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Journal of the House - 94th Day - Wednesday, April 28, 2010 - Top of Page 10629


subdivision 14; 256B.055, by adding a subdivision; 256B.056, subdivision 4; 256B.057, subdivision 9; 256B.0625, subdivisions 8, 8a, 8b, 18a, 22, 31, by adding subdivisions; 256B.0631, subdivisions 1, 3; 256B.0644, as amended; 256B.0754, by adding a subdivision; 256B.0915, subdivision 3b; 256B.19, subdivision 1c; 256B.69, subdivisions 20, as amended, 27, by adding subdivisions; 256B.692, subdivision 1; 256B.75; 256B.76, subdivisions 2, 4, by adding a subdivision; 256D.0515; 256J.20, subdivision 3; 256J.24, subdivision 10; 256J.37, subdivision 3a; 256L.02, subdivision 3; 256L.03, subdivision 3, by adding a subdivision; 256L.05, by adding a subdivision; 256L.07, by adding a subdivision; 256L.12, subdivisions 5, 6, 9; 256L.15, subdivision 1; 626.556, subdivision 10i; 626.557, subdivision 9d; Minnesota Statutes 2009 Supplement, sections 62J.495, subdivisions 1a, 3, by adding a subdivision; 144.0724, subdivision 11; 157.16, subdivision 3; 245C.27, subdivision 1; 252.025, subdivision 7; 252.27, subdivision 2a; 256.045, subdivision 3; 256.969, subdivision 3a; 256B.0625, subdivisions 9, 13e; 256B.0653, subdivision 5; 256B.0911, subdivision 1a; 256B.0915, subdivision 3a; 256B.69, subdivision 23; 256B.76, subdivision 1; 256B.766; 256D.03, subdivision 3, as amended; 256J.425, subdivision 3; 256L.03, subdivision 5; 256L.11, subdivision 1; 327.15, subdivision 3; Laws 2005, First Special Session chapter 4, article 8, section 66, as amended; Laws 2009, chapter 79, article 3, section 18; article 5, sections 17; 18; 22; 75, subdivision 1; 78, subdivision 5; article 13, sections 3, subdivisions 1, as amended, 3, as amended, 4, as amended, 8, as amended; 5, subdivision 8, as amended; Laws 2009, chapter 173, article 1, section 17; Laws 2010, chapter 200, article 1, sections 12; 16; 21; article 2, section 2, subdivisions 1, 8; proposing coding for new law in Minnesota Statutes, chapters 62A; 62D; 62E; 62J; 62Q; 144; 245; 254B; 256; 256B; repealing Minnesota Statutes 2008, sections 254B.02, subdivisions 2, 3, 4; 254B.09, subdivisions 4, 5, 7; 256D.03, subdivisions 3a, 3b, 5, 6, 7, 8; Minnesota Statutes 2009 Supplement, section 256D.03, subdivision 3; Laws 2009, chapter 79, article 7, section 26, subdivision 3; Laws 2010, chapter 200, article 1, sections 12, subdivisions 1, 2, 3, 4, 5, 6, 7, 8, 9; 18; 19."

 

 

With the recommendation that when so amended the bill pass and be re-referred to the Committee on Ways and Means.

 

      The report was adopted.

 

 

Lenczewski from the Committee on Taxes to which was referred:

 

H. F. No. 2849, A bill for an act relating to business development; providing for a comparative study of state laws affecting small business start-ups in Minnesota and Wisconsin. 

 

Reported the same back with the following amendments:

 

Page 1, line 16, after "taxes" insert ", including special tax provisions that affect the business' ability to start operations"

 

 

With the recommendation that when so amended the bill pass.

 

      The report was adopted.

 

 

Pelowski from the Committee on State and Local Government Operations Reform, Technology and Elections to which was referred:

 

H. F. No. 2958, A bill for an act relating to state government; making changes to the Open Meeting Law; amending Minnesota Statutes 2008, sections 13D.01, subdivisions 1, 3, 4, 6, by adding a subdivision; 13D.021, subdivision 1; 13D.04, subdivisions 2, 6.

 

Reported the same back with the following amendments:


Journal of the House - 94th Day - Wednesday, April 28, 2010 - Top of Page 10630


Page 1, delete section 1, and insert:

 

"Section 1.  Minnesota Statutes 2008, section 13D.01, subdivision 1, is amended to read:

 

Subdivision 1.  In executive branch, local government; open meetings; definitions.  (a) All meetings, including executive sessions, of a public body must be open to the public.

 

(a) of a state

 

(1) agency,

 

(2) board,

 

(3) commission, or

 

(4) department,

 

when required or permitted by law to transact public business in a meeting;

 

(b) of the governing body of a

 

(1) school district however organized,

 

(2) unorganized territory,

 

(3) county,

 

(4) statutory or home rule charter city,

 

(5) town, or

 

(6) other public body;

 

(c) of any

 

(1) committee,

 

(2) subcommittee,

 

(3) board,

 

(4) department, or

 

(5) commission,

 

of a public body; and

 

(d) of the governing body or a committee of:

 

(1) a statewide public pension plan defined in section 356A.01, subdivision 24; or


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(2) a local public pension plan governed by section 69.77, sections 69.771 to 69.775, or chapter 354A, 422A, or 123B. 

 

(b) "Governmental power" means the power to regulate, license, enact ordinances, make public policy, or determine the use of public resources or otherwise transact public business.

 

(c) "Meeting" means a quorum of the members of a public body transacting public business.

 

(d) "Public body" means:

 

(1) a governmental multimember state, regional, or local appointed or elected body with governmental powers; a committee, subcommittee, board, commission, or other subset of the body with governmental powers;

 

(2) a multimember advisory group, however named, established by a body or a subset of a body described in clause (1) for the purpose of providing the body advice or recommendations on its exercise of governmental powers on a matter that is or may be pending before the body or subset of the body.  This does not include an advisory group comprised solely of the body's employees, students, or contractors.  "Established" means the body or subset of the body that (i) provides for the multimember advisory group to be formed under resolution or ordinance or order and makes the appointments directly, and (ii) provides any public resources for the group's work;

 

(3) a multimember advisory body established under section 15.014 or other state law; or

 

(4) the governing body of a statewide public pension plan as defined by section 356A.01, subdivision 24, or the governing body of a local public pension plan under section 69.77, sections 69.771 to 69.775, or chapter 354A, 422A, or 423B.

 

(e) Meetings of the legislature are governed by section 3.055."

 

Page 5, after line 5, insert:

 

"Sec. 9.  Minnesota Statutes 2008, section 13D.06, is amended by adding a subdivision to read:

 

Subd. 5.  Advisory groups.  A person serving on an advisory group, as defined in section 13D.01, subdivision 1, paragraph (c), clause (2), is not subject to this section."

 

Correct the title numbers accordingly

 

 

With the recommendation that when so amended the bill pass and be re-referred to the Committee on Rules and Legislative Administration.

 

      The report was adopted.

 

 

Solberg from the Committee on Ways and Means to which was referred:

 

H. F. No. 3033, A bill for an act relating to energy; modifying fee for storage of spent nuclear fuel; establishing rebate program for solar photovoltaic modules; appropriating money; amending Minnesota Statutes 2008, section 116C.779, subdivision 1; proposing coding for new law in Minnesota Statutes, chapter 116C.

 

Reported the same back with the recommendation that the bill pass.

 

      The report was adopted.


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Carlson from the Committee on Finance to which was referred:

 

H. F. No. 3281, A bill for an act relating to retirement; various retirement plans; increasing certain contribution rates; suspending certain post-retirement adjustments; reducing certain postretirement adjustment increase rates; reducing interest rates on refunds; reducing deferred annuity augmentation rates; eliminating interest on reemployed annuitant earnings limitation deferred accounts; increasing certain vesting requirements; increasing certain early retirement reduction rates; reducing certain benefit accrual rates; extending certain amortization periods; making changes of an administrative nature for retirement plans administered by the Minnesota State Retirement Association; revising insurance withholding for certain retired public employees; authorizing state patrol plan service credit for leave procedures; addressing plan coverage errors and omitted contributions; revising unlawful discharge annuity repayment requirements; requiring employment unit accommodation of daily valuation of investment accounts; eliminating administrative fee maximum for the unclassified state employees retirement program; making changes of an administrative nature in the general employees retirement plan of the Public Employees Retirement Association, the public employees police and fire retirement plan, and the defined contribution retirement plan; making various administrative modifications in the voluntary statewide lump-sum volunteer firefighter retirement plan of the Public Employees Retirement Association; revising purchase of salary credit procedures in certain partial salary situations; adding new partial salary credit purchase authority for partial paid medical leaves and budgetary leaves; redefining TRA allowable service credit; defining annual base salary; requiring base salary reporting by TRA-covered employing units; making changes of an administrative nature in the Minnesota State Colleges and Universities System individual retirement account plan; setting deadline dates for actuarial reporting; extending and revising an early retirement incentive program; permitting the court-ordered revocation of an optional annuity election in certain marriage dissolutions; transfer of the administrative functions of the Minneapolis Employees Retirement Fund to the Public Employees Retirement Association; creation of MERF consolidation account within the Public Employees Retirement Association; making various technical corrections relating to volunteer fire relief associations; revising break-in-service return to firefighting authorizations; authorizing Minnesota deferred compensation plan service pension transfers; revising payout defaults in survivor benefits; authorizing corrections of certain special fund deposits; requiring a retirement fund investment authority study; authorizing certain bylaw amendments; making technical changes; appropriating money; amending Minnesota Statutes 2008, sections 3A.02, subdivision 4; 3A.07; 11A.04; 11A.23, subdivision 4; 13D.01, subdivision 1; 43A.17, subdivision 9; 43A.316, subdivision 8; 69.021, subdivision 10; 69.051, subdivision 3; 126C.41, subdivision 3; 256D.21; 352.01, subdivision 2a; 352.03, subdivision 4; 352.04, subdivision 9; 352.113, subdivision 1; 352.115, subdivisions 1, 10; 352.12, subdivision 2; 352.22, subdivisions 2, 3; 352.72, subdivisions 1, 2; 352.91, by adding a subdivision; 352.93, subdivisions 1, 2a, 3a; 352.931, subdivision 1; 352.965, subdivisions 1, 2, 6; 352B.02, as amended; 352B.08, subdivisions 1, 2a; 352B.11, subdivision 2b; 352B.30, subdivisions 1, 2; 352D.015, subdivisions 4, 9, by adding a subdivision; 352D.02, subdivisions 1, 1c, 2, 3; 352D.03; 352D.04, subdivisions 1, 2; 352D.05, subdivisions 3, 4; 352D.06, subdivision 3; 352D.065, subdivision 3; 352D.09, subdivisions 3, 7; 352F.07; 353.01, subdivisions 2b, 2d, by adding subdivisions; 353.0161, subdivision 2; 353.03, subdivision 1; 353.05; 353.27, as amended; 353.29, subdivision 1; 353.30, subdivision 1c; 353.32, subdivisions 1, 1a; 353.34, subdivisions 1, 2, 3, 6; 353.37, subdivisions 1, 2, 3, 3a, 4, 5; 353.46, subdivisions 2, 6; 353.64, subdivision 7; 353.651, subdivisions 1, 4; 353.657, subdivisions 1, 2a; 353.71, subdivisions 1, 2, 4; 353.86, subdivisions 1, 2; 353.87, subdivisions 1, 2; 353.88; 353D.01, subdivision 2; 353D.03, subdivision 1; 353D.04, subdivisions 1, 2; 353E.04, subdivisions 1, 4; 353E.07, subdivisions 1, 2; 353F.025, subdivisions 1, 2; 353F.03; 354.05, by adding a subdivision; 354.07, subdivision 5; 354.091; 354.42, subdivisions 3, 7, by adding subdivisions; 354.52, subdivision 6, by adding a subdivision; 354.66, subdivision 3; 354.71; 354A.011, subdivision 27; 354A.12, subdivisions 1, 3c, by adding a subdivision; 354A.27, subdivisions 5, 6, by adding a subdivision; 354A.31, subdivision 1; 354A.35, subdivision 1; 354A.37, subdivisions 2, 3, 4; 354A.39; 354B.25, subdivisions 1, 3; 354C.14; 355.095, subdivision 1; 356.214, subdivision 1; 356.215, subdivisions 3, 8; 356.24, subdivision 1; 356.30, subdivisions 1, 3; 356.302, subdivisions 1, 3, 4, 5, 7; 356.303, subdivisions 2, 4; 356.315, subdivision 5; 356.351, subdivision 1; 356.407, subdivision 2; 356.431, subdivision 1; 356.465, subdivision 3; 356.47, subdivision 3; 356.50, subdivision 4; 356.64; 356.65, subdivision 2; 356.91; 356.96, subdivisions 2, 3, 7, 8; 356A.06, subdivision 8; 422A.101, subdivision 3; 422A.26; 473.511, subdivision 3; 473.606, subdivision 5; 475.52, subdivision 6; 490.123, by adding a subdivision;


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518.58, subdivisions 3, 4; Minnesota Statutes 2009 Supplement, sections 6.67; 69.011, subdivision 1; 69.031, subdivision 5; 69.772, subdivision 6; 69.773, subdivision 6; 352.01, subdivision 2b; 352.75, subdivision 4; 352.95, subdivision 2; 352B.011, subdivision 3; 353.01, subdivisions 2, 2a, 16; 353.06; 353.27, subdivisions 2, 3, 7; 353.33, subdivision 1; 353.371, subdivision 4; 353.65, subdivisions 2, 3; 353F.02, subdivision 4; 353G.05, subdivision 2; 353G.06, subdivision 1; 353G.08; 353G.09, subdivision 3; 353G.11, subdivision 1, by adding a subdivision; 354.42, subdivision 2; 354.47, subdivision 1; 354.49, subdivision 2; 354.52, subdivision 4b; 354.55, subdivision 11; 354A.12, subdivision 2a; 356.20, subdivision 2; 356.215, subdivision 11; 356.32, subdivision 2; 356.351, subdivision 2; 356.401, subdivision 3; 356.415, subdivisions 1, 2, by adding subdivisions; 356.96, subdivisions 1, 5; 423A.02, subdivision 3; 424A.01, subdivisions 1, 6; 424A.015, by adding a subdivision; 424A.016, subdivisions 4, 7; 424A.02, subdivisions 9, 10; 424A.05, subdivision 3, by adding a subdivision; 424A.08; 480.181, subdivision 2; Laws 2009, chapter 169, article 4, section 49; article 5, section 2; proposing coding for new law in Minnesota Statutes, chapters 352B; 353; 353G; 356; repealing Minnesota Statutes 2008, sections 13.63, subdivision 1; 69.011, subdivision 2a; 352.91, subdivision 5; 353.01, subdivision 40; 353.46, subdivision 1a; 353.88; 353D.03, subdivision 2; 353D.12; 354A.27, subdivision 1; 354C.15; 356.43; 422A.01, subdivisions 1, 2, 3, 4, 4a, 5, 6, 7, 8, 9, 10, 11, 12, 13a, 17, 18; 422A.02; 422A.03; 422A.04; 422A.05, subdivisions 1, 2a, 2b, 2c, 2d, 2e, 2f, 5, 6, 8; 422A.06, subdivisions 1, 2, 3, 5, 6, 7; 422A.08, subdivision 1; 422A.09; 422A.10; 422A.101, subdivisions 1, 1a, 2, 2a; 422A.11; 422A.12; 422A.13; 422A.14, subdivision 1; 422A.15; 422A.151; 422A.155; 422A.156; 422A.16, subdivisions 1, 2, 3, 4, 5, 6, 7, 8, 9, 10; 422A.17; 422A.18, subdivisions 1, 2, 3, 4, 5, 7; 422A.19; 422A.20; 422A.21; 422A.22, subdivisions 1, 3, 4, 6; 422A.23, subdivisions 1, 2, 5, 6, 7, 8, 9, 10, 11, 12; 422A.231; 422A.24; 422A.25; Minnesota Statutes 2009 Supplement, sections 422A.06, subdivision 8; 422A.08, subdivision 5; 424A.001, subdivision 6; Laws 2009, chapter 169, article 10, section 32.

 

Reported the same back with the following amendments:

 

Delete everything after the enacting clause and insert:

 

"ARTICLE 1

 

FINANCIAL SUSTAINABILITY PROVISIONS

 

Section 1.  Minnesota Statutes 2008, section 3A.02, subdivision 4, is amended to read:

 

Subd. 4.  Deferred annuities augmentation.  (a) The deferred retirement allowance of any former legislator must be augmented as provided herein.

 

(b) The required reserves applicable to the deferred retirement allowance, determined as of the date the benefit begins to accrue using an appropriate mortality table and an interest assumption of six percent, must be augmented from the first of the month following the termination of active service, or July 1, 1973, whichever is later, to the first day of the month in which the allowance begins to accrue, at the following annually compounded rate or rates:

 

(1) five percent until January 1, 1981;

 

(2) three percent from January 1, 1981, or from the first day of the month following the termination of active service, whichever is later, until January 1 of the year in which the former legislator attains age 55 or until January 1, 2012, whichever is earlier; and

 

(3) five percent from the period end date under clause (2) to until the effective date of retirement or until January 1, 2012, whichever is earlier; and

 

(4) two percent after December 31, 2011.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.


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Sec. 2.  Minnesota Statutes 2008, section 352.113, subdivision 1, is amended to read:

 

Subdivision 1.  Age and service requirements.  (a) An employee covered by the system, who is less than normal retirement age and who becomes totally and permanently disabled after three or more years of allowable service if employed before July 1, 2010, or after five or more years of allowable service if employed after June 30, 2010, is entitled to a disability benefit in an amount provided in subdivision 3.

 

(b) If the disabled employee's state service has terminated at any time, the employee must have at least two years of allowable service after last becoming a state employee covered by the system.

 

(c) Refunds may be repaid under section 352.23 before the effective accrual date of the disability benefit under subdivision 2. 

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 3.  Minnesota Statutes 2008, section 352.115, subdivision 1, is amended to read:

 

Subdivision 1.  Age and service requirements.  After separation from state service, any employee (1) who has attained the age of at least 55 years and who is entitled to credit for at least three years allowable service if employed before July 1, 2010, or after five or more years of allowable service if employed after June 30, 2010, or (2) who has received credit for at least 30 years allowable service regardless of age, is entitled upon application to a retirement annuity.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 4.  Minnesota Statutes 2008, section 352.12, subdivision 2, is amended to read:

 

Subd. 2.  Surviving spouse benefit.  (a) If an employee or former employee has credit for at least three years allowable service if the employee was employed before July 1, 2010, or for at least five years of allowable service if the employee was employed after June 30, 2010, and dies before an annuity or disability benefit has become payable, notwithstanding any designation of beneficiary to the contrary, the surviving spouse of the employee may elect to receive, in lieu of the refund with interest under subdivision 1, an annuity equal to the joint and 100 percent survivor annuity which the employee or former employee could have qualified for on the date of death.

 

(b) If the employee was under age 55 and has credit for at least 30 years of allowable service on the date of death, the surviving spouse may elect to receive a 100 percent joint and survivor annuity based on the age of the employee and surviving spouse on the date of death.  The annuity is payable using the full early retirement reduction under section 352.116, subdivision 1, paragraph (a), to age 55 and one-half of the early retirement reduction from age 55 to the age payment begins. 

 

(c) If the employee was under age 55 and has credit for at least three years of allowable service credit on the date of death if the employee was employed before July 1, 2010, or for at least five years of allowable service if the employee was employed after June 30, 2010, but did not yet qualify for retirement, the surviving spouse may elect to receive a 100 percent joint and survivor annuity based on the age of the employee and surviving spouse at the time of death.  The annuity is payable using the full early retirement reduction under section 352.116, subdivision 1 or 1a, to age 55 and one-half of the early retirement reduction from age 55 to the age payment begins. 

 

(d) The surviving spouse eligible for benefits under paragraph (a) may apply for the annuity at any time after the date on which the employee or former employee would have attained the required age for retirement based on the allowable service earned.  The surviving spouse eligible for surviving spouse benefits under paragraph (b) or (c) may apply for the annuity at any time after the employee's death.  The annuity must be computed under sections


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352.115, subdivisions 1, 2, and 3, and 352.116, subdivisions 1, 1a, and 3.  Sections 352.22, subdivision 3, and 352.72, subdivision 2, apply to a deferred annuity or surviving spouse benefit payable under this subdivision.  The annuity must cease with the last payment received by the surviving spouse in the lifetime of the surviving spouse, or upon expiration of a term certain benefit payment to a surviving spouse under subdivision 2a.  An amount equal to the excess, if any, of the accumulated contributions credited to the account of the deceased employee in excess of the total of the benefits paid and payable to the surviving spouse must be paid to the deceased employee's or former employee's last designated beneficiary or, if none, as specified under subdivision 1. 

 

(e) Any employee or former employee may request in writing, with the signed consent of the spouse, that this subdivision not apply and that payment be made only to a designated beneficiary as otherwise provided by this chapter.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 5.  Minnesota Statutes 2008, section 352.22, subdivision 2, is amended to read:

 

Subd. 2.  Amount of refund.  Except as provided in subdivision 3, the refund payable to a person who ceased to be a state employee by reason of a termination of state service is an amount equal to employee accumulated contributions plus interest at the rate of six percent per year compounded daily from the date that the contribution was made until June 30, 2011, or until the date on which the refund is paid, whichever is earlier, and at the rate of four percent per year compounded daily from the date that the contribution was made or from July 1, 2011, whichever is later, until the date on which the refund is paid.  Included with the refund is any interest paid as part of repayment of a past refund, plus interest thereon from the date of repayment.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 6.  Minnesota Statutes 2008, section 352.22, subdivision 3, is amended to read:

 

Subd. 3.  Deferred annuity.  (a) An employee who has at least three years of allowable service if employed before July 1, 2010, or who has at least five years of allowable service if employed after June 30, 2010, when termination occurs may elect to leave the accumulated contributions in the fund and thereby be entitled to a deferred retirement annuity.  The annuity must be computed under the law in effect when state service terminated, on the basis of the allowable service credited to the person before the termination of service.

 

(b) An employee on layoff or on leave of absence without pay, except a leave of absence for health reasons, and who does not return to state service must have an annuity, deferred annuity, or other benefit to which the employee may become entitled computed under the law in effect on the employee's last working day.

 

(c) No application for a deferred annuity may be made more than 60 days before the time the former employee reaches the required age for entitlement to the payment of the annuity.  The deferred annuity begins to accrue no earlier than 60 days before the date the application is filed in the office of the system, but not (1) before the date on which the employee reaches the required age for entitlement to the annuity nor (2) before the day following the termination of state service in a position which is not covered by the retirement system.

 

(d) Application for the accumulated contributions left on deposit with the fund may be made at any time following the date of the termination of service.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.


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Sec. 7.  Minnesota Statutes 2008, section 352.72, subdivision 1, is amended to read:

 

Subdivision 1.  Entitlement to annuity.  (a) Any person who has been an employee covered by a retirement system listed in paragraph (b) is entitled when qualified to an annuity from each fund if total allowable service in all funds or in any two of these funds totals three or more years if employed before July 1, 2010, or totals five or more years if employed after June 30, 2010.

 

(b) This section applies to the Minnesota State Retirement System, the Public Employees Retirement Association including the Public Employees Retirement Association police and fire fund, the Teachers Retirement Association, the State Patrol Retirement Association, or any other public employee retirement system in the state with a similar provision, except as noted in paragraph (c).

 

(c) This section does not apply to other funds providing benefits for police officers or firefighters.

 

(d) No portion of the allowable service upon which the retirement annuity from one fund is based shall be again used in the computation for benefits from another fund.  No refund may have been taken from any one of these funds since service entitling the employee to coverage under the system or the employee's membership in any of the associations last terminated.  The annuity from each fund must be determined by the appropriate provisions of the law except that the requirement that a person must have at least three a specific number of years of allowable service in the respective system or association does not apply for the purposes of this section if the combined service in two or more of these funds equals three or more years at least the longest period of allowable service of any of the applicable retirement plans.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 8.  Minnesota Statutes 2008, section 352.72, subdivision 2, is amended to read:

 

Subd. 2.  Computation of deferred annuity.  (a) The deferred annuity, if any, accruing under subdivision 1, or section 352.22, subdivision 3, must be computed as provided in section 352.22, subdivision 3, on the basis of allowable service before termination of state service and augmented as provided herein.  The required reserves applicable to a deferred annuity or to an annuity for which a former employee was eligible but had not applied or to any deferred segment of an annuity must be determined as of the date the benefit begins to accrue and augmented by interest compounded annually from the first day of the month following the month in which the employee ceased to be a state employee, or July 1, 1971, whichever is later, to the first day of the month in which the annuity begins to accrue.  The rates of interest used for this purpose must be five percent compounded annually until January 1, 1981, and three percent compounded annually thereafter until January 1 of the year following the year in which the former employee attains age 55 or until January 1, 2012, whichever is earlier, and from that date the January 1 next following the attainment of age 55 to the effective date of retirement or until January 1, 2012, whichever is earlier, the rate is five percent compounded annually if the employee became an employee before July 1, 2006, and at 2.5 percent compounded annually until January 1, 2012, if the employee becomes an employee after June 30, 2006, and two percent compounded annually after December 31, 2011, irrespective of when the employee became a state employee.  If a person has more than one period of uninterrupted service, the required reserves related to each period must be augmented by interest under this subdivision.  The sum of the augmented required reserves so determined is the present value of the annuity.  "Uninterrupted service" for the purpose of this subdivision means periods of covered employment during which the employee has not been separated from state service for more than two years.  If a person repays a refund, the service restored by the repayment must be considered continuous with the next period of service for which the employee has credit with this system.  The formula percentages used for each period of uninterrupted service must be those applicable to a new employee.  The mortality table and interest assumption used to compute the annuity must be those in effect when the employee files application for annuity.  This section does not reduce the annuity otherwise payable under this chapter. 


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(b) The retirement annuity or disability benefit of, or the survivor benefit payable on behalf of, a former state employee who terminated service before July 1, 1997, which is not first payable until after June 30, 1997, must be increased on an actuarial equivalent basis to reflect the change in the postretirement interest rate actuarial assumption under section 356.215, subdivision 8, from five percent to six percent under a calculation procedure and the tables adopted by the board and approved by the actuary retained under section 356.214. 

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 9.  Minnesota Statutes 2009 Supplement, section 352.75, subdivision 4, is amended to read:

 

Subd. 4.  Existing deferred retirees.  Any former member of the former Metropolitan Transit Commission-Transit Operating Division employees retirement fund is entitled to a retirement annuity from the Minnesota State Retirement System if the employee:

 

(1) is not an active employee of the Transit Operating Division of the former Metropolitan Transit Commission on July 1, 1978; (2) has at least ten years of active continuous service with the Transit Operating Division of the former Metropolitan Transit Commission as defined by the former Metropolitan Transit Commission-Transit Operating Division employees retirement plan document in effect on December 31, 1977; (3) has not received a refund of contributions; (4) has not retired or begun receiving an annuity or benefit from the former Metropolitan Transit Commission-Transit Operating Division employees retirement fund; (5) is at least 55 years old; and (6) submits a valid application for a retirement annuity to the executive director of the Minnesota State Retirement System.

