the amount of the employee
158.7deductions taken in error on the invalid salary, with interest determined in the manner
158.8provided for a former member under subdivision 7, paragraph (e), clause (2), item (i),
158.9and must subtract that amount from the total annuity or benefit overpayment, and the
158.10remaining balance of the overpaid annuity or benefit, if any, must be recovered.
158.11(b) If the invalid employee deductions plus interest exceed the amount of the
158.12overpaid benefits, the balance must be refunded to the person to whom the benefit or
158.13annuity is being paid.
158.14(c) Any invalid employer contributions reported on the invalid salary must be
158.15credited to the employer as provided in subdivision 7, paragraph (e).
158.16(d) If a member or former member, who is receiving a retirement annuity or
158.17disability benefit for which an overpayment is being recovered, dies before recovery of
158.18the overpayment is completed and a joint and survivor optional annuity is payable, the
158.19remaining balance of the overpaid annuity or benefit must continue to be recovered from
158.20the payment to the optional annuity beneficiary.
158.21(e) If the association finds that a refund has been overpaid to a former member,
158.22beneficiary or other person, the amount of the overpayment must be recovered for the
158.23benefit of the respective retirement fund or account.
158.24(f) The board of trustees shall adopt policies directing the period of time and manner
158.25for the collection of any overpaid retirement or optional annuity, and survivor or disability
158.26benefit, or a refund that the executive director determines must be recovered as provided
158.27under this section.
158.28    Subd. 7c. Limitation on additional plan coverage. No deductions for any plan
158.29under this chapter or chapter 353E may be taken from the salary of a person who is
158.30employed by a governmental subdivision under section 353.01, subdivision 6, and who is
158.31receiving disability benefit payments from any plan under this chapter or chapter 353E
158.32unless the person waives the right to further disability benefit payments.
158.33    Subd. 8. District court reporters; salary deductions. Deductions from the salary
158.34of a district court reporter in a judicial district consisting of two or more counties shall
158.35must be made by the auditor of the county in which the bond and official oath of such
158.36district court reporter are filed, from the portion of salary paid by such county.
159.1    Subd. 9. Fee officers; contributions; obligations of employers. Any appointed or
159.2elected officer of a governmental subdivision who was or is a "public employee" within
159.3the meaning of section 353.01 and was or is a member of the fund general employees
159.4retirement plan of the Public Employees Retirement Association and whose salary
159.5was or is paid in whole or in part from revenue derived by fees and assessments, shall
159.6pay employee contribution in the amount, at the time, and in the manner provided in
159.7subdivisions 2 and 4. This subdivision shall does not apply to district court reporters.
159.8The employer contribution as provided in subdivision 3, and the additional employer
159.9contribution as provided in subdivision 3a, with respect to such service shall must be
159.10paid by the governmental subdivision. This subdivision shall have has both retroactive
159.11and prospective application as to all such members; and every employing governmental
159.12subdivision is deemed liable, retroactively and prospectively, for all employer and
159.13additional employer contributions for every such member of the general employees
159.14retirement plan in its employ. Delinquencies under this section shall be are governed
159.15in all respects by section 353.28.
159.16    Subd. 10. Employer exclusion reports. The head of a department shall annually
159.17furnish the executive director with an exclusion report listing only those employees in
159.18potentially PERA general employees retirement plan-eligible positions who were not
159.19reported as members of the association general employees retirement plan and who worked
159.20during the school year for school employees and calendar year for nonschool employees.
159.21The department head must certify the accuracy and completeness of the exclusion report
159.22to the association. The executive director shall prescribe the manner and forms, including
159.23standardized exclusion codes, to be used by a governmental subdivision in preparing and
159.24filing exclusion reports. The executive director shall also check the exclusion report to
159.25ascertain whether any omissions have been made by a department head in the reporting
159.26of new public employees for membership. The executive director may delegate an
159.27association employee under section 353.03, subdivision 3a, paragraph (b), clause (5), to
159.28conduct a field audit to review the payroll records of a governmental subdivision.
159.29    Subd. 11. Employers; required to furnish requested information. (a) All
159.30governmental subdivisions shall furnish promptly such other information relative to the
159.31employment status of all employees or former employees, including, but not limited to,
159.32payroll abstracts pertaining to all past and present employees, as may be requested by the
159.33executive director, including schedules of salaries applicable to various categories of
159.34employment.
159.35(b) In the event payroll abstract records have been lost or destroyed, for whatever
159.36reason or in whatever manner, so that such schedules of salaries cannot be furnished
160.1therefrom, the employing governmental subdivision, in lieu thereof, shall furnish to the
160.2association an estimate of the earnings of any employee or former employee for any
160.3period as may be requested by the executive director. If the association is provided a
160.4schedule of estimated earnings, the executive director is authorized to use the same as a
160.5basis for making whatever computations might be necessary for determining obligations
160.6of the employee and employer to the general employees retirement fund plan, the public
160.7employees police and fire retirement plan, or the local government correctional employees
160.8retirement plan. If estimates are not furnished by the employer at the request of the
160.9executive director, the executive director may estimate the obligations of the employee
160.10and employer to the general employees retirement fund, the public employees police and
160.11fire retirement plan, or the local government correctional employees retirement plan based
160.12upon those records that are in its possession.
160.13    Subd. 12. Omitted salary deductions; obligations. (a) In the case of omission
160.14of required deductions for the general employees retirement plan, the public employees
160.15police and fire retirement plan, or the local government correctional employees retirement
160.16plan from the salary of an employee, the department head or designee shall immediately,
160.17upon discovery, report the employee for membership and deduct the employee deductions
160.18under subdivision 4 during the current pay period or during the pay period immediately
160.19following the discovery of the omission. Payment for the omitted obligations may only be
160.20made in accordance with reporting procedures and methods established by the executive
160.21director.
160.22(b) When the entire omission period of an employee does not exceed 60 days, the
160.23governmental subdivision may report and submit payment of the omitted employee
160.24deductions and the omitted employer contributions through the reporting processes under
160.25subdivision 4.
160.26(c) When the omission period of an employee exceeds 60 days, the governmental
160.27subdivision shall furnish to the association sufficient data and documentation upon which
160.28the obligation for omitted employee and employer contributions can be calculated.
160.29The omitted employee deductions must be deducted from the employee's subsequent
160.30salary payment or payments and remitted to the association for deposit in the applicable
160.31retirement fund. The employee shall pay omitted employee deductions due for the 60
160.32days prior to the end of the last pay period in the omission period during which salary
160.33was earned. The employer shall pay any remaining omitted employee deductions and any
160.34omitted employer contributions, plus cumulative interest at an annual rate of 8.5 percent
160.35compounded annually, from the date or dates each omitted employee contribution was
160.36first payable.
161.1(d) An employer shall not hold an employee liable for omitted employee deductions
161.2beyond the pay period dates under paragraph (c), nor attempt to recover from the employee
161.3those employee deductions paid by the employer on behalf of the employee. Omitted
161.4deductions due under paragraph (c) which are not paid by the employee constitute a
161.5liability of the employer that failed to deduct the omitted deductions from the employee's
161.6salary. The employer shall make payment with interest at an annual rate of 8.5 percent
161.7compounded annually. Omitted employee deductions are no longer due if an employee
161.8terminates public service before making payment of omitted employee deductions to
161.9the association, but the employer remains liable to pay omitted employer contributions
161.10plus interest at an annual rate of 8.5 percent compounded annually from the date the
161.11contributions were first payable.
161.12(e) The association may not commence action for the recovery of omitted employee
161.13deductions and employer contributions after the expiration of three calendar years after
161.14the calendar year in which the contributions and deductions were omitted. Except as
161.15provided under paragraph (b), no payment may be made or accepted unless the association
161.16has already commenced action for recovery of omitted deductions. An action for recovery
161.17commences on the date of the mailing of any written correspondence from the association
161.18requesting information from the governmental subdivision upon which to determine
161.19whether or not omitted deductions occurred.
161.20    Subd. 12a. Terminated employees: omitted deductions. A terminated employee
161.21who was a member of the general employees retirement plan of the Public Employees
161.22Retirement Association, the public employees police and fire retirement plan, or the local
161.23government correctional employees retirement plan and who has a period of employment
161.24in which previously omitted employer contributions were made under subdivision 12
161.25but for whom no, or only partial, omitted employee contributions have been made, or
161.26a member who had prior coverage in the association for which previously omitted
161.27employer contributions were made under subdivision 12 but who terminated service
161.28before required omitted employee deductions could be withheld from salary, may pay the
161.29omitted employee deductions for the period on which omitted employer contributions
161.30were previously paid plus interest at an annual rate of 8.5 percent compounded annually.
161.31A terminated employee may pay the omitted employee deductions plus interest within six
161.32months of an initial notification from the association of eligibility to pay those omitted
161.33deductions. If a terminated employee is reemployed in a position covered under a public
161.34pension fund under section 356.30, subdivision 3, and elects to pay omitted employee
161.35deductions, payment must be made no later than six months after a subsequent termination
161.36of public service.
162.1    Subd. 12b. Terminated employees: immediate eligibility. If deductions were
162.2omitted from salary adjustments or final salary of a terminated employee who was a
162.3member of the general employees retirement plan, the public employees police and fire
162.4retirement plan, or the local government correctional employees retirement plan and who
162.5is immediately eligible to draw a monthly benefit, the employer shall pay the omitted
162.6employer and employer additional contributions plus interest on both the employer and
162.7employee amounts due at an annual rate of 8.5 percent compounded annually. The
162.8employee shall pay the employee deductions within six months of an initial notification
162.9from the association of eligibility to pay omitted deductions or the employee forfeits
162.10the right to make the payment.
162.11    Subd. 13. Certain warrants canceled. A warrant payable from the general
162.12employees retirement fund, the public employees police and fire retirement fund, or the
162.13local government correctional retirement fund remaining unpaid for a period of six
162.14months must be canceled into the applicable retirement fund and not canceled into the
162.15state's general fund.
162.16    Subd. 14. Periods before initial coverage date. (a) If an entity is determined to
162.17be a governmental subdivision due to receipt of a written notice of eligibility from the
162.18association with respect to the general employees retirement plan, the public employees
162.19police and fire retirement plan, or the local government correctional retirement plan, that
162.20employer and its employees are subject to the requirements of subdivision 12, effective
162.21retroactively to the date that the executive director of the association determines that
162.22the entity first met the definition of a governmental subdivision, if that date predates
162.23the notice of eligibility.
162.24    (b) If the retroactive time period under paragraph (a) exceeds three years, an
162.25employee is authorized to purchase service credit in the applicable Public Employees
162.26Retirement Association plan for the portion of the period in excess of three years, by
162.27making payment under section 356.551. Notwithstanding any provision of section
162.28356.551, subdivision 2 , to the contrary, regarding time limits on purchases, payment of a
162.29service credit purchase amount may be made anytime before the termination of public
162.30service.
162.31    (c) This subdivision does not apply if the applicable employment under paragraph
162.32(a) included coverage by any public or private defined benefit or defined contribution
162.33retirement plan, other than a volunteer firefighters relief association. If this paragraph
162.34applies, an individual is prohibited from purchasing service credit from a Public Employees
162.35Retirement Association plan for any period or periods specified in paragraph (a).