 

The person is entitled to a retirement annuity in an amount equal to the normal old age retirement allowance calculated under the former Metropolitan Transit Commission-Transit Operating Division employees retirement fund plan document in effect on December 31, 1977, subject to an early retirement reduction or adjustment in amount on account of retirement before the normal retirement age specified in that former Metropolitan Transit Commission-Transit Operating Division employees retirement fund plan document.

 

The deferred retirement annuity of any person to whom this subdivision applies must be augmented.  The required reserves applicable to the deferred retirement annuity, determined as of the date the allowance begins to accrue using an appropriate mortality table and an interest assumption of five percent, must be augmented by interest at the rate of five percent per year compounded annually from January 1, 1978, to January 1, 1981, and three percent per year compounded annually from January 1, 1981, until the date that the annuity begins to accrue or June 30, 2011, whichever is earlier, and two percent after June 30, 2011, to the first day of the month in which the annuity begins to accrue.  After the commencement of the retirement annuity, the annuity is eligible for postretirement adjustments under section 356.415.  On applying for a retirement annuity under this subdivision, the person is entitled to elect a joint and survivor optional annuity under section 352.116, subdivision 3. 

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 10.  Minnesota Statutes 2008, section 352.93, subdivision 1, is amended to read:

 

Subdivision 1.  Basis of annuity; when to apply.  After separation from state service, an employee covered under section 352.91 who has reached age 55 years and has credit for at least three years of covered correctional service or a combination of covered correctional service and general state employees state retirement plan allowable service if first employed as a state employee before July 1, 2010, or has credit for at least ten years of covered correctional service or a combination of covered correctional service and general state employees retirement plan allowable service if first employed as a state employee after June 30, 2010, is entitled upon application to a retirement annuity under this section, based only on covered correctional employees' service.  Application may be made no earlier than 60 days before the date the employee is eligible to retire by reason of both age and service requirements.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.


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Sec. 11.  Minnesota Statutes 2008, section 352.93, subdivision 2a, is amended to read:

 

Subd. 2a.  Early retirement.  Any covered correctional employee who becomes at least 50 years old and who has at least three years of allowable service if first employed as a correctional state employee before July 1, 2010, or has credit for at least ten years of allowable service if first employed as a correctional state employee after June 30, 2010, is entitled upon application to a reduced retirement annuity equal to the annuity calculated under subdivision 2, reduced by two-tenths of one percent for each month that the correctional employee is under age 55 at the time of retirement if first employed as a correctional state employee before July 1, 2010, and if retired before July 1, 2015, or reduced by 0.417 percent for each month that the correctional employee is under age 55 at the time of retirement if first employed as a correctional state employee after June 30, 2010, or if first employed as a correctional state employee before July 1, 2010, and if retired after June 30, 2015.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 12.  Minnesota Statutes 2008, section 352.93, subdivision 3a, is amended to read:

 

Subd. 3a.  Optional annuities.  The board may establish optional annuity forms to pay a higher amount from the date of retirement until an employee is first eligible to draw Social Security benefits, reaches age 65, or up to reaches the age the employee is eligible to receive unreduced Social Security benefits, at which time the monthly benefits must be reduced.  The optional annuity forms must be actuarially equivalent to the normal single life annuity form provided in subdivision 2.  The optional annuity forms must be approved certified as actuarially equivalent by the actuary retained under section 356.214.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 13.  Minnesota Statutes 2008, section 352.931, subdivision 1, is amended to read:

 

Subdivision 1.  Surviving spouse benefit.  (a) If the correctional employee was at least age 50, has credit for at least three years of allowable service if first employed as a correctional state employee before July 1, 2010, or has credit for at least ten years of allowable service if first employed as a correctional state employee after June 30, 2010, and dies before an annuity or disability benefit has become payable, notwithstanding any designation of beneficiary to the contrary, the surviving spouse of the employee may elect to receive, in lieu of the refund under section 352.12, subdivision 1, an annuity for life equal to the joint and 100 percent survivor annuity which the employee could have qualified for had the employee terminated service on the date of death.  The election may be made at any time after the date of death of the employee.  The surviving spouse benefit begins to accrue as of the first of the month next following the date on which the application for the benefit was filed. 

 

(b) If the employee was under age 50, dies, and had credit for at least three years of allowable service credit on the date of death if first employed as a correctional state employee before July 1, 2010, or had credit for at least ten years of allowable service on the date of death if first employed as a correctional state employee after June 30, 2010, but did not yet qualify for retirement, the surviving spouse may elect to receive a 100 percent joint and survivor annuity based on the age of the employee and surviving spouse at the time of death.  The annuity is payable using the early retirement reduction under section 352.93, subdivision 2a, to age 50, and one-half of the early retirement reduction from age 50 to the age payment begins.  The surviving spouse eligible for surviving spouse benefits under this paragraph may apply for the annuity at any time after the employee's death.  Sections 352.22, subdivision 3, and 352.72, subdivision 2, apply to a deferred annuity or surviving spouse benefit payable under this subdivision.  

 

(c) The annuity must cease with the last payment received by the surviving spouse in the lifetime of the surviving spouse.  Any employee may request in writing, with the signed consent of the spouse, that this subdivision not apply and that payment be made only to a designated beneficiary as otherwise provided by this chapter.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.


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Sec. 14.  Minnesota Statutes 2009 Supplement, section 352.95, subdivision 2, is amended to read:

 

Subd. 2.  Regular disability; computation of benefit.  A covered correctional employee who was hired before July 1, 2009, after rendering at least one year of covered correctional service, or a covered correctional employee who was first hired after June 30, 2009, after rendering at least three years of covered correctional plan service if first employed as a correctional state employee before July 1, 2010, or after rendering at least ten years of covered correctional plan service if first employed as a correctional state employee after June 30, 2010, and who is determined to have a regular disability, physical or psychological, as defined under section 352.01, subdivision 17c, is entitled to a regular disability benefit.  The regular disability benefit must be based on covered correctional service only.  The regular disability benefit must be computed as provided in section 352.93, subdivisions 1 and 2.  The regular disability benefit of a covered correctional employee who was first hired before July 1, 2009, and who is determined to have a regular disability, physical or psychological, under this subdivision must be computed as though the employee had at least 15 years of covered correctional service.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 15.  Minnesota Statutes 2008, section 352B.02, as amended by Laws 2009, chapter 101, article 2, section 109; and Laws 2009, chapter 169, article 1, section 23; article 2, section 16; and article 4, sections 3 and 4, is amended to read:

 

352B.02 STATE PATROL RETIREMENT FUND. 

 

Subdivision 1.  Fund created; membership.  A State Patrol retirement fund is established.  Its membership consists of all persons defined in section 352B.011, subdivision 10. 

 

Subd. 1a.  Member contributions.  (a) The member contribution is 10.40 percent the following percentage of the member's salary.:

 

          (1) before the first day of the first pay period beginning after July 1, 2011                             10.40 percent

          (2) on or after the first day of the first pay period beginning after July 1, 2011                     12.40 percent

 

(b) These contributions must be made by deduction from salary as provided in section 352.04, subdivision 4.

 

Subd. 1b.  Salary deductions.  Member contribution amounts must be deducted each pay period by the department head, who shall have the total amount of the deductions paid to the commissioner of management and budget for deposit in the State Patrol retirement fund, and have a detailed report of all deductions made each pay period to the executive director of the Minnesota State Retirement System.

 

Subd. 1c.  Employer contributions.  (a) In addition to member contributions, department heads shall pay a sum equal to 15.60 percent the specified percentage of the salary upon which deductions were made, which constitutes the employer contribution to the fund.  as follows:

 

          (1) before the first day of the first pay period beginning after July 1, 2011                             15.60 percent

          (2) on or after the first day of the first pay period beginning after July 1, 2011                     18.60 percent

 

(b) Department contributions must be paid out of money appropriated to departments for this purpose.

 

Subd. 1d.  Fund revenue and expenses.  The amounts provided for in this section must be credited to the State Patrol retirement fund.  All money received must be deposited by the commissioner of management and budget in the State Patrol retirement fund.  The fund must be used to pay the administrative expenses of the retirement fund, and the benefits and annuities provided in this chapter. 


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Subd. 1e.  Audit; actuarial valuation.  (a) The legislative auditor shall audit the fund.

 

(b) Any actuarial valuation of the fund required under section 356.215 must be prepared by the actuary retained under section 356.214.

 

(c) Any approved actuary retained by the executive director under section 352.03, subdivision 6, may perform actuarial valuations and experience studies to supplement those performed by the actuary retained under section 356.214.  Any supplemental actuarial valuation or experience studies must be filed with the executive director of the Legislative Commission on Pensions and Retirement.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 16.  Minnesota Statutes 2008, section 352B.08, subdivision 1, is amended to read:

 

Subdivision 1.  Eligibility; when to apply; accrual.  (a) Every member who is credited with three or more years of allowable service if first employed before July 1, 2010, or with at least five years of allowable service if first employed after June 30, 2010, is entitled to separate from state service and upon becoming 50 years old, is entitled to receive a life annuity, upon separation from state service.

 

(b) Members shall must apply for an annuity in a form and manner prescribed by the executive director.

 

(c) No application may be made more than 90 days before the date the member is eligible to retire by reason of both age and service requirements.

 

(d) An annuity begins to accrue no earlier than 180 days before the date the application is filed with the executive director.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 17.  Minnesota Statutes 2008, section 352B.08, subdivision 2a, is amended to read:

 

Subd. 2a.  Early retirement.  Any member who has become at least 50 years old and who has at least three years of allowable service if first employed before July 1, 2010, or who has at least five years of allowable service if first employed after June 30, 2010, is entitled upon application to a reduced retirement annuity equal to the annuity calculated under subdivision 2, reduced by one-tenth of one percent for each month that the member is under age 55 at the time of retirement if first employed before July 1, 2010, or reduced by two-tenths of one percent for each month that the member is under age 55 at the time of retirement if first employed after June 30, 2010.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 18.  Minnesota Statutes 2008, section 352B.11, subdivision 2b, is amended to read:

 

Subd. 2b.  Surviving spouse benefit eligibility.  (a) If an active member with three or more years of allowable service if first employed before July 1, 2010, or with at least five years of allowable service if first employed after June 30, 2010, dies before attaining age 55, the surviving spouse is entitled to the benefit specified in subdivision 2c, paragraph (b).

 

(b) If an active member with less than three years of allowable service if first employed before July 1, 2010, or with fewer than five years of allowable service if first employed after June 30, 2010, dies at any age, the surviving spouse is entitled to receive the benefit specified in subdivision 2c, paragraph (c).


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(c) If an active member with three or more years of allowable service if first employed before July 1, 2010, or with at least five years of allowable service if first employed after June 30, 2010, dies on or after attaining exact age 55, the surviving spouse is entitled to receive the benefits specified in subdivision 2c, paragraph (d).

 

(d) If a disabilitant dies while receiving a disability benefit under section 352B.10 or before the benefit under that section commenced, and an optional annuity was not elected under section 352B.10, subdivision 5, the surviving spouse is entitled to receive the benefit specified in subdivision 2c, paragraph (b). 

 

(e) If a former member with three or more years of allowable service if first employed before July 1, 2010, or with at least five years of allowable service if first employed after June 30, 2010, who terminated from service and has not received a refund or commenced receipt of any other benefit provided by this chapter, dies, the surviving spouse is entitled to receive the benefit specified in subdivision 2c, paragraph (e).

 

(f) If a former member with less than three years of allowable service if first employed before July 1, 2010, or with fewer than five years of allowable service if first employed after June 30, 2010, who terminated from service and has not received a refund or commenced receipt of any other benefit, if applicable, provided by this chapter, dies, the surviving spouse is entitled to receive the refund specified in subdivision 2c, paragraph (f).

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 19.  Minnesota Statutes 2008, section 352B.30, subdivision 1, is amended to read:

 

Subdivision 1.  Entitlement to annuity.  Any person who has been an employee covered by the Minnesota State Retirement System, or a member of the Public Employees Retirement Association including the Public Employees Retirement Association Police and Fire Fund, or the Teachers Retirement Association, or the State Patrol retirement fund, or any other public employee retirement system in Minnesota having a like provision but excluding all other funds providing benefits for police or firefighters is entitled when qualified to an annuity from each fund if total allowable service in all funds or in any two of these funds totals three or more the number of years of allowable service required by the applicable retirement plan with the longest vesting period for the person.  No part of the allowable service upon which the retirement annuity from one fund is based may again be used in the computation for benefits from another fund.  The member must not have taken a refund from any one of these funds since service entitling the member to coverage under the system or membership in any of the associations last terminated.  The annuity from each fund must be determined by the appropriate law except that the requirement that a person must have at least three a specific number of years allowable service in the respective system or association does not apply for the purposes of this section if the combined service in two or more of these funds equals three or more the number of years of allowable service required by the applicable retirement plan with the longest vesting period for the person.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 20.  Minnesota Statutes 2008, section 352B.30, subdivision 2, is amended to read:

 

Subd. 2.  Computation of deferred annuity.  Deferred annuities must be computed according to this chapter on the basis of allowable service before termination of service and augmented as provided in this chapter.  The required reserves applicable to a deferred annuity must be augmented by interest compounded annually from the first day of the month following the month in which the member terminated service, or July 1, 1971, whichever is later, to the first day of the month in which the annuity begins to accrue.  The rates of interest used for this purpose shall must be five percent per year compounded annually until January 1, 1981, and after that date three percent per year compounded annually after January 1, 1981, until January 1, 2012, if the employee became an employee before July 1, 2006, and at 2.5 percent compounded annually if the employee becomes an employee after June 30, 2006,


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and two percent per year compounded annually after December 31, 2011, irrespective of when the employee was first employed.  The mortality table and interest assumption used to compute the annuity shall must be those in effect when the member files application for annuity.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 21.  Minnesota Statutes 2008, section 352F.07, is amended to read:

 

352F.07 EFFECT ON REFUND. 

 

Notwithstanding any provision of chapter 352 to the contrary, terminated hospital employees may receive a refund of employee accumulated contributions plus interest at the rate of six percent per year compounded annually in accordance with Minnesota Statutes 1994, section 352.22, subdivision 2, at any time after the transfer of employment to Fairview, University of Minnesota Physicians, or University Affiliated Family Physicians.  If a terminated hospital employee has received a refund from a pension plan enumerated in section 356.30, subdivision 3, the person may not repay that refund unless the person again becomes a member of one of those enumerated plans and complies with section 356.30, subdivision 2. 

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 22.  Minnesota Statutes 2008, section 353.01, is amended by adding a subdivision to read:

 

Subd. 47.  Vesting.  (a) "Vesting" means obtaining a nonforfeitable entitlement to an annuity or benefit from a retirement plan administered by the Public Employees Retirement Association by having credit for sufficient allowable service under paragraph (b) or (c), whichever applies.

 

(b) For purposes of qualifying for an annuity or benefit as a basic or coordinated plan member of the general employees retirement plan of the Public Employees Retirement Association:

 

(1) a member who first became a public employee before July 1, 2010, is vested when the person has accrued credit for not less than three years of allowable service as defined under subdivision 16; and

 

(2) a member who first becomes a public employee after June 30, 2010, is vested when the person has accrued credit for not less than five years of allowable service as defined under subdivision 16.

 

(c) For purposes of qualifying for an annuity or benefit as a member of the police and fire plan or a member of the local government correctional employees retirement plan:

 

(1) a member who first became a public employee before July 1, 2010, is vested when the person has accrued credit for not less than three years of allowable service as defined under subdivision 16; and

 

(2) a member who first becomes a public employee after June 30, 2010, is vested at the following percentages when the person has accrued credited allowable service as defined under subdivision 16, as follows:

 

(i) 50 percent after five years;

 

(ii) 60 percent after six years;

 

(iii) 70 percent after seven years;

 

(iv) 80 percent after eight years;


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(v) 90 percent after nine years; and

 

(vi) 100 percent after ten years.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 23.  Minnesota Statutes 2009 Supplement, section 353.27, subdivision 2, is amended to read:

 

Subd. 2.  Employee contribution.  (a) For a basic member, the employee contribution is 9.10 percent of salary.  For a coordinated member, the employee contribution is six percent the following percentage of salary plus any contribution rate adjustment under subdivision 3b.:

 

          Effective before January 1, 2011                                                                                                    6.00

          Effective after December 31, 2010                                                                                                 6.25

 

(b) These contributions must be made by deduction from salary as defined in section 353.01, subdivision 10, in the manner provided in subdivision 4.  If any portion of a member's salary is paid from other than public funds, the member's employee contribution must be based on the total salary received by the member from all sources.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 24.  Minnesota Statutes 2009 Supplement, section 353.27, subdivision 3, is amended to read:

 

Subd. 3.  Employer contribution.  (a) For a basic member, the employer contribution is 9.10 percent of salary.  For a coordinated member, the employer contribution is six percent the following percentage of salary plus any contribution rate adjustment under subdivision 3b.:

 

          Effective before January 1, 2011                                                                                                    6.00

          Effective after December 31, 2010                                                                                                 6.25

 

(b) This contribution must be made from funds available to the employing subdivision by the means and in the manner provided in section 353.28.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 25.  Minnesota Statutes 2008, section 353.27, subdivision 3b, is amended to read:

 

Subd. 3b.  Change in employee and employer contributions in certain instances.  (a) For purposes of this section,:

 

(1) a contribution sufficiency exists if the total of the employee contribution under subdivision 2, the employer contribution under subdivision 3, the additional employer contribution under subdivision 3a, and any additional contribution previously imposed under this subdivision exceeds the total of the normal cost, the administrative expenses, and the amortization contribution of the retirement plan as reported in the most recent actuarial valuation of the retirement plan prepared by the actuary retained under section 356.214 and prepared under section 356.215 and the standards for actuarial work of the Legislative Commission on Pensions and Retirement.  For purposes of this section,; and

 

(2) a contribution deficiency exists if the total of the employee contributions under subdivision 2, the employer contributions under subdivision 3, the additional employer contribution under subdivision 3a, and any additional contribution previously imposed under this subdivision is less than the total of the normal cost, the administrative


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expenses, and the amortization contribution of the retirement plan as reported in the most recent actuarial valuation of the retirement plan prepared by the actuary retained under section 356.214 and prepared under section 356.215 and the standards for actuarial work of the Legislative Commission on Pensions and Retirement.

 

(b) Employee and employer contributions under subdivisions 2 and 3 must be adjusted:

 

(1) if, on or after July 1, 2010, the regular actuarial valuations valuation of the general employees retirement plan of the Public Employees Retirement Association under section 356.215 indicate indicates that there is a contribution sufficiency under paragraph (a) equal to or greater than 0.5 one percent of covered payroll and that the sufficiency has existed for at least two consecutive years, the coordinated program employee and employer contribution rates must be decreased as determined under paragraph (c) to a level such that the sufficiency equals is no more greater than 0.25 one percent of covered payroll based on the most recent actuarial valuation; or

 

(2) if, on or after July 1, 2010, the regular actuarial valuations valuation of the general employees retirement plan of the Public Employees Retirement Association under section 356.215 indicate indicates that there is a contribution deficiency equal to or greater than 0.5 percent of covered payroll and that the deficiency has existed for at least two consecutive years, the coordinated program employee and employer contribution rates must be increased as determined under paragraph (c) (d) to a level such that no deficiency exists based on the most recent actuarial valuation.

 

(c) The contribution rate increase or decrease must be determined by the executive director of the Public Employees Retirement Association, must be reported to the chair and the executive director of the Legislative Commission on Pensions and Retirement on or before the next February 1, and, if the Legislative Commission on Pensions and Retirement does not recommend against the rate change or does not recommend a modification in the rate change, is effective on the next July 1 following the determination by the executive director that a contribution deficiency or sufficiency has existed for two consecutive fiscal years based on the most recent actuarial valuations under section 356.215.  If the actuarially required contribution exceeds or is less than the total support provided by the combined employee and employer contribution rates under subdivisions 2, 3, and 3a, by more than 0.5 one percent of covered payroll, the coordinated program employee and employer contribution rates under subdivisions 2 and 3 must be adjusted decreased incrementally over one or more years by no more than 0.25 percent of pay each for employee and employer matching contribution rates to a level such that there remains a contribution sufficiency of no more than 0.25 at least one percent of covered payroll.  No contribution rate decrease may be made until at least two years have elapsed since any adjustment under this subdivision has been fully implemented.

 

(d) No If the actuarially required contribution exceeds the total support provided by the combined employee and employer contribution rates under subdivisions 2, 3, and 3a, the employee and matching employer contribution rates must be increased equally to eliminate that contribution deficiency.  If the contribution deficiency is:

 

(1) less than two percent, the incremental adjustment increase may exceed be up to 0.25 percent for either the coordinated program employee and matching employer contribution rates per year in which any adjustment is implemented.  A contribution rate adjustment under this subdivision must not be made until at least two years have passed since fully implementing a previous adjustment under this subdivision.;

 

(2) greater than 1.99 percent and less than 4.01 percent, the incremental increase may be up to 0.5 percent for the employee and matching employer contribution rates; or

 

(3) greater than four percent, the incremental increase may be up to 0.75 percent for the employee and matching employer contribution.

 

(e) Any recommended adjustment to the contribution rates must be reported to the chair and the executive director of the Legislative Commission on Pensions and Retirement by January 15 following receipt of the most recent annual actuarial valuation prepared under section 356.215.  If the Legislative Commission on Pensions and


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Retirement does not recommend against the rate change or does not recommend a modification in the rate change, the recommended adjustment becomes effective on the first day of the first full payroll period in the fiscal year following receipt of the most recent actuarial valuation that gave rise to the adjustment.

 

(f) A contribution sufficiency of up to one percent of covered payroll must be held in reserve to be used to offset any future actuarially required contributions that are more than the total combined employee and employer contributions under subdivisions 2, 3, and 3a.

 

(g) Before any reduction in contributions to eliminate a sufficiency in excess of one percent of covered pay may be recommended, the executive director must review any need for a change in actuarial assumptions, as recommended by the actuary retained under section 356.214 in the most recent experience study of the general employees retirement plan prepared under section 356.215 and the standards for actuarial work promulgated by the Legislative Commission on Pensions and Retirement that may result in an increase in the actuarially required contribution and must report to the Legislative Commission on Pensions and Retirement any recommendation by the board to use the sufficiency exceeding one percent of covered payroll to offset the impact of an actuarial assumption change recommended by the actuary retained under section 356.214, subdivision 1, and reviewed by the actuary retained by the commission under section 356.214, subdivision 4.

 

(h) No contribution sufficiency in excess of one percent of covered pay may be proposed to be used to increase benefits, and no benefit increase may be proposed that would initiate an automatic adjustment to increase contributions under this subdivision.  Any proposed benefit improvement must include a recommendation, prepared by the actuary retained under section 356.214, subdivision 1, and reviewed by the actuary retained by the Legislative Commission on Pensions and Retirement as provided under section 356.214, subdivision 4, on how the benefit modification will be funded.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 26.  Minnesota Statutes 2008, section 353.29, subdivision 1, is amended to read:

 

Subdivision 1.  Age and allowable service requirements.  Upon termination of membership, a person who has attained normal retirement age and who received credit for not less than three years of allowable service is vested under section 353.01, subdivision 47, is entitled upon application to a retirement annuity.  The retirement annuity is known as the "normal" retirement annuity.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 27.  Minnesota Statutes 2008, section 353.30, subdivision 1c, is amended to read:

 

Subd. 1c.  Pre-July 1, 1989, members:  early retirement.  Upon termination of public service, a person who first became a public employee or a member of a pension fund listed in section 356.30, subdivision 3, before July 1, 1989, who has become at least 55 years old but not normal retirement age, and has received credit for at least three years of allowable service is vested under section 353.01, subdivision 47, is entitled, upon application, to a retirement annuity in an amount equal to the normal annuity provided in section 353.29, subdivision 3, paragraph (a), reduced by one-quarter of one percent for each month that the member is under normal retirement age at the time of retirement. 

 

EFFECTIVE DATE.  This section is effective the day following final enactment.


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Sec. 28.  Minnesota Statutes 2008, section 353.32, subdivision 1, is amended to read:

 

Subdivision 1.  Before retirement.  If a member or former member who terminated public service dies before retirement or before receiving any retirement annuity and no other payment of any kind is or may become payable to any person, a refund shall be paid is payable to the designated beneficiary or, if there be none, to the surviving spouse, or, if none, to the legal representative of the decedent's estate.  Such The refund shall must be in an amount equal to accumulated deductions plus annual compound interest thereon at the rate of six percent per annum compounded annually specified in section 353.34, subdivision 2, and less the sum of any disability or survivor benefits, if any, that may have been paid by the fund; provided that a survivor who has a right to benefits pursuant to under section 353.31 may waive such benefits in writing, except such benefits for a dependent child under the age of 18 years may only be waived pursuant to under an order of the district court. 

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 29.  Minnesota Statutes 2008, section 353.32, subdivision 1a, is amended to read:

 

Subd. 1a.  Surviving spouse optional annuity.  (a) If a member or former member who has credit for not less than three years of allowable service is vested under section 353.01, subdivision 47, and who dies before the annuity or disability benefit begins to accrue under section 353.29, subdivision 7, or 353.33, subdivision 2, notwithstanding any designation of beneficiary to the contrary, the surviving spouse may elect to receive, instead of a refund with interest under subdivision 1, or surviving spouse benefits otherwise payable under section 353.31, an annuity equal to a 100 percent joint and survivor annuity computed consistent with section 353.30, subdivision 1a, 1c, or 5, whichever is applicable. 

 

(b) If a member first became a public employee or a member of a pension fund listed in section 356.30, subdivision 3, before July 1, 1989, and has credit for at least 30 years of allowable service on the date of death, the surviving spouse may elect to receive a 100 percent joint and survivor annuity computed using section 353.30, subdivision 1b, except that the early retirement reduction under that provision will be applied from age 62 back to age 55 and one-half of the early retirement reduction from age 55 back to the age payment begins. 

 

(c) If a member who was under age 55 and has credit for at least three years of allowable service who is vested under section 353.01, subdivision 47, dies, but did not qualify for retirement on the date of death, the surviving spouse may elect to receive a 100 percent joint and survivor annuity computed using section 353.30, subdivision 1c or 5, as applicable, except that the early retirement reduction specified in the applicable subdivision will be applied to age 55 and one-half of the early retirement reduction from age 55 back to the age payment begins. 

 

(d) Notwithstanding the definition of surviving spouse in section 353.01, subdivision 20, a former spouse of the member, if any, is entitled to a portion of the monthly surviving spouse optional annuity if stipulated under the terms of a marriage dissolution decree filed with the association.  If there is no surviving spouse or child or children, a former spouse may be entitled to a lump-sum refund payment under subdivision 1, if provided for in a marriage dissolution decree, but not a monthly surviving spouse optional annuity, despite the terms of a marriage dissolution decree filed with the association. 

 

(e) The surviving spouse eligible for surviving spouse benefits under paragraph (a) may apply for the annuity at any time after the date on which the deceased employee would have attained the required age for retirement based on the employee's allowable service.  The surviving spouse eligible for surviving spouse benefits under paragraph (b) or (c) may apply for an annuity any time after the member's death. 

 

(f) Sections 353.34, subdivision 3, and 353.71, subdivision 2, apply to a deferred annuity or surviving spouse benefit payable under this subdivision. 


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(g) An amount equal to any excess of the accumulated contributions that were credited to the account of the deceased employee over and above the total of the annuities paid and payable to the surviving spouse must be paid to the surviving spouse's estate. 

 

(h) A member may specify in writing, with the signed consent of the spouse, that this subdivision does not apply and that payment may be made only to the designated beneficiary as otherwise provided by this chapter.  The waiver of a surviving spouse annuity under this section does not make a dependent child eligible for benefits under subdivision 1c. 

 

(i) If the deceased member or former member first became a public employee or a member of a public pension plan listed in section 356.30, subdivision 3, on or after July 1, 1989, a survivor annuity computed under paragraph (a) or (c) must be computed as specified in section 353.30, subdivision 5, except for the revised early retirement reduction specified in paragraph (c), if paragraph (c) is the applicable provision.

 

(j) For any survivor annuity determined under this subdivision, the payment is to be based on the total allowable service that the member had accrued as of the date of death and the age of the member and surviving spouse on that date.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 30.  Minnesota Statutes 2009 Supplement, section 353.33, subdivision 1, is amended to read:

 

Subdivision 1.  Age, service, and salary requirements.  (a) A coordinated or basic member who has at least three years of allowable service is vested under section 353.01, subdivision 47, and who becomes totally and permanently disabled before normal retirement age, upon application as defined under section 353.031, is entitled to a disability benefit in an amount determined under subdivision 3.

 

(b) If the disabled person's public service has terminated at any time, at least two of the required three years of allowable service required to be vested under section 353.01, subdivision 47, must have been rendered after last becoming an active member. 

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 31.  Minnesota Statutes 2008, section 353.34, subdivision 1, is amended to read:

 

Subdivision 1.  Refund or deferred annuity.  (a) A former member is entitled to either a refund of accumulated employee deductions under subdivision 2, or to a deferred annuity under subdivision 3.  Application for a refund may not be made before the date of termination of public service.  Except as specified in paragraph (b), a refund must be paid within 120 days following receipt of the application unless the applicant has again become a public employee required to be covered by the association.

 

(b) If an individual was placed on layoff under section 353.01, subdivision 12 or 12c, a refund is not payable before termination of service under section 353.01, subdivision 11a. 

 

(c) An individual who terminates public service covered by the Public Employees Retirement Association general employees retirement plan, the Public Employees Retirement Association police and fire retirement plan, or the public employees local government corrections correctional service retirement plan, and who is employed by a different employer and who becomes an active member covered by one of the other two plans, may receive a refund of employee contributions plus six percent annual compound interest compounded annually from the plan from which the member terminated service at the applicable rate specified in subdivision 2.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.


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Sec. 32.  Minnesota Statutes 2008, section 353.34, subdivision 2, is amended to read:

 

Subd. 2.  Refund with interest.  (a) Except as provided in subdivision 1, any person who ceases to be a public employee shall is entitled to receive a refund in an amount equal to accumulated deductions with annual compound interest to the first day of the month in which the refund is processed at the rate of six percent compounded annually based on fiscal year balances.

 

(b) For a person who ceases to be a public employee before July 1, 2011, the refund interest is at the rate of six percent to June 30, 2011, and at the rate of four percent after June 30, 2011.  For a person who ceases to be a public employee after July 1, 2011, the refund interest is at the rate of four percent.

 

(c) If a person repays a refund and subsequently applies for another refund, the repayment amount, including interest, is added to the fiscal year balance in which the repayment was made.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 33.  Minnesota Statutes 2008, section 353.34, subdivision 3, is amended to read:

 

Subd. 3.  Deferred annuity; eligibility; computation.  (a) A member with at least three years of allowable service who is vested under section 353.01, subdivision 47, when termination of public service or termination of membership occurs has the option of leaving the accumulated deductions in the fund and being entitled to a deferred retirement annuity commencing at normal retirement age or to a deferred early retirement annuity under section 353.30, subdivision 1a, 1b, 1c, or 5.

 

(b) The deferred annuity must be computed under section 353.29, subdivision 3, on the basis of the law in effect on the date of termination of public service or termination of membership, whichever is earlier, and must be augmented as provided in section 353.71, subdivision 2.

 

(c) A former member qualified to apply for a deferred retirement annuity may revoke this option at any time before the commencement of deferred annuity payments by making application for a refund.  The person is entitled to a refund of accumulated member contributions within 30 days following date of receipt of the application by the executive director. 

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 34.  Minnesota Statutes 2009 Supplement, section 353.65, subdivision 2, is amended to read:

 

Subd. 2.  Employee contribution.  The employee contribution is 9.4 percent of the salary of the member in calendar year 2010 and is 9.6 percent of the salary of the member in each calendar year after 2010.  This contribution must be made by deduction from salary in the manner provided in subdivision 4.  Where any portion of a member's salary is paid from other than public funds, the member's employee contribution is based on the total salary received from all sources.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 35.  Minnesota Statutes 2009 Supplement, section 353.65, subdivision 3, is amended to read:

 

Subd. 3.  Employer contribution.  The employer contribution is 14.1 percent of the salary of the member in calendar year 2010 and is 14.4 percent of the salary of the member in each calendar year after 2010.  This contribution must be made from funds available to the employing subdivision by the means and in the manner provided in section 353.28.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.


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Sec. 36.  Minnesota Statutes 2008, section 353.651, subdivision 1, is amended to read:

 

Subdivision 1.  Age and allowable service requirements.  Upon separation from public service, any police officer or firefighter member who has attained the age of at least 55 years and who received credit for not less than three years of allowable service is vested under section 353.01, subdivision 47, is entitled upon application to a retirement annuity.  Such retirement annuity is, known as the "normal" retirement annuity.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 37.  Minnesota Statutes 2008, section 353.651, subdivision 4, is amended to read:

 

Subd. 4.  Early retirement.  (a) A person who becomes a police and fire plan member after June 30, 2007, or a former member who is reinstated as a member of the plan after that date, who is at least 50 years of age with at least three years of allowable service and who is vested under section 353.01, subdivision 47, upon the termination of public service is entitled upon application to a retirement annuity equal to the normal annuity calculated under subdivision 3, reduced by two-tenths of one percent for each month that the member is under age 55 at the time of retirement.

 

(b) Upon the termination of public service, any police and fire plan member not specified in paragraph (a), upon attaining at least 50 years of age with at least three years of allowable service is entitled upon application to a retirement annuity equal to the normal annuity calculated under subdivision 3, reduced by one-tenth of one percent for each month that the member is under age 55 at the time of retirement.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 38.  Minnesota Statutes 2008, section 353.657, subdivision 1, is amended to read:

 

Subdivision 1.  Generally.  (a) In the event that a member of the police and fire fund dies from any cause before retirement or before becoming disabled and receiving disability benefits, the association shall grant survivor benefits to a surviving spouse, as defined in section 353.01, subdivision 20, and to a dependent child or children, as defined in section 353.01, subdivision 15, except that if the death is not a line of duty death, the member must have accrued at least three years of credited service be vested under section 353.01, subdivision 47.

 

(b) Notwithstanding the definition of surviving spouse, a former spouse of the member, if any, is entitled to a portion of the monthly surviving spouse benefit if stipulated under the terms of a marriage dissolution decree filed with the association.  If there is no surviving spouse or child or children, a former spouse may be entitled to a lump-sum refund payment under section 353.32, subdivision 1, if provided for in a marriage dissolution decree but not a monthly surviving spouse benefit despite the terms of a marriage dissolution decree filed with the association.

 

(c) The spouse and child or children are entitled to monthly benefits as provided in subdivisions 2 to 4.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 39.  Minnesota Statutes 2008, section 353.657, subdivision 2a, is amended to read:

 

Subd. 2a.  Death while eligible survivor benefit.  (a) If a member or former member who has attained the age of at least 50 years and has credit for not less than three years allowable service either who is vested under section 353.01, subdivision 47, or who has credit for at least 30 years of allowable service, regardless of age attained, dies before the annuity or disability benefit becomes payable, notwithstanding any designation of beneficiary to the contrary, the surviving spouse may elect to receive a death while eligible survivor benefit.


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(b) Notwithstanding the definition of surviving spouse in section 353.01, subdivision 20, a former spouse of the member, if any, is entitled to a portion of the death while eligible survivor benefit if stipulated under the terms of a marriage dissolution decree filed with the association.  If there is no surviving spouse or child or children, a former spouse may be entitled to a lump-sum refund payment under section 353.32, subdivision 1, if provided for in a marriage dissolution decree but not a death while eligible survivor benefit despite the terms of a marriage dissolution decree filed with the association. 

 

(c) The benefit may be elected instead of a refund with interest under section 353.32, subdivision 1, or surviving spouse benefits otherwise payable under subdivisions 1 and 2.  The benefit must be an annuity equal to the 100 percent joint and survivor annuity which the member could have qualified for on the date of death, computed as provided in sections 353.651, subdivisions 2 and 3, and 353.30, subdivision 3. 

 

(d) The surviving spouse may apply for the annuity at any time after the date on which the deceased employee would have attained the required age for retirement based on the employee's allowable service.  Sections 353.34, subdivision 3, and 353.71, subdivision 2, apply to a deferred annuity payable under this subdivision.

 

(e) No payment accrues beyond the end of the month in which entitlement to such annuity has terminated.  An amount equal to the excess, if any, of the accumulated contributions which were credited to the account of the deceased employee over and above the total of the annuities paid and payable to the surviving spouse must be paid to the deceased member's last designated beneficiary or, if none, to the legal representative of the estate of such deceased member.

 

(f) Any member may request in writing, with the signed consent of the spouse, that this subdivision not apply and that payment be made only to the designated beneficiary, as otherwise provided by this chapter.

 

(g) For a member who is employed as a full-time firefighter by the Department of Military Affairs of the state of Minnesota, allowable service as a full-time state Military Affairs Department firefighter credited by the Minnesota State Retirement System may be used in meeting the minimum allowable service requirement of this subdivision.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 40.  Minnesota Statutes 2008, section 353.71, subdivision 1, is amended to read:

 

Subdivision 1.  Eligibility.  Any person who has been a member of a defined benefit retirement plan administered by the Public Employees Retirement Association, or a retirement plan administered by the Minnesota State Retirement System, or the Teachers Retirement Association, or any other public retirement system in the state of Minnesota having a like provision, except a fund retirement plan providing benefits for police officers or firefighters governed by sections 69.77 or 69.771 to 69.776, shall be is entitled, when qualified, to an annuity from each fund retirement plan if the total allowable service in all funds retirement plans or in any two of these funds retirement plans totals three or more years the number of years of allowable service required to receive a normal retirement annuity for that retirement plan, provided that no portion of the allowable service upon which the retirement annuity from one fund retirement plan is based is again used in the computation for benefits from another fund retirement plan and provided further that the person has not taken a refund from any one of these funds retirement plans since the person's membership in that association or system last terminated.  The annuity from each fund shall must be determined by the appropriate provisions of the law except that the requirement that a person must have at least three years a specific minimum period of allowable service in the respective association or system shall does not apply for the purposes of this section provided if the combined service in two or more of these funds retirement plans equals three or more the number of years of allowable service required to receive a normal retirement annuity for that retirement plan. 

 

EFFECTIVE DATE.  This section is effective the day following final enactment.


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Sec. 41.  Minnesota Statutes 2008, section 353.71, subdivision 2, is amended to read:

 

Subd. 2.  Deferred annuity computation; augmentation.  (a) The deferred annuity accruing under subdivision 1, or under sections 353.34, subdivision 3, and 353.68, subdivision 4, must be computed on the basis of allowable service prior to the termination of public service and augmented as provided in this paragraph subdivision.  The required reserves applicable to a deferred annuity, or to any deferred segment of an annuity must be determined as of the first day of the month following the month in which the former member ceased to be a public employee, or July 1, 1971, whichever is later.  These

 

(b) For a person who became a public employee before July 1, 2006, whose period of deferral began after June 30, 1971, and who terminated public employment before January 1, 2012, the required reserves of the deferred annuity must be augmented at the following applicable rate of or rates:

 

(1) five percent annually compounded annually annual compound interest until January 1, 1981, and at the rate of;

 

(2) three percent thereafter annual compound interest after January 1, 1981, or until the earlier of December 31, 2011, or after the date of the termination of public service or the termination of membership, whichever is later, until January 1 of the year following the year in which the former member attains age 55 and;

 

(3) five percent annual compound interest from that date to the effective date of retirement, the rate is five percent compounded annually if the employee became an employee before July 1, 2006, and at 2.5 percent compounded annually if the employee becomes an January 1 of the year following the year in which the former member attains age 55, or until December 31, 2011, whichever is earlier; and

 

(4) one percent annual compound interest from January 1, 2012.

 

(c) For a person who became a public employee after June 30, 2006, and who terminated public employment before January 1, 2012, the required reserves of the deferred annuity must be augmented at 2.5 percent annual compound interest from the date of termination of public service or termination of membership, whichever is earlier, until December 31, 2011, and one percent annual compound interest after December 31, 2011.

 

(d) For a person who terminates public employment after December 31, 2011, the required reserves of the deferred annuity must not be augmented.

 

(e) If a person has more than one period of uninterrupted service, the required reserves related to each period must be augmented as specified in this paragraph.  The sum of the augmented required reserves is the present value of the annuity.  Uninterrupted service for the purpose of this subdivision means periods of covered employment during which the employee has not been separated from public service for more than two years.  If a person repays a refund, the restored service must be considered as continuous with the next period of service for which the employee has credit with this association.  This section must not reduce the annuity otherwise payable under this chapter.  This paragraph applies to individuals who become deferred annuitants on or after July 1, 1971.  For a member who became a deferred annuitant before July 1, 1971, the paragraph applies from July 1, 1971, if the former active member applies for an annuity after July 1, 1973. 

 

(b) (f) The retirement annuity or disability benefit of, or the survivor benefit payable on behalf of, a former member who terminated service before July 1, 1997, or the survivor benefit payable on behalf of a basic or police and fire member who was receiving disability benefits before July 1, 1997, which is first payable after June 30, 1997, must be increased on an actuarial equivalent basis to reflect the change in the postretirement interest rate actuarial assumption under section 356.215, subdivision 8, from five percent to six percent under a calculation procedure and tables adopted by the board and approved by the actuary retained under section 356.214. 

 

EFFECTIVE DATE.  This section is effective the day following final enactment.


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Sec. 42.  Minnesota Statutes 2008, section 353E.04, subdivision 1, is amended to read:

 

Subdivision 1.  Eligibility requirements.  After termination of public employment, an employee covered under section 353E.02 who has attained the age of at least 55 years and has credit for not less than three years of coverage who is vested under section 353.01, subdivision 47, in the local government correctional service plan is entitled, upon application, to a normal retirement annuity.  Instead of a normal retirement annuity, a retiring employee may elect to receive the optional annuity provided in section 353.30, subdivision 3. 

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 43.  Minnesota Statutes 2008, section 353E.04, subdivision 4, is amended to read:

 

Subd. 4.  Early retirement.  An employee covered under section 353E.02 who has attained the age of at least 50 years and has credit for not less than three years of coverage who is vested under section 353.01, subdivision 47, in the local government correctional service plan is entitled, upon application, to a reduced retirement annuity equal to the annuity calculated under subdivision 3, reduced so that the reduced annuity is the actuarial equivalent of the annuity that would be payable if the employee deferred receipt of the annuity from the day the annuity begins to accrue until age 55. 

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 44.  Minnesota Statutes 2008, section 353E.07, subdivision 1, is amended to read:

 

Subdivision 1.  Member at least age 50.  If a member or former member of the local government correctional service retirement plan who has attained the age of at least 50 years and has credit for not less than three years of allowable service who is vested under section 353.01, subdivision 47, dies before the annuity or disability benefit has become payable, notwithstanding any designation of beneficiary to the contrary, the surviving spouse may elect to receive, in lieu of a refund with interest provided in section 353.32, subdivision 1, a surviving spouse annuity equal to the 100 percent joint and survivor annuity for which the member could have qualified had the member terminated service on the date of death. 

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 45.  Minnesota Statutes 2008, section 353E.07, subdivision 2, is amended to read:

 

Subd. 2.  Member not yet age 50.  If the member was under age 50, dies, and had credit for not less than three years of allowable service was vested under section 353.01, subdivision 47, on the date of death but did not yet qualify for retirement, the surviving spouse may elect to receive a 100 percent joint and survivor annuity based on the age of the employee and the surviving spouse at the time of death.  The annuity is payable using the early retirement reduction under section 353E.04, subdivision 4, to age 50 and one-half the early retirement reduction from age 50 to the age payment begins.  Sections 353.34, subdivision 3, and 353.71, subdivision 2, apply to a deferred annuity or surviving spouse benefit payable under this subdivision. 

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 46.  Minnesota Statutes 2008, section 353F.03, is amended to read:

 

353F.03 VESTING RULE FOR CERTAIN EMPLOYEES. 

 

Notwithstanding any provision of chapter 353 to the contrary, a terminated medical facility or other public employing unit employee is eligible to receive a retirement annuity under section 353.29 of the edition of Minnesota Statutes published in the year before the year in which the privatization occurred, without regard to the requirement for three years of allowable service specified in section 353.01, subdivision 47. 

 

EFFECTIVE DATE.  This section is effective the day following final enactment.


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Sec. 47.  Minnesota Statutes 2009 Supplement, section 354.42, subdivision 2, is amended to read:

 

Subd. 2.  Employee contribution.  (a) For a basic member, the employee contribution to the fund is 9.0 percent the following percentage of the member's salary.:

 

          before July 1, 2011                                                                                                                             9.0 percent

          from July 1, 2011, until June 30, 2012                                                                                            9.5 percent

          from July 1, 2012, until June 30, 2013                                                                                            10.0 percent

          from July 1, 2013, until June 30, 2014                                                                                            10.5 percent

          after June 30, 2014                                                                                                                             11.0 percent

 

(b) For a coordinated member, the employee contribution is 5.5 percent the following percentage of the member's salary.:

 

          before July 1, 2011                                                                                                                             5.5 percent

          from July 1, 2011, until June 30, 2012                                                                                            6.0 percent

          from July 1, 2012, until June 30, 2013                                                                                            6.5 percent

          from July 1, 2013, until June 30, 2014                                                                                            7.0 percent

          after June 30, 2014                                                                                                                             7.5 percent

 

(c) When an employee contribution rate changes for a fiscal year, the new contribution rate is effective for the entire salary paid for each employer unit with the first payroll cycle reported.

 

(d) After June 30, 2015, if a contribution rate revision is required under subdivisions 4a, 4b, and 4c, the employee contributions under paragraphs (a) and (b) must be adjusted accordingly.

 

(b) (e) This contribution must be made by deduction from salary.  Where any portion of a member's salary is paid from other than public funds, the member's employee contribution must be based on the entire salary received.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 48.  Minnesota Statutes 2008, section 354.42, subdivision 3, is amended to read:

 

Subd. 3.  Employer.  (a) The regular employer contribution to the fund by Special School District No. 1, Minneapolis, after July 1, 2006, and before July 1, 2007, is an amount equal to 5.0 percent of the salary of each of its teachers who is a coordinated member and 9.0 percent of the salary of each of its teachers who is a basic member.  After July 1, 2007, the regular employer contribution to the fund by Special School District No. 1, Minneapolis, is an amount equal to 5.5 percent the applicable following percentage of salary of each coordinated member and 9.5 percent the applicable following percentage of salary of each basic member.:

 

Period                                                                                              Coordinated Member                         Basic Member

 

before July 1, 2011                                                                       5.5 percent                                            9.5 percent

from July 1, 2011, until June 30, 2012                                     6.0 percent                                            10.0 percent

from July 1, 2012, until June 30, 2013                                     6.5 percent                                            10.5 percent

from July 1, 2013, until June 30, 2014                                     7.0 percent                                            11.0 percent

after June 30, 2014                                                                       7.5 percent                                            11.5 percent

 

The additional employer contribution to the fund by Special School District No. 1, Minneapolis, after July 1, 2006, is an amount equal to 3.64 percent of the salary of each teacher who is a coordinated member or is a basic member.


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(b) The employer contribution to the fund for every other employer is an amount equal to 5.0 percent the applicable following percentage of the salary of each coordinated member and 9.0 percent the applicable following percentage of the salary of each basic member before July 1, 2007, and 5.5 percent of the salary of each coordinated member and 9.5 percent of the salary of each basic member after June 30, 2007.:

 

Period                                                                                              Coordinated Member                         Basic Member

 

before July 1, 2011                                                                       5.5 percent                                            9.5 percent

from July 1, 2011, until June 30, 2012                                     6.0 percent                                            10.0 percent

from July 1, 2012, until June 30, 2013                                     6.5 percent                                            10.5 percent

from July 1, 2013, until June 30, 2014                                     7.0 percent                                            11.0 percent

after June 30, 2014                                                                       7.5 percent                                            11.5 percent

 

(c) When an employer contribution rate changes for a fiscal year, the new contribution rate is effective for the entire salary paid for each employer unit with the first payroll cycle reported.

 

(d) After June 30, 2015, if a contribution rate revision is made under subdivisions 4a, 4b, and 4c, the employer contributions under paragraphs (a) and (b) must be adjusted accordingly.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 49.  Minnesota Statutes 2008, section 354.42, is amended by adding a subdivision to read:

 

Subd. 4a.  Determination.  (a) For purposes of this section, a contribution sufficiency exists if the total of the employee contributions, the employer contributions, and any additional employer contributions, if applicable, exceeds the total of the normal cost, the administrative expenses, and the amortization contribution of the retirement plan as reported in the most recent actuarial valuation of the retirement plan prepared by the approved actuary retained under section 356.214 and prepared under section 356.215 and the standards for actuarial work of the Legislative Commission on Pensions and Retirement.

 

(b) For purposes of this section, a contribution deficiency exists if the total of the employee contributions, the employer contributions, and any additional employer contributions are less than the total of the normal cost, the administrative expenses, and the amortization contribution of the retirement plan as reported in the most recent actuarial valuation of the retirement plan prepared by the approved actuary retained under section 356.214 and prepared under section 356.215 and the standards for actuarial work of the Legislative Commission on Pensions and Retirement.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 50.  Minnesota Statutes 2008, section 354.42, is amended by adding a subdivision to read:

 

Subd. 4b.  Contribution rate revision.  Notwithstanding the contribution rate provisions under subdivisions 2 and 3, the employee and employer contribution rates may be adjusted as follows:

 

(1) if, after June 30, 2015, the regular actuarial valuation of the plan under section 356.215 indicates that there is a contribution sufficiency under subdivision 4a equal to or greater than one percent of covered payroll and the sufficiency has existed for at least two consecutive years, the employee and employer contribution rates for the plan may each be decreased to a level such that the sufficiency equals no more than one percent of covered payroll based on the most recent actuarial valuation; or


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(2) if, after June 30, 2015, the regular valuation of the plan under section 356.215 indicates that there is a deficiency equal to or greater than 0.25 percent of covered payroll and the deficiency has existed for at least two consecutive years, the employee and employer contribution rates for the applicable plan may each be increased by:

 

(i) 0.25 percent if the deficiency is less than 2.00 percent of covered payroll;

 

(ii) 0.5 percent if the deficiency is equal to or greater than 2.00 percent of covered payroll and less than or equal to four percent; and

 

(iii) 0.75 percent if the deficiency is greater than four percent.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 51.  Minnesota Statutes 2008, section 354.42, is amended by adding a subdivision to read:

 

Subd. 4c.  Contribution sufficiency measures.  (a) A contribution sufficiency of up to one percent of covered payroll must be held in reserve to be used to offset any future actuarially required contributions that are more than the total combined employee and employer contributions being collected.

 

(b) Before any reduction in contributions to eliminate a sufficiency in excess of one percent of covered pay may be recommended, the executive director must review any need for a change in actuarial assumptions, as recommended by the actuary retained under section 356.214 in the most recent experience study of the retirement plan, that may result in an increase in the actuarially required contribution and must report to the Legislative Commission on Pensions and Retirement any recommendation by the board to use the sufficiency exceeding one percent of covered payroll to offset the impact of an actuarial assumption change recommended by the actuary retained under section 356.214, subdivision 1, and reviewed by the actuary retained by the commission under section 356.214, subdivision 4.

 

(c) A contribution sufficiency in excess of one percent of covered pay must not be used to increase benefits, and a benefit increase must not be proposed that would initiate an automatic adjustment under this section to increase contributions.  A proposed benefit improvement must include a recommendation, prepared by the actuary retained under section 356.214, subdivision 1, and reviewed by the actuary retained by the Legislative Commission on Pensions and Retirement, as provided under section 356.214, subdivision 4, on the manner in which the benefit modification is to be funded.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 52.  Minnesota Statutes 2008, section 354.42, is amended by adding a subdivision to read:

 

Subd. 4d.  Reporting; commission review.  A contribution rate increase or decrease under subdivision 4b, as determined by the executive director of the Teachers Retirement Association, must be reported to the chair and the executive director of the Legislative Commission on Pensions and Retirement on or before the next February 1 and, if the Legislative Commission on Pensions and Retirement does not recommend against the rate change or does not recommend a modification in the rate change, is effective on the next July 1 following the determination by the executive director that a contribution deficiency or sufficiency exists based on the most recent actuarial valuation under section 356.215.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.


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Sec. 53.  Minnesota Statutes 2009 Supplement, section 354.47, subdivision 1, is amended to read:

 

Subdivision 1.  Death before retirement.  (a) If a member dies before retirement and is covered under section 354.44, subdivision 2, and neither an optional annuity, nor a reversionary annuity, nor a benefit under section 354.46, subdivision 1, is payable to the survivors if the member was a basic member, then the surviving spouse, or if there is no surviving spouse, the designated beneficiary is entitled to an amount equal to the member's accumulated deductions with interest credited to the account of the member to the date of death of the member.  If the designated beneficiary is a minor, interest must be credited to the date the beneficiary reaches legal age, or the date of receipt, whichever is earlier. 

 

(b) If a member dies before retirement and is covered under section 354.44, subdivision 6, and neither an optional annuity, nor reversionary annuity, nor the benefit described in section 354.46, subdivision 1, is payable to the survivors if the member was a basic member, then the surviving spouse, or if there is no surviving spouse, then the designated beneficiary is entitled to an amount equal to the member's accumulated deductions credited to the account of the member as of June 30, 1957, and from July 1, 1957, to the date of death of the member, the member's accumulated deductions plus six percent interest compounded annually.  a refund equal to the accumulated deductions credited to the member's account plus interest compounded annually until the member's date of death using the following interest rates:

 

(1) before July 1, 1957, no interest accrues;

 

(2) July 1, 1957, to June 30, 2011, six percent; and

 

(3) after June 30, 2011, four percent.