163.1    Sec. 8. Minnesota Statutes 2008, section 353.34, subdivision 1, is amended to read:
163.2    Subdivision 1. Refund or deferred annuity. (a) A former member is entitled
163.3to a refund of accumulated employee deductions under subdivision 2, or to a deferred
163.4annuity under subdivision 3. Application for a refund may not be made before the date of
163.5termination of public service. Except as specified in paragraph (b), a refund must be paid
163.6within 120 days following receipt of the application unless the applicant has again become
163.7a public employee required to be covered by the association.
163.8(b) If an individual was placed on layoff under section 353.01, subdivision 12 or 12c,
163.9a refund is not payable before termination of service under section 353.01, subdivision 11a.
163.10(c) An individual who terminates public service covered by the Public Employees
163.11Retirement Association general employees retirement plan, the MERF division, the
163.12Public Employees Retirement Association police and fire retirement plan, or the public
163.13employees local government corrections service retirement plan, and who is employed
163.14by a different employer and who becomes an active member covered by one of the other
163.15two plans, may receive a refund of employee contributions plus six percent interest
163.16compounded annually from the plan from which the member terminated service.

163.17    Sec. 9. Minnesota Statutes 2008, section 353.34, subdivision 6, is amended to read:
163.18    Subd. 6. Additions to fund. The board of trustees may credit to the general
163.19employees retirement fund any moneys money received in the form of contributions,
163.20donations, gifts, appropriations, bequests, or otherwise.

163.21    Sec. 10. Minnesota Statutes 2008, section 353.37, subdivision 1, is amended to read:
163.22    Subdivision 1. Salary maximums. (a) The annuity of a person otherwise eligible
163.23for an annuity under this chapter from the general employees retirement plan of the Public
163.24Employees Retirement Association, the public employees police and fire retirement plan,
163.25or the local government correctional employees retirement plan must be suspended under
163.26subdivision 2 or reduced under subdivision 3, whichever results in the higher annual
163.27annuity amount, if the person reenters public service as a nonelective employee of a
163.28governmental subdivision in a position covered by this chapter or returns to work as an
163.29employee of a labor organization that represents public employees who are association
163.30members under this chapter and salary for the reemployment service exceeds the annual
163.31maximum earnings allowable for that age for the continued receipt of full benefit amounts
163.32monthly under the federal Old Age, Survivors and Disability Insurance Program as set by
163.33the secretary of health and human services under United States Code, title 42, section 403,
163.34in any calendar year. If the person has not yet reached the minimum age for the receipt
164.1of Social Security benefits, the maximum salary for the person is equal to the annual
164.2maximum earnings allowable for the minimum age for the receipt of Social Security
164.3benefits.
164.4(b) The provisions of paragraph (a) do not apply to the members of the MERF
164.5division.