 

(c) If the designated beneficiary under paragraph (b) is a minor, any interest credited under that paragraph must be credited to the date the beneficiary reaches legal age, or the date of receipt, whichever is earlier.

 

(d) The amount of any refund payable under this subdivision must be reduced by any permanent disability payment under section 354.48 received by the member.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 54.  Minnesota Statutes 2009 Supplement, section 354.49, subdivision 2, is amended to read:

 

Subd. 2.  Calculation.  (a) Except as provided in section 354.44, subdivision 1, any person who ceases to be a member by reason of termination of teaching service, is entitled to receive a refund in an amount equal to the accumulated deductions credited to the account as of June 30, 1957, and after July 1, 1957, the accumulated deductions with interest at the rate of six percent per annum compounded annually.  plus interest compounded annually using the following interest rates:

 

(1) before July 1, 1957, no interest accrues;

 

(2) July 1, 1957, to June 30, 2011, six percent; and

 

(3) after June 30, 2011, four percent.

 

For the purpose of this subdivision, interest must be computed on fiscal year end balances to the first day of the month in which the refund is issued. 


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(b) If the person has received permanent disability payments under section 354.48, the refund amount must be reduced by the amount of those payments.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 55.  Minnesota Statutes 2009 Supplement, section 354.55, subdivision 11, is amended to read:

 

Subd. 11.  Deferred annuity; augmentation.  (a) Any person covered under section 354.44, subdivision 6, who ceases to render teaching service, may leave the person's accumulated deductions in the fund for the purpose of receiving a deferred annuity at retirement. 

 

(b) The amount of the deferred retirement annuity is determined by section 354.44, subdivision 6, and augmented as provided in this subdivision.  The required reserves for the annuity which had accrued when the member ceased to render teaching service must be augmented, as further specified in this subdivision, by the applicable interest rate compounded annually from the first day of the month following the month during which the member ceased to render teaching service to the effective date of retirement.

 

(c) No augmentation is not creditable if the deferral period is less than three months or if deferral commenced before July 1, 1971. 

 

(d) For persons who became covered employees before July 1, 2006, with a deferral period commencing after June 30, 1971, the annuity must be augmented using as follows:

 

(1) five percent interest compounded annually until January 1, 1981, and;

 

(2) three percent interest compounded annually thereafter from January 1, 1981, until January 1 of the year following the year in which the deferred annuitant attains age 55.;

 

From that date (3) five percent interest compounded annually from the date established in clause (2) to the effective date of retirement, the rate is five percent compounded annually.  or until June 30, 2012, whichever is earlier; and

 

(4) two percent interest compounded annually after June 30, 2012.

 

(e) For persons who become covered employees after June 30, 2006, the interest rate used to augment the deferred annuity is 2.5 percent interest compounded annually until June 30, 2012, or until the effective date of retirement, whichever is earlier, and two percent interest compounded annually after June 30, 2012.

 

(f) If a person has more than one period of uninterrupted service, a separate average salary determined under section 354.44, subdivision 6, must be used for each period and the required reserves related to each period must be augmented as specified in this subdivision.  The sum of the augmented required reserves is the present value of the annuity.  For the purposes of this subdivision, "period of uninterrupted service" means a period of covered teaching service during which the member has not been separated from active service for more than one fiscal year.

 

(g) If a person repays a refund, the service restored by the repayment must be considered as continuous with the next period of service for which the person has allowable service credit in the Teachers Retirement Association.

 

(h) If a person does not render teaching service in any one fiscal year or more consecutive fiscal years and then resumes teaching service, the formula percentages used from the date of the resumption of teaching service must be those applicable to new members.


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(i) The mortality table and interest rate actuarial assumption used to compute the annuity must be the applicable mortality table established by the board under section 354.07, subdivision 1, and the interest rate actuarial assumption under section 356.215 in effect when the member retires. 

 

(j) In no case may the annuity payable under this subdivision be less than the amount of annuity payable under section 354.44, subdivision 6. 

 

(k) The requirements and provisions for retirement before normal retirement age contained in section 354.44, subdivision 6, also apply to an employee fulfilling the requirements with a combination of service as provided in section 354.60. 

 

(l) The augmentation provided by this subdivision applies to the benefit provided in section 354.46, subdivision 2. 

 

(m) The augmentation provided by this subdivision does not apply to any period in which a person is on an approved leave of absence from an employer unit covered by the provisions of this chapter.

 

(n) The retirement annuity or disability benefit of, or the survivor benefit payable on behalf of, a former teacher who terminated service before July 1, 1997, which is not first payable until after June 30, 1997, must be increased on an actuarial equivalent basis to reflect the change in the postretirement interest rate actuarial assumption under section 356.215, subdivision 8, from five percent to six percent under a calculation procedure and tables adopted by the board as recommended by an approved actuary and approved by the actuary retained under section 356.214.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 56.  Minnesota Statutes 2008, section 354A.12, subdivision 1, is amended to read:

 

Subdivision 1.  Employee contributions.  (a) The contribution required to be paid by each member of a teachers retirement fund association shall not be less than is the percentage of total salary specified below for the applicable association and program: 

 

                   Association and Program                                                                                         Percentage of Total Salary

Duluth Teachers Retirement Fund Association

 

          old law and new law                                                                                                                          

          coordinated programs                                                                                                                        5.5 percent

 

          before July 1, 2011                                                                                                                             5.5 percent

          effective July 1, 2011                                                                                                                         6.0 percent

          effective July 1, 2012                                                                                                                         6.5 percent

 

St. Paul Teachers Retirement Fund Association

 

          basic program before July 1, 2010                                                                                                   8 percent

          basic program after June 30, 2010                                                                                                  8.5 percent

          basic program after June 30, 2011                                                                                                  9.0 percent

          coordinated program before July 1, 2010                                                                                      5.5 percent

          coordinated program after June 30, 2010                                                                                      6.0 percent

          coordinated program after June 30, 2011                                                                                      6.5 percent


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(b) Contributions shall be made by deduction from salary and must be remitted directly to the respective teachers retirement fund association at least once each month. 

 

(c) When an employee contribution rate changes for a fiscal year, the new contribution rate is effective for the entire salary paid by the employer with the first payroll cycle reported.

 

EFFECTIVE DATE.  This section is effective July 1, 2010.

 

Sec. 57.  Minnesota Statutes 2009 Supplement, section 354A.12, subdivision 2a, is amended to read:

 

Subd. 2a.  Employer regular and additional contributions.  (a) The employing units shall make the following employer contributions to teachers retirement fund associations: 

 

(1) for any coordinated member of one of the following teachers retirement fund associations in a city of the first class, the employing unit shall make a regular employer contribution to the respective retirement fund association in an amount equal to the designated percentage of the salary of the coordinated member as provided below: 

 

          Duluth Teachers Retirement Fund Association                                                                             4.50 percent

 

          before July 1, 2011                                                                                                                             5.79 percent

          effective July 1, 2011                                                                                                                         6.29 percent

          effective July 1, 2012                                                                                                                         6.79 percent

 

          St. Paul Teachers Retirement Fund Association

 

          before July 1, 2010                                                                                                                             4.50 percent

          after June 30, 2010                                                                                                                             5.0 percent

          after June 30, 2011                                                                                                                             5.5 percent

          after June 30, 2013                                                                                                                             6.5 percent

 

(2) for any basic member of the St. Paul Teachers Retirement Fund Association, the employing unit shall make a regular employer contribution to the respective retirement fund in an amount equal to 8.00 percent of the salary of the basic member; according to the schedule below: 

 

          before July 1, 2010                                                                            8.0 percent of the salary of the basic member

          before July 1, 2011                                                                            8.5 percent of the salary of the basic member

          before July 1, 2012                                                                            9.0 percent of the salary of the basic member

          before July 1, 2013                                                                            9.5 percent of the salary of the basic member

          before July 1, 2014                                                                         10.0 percent of the salary of the basic member

 

(3) for a basic member of the St. Paul Teachers Retirement Fund Association, the employing unit shall make an additional employer contribution to the respective fund in an amount equal to 3.64 percent of the salary of the basic member;

 

(4) for a coordinated member of a teachers retirement fund association in a city of the first class the St. Paul Teachers Retirement Fund Association, the employing unit shall make an additional employer contribution to the respective fund in an amount equal to the applicable percentage of the coordinated member's salary, as provided below:

 

          Duluth Teachers Retirement Fund Association                                                                             1.29 percent

          St. Paul Teachers Retirement Fund Association                                                                            3.84 percent


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(b) The regular and additional employer contributions must be remitted directly to the respective teachers retirement fund association at least once each month.  Delinquent amounts are payable with interest under the procedure in subdivision 1a.

 

(c) Payments of regular and additional employer contributions for school district or technical college employees who are paid from normal operating funds must be made from the appropriate fund of the district or technical college. 

 

(d) When an employer contribution rate changes for a fiscal year, the new contribution rate is effective for the entire salary paid by the employer with the first payroll cycle reported.

 

EFFECTIVE DATE.  This section is effective July 1, 2010.

 

Sec. 58.  Minnesota Statutes 2008, section 354A.12, subdivision 3c, is amended to read:

 

Subd. 3c.  Termination of supplemental contributions and direct matching and state aid.  (a) The supplemental contributions payable to the Minneapolis Teachers Retirement Fund Association by Special School District No. 1 and the city of Minneapolis under section 423A.02, subdivision 3, must be paid to the Teachers Retirement Association and must continue until the current assets of the fund equal or exceed the actuarial accrued liability of the fund as determined in the most recent actuarial report for the fund by the actuary retained under section 356.214, or 2037, whichever occurs earlier.  The supplemental contributions payable to the St. Paul Teachers Retirement Fund Association by Independent School District No. 625 under section 423A.02, subdivision 3, or the direct state aid under subdivision 3a to the St. Paul Teachers Retirement Fund Association terminate at the end of the fiscal year in which the accrued liability funding ratio for that fund, as determined in the most recent actuarial report for that fund by the actuary retained under section 356.214, equals or exceeds the accrued liability funding ratio for the Teachers Retirement Association, as determined in the most recent actuarial report for the Teachers Retirement Association by the actuary retained under section 356.214.  must continue until the current assets of the fund equal or exceed the actuarial accrued liability of the fund as determined in the most recent actuarial report for the fund by the actuary retained under section 356.214 or until 2037, whichever occurs earlier. 

 

(b) If the St. Paul Teachers Retirement Fund Association is funded at an amount equal to or greater than the funding ratio applicable to the Teachers Retirement Association, then any future state aid under subdivision 3a is payable to the Teachers Retirement Association.

 

EFFECTIVE DATE.  This section is effective July 1, 2010.

 

Sec. 59.  Minnesota Statutes 2008, section 354A.27, subdivision 5, is amended to read:

 

Subd. 5.  Calculation Eligibility for and payment of postretirement adjustments.  (a) Annually, after June 30, the board of trustees of the Duluth Teachers Retirement Fund Association determines the amount of any postretirement adjustment using the procedures in this subdivision and subdivision 6 or 7, whichever is applicable.

 

(b) Each person who has been receiving an annuity or benefit under the articles of incorporation, bylaws, or under this section for at least 12 months as of the date of the postretirement adjustment shall be eligible for a postretirement adjustment.  The postretirement adjustment shall be payable each January 1.  The postretirement adjustment shall be equal to two percent of a permanent percentage increase as specified under subdivision 6 or 7, whichever is applicable, applied to the annuity or benefit to which the person is entitled one month prior to the payment of the postretirement adjustment.

 

EFFECTIVE DATE.  This section is effective July 1, 2010.


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Sec. 60.  Minnesota Statutes 2008, section 354A.27, subdivision 6, is amended to read:

 

Subd. 6.  Additional increase Calculation of postretirement adjustments; transitional provision.  (a) In addition to the postretirement increases granted under subdivision 5, an additional percentage increase must be computed and paid under this subdivision.

 

(b) The board of trustees shall determine the number of annuitants or benefit recipients who have been receiving an annuity or benefit for at least 12 months as of the current June 30.  These recipients are entitled to receive the surplus investment earnings additional postretirement increase.

 

(c) Annually, as of each June 30, the board shall determine the five-year annualized rate of return attributable to the assets of the Duluth Teachers Retirement Fund Association under the formula or formulas specified in section 11A.04, clause (11). 

 

(d) The board shall determine the amount of excess five-year annualized rate of return over the preretirement interest assumption as specified in section 356.215. 

 

(e) The additional percentage increase must be determined by multiplying the quantity one minus the rate of contribution deficiency, as specified in the most recent actuarial report of the actuary retained under section 356.214, times the rate of return excess as determined in paragraph (d).

 

(f) The additional increase is payable to all eligible annuitants or benefit recipients on the following January 1.

 

(a) For purposes of computing postretirement adjustments after the effective date of this section for eligible benefit recipients of the Duluth Teachers Retirement Fund Association, the funding ratio of the plan, as determined by dividing the market value of assets by the actuarial accrued liability as reported in the most recent actuarial valuation prepared under sections 356.214 and 356.215, determines the postretirement increase as follows:

 

          Funding Ratio                                                                                                                      Postretirement Increase

 

          less than 80 percent                                                                                                            0 percent

          at least 80 percent but less than 90 percent                                                                   1 percent

          at least 90 percent                                                                                                               2 percent

 

(b) If the funding ratio of the plan based on actuarial value, rather than market value, is at least 90 percent as reported in the most recent actuarial valuation prepared under sections 356.214 and 356.215, this subdivision expires and subsequent postretirement increases must be paid as specified under subdivision 7.

 

EFFECTIVE DATE.  This section is effective July 1, 2010.

 

Sec. 61.  Minnesota Statutes 2008, section 354A.27, is amended by adding a subdivision to read:

 

Subd. 7.  Calculation of postretirement adjustments.  (a) This subdivision applies if subdivision 6 has expired.

 

(b) A percentage adjustment must be computed and paid under this subdivision to eligible persons under subdivision 5.  This adjustment is determined by reference to the Consumer Price Index for urban wage earners and clerical workers all items index as reported by the Bureau of Labor Statistics within the United States Department of Labor each year as part of the determination of annual cost-of-living adjustments to recipients of federal old-age, survivors, and disability insurance.  For calculations of cost-of-living adjustments under paragraph (c), the term "average third quarter Consumer Price Index value" means the sum of the monthly index values as initially reported by the Bureau of Labor Statistics for the months of July, August, and September, divided by 3.


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(c) Before January 1 of each year, the executive director must calculate the amount of the cost-of-living adjustment by dividing the most recent average third quarter index value by the same average third quarter index value from the previous year, subtract one from the resulting quotient, and express the result as a percentage amount, which must be rounded to the nearest one-tenth of one percent.

 

(d) The amount calculated under paragraph (c) is the full cost-of-living adjustment to be applied as a permanent increase to the regular payment of each eligible member on January 1 of the next calendar year.  For any eligible member whose effective date of benefit commencement occurred during the calendar year before the cost-of-living adjustment is applied, the full increase amount must be prorated on the basis of whole calendar quarters in benefit payment status in the calendar year prior to the January 1 on which the cost-of-living adjustment is applied, calculated to the third decimal place.

 

(e) The adjustment must not be less than zero nor greater than five percent.

 

(f) If the funding ratio of the plan as determined in the most recent actuarial valuation using the actuarial value of assets is less than 80 percent there will be no postretirement adjustment the following January 1.

 

EFFECTIVE DATE.  This section is effective July 1, 2010.

 

Sec. 62.  Minnesota Statutes 2008, section 354A.31, subdivision 1, is amended to read:

 

Subdivision 1.  Age and service requirements.  Any coordinated member or former coordinated member of the St. Paul Teachers Retirement Fund Association who has ceased to render teaching service for the school district in which the teachers retirement fund association exists and who has either attained the age of at least 55 years with not less than three years of allowable service credit or received credit for not less than 30 years of allowable service regardless of age, shall be entitled upon written application to a retirement annuity.  Any coordinated member or former coordinated member of the Duluth Teachers Retirement Fund Association who has ceased to render teaching service for the school district in which the teacher retirement fund association exists and who has either attained the age of at least 55 years with not less than three years of allowable service credit if the member became an employee before July 1, 2010, or not less than five years of allowable service credit if the member became an employee after June 30, 2010, or received service credit for not less than 30 years of allowable service regardless of age, shall be entitled upon written application to a retirement annuity.

 

EFFECTIVE DATE.  This section is effective July 1, 2010.

 

Sec. 63.  Minnesota Statutes 2008, section 354A.35, subdivision 1, is amended to read:

 

Subdivision 1.  Death before retirement; refund.  If a coordinated member or former coordinated member dies prior to retirement or prior to the receipt of any retirement annuity or other benefit payment which is or may be payable and a surviving spouse optional annuity is not payable pursuant to subdivision 2, a refund shall be paid to the person's surviving spouse, or if there is none, to the person's designated beneficiary, or if there is none, to the legal representative of the person's estate.  For a coordinated member or former coordinated member of the St. Paul Teachers Retirement Fund Association, the refund shall be in an amount equal to the person's accumulated employee contributions plus interest at the rate of six percent per annum compounded annually.  For a coordinated member or former coordinated member of the Duluth Teachers Retirement Fund Association, the refund shall be in an amount equal to the person's accumulated employee contributions plus interest at the rate of six percent per annum compounded annually to July 1, 2010, and four percent per annum compounded annually thereafter.

 

EFFECTIVE DATE.  This section is effective July 1, 2010.


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Sec. 64.  Minnesota Statutes 2008, section 354A.37, subdivision 2, is amended to read:

 

Subd. 2.  Eligibility for deferred retirement annuity.  (a) Any coordinated member who ceases to render teaching services for the school district in which the teachers retirement fund association is located, with sufficient allowable service credit to meet the minimum service requirements specified in section 354A.31, subdivision 1, shall be entitled to a deferred retirement annuity in lieu of a refund pursuant to subdivision 1.  The deferred retirement annuity shall be computed pursuant to section 354A.31 and shall be augmented as provided in this subdivision.  The deferred annuity shall commence upon application after the person on deferred status attains at least the minimum age specified in section 354A.31, subdivision 1. 

 

(b) The monthly annuity amount that had accrued when the member ceased to render teaching service must be augmented from the first day of the month following the month during which the member ceased to render teaching service to the effective date of retirement.  There is no augmentation if this period is less than three months.  For a member of the St. Paul Teachers Retirement Fund Association, the rate of augmentation is three percent compounded annually until January 1 of the year following the year in which the former member attains age 55, and five percent compounded annually after that date to the effective date of retirement if the employee became an employee before July 1, 2006, and at 2.5 percent compounded annually if the employee becomes an employee after June 30, 2006.  For a member of the Duluth Teachers Retirement Fund Association, the rate of augmentation is three percent compounded annually until January 1 of the year following the year in which the former member attains age 55, five percent compounded annually after that date to July 1, 2012, and two percent compounded annually after that date to the effective date of retirement if the employee became an employee before July 1, 2006, and at 2.5 percent compounded annually to July 1, 2012, and two percent compounded annually after that date to the effective date of retirement if the employee becomes an employee after June 30, 2006.  If a person has more than one period of uninterrupted service, a separate average salary determined under section 354A.31 must be used for each period, and the monthly annuity amount related to each period must be augmented as provided in this subdivision.  The sum of the augmented monthly annuity amounts determines the total deferred annuity payable.  If a person repays a refund, the service restored by the repayment must be considered as continuous with the next period of service for which the person has credit with the fund.  If a person does not render teaching services in any one fiscal year or more consecutive fiscal years and then resumes teaching service, the formula percentages used from the date of resumption of teaching service are those applicable to new members.  The mortality table and interest assumption used to compute the annuity are the table established by the fund to compute other annuities, and the interest assumption under section 356.215 in effect when the member retires.  A period of uninterrupted service for the purpose of this subdivision means a period of covered teaching service during which the member has not been separated from active service for more than one fiscal year. 

 

(c) The augmentation provided by this subdivision applies to the benefit provided in section 354A.35, subdivision 2.  The augmentation provided by this subdivision does not apply to any period in which a person is on an approved leave of absence from an employer unit. 

 

EFFECTIVE DATE.  This section is effective July 1, 2010.

 

Sec. 65.  Minnesota Statutes 2008, section 354A.37, subdivision 3, is amended to read:

 

Subd. 3.  Computation of refund amount.  A former coordinated member of the St. Paul Teachers Retirement Fund Association who qualifies for a refund pursuant to under subdivision 1 shall receive a refund equal to the amount of the former coordinated member's accumulated employee contributions with interest at the rate of six percent per annum compounded annually.  A former coordinated member of the Duluth Teachers Retirement Fund Association who qualifies for a refund under subdivision 1 shall receive a refund equal to the amount of the former coordinated member's accumulated employee contributions with interest at the rate of six percent per annum compounded annually to July 1, 2010, and four percent per annum compounded annually thereafter.

 

EFFECTIVE DATE.  This section is effective July 1, 2010.


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Sec. 66.  Minnesota Statutes 2008, section 354A.37, subdivision 4, is amended to read:

 

Subd. 4.  Certain refunds at normal retirement age.  Any coordinated member who has attained the normal retirement age with less than ten years of allowable service credit and has terminated active teaching service shall be entitled to a refund in lieu of a proportionate annuity pursuant to section 356.32.  The refund for a member of the St. Paul Teachers Retirement Fund Association shall be equal to the coordinated member's accumulated employee contributions plus interest at the rate of six percent compounded annually.  The refund for a member of the Duluth Teachers Retirement Fund Association shall be equal to the coordinated member's accumulated employee contributions plus interest at the rate of six percent compounded annually to July 1, 2010, and four percent per annum compounded annually thereafter.

 

EFFECTIVE DATE.  This section is effective July 1, 2010.

 

Sec. 67.  Minnesota Statutes 2008, section 356.215, subdivision 8, is amended to read:

 

Subd. 8.  Interest and salary assumptions.  (a) The actuarial valuation must use the applicable following preretirement interest assumption and the applicable following postretirement interest assumption:

 

                                                                                                                  preretirement                       postretirement

                                                                                                                   interest rate                           interest rate

                                    plan                                                                        assumption                           assumption

 

general state employees retirement plan                                                  8.5%                                       6.0%

correctional state employees retirement plan                                          8.5                                          6.0

State Patrol retirement plan                                                                        8.5                                          6.0

legislators retirement plan                                                                            8.5                                          6.0

elective state officers retirement plan                                                       8.5                                          6.0

judges retirement plan                                                                                  8.5                                          6.0

general public employees retirement plan                                                8.5                                          6.0

public employees police and fire retirement plan                                   8.5                                          6.0

local government correctional service retirement plan                          8.5                                          6.0

teachers retirement plan                                                                              8.5                                          6.0

Minneapolis employees retirement plan                                                   6.0                                          5.0

Duluth teachers retirement plan                                                                 8.5                                          8.5

St. Paul teachers retirement plan                                                                8.5                                          8.5

Minneapolis Police Relief Association                                                      6.0                                          6.0

Fairmont Police Relief Association                                                            5.0                                          5.0

Minneapolis Fire Department Relief Association                                   6.0                                          6.0

Virginia Fire Department Relief Association                                            5.0                                          5.0

Bloomington Fire Department Relief Association                                  6.0                                          6.0

local monthly benefit volunteer firefighters relief associations            5.0                                          5.0

 

(b) Before July 1, 2010, the actuarial valuation must use the applicable following single rate future salary increase assumption, the applicable following modified single rate future salary increase assumption, or the applicable following graded rate future salary increase assumption:

 

          (1) single rate future salary increase assumption

 

                                                                                                                                                                  future salary

                          plan                                                                                                                          increase assumption

 

legislators retirement plan                                                                                                                            5.0%

judges retirement plan                                                                                                                                  4.0


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Minneapolis Police Relief Association            4.0

Fairmont Police Relief Association                                                                                                            3.5

Minneapolis Fire Department Relief Association                                                                                   4.0

Virginia Fire Department Relief Association                                                                                            3.5

Bloomington Fire Department Relief Association                                                                                  4.0

 

          (2) modified single rate future salary increase assumption

 

                                                                                                                                              future salary

                          plan                                                                                                      increase assumption

 

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

 

          (3) age-related select and ultimate future salary increase assumption or graded rate future salary increase assumption

 

                                                                                                                                              future salary

plan                                                                                                                               increase assumption

 

general state employees retirement plan                                                  select calculation and assumption A

correctional state employees retirement plan                                                           assumption H G

State Patrol retirement plan                                                                                          assumption G F

general public employees retirement plan                                                select calculation and assumption B

public employees police and fire fund retirement plan                                           assumption C B

local government correctional service retirement plan                                            assumption G F

teachers retirement plan                                                                                                assumption D C

Duluth teachers retirement plan                                                                                   assumption E D

St. Paul teachers retirement plan                                                                                  assumption F E

 

The select calculation is:  during the designated select period, a designated percentage rate is multiplied by the result of the designated integer minus T, where T is the number of completed years of service, and is added to the applicable future salary increase assumption.  The designated select period is five years and the designated integer is five for the general state employees retirement plan and the general public employees retirement plan.  The designated select period is ten years and the designated integer is ten for all other retirement plans covered by this clause.  The designated percentage rate is:  (1) 0.2 percent for the correctional state employees retirement plan, the State Patrol retirement plan, the public employees police and fire plan, and the local government correctional service plan; (2) 0.6 percent for the general state employees retirement plan and the general public employees retirement plan; and (3) 0.3 percent for the teachers retirement plan, the Duluth Teachers Retirement Fund Association, and the St. Paul Teachers Retirement Fund Association.  The select calculation for the Duluth Teachers Retirement Fund Association is 8.00 percent per year for service years one through seven, 7.25 percent per year for service years seven and eight, and 6.50 percent per year for service years eight and nine.