164.6    Sec. 11. Minnesota Statutes 2008, section 353.37, subdivision 2, is amended to read:
164.7    Subd. 2. Suspension of annuity. (a) The association shall suspend the annuity on
164.8the first of the month after the month in which the salary of the reemployed annuitant
164.9described in subdivision 1, paragraph (a), exceeds the maximums set in subdivision 1,
164.10paragraph (a), based only on those months in which the annuitant is actually employed
164.11in nonelective public service in a position covered under this chapter or employment
164.12with a labor organization that represents public employees who are association members
164.13of a retirement plan under this chapter or chapter 353E.
164.14(b) An annuitant who is elected to public office after retirement may hold that office
164.15and receive an annuity otherwise payable from a retirement plan administered by the
164.16association.

164.17    Sec. 12. Minnesota Statutes 2008, section 353.37, subdivision 3, is amended to read:
164.18    Subd. 3. Reduction of annuity. (a) The association shall reduce the amount
164.19of the annuity of a person who has not reached the retirement age by one-half of the
164.20amount in excess of the applicable reemployment income maximum under subdivision
164.211, paragraph (a).
164.22(b) There is no reduction upon reemployment, regardless of income, for a person
164.23who has reached the retirement age.

164.24    Sec. 13. Minnesota Statutes 2008, section 353.37, subdivision 4, is amended to read:
164.25    Subd. 4. Resumption of annuity. The association shall resume paying a full
164.26annuity to the reemployed annuitant described in subdivision 1, paragraph (a), at the
164.27start of each calendar year until the salary exceeds the maximums under subdivision 1,
164.28paragraph (a), or on the first of the month following the termination of the employment
164.29which resulted in the suspension of the annuity. The executive director may adopt policies
164.30regarding the suspension and reduction of annuities under this section.

164.31    Sec. 14. Minnesota Statutes 2008, section 353.37, subdivision 5, is amended to read:
165.1    Subd. 5. Effect on annuity. Except as provided under this section, public service
165.2performed by an annuitant described in subdivision 1, paragraph (a), subsequent to
165.3retirement under this chapter from the general employees retirement plan, the public
165.4employees police and fire retirement plan, or the local government correctional employees
165.5retirement plan does not increase or decrease the amount of an annuity. The annuitant shall
165.6not make any further contributions to the association's a defined benefit plan administered
165.7by the association by reason of this subsequent public service.

165.8    Sec. 15. Minnesota Statutes 2008, section 353.46, subdivision 2, is amended to read:
165.9    Subd. 2. Rights of deferred annuitant. The right entitlement of a deferred
165.10annuitant or other former member of the general employees retirement plan of the
165.11Public Employees Retirement Association, the Minneapolis Employees Retirement Fund
165.12division, the public employees police and fire retirement plan, or the local government
165.13correctional employees retirement plan to receive an annuity under the law in effect at the
165.14time such the person terminated public service is herein preserved; provided, however,.
165.15The provisions of section 353.71, subdivision 2, as amended by Laws 1973, chapter 753
165.16shall, apply to a deferred annuitant or other former member who first begins receiving an
165.17annuity after July 1, 1973.

165.18    Sec. 16. Minnesota Statutes 2008, section 353.46, subdivision 6, is amended to read:
165.19    Subd. 6. Computation of benefits for certain coordinated members. Any
165.20coordinated member of the general employees retirement plan of the Public Employees
165.21Retirement Association who prior to, before July 1, 1979, was a member of the former
165.22coordinated program of the former Minneapolis Municipal Employees Retirement
165.23Fund and who prior to, before July 1, 1978, was a member of the basic program of the
165.24Minneapolis Municipal Employees Retirement Fund shall:
165.25(1) be is entitled to receive a retirement annuity when otherwise qualified, the
165.26calculation of which shall must utilize the formula accrual rates specified in section
165.27422A.15, subdivision 1 , for that portion of credited service which was rendered prior to
165.28before July 1, 1978, and the formula accrual rates specified in section 353.29, subdivision
165.293
, for the remainder of credited service, both applied to the average salary as specified
165.30in section 353.29, subdivision 2 353.01, subdivision 17a. The formula accrual rates to
165.31be used in calculating the retirement annuity shall must recognize the service after July
165.321, 1978 as a member of the former coordinated program of the former Minneapolis
165.33Municipal Employees Retirement Fund and after July 1, 1979 as a member of the
165.34general employees retirement plan of the Public Employees Retirement Association as
166.1a continuation of service rendered prior to before July 1, 1978. The annuity amount
166.2attributable to service as a member of the basic program of the former Minneapolis
166.3Municipal Employees Retirement Fund shall be is payable by from the Minneapolis
166.4Employees Retirement Fund MERF division and the annuity amount attributable to all
166.5other service shall be is payable by from the general employees retirement fund of the
166.6Public Employees Retirement Association; .
166.7(2) retain eligibility when otherwise qualified for a disability benefit from the
166.8Minneapolis Employees Retirement Fund until July 1, 1982, notwithstanding coverage
166.9by the Public Employees Retirement Association, if the member has or would, without
166.10the transfer of retirement coverage from the basic program of the Minneapolis Municipal
166.11Employees Retirement Fund to the coordinated program of the Minneapolis Municipal
166.12Employees Retirement Fund or from the coordinated program of the Minneapolis
166.13Municipal Employees Retirement Fund to the public employees retirement fund, have
166.14sufficient credited service prior to January 1, 1983, to meet the minimum service
166.15requirements for a disability benefit pursuant to section 422A.18. The disability benefit
166.16amount attributable to service as a member of the basic program of the Minneapolis
166.17Municipal Employees Retirement Fund shall be payable by the Minneapolis Employees
166.18Retirement Fund and the disability benefit amount attributable to all other service shall be
166.19payable by the Public Employees Retirement Association.