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The ultimate future salary increase assumption is:

 

age          A                     B                     C B               D C                 E D                  F E                    G F                       H G

 

16         5.95%            5.95%            11.00%          7.70%            8.00%            6.90%            7.7500%            7.2500%

17         5.90                5.90                11.00              7.65                8.00                6.90                7.7500               7.2500

18         5.85                5.85                11.00              7.60                8.00                6.90                7.7500               7.2500

19         5.80                5.80                11.00              7.55                8.00                6.90                7.7500               7.2500

20         5.75                5.40                11.00              5.50                6.90                6.90                7.7500               7.2500

21         5.75                5.40                11.00              5.50                6.90                6.90                7.1454               6.6454

22         5.75                5.40                10.50              5.50                6.90                6.90                7.0725               6.5725

23         5.75                5.40                10.00              5.50                6.85                6.85                7.0544               6.5544

24         5.75                5.40                9.50                5.50                6.80                6.80                7.0363               6.5363

25         5.75                5.40                9.00                5.50                6.75                6.75                7.0000               6.5000

26         5.75                5.36                8.70                5.50                6.70                6.70                7.0000               6.5000

27         5.75                5.32                8.40                5.50                6.65                6.65                7.0000               6.5000

28         5.75                5.28                8.10                5.50                6.60                6.60                7.0000               6.5000

29         5.75                5.24                7.80                5.50                6.55                6.55                7.0000               6.5000

30         5.75                5.20                7.50                5.50                6.50                6.50                7.0000               6.5000

31         5.75                5.16                7.30                5.50                6.45                6.45                7.0000               6.5000

32         5.75                5.12                7.10                5.50                6.40                6.40                7.0000               6.5000

33         5.75                5.08                6.90                5.50                6.35                6.35                7.0000               6.5000

34         5.75                5.04                6.70                5.50                6.30                6.30                7.0000               6.5000

35         5.75                5.00                6.50                5.50                6.25                6.25                7.0000               6.5000

36         5.75                4.96                6.30                5.50                6.20                6.20                6.9019               6.4019

37         5.75                4.92                6.10                5.50                6.15                6.15                6.8074               6.3074

38         5.75                4.88                5.90                5.40                6.10                6.10                6.7125               6.2125

39         5.75                4.84                5.70                5.30                6.05                6.05                6.6054               6.1054

40         5.75                4.80                5.50                5.20                6.00                6.00                6.5000               6.0000

41         5.75                4.76                5.40                5.10                5.90                5.95                6.3540               5.8540

42         5.75                4.72                5.30                5.00                5.80                5.90                6.2087               5.7087

43         5.65                4.68                5.20                4.90                5.70                5.85                6.0622               5.5622

44         5.55                4.64                5.10                4.80                5.60                5.80                5.9048               5.4078

45         5.45                4.60                5.00                4.70                5.50                5.75                5.7500               5.2500

46         5.35                4.56                4.95                4.60                5.40                5.70                5.6940               5.1940

47         5.25                4.52                4.90                4.50                5.30                5.65                5.6375               5.1375

48         5.15                4.48                4.85                4.50                5.20                5.60                5.5822               5.0822

49         5.05                4.44                4.80                4.50                5.10                5.55                5.5404               5.0404

50         4.95                4.40                4.75                4.50                5.00                5.50                5.5000               5.0000

51         4.85                4.36                4.75                4.50                4.90                5.45                5.4384               4.9384

52         4.75                4.32                4.75                4.50                4.80                5.40                5.3776               4.8776

53         4.65                4.28                4.75                4.50                4.70                5.35                5.3167               4.8167

54         4.55                4.24                4.75                4.50                4.60                5.30                5.2826               4.7826

55         4.45                4.20                4.75                4.50                4.50                5.25                5.2500               4.7500

56         4.35                4.16                4.75                4.50                4.40                5.20                5.2500               4.7500

57         4.25                4.12                4.75                4.50                4.30                5.15                5.2500               4.7500

58         4.25                4.08                4.75                4.60                4.20                5.10                5.2500               4.7500

59         4.25                4.04                4.75                4.70                4.10                5.05                5.2500               4.7500

60         4.25                4.00                4.75                4.80                4.00                5.00                5.2500               4.7500

61         4.25                4.00                4.75                4.90                3.90                5.00                5.2500               4.7500


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62           4.25        4.00        4.75        5.00        3.80        5.00        5.2500   4.7500

63         4.25                4.00                4.75                5.10                3.70                5.00                5.2500               4.7500

64         4.25                4.00                4.75                5.20                3.60                5.00                5.2500               4.7500

65         4.25                4.00                4.75                5.20                3.50                5.00                5.2500               4.7500

66         4.25                4.00                4.75                5.20                3.50                5.00                5.2500               4.7500

67         4.25                4.00                4.75                5.20                3.50                5.00                5.2500               4.7500

68         4.25                4.00                4.75                5.20                3.50                5.00                5.2500               4.7500

69         4.25                4.00                4.75                5.20                3.50                5.00                5.2500               4.7500

70         4.25                4.00                4.75                5.20                3.50                5.00                5.2500               4.7500

71         4.25                4.00                                        5.20                                                                                           

 

          (4) service-related ultimate future salary increase assumption

 

                                              service length                               general employees retirement plan of the

                                                                                                    Public Employees Retirement Association

 

                                                         1                                                                        12.03%

                                                         2                                                                           8.90

                                                         3                                                                           7.46

                                                         4                                                                           6.58

                                                         5                                                                           5.97

                                                         6                                                                           5.52

                                                         7                                                                           5.16

                                                         8                                                                           4.87

                                                         9                                                                           4.63

                                                       10                                                                          4.42

                                                       11                                                                          4.24

                                                       12                                                                          4.08

                                                       13                                                                          3.94

                                                       14                                                                          3.82

                                                       15                                                                          3.70

                                                       16                                                                          3.60

                                                       17                                                                          3.51

                                                       18                                                                          3.50

                                                       19                                                                          3.50

                                                       20                                                                          3.50

                                                       21                                                                          3.50

                                                       22                                                                          3.50

                                                       23                                                                          3.50

                                                       24                                                                          3.50

                                                       25                                                                          3.50

                                                       26                                                                          3.50

                                                       27                                                                          3.50

                                                       28                                                                          3.50

                                                       29                                                                          3.50

                                                30 or more                                                                  3.50

 

(c) Before July 2, 2010, the actuarial valuation must use the applicable following payroll growth assumption for calculating the amortization requirement for the unfunded actuarial accrued liability where the amortization retirement is calculated as a level percentage of an increasing payroll:


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Plan                        payroll growth

                                                                                                                                                                   assumption

 

general state employees retirement plan                                                                                                  4.50%

correctional state employees retirement plan                                                                                          4.50

State Patrol retirement plan                                                                                                                        4.50

legislators retirement plan                                                                                                                            4.50

judges retirement plan                                                                                                                                  4.00

general public employees retirement plan of the

Public Employees Retirement Association                                                                                               4.50 4.00

public employees police and fire retirement plan                                                                                   4.50

local government correctional service retirement plan                                                                          4.50

teachers retirement plan                                                                                                                              4.50

Duluth teachers retirement plan                                                                                                                 4.50

St. Paul teachers retirement plan                                                                                                                5.00

 

(d) After July 1, 2010, the assumptions set forth in paragraphs (b) and (c) continue to apply, unless a different salary assumption or a different payroll increase assumption:

 

(1) has been proposed by the governing board of the applicable retirement plan;

 

(2) is accompanied by the concurring recommendation of the actuary retained under section 356.214, subdivision 1, if applicable, or by the approved actuary preparing the most recent actuarial valuation report if section 356.214 does not apply; and

 

(3) has been approved or deemed approved under subdivision 18.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 68.  Minnesota Statutes 2009 Supplement, section 356.215, subdivision 11, is amended to read:

 

Subd. 11.  Amortization contributions.  (a) In addition to the exhibit indicating the level normal cost, the actuarial valuation of the retirement plan must contain an exhibit for financial reporting purposes indicating the additional annual contribution sufficient to amortize the unfunded actuarial accrued liability and must contain an exhibit for contribution determination purposes indicating the additional contribution sufficient to amortize the unfunded actuarial accrued liability.  For the retirement plans listed in subdivision 8, paragraph (c), the additional contribution must be calculated on a level percentage of covered payroll basis by the established date for full funding in effect when the valuation is prepared, assuming annual payroll growth at the applicable percentage rate set forth in subdivision 8, paragraph (c).  For all other retirement plans, the additional annual contribution must be calculated on a level annual dollar amount basis. 

 

(b) For any retirement plan other than the Minneapolis Employees Retirement Fund, the general employees retirement plan of the Public Employees Retirement Association, the general state employees retirement plan of the Minnesota State Retirement System, and the St. Paul Teachers Retirement Fund Association, if there has not been a change in the actuarial assumptions used for calculating the actuarial accrued liability of the fund, a change in the benefit plan governing annuities and benefits payable from the fund, a change in the actuarial cost method used in calculating the actuarial accrued liability of all or a portion of the fund, or a combination of the three, which change or changes by itself or by themselves without inclusion of any other items of increase or decrease produce a net increase in the unfunded actuarial accrued liability of the fund, the established date for full funding is the first actuarial valuation date occurring after June 1, 2020.


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(c) For any retirement plan other than the Minneapolis Employees Retirement Fund and the general employees retirement plan of the Public Employees Retirement Association, if there has been a change in any or all of the actuarial assumptions used for calculating the actuarial accrued liability of the fund, a change in the benefit plan governing annuities and benefits payable from the fund, a change in the actuarial cost method used in calculating the actuarial accrued liability of all or a portion of the fund, or a combination of the three, and the change or changes, by itself or by themselves and without inclusion of any other items of increase or decrease, produce a net increase in the unfunded actuarial accrued liability in the fund, the established date for full funding must be determined using the following procedure:

 

(i) the unfunded actuarial accrued liability of the fund must be determined in accordance with the plan provisions governing annuities and retirement benefits and the actuarial assumptions in effect before an applicable change;

 

(ii) the level annual dollar contribution or level percentage, whichever is applicable, needed to amortize the unfunded actuarial accrued liability amount determined under item (i) by the established date for full funding in effect before the change must be calculated using the interest assumption specified in subdivision 8 in effect before the change;

 

(iii) the unfunded actuarial accrued liability of the fund must be determined in accordance with any new plan provisions governing annuities and benefits payable from the fund and any new actuarial assumptions and the remaining plan provisions governing annuities and benefits payable from the fund and actuarial assumptions in effect before the change;

 

(iv) the level annual dollar contribution or level percentage, whichever is applicable, needed to amortize the difference between the unfunded actuarial accrued liability amount calculated under item (i) and the unfunded actuarial accrued liability amount calculated under item (iii) over a period of 30 years from the end of the plan year in which the applicable change is effective must be calculated using the applicable interest assumption specified in subdivision 8 in effect after any applicable change;

 

(v) the level annual dollar or level percentage amortization contribution under item (iv) must be added to the level annual dollar amortization contribution or level percentage calculated under item (ii);

 

(vi) the period in which the unfunded actuarial accrued liability amount determined in item (iii) is amortized by the total level annual dollar or level percentage amortization contribution computed under item (v) must be calculated using the interest assumption specified in subdivision 8 in effect after any applicable change, rounded to the nearest integral number of years, but not to exceed 30 years from the end of the plan year in which the determination of the established date for full funding using the procedure set forth in this clause is made and not to be less than the period of years beginning in the plan year in which the determination of the established date for full funding using the procedure set forth in this clause is made and ending by the date for full funding in effect before the change; and

 

(vii) the period determined under item (vi) must be added to the date as of which the actuarial valuation was prepared and the date obtained is the new established date for full funding.

 

(d) For the Minneapolis Employees Retirement Fund, the established date for full funding is June 30, 2020.

 

(e) For the general employees retirement plan of the Public Employees Retirement Association, the established date for full funding is June 30, 2031.

 

(f) For the Teachers Retirement Association, the established date for full funding is June 30, 2037.


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(g) For the correctional state employees retirement plan of the Minnesota State Retirement System, the established date for full funding is June 30, 2038.

 

(h) For the judges retirement plan, the established date for full funding is June 30, 2038.

 

(i) For the public employees police and fire retirement plan, the established date for full funding is June 30, 2038.

 

(j) For the St. Paul Teachers Retirement Fund Association, the established date for full funding is June 30 of the 25th year from the valuation date.  In addition to other requirements of this chapter, the annual actuarial valuation shall contain an exhibit indicating the funded ratio and the deficiency or sufficiency in annual contributions when comparing liabilities to the market value of the assets of the fund as of the close of the most recent fiscal year.

 

(k) For the general state employees retirement plan of the Minnesota State Retirement System, the established date for full funding is June 30, 2040.

 

(l) For the retirement plans for which the annual actuarial valuation indicates an excess of valuation assets over the actuarial accrued liability, the valuation assets in excess of the actuarial accrued liability must be recognized as a reduction in the current contribution requirements by an amount equal to the amortization of the excess expressed as a level percentage of pay over a 30-year period beginning anew with each annual actuarial valuation of the plan.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 69.  Minnesota Statutes 2008, section 356.30, subdivision 1, is amended to read:

 

Subdivision 1.  Eligibility; computation of annuity.  (a) Notwithstanding any provisions of the laws governing the retirement plans enumerated in subdivision 3, a person who has met the qualifications of paragraph (b) may elect to receive a retirement annuity from each enumerated retirement plan in which the person has at least one-half year of allowable service, based on the allowable service in each plan, subject to the provisions of paragraph (c). 

 

(b) A person may receive, upon retirement, a retirement annuity from each enumerated retirement plan in which the person has at least one-half year of allowable service, and augmentation of a deferred annuity calculated at the appropriate rate under the laws governing each public pension plan or fund named in subdivision 3, based on the date of the person's initial entry into public employment from the date the person terminated all public service if: 

 

(1) the person has allowable service totaling an amount that allows the person to receive an annuity in any two or more of the enumerated plans;

 

(2) the person has sufficient allowable service in total that equals or exceeds the applicable service credit vesting requirement of the retirement plan with the longest applicable service credit vesting requirement; and

 

(2) (3) the person has not begun to receive an annuity from any enumerated plan or the person has made application for benefits from each applicable plan and the effective dates of the retirement annuity with each plan under which the person chooses to receive an annuity are within a one-year period. 

 

(c) The retirement annuity from each plan must be based upon the allowable service, accrual rates, and average salary in the applicable plan except as further specified or modified in the following clauses: 

 

(1) the laws governing annuities must be the law in effect on the date of termination from the last period of public service under a covered retirement plan with which the person earned a minimum of one-half year of allowable service credit during that employment;


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(2) the "average salary" on which the annuity from each covered plan in which the employee has credit in a formula plan must be based on the employee's highest five successive years of covered salary during the entire service in covered plans;

 

(3) the accrual rates to be used by each plan must be those percentages prescribed by each plan's formula as continued for the respective years of allowable service from one plan to the next, recognizing all previous allowable service with the other covered plans;

 

(4) the allowable service in all the plans must be combined in determining eligibility for and the application of each plan's provisions in respect to reduction in the annuity amount for retirement prior to normal retirement age; and

 

(5) the annuity amount payable for any allowable service under a nonformula plan of a covered plan must not be affected, but such service and covered salary must be used in the above calculation. 

 

(d) This section does not apply to any person whose final termination from the last public service under a covered plan was before May 1, 1975. 

 

(e) For the purpose of computing annuities under this section, the accrual rates used by any covered plan, except the public employees police and fire plan, the judges retirement fund, and the State Patrol retirement plan, must not exceed the percent specified in section 356.315, subdivision 4, per year of service for any year of service or fraction thereof.  The formula percentage used by the judges retirement fund must not exceed the percentage rate specified in section 356.315, subdivision 8, per year of service for any year of service or fraction thereof.  The accrual rate used by the public employees police and fire plan and the State Patrol retirement plan must not exceed the percentage rate specified in section 356.315, subdivision 6, per year of service for any year of service or fraction thereof.  The accrual rate or rates used by the legislators retirement plan must not exceed 2.5 percent, but this limit does not apply to the adjustment provided under section 3A.02, subdivision 1, paragraph (c). 

 

(f) Any period of time for which a person has credit in more than one of the covered plans must be used only once for the purpose of determining total allowable service. 

 

(g) If the period of duplicated service credit is more than one-half year, or the person has credit for more than one-half year, with each of the plans, each plan must apply its formula to a prorated service credit for the period of duplicated service based on a fraction of the salary on which deductions were paid to that fund for the period divided by the total salary on which deductions were paid to all plans for the period. 

 

(h) If the period of duplicated service credit is less than one-half year, or when added to other service credit with that plan is less than one-half year, the service credit must be ignored and a refund of contributions made to the person in accord with that plan's refund provisions. 

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 70.  Minnesota Statutes 2008, section 356.302, subdivision 3, is amended to read:

 

Subd. 3.  General employee plan eligibility requirements.  A disabled member of a covered retirement plan who has credit for allowable service in a combination of general employee retirement plans is entitled to a combined service disability benefit if the member:

 

(1) is less than the normal retirement age on the date of the application for the disability benefit;

 

(2) has become totally and permanently disabled;


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(3) has credit for allowable service in any combination of general employee retirement plans totaling at least three years the number of years required by the applicable retirement plan with the longest service credit requirement for disability benefit receipt;

 

(4) has credit for at least one-half year of allowable service with the current general employee retirement plan before the commencement of the disability;

 

(5) has at least three continuous years of allowable service credit by the general employee retirement plan or has at least a total of three years of allowable service credit by a combination of general employee retirement plans in a 72-month period during which no interruption of allowable service credit from a termination of employment exceeded 29 days; and

 

(6) was not receiving a retirement annuity or disability benefit from any covered general employee retirement plan at the time of the commencement of the disability.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 71.  Minnesota Statutes 2008, section 356.302, subdivision 4, is amended to read:

 

Subd. 4.  Public safety plan eligibility requirements.  A disabled member of a covered retirement plan who has credit for allowable service in a combination of public safety employee retirement plans is entitled to a combined service disability benefit if the member:

 

(1) has become occupationally disabled;

 

(2) has credit for allowable service in any combination of public safety employee retirement plans totaling at least one year the minimum period of service credit required by the applicable retirement plan with the longest service credit eligibility requirement for the receipt of a duty-related disability benefit if the disability is duty-related or totaling at least three years the minimum period of service credit required by the applicable retirement plan with the longest service credit eligibility requirement for a disability benefit that is not duty-related if the disability is not duty-related;

 

(3) has credit for at least one-half year of allowable service with the current public safety employee retirement plan before the commencement of the disability; and

 

(4) was not receiving a retirement annuity or disability benefit from any covered public safety employee retirement plan at the time of the commencement of the disability.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 72.  Minnesota Statutes 2008, section 356.302, subdivision 5, is amended to read:

 

Subd. 5.  General and public safety plan eligibility requirements.  A disabled member of a covered retirement plan who has credit for allowable service in a combination of both a public safety employee retirement plan and general employee retirement plan must meet the qualifying requirements in subdivisions 3 and 4 to receive a combined service disability benefit from the applicable general employee and public safety employee retirement plans, except that the person need only be a member of a covered retirement plan at the time of the commencement of the disability, that the person must have allowable service credit for the applicable retirement plan with the longest service credit eligibility requirement for the receipt of a disability benefit, and that the minimum allowable service requirements of subdivisions 3, clauses (3) and (5), and 4, clauses (3) and (4), may be met in any combination of covered retirement plans.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.


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Sec. 73.  Minnesota Statutes 2008, section 356.303, subdivision 2, is amended to read:

 

Subd. 2.  Entitlement; eligibility.  Notwithstanding any provision of law to the contrary governing a covered retirement plan, a person who is the survivor of a deceased member of a covered retirement plan may receive a combined service survivor benefit from each covered retirement plan in which the deceased member had credit for at least one-half year of allowable service if the deceased member:

 

(1) had credit for sufficient allowable service in any combination of covered retirement plans to meet any the minimum allowable service credit requirement of the applicable covered retirement fund with the longest allowable service credit requirement for qualification for a survivor benefit or annuity;

 

(2) had credit for at least one-half year of allowable service with the most recent covered retirement plan before the date of death and was an active member of that covered retirement plan on the date of death; and

 

(3) was not receiving a retirement annuity from any covered retirement plan on the date of death.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 74.  Minnesota Statutes 2008, section 356.315, subdivision 5, is amended to read:

 

Subd. 5.  Correctional plan members.  The applicable benefit accrual rate is 2.4 percent if employed as a correctional state employee before July 1, 2010, or 2.2 percent if employed as a correctional state employee after June 30, 2010.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 75.  Minnesota Statutes 2009 Supplement, section 356.415, subdivision 1, is amended to read:

 

Subdivision 1.  Annual postretirement adjustments; generally.  (a) Except as otherwise provided in subdivision 1a, 1b, 1c, 1d, or 1e, retirement annuity, disability benefit, or survivor benefit recipients of a covered retirement plan are entitled to a postretirement adjustment annually on January 1, as follows:

 

(1) a postretirement increase of 2.5 percent must be applied each year, effective January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who has been receiving an annuity or a benefit for at least 12 full months prior to the January 1 increase; and

 

(2) for each annuitant or benefit recipient who has been receiving an annuity or a benefit amount for at least one full month, an annual postretirement increase of 1/12 of 2.5 percent for each month that the person has been receiving an annuity or benefit must be applied, effective on January 1 following the calendar year in which the person has been retired for less than 12 months.

 

(b) The increases provided by this section subdivision commence on January 1, 2010.

 

(c) An increase in annuity or benefit payments under this section must be made automatically unless written notice is filed by the annuitant or benefit recipient with the executive director of the covered retirement plan requesting that the increase not be made.

 

(d) The retirement annuity payable to a person who retires before becoming eligible for Social Security benefits and who has elected the optional payment as provided in section 353.29, subdivision 6, or 354.35 must be treated as the sum of a period certain retirement annuity and a life retirement annuity for the purposes of any postretirement adjustment.  The period certain retirement annuity plus the life retirement annuity must be the annuity amount


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payable until age 62 for section 353.29, subdivision 6, or age 62, 65, or normal retirement age, as selected by the member at retirement, for an annuity amount payable under section 354.35.  A postretirement adjustment granted on the period certain retirement annuity must terminate when the period certain retirement annuity terminates.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 76.  Minnesota Statutes 2009 Supplement, section 356.415, is amended by adding a subdivision to read:

 

Subd. 1a.  Annual postretirement adjustments; Minnesota State Retirement System plans other than State Patrol retirement plan.  (a) Retirement annuity, disability benefit, or survivor benefit recipients of the legislators retirement plan, the general state employees retirement plan, the correctional state employees retirement plan, the elected state officers retirement plan, the unclassified state employees retirement program, and the judges retirement plan are entitled to a postretirement adjustment annually on January 1, as follows:

 

(1) a postretirement increase of two percent must be applied each year, effective on January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who has been receiving an annuity or a benefit for at least 18 full months before the January 1 increase; and

 

(2) for each annuitant or benefit recipient who has been receiving an annuity or a benefit for at least six full months, an annual postretirement increase of 1/12 of two percent for each month that the person has been receiving an annuity or benefit must be applied, effective January 1, following the calendar year in which the person has been retired for at least six months, but has been retired for less than 18 months.

 

(b) The increases provided by this subdivision commence on January 1, 2011.  Increases under this subdivision for the general state employees retirement plan, the correctional state employees retirement plan, or the judges retirement plan terminate on December 31 of the calendar year in which the actuarial valuation prepared by the approved actuary under sections 356.214 and 356.215 and the standards for actuarial work promulgated by the Legislative Commission on Pensions and Retirement indicates that the market value of assets of the retirement plan equals or exceeds 90 percent of the actuarial accrued liability of the retirement plan and increases under subdivision 1 recommence after that date.  Increases under this subdivision for the legislators retirement plan or the elected state officers retirement plan terminate on December 31 of the calendar year in which the actuarial valuation prepared by the approved actuary under sections 356.214 and 356.215 and the standards for actuarial work promulgated by the Legislative Commission on Pensions and Retirement indicates that the market value of assets of the general state employees retirement plan equals or exceeds 90 percent of the actuarial accrued liability of the retirement plan and increases under subdivision 1 recommence after that date.

 

(c) An increase in annuity or benefit payments under this subdivision must be made automatically unless written notice is filed by the annuitant or benefit recipient with the executive director of the applicable covered retirement plan requesting that the increase not be made.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 77.  Minnesota Statutes 2009 Supplement, section 356.415, is amended by adding a subdivision to read:

 

Subd. 1b.  Annual postretirement adjustments; PERA; general employees retirement plan and local government correctional retirement plan.  (a) Retirement annuity, disability benefit, or survivor benefit recipients of the general employees retirement plan of the Public Employees Retirement Association and the local government correctional service retirement plan are entitled to a postretirement adjustment annually on January 1, as follows:

 

(1) for January 1, 2011, and each successive January 1 until funding stability is restored for the applicable retirement plan, a postretirement increase of one percent must be applied each year, effective on January 1, to the monthly annuity or benefit amount of each annuitant or benefit recipient who has been receiving an annuity or benefit for at least 12 full months as of the current June 30;


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(2) for January 1, 2011, and each successive January 1 until funding stability is restored for the applicable retirement plan, for each annuitant or benefit recipient who has been receiving an annuity or a benefit for at least one full month, but less than 12 full months as of the current June 30, an annual postretirement increase of 1/12 of one percent for each month the person has been receiving an annuity or benefit must be applied;

 

(3) for each January 1 following the restoration of funding stability for the applicable retirement plan, a postretirement increase of 2.5 percent must be applied each year, effective January 1, to the monthly annuity or benefit amount of each annuitant or benefit recipient who has been receiving an annuity or benefit for at least 12 full months as of the current June 30; and

 

(4) for each January 1 following restoration of funding stability for the applicable retirement plan, for each annuity or benefit recipient who has been receiving an annuity or a benefit for at least one full month, but less than 12 full months as of the current June 30, an annual postretirement increase of 1/12 of 2.5 percent for each month the person has been receiving an annuity or benefit must be applied.

 

(b) Funding stability is restored when the market value of assets of the applicable retirement plan equals or exceeds 90 percent of the actuarial accrued liabilities of the applicable plan in the most recent prior actuarial valuation prepared under section 356.215 and the standards for actuarial work by the approved actuary retained by the Public Employees Retirement Association under section 356.214.

 

(c) If, after applying the increase as provided for in paragraph (a), clauses (3) and (4), the market value of the applicable retirement plan is determined in the next subsequent actuarial valuation prepared under section 356.215 to be less than 90 percent of the actuarial accrued liability of any of the applicable Public Employees Retirement Association plans, the increase provided in paragraph (a), clauses (1) and (2), are to be applied as of the next successive January until funding stability is again restored.

 

(d) An increase in annuity or benefit payments under this section must be made automatically unless written notice is filed by the annuitant or benefit recipient with the executive director of the Public Employees Retirement Association requesting that the increase not be made.

 

(e) The retirement annuity payable to a person who retires before becoming eligible for Social Security benefits and who has elected the optional payment, as provided in section 353.29, subdivision 6, must be treated as the sum of a period-certain retirement annuity and a life retirement annuity for the purposes of any postretirement adjustment.  The period-certain retirement annuity plus the life retirement annuity must be the annuity amount payable until age 62 for section 353.29, subdivision 6.  A postretirement adjustment granted on the period-certain retirement annuity must terminate when the period-certain retirement annuity terminates.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 78.  Minnesota Statutes 2009 Supplement, section 356.415, is amended by adding a subdivision to read:

 

Subd. 1c.  Annual postretirement adjustments; PERA-P&F.  (a) Retirement annuity, disability benefit, or survivor benefit recipients of the public employees police and fire retirement plan are entitled to a postretirement adjustment annually on January 1, as follows:

 

(1) for January 1, 2011, and for January 1, 2012, for each annuitant or benefit recipient who has been receiving the annuity or benefit for at least 12 full months as of the immediate preceding June 30, an amount equal to one percent in each year;

 

(2) for January 1, 2011, and for January 1, 2012, for each annuitant or benefit recipient who has been receiving the annuity or benefit for at least one full month as of the immediate preceding June 30, an amount equal to 1/12 of one percent in each year;


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(3) for January 1, 2013, and each successive January 1 that follows the loss of funding stability as defined under paragraph (b) until funding stability as defined under paragraph (b) is again restored, for each annuitant or benefit recipient who has been receiving the annuity or benefit for at least 12 full months as of the immediate preceding June 30, an amount equal to the percentage increase in the Consumer Price Index for urban wage earners and clerical workers all items index published by the Bureau of Labor Statistics of the United States Department of Labor between the immediate preceding June 30 and the June 30 occurring 12 months previous, but not to exceed 1.5 percent;

 

(4) for January 1, 2013, and each successive January 1 that follows the loss of funding stability as defined under paragraph (b) until funding stability as defined under paragraph (b) is again restored, for each annuitant or benefit recipient who has been receiving the annuity or benefit for at least one full month as of the immediate preceding June 30, an amount equal to 1/12 of the percentage increase in the Consumer Price Index for urban wage earners and clerical workers all items index published by the Bureau of Labor Statistics of the United States Department of Labor between the immediate preceding June 30 and the June 30 occurring 12 months previous for each full month of annuity or benefit receipt, but not to exceed 1/12 of 1.5 percent for each full month of annuity or benefit receipt;

 

(5) for each January 1 following the restoration of funding stability as defined under paragraph (b) and during the continuation of funding stability as defined under paragraph (b), for each annuitant or benefit recipient who has been receiving the annuity or benefit for at least 12 full months as of the immediate preceding June 30, an amount equal to the percentage increase in the Consumer Price Index for urban wage earners and clerical workers all items index published by the Bureau of Labor Statistics of the United States Department of Labor between the immediate preceding June 30 and the June 30 occurring 12 months previous, but not to exceed 2.5 percent; and

 

(6) for each January 1 following the restoration of funding stability as defined under paragraph (b) and during the continuation of funding stability as defined under paragraph (b), for each annuitant or benefit recipient who has been receiving the annuity or benefit for at least one full month as of the immediate preceding June 30, an amount equal to 1/12 of the percentage increase in the Consumer Price Index for urban wage earners and clerical workers all items index published by the Bureau of Labor Statistics of the United States Department of Labor between the immediate preceding June 30 and the June 30 occurring 12 months previous for each full month of annuity or benefit receipt, but not to exceed 1/12 of 2.5 percent for each full month of annuity or benefit receipt.

 

(b) Funding stability is restored when the market value of assets of the public employees police and fire retirement plan equals or exceeds 90 percent of the actuarial accrued liabilities of the applicable plan in the most recent prior actuarial valuation prepared under section 356.215 and under the standards for actuarial work of the Legislative Commission on Pensions and Retirement by the approved actuary retained by the Public Employees Retirement Association under section 356.214.

 

(c) An increase in annuity or benefit payments under this section must be made automatically unless written notice is filed by the annuitant or benefit recipient with the executive director of the Public Employees Retirement Association requesting that the increase not be made.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 79.  Minnesota Statutes 2009 Supplement, section 356.415, is amended by adding a subdivision to read:

 

Subd. 1d.  Teachers Retirement Association annual postretirement adjustments.  (a) Retirement annuity, disability benefit, or survivor benefit recipients of the Teachers Retirement Association are entitled to a postretirement adjustment annually on January 1, as follows:

 

(1) for January 1, 2011, and January 1, 2012, no postretirement increase is payable;


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(2) for January 1, 2013, and each successive January 1 until funding stability is restored, a postretirement increase of two percent must be applied each year, effective on January 1, to the monthly annuity or benefit amount of each annuitant or benefit recipient who has been receiving an annuity or a benefit for at least 18 full months prior to the January 1 increase;

 

(3) for January 1, 2013, and each successive January 1 until funding stability is restored, for each annuitant or benefit recipient who has been receiving an annuity or a benefit for at least six full months, an annual postretirement increase of 1/12 of two percent for each month the person has been receiving an annuity or benefit must be applied, effective January 1, following the year in which the person has been retired for less than 12 months;

 

(4) for each January 1 following the restoration of funding stability, a postretirement increase of 2.5 percent must be applied each year, effective January 1, to the monthly annuity or benefit amount of each annuitant or benefit recipient who has been receiving an annuity or a benefit for at least 18 full months prior to the January 1 increase; and

 

(5) for each January 1 following the restoration of funding stability, for each annuitant or benefit recipient who has been receiving an annuity or a benefit for at least six full months, an annual postretirement increase of 1/12 of 2.5 percent for each month the person has been receiving an annuity or benefit must be applied, effective January 1, following the year in which the person has been retired for less than 12 months.

 

(b) Funding stability is restored when the market value of assets of the Teachers Retirement Association equals or exceeds 90 percent of the actuarial accrued liabilities of the Teachers Retirement Association in the most recent prior actuarial valuation prepared under section 356.215 and the standards for actuarial work by the approved actuary retained by the Teachers Retirement Association under section 356.214.

 

(c) An increase in annuity or benefit payments under this section must be made automatically unless written notice is filed by the annuitant or benefit recipient with the executive director of the Teachers Retirement Association requesting that the increase not be made.

 

(d) The retirement annuity payable to a person who retires before becoming eligible for Social Security benefits and who has elected the optional payment as provided in section 354.35 must be treated as the sum of a period-certain retirement annuity and a life retirement annuity for the purposes of any postretirement adjustment.  The period-certain retirement annuity plus the life retirement annuity must be the annuity amount payable until age 62, 65, or normal retirement age, as selected by the member at retirement, for an annuity amount payable under section 354.35.  A postretirement adjustment granted on the period-certain retirement annuity must terminate when the period-certain retirement annuity terminates.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 80.  Minnesota Statutes 2009 Supplement, section 356.415, is amended by adding a subdivision to read:

 

Subd. 1e.  Annual postretirement adjustments; State Patrol retirement plan.  (a) Retirement annuity, disability benefit, or survivor benefit recipients of the State Patrol retirement plan are entitled to a postretirement adjustment annually on January 1, as follows:

 

(1) a postretirement increase of 1.5 percent must be applied each year, effective on January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who has been receiving an annuity or a benefit for at least 18 full months before the January 1 increase; and

 

(2) for each annuitant or benefit recipient who has been receiving an annuity or a benefit for at least six full months, an annual postretirement increase of 1/12 of 1.5 percent for each month that the person has been receiving an annuity or benefit must be applied, effective January 1, following the calendar year in which the person has been retired for at least six months, but has been retired for less than 18 months.


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(b) The increases provided by this subdivision commence on January 1, 2011.  Increases under this subdivision for the State Patrol retirement plan terminate on December 31 of the calendar year in which the actuarial valuation prepared by the approved actuary under sections 356.214 and 356.215 and the standards for actuarial work promulgated by the Legislative Commission on Pensions and Retirement indicates that the market value of assets of the retirement plan equals or exceeds 90 percent of the actuarial accrued liability of the retirement plan and increases under subdivision 1 recommence after that date.

 

(c) An increase in annuity or benefit payments under this subdivision must be made automatically unless written notice is filed by the annuitant or benefit recipient with the executive director of the applicable covered retirement plan requesting that the increase not be made.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 81.  Minnesota Statutes 2009 Supplement, section 356.415, is amended by adding a subdivision to read:

 

Subd. 3.  Actuarial valuation reports until funding is stabilized.  Notwithstanding any provision of section 356.215, subdivision 8, to the contrary, until the actuarial valuations, prepared annually by the approved actuary under sections 356.214 and 356.215 and the standards for actuarial work promulgated by the Legislative Commission on Pensions and Retirement, indicate that the market value of assets of the applicable covered plans equals or exceeds 90 percent of the actuarial accrued liabilities, the actuarial valuation reports must utilize a postretirement interest rate assumption that is equal to the difference between the preretirement interest rate assumption provided in section 356.215, subdivision 8, and the stated annual postretirement adjustment rate provided under this section, as applicable to each covered plan.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 82.  Minnesota Statutes 2008, section 356.47, subdivision 3, is amended to read:

 

Subd. 3.  Payment.  (a) Beginning one year after the reemployment withholding period ends relating to the reemployment that gave rise to the limitation, and the filing of a written application, the retired member is entitled to the payment, in a lump sum, of the value of the person's amount under subdivision 2, plus annual compound interest at.  For the general state employees retirement plan, the correctional state employees retirement plan, the general employees retirement plan of the Public Employees Retirement Association, the public employees police and fire retirement plan, the local government correctional employees retirement plan, and the teachers retirement plan, the annual interest rate is six percent from the date on which the amount was deducted from the retirement annuity to the date of payment or until January 1, 2011, whichever is earlier, and no interest after January 1, 2011.  For the Duluth Teachers Retirement Fund Association, the annual interest is six percent from the date on which the amount was deducted from the retirement annuity to the date of payment or until June 30, 2010, whichever is earlier, and no interest after June 30, 2010.  For the St. Paul Teachers Retirement Fund Association, the annual interest is the compound annual rate of six percent from the date that the amount was deducted from the retirement annuity to the date of payment.

 

(b) The written application must be on a form prescribed by the chief administrative officer of the applicable retirement plan.

 

(c) If the retired member dies before the payment provided for in paragraph (a) is made, the amount is payable, upon written application, to the deceased person's surviving spouse, or if none, to the deceased person's designated beneficiary, or if none, to the deceased person's estate.

 

(d) In lieu of the direct payment of the person's amount under subdivision 2, on or after the payment date under paragraph (a), if the federal Internal Revenue Code so permits, the retired member may elect to have all or any portion of the payment amount under this section paid in the form of a direct rollover to an eligible retirement plan


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as defined in section 402(c) of the federal Internal Revenue Code that is specified by the retired member.  If the retired member dies with a balance remaining payable under this section, the surviving spouse of the retired member, or if none, the deceased person's designated beneficiary, or if none, the administrator of the deceased person's estate may elect a direct rollover under this paragraph.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 83.  Minnesota Statutes 2009 Supplement, section 423A.02, subdivision 3, is amended to read:

 

Subd. 3.  Reallocation of amortization or supplementary amortization state aid.  (a) Seventy percent of the difference between $5,720,000 and the current year amortization aid and supplemental amortization aid distributed under subdivisions 1 and 1a that is not distributed for any reason to a municipality for use by a local police or salaried fire relief association must be distributed by the commissioner of revenue according to this paragraph.  The commissioner shall distribute 50 percent of the amounts derived under this paragraph to the Teachers Retirement Association, ten percent to the Duluth Teachers Retirement Fund Association, and 40 percent to the St. Paul Teachers Retirement Fund Association to fund the unfunded actuarial accrued liabilities of the respective funds.  These payments shall be made on or before June 30 each fiscal year.  If the St. Paul Teachers Retirement Fund Association becomes fully funded, its eligibility for this aid ceases.  Amounts remaining in the undistributed balance account at the end of the biennium if aid eligibility ceases cancel to the general fund.

 

(b) In order to receive amortization and supplementary amortization aid under paragraph (a), Independent School District No. 625, St. Paul, must make contributions to the St. Paul Teachers Retirement Fund Association in accordance with the following schedule:

 

                                      Fiscal Year                                                                                   Amount             

 

                                          1996                                                                                       $0

                                          1997                                                                                       $0

                                          1998                                                                                       $200,000

                                          1999                                                                                       $400,000

                                          2000                                                                                       $600,000

                                          2001 and thereafter                                                            $800,000

 

(c) Special School District No. 1, Minneapolis, and the city of Minneapolis must each make contributions to the Teachers Retirement Association in accordance with the following schedule:

 

    Fiscal Year                                                 City amount                                School district amount

 

          1996                                                       $0                                                           $0

          1997                                                       $0                                                           $0

          1998                                                       $250,000                                               $250,000

          1999                                                       $400,000                                               $400,000

          2000                                                       $550,000                                               $550,000

          2001                                                       $700,000                                               $700,000

          2002                                                       $850,000                                               $850,000

          2003 and thereafter                            $1,000,000                                        $1,000,000

 

(d) Money contributed under paragraph (a) and either paragraph (b) or (c), as applicable, must be credited to a separate account in the applicable teachers retirement fund and may not be used in determining any benefit increases.  The separate account terminates for a fund when the aid payments to the fund under paragraph (a) cease.


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(e) (d) Thirty percent of the difference between $5,720,000 and the current year amortization aid and supplemental amortization aid under subdivisions 1 and 1a that is not distributed for any reason to a municipality for use by a local police or salaried firefighter relief association must be distributed under section 69.021, subdivision 7, paragraph (d), as additional funding to support a minimum fire state aid amount for volunteer firefighter relief associations.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 84.  LOCAL RETIREMENT FUND INVESTMENT AUTHORITIES STUDY. 

 

A study group consisting of representatives from pension plans subject to Minnesota Statutes, section 356A.06, subdivision 6 or 7, shall be convened by the state auditor to study investment-related provisions, authorities, and limitations under Minnesota Statutes, chapter 356A, and related sections of other chapters.  Administrative support for the study group shall be provided by the state auditor.  The study group shall prepare a report to include an assessment of the effectiveness of current statutory prescriptions, options for change, and recommendations for consideration by the governor and the legislature during the 2011 legislative session.  The report will be provided no later than January 15, 2011, to the executive director of the Legislative Commission on Pensions and Retirement, the chair and ranking minority caucus member of the senate State and Local Government Operations and Oversight Committee, and the chair and ranking minority caucus member of the house State and Local Government Operations Reform, Technology and Elections Committee.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 85.  BYLAW AUTHORIZATION. 

 

Consistent with the requirements of Minnesota Statutes, section 354A.12, subdivision 4, the board of the Duluth Teachers Retirement Fund Association is authorized to revise the bylaws or articles of incorporation so that the requirements of this act apply to the old law coordinated program.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 86.  REPEALER. 

 

Minnesota Statutes 2008, section 354A.27, subdivision 1, is repealed.

 

EFFECTIVE DATE.  This section is effective July 1, 2010.

 

ARTICLE 2

 

MSRS ADMINISTRATIVE PROVISIONS

 

Section 1.  Minnesota Statutes 2008, section 352.01, subdivision 2a, is amended to read:

 

Subd. 2a.  Included employees.  (a) "State employee" includes:

 

(1) employees of the Minnesota Historical Society;

 

(2) employees of the State Horticultural Society;

 

(3) employees of the Minnesota Crop Improvement Association;


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(4) employees of the adjutant general who whose salaries are paid from federal funds and who are not covered by any federal civilian employees retirement system;

 

(5) employees of the Minnesota State Colleges and Universities who are employed under the university or college activities program;

 

(6) currently contributing employees covered by the system who are temporarily employed by the legislature during a legislative session or any currently contributing employee employed for any special service as defined in subdivision 2b, clause (8);

 

(7) employees of the legislature who are appointed without a limit on the duration of their employment and persons employed or designated by the legislature or by a legislative committee or commission or other competent authority to conduct a special inquiry, investigation, examination, or installation;

 

(8) trainees who are employed on a full-time established training program performing the duties of the classified position for which they will be eligible to receive immediate appointment at the completion of the training period;

 

(9) employees of the Minnesota Safety Council;

 

(10) any employees who are on authorized leave of absence from the Transit Operating Division of the former Metropolitan Transit Commission and who are employed by the labor organization which is the exclusive bargaining agent representing employees of the Transit Operating Division;

 

(11) employees of the Metropolitan Council, Metropolitan Parks and Open Space Commission, Metropolitan Sports Facilities Commission, or Metropolitan Mosquito Control Commission, or Metropolitan Radio Board unless excluded under subdivision 2b or are covered by another public pension fund or plan under section 473.415, subdivision 3;

 

(12) judges of the Tax Court;

 

(13) personnel who were employed on June 30, 1992, by the University of Minnesota in the management, operation, or maintenance of its heating plant facilities, whose employment transfers to an employer assuming operation of the heating plant facilities, so long as the person is employed at the University of Minnesota heating plant by that employer or by its successor organization;

 

(14) personnel who are employed as seasonal help employees in the classified or unclassified service employed by the Department of Revenue;

 

(15) persons who are employed by the Department of Commerce as a peace officer in the Insurance Fraud Prevention Division under section 45.0135 who have attained the mandatory retirement age specified in section 43A.34, subdivision 4;

 

(16) employees of the University of Minnesota unless excluded under subdivision 2b, clause (3);

 

(17) employees of the Middle Management Association whose employment began after July 1, 2007, and to whom section 352.029 does not apply; and

 

(18) employees of the Minnesota Government Engineers Council to whom section 352.029 does not apply.


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(b) Employees specified in paragraph (a), clause (13), are included employees under paragraph (a) if employer and employee contributions are made in a timely manner in the amounts required by section 352.04.  Employee contributions must be deducted from salary.  Employer contributions are the sole obligation of the employer assuming operation of the University of Minnesota heating plant facilities or any successor organizations to that employer.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 2.  Minnesota Statutes 2008, section 352.03, subdivision 4, is amended to read:

 

Subd. 4.  Duties and powers of board of directors.  (a) The board shall:

 

(1) elect a chair;

 

(2) appoint an executive director;

 

(3) establish rules to administer this chapter and chapters 3A, 352B, 352C, 352D, and 490 and transact the business of the system, subject to the limitations of law;

 

(4) consider and dispose of, or take any other action the board of directors deems appropriate concerning, denials of applications for annuities or disability benefits under this chapter, chapter 3A, 352B, 352C, 352D, or 490, and complaints of employees and others pertaining to the retirement of employees and the operation of the system;

 

(5) oversee the administration of the state deferred compensation plan established in section 352.965; and

 

(6) oversee the administration of the health care savings plan established in section 352.98. 

 

(b) The board shall advise the director on any matters relating to the system and carrying out functions and purposes of this chapter.  The board's advice shall control.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 3.  Minnesota Statutes 2008, section 352.04, subdivision 9, is amended to read:

 

Subd. 9.  Erroneous deductions, canceled warrants.  (a) Deductions taken from the salary of an employee for the retirement fund in error excess of required amounts must, upon discovery and verification by the department making the deduction, be refunded to the employee.

 

(b) If a deduction for the retirement fund is taken from a salary warrant or check, and the check is canceled or the amount of the warrant or check returned to the funds of the department making the payment, the sum deducted, or the part of it required to adjust the deductions, must be refunded to the department or institution if the department applies for the refund on a form furnished by the director.  The department's payments must likewise be refunded to the department.

 

(c) Employee deductions and employer contributions taken in error may be directly transferred, without interest, to another Minnesota public employee retirement plan by which the employee is actually covered.

 

For purposes of this subdivision, a Minnesota public pension plan means a plan specified in section 356.30, subdivision 3, or the plan governed by chapter 354B. 


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(c) If erroneous employee deductions and employer contributions are caused by an error in plan coverage involving the plan and any other plans specified in section 356.99, that section applies.  If the employee should have been covered by the plan governed by chapter 352D, 353D, 354B, or 354D, the employee deductions and employer contributions taken in error must be directly transferred to the applicable employee's account in the correct retirement plan, with interest at the rate of 0.71 percent per month, compounded annually, from the first day of the month following the month in which coverage should have commenced in the correct defined contribution plan until the end of the month in which the transfer occurs.

 

EFFECTIVE DATE.  This section is effective July 1, 2010.

 

Sec. 4.  Minnesota Statutes 2008, section 352.115, subdivision 10, is amended to read:

 

Subd. 10.  Reemployment of annuitant.  (a) Except for salary or wages received as a temporary employee of the legislature during a legislative session, if any retired employee again becomes entitled to receive salary or wages from the state, or any employer who employs state employees as that term is defined in section 352.01, subdivision 2, other than salary or wages received as a temporary employee of the legislature during a legislative session in a position covered by this chapter, the annuity or retirement allowance shall must cease when the retired employee has earned an amount equal to the annual maximum earnings allowable for that age for the continued receipt of full benefit amounts monthly under the federal old age, survivors, and disability insurance program as set by the secretary of health and human services under United States Code, title 42, section 403, in any calendar year.  If the retired employee has not yet reached the minimum age for the receipt of Social Security benefits, the maximum earnings for the retired employee shall be are equal to the annual maximum earnings allowable for the minimum age for the receipt of Social Security benefits. 

 

(b) The balance of the annual retirement annuity after cessation must be handled or disposed of as provided in section 356.47. 

 

(c) The annuity must be resumed when state service ends, or, if the retired employee is still employed at the beginning of the next calendar year, at the beginning of that calendar year, and payment must again end when the retired employee has earned the applicable reemployment earnings maximum specified in this subdivision.  If the retired employee is granted a sick leave without pay, but not otherwise, the annuity or retirement allowance must be resumed during the period of sick leave.

 

(d) No payroll deductions for the retirement fund may be made from the earnings of a reemployed retired employee.

 

(e) No change shall may be made in the monthly amount of an annuity or retirement allowance because of the reemployment of an annuitant.

 

(f) If a reemployed annuitant whose annuity is suspended under paragraph (a) is having insurance premium amounts withheld under section 356.87, subdivision 2, insurance premium amounts must continue to be withheld and transferred from the suspended portion of the annuity.  The balance of the annual retirement annuity after cessation, after deduction of the insurance premium amounts, must be treated as specified in paragraph (b).

 

EFFECTIVE DATE.  This section is effective January 1, 2010.

 

Sec. 5.  Minnesota Statutes 2008, section 352.91, is amended by adding a subdivision to read:

 

Subd. 6.  Correction of plan coverage errors.  If erroneous employee deductions and employer contributions are caused by an error in plan coverage involving the correctional state employees retirement plan and any other plan specified in section 356.99, that section applies.

 

EFFECTIVE DATE.  This section is effective July 1, 2010.


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Sec. 6.  Minnesota Statutes 2008, section 352.965, subdivision 1, is amended to read:

 

Subdivision 1.  Establishment.  (a) The Minnesota state deferred compensation plan is established.  For purposes of this section, "plan" means the Minnesota state deferred compensation plan, unless the context clearly indicates otherwise.  The Minnesota State Retirement System shall administer the plan.

 

(b) The purpose of the plan is to provide a means for a public employee to contribute a portion of the employee's compensation to a tax-deferred investment account.  The plan is an eligible tax-deferred compensation plan under section 457(b) of the Internal Revenue Code, United States Code, title 26, section 457(b), and the applicable regulations under Code of Federal Regulations, title 26, parts 1.457-3 to 1.457-10.

 

(c) The board of directors of the Minnesota State Retirement System is the plan trustee and plan sponsor.  The board's executive director is the plan administrator.  Fiduciary activities of the plan must be undertaken in a manner consistent with chapter 356A.

 

(d) The executive director, with the approval of the board of directors, shall adopt and amend, as required to maintain tax-qualified status, a written plan document specifying the material terms and conditions for eligibility, benefits, applicable limitations, and the time and form under which benefit distributions can be made.  With the approval of the board of directors, the executive director may also establish policies and procedures necessary for the administration of the deferred compensation plan.

 

(e) The plan document shall must include provisions that are necessary to cause the plan to be an eligible deferred compensation plan within the meaning of section 457(b) of the Internal Revenue Code.  The plan document may provide additional administrative and substantive provisions consistent with state law, provided that those provisions will do not cause the plan to fail to be an eligible deferred compensation plan within the meaning of section 457(b) of the Internal Revenue Code and may include provisions for certain optional features and services.

 

(f) The board of directors may authorize the executive director to establish and administer a Roth 457 plan if authorized by the Internal Revenue Code or a Roth individual retirement account as defined under section 408A of the Internal Revenue Code.

 

(g) All amounts contributed to the deferred compensation plan and all earnings on those amounts must be held in trust, in custodial accounts, or in qualifying annuity contracts for the exclusive benefit of the plan participants and beneficiaries, as required by section 457(g) of the Internal Revenue Code and in accordance with sections 356.001 and 356A.06, subdivision 1.

 

(h) The information and data maintained in the accounts of the participants and beneficiaries are private data and shall must not be disclosed to anyone other than the participant or beneficiary pursuant to a court order or pursuant to under section 356.49.

 

(i) The plan document is not subject to the rule adoption process under the Administrative Procedures Act, including section 14.386, but must conform with applicable federal and state laws.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 7.  Minnesota Statutes 2008, section 352.965, subdivision 2, is amended to read:

 

Subd. 2.  Right to participate in deferred compensation plan.  (a) At the request of an officer or employee of the state, an officer or employee of a political subdivision, or an employee covered by a retirement fund in section 356.20, subdivision 2, the appointing authority shall defer the payment of part of the compensation of the public officer or employee through payroll deduction.


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(b) The amount to be deferred must be as provided in a written an agreement between the officer or employee and the public employer plan sponsor.  The agreement must be in a form specified by the executive director of the Minnesota State Retirement System and must be consistent with the requirements for an eligible plan under federal and state tax laws, regulations, and rulings.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 8.  Minnesota Statutes 2009 Supplement, section 352B.011, subdivision 3, is amended to read:

 

Subd. 3.  Allowable service.  (a) "Allowable service" means:

 

(1) service in a month during which a member is paid a salary from which a member contribution is deducted, deposited, and credited in the State Patrol retirement fund;

 

(2) for members defined in subdivision 10, clause (1), service in any month for which payments have been made to the State Patrol retirement fund under law; and

 

(3) for members defined in subdivision 10, clauses (2) and (3), service for which payments have been made to the State Patrol retirement fund under law, service for which payments were made to the State Police officers retirement fund under law after June 30, 1961, and all prior service which was credited to a member for service on or before June 30, 1961.;

 

(4) any period of authorized leave of absence without pay that does not exceed one year and for which the employee obtains credit by payment to the fund under section 352B.013; and

 

(5) eligible periods of uniformed service for which the member obtained service credit by payment under section 352B.086 to the fund.

 

(b) Allowable service also includes any period of absence from duty by a member who, by reason of injury incurred in the performance of duty, is temporarily disabled and for which disability the state is liable under the workers' compensation law, until the date authorized by the executive director for commencement of payment of a disability benefit or until the date of a return to employment.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 9.  [352B.013] AUTHORIZED LEAVE OF ABSENCE SERVICE CREDIT PURCHASE PROCEDURE. 

 

Subdivision 1.  Application.  This section specifies the procedure for purchasing service credit in the State Patrol retirement plan for authorized leaves of absence under section 352B.011, subdivision 3, unless an alternative payment procedure is specified in law for a particular form of leave or break in service.

 

Subd. 2.  Purchase procedure.  (a) An employee covered by the plan specified in this chapter may purchase credit for allowable service in the plan for a period specified in subdivision 1 if the employee makes a payment as specified in paragraph (b) or (c), whichever applies.  The employing unit, at its option, may pay the employer portion of the amount specified in paragraph (b) on behalf of its employees.

 

(b) If payment is received by the executive director within one year from the date the employee returned to work following the authorized leave, the payment amount is equal to the employee and employer contribution rates specified in section 352B.02 at the end of the leave period multiplied by the employee's hourly rate of salary on the date of return from the leave of absence and by the days and months of the leave of absence for which the employee


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is eligible for allowable service credit.  The payment must include compound interest at a monthly rate of 0.71 percent from the last day of the leave period until the last day of the month in which payment is received.  If payment is received by the executive director after one year from the date the employee returned to work following the authorized leave, the payment amount is the amount determined under section 356.551.  Payment under this paragraph must be made before the date of termination from public employment covered under this chapter.