166.20    Sec. 17. [353.50] MERF CONSOLIDATION ACCOUNT; ESTABLISHMENT
166.21AND OPERATION.
166.22    Subdivision 1. Administrative consolidation. (a) Notwithstanding any provision
166.23of this chapter or chapter 422A to the contrary, the administration of the Minneapolis
166.24Employees Retirement Fund as the MERF division is transferred to the Public Employees
166.25Retirement Association board of trustees. The assets, service credit, and benefit liabilities
166.26of the Minneapolis Employees Retirement Fund transfer to the MERF division account
166.27within the general employees retirement plan of the Public Employees Retirement
166.28Association established by section 353.27, subdivision 1a, on July 1, 2010.
166.29(b) The creation of the MERF division must not be construed to alter the Social
166.30Security or Medicare coverage of any member of the former Minneapolis Employees
166.31Retirement Fund on June 29, 2010, while the person is employed in a position covered
166.32under the MERF division of the Public Employees Retirement Association.
166.33    Subd. 2. Membership transfer. Effective June 30, 2010, the active, inactive, and
166.34retired members of the Minneapolis Employees Retirement Fund are transferred to the
167.1MERF division administered by the Public Employees Retirement Association and are no
167.2longer members of the Minneapolis Employees Retirement Fund.
167.3    Subd. 3. Service credit and benefit liability transfer. (a) All allowable service
167.4credit and salary credit of the members of the Minneapolis Employees Retirement Fund
167.5as specified in the records of the Minneapolis Employees Retirement Fund through June
167.630, 2010, are transferred to the MERF division of the Public Employees Retirement
167.7Association and are credited by the MERF division. Annuities or benefits of persons
167.8who are active members of the former Minneapolis Employees Retirement Fund on
167.9June 30, 2010, must be calculated under Minnesota Statutes 2008, sections 422A.11;
167.10422A.12; 422A.13; 422A.14; 422A.15; 422A.151; 422A.155; 422A.156; 422A.16;
167.11422A.17; 422A.18; 422A.19; 422A.20; and 422A.23, but are only eligible for automatic
167.12postretirement adjustments after December 31, 2010, under section 356.415.
167.13(b) The liability for the payment of annuities and benefits of the Minneapolis
167.14Employees Retirement Fund retirees and benefit recipients as specified in the records
167.15of the Minneapolis Employees Retirement Fund on June 29, 2010, is transferred to the
167.16MERF division of the Public Employees Retirement Association on June 30, 2010.
167.17    Subd. 4. Records transfer. On June 30, 2010, the executive director of the
167.18Minneapolis Employees Retirement Fund shall transfer all records and documents relating
167.19to the Minneapolis Employees Retirement Fund and its benefit plan to the executive
167.20director of the Public Employees Retirement Association. To the extent possible, original
167.21copies of all records and documents must be transferred.
167.22    Subd. 5. Transfer of title to assets. On June 30, 2010, legal title to the assets of
167.23the Minneapolis Employees Retirement Fund transfers to the State Board of Investment
167.24and the assets must be invested under section 11A.14, as assets of the MERF division of
167.25the Public Employees Retirement Association. The MERF division is the successor in
167.26interest to all claims that the former Minneapolis Employees Retirement Fund may have
167.27or may assert against any person and is the successor in interest to all claims which could
167.28have been asserted against the former Minneapolis Employees Retirement Fund, but the
167.29MERF division is not liable for any claim against the former Minneapolis Employees
167.30Retirement Fund, its former governing board, or its former administrative staff acting in a
167.31fiduciary capacity under chapter 356A or under common law, which is founded upon a
167.32claim of breach of fiduciary duty, but where the act or acts constituting the claimed breach
167.33were not undertaken in good faith, the Public Employees Retirement Association may
167.34assert any applicable defense to any claim in any judicial or administrative proceeding
167.35that the former Minneapolis Employees Retirement Fund, its former board, or its
167.36former administrative staff would otherwise have been entitled to assert, and the Public
168.1Employees Retirement Association may assert any applicable defense that it has in its
168.2capacity as a statewide agency.
168.3    Subd. 6. Benefits. (a) The annuities and benefits of, or attributable to, retired,
168.4disabled, deferred, or inactive Minneapolis Employees Retirement Fund members
168.5with that status as of June 30, 2010, with the exception of post-December 31, 2010,
168.6postretirement adjustments, which are governed by paragraph (b), as calculated under
168.7Minnesota Statutes 2008, sections 422A.11; 422A.12; 422A.13; 422A.14; 422A.15;
168.8422A.151; 422A.155; 422A.156; 422A.16; 422A.17; 422A.18; 422A.19; 422A.20; and
168.9422A.23, continue in force after the administrative consolidation under this article.
168.10(b) After December 31, 2010, annuities and benefits from the MERF division are
168.11eligible for annual automatic postretirement adjustments solely under section 356.415.
168.12    Subd. 7. MERF division account contributions. (a) After June 30, 2010, the
168.13member and employer contributions to the MERF division account are governed by this
168.14subdivision.
168.15(b) An active member covered by the MERF division must make an employee
168.16contribution of 9.75 percent of the total salary of the member as defined in section 353.01,
168.17subdivision 10. The employee contribution must be made by payroll deduction by the
168.18member's employing unit under section 353.27, subdivision 4, and is subject to the
168.19provisions of section 353.27, subdivisions 7, 7a, 7b, 12, 12a, and 12b.
168.20(c) The employer regular contribution to the MERF division account with respect
168.21to an active MERF division member is 9.75 percent of the total salary of the member as
168.22defined in section 353.01, subdivision 10.
168.23(d) The employer additional contribution to the MERF division account with respect
168.24to an active member of the MERF division is 2.68 percent of the total salary of the member
168.25as defined in section 353.01, subdivision 10, plus the employing unit's share of $3,900,000
168.26that the employing unit paid or is payable to the former Minneapolis Employees
168.27Retirement Fund under Minnesota Statutes 2008, section 422A.101, subdivision 1a, 2,
168.28or 2a, during calendar year 2009, as was certified by the former executive director of the
168.29former Minneapolis Employees Retirement Fund.
168.30(e) Annually after June 30, 2012, The employer supplemental contribution to
168.31the MERF division account by the city of Minneapolis, Special School District No. 1,
168.32Minneapolis, a Minneapolis-owned public utility, improvement, or municipal activity,
168.33Hennepin county, the Metropolitan Council, the Metropolitan Airports Commission,
168.34and the Minnesota State Colleges and Universities system is the amount by which the
168.35total actuarial required contribution determined under section 356.215 by the approved
168.36actuary retained by the Public Employees Retirement Association in the most recent
169.1actuarial valuation of the MERF division and based on a June 30, 2031, amortization
169.2date, after subtracting the contributions under paragraphs (b), (c), and (d), exceeds
169.3$36,500,000. Unless the various employing units agree to a different allocation and file
169.4that agreement with the executive director by August 15 for the following calendar year,
169.5each employing unit's share of the total employer supplemental contribution amount
169.6is equal to its percentage share of the total amount allocated under Minnesota Statutes
169.72008, section 422A.101, subdivision 3, payable for calendar year 2009. The initial total
169.8actuarial required contribution after June 30, 2012, must be calculated using the mortality
169.9assumption change recommended on September 30, 2009, for the Minneapolis Employees
169.10Retirement Fund by the approved consulting actuary retained by the Minneapolis
169.11Employees Retirement Fund board.
169.12(f) Notwithstanding any provision of paragraph (c), (d), or (e) to the contrary, as of
169.13August 1 annually, if the amount of the retirement annuities and benefits paid from the
169.14MERF division account during the preceding fiscal year, multiplied by the factor of 1.035,
169.15exceeds the market value of the assets of the MERF division account on the preceding June
169.1630, plus state aid of $9,000,000 or $36,500,000, whichever applies, and plus the amounts
169.17payable under paragraphs (b), (c), (d), and (e) during the preceding fiscal year, multiplied
169.18by the factor of 1.035, the balance calculated is a special additional employer contribution.
169.19The special additional employer contribution under this paragraph is payable in addition
169.20to any employer contribution required under paragraphs (c), (d), and (e), and is payable on
169.21or before the next following June 30. The special additional employer contribution under
169.22this paragraph must be allocated between the city of Minneapolis, Special School District
169.23No. 1, Minneapolis, any Minneapolis-owned public utility, improvement, or municipal
169.24activity, the Minnesota State Colleges and Universities system, Hennepin County, the
169.25Metropolitan Council, and the Metropolitan Airports Commission in proportion to their
169.26share of the actuarial accrued liability of the former Minneapolis Employees Retirement
169.27Fund as of July 1, 2009, as calculated by the approved actuary retained under section
169.28356.214 as part of the actuarial valuation prepared as of July 1, 2009, under section
169.29356.215 and the Standards for Actuarial Work adopted by the Legislative Commission on
169.30Pensions and Retirement.
169.31(g) The employer contributions under paragraphs (c), (d), and (e) must be paid as
169.32provided in section 353.28.
169.33(h) Contributions under this subdivision are subject to the provisions of section
169.34353.27, subdivisions 4, 7, 7a, 7b, 11, 12, 12a, 12b, 13, and 14.
169.35    Subd. 7a. Minneapolis Municipal Retirement Association dues. If authorized
169.36by an annuitant or retirement benefit recipient in writing on a form prescribed by the
170.1executive director of the Public Employees Retirement Association, the executive director
170.2shall deduct the dues for the Minneapolis Municipal Retirement Association from the
170.3person's annuity or retirement benefit. This dues deduction authority expires upon the
170.4eventual full consolidation of the MERF account under subdivision 8.
170.5    Subd. 8. Eventual full consolidation. (a) Once the fiscal year end market value
170.6of assets of the MERF division account equals or exceeds 80 percent of the actuarial
170.7accrued liability of the MERF division as calculated by the approved actuary retained by
170.8the Public Employees Retirement Association under section 356.215 and the Standards
170.9for Actuarial Work adopted by the Legislative Commission on Pensions and Retirement,
170.10the MERF division must be merged with the general employees retirement plan of the
170.11Public Employees Retirement Association and the MERF division account ceases as a
170.12separate account within the general employees retirement fund of the Public Employees
170.13Retirement Association.
170.14(b) If the market value of the MERF division account is less than 100 percent of the
170.15actuarial accrued liability of the MERF division under paragraph (a), the total employer
170.16contribution of employing units referenced in subdivision 7, paragraph (e), for the period
170.17after the full consolidation and June 30, 2031, to amortize on a level annual dollar payment
170.18the remaining unfunded actuarial accrued liability of the former MERF division account
170.19on the full consolidation date by June 30, 2031, shall be calculated by the consulting
170.20actuary retained under section 356.214 using the applicable postretirement interest rate
170.21actuarial assumption for the general employees retirement plan under section 356.215.
170.22The actuarial accrued liability of the MERF division must be calculated using the healthy
170.23retired life mortality assumption applicable to the general employees retirement plan.
170.24(c) The merger shall occur as of the first day of the first month after the date on
170.25which the triggering actuarial valuation report is filed with the executive director of the
170.26Legislative Commission on Pensions and Retirement.
170.27(d) The executive director of the Public Employees Retirement Association shall
170.28prepare proposed legislation fully implementing the merger and updating the applicable
170.29provisions of chapters 353 and 356 and transmit the proposed legislation to the executive
170.30director of the Legislative Commission on Pensions and Retirement by the following
170.31February 15.
170.32    Subd. 9. Merger of former MERF membership groups into PERA-general.
170.33If provided for in an agreement between the board of trustees of the Public Employees
170.34Retirement Association and the governing board of an employing unit formerly with
170.35retirement coverage provided for its employees by the former Minneapolis Employees
170.36Retirement Fund, an employing unit may transfer sufficient assets to the general
171.1employees retirement fund to cover the anticipated actuarial accrued liability for its
171.2current or former employees that is in excess of MERF division account assets attributable
171.3to those employees, have those employees be considered full members of the general
171.4employees retirement plan, and be relieved of any further contribution obligation to the
171.5general employees retirement plan for those employees under this section. Any agreement
171.6under this subdivision and any actuarial valuation report related to a merger under this
171.7subdivision must be submitted to the executive director of the Legislative Commission on
171.8Pensions and Retirement for comment prior to the final execution.

171.9    Sec. 18. Minnesota Statutes 2008, section 353.64, subdivision 7, is amended to read:
171.10    Subd. 7. Pension coverage for certain public safety employees of the
171.11Metropolitan Airports Commission. Any person first employed as either a full-time
171.12firefighter or a full-time police officer by the Metropolitan Airports Commission after June
171.1330, 1978, who is not eligible for coverage under the agreement signed between the state
171.14and the secretary of the federal Department of Health and Human Services making the
171.15provisions of the federal Old Age, Survivors, and Disability Insurance Act applicable to
171.16municipal employees because that position is excluded from application pursuant to under
171.17Title 42, United States Code, Sections 418 (d) (5) (A) and 418 (d) (8) (D) and section
171.18355.07 , shall not be a member of the Minneapolis Employees Retirement Fund but shall
171.19be is a member of the public employees police and fire fund and shall be is deemed to be a
171.20firefighter or a police officer within the meaning of this section. The Metropolitan Airports
171.21Commission shall make the employer contribution required pursuant to under section
171.22353.65, subdivision 3 , with respect to each of its firefighters or police officers covered
171.23by the public employees police and fire fund and shall meet the employers recording and
171.24reporting requirements set forth in section 353.65, subdivision 4.

171.25    Sec. 19. Minnesota Statutes 2008, section 356.215, subdivision 8, is amended to read:
171.26    Subd. 8. Interest and salary assumptions. (a) The actuarial valuation must use
171.27the applicable following preretirement interest assumption and the applicable following
171.28postretirement interest assumption:
171.29
171.30
171.31
plan
preretirement
interest rate
assumption
postretirement
interest rate
assumption
171.32
general state employees retirement plan
8.5%
6.0%
171.33
correctional state employees retirement plan
8.5
6.0
171.34
State Patrol retirement plan
8.5
6.0
171.35
legislators retirement plan
8.5
6.0
171.36
elective state officers retirement plan
8.5
6.0
172.1
judges retirement plan
8.5
6.0
172.2
general public employees retirement plan
8.5
6.0
172.3
public employees police and fire retirement plan
8.5
6.0
172.4
172.5
local government correctional service retirement
plan
8.5
6.0
172.6
teachers retirement plan
8.5
6.0
172.7
Minneapolis employees retirement plan
6.0
5.0
172.8
Duluth teachers retirement plan
8.5
8.5
172.9
St. Paul teachers retirement plan
8.5
8.5
172.10
Minneapolis Police Relief Association
6.0
6.0
172.11
Fairmont Police Relief Association
5.0
5.0
172.12
Minneapolis Fire Department Relief Association
6.0
6.0
172.13
Virginia Fire Department Relief Association
5.0
5.0
172.14
Bloomington Fire Department Relief Association
6.0
6.0
172.15
172.16
local monthly benefit volunteer firefighters relief
associations
5.0
5.0
172.17    (b) Before July 1, 2010, the actuarial valuation must use the applicable following
172.18single rate future salary increase assumption, the applicable following modified single
172.19rate future salary increase assumption, or the applicable following graded rate future
172.20salary increase assumption:
172.21    (1) single rate future salary increase assumption
172.22
172.23
plan
future salary
increase assumption
172.24
legislators retirement plan
5.0%
172.25
judges retirement plan
4.0
172.26
Minneapolis Police Relief Association
4.0
172.27
Fairmont Police Relief Association
3.5
172.28
172.29
Minneapolis Fire Department Relief
Association
4.0
172.30
Virginia Fire Department Relief Association
3.5
172.31
172.32
Bloomington Fire Department Relief
Association
4.0
172.33    (2) modified single rate future salary increase assumption
172.34
172.35
plan
future salary
increase assumption
172.36
172.37
172.38
172.39
Minneapolis employees
retirement plan
the prior calendar year amount increased
first by 1.0198 percent to prior fiscal year
date and then increased by 4.0 percent
annually for each future year
172.40    (3) (2) select and ultimate future salary increase assumption or graded rate future
172.41salary increase assumption
173.1
173.2
plan
future salary
increase assumption
173.3
173.4
general state employees retirement plan
select calculation and
assumption A
173.5
correctional state employees retirement plan
assumption H
173.6
State Patrol retirement plan
assumption G
173.7
173.8
general public employees retirement plan
select calculation and
assumption B
173.9
public employees police and fire fund retirement plan
assumption C
173.10
local government correctional service retirement plan
assumption G
173.11
teachers retirement plan
assumption D
173.12
Duluth teachers retirement plan
assumption E
173.13
St. Paul teachers retirement plan
assumption F
173.14The select calculation is: during the
173.15designated select period, a designated
173.16percentage rate is multiplied by the result of
173.17the designated integer minus T, where T is the
173.18number of completed years of service, and is
173.19added to the applicable future salary increase
173.20assumption. The designated select period is
173.21five years and the designated integer is five
173.22for the general state employees retirement
173.23plan and the general public employees
173.24retirement plan. The designated select period
173.25is ten years and the designated integer is ten
173.26for all other retirement plans covered by