 

(c) If the employee terminates employment covered by this chapter during the leave or following the leave rather than returning to covered employment, payment must be received by the executive director within 30 days after the termination date.  The payment amount is equal to the employee and employer contribution rates specified in section 352B.02 on the day prior to the termination date, multiplied by the employee's hourly rate of salary on that date and by the days and months of the leave of absence prior to termination.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 10.  Minnesota Statutes 2008, section 352B.02, is amended by adding a subdivision to read:

 

Subd. 3.  Correction of plan coverage errors.  If erroneous employee deductions and employer contributions are caused by an error in plan coverage involving the State Patrol retirement plan and any other plan specified in section 356.99, that section applies.

 

EFFECTIVE DATE.  This section is effective July 1, 2010.

 

Sec. 11.  Minnesota Statutes 2008, section 353.27, subdivision 7a, is amended to read:

 

Subd. 7a.  Deductions or contributions transmitted by error.  (a) If employee deductions and employer contributions were erroneously transmitted to the association, but should have been transmitted to another Minnesota public pension a plan covered by chapter 352D, 353D, 354B, or 354D, the executive director shall transfer the erroneous employee deductions and employer contributions to the appropriate retirement fund or individual account, as applicable, without interest.  The time limitations specified in subdivisions 7 and 12 do not apply.  The transfer to the applicable defined contribution plan account must include interest at the rate of 0.71 percent per month, compounded annually, from the first day of the month following the month in which coverage should have commenced in the defined contribution plan until the end of the month in which the transfer occurs.

 

(b) For purposes of this subdivision, a Minnesota public pension plan means a plan specified in section 356.30, subdivision 3, or the plans governed by chapters 353D and 354B. 

 

(c) (b) A potential transfer under paragraph (a) that is reasonably determined to cause the plan to fail to be a qualified plan under section 401(a) of the federal Internal Revenue Code, as amended, must not be made by the executive director of the association.  Within 30 days after being notified by the Public Employees Retirement Association of an unmade potential transfer under this paragraph, the employer of the affected person must transmit an amount representing the applicable salary deductions and employer contributions, without interest, to the retirement fund of the appropriate Minnesota public pension plan, or to the applicable individual account if the proper coverage is by a defined contribution plan.  The association must provide the employing unit a credit for the amount of the erroneous salary deductions and employer contributions against future contributions from the employer.  If the employing unit receives a credit under this paragraph, the employing unit is responsible for refunding to the applicable employee any amount that had been erroneously deducted from the person's salary.


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(c) If erroneous employee deductions and employer contributions reflect a plan coverage error involving any Public Employees Retirement Association plan specified in section 356.99 and any other plan specified in that section, section 356.99 applies.

 

EFFECTIVE DATE.  This section is effective July 1, 2010.

 

Sec. 12.  Minnesota Statutes 2008, section 353.37, subdivision 3a, is amended to read:

 

Subd. 3a.  Disposition of suspension or reduction amount.  (a) The balance of the annual retirement annuity after suspension or the amount of the retirement annuity reduction must be handled or disposed of as provided in section 356.47. 

 

(b) If a reemployed annuitant whose annuity is suspended is having insurance premium amounts withheld under section 356.87, subdivision 2, insurance premium amounts must continue to be withheld and transferred from the suspended portion of the annuity.  The balance of the annual retirement annuity after cessation, after deduction of the insurance premium amounts, must be treated as specified in paragraph (a).

 

EFFECTIVE DATE.  This section is effective January 1, 2010.

 

Sec. 13.  Minnesota Statutes 2008, section 354.42, subdivision 7, is amended to read:

 

Subd. 7.  Erroneous salary deductions or direct payments.  (a) Any deductions taken from the salary of an employee for the retirement fund in error excess of amounts required must be refunded to the employee upon the discovery of the error and after the verification of the error by the employing unit making the deduction.  The corresponding excess employer contribution and excess additional employer contribution amounts attributable to the erroneous salary deduction must be refunded to the employing unit.

 

(b) If salary deductions and employer contributions were erroneously transmitted to the retirement fund and should have been transmitted to another Minnesota public pension the plan covered by chapter 352D, 353D, 354B, or 354D, the executive director must transfer these salary deductions and employer contributions to the account of the appropriate public pension fund without interest.  For purposes of this paragraph, a Minnesota public pension plan means a plan specified in section 356.30, subdivision 3, or the plan governed by chapter 354B.  person under the applicable plan.  The transfer to the applicable defined contribution plan account must include interest at the rate of 0.71 percent per month, compounded annually, from the first day of the month following the month in which coverage should have commenced in the defined contribution plan until the end of the month in which the transfer occurs. 

 

(c) A potential transfer under paragraph (b) that would cause the plan to fail to be a qualified plan under section 401(a) of the Internal Revenue Code, as amended, must not be made by the executive director.  Within 30 days after being notified by the Teachers Retirement Association of an unmade potential transfer under this paragraph, the employer of the affected person must transmit an amount representing the applicable salary deductions and employer contributions, without interest, to the retirement fund of the appropriate Minnesota public pension plan fund account of the applicable person under the appropriate plan.  The retirement association must provide a credit for the amount of the erroneous salary deductions and employer contributions against future contributions from the employer.

 

(d) If a salary warrant or check from which a deduction for the retirement fund was taken has been canceled or the amount of the warrant or if a check has been returned to the funds of the employing unit making the payment, a refund of the amount deducted, or any portion of it that is required to adjust the salary deductions, must be made to the employing unit.


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(e) Erroneous direct payments of member-paid contributions or erroneous salary deductions that were not refunded during the regular payroll cycle processing must be refunded to the member, plus interest computed using the rate and method specified in section 354.49, subdivision 2. 

 

(f) Any refund under this subdivision that would cause the plan to fail to be a qualified plan under section 401(a) of the Internal Revenue Code, as amended, may not be refunded and instead must be credited against future contributions payable by the employer.  The employer is responsible for refunding to the applicable employee any amount that was erroneously deducted from the salary of the employee, with interest as specified in paragraph (e).

 

(g) If erroneous employee deductions and employer contributions are caused by an error in plan coverage involving the plan and any other plan specified in section 356.99, that section applies.

 

EFFECTIVE DATE.  This section is effective July 1, 2010.

 

Sec. 14.  Minnesota Statutes 2008, section 354A.12, is amended by adding a subdivision to read:

 

Subd. 6a.  Erroneous salary deductions or direct payments.  If erroneous employee deductions and employer contributions reflect a plan coverage error involving any plan covered by this chapter and any plan specified in section 356.99, that section applies.

 

EFFECTIVE DATE.  This section is effective July 1, 2010.

 

Sec. 15.  Minnesota Statutes 2008, section 356.24, subdivision 1, is amended to read:

 

Subdivision 1.  Restriction; exceptions.  (a) It is unlawful for a school district or other governmental subdivision or state agency to levy taxes for, or to contribute public funds to a supplemental pension or deferred compensation plan that is established, maintained, and operated in addition to a primary pension program for the benefit of the governmental subdivision employees other than:

 

(1) to a supplemental pension plan that was established, maintained, and operated before May 6, 1971;

 

(2) to a plan that provides solely for group health, hospital, disability, or death benefits;

 

(3) to the individual retirement account plan established by chapter 354B;

 

(4) to a plan that provides solely for severance pay under section 465.72 to a retiring or terminating employee;

 

(5) for employees other than personnel employed by the Board of Trustees of the Minnesota State Colleges and Universities and covered under the Higher Education Supplemental Retirement Plan under chapter 354C, but including city managers covered by an alternative retirement arrangement under section 353.028, subdivision 3, paragraph (a), or by the defined contribution plan of the Public Employees Retirement Association under section 353.028, subdivision 3, paragraph (b), if the supplemental plan coverage is provided for in a personnel policy of the public employer or in the collective bargaining agreement between the public employer and the exclusive representative of public employees in an appropriate unit or in the individual employment contract between a city and a city manager, and if for each available investment all fees and historic rates of return for the prior one-, three-, five-, and ten-year periods, or since inception, are disclosed in an easily comprehended document not to exceed two pages, in an amount matching employee contributions on a dollar for dollar basis, but not to exceed an employer contribution of one-half of the available elective deferral permitted per year per employee, under the Internal Revenue Code:

 

(i) to the state of Minnesota deferred compensation plan under section 352.965;


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(ii) in payment of the applicable portion of the contribution made to any investment eligible under section 403(b) of the Internal Revenue Code, if the employing unit has complied with any applicable pension plan provisions of the Internal Revenue Code with respect to the tax-sheltered annuity program during the preceding calendar year; or

 

(iii) any other deferred compensation plan offered by the employer under section 457 of the Internal Revenue Code;

 

(6) for personnel employed by the Board of Trustees of the Minnesota State Colleges and Universities and not covered by clause (5), to the supplemental retirement plan under chapter 354C, if the supplemental plan coverage is provided for in a personnel policy or in the collective bargaining agreement of the public employer with the exclusive representative of the covered employees in an appropriate unit, in an amount matching employee contributions on a dollar for dollar basis, but not to exceed an employer contribution of $2,700 a year for each employee;

 

(7) to a supplemental plan or to a governmental trust to save for postretirement health care expenses qualified for tax-preferred treatment under the Internal Revenue Code, if the supplemental plan coverage is provided for in a personnel policy or in the collective bargaining agreement of a public employer with the exclusive representative of the covered employees in an appropriate unit;

 

(8) to the laborers national industrial pension fund or to a laborers local pension fund for the employees of a governmental subdivision who are covered by a collective bargaining agreement that provides for coverage by that fund and that sets forth a fund contribution rate, but not to exceed an employer contribution of $5,000 per year per employee;

 

(9) to the plumbers and pipefitters national pension fund or to a plumbers and pipefitters local pension fund for the employees of a governmental subdivision who are covered by a collective bargaining agreement that provides for coverage by that fund and that sets forth a fund contribution rate, but not to exceed an employer contribution of $5,000 per year per employee;

 

(10) to the international union of operating engineers pension fund for the employees of a governmental subdivision who are covered by a collective bargaining agreement that provides for coverage by that fund and that sets forth a fund contribution rate, but not to exceed an employer contribution of $5,000 per year per employee;

 

(11) to a supplemental plan organized and operated under the federal Internal Revenue Code, as amended, that is wholly and solely funded by the employee's accumulated sick leave, accumulated vacation leave, and accumulated severance pay;

 

(12) to the International Association of Machinists national pension fund for the employees of a governmental subdivision who are covered by a collective bargaining agreement that provides for coverage by that fund and that sets forth a fund contribution rate, but not to exceed an employer contribution of $5,000 per year per employee; or

 

(13) for employees of United Hospital District, Blue Earth, to the state of Minnesota deferred compensation program, if the employee makes a contribution, in an amount that does not exceed the total percentage of covered salary under section 353.27, subdivisions 3 and 3a.

 

(b) No governmental subdivision may make a contribution to a deferred compensation plan operating under section 457 of the Internal Revenue Code for volunteer or emergency on-call firefighters in lieu of providing retirement coverage under the federal Old Age, Survivors, and Disability Insurance Program.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.


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Sec. 16.  Minnesota Statutes 2008, section 356.50, subdivision 4, is amended to read:

 

Subd. 4.  Annuity repayment.  Notwithstanding subdivisions 1 and 2, if after being discharged, the person commences receipt of an annuity from the applicable plan, and it is later determined that the person was wrongfully discharged, the person shall repay the annuity received in a lump sum within 60 days of receipt of the back pay award.  If the annuity is not repaid, the person is not entitled to reinstatement in the applicable plan as an active member, the person is not authorized to make payments under subdivision 2, paragraph (a), and, for subsequent employment with the employer, the person shall be treated as a reemployed annuitant.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

CORRECTION OF PLAN COVERAGE ERRORS

 

Sec. 17.  [356.99] CORRECTION OF ERRONEOUS DEFINED BENEFIT PLAN COVERAGE. 

 

Subdivision 1.  Definitions.  (a) For purposes of this section, the terms in paragraphs (b) to (e) have the meanings given them.

 

(b) "Chief administrative officer" means the person selected or elected by the governing board of a covered pension plan with primary responsibility to administer the covered pension plan, or that person's designee or representative.

 

(c) "Covered pension plan" means a plan enumerated in section 356.30, subdivision 3, except clauses (3), (5), (6), and (11).

 

(d) "Governing board" means the governing board of the Minnesota State Retirement System, the Public Employees Retirement Association, the Teachers Retirement Association, the Duluth Teachers Retirement Fund Association, or the St. Paul Teachers Retirement Fund Association.

 

(e) "Member" means an active plan member in a covered pension plan.

 

Subd. 2.  Treatment of terminated employee coverage error.  Any person who terminated the erroneously covered service before a chief administrative officer determined the covered pension plan coverage was in error retains the coverage with the plan that originally credited the service.

 

Subd. 3.  Active employee correction of prospective service coverage.  Upon determination by a chief administrative officer that a member is covered by the wrong pension plan, the employer must stop remitting the erroneous employee deductions and employer contributions and report the employee to the correct covered pension plan for all subsequent service.

 

Subd. 4.  Active employee treatment of past service.  Any plan member, with past service credited in an erroneous plan, retains the coverage for that past service with the plan that originally credited that service if the reporting error began earlier than two fiscal years prior to the current fiscal year in which the error was determined by the chief administrative officer.  If the reporting error began within two fiscal years prior to the current fiscal year, the pension plan coverage for that past service must be corrected as provided in subdivision 5.

 

Subd. 5.  Past service transfer procedure.  (a) For cases under subdivision 4 requiring correction of prior service coverage, on behalf of the applicable member the chief administrative officer of the covered pension plan fund that has received erroneous employee deductions and employer contributions must transfer to the appropriate covered retirement plan fund an amount which is the lesser of all contributions made by or on behalf of the member for the period of erroneous membership, or the specific amount requested by the chief administrative officer of the other covered pension plan which represents the employee deductions and employer contributions that would have been made had the member been properly reported.


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(b) If excess employee deductions remain in the member's account after the transfer of funds, the remaining erroneous amount must be refunded to the person with interest at the rate provided under the general refund law of the applicable covered pension plan.  The chief administrative officer must also return any remaining excess employer contributions by providing to the employer a credit against future contributions payable by that employer.

 

(c) If the contributions transferred to the correct covered pension plan fund are less than the amounts required for the period being corrected, the chief administrative officer of the correct covered pension plan fund must collect the remaining employee deductions and employer contributions from the employer under laws for recovering deficient contributions applicable to the correct covered pension plan, except that no interest is chargeable if the additional amounts due under this paragraph are received by the chief administrative officer within 30 days of notifying the employer of the amount due.

 

(d) A potential transfer under this section that would cause a plan to fail to be a qualified plan under section 401(a) of the Internal Revenue Code, as amended, must not be made.  Within 30 days after being notified by a chief administrative officer of an unmade potential transfer under this section, the employer of the member must transmit an amount representing the applicable salary deductions and employer contributions, without interest, to the fund of the appropriate covered pension plan.  The chief administrative officer of the covered pension plan which erroneously provided coverage must provide to the employer a credit for the amount of the erroneous salary deductions and employer contributions against future contributions from that employer.

 

(e) Upon transfer of the required assets, or payment from the employer under paragraph (d), whichever is applicable, allowable service and salary credit for the period being transferred is forfeited in the erroneous plan and is granted in the correct plan.

 

EFFECTIVE DATE.  This section is effective July 1, 2010.

 

Sec. 18.  Minnesota Statutes 2008, section 490.123, is amended by adding a subdivision to read:

 

Subd. 4.  Correction of contribution errors.  (a) If erroneous employee deductions and employer contributions are caused by an error in plan coverage involving the judges retirement plan and any other plan specified in section 356.99, that section applies.

 

(b) The provisions of section 352.04, subdivisions 8 and 9, apply to the judges' retirement plan, except that if employee deductions or contributions are erroneously transmitted to the judges' retirement fund for service rendered after the service credit limit under section 490.121, subdivision 22, has been attained, consistent with section 352D.04, subdivision 2, no employer contributions may be transferred.

 

EFFECTIVE DATE.  This section is effective July 1, 2010.

 

Sec. 19.  REPEALER. 

 

Minnesota Statutes 2008, sections 352.91, subdivision 5; and 353.88, are repealed.

 

EFFECTIVE DATE.  This section is effective July 1, 2010.

 

ARTICLE 3

 

MINNESOTA STATE DEFERRED COMPENSATION PLAN AMENDMENTS

 

Section 1.  Minnesota Statutes 2008, section 352.965, subdivision 6, is amended to read:


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Subd. 6.  Plan administrative expenses.  (a) The reasonable and necessary administrative expenses of the deferred compensation plan may be charged to plan participants in the form of an annual fee, an asset-based fee, a percentage of the contributions to the plan, or a combination thereof, as set forth in the plan document.  The executive director of the system at the direction of the board of directors shall establish procedures to carry out this section including allocation of administrative costs of the plan to participants.  Processes and procedures shall be set forth in the plan document.  Fees cannot be charged on contributions and investment returns attributable to contributions made to the Minnesota supplemental investment funds before July 1, 1992. 

 

(b) The plan document must conform to federal and state tax laws, regulations, and rulings, and is not subject to the Administrative Procedure Act.

 

(c) The executive director may contract with a third party to perform administrative and record keeping functions.  The executive director may solicit bids and negotiate such contracts.  Participating employers must provide the necessary data to the third-party record keeper as determined by the executive director.  The third-party record keeper and the Minnesota State Retirement System shall follow the data privacy provisions under chapter 13.  The third-party record keeper may not solicit participants for any product or services not related to the deferred compensation plan.

 

(d) The board of directors may authorize a third-party investment consultant to provide investment information and advice, provided that if the offering of such information and advice is consistent with the investment advice requirements applicable to private plans under Title VI, subtitle A, of the Pension Protection Act of 2006, Public Law 109-280, section 601.

 

EFFECTIVE DATE.  This section is effective July 1, 2010.

 

ARTICLE 4

 

MSRS UNCLASSIFIED STATE EMPLOYEES RETIREMENT PROGRAM AMENDMENTS

 

Section 1.  Minnesota Statutes 2008, section 3A.07, is amended to read:

 

3A.07 APPLICATION. 

 

(a) Except as provided in paragraph (b) or (d), this chapter applies to members of the legislature in service after July 1, 1965, who otherwise meet the requirements of this chapter.

 

(b) Members of the legislature who were elected for the first time after June 30, 1997, or members of the legislature who were elected before July 1, 1997, and who, after July 1, 1998, elect not to be members of the plan established by this chapter are covered by the unclassified employees retirement program governed by chapter 352D.

 

(c) The post-July 1, 1998, coverage election under paragraph (b) is irrevocable and must be made on a form prescribed by the director.  The second chance referendum election under Laws 2002, chapter 392, article 15, also is irrevocable.

 

(d) Members of the legislature who are covered by the retirement plan governed by this chapter on July 1, 2010, may, on or before the end of the member's seventh year of legislative service or January 1, 2011, whichever is later, elect to have future retirement coverage by either the general state employees retirement plan governed by chapter 352 or the unclassified state employees retirement program governed by chapter 352D.  The election must be made on a form prescribed by the director and is irrevocable.


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Sec. 2.  Minnesota Statutes 2009 Supplement, section 352.01, subdivision 2b, is amended to read:

 

Subd. 2b.  Excluded employees.  "State employee" does not include: 

 

(1) students who are employed by the University of Minnesota, or the state colleges and universities, unless approved for coverage by the Board of Regents of the University of Minnesota or the Board of Trustees of the Minnesota State Colleges and Universities, whichever is applicable;

 

(2) employees who are eligible for membership in the state Teachers Retirement Association, except employees of the Department of Education who have chosen or may choose to be covered by the general state employees retirement plan of the Minnesota State Retirement System instead of the Teachers Retirement Association;

 

(3) employees of the University of Minnesota who are excluded from coverage by action of the Board of Regents;

 

(4) officers and enlisted personnel in the National Guard and the naval militia who are assigned to permanent peacetime duty and who under federal law are or are required to be members of a federal retirement system;

 

(5) election officers;

 

(6) persons who are engaged in public work for the state but who are employed by contractors when the performance of the contract is authorized by the legislature or other competent authority;

 

(7) officers and employees of the senate, or of the house of representatives, or of a legislative committee or commission who are temporarily employed;

 

(8) receivers, jurors, notaries public, and court employees who are not in the judicial branch as defined in section 43A.02, subdivision 25, except referees and adjusters employed by the Department of Labor and Industry;

 

(9) patient and inmate help who perform services in state charitable, penal, and correctional institutions including the Minnesota Veterans Home;

 

(10) persons who are employed for professional services where the service is incidental to their regular professional duties and whose compensation is paid on a per diem basis;

 

(11) employees of the Sibley House Association;

 

(12) the members of any state board or commission who serve the state intermittently and are paid on a per diem basis; the secretary, secretary-treasurer, and treasurer of those boards if their compensation is $5,000 or less per year, or, if they are legally prohibited from serving more than three years; and the board of managers of the State Agricultural Society and its treasurer unless the treasurer is also its full-time secretary;

 

(13) state troopers and persons who are described in section 352B.011, subdivision 10, clauses (2) to (8);

 

(14) temporary employees of the Minnesota State Fair who are employed on or after July 1 for a period not to extend beyond October 15 of that year; and persons who are employed at any time by the state fair administration for special events held on the fairgrounds;

 

(15) emergency employees who are in the classified service; except that if an emergency employee, within the same pay period, becomes a provisional or probationary employee on other than a temporary basis, the employee must be considered a "state employee" retroactively to the beginning of the pay period;


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(16) temporary employees in the classified service, and temporary employees in the unclassified service who are appointed for a definite period of not more than six months and who are employed less than six months in any one-year period;

 

(17) interns who are hired for six months or less and trainee employees, except those listed in subdivision 2a, clause (8);

 

(18) persons whose compensation is paid on a fee basis or as an independent contractor;

 

(19) state employees who are employed by the Board of Trustees of the Minnesota State Colleges and Universities in unclassified positions enumerated in section 43A.08, subdivision 1, clause (9);

 

(20) state employees who in any year have credit for 12 months service as teachers in the public schools of the state and as teachers are members of the Teachers Retirement Association or a retirement system in St. Paul, Minneapolis, or Duluth, except for incidental employment as a state employee that is not covered by one of the teacher retirement associations or systems;

 

(21) employees of the adjutant general who are employed on an unlimited intermittent or temporary basis in the classified or unclassified service for the support of Army and Air National Guard training facilities;

 

(22) chaplains and nuns who are excluded from coverage under the federal Old Age, Survivors, Disability, and Health Insurance Program for the performance of service as specified in United States Code, title 42, section 410(a)(8)(A), as amended, if no irrevocable election of coverage has been made under section 3121(r) of the Internal Revenue Code of 1986, as amended through December 31, 1992;

 

(23) examination monitors who are employed by departments, agencies, commissions, and boards to conduct examinations required by law;

 

(24) persons who are appointed to serve as members of fact-finding commissions or adjustment panels, arbitrators, or labor referees under chapter 179;

 

(25) temporary employees who are employed for limited periods under any state or federal program for training or rehabilitation, including persons who are employed for limited periods from areas of economic distress, but not including skilled and supervisory personnel and persons having civil service status covered by the system;

 

(26) full-time students who are employed by the Minnesota Historical Society intermittently during part of the year and full-time during the summer months;

 

(27) temporary employees who are appointed for not more than six months, of the Metropolitan Council and of any of its statutory boards, if the board members are appointed by the Metropolitan Council;

 

(28) persons who are employed in positions designated by the Department of Management and Budget as student workers;

 

(29) members of trades who are employed by the successor to the Metropolitan Waste Control Commission, who have trade union pension plan coverage under a collective bargaining agreement, and who are first employed after June 1, 1977;

 

(30) off-duty peace officers while employed by the Metropolitan Council;


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(31) persons who are employed as full-time police officers by the Metropolitan Council and as police officers are members of the public employees police and fire fund;

 

(32) persons who are employed as full-time firefighters by the Department of Military Affairs and as firefighters are members of the public employees police and fire fund;

 

(33) foreign citizens with who are employed under a work permit of less than three years, or an H-1b/JV visa valid for less than three years of employment, unless notice of extension is supplied which allows them to work for three or more years as of the date that the extension is granted, in which case they are eligible for coverage from the date extended; and

 

(34) persons who are employed by the Board of Trustees of the Minnesota State Colleges and Universities and who elected to remain members of the Public Employees Retirement Association or the Minneapolis Employees Retirement Fund, whichever applies, under Minnesota Statutes 1994, section 136C.75.; and

 

(35) employees who have elected to transfer service to the unclassified program under section 352D.02, subdivision 1d.

 

EFFECTIVE DATE.  This section is effective June 30, 2010.

 

Sec. 3.  Minnesota Statutes 2008, section 352D.015, subdivision 4, is amended to read:

 

Subd. 4.  General fund.  "General fund" means the general state employees retirement fund except the moneys for the unclassified program under chapter 352.

 

EFFECTIVE DATE.  This section is effective June 30, 2010.

 

Sec. 4.  Minnesota Statutes 2008, section 352D.015, is amended by adding a subdivision to read:

 

Subd. 4a.  General employees retirement plan.  "General employees retirement plan" means the general state employees retirement plan under chapter 352.

 

EFFECTIVE DATE.  This section is effective June 30, 2010.

 

Sec. 5.  Minnesota Statutes 2008, section 352D.015, subdivision 9, is amended to read:

 

Subd. 9.  Value.  "Value" means cash value at the end of the month following receipt of an application.  If no application is required, "value" means the cash value at the end of the month in which the event necessitating the transfer occurs the market value of the account at the end of the United States investment market day.

 

EFFECTIVE DATE.  This section is effective July 1, 2010.

 

Sec. 6.  Minnesota Statutes 2008, section 352D.02, subdivision 1, is amended to read:

 

Subdivision 1.  Coverage.  (a) Employees enumerated in paragraph (b), clause (1), are participants in the unclassified program under this chapter.  Persons referenced in paragraph (b), clause (15), are participants in the unclassified program under this chapter for judicial employment in excess of the service credit limit in section 490.121, subdivision 22.  Employees enumerated in paragraph (c) (b), clauses (2), (3), (4), (6) to (14), and (16) to (18), clauses (2) to (14) and (16) to (18), if they are in the unclassified service of the state or Metropolitan Council and are eligible for coverage under the general state employees retirement plan under chapter 352, are participants in the unclassified program under this chapter unless the employee gives notice to the executive director of the


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Minnesota State Retirement System within one year following the commencement of employment in the unclassified service that the employee desires coverage under the general state employees retirement plan.  For the purposes of this chapter, an employee who does not file notice with the executive director is deemed to have exercised the option to participate in the unclassified program.