173.27this clause. The designated percentage rate
173.28is: (1) 0.2 percent for the correctional state
173.29employees retirement plan, the State Patrol
173.30retirement plan, the public employees police
173.31and fire plan, and the local government
173.32correctional service plan; (2) 0.6 percent
173.33for the general state employees retirement
173.34plan and the general public employees
173.35retirement plan; and (3) 0.3 percent for the
173.36teachers retirement plan, the Duluth Teachers
173.37Retirement Fund Association, and the St.
173.38Paul Teachers Retirement Fund Association.
174.1The select calculation for the Duluth Teachers
174.2Retirement Fund Association is 8.00 percent
174.3per year for service years one through seven,
174.47.25 percent per year for service years seven
174.5and eight, and 6.50 percent per year for
174.6service years eight and nine.
174.7    The ultimate future salary increase assumption is:
174.8
age
A
B
C
D
E
F
G
H
174.9
16
5.95%
5.95%
11.00%
7.70%
8.00%
6.90%
7.7500%
7.2500%
174.10
17
5.90
5.90
11.00
7.65
8.00
6.90
7.7500
7.2500
174.11
18
5.85
5.85
11.00
7.60
8.00
6.90
7.7500
7.2500
174.12
19
5.80
5.80
11.00
7.55
8.00
6.90
7.7500
7.2500
174.13
20
5.75
5.40
11.00
5.50
6.90
6.90
7.7500
7.2500
174.14
21
5.75
5.40
11.00
5.50
6.90
6.90
7.1454
6.6454
174.15
22
5.75
5.40
10.50
5.50
6.90
6.90
7.0725
6.5725
174.16
23
5.75
5.40
10.00
5.50
6.85
6.85
7.0544
6.5544
174.17
24
5.75
5.40
9.50
5.50
6.80
6.80
7.0363
6.5363
174.18
25
5.75
5.40
9.00
5.50
6.75
6.75
7.0000
6.5000
174.19
26
5.75
5.36
8.70
5.50
6.70
6.70
7.0000
6.5000
174.20
27
5.75
5.32
8.40
5.50
6.65
6.65
7.0000
6.5000
174.21
28
5.75
5.28
8.10
5.50
6.60
6.60
7.0000
6.5000
174.22
29
5.75
5.24
7.80
5.50
6.55
6.55
7.0000
6.5000
174.23
30
5.75
5.20
7.50
5.50
6.50
6.50
7.0000
6.5000
174.24
31
5.75
5.16
7.30
5.50
6.45
6.45
7.0000
6.5000
174.25
32
5.75
5.12
7.10
5.50
6.40
6.40
7.0000
6.5000
174.26
33
5.75
5.08
6.90
5.50
6.35
6.35
7.0000
6.5000
174.27
34
5.75
5.04
6.70
5.50
6.30
6.30
7.0000
6.5000
174.28
35
5.75
5.00
6.50
5.50
6.25
6.25
7.0000
6.5000
174.29
36
5.75
4.96
6.30
5.50
6.20
6.20
6.9019
6.4019
174.30
37
5.75
4.92
6.10
5.50
6.15
6.15
6.8074
6.3074
174.31
38
5.75
4.88
5.90
5.40
6.10
6.10
6.7125
6.2125
174.32
39
5.75
4.84
5.70
5.30
6.05
6.05
6.6054
6.1054
174.33
40
5.75
4.80
5.50
5.20
6.00
6.00
6.5000
6.0000
174.34
41
5.75
4.76
5.40
5.10
5.90
5.95
6.3540
5.8540
174.35
42
5.75
4.72
5.30
5.00
5.80
5.90
6.2087
5.7087
174.36
43
5.65
4.68
5.20
4.90
5.70
5.85
6.0622
5.5622
174.37
44
5.55
4.64
5.10
4.80
5.60
5.80
5.9048
5.4078
174.38
45
5.45
4.60
5.00
4.70
5.50
5.75
5.7500
5.2500
174.39
46
5.35
4.56
4.95
4.60
5.40
5.70
5.6940
5.1940
174.40
47
5.25
4.52
4.90
4.50
5.30
5.65
5.6375
5.1375
174.41
48
5.15
4.48
4.85
4.50
5.20
5.60
5.5822
5.0822
174.42
49
5.05
4.44
4.80
4.50
5.10
5.55
5.5404
5.0404
175.1
50
4.95
4.40
4.75
4.50
5.00
5.50
5.5000
5.0000
175.2
51
4.85
4.36
4.75
4.50
4.90
5.45
5.4384
4.9384
175.3
52
4.75
4.32
4.75
4.50
4.80
5.40
5.3776
4.8776
175.4
53
4.65
4.28
4.75
4.50
4.70
5.35
5.3167
4.8167
175.5
54
4.55
4.24
4.75
4.50
4.60
5.30
5.2826
4.7826
175.6
55
4.45
4.20
4.75
4.50
4.50
5.25
5.2500
4.7500
175.7
56
4.35
4.16
4.75
4.50
4.40
5.20
5.2500
4.7500
175.8
57
4.25
4.12
4.75
4.50
4.30
5.15
5.2500
4.7500
175.9
58
4.25
4.08
4.75
4.60
4.20
5.10
5.2500
4.7500
175.10
59
4.25
4.04
4.75
4.70
4.10
5.05
5.2500
4.7500
175.11
60
4.25
4.00
4.75
4.80
4.00
5.00
5.2500
4.7500
175.12
61
4.25
4.00
4.75
4.90
3.90
5.00
5.2500
4.7500
175.13
62
4.25
4.00
4.75
5.00
3.80
5.00
5.2500
4.7500
175.14
63
4.25
4.00
4.75
5.10
3.70
5.00
5.2500
4.7500
175.15
64
4.25
4.00
4.75
5.20
3.60
5.00
5.2500
4.7500
175.16
65
4.25
4.00
4.75
5.20
3.50
5.00
5.2500
4.7500
175.17
66
4.25
4.00
4.75
5.20
3.50
5.00
5.2500
4.7500
175.18
67
4.25
4.00
4.75
5.20
3.50
5.00
5.2500
4.7500
175.19
68
4.25
4.00
4.75
5.20
3.50
5.00
5.2500
4.7500
175.20
69
4.25
4.00
4.75
5.20
3.50
5.00
5.2500
4.7500
175.21
70
4.25
4.00
4.75
5.20
3.50
5.00
5.2500
4.7500
175.22
71
4.25
4.00
5.20
175.23    (c) Before July 2, 2010, the actuarial valuation must use the applicable following
175.24payroll growth assumption for calculating the amortization requirement for the unfunded
175.25actuarial accrued liability where the amortization retirement is calculated as a level
175.26percentage of an increasing payroll:
175.27
175.28
plan
payroll growth
assumption
175.29
general state employees retirement plan
4.50%
175.30
correctional state employees retirement plan
4.50
175.31
State Patrol retirement plan
4.50
175.32
legislators retirement plan
4.50
175.33
judges retirement plan
4.00
175.34
general public employees retirement plan
4.50
175.35
public employees police and fire retirement plan
4.50
175.36
175.37
local government correctional service retirement
plan
4.50
175.38
teachers retirement plan
4.50
175.39
Duluth teachers retirement plan
4.50
175.40
St. Paul teachers retirement plan
5.00
175.41    (d) After July 1, 2010, the assumptions set forth in paragraphs (b) and (c) continue to
175.42apply, unless a different salary assumption or a different payroll increase assumption:
176.1    (1) has been proposed by the governing board of the applicable retirement plan;
176.2    (2) is accompanied by the concurring recommendation of the actuary retained under
176.3section 356.214, subdivision 1, if applicable, or by the approved actuary preparing the
176.4most recent actuarial valuation report if section 356.214 does not apply; and
176.5    (3) has been approved or deemed approved under subdivision 18.

176.6    Sec. 20. Minnesota Statutes 2009 Supplement, section 356.215, subdivision 11,
176.7is amended to read:
176.8    Subd. 11. Amortization contributions. (a) In addition to the exhibit indicating
176.9the level normal cost, the actuarial valuation of the retirement plan must contain an
176.10exhibit for financial reporting purposes indicating the additional annual contribution
176.11sufficient to amortize the unfunded actuarial accrued liability and must contain an exhibit
176.12for contribution determination purposes indicating the additional contribution sufficient
176.13to amortize the unfunded actuarial accrued liability. For the retirement plans listed in
176.14subdivision 8, paragraph (c), but excluding the MERF division of the Public Employees
176.15Retirement Association, the additional contribution must be calculated on a level
176.16percentage of covered payroll basis by the established date for full funding in effect when
176.17the valuation is prepared, assuming annual payroll growth at the applicable percentage
176.18rate set forth in subdivision 8, paragraph (c). For all other retirement plans and for the
176.19MERF division of the Public Employees Retirement Association, the additional annual
176.20contribution must be calculated on a level annual dollar amount basis.
176.21    (b) For any retirement plan other than the Minneapolis Employees Retirement Fund,
176.22the general employees a retirement plan of the Public Employees Retirement Association,
176.23and the St. Paul Teachers Retirement Fund Association governed by paragraph (d), (e),
176.24(f), (g), (h), (i), or (j), if there has not been a change in the actuarial assumptions used
176.25for calculating the actuarial accrued liability of the fund, a change in the benefit plan
176.26governing annuities and benefits payable from the fund, a change in the actuarial cost
176.27method used in calculating the actuarial accrued liability of all or a portion of the fund, or
176.28a combination of the three, which change or changes by itself or by themselves without
176.29inclusion of any other items of increase or decrease produce a net increase in the unfunded
176.30actuarial accrued liability of the fund, the established date for full funding is the first
176.31actuarial valuation date occurring after June 1, 2020.
176.32    (c) For any retirement plan other than the Minneapolis Employees Retirement
176.33Fund and the general employees retirement plan of the Public Employees Retirement
176.34Association, if there has been a change in any or all of the actuarial assumptions used
176.35for calculating the actuarial accrued liability of the fund, a change in the benefit plan
177.1governing annuities and benefits payable from the fund, a change in the actuarial cost
177.2method used in calculating the actuarial accrued liability of all or a portion of the fund,
177.3or a combination of the three, and the change or changes, by itself or by themselves and
177.4without inclusion of any other items of increase or decrease, produce a net increase in the
177.5unfunded actuarial accrued liability in the fund, the established date for full funding must
177.6be determined using the following procedure:
177.7    (i) the unfunded actuarial accrued liability of the fund must be determined in
177.8accordance with the plan provisions governing annuities and retirement benefits and the
177.9actuarial assumptions in effect before an applicable change;
177.10    (ii) the level annual dollar contribution or level percentage, whichever is applicable,
177.11needed to amortize the unfunded actuarial accrued liability amount determined under item
177.12(i) by the established date for full funding in effect before the change must be calculated
177.13using the interest assumption specified in subdivision 8 in effect before the change;
177.14    (iii) the unfunded actuarial accrued liability of the fund must be determined in
177.15accordance with any new plan provisions governing annuities and benefits payable from
177.16the fund and any new actuarial assumptions and the remaining plan provisions governing
177.17annuities and benefits payable from the fund and actuarial assumptions in effect before
177.18the change;
177.19    (iv) the level annual dollar contribution or level percentage, whichever is applicable,
177.20needed to amortize the difference between the unfunded actuarial accrued liability amount
177.21calculated under item (i) and the unfunded actuarial accrued liability amount calculated
177.22under item (iii) over a period of 30 years from the end of the plan year in which the
177.23applicable change is effective must be calculated using the applicable interest assumption
177.24specified in subdivision 8 in effect after any applicable change;
177.25    (v) the level annual dollar or level percentage amortization contribution under item
177.26(iv) must be added to the level annual dollar amortization contribution or level percentage
177.27calculated under item (ii);
177.28    (vi) the period in which the unfunded actuarial accrued liability amount determined
177.29in item (iii) is amortized by the total level annual dollar or level percentage amortization
177.30contribution computed under item (v) must be calculated using the interest assumption
177.31specified in subdivision 8 in effect after any applicable change, rounded to the nearest
177.32integral number of years, but not to exceed 30 years from the end of the plan year in
177.33which the determination of the established date for full funding using the procedure set
177.34forth in this clause is made and not to be less than the period of years beginning in the
177.35plan year in which the determination of the established date for full funding using the
178.1procedure set forth in this clause is made and ending by the date for full funding in effect
178.2before the change; and
178.3    (vii) the period determined under item (vi) must be added to the date as of which
178.4the actuarial valuation was prepared and the date obtained is the new established date
178.5for full funding.
178.6    (d) For the Minneapolis Employees Retirement Fund MERF division of the Public
178.7Employees Retirement Association, the established date for full funding is June 30, 2020
178.82031.
178.9    (e) For the general employees retirement plan of the Public Employees Retirement
178.10Association, the established date for full funding is June 30, 2031.
178.11    (f) For the Teachers Retirement Association, the established date for full funding is
178.12June 30, 2037.
178.13    (g) For the correctional state employees retirement plan of the Minnesota State
178.14Retirement System, the established date for full funding is June 30, 2038.
178.15    (h) For the judges retirement plan, the established date for full funding is June
178.1630, 2038.
178.17    (i) For the public employees police and fire retirement plan, the established date
178.18for full funding is June 30, 2038.
178.19    (j) For the St. Paul Teachers Retirement Fund Association, the established date for
178.20full funding is June 30 of the 25th year from the valuation date. In addition to other
178.21requirements of this chapter, the annual actuarial valuation shallmust contain an exhibit
178.22indicating the funded ratio and the deficiency or sufficiency in annual contributions when
178.23comparing liabilities to the market value of the assets of the fund as of the close of the
178.24most recent fiscal year.
178.25    (k) For the retirement plans for which the annual actuarial valuation indicates an
178.26excess of valuation assets over the actuarial accrued liability, the valuation assets in
178.27excess of the actuarial accrued liability must be recognized as a reduction in the current
178.28contribution requirements by an amount equal to the amortization of the excess expressed
178.29as a level percentage of pay over a 30-year period beginning anew with each annual
178.30actuarial valuation of the plan.

178.31    Sec. 21. Minnesota Statutes 2008, section 422A.101, subdivision 3, is amended to read:
178.32    Subd. 3. State contributions. (a) Subject to the limitation set forth in paragraph
178.33(c), the state shall pay to the MERF division account of the Public Employees Retirement
178.34Association with respect to the former Minneapolis Employees Retirement Fund annually
178.35an amount equal to the amount calculated under paragraph (b).
179.1    (b) The payment amount is an amount equal to the financial requirements of the
179.2Minneapolis Employees Retirement Fund MERF division of the Public Employees
179.3Retirement Association reported in the actuarial valuation of the fund general employees
179.4retirement plan of the Public Employees Retirement Association prepared by the actuary
179.5retained under section 356.214 consistent with section 356.215 for the most recent year
179.6but based on a target date for full amortization of the unfunded actuarial accrued liabilities
179.7by June 30, 2020 2031, less the amount of employee contributions required under section
179.8422A.10 353.50, subdivision 7, paragraph (b), and the amount of employer contributions
179.9required under subdivisions 1a, 2, and 2a section 353.50, subdivision 7, paragraphs (c)
179.10and (d). Payments shall must be made September 15 annually.
179.11    (c) The annual state contribution under this subdivision may not exceed $9,000,000,
179.12plus the cost of the annual supplemental benefit determined under Minnesota Statutes
179.132008, section 356.43, through June 30, 2012, and may not exceed $9,000,000, plus the
179.14cost of the annual supplemental benefit determined under Minnesota Statutes 2008, section
179.15356.43, plus $27,500,000 annually after June 30, 2012, and until June 30, 2031.
179.16    (d) Annually and after June 30, 2012, If the amount determined under paragraph
179.17(b) exceeds $9,000,000 the applicable maximum amount specified in paragraph (c),
179.18the excess must be allocated to and paid to the fund by the employers identified in
179.19Minnesota Statutes 2008, section 422A.101, subdivisions 1a and, 2, and 2a other than
179.20units of metropolitan government. Each employer's share of the excess is proportionate
179.21to the employer's share of the fund's unfunded actuarial accrued liability as disclosed in
179.22the annual actuarial valuation prepared by the actuary retained under section 356.214
179.23compared to the total unfunded actuarial accrued liability as of July 1, 2009, attributed
179.24to all employers identified in Minnesota Statutes 2008, section 422A.101, subdivisions
179.251a and 2, other than units of metropolitan government. Payments must be made in equal
179.26installments as set forth in paragraph (b).
179.27(e) State contributions under this section end on September 15, 2031, or on
179.28September 1 following the first date on which the current assets of the MERF division
179.29of the Public Employees Retirement Association equal or exceed the actuarial accrued
179.30liability of the MERF division of the Public Employees Retirement Association,
179.31whichever occurs earlier.

179.32    Sec. 22. Minnesota Statutes 2008, section 422A.26, is amended to read:
179.33422A.26 COVERAGE BY THE PUBLIC EMPLOYEES RETIREMENT
179.34ASSOCIATION.
180.1Notwithstanding section 422A.09, or any other law to the contrary, any person
180.2whose employment by, or assumption of a position as an appointed or elected officer
180.3of, the city of Minneapolis, any of the boards, departments, or commissions operated
180.4as a department of the city of Minneapolis or independently if financed in whole or in
180.5part by funds of the city of Minneapolis, the Metropolitan Airports Commission, the
180.6former Minneapolis Employees Retirement Fund, or Special School District Number 1 if
180.7the person is not a member of the Minneapolis Teachers Retirement Fund Association
180.8by virtue of that employment or position, initially commences on or after July 1, 1979
180.9shall be is a member of the general employees retirement plan of the Public Employees
180.10Retirement Association unless excluded from membership pursuant to under section
180.11353.01, subdivision 2b . In no event shall there be any new members of the contributing
180.12class of the Minneapolis employees fund on or after July 1, 1979.

180.13    Sec. 23. JULY 1, 2010, MERF DIVISION ACTUARIAL VALUATION
180.14ASSUMPTIONS.
180.15The approved actuary retained by the Minneapolis Employees Retirement Fund shall
180.16compare the actuarial assumptions to be used for the July 1, 2010, actuarial valuation of
180.17the general employees retirement plan of the Public Employees Retirement Association
180.18with the actuarial assumptions used to prepare the July 1, 2009, actuarial valuation of the
180.19Minneapolis Employees Retirement Fund and, on or before July 1, 2010, shall recommend
180.20to the approved actuary retained by the Public Employees Retirement Association and to
180.21the Legislative Commission on Pensions and Retirement the actuarial assumptions that
180.22the actuary believes would be appropriate for the MERF division portion of the actuarial
180.23valuation of the general employees retirement plan of the Public Employees Retirement
180.24Association. Any actuarial assumption changes related to the MERF division must be
180.25approved under Minnesota Statutes, section 356.215, subdivision 18.

180.26    Sec. 24. MINNEAPOLIS MUNICIPAL RETIREMENT ASSOCIATION.
180.27(a) The administrative consolidation of the former Minneapolis Employees
180.28Retirement Fund into the general employees retirement plan of the Public Employees
180.29Retirement Association and the merger of the MERF division of the Public Employees
180.30Retirement Association into the general employees retirement plan of the Public
180.31Employees Retirement Association does not affect the function of the Minneapolis
180.32Municipal Retirement Association, a nonprofit corporation, to monitor the administration
180.33of the retirement coverage for former members of the former Minneapolis Employees
180.34Retirement Fund.
181.1(b) Nothing in this article entitles the Minneapolis Municipal Retirement Association
181.2to receive any revenue derived from taxes or obligates the Public Employees Retirement
181.3Association to undertake any special duties with respect to the corporation.

181.4    Sec. 25. TRANSFER OF MERF EMPLOYEES.
181.5(a) Unless the employee elects the severance pay option under paragraph (c),
181.6full-time employees of the Minneapolis Employees Retirement Fund first employed
181.7before June 30, 2008, and employed full time by the Minneapolis Employees Retirement
181.8Fund on June 29, 2010, with the employment title of benefits coordinator, are transferred
181.9to employment by the city of Minneapolis on July 1, 2010. The chief human relations