 

(b) Persons referenced in paragraph (c), clause (5), are participants in the unclassified program under this chapter unless the person was eligible to elect different coverage under section 3A.07 and elected retirement coverage by the applicable alternative retirement plan.  Persons referenced in paragraph (c), clause (15), are participants in the unclassified program under this chapter for judicial employment in excess of the service credit limit in section 490.121, subdivision 22.

 

(c) (b) Enumerated employees and referenced persons are:

 

(1) the governor, the lieutenant governor, the secretary of state, the state auditor, and the attorney general;

 

(2) an employee in the Office of the Governor, Lieutenant Governor, Secretary of State, State Auditor, Attorney General;

 

(3) an employee of the State Board of Investment;

 

(4) the head of a department, division, or agency created by statute in the unclassified service, an acting department head subsequently appointed to the position, or an employee enumerated in section 15A.0815 or 15A.083, subdivision 4;

 

(5) a member of the legislature;

 

(6) a full-time unclassified employee of the legislature or a commission or agency of the legislature who is appointed without a limit on the duration of the employment or a temporary legislative employee having shares in the supplemental retirement fund as a result of former employment covered by this chapter, whether or not eligible for coverage under the Minnesota State Retirement System;

 

(7) a person who is employed in a position established under section 43A.08, subdivision 1, clause (3), or in a position authorized under a statute creating or establishing a department or agency of the state, which is at the deputy or assistant head of department or agency or director level;

 

(8) the regional administrator, or executive director of the Metropolitan Council, general counsel, division directors, operations managers, and other positions as designated by the council, all of which may not exceed 27 positions at the council and the chair;

 

(9) the executive director, associate executive director, and not to exceed nine positions of the Minnesota Office of Higher Education in the unclassified service, as designated by the Minnesota Office of Higher Education before January 1, 1992, or subsequently redesignated with the approval of the board of directors of the Minnesota State Retirement System, unless the person has elected coverage by the individual retirement account plan under chapter 354B;

 

(10) the clerk of the appellate courts appointed under article VI, section 2, of the Constitution of the state of Minnesota, the state court administrator and judicial district administrators;

 

(11) the chief executive officers of correctional facilities operated by the Department of Corrections and of hospitals and nursing homes operated by the Department of Human Services;


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(12) an employee whose principal employment is at the state ceremonial house;

 

(13) an employee of the Agricultural Utilization Research Institute;

 

(14) an employee of the State Lottery who is covered by the managerial plan established under section 43A.18, subdivision 3;

 

(15) a judge who has exceeded the service credit limit in section 490.121, subdivision 22;

 

(16) an employee of Enterprise Minnesota, Inc.;

 

(17) a person employed by the Minnesota State Colleges and Universities as faculty or in an eligible unclassified administrative position as defined in section 354B.20, subdivision 6, who was employed by the former state university or the former community college system before May 1, 1995, and elected unclassified program coverage prior to May 1, 1995; and

 

(18) a person employed by the Minnesota State Colleges and Universities who was employed in state service before July 1, 1995, who subsequently is employed in an eligible unclassified administrative position as defined in section 354B.20, subdivision 6, and who elects coverage by the unclassified program.

 

Sec. 7.  Minnesota Statutes 2008, section 352D.02, subdivision 1c, is amended to read:

 

Subd. 1c.  Transfer of contributions.  An employee covered by the regular general employees retirement plan who is subsequently employed as a full-time unclassified employee of the legislature or any commission or agency of the legislature without a limit on the duration of the employment may elect to transfer accumulated employee and matching employer contributions, as provided in section 352D.03. 

 

EFFECTIVE DATE.  This section is effective June 30, 2010.

 

Sec. 8.  Minnesota Statutes 2008, section 352D.02, subdivision 2, is amended to read:

 

Subd. 2.  Coverage upon employment change.  A person becoming a participant in the unclassified program prior to July 1, 2010, by virtue of employment in a position specified in subdivision 1, clause (4), and remaining in the unclassified service shall remain a participant in the program even though the position the person occupies is deleted from any of the sections referenced in subdivision 1, clause (4), by subsequent amendment, except that a person shall is not be eligible to elect the unclassified program after separation from unclassified service if on the return of the person to service, that position is not specified in subdivision 1, clause (4).  Any person employed in a position specified in subdivision 1 shall cease to participate in the unclassified program in the event that the position is placed in the classified service.

 

EFFECTIVE DATE.  This section is effective June 30, 2010.

 

Sec. 9.  Minnesota Statutes 2008, section 352D.02, subdivision 3, is amended to read:

 

Subd. 3.  Transfer to general employees retirement plan.  (a) An employee referred to in subdivision 1, paragraph (b), clauses (2) to (4), (6) to (14), and (16) to (18), who is credited with employee shares in the unclassified program, after acquiring and who has credit for ten years of allowable service and, not later than one month following the termination of covered employment, may elect to terminate participation in the unclassified program and be covered by the general employees retirement plan by filing a written election with the executive director.  if the employee was employed before July 1, 2010, and has at least ten years of allowable service as of the date of the election or if the employee was employed after June 30, 2010, and has no more than seven years of allowable service as of the date of the election.


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(b) A person referred to in subdivision 1, paragraph (b), clause (5), who is credited with employee shares in the unclassified program, and who has credit for allowable service, prior to the termination of service, may elect to terminate participation in the unclassified program and be covered by the general employees retirement plan by filing a written election with the executive director if the person first became covered by the unclassified program after June 30, 2010, and has no more than seven years of allowable service or if the person first became covered by the unclassified program before July 1, 2010, and makes the election to transfer on or before January 1, 2011.

 

(c) If the transfer election is made, the executive director shall then redeem the employee's total shares and shall credit to the employee's account in the general employees retirement plan the amount of contributions that would have been so credited had the employee been covered by the general employees retirement plan during the employee's entire covered employment or elective state service.  The balance of money so redeemed and not credited to the employee's account shall must be transferred to the general employees retirement plan retirement fund, except that (1) the employee contribution paid to the unclassified program must be compared to (2) the employee contributions that would have been paid to the general employees retirement plan for the comparable period, if the individual had been covered by that plan.  If clause (1) is greater than clause (2), the difference must be refunded to the employee as provided in section 352.22.  If clause (2) is greater than clause (1), the difference must be paid by the employee within six months of electing general employees retirement plan coverage or before the effective date of the annuity, whichever is sooner. 

 

(b) (d) An election under paragraph (a) or (b) to transfer coverage to the general employees retirement plan is irrevocable during any period of covered employment.

 

(e) A person referenced in subdivision 1, paragraph (b), clause (1) or (15), who is credited with employee shares in the unclassified program is not permitted to terminate participation in the unclassified program and be covered by the general employees retirement plan.

 

EFFECTIVE DATE.  This section is effective June 30, 2010.

 

Sec. 10.  Minnesota Statutes 2008, section 352D.03, is amended to read:

 

352D.03 TRANSFER OF ASSETS. 

 

Unless an eligible employee enumerated in section 352D.02, subdivision 1, has elected coverage under the individual retirement account plan under chapter 354B, a sum of money representing the assets credited to each employee exercising the option contained in section 352D.02, plus an equal employer contribution together with interest for an employee exercising an option under section 352D.02, an amount equal to the employee and employer contributions for the employment period at the applicable preretirement interest actuarial assumption rate during this period plus six percent interest, compounded annually, must be used for the purchase of shares on behalf of each employee in the accounts of the supplemental retirement fund established by section 11A.17.

 

EFFECTIVE DATE.  This section is effective June 30, 2010.

 

Sec. 11.  Minnesota Statutes 2008, section 352D.04, subdivision 1, is amended to read:

 

Subdivision 1.  Investment options.  (a) A person exercising an option to participate in the retirement program provided by this chapter may elect to purchase shares in one or a combination of the income share account, the growth share account, the international share account, the money market account, the bond market account, the fixed interest account, or the common stock index account established in section 11A.17.  The person may elect to participate in one or more of the investment accounts in the fund by specifying, on a form provided in a manner prescribed by the executive director, the percentage of the person's contributions provided in subdivision 2 to be used to purchase shares in each of the accounts. 


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(b) A participant may indicate in writing on forms provided, in a manner prescribed by the Minnesota State Retirement System a choice of options executive director, choose their investment allocation for subsequent purchases of shares.  Until a different written indication is made by the participant, the executive director shall purchase shares in the supplemental fund as selected by the participant.  If no initial option is chosen, 100 percent income shares must be purchased for a participant.  A change in choice of investment option is effective no later than the first pay date first occurring after 30 days following the receipt of the request for a change at the end of the most recent United States investment market day.

 

(c) Shares in the fixed interest account attributable to any guaranteed investment contract as of July 1, 1994, may not be withdrawn from the fund or transferred to another account until the guaranteed investment contract has expired, unless the participant qualifies for withdrawal under section 352D.05 or for benefit payments under sections 352D.06 to 352D.075. 

 

(d) (c) A participant or former participant may also change the investment options selected for all or a portion of the participant's shares previously purchased in accounts, subject to the provisions of paragraph (c) concerning the fixed interest account.  Changes in investment options for the participant's shares must be effected as soon as cash flow to an account practically permits, but not later than six months after the requested change trading restrictions imposed on the investment option.

 

EFFECTIVE DATE.  This section is effective July 1, 2010.

 

Sec. 12.  Minnesota Statutes 2008, section 352D.04, subdivision 2, is amended to read:

 

Subd. 2.  Contribution rates.  (a) The money used to purchase shares under this section is the employee and employer contributions provided in this subdivision.

 

(b) The employee contribution is an amount equal to four the percent of salary specified in section 352.04, subdivision 2, or 352.045, subdivision 3.

 

(c) The employer contribution is an amount equal to six percent of salary.

 

(d) For members of the legislature, the contributions under this subdivision also must be made on per diem payments received during a regular or special legislative session, but may not be made on per diem payments received outside of a regular or special legislative session, on the additional compensation attributable to a leadership position under section 3.099, subdivision 3, living expense payments under section 3.101, or special session living expense payments under section 3.103.

 

(e) For a judge who is a member of the unclassified plan under section 352D.02, subdivision 1, paragraph (c), clause (16), the employee contribution rate is eight percent of salary, and there is no employer contribution.

 

(f) These contributions must be made in the manner provided in section 352.04, subdivisions 4, 5, and 6.

 

EFFECTIVE DATE.  This section is effective the first day of the first full pay period beginning after July 1, 2010.

 

Sec. 13.  Minnesota Statutes 2008, section 352D.05, subdivision 3, is amended to read:

 

Subd. 3.  Full or partial withdrawal.  After termination of covered employment or at any time thereafter, a participant is entitled, upon application, to withdraw the cash value of the participant's total shares or leave such shares on deposit with the supplemental retirement fund.  The account is valued at the end of the month in which


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most recent United States investment market day following receipt of the application for withdrawal is made.  Shares not withdrawn remain on deposit with the supplemental retirement fund until the former participant becomes at least 55 years old, and applies for an annuity under section 352D.06, subdivision 1. 

 

EFFECTIVE DATE.  This section is effective July 1, 2010.

 

Sec. 14.  Minnesota Statutes 2008, section 352D.05, subdivision 4, is amended to read:

 

Subd. 4.  Repayment of refund.  (a) A participant in the unclassified program may repay regular refunds taken under section 352.22, as provided in section 352.23.

 

(b) A participant in the unclassified program or an employee covered by the general employees retirement plan who has withdrawn the value of the total shares may repay the refund taken and thereupon restore the service credit, rights and benefits forfeited by paying into the fund the amount refunded plus interest at an annual rate of 8.5 percent compounded annually from the date that the refund was taken until the date that the refund is repaid.  If the participant had withdrawn only the employee shares as permitted under prior laws, repayment must be pro rata.

 

(c) Except as provided in section 356.441, the repayment of a refund under this section must be made in a lump sum.

 

EFFECTIVE DATE.  This section is effective June 30, 2010.

 

Sec. 15.  Minnesota Statutes 2008, section 352D.06, subdivision 3, is amended to read:

 

Subd. 3.  Accrual date.  An annuity under this section accrues the first day of the first full month after an application is received or the day following termination of state service, whichever is later.  The account must be valued and redeemed on the later of the end of the month of termination of covered employment, or the end of the month of receipt of the annuity application for the purpose of computing the annuity day following receipt of the application or the day following termination, whichever is later.  The benefit must be based on the value of the account the day following receipt of the application or the date of termination, whichever is later, plus any contributions and interest received after that date.

 

EFFECTIVE DATE.  This section is effective July 1, 2010.

 

Sec. 16.  Minnesota Statutes 2008, section 352D.065, subdivision 3, is amended to read:

 

Subd. 3.  Annuity payment.  The annuity payable under this section shall begin begins to accrue the first day of the month following the date of disability receipt of the application or the day after termination, whichever is later, plus any contributions and interest received after that date, and shall must be based on the participant's age when the annuity begins to accrue.  The shares shall must be valued as of the end of the month following authorization of payments day on which the benefit accrues.

 

EFFECTIVE DATE.  This section is effective July 1, 2010.

 

Sec. 17.  Minnesota Statutes 2008, section 352D.09, subdivision 3, is amended to read:

 

Subd. 3.  Prospectus.  (a) The executive director shall annually distribute make available by electronic means to each participant the prospectus prepared by the supplemental fund, by July 1 or when received from such fund, whichever is later, to each participant in covered employment.

 

(b) Any participant may contact the Minnesota State Retirement System and request a copy of the prospectus.

 

EFFECTIVE DATE.  This section is effective July 1, 2010.


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Sec. 18.  Minnesota Statutes 2008, section 352D.09, subdivision 7, is amended to read:

 

Subd. 7.  Administrative fees.  The board of directors shall establish a budget and charge participants a reasonable fee to pay the administrative expenses of the unclassified program.  Fees cannot may not be charged on contributions and investment returns attributable to contributions made before July 1, 1992.  Annual total fees charged for plan administration cannot exceed 10/100 of one percent of the contributions and investment returns attributable to contributions made on or after July 1, 1992.

 

EFFECTIVE DATE.  This section is effective July 1, 2010.

 

ARTICLE 5

 

PUBLIC EMPLOYEES RETIREMENT ASSOCIATION ADMINISTRATIVE PROVISIONS

 

Section 1.  Minnesota Statutes 2009 Supplement, section 353.01, subdivision 2, is amended to read:

 

Subd. 2.  Public employee.  "Public employee" means a governmental employee or a public officer performing personal services for a governmental subdivision defined in subdivision 6, whose salary is paid, in whole or in part, from revenue derived from taxation, fees, assessments, or from other sources.  For purposes of membership in the association, the term includes the classes of persons described or listed in subdivision 2a and excludes the classes of persons listed in subdivision 2b.  The term also includes persons who elect association membership under subdivision 2d, paragraph (a), and persons for whom the applicable governmental subdivision had elected association membership under subdivision 2d, paragraph (b).  The term excludes the classes of persons listed in subdivision 2b for purposes of membership in the association.

 

EFFECTIVE DATE.  This section is effective July 1, 2010.

 

Sec. 2.  Minnesota Statutes 2009 Supplement, section 353.01, subdivision 2a, is amended to read:

 

Subd. 2a.  Included employees; mandatory membership.  (a) Public employees whose salary from employment in one or more positions within one governmental subdivision exceeds $425 in any month shall participate as members of the association.  If the salary is less than $425 in a subsequent month, the employee retains membership eligibility.  Eligible Public employees shall whose salary exceeds $425 in any month and who are not specifically excluded under subdivision 2b or who have not been provided an option to participate under subdivision 2d, whether individually or by action of the governmental subdivision, must participate as members of the association with retirement coverage by the public employees retirement plan or the public employees police and fire retirement plan under this chapter, or the local government correctional employees retirement plan under chapter 353E, whichever applies,.  Membership commences as a condition of their employment on the first day of their employment unless they or on the first day that the eligibility criteria are met, whichever is later.  Public employees include but are not limited to:

 

(1) are specifically excluded under subdivision 2b;

 

(2) do not exercise their option to elect retirement coverage in the association as provided in subdivision 2d, paragraph (a); or

 

(3) are employees of the governmental subdivisions listed in subdivision 2d, paragraph (b), where the governmental subdivision has not elected to participate as a governmental subdivision covered by the association.

 

(1) persons whose salary meets the threshold in this paragraph from employment in one or more positions within one governmental subdivision;


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(2) elected county sheriffs;

 

(3) persons who are appointed, employed, or contracted to perform governmental functions that by law or local ordinance are required of a public officer, including, but not limited to:

 

(i) town and city clerk or treasurer;

 

(ii) county auditor, treasurer, or recorder;

 

(iii) city manager as defined in section 353.028 who does not exercise the option provided under subdivision 2d; or

 

(iv) emergency management director, as provided under section 12.25;

 

(4) physicians under section 353D.01, subdivision 2, who do not elect public employees defined contribution plan coverage under section 353D.02, subdivision 2;

 

(5) full-time employees of the Dakota County Agricultural Society; and

 

(6) employees of the Minneapolis Firefighters Relief Association or Minneapolis Police Relief Association who are not excluded employees under subdivision 2b due to coverage by the relief association pension plan and who elected general employee retirement plan coverage before August 20, 2009.

 

(b) A public employee or elected official who was a member of the association on June 30, 2002, based on employment that qualified for membership coverage by the public employees retirement plan or the public employees police and fire plan under this chapter, or the local government correctional employees retirement plan under chapter 353E as of June 30, 2002, retains that membership for the duration of the person's employment in that position or incumbency in elected office.  Except as provided in subdivision 28, the person shall participate as a member until the employee or elected official terminates public employment under subdivision 11a or terminates membership under subdivision 11b.

 

(c) Public employees under paragraph (a) include:

 

(1) physicians under section 353D.01, subdivision 2, who do not elect public employees defined contribution plan coverage under section 353D.02, subdivision 2;

 

(2) full-time employees of the Dakota County Agricultural Society; and

 

(3) employees of the Minneapolis Firefighters Relief Association or Minneapolis Police Relief Association who are not excluded employees under subdivision 2b due to coverage by the relief association pension plan and who elect Public Employee Retirement Association general plan coverage under Laws 2009, chapter 169, article 12, section 10.

 

(c) If the salary of an included public employee is less than $425 in any subsequent month, the member retains membership eligibility.

 

EFFECTIVE DATE.  This section is effective July 1, 2010, except that the amendment to paragraph (a), clause (3), applies to any person first appointed, elected, or contracted after June 30, 2010.


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Sec. 3.  Minnesota Statutes 2008, section 353.01, subdivision 2b, is amended to read:

 

Subd. 2b.  Excluded employees.  (a) The following public employees are not eligible to participate as members of the association with retirement coverage by the public general employees retirement plan, the local government correctional employees retirement plan under chapter 353E, or the public employees police and fire retirement plan:

 

(1) persons whose salary from one governmental subdivision never exceeds $425 in a month;

 

(2) public officers, other than county sheriffs, who are elected to a governing body, city mayors, or persons who are appointed to fill a vacancy in an elective office of a governing body, whose term of office commences on or after July 1, 2002, for the service to be rendered in that elective position;

 

(2) (3) election officers or election judges;

 

(3) (4) patient and inmate personnel who perform services for a governmental subdivision;

 

(4) (5) except as otherwise specified in subdivision 12a, employees who are hired for a temporary position as defined under subdivision 12a, and employees who resign from a nontemporary position and accept a temporary position within 30 days in the same governmental subdivision;

 

(5) (6) employees who are employed by reason of work emergency caused by fire, flood, storm, or similar disaster;

 

(6) (7) employees who by virtue of their employment in one governmental subdivision are required by law to be a member of and to contribute to any of the plans or funds administered by the Minnesota State Retirement System, the Teachers Retirement Association, the Duluth Teachers Retirement Fund Association, the St. Paul Teachers Retirement Fund Association, the Minneapolis Employees Retirement Fund, or any police or firefighters relief association governed by section 69.77 that has not consolidated with the Public Employees Retirement Association, or any local police or firefighters consolidation account who have not elected the type of benefit coverage provided by the public employees police and fire fund under sections 353A.01 to 353A.10, or any persons covered by section 353.665, subdivision 4, 5, or 6, who have not elected public employees police and fire plan benefit coverage.  This clause must not be construed to prevent a person from being a member of and contributing to the Public Employees Retirement Association and also belonging to and contributing to another public pension plan or fund for other service occurring during the same period of time.  A person who meets the definition of "public employee" in subdivision 2 by virtue of other service occurring during the same period of time becomes a member of the association unless contributions are made to another public retirement fund on the salary based on the other service or to the Teachers Retirement Association by a teacher as defined in section 354.05, subdivision 2;

 

(7) (8) persons who are members of a religious order and are excluded from coverage under the federal Old Age, Survivors, Disability, and Health Insurance Program for the performance of service as specified in United States Code, title 42, section 410(a)(8)(A), as amended through January 1, 1987, if no irrevocable election of coverage has been made under section 3121(r) of the Internal Revenue Code of 1954, as amended;

 

(8) (9) employees of a governmental subdivision who have not reached the age of 23 and are enrolled on a full-time basis to attend or are attending classes on a full-time basis at an accredited school, college, or university in an undergraduate, graduate, or professional-technical program, or a public or charter high school;

 

(9) (10) resident physicians, medical interns, and pharmacist residents and pharmacist interns who are serving in a degree or residency program in public hospitals or clinics;


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(10) (11) students who are serving in an internship or residency program sponsored by an accredited educational institution;

 

(11) (12) persons who hold a part-time adult supplementary technical college license who render part-time teaching service in a technical college;

 

(12) (13) except for employees of Hennepin County or Hennepin Healthcare System, Inc., foreign citizens working for who are employed by a governmental subdivision with under a work permit of less than three years, or an H-1b visa valid initially issued or extended for a combined period less than three years of employment.  Upon notice to the association that the work permit or visa extends extension of the employment beyond the three-year period, the foreign citizens must be reported for membership from the date of the extension beginning the first of the month thereafter provided the monthly earnings threshold as provided under subdivision 2a is met;

 

(13) (14) public hospital employees who elected not to participate as members of the association before 1972 and who did not elect to participate from July 1, 1988, to October 1, 1988;

 

(14) (15) except as provided in section 353.86, volunteer ambulance service personnel, as defined in subdivision 35, but persons who serve as volunteer ambulance service personnel may still qualify as public employees under subdivision 2 and may be members of the Public Employees Retirement Association and participants in the public general employees retirement fund plan or the public employees police and fire fund plan, whichever applies, on the basis of compensation received from public employment service other than service as volunteer ambulance service personnel;

 

(15) (16) except as provided in section 353.87, volunteer firefighters, as defined in subdivision 36, engaging in activities undertaken as part of volunteer firefighter duties; provided that, but a person who is a volunteer firefighter may still qualify as a public employee under subdivision 2 and may be a member of the Public Employees Retirement Association and a participant in the public general employees retirement fund plan or the public employees police and fire fund plan, whichever applies, on the basis of compensation received from public employment activities other than those as a volunteer firefighter;

 

(16) (17) pipefitters and associated trades personnel employed by Independent School District No. 625, St. Paul, with coverage under a collective bargaining agreement by the pipefitters local 455 pension plan who were either first employed after May 1, 1997, or, if first employed before May 2, 1997, elected to be excluded under Laws 1997, chapter 241, article 2, section 12;

 

(17) (18) electrical workers, plumbers, carpenters, and associated trades personnel who are employed by Independent School District No. 625, St. Paul, or the city of St. Paul, who have retirement coverage under a collective bargaining agreement by the Electrical Workers Local 110 pension plan, the United Association Plumbers Local 34 pension plan, or the pension plan applicable to Carpenters Local 87 pension plan who were either first employed after May 1, 2000, or, if first employed before May 2, 2000, elected to be excluded under Laws 2000, chapter 461, article 7, section 5;

 

(18) (19) bricklayers, allied craftworkers, cement masons, glaziers, glassworkers, painters, allied tradesworkers, and plasterers who are employed by the city of St. Paul or Independent School District No. 625, St. Paul, with coverage under a collective bargaining agreement by the Bricklayers and Allied Craftworkers Local 1 pension plan, the Cement Masons Local 633 pension plan, the Glaziers and Glassworkers Local L-1324 pension plan, the Painters and Allied Trades Local 61 pension plan, or the Twin Cities Plasterers Local 265 pension plan who were either first employed after May 1, 2001, or if first employed before May 2, 2001, elected to be excluded under Laws 2001, First Special Session chapter 10, article 10, section 6;


Journal of the House - 94th Day - Wednesday, April 28, 2010 - Top of Page 10705


(19) (20) plumbers who are employed by the Metropolitan Airports Commission, with coverage under a collective bargaining agreement by the Plumbers Local 34 pension plan, who either were first employed after May 1, 2001, or if first employed before May 2, 2001, elected to be excluded under Laws 2001, First Special Session chapter 10, article 10, section 6;

 

(20) (21) employees who are hired after June 30, 2002, to fill seasonal positions under subdivision 12b which are limited in duration by the employer to 185 consecutive calendar days or less in each year of employment with the governmental subdivision;

 

(21) (22) persons who are provided supported employment or work-study positions by a governmental subdivision and who participate in an employment or industries program maintained for the benefit of these persons where the governmental subdivision limits the position's duration to three years or less, including persons participating in a federal or state subsidized on-the-job training, work experience, senior citizen, youth, or unemployment relief program where the training or work experience is not provided as a part of, or for, future permanent public employment;

 

(22) (23) independent contractors and the employees of independent contractors; and

 

(23) (24) reemployed annuitants of the association during the course of that reemployment.; and

 

(25) persons appointed to serve on a board or commission of a governmental subdivision or an instrumentality thereof.

 

(b) Any person performing the duties of a public officer in a position defined in subdivision 2a, paragraph (a), clause (3), is not an independent contractor and is not an employee of an independent contractor.

 

EFFECTIVE DATE.  This section is effective July 1, 2010, except that clause (25) is effective for persons first appointed after June 30, 2010.

 

Sec. 4.  Minnesota Statutes 2008, section 353.01, subdivision 2d, is amended to read:

 

Subd. 2d.  Optional membership.  (a) Membership in the association is optional by action of the individual employee for the following public employees who meet the conditions set forth in subdivision 2a:

 

(1) members of the coordinated plan who are also employees of labor organizations as defined in section 353.017, subdivision 1, for their employment by the labor organization only, if they elect to have membership under section 353.017, subdivision 2;

 

(2) persons who are elected or persons who are appointed to elected positions other than local governing body elected positions who elect to participate by filing a written election for membership;

 

(3) members of the association who are appointed by the governor to be a state department head and who elect not to be covered by the general state employees retirement plan of the Minnesota State Retirement System under section 352.021;

 

(4) city managers as defined in section 353.028, subdivision 1, who do not elect to be excluded from membership in the association under section 353.028, subdivision 2; and

 

(5) employees of the Port Authority of the city of St. Paul on January 1, 2003, who were at least age 45 on that date, and who elected to participate by filing a written election for membership.


Journal of the House - 94th Day - Wednesday, April 28, 2010 - Top of Page 10706


(b) Membership in the association is optional by action of the governmental subdivision for the employees of the following governmental subdivisions under the conditions specified: