Journal of the House - 79th Day - Monday, March 31, 2014

A quorum was present.

Leidiger, Lohmer and Persell were excused.

Hamilton and Hoppe were excused until 3:25 p.m. Hilstrom was excused until 3:50 p.m.

The Chief Clerk proceeded to read the Journal of the preceding day. There being no objection, further reading of the Journal was dispensed with and the Journal was approved as corrected by the Chief Clerk.

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REPORTS OF CHIEF CLERK

S. F. No. 2004 and H. F. No. 2655, which had been referred to the Chief Clerk for comparison, were examined and found to be identical with certain exceptions.

SUSPENSION OF RULES

Huntley moved that the rules be so far suspended that S. F. No. 2004 be substituted for H. F. No. 2655 and that the House File be indefinitely postponed. The motion prevailed.

REPORTS OF STANDING COMMITTEES AND DIVISIONS

Liebling from the Committee on Health and Human Services Policy to which was referred:

H. F. No. 435, A bill for an act relating to health; improving access to health care delivered by advanced practice registered nurses; providing penalties; amending Minnesota Statutes 2012, sections 148.171, subdivisions 3, 5, 9, 10, 11, 13, 16, 21, by adding subdivisions; 148.181, subdivision 1; 148.191, subdivision 2; 148.211, subdivision 2, by adding subdivisions; 148.231, subdivisions 1, 4, 5; 148.233, subdivision 2; 148.234; 148.235, by adding subdivisions; 148.251, subdivision 1; 148.261, subdivision 1; 148.262, subdivisions 1, 2, 4; 148.271; 148.281, subdivision 1, by adding a subdivision; repealing Minnesota Statutes 2012, sections 148.171, subdivision 6; 148.235, subdivisions 1, 2, 2a, 4, 4a, 4b, 6, 7; 148.284.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

"Section 1. Minnesota Statutes 2012, section 148.171, subdivision 3, is amended to read:

Subd. 3. Advanced practice registered nurse. "Advanced practice registered nurse," abbreviated APRN, means an individual licensed as a an advanced practice registered nurse by the board and certified by a national nurse certification organization acceptable to the board to practice as a clinical nurse specialist, nurse anesthetist, nurse-midwife, or nurse practitioner."

Delete the title and insert:

"A bill for an act relating to health; clarifying advanced practice registered nurse; amending Minnesota Statutes 2012, section 148.171, subdivision 3."

With the recommendation that when so amended the bill be placed on the General Register.

The report was adopted.

Nelson from the Committee on Government Operations to which was referred:

H. F. No. 1951, A bill for an act relating to retirement; providing for the consolidation of the Duluth Teachers Retirement Fund Association retirement plan and fund into the statewide Teachers Retirement Association; amending Minnesota Statutes 2012, sections 13.632, subdivision 1; 122A.18, subdivision 7a; 354.05, subdivisions 2,

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13; 354.42, subdivisions 2, 3; 354A.011, subdivisions 11, 15a, 27; 354A.021, subdivision 1; 354A.092; 354A.093, subdivision 1; 354A.096; 354A.12, subdivision 2; 354A.31, subdivision 1; 354A.32, subdivision 1; 354A.35, subdivision 1; 354A.37, subdivisions 3, 4; 354A.39; 354A.41; 354B.21, subdivision 3a; 355.01, subdivision 2c; 356.302, subdivision 7; 356.303, subdivision 4; 356.32, subdivision 2; 356.42, subdivision 3; 356.465, subdivision 3; 356.47, subdivision 3; 356.99, subdivision 1; Minnesota Statutes 2013 Supplement, sections 353.01, subdivision 2b; 354.436; 354.44, subdivision 6; 354A.12, subdivisions 1, 2a, 3a; 356.20, subdivision 2; 356.214, subdivision 1; 356.215, subdivision 8; 356.219, subdivision 8; 356.30, subdivision 3; 356.401, subdivision 3; 423A.02, subdivision 3; proposing coding for new law in Minnesota Statutes, chapter 354; repealing Minnesota Statutes 2012, sections 354A.021, subdivision 5; 354A.108; 354A.24; 354A.27, subdivision 5; Minnesota Statutes 2013 Supplement, sections 354A.27, subdivisions 6a, 7; 354A.31, subdivision 4a.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

"ARTICLE 1

RETIREMENT PLAN MEMBERSHIP INCLUSIONS AND EXCLUSIONS

Section 1. Minnesota Statutes 2013 Supplement, 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;

(4) employees of the adjutant general 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;

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(11) employees of the Metropolitan Council, Metropolitan Parks and Open Space Commission, Metropolitan Sports Facilities Commission, or Metropolitan Mosquito Control Commission 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 employees in the classified or unclassified service;

(15) persons who are employed by the Department of Commerce as a peace officer in the Commerce Fraud Bureau 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;

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

(19) employees of the Minnesota Sports Facilities Authority; ~~and~~

(20) employees of the Minnesota Association of Professional Employees.;

(21) employees of the Minnesota State Retirement System;

(22) employees of the State Agricultural Society;

(23) employees of the Gillette Children's Hospital Board who were employed in the state unclassified service at the former Gillette Children's Hospital on March 28, 1974; and

(24) if approved for coverage by the Board of Directors of Conservation Corps Minnesota, employees of Conservation Corps Minnesota so employed on June 30, 2003.

(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 July 1, 2014.

Sec. 2. Minnesota Statutes 2012, section 352.01, subdivision 2b, is amended to read:

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

(1) persons who are:

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(i) students ~~who are~~ employed by the University of Minnesota, or within the Minnesota State Colleges and Universities system, 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~~ applies;

(ii) employed as interns for a period not to exceed six months unless included under subdivision 2a, paragraph (a), clause (8);

(iii) employed as trainee employees unless included under subdivision 2a, paragraph (a), clause (8); or

(iv) employed in the student worker classification as designated by Minnesota Management and Budget;

(2) employees who are:

(i) eligible for membership in the state Teachers Retirement Association, ~~except employees~~ unless the person is an employee of the Department of Education who ~~have chosen or may choose~~ elected to be covered by the general state employees retirement plan of the Minnesota State Retirement System instead of the Teachers Retirement Association;

(ii) employees of the state who, in any year, were credited with 12 months of allowable service as a public school teacher and, as such, are members of a retirement plan governed by chapter 354 or 354A unless the employment is incidental employment as a state employee that is not covered by a retirement plan governed by chapter 354 or 354A;

(iii) employees of the state who are employed by the Board of Trustees of the Minnesota State Colleges and Universities in an unclassified position that is listed in section 43A.08, subdivision 1, clause (9);

(iv) persons employed by the Board of Trustees of the Minnesota State Colleges and Universities who elected retirement coverage other than by the general state employees retirement plan of the Minnesota State Retirement System under Minnesota Statutes 1994, section 136C.75;

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

(vi) persons employed by the Department of Military Affairs as full-time firefighters and who, as such, are members of the public employees police and fire retirement plan;

(vii) members of the State Patrol retirement plan under section 352B.011, subdivision 10;

(viii) off-duty police officers while employed by the Metropolitan Council and persons employed as full-time police officers by the Metropolitan Council and who, as such, are members of the public employees police and fire retirement plan; and

(ix) employees of the state who have elected to transfer account balances derived from state service to the unclassified state employees retirement program under section 352D.02, subdivision 1d;

(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;

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~~(5)~~ (4) election ~~officers~~ judges and persons who are employed solely to administer elections;

~~(6)~~ (5) persons who are:

(i) 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;~~

(ii) employed to perform professional services where the service is incidental to the person's regular professional duties and where compensation is paid on a per diem basis; or

(iii) compensated on a fee payment basis or as an independent contractor;

(6) persons who are employed:

(i) on a temporary basis by the house of representatives, the senate, or a legislative commission or agency under the jurisdiction of the Legislative Coordinating Commission;

(ii) as a temporary employee on or after July 1 for a period ending on or before October 15 of that calendar year for the Minnesota State Agricultural Society or the Minnesota State Fair, or as an employee at any time for a special event held on the fairgrounds;

(iii) by the executive branch as a temporary employee in the classified service or as an executive branch temporary employee in the unclassified service if appointed for a definite period not to exceed six months, and if employment is less than six months, then in any 12-month period;

(iv) by the adjutant general if employed on an unlimited intermittent or temporary basis in the classified service or in the unclassified service for the support of Army or Air National Guard training facilities;

(v) by a state or federal program for training or rehabilitation as a temporary employee if employed for a limited period from an area of economic distress and if other than a skilled or supervisory personnel position or other than a position that has civil service status covered by the retirement system; and

(vi) by the Metropolitan Council or a statutory board of the Metropolitan Council where the members of the board are appointed by the Metropolitan Council as a temporary employee if the appointment does not exceed six months;

~~(8)~~ (7) 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)~~ (8) patient and inmate help who perform services in state charitable, penal, and correctional institutions, including ~~the~~ a 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)~~ (9) employees of the Sibley House Association;

(10) persons who are:

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~~(12) the~~ (i) 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;

(ii) examination monitors employed by a department, agency, commission, or board of the state to conduct examinations that are required by law; or

(iii) appointees serving as a member of a fact-finding commission or an adjustment panel, an arbitrator, or a labor referee under chapter 179;

~~(15)~~ (11) emergency employees who are in the classified service~~; except that~~, but 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;

(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~~ (12) persons who are members of a religious order 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;~~

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(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)~~ (13) 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;~~

~~(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)~~ (14) foreign citizens who are employed under a work permit of less than three years, or under an ~~H-1b/JV~~ H-1b visa or a J-1 visa that is initially valid for less than three years of employment, unless notice of a visa extension ~~is supplied~~ which allows them to work for three or more years as of the date that the extension is granted and is supplied to the retirement plan, in which case ~~they are~~ the person is eligible for coverage from the date ~~extended~~ of the extension; 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 of the MERF division of the Public Employees Retirement Association as the successor of 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.~~

(15) reemployed annuitants of the general state employees retirement plan, the military affairs personnel retirement plan, the transportation department pilots retirement plan, the state fire marshal employees retirement plan, or the correctional state employees retirement plan during the course of that reemployment.

EFFECTIVE DATE. This section is effective July 1, 2014.

Sec. 3. Minnesota Statutes 2013 Supplement, section 353.01, subdivision 2a, is amended to read:

Subd. 2a. Included employees; mandatory membership. (a) Public employees whose annual salary ~~exceeds $425 in any month~~ is stipulated in advance to exceed $5,100 if the person is not a school district employee or $3,800 if the person is a school district employee 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

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governmental subdivision, must participate as members of the association with retirement coverage by the general employees retirement plan under this chapter, 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 or on the first day that the eligibility criteria are met, whichever is later. Public employees include but are not limited to:

(1) persons whose salary meets the threshold in this paragraph from employment in one or more positions within one governmental subdivision;

(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;

(6) employees of the Red Wing Port Authority who were first employed by the Red Wing Port Authority before May 1, 2011, and who are not excluded employees under subdivision 2b; ~~and~~

(7) employees of the Seaway Port Authority of Duluth who are not excluded employees under subdivision 2b.

(8) employees of the Stevens County Housing and Redevelopment Authority who were first employed by the Stevens County Housing and Redevelopment Authority before May 1, 2014, and who are not excluded employees under subdivision 2b; and

(9) employees of the Public Employees Retirement Association.

(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) If the annual salary of an included public employee ~~is less than $425~~ is stipulated in advance to exceed $5,100 if the person is not a school district employee or $3,800 if the person is a school district employee in any subsequent ~~month~~ year, the member retains membership eligibility.

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(d) For the purpose of participation in the MERF division of the general employees retirement plan, public employees include employees who were members of the former Minneapolis Employees Retirement Fund on June 29, 2010, and who participate as members of the MERF division of the association.

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

Sec. 4. Minnesota Statutes 2013 Supplement, 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 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 annual salary from one governmental subdivision never exceeds an amount, stipulated in writing in advance, of $5,100 if the person is not a school district employee or $3,800 if the person is a school district employee. If annual compensation from one governmental subdivision to an employee exceeds the stipulated amount in a calendar year or a school year, whichever applies, after being stipulated in advance not to exceed the applicable amount, the stipulation is no longer valid and contributions must be made on behalf of the employee under section 353.27, subdivision 12, from the first month in which the employee received salary exceeding $425 ~~in a month~~;

(2) public officers 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;

(3) ~~election officers or~~ election judges and persons employed solely to administer elections;

(4) patient and inmate personnel who perform services for a governmental subdivision;

(5) except as otherwise specified in subdivision 12a, employees who are ~~hired for~~ employed solely in a temporary position as defined under subdivision 12a, and employees who resign from a nontemporary position and accept a temporary position within 30 days of that resignation in the same governmental subdivision;

(6) employees who are employed by reason of work emergency caused by fire, flood, storm, or similar disaster, but if the person becomes a probationary or provisional employee within the same pay period, other than on a temporary basis, the person is a "public employee" retroactively to the beginning of the pay period;

(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, ~~and~~ or the St. Paul Teachers Retirement Fund Association., but this ~~clause~~ exclusion 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., and 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~~ plan 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;

(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;

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(9) ~~employees of~~ persons who are:

(i) employed by a governmental subdivision who have not reached the age of 23 and who 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 at a public or charter high school;

~~(10)~~ (ii) employed as resident physicians, medical interns, ~~and~~ pharmacist residents ~~and~~, or pharmacist interns ~~who~~ and are serving in a degree or residency program in a public ~~hospitals~~ hospital or ~~clinics~~ in a public clinic; or

~~(11)~~ (iii) students who are serving for up a period not to exceed five years in an internship or a residency program that is sponsored by a governmental subdivision, including an accredited educational institution;

~~(12)~~ (10) persons who hold a part-time adult supplementary technical college license who render part-time teaching service in a technical college;

~~(13)~~ (11) except for employees of Hennepin County or employees of Hennepin Healthcare System, Inc., foreign citizens who are employed by a governmental subdivision under a work permit, or under an H-1b visa initially issued or extended for a combined period of less than three years of employment. but upon extension of the employment of the visa beyond the three-year period, the foreign ~~citizens~~ citizen must be reported for membership beginning on the first of the month ~~thereafter provided~~ following the extension if the monthly earnings threshold as provided under subdivision 2a is met;

~~(14)~~ (12) 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;

~~(15)~~ (13) 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 general employees retirement plan or the public employees police and fire plan, whichever applies, on the basis of compensation received from public employment service other than service as volunteer ambulance service personnel;

~~(16)~~ (14) except as provided in section 353.87, volunteer firefighters, as defined in subdivision 36, engaging in activities undertaken as part of volunteer firefighter duties, 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 general employees retirement plan or the public employees police and fire plan, whichever applies, on the basis of compensation received from public employment activities other than those as a volunteer firefighter;

~~(17)~~ (15) 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;

~~(18)~~ (16) 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 87 322 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;

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~~(19)~~ (17) 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;

~~(20)~~ (18) 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;

~~(21)~~ (19) employees who are hired after June 30, 2002, solely 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;

~~(22)~~ (20) 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 up to five years, 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;

~~(23)~~ (21) independent contractors and the employees of independent contractors;

~~(24)~~ (22) reemployed annuitants of the association during the course of that reemployment; ~~and~~

~~(25)~~ (23) persons appointed to serve on a board or commission of a governmental subdivision or an instrumentality thereof.; and

(24) persons employed as full-time fixed-route bus drivers by the St. Cloud Metropolitan Transit Commission who are members of the International Brotherhood of Teamsters Local 638 and who are, by virtue of that employment, members of the International Brotherhood of Teamsters Central States pension plan.

(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, 2014, except paragraph (a), clause (24), is effective retroactively from August 1, 1986.

Sec. 5. Minnesota Statutes 2012, section 353.27, is amended by adding a subdivision to read:

Subd. 10a. Written disclosure of membership exclusion determination. If the determination by the employer under section 353.01, subdivision 2a, paragraph (a), is to exclude a public employee from membership, the governmental subdivision shall provide the employee with a written notice of the exclusion on a form prescribed by the executive director. The notice must include the statutory basis for the exclusion and information about the employee's right to appeal the determination to the association under section 356.96. The employer must provide the exclusion notice to the employee within two weeks of the date of the determination and shall retain a copy in the person's personnel file.

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

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Sec. 6. Minnesota Statutes 2012, section 354.05, subdivision 2, is amended to read:

Subd. 2. Teacher. (a) "Teacher" means:

(1) a person who renders service as a teacher, supervisor, principal, superintendent, librarian, nurse, counselor, social worker, therapist, or psychologist in a public school of the state ~~located outside of the corporate limits of the city of Duluth or the city of St. Paul~~ other than in Independent School District No. 625 or in Independent School District No. 709, or in any charter school, irrespective of the location of the school, or in any charitable, penal, or correctional institutions of a governmental subdivision, or who is engaged in educational administration in connection with the state public school system, ~~but excluding the University of Minnesota,~~ whether the position be a public office or an employment~~, and not including the members or officers of any general governing or managing board or body~~;

(2) an employee of the Teachers Retirement Association;

(3) a person who renders teaching service on a part-time basis and who also renders other services for a single employing unit~~. A person whose~~ where the teaching service comprises at least 50 percent of the combined employment salary is a member of the association for all services with the single employing unit~~. If the person's teaching service comprises~~ or, if less than 50 percent of the combined employment salary, the executive director ~~must determine whether~~ determines all ~~or none~~ of the combined service is covered by the association; or

(4) a person who is not covered by the plans established under chapter 352D, 354A, or 354B and who is employed by the Board of Trustees of the Minnesota State Colleges and Universities system in an unclassified position as:

(i) a president, vice-president, or dean;

(ii) a manager or a professional in an academic or an academic support program other than specified in item (i);

(iii) an administrative or a service support faculty position; or

(iv) a teacher or a research assistant.

(b) "Teacher" does not mean:

(1) a person who works for a school or institution as an independent contractor as defined by the Internal Revenue Service;

(2) a person who renders part-time teaching service or who is a customized trainer as defined by the Minnesota State Colleges and Universities system if (i) the service is incidental to the regular nonteaching occupation of the person; and (ii) the employer stipulates annually in advance that the part-time teaching service or customized training service will not exceed 300 hours in a fiscal year and retains the stipulation in its records; and (iii) the part-time teaching service or customized training service actually does not exceed 300 hours in a fiscal year; or

(3) a person exempt from licensure under section 122A.30.;

(4) annuitants of the teachers retirement plan who are employed after retirement by an employing unit that participates in the teachers retirement plan during the course of that reemployment;

(5) a person who is employed by the University of Minnesota;

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(6) a member or an officer of any general governing or managing board or body of an employing unit that participates in the teachers retirement plan; or

(7) a person employed by Independent School District No. 625 or Independent School District No. 709 as a teacher as defined in section 354A.011, subdivision 27.

EFFECTIVE DATE. This section is effective July 1, 2014.

Sec. 7. Minnesota Statutes 2012, section 354A.011, subdivision 27, is amended to read:

Subd. 27. Teacher. (a) "Teacher" means any person who renders service for a public school district, other than a charter school, located in the corporate limits of Duluth or St. Paul, as any of the following:

(1) a full-time employee in a position for which a valid license from the state Department of Education is required;

(2) an employee of the teachers retirement fund association located in the city of the first class;

(3) a part-time employee in a position for which a valid license from the state Department of Education is required; or

(4) a part-time employee in a position for which a valid license from the state Department of Education is required who also renders other nonteaching services for the school district, unless the board of trustees of the teachers retirement fund association determines that the combined employment is on the whole so substantially dissimilar to teaching service that the service may not be covered by the association.

(b) The term does not mean any person who renders service in the school district as any of the following:

(1) an independent contractor or the employee of an independent contractor;

(2) an employee who is a full-time teacher covered by the Teachers Retirement Association or by another teachers retirement fund association established pursuant to this chapter or chapter 354;

(3) an employee who is exempt from licensure pursuant to section 122A.30;

(4) an employee who is a teacher in a technical college located in a city of the first class unless the person elects coverage by the applicable first class city teacher retirement fund association under section 354B.21, subdivision 2;

(5) a teacher employed by a charter school, irrespective of the location of the school; or

(6) an employee who is a part-time teacher in a technical college in a city of the first class and who has elected coverage by the applicable first class city teacher retirement fund association under section 354B.21, subdivision 2, but (i) the teaching service is incidental to the regular nonteaching occupation of the person; (ii) the applicable technical college stipulates annually in advance that the part-time teaching service will not exceed 300 hours in a fiscal year; and (iii) the part-time teaching actually does not exceed 300 hours in the fiscal year to which the certification applies.; or

(7) a person who is receiving a retirement annuity from the Teachers Retirement Fund Association and is employed after retirement by the school district associated with the retirement fund association.

EFFECTIVE DATE. This section is effective July 1, 2014.

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Sec. 8. Minnesota Statutes 2012, section 356.24, subdivision 1, is amended to read:

Subdivision 1. Restriction; exceptions. 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;

(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;

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(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;

(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; or

(14) to the alternative retirement plans established by the Hennepin County Medical Center under section 383B.914, subdivision 5.; or

(15) to the International Brotherhood of Teamsters Central States pension plan for fixed-route bus drivers employed by the St. Cloud Metropolitan Transit Commission who are members of the International Brotherhood of Teamsters Local 638 by virtue of that employment.

EFFECTIVE DATE. This section is effective retroactively from August 1, 1986.

Sec. 9. VALIDATION OF PAST RETIREMENT COVERAGE AND CONTRIBUTIONS FOR STEVENS COUNTY HOUSING AND REDEVELOPMENT AUTHORITY EMPLOYEES.

(a) Retirement coverage by the general employees plan of the Public Employees Retirement Association, allowable service credit, and salary credit for employees of the Stevens County Housing and Redevelopment Authority who were so employed after November 7, 1984, and were first so employed before May 1, 2014, who had monthly salary in any month of at least $325 until June 30, 1988, and who had monthly salary in any month of at least $425 after June 30, 1988, who were not otherwise excluded under the applicable edition of Minnesota Statutes, section 353.01, subdivision 2b, and who had member deductions taken and transferred in a timely manner to the general employees retirement fund before the effective date of this section are hereby validated.

(b) Notwithstanding any provision of Minnesota Statutes, chapter 353, to the contrary, employee contributions deducted from employees of the Stevens County Housing and Redevelopment Authority described in paragraph (a) before the effective date of this section and associated employer contributions are valid assets of the general employees retirement fund and are not subject to refund or adjustment for erroneous receipt except as provided in Minnesota Statutes, section 353.32, subdivision 1 or 2; or 353.34, subdivisions 1 and 2.

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

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ARTICLE 2

RETIREMENT GOVERNING BOARD PROVISIONS

Section 1. Minnesota Statutes 2012, section 352.03, subdivision 1, is amended to read:

Subdivision 1. Membership of board; election; term. (a) The policy-making function of the system is vested in a board of 11 members known as the board of directors. This board shall consist of:

(1) three members appointed by the governor, one of whom must be a constitutional officer or appointed state official and two of whom must be public members knowledgeable in pension matters,;

(2) four state employees elected by ~~state employees covered by the system~~ active members and former members eligible for a deferred annuity from the general state employees retirement plan, excluding employees ~~in categories specifically authorized to designate or elect a member by this subdivision,~~ and deferred annuitants for whom a board member is designated;

(3) one employee of the Metropolitan Council's transit operations or its successor agency designated by the executive committee of the labor organization that is the exclusive bargaining agent representing employees of the transit division,;

(4) one employee who is a member of the State Patrol retirement ~~fund~~ plan elected by active members of and former members eligible for a deferred annuity from that ~~fund at a time and in a manner fixed by the board,~~ plan;

(5) one employee ~~covered by~~ who is a member of the correctional state employees retirement plan established under this chapter elected by ~~employees covered by~~ active members and former members eligible for a deferred annuity from that plan,; and

(6) one retired employee of a plan included in the system, elected by disabled and retired employees of ~~all~~ the plans administered by the system at a time and in a manner ~~to be fixed~~ determined by the board.

(b) The terms of the four elected state employees under paragraph (a), clause (2), must be staggered, with two of the state employee ~~members~~ board positions elected each biennium, whose terms of office begin on the first Monday in May after their election~~, must be elected biennially~~. Elected members and the appointed member of the Metropolitan Council's transit operations hold office for a term of four years and until their successors are elected or appointed, and have qualified.

(c) An employee or former employee of the system is not eligible for membership on the board of directors. A state employee on leave of absence is not eligible for election or reelection to membership on the board of directors.

(d) The term of any board member who is on leave for more than six months automatically ends on expiration of the term of office.

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

Sec. 2. Minnesota Statutes 2012, section 352.03, is amended by adding a subdivision to read:

Subd. 1b. Membership voting limitations. Active members and former members eligible for a deferred annuity from a plan under this chapter or chapter 352B are eligible to vote in board elections as further specified and restricted in this section. Retired members and disabilitants from a plan in the system may vote only for the retired member position under subdivision 1, paragraph (a), clause (6). If a former member eligible for a deferred annuity from a plan under this chapter or chapter 352B is a deferred annuitant from more than one plan covered by the

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system, that person is eligible to vote only in elections applicable for deferred annuitants from the plan in the system from which the person last received allowable service. If a person is an active member of a plan in the system and is a deferred annuitant or a retiree from another plan or plans in the system, the person is only eligible to vote in board elections applicable due to the active member plan membership. If a person is a deferred annuitant from a plan in the system and is also a retiree from another plan in the system, the person is only eligible to vote in elections applicable due to the retiree status.

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

ARTICLE 3

RETIREMENT PLAN CONTRIBUTION RATE CHANGES

Section 1. Minnesota Statutes 2012, section 352.04, subdivision 2, is amended to read:

Subd. 2. Employee contributions. (a) The employee contribution to the fund must be equal to the following percent of salary:

	~~before July 1, 2007~~	~~4.00~~
	~~from July 1, 2007, to June 30, 2008~~	~~4.25~~
	~~from July 1, 2008, to June 30, 2009~~	~~4.50~~
	~~from July 1, 2009, to June 30, 2010~~	~~4.75~~
	from July 1, 2010, ~~and thereafter~~ to June 30, 2014	5.00.
	from July 1, 2014, and thereafter	5.50.

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

EFFECTIVE DATE. This section is effective on the first day of the first full pay period beginning after July 1, 2014.

Sec. 2. Minnesota Statutes 2012, section 352.04, subdivision 3, is amended to read:

Subd. 3. Employer contributions. The employer contribution to the fund must be equal to the following percent of salary:

	~~before July 1, 2007~~	~~4.00~~
	~~from July 1, 2007, to June 30, 2008~~	~~4.25~~
	~~from July 1, 2008, to June 30, 2009~~	~~4.50~~
	~~from July 1, 2009, to June 30, 2010~~	~~4.75~~
	from July 1, 2010, ~~and thereafter~~ to June 30, 2014	5.00.
	from July 1, 2014, and thereafter	5.50.

EFFECTIVE DATE. This section is effective on the first day of the first full pay period beginning after July 1, 2014.

Sec. 3. Minnesota Statutes 2012, section 352.92, subdivision 1, is amended to read:

Subdivision 1. Employee contributions. (a) Employee contributions of covered correctional employees must be in an amount equal to the following percent of salary:

	~~before July 1, 2007~~	~~5.69~~
	~~from July 1, 2007, to June 30, 2008~~	~~6.40~~
	~~from July 1, 2008, to June 30, 2009~~	~~7.00~~
Journal of the House - 79th Day - Monday, March 31, 2014 - Top of Page 8261	~~from July 1, 2009, to June 30, 2010~~	~~7.70~~
	from July 1, 2010, ~~and thereafter~~ to June 30, 2014	8.60.
	from July 1, 2014, and thereafter	9.10.

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

EFFECTIVE DATE. This section is effective on the first day of the first full pay period beginning after July 1, 2014.

Sec. 4. Minnesota Statutes 2012, section 352.92, subdivision 2, is amended to read:

Subd. 2. Employer contributions. The employer shall contribute for covered correctional employees an amount equal to the following percent of salary:

	~~before July 1, 2007~~	~~7.98~~
	~~from July 1, 2007, to June 30, 2008~~	~~9.10~~
	~~from July 1, 2008, to June 30, 2009~~	~~10.10~~
	~~from July 1, 2009, to June 30, 2010~~	~~11.10~~
	from July 1, 2010, ~~and thereafter~~ to June 30, 2014	12.10.
	from July 1, 2014, and thereafter	12.85.

EFFECTIVE DATE. This section is effective on the first day of the first full pay period beginning after July 1, 2014.

Sec. 5. Minnesota Statutes 2012, section 353.27, subdivision 2, is amended to read:

Subd. 2. General employees retirement plan; employee contribution. (a) For a basic member of the general employees retirement plan of the Public Employees Retirement Association, the employee contribution is 9.10 percent of salary. For a coordinated member of the general employees retirement plan of the Public Employees Retirement Association, the employee contribution is 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
	Effective January 1, 2015	6.50.

(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. 6. Minnesota Statutes 2012, section 353.27, subdivision 3, is amended to read:

Subd. 3. General employees retirement plan; employer contribution. (a) For a basic member of the general employees retirement plan of the Public Employees Retirement Association, the employer contribution is 9.10 percent of salary. For a coordinated member of the general employees retirement plan of the Public Employees Retirement Association, the employer contribution is 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
	Effective January 1, 2015	6.50.

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(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. 7. Minnesota Statutes 2012, 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 general employees 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; 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 expenses, and the amortization contribution of the general employees 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 to the general employees retirement plan under subdivisions 2 and 3 must be adjusted:

(1) if~~, on or after July 1, 2010,~~ the regular actuarial valuation of the general employees retirement plan of the Public Employees Retirement Association under section 356.215 indicates that there is a contribution sufficiency under paragraph (a) greater than 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 is no greater than one percent of covered payroll based on the most recent actuarial valuation; or

(2) if~~, on or after July 1, 2010,~~ the regular actuarial valuation of the general employees retirement plan of the Public Employees Retirement Association under section 356.215 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 (d) to a level such that no deficiency exists based on the most recent actuarial valuation.

(c) If the actuarially required contribution of the general employees retirement plan is less than the total support provided by the combined employee and employer contribution rates under subdivisions 2, 3, and 3a, by more than one percent of covered payroll, the general employees retirement plan coordinated program employee and employer contribution rates under subdivisions 2 and 3 must be 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 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) 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:

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(1) less than two percent, the incremental increase may be up to 0.25 percent for the general employees retirement plan employee and matching employer contribution rates;

(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) The general employees retirement plan contribution sufficiency or deficiency determination under paragraphs (a) to (d) must be made without the inclusion of the contributions to, the funded condition of, or the actuarial funding requirements of the MERF division.

(f) 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 the receipt of the most recent annual actuarial valuation prepared under section 356.215. 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, the recommended adjustment becomes effective ~~on the first day of the first full payroll period in the fiscal year~~ for any salary paid on or after the January 1 next following ~~receipt of the most recent actuarial valuation that gave rise to the adjustment~~ the legislative session in which the Legislative Commission on Pensions and Retirement did not take any action to disapprove or modify the Public Employees Retirement Association Board of Trustees' recommendation to adjust the employee and employer rates.

(g) 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.

(h) 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.

(i) 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.

ARTICLE 4

JOINT AND SURVIVOR OPTIONAL ANNUITY COMPUTATION DISCOUNT RATE

Section 1. Minnesota Statutes 2012, section 3A.01, subdivision 1a, is amended to read:

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Subd. 1a. Actuarial equivalent. (a) "Actuarial equivalent" means the condition of one allowance or benefit having an equal actuarial present value to another allowance or benefit, determined by the actuary retained under section 356.214 as of a given date at a specified age with each actuarial present value based on the mortality table applicable for the plan and approved under section 356.215, subdivision 18, and using the applicable preretirement or postretirement interest rate assumption specified in section 356.215, subdivision 8.

(b) For purposes of computing a joint and survivor annuity, the postretirement interest rate assumption specified in section 356.461 must be used, rather than the postretirement interest rate specified in section 356.215, subdivision 8.

EFFECTIVE DATE. This section is effective July 1, 2014.

Sec. 2. Minnesota Statutes 2012, section 352.01, subdivision 12, is amended to read:

Subd. 12. Actuarial equivalent. (a) "Actuarial equivalent" means the condition of one annuity or benefit having an equal actuarial present value as another annuity or benefit, determined as of a given date at a specified age with each actuarial present value based on the appropriate mortality table adopted by the board of directors based on the experience of the fund as recommended by the actuary retained under section 356.214, and approved under section 356.215, subdivision 18, and using the applicable preretirement or postretirement interest rate assumption specified in section 356.215, subdivision 8.

EFFECTIVE DATE. This section is effective July 1, 2014.

Sec. 3. Minnesota Statutes 2013 Supplement, 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 deferred compensation plan established in section 352.965;

(6) oversee the administration of the health care savings plan established in section; and

(7) approve early retirement and optional annuity factors for all plans administered by the system, including approving retirement annuity factors for the unclassified state employees program under chapter 352D, subject to review by the actuary retained by the Legislative Commission on Pensions and Retirement; establish the schedule for implementation of the approved factors; and notify the Legislative Commission on Pensions and Retirement of the implementation schedule.

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(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 July 1, 2014.

Sec. 4. Minnesota Statutes 2012, section 352B.08, subdivision 3, is amended to read:

Subd. 3. Optional annuity forms. (a) In lieu of the single life annuity provided in subdivision 2, the member or former member may elect an optional annuity form. The board of the Minnesota state retirement system shall establish a joint and survivor annuity, payable to a designated beneficiary for life, adjusted to the actuarial equivalent value of the single life annuity. The board shall also establish an additional optional annuity with an actuarial equivalent value of the single life annuity in the form of a joint and survivor annuity which provides that the elected annuity be reinstated to the single life annuity provided in subdivision 2, if after commencing the elected joint and survivor annuity, the designated beneficiary dies before the member, which reinstatement is not retroactive but takes effect for the first full month occurring after the death of the designated beneficiary. The board may also establish other actuarial equivalent value optional annuity forms. In establishing actuarial equivalent value optional annuity forms, each optional annuity form shall have the same present value as a regular single life annuity using the mortality table adopted by the board and the interest assumption specified in section 356.215, subdivision 8~~, and~~.

(c) The board shall obtain the written recommendation of the actuary retained under section 356.214. These recommendations shall be a part of the permanent records of the board.

EFFECTIVE DATE. This section is effective July 1, 2014.

Sec. 5. Minnesota Statutes 2012, section 353.01, subdivision 14, is amended to read:

Subd. 14. Actuarial equivalent. (a) "Actuarial equivalent" means the condition of one annuity or benefit having an equal actuarial present value as another annuity or benefit, determined as of a given date with each actuarial present value based on the appropriate mortality table adopted by the board of trustees based on the experience of the fund as recommended by the actuary retained under section 356.214, and approved under section 356.215, subdivision 18, and using the applicable preretirement or postretirement interest rate assumption specified in section 356.215, subdivision 8.

(b) For purposes of computing a joint and survivor annuity, the postretirement interest rate assumption specified in section 356.461 must be used rather than the postretirement interest rate specified in section 356.215, subdivision 8.

EFFECTIVE DATE. This section is effective on the same date as the next mortality assumption adjustment or on July 1, 2017, whichever is earlier.

Sec. 6. Minnesota Statutes 2012, section 353.30, subdivision 3, is amended to read:

Subd. 3. Optional retirement annuity forms. (a) The board of trustees shall establish optional annuities which shall take the form of a joint and survivor annuity. Except as provided in subdivision 3a, the optional annuity forms shall be actuarially equivalent to the forms provided in section 353.29 and subdivisions 1, 1a, 1b, 1c, and 5. In establishing those optional forms, the board shall obtain the written recommendation of the actuary retained under section 356.214. The recommendations shall be a part of the permanent records of the board. A member or former member may select an optional form of annuity, subject to the provisions of section 356.46, in lieu of accepting any other form of annuity which might otherwise be available.

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EFFECTIVE DATE. This section is effective on the same date as the next mortality assumption adjustment or on July 1, 2017, whichever is earlier.

Sec. 7. Minnesota Statutes 2012, section 354.05, subdivision 7, is amended to read:

Subd. 7. Actuarial equivalent. (a) "Actuarial equivalent" means the condition of one annuity or benefit having an equal actuarial present value as another annuity or benefit, determined as of a given date with each actuarial present value based on the appropriate mortality table adopted by the board of trustees based on the experience of the association as recommended by the actuary retained under section 356.214, and approved under section 356.215, subdivision 18, and using the applicable preretirement or postretirement interest rate assumption specified in section 356.215, subdivision 8.

EFFECTIVE DATE. This section is effective July 1, 2014.

Sec. 8. [356.461] VARIOUS RETIREMENT SYSTEMS; JOINT AND SURVIVOR ANNUITY COMPUTATION.

Subdivision 1. Joint and survivor annuity computation. Notwithstanding any provision of section 356.215, subdivision 8, or 356.415, subdivision 3, to the contrary, for purposes of computing joint and survivor annuities, the applicable postretirement interest assumption is 6.5 percent.

Subd. 2. Covered plans. This section applies to the following retirement plans:

(1) the legislators retirement plan, established under chapter 3A, including constitutional officers as specified in that chapter;

(2) the correctional state employees retirement plan of the Minnesota State Retirement System, established under chapter 352;

(3) the general state employees retirement plan of the Minnesota State Retirement System, established under chapter 352;

(4) the State Patrol retirement plan, established under chapter 352B;

(5) the unclassified state employees retirement program of the Minnesota State Retirement System, established under chapter 352D;

(6) the judges retirement plan, established under chapter 490;

(7) the general employees retirement plan of the Public Employees Retirement Association, established under chapter 353, including the MERF division of the Public Employees Retirement Association;

(8) the public employees police and fire retirement plan of the Public Employees Retirement Association, established under chapter 353;

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(9) the local government correctional service retirement plan of the Public Employees Retirement Association, established under chapter 353E; and

(10) the Teachers Retirement Association, established under chapter 354.

EFFECTIVE DATE. (a) For plans administered by the Minnesota State Retirement System and the Teachers Retirement Association, this section is effective July 1, 2014.

(b) For plans administered by the Public Employees Retirement Association, this section applies to the determination of joint and survivor factors implemented for the applicable Public Employees Retirement Association plan effective on the same date as the next mortality assumption adjustment or on July 1, 2017, whichever is earlier.

Sec. 9. Minnesota Statutes 2012, section 490.121, subdivision 2a, is amended to read:

Subd. 2a. Actuarial equivalent. (a) "Actuarial equivalent" means the condition of one annuity or benefit having an equal actuarial present value as another annuity or benefit, determined as of a given date with each actuarial present value based on the appropriate mortality table adopted by the board of directors of the Minnesota State Retirement System based on the experience of the fund as recommended by the actuary retained under section 356.214 and approved under section 356.215, subdivision 18, and using the applicable preretirement or postretirement interest rate assumption specified in section 356.215, subdivision 8.

EFFECTIVE DATE. This section is effective July 1, 2014.

ARTICLE 5

MSRS-CORRECTIONAL RETIREMENT PLAN COVERAGE CHANGES

Section 1. Minnesota Statutes 2012, section 352.90, is amended to read:

352.90 POLICY.

It is the policy of the legislature to provide special retirement benefits for and special contributions by certain correctional employees who may be required to retire at an early age because they lose the mental or physical capacity required to maintain the safety, security, discipline, and custody of inmates at state correctional facilities or; of patients at in the state-operated forensic services program, which is comprised of the Minnesota Security Hospital, the forensic nursing home, the forensic transition service, and the competency restoration program; of patients in the Minnesota sex offender program,; or of patients in the Minnesota Specialty Health System-Cambridge.

Sec. 2. Minnesota Statutes 2012, section 352.91, subdivision 1, is amended to read:

Subdivision 1. Qualifying jobs. "Covered correctional service" means service performed by a state employee, as defined in section 352.01, employed at a state correctional facility, the ~~Minnesota Security Hospital~~ state-operated forensic services program, or the Minnesota sex offender program as:

(1) a corrections officer 1;

(2) a corrections officer 2;

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(3) a corrections officer 3;

(4) a corrections officer supervisor;

(5) a corrections lieutenant;

(6) a corrections captain;

(7) a security counselor;

(8) a security counselor lead; or

(9) a corrections canine officer.

Sec. 3. Minnesota Statutes 2012, section 352.91, subdivision 2, is amended to read:

Subd. 2. Maintenance, correctional industry, and trades. "Covered correctional service" also means service rendered at any time by state employees as maintenance personnel, correctional industry personnel, or members of trades certified by the commissioner of management and budget to the executive director as being engaged for at least 75 percent of the employee's working time in the rehabilitation, treatment, custody, or supervision of inmates at a Minnesota correctional facility, or of patients at in the ~~Minnesota Security Hospital~~ state-operated forensic services program or the Minnesota sex offender program.

Sec. 4. Minnesota Statutes 2012, section 352.91, subdivision 3c, is amended to read:

Subd. 3c. Nursing personnel. (a) "Covered correctional service" means service by a state employee in one of the employment positions at a correctional facility ~~or at~~, in the ~~Minnesota Security Hospital~~ state-operated forensic services program, or in the Minnesota sex offender program that are specified in paragraph (b) if at least 75 percent of the employee's working time is spent in direct contact with inmates or patients and the fact of this direct contact is certified to the executive director by the appropriate commissioner.

(b) The employment positions are as follows:

(1) registered nurse - senior;

(2) registered nurse;

(3) registered nurse - principal;

(4) licensed practical nurse 2;

(5) registered nurse advance practice; and

(6) psychiatric advance practice registered nurse.

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

Sec. 5. Minnesota Statutes 2012, section 352.91, subdivision 3d, is amended to read:

Subd. 3d. Other correctional personnel. (a) "Covered correctional service" means service by a state employee in one of the employment positions at a correctional facility or at in the ~~Minnesota Security Hospital~~ state-operated forensic services program specified in paragraph (b) if at least 75 percent of the employee's working time is spent in direct contact with inmates or patients and the fact of this direct contact is certified to the executive director by the appropriate commissioner.

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(b) The employment positions are:

(1) automotive mechanic;

(2) baker;

(3) central services administrative specialist, intermediate;

(4) central services administrative specialist, principal;

(5) chaplain;

(6) chief cook;

(7) clinical program therapist 1;

(8) clinical program therapist 2;

(9) clinical program therapist 3;

(10) clinical program therapist 4;

(11) cook;

(12) cook coordinator;

(13) corrections inmate program coordinator;

(14) corrections transitions program coordinator;

(15) corrections security caseworker;

(16) corrections security caseworker career;

(17) corrections teaching assistant;

(18) delivery van driver;

(19) dentist;

(20) electrician supervisor;

(21) general maintenance worker lead;

(22) general repair worker;

(23) library/information research services specialist;

(24) library/information research services specialist senior;

(25) library technician;

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(26) painter lead;

(27) plant maintenance engineer lead;

(28) plumber supervisor;

(29) psychologist 1;

(30) psychologist 3;

(31) recreation therapist;

(32) recreation therapist coordinator;

(33) recreation program assistant;

(34) recreation therapist senior;

(35) sports medicine specialist;

(36) work therapy assistant;

(37) work therapy program coordinator; and

(38) work therapy technician.

Sec. 6. Minnesota Statutes 2012, section 352.91, subdivision 3e, is amended to read:

Subd. 3e. Minnesota Specialty Health System-Cambridge. (a) "Covered correctional service" means service by a state employee in one of the employment positions with the Minnesota Specialty Health System-Cambridge specified in paragraph (b) if at least 75 percent of the employee's working time is spent in direct contact with patients who are in the Minnesota Specialty Health System-Cambridge and if service in such a position is certified to the executive director by the commissioner of human services.

(b) The employment positions are:

(1) behavior analyst 1;

(2) behavior analyst 2;

(3) behavior analyst 3;

(4) group supervisor;

(5) group supervisor assistant;

(6) human services support specialist;

(7) residential program lead;

(8) psychologist 2;

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(9) recreation program assistant;

(10) recreation therapist senior;

(11) registered nurse senior;

(12) skills development specialist;

(13) social worker senior;

(14) social worker specialist; and

(15) speech pathology specialist.

(c) A Department of Human Services employee who was employed at the Minnesota Specialty Health System-Cambridge immediately preceding the 2014 conversion to the community-based homes and was in covered correctional service at the time of the transition shall continue to be covered by the correctional employee retirement plan while employed and without a break in service with the Department of Human Services in the direct care and treatment services administration.

Sec. 7. Minnesota Statutes 2012, section 352.91, subdivision 3f, is amended to read:

Subd. 3f. Additional Department of Human Services personnel. (a) "Covered correctional service" means service by a state employee in one of the employment positions specified in paragraph (b) at in the ~~Minnesota Security Hospital~~ state-operated forensic services program or in the Minnesota sex offender program if at least 75 percent of the employee's working time is spent in direct contact with patients and the determination of this direct contact is certified to the executive director by the commissioner of human services.

(b) The employment positions are:

(1) behavior analyst 2;

(2) behavior analyst 3;

(3) certified occupational therapy assistant 1;

(4) certified occupational therapy assistant 2;

(5) chemical dependency counselor senior;

(6) client advocate;

(7) clinical program therapist 2;

~~(7)~~ (8) clinical program therapist 3;

~~(8)~~ (9) clinical program therapist 4;

~~(9)~~ (10) customer services specialist principal;

~~(10)~~ (11) dental assistant registered;

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~~(11)~~ (12) group supervisor;

~~(12)~~ (13) group supervisor assistant;

~~(13)~~ (14) human services support specialist;

~~(14)~~ (15) licensed alcohol and drug counselor;

~~(15)~~ (16) licensed practical nurse 1;

~~(16)~~ (17) management analyst 3;

~~(17)~~ (18) occupational therapist;

~~(18)~~ (19) occupational therapist, senior;

~~(19)~~ (20) psychologist 1;

~~(20)~~ (21) psychologist 2;

~~(21)~~ (22) psychologist 3;

~~(22)~~ (23) recreation program assistant;

~~(23)~~ (24) recreation therapist lead;

~~(24)~~ (25) recreation therapist senior;

~~(25)~~ (26) rehabilitation counselor senior;

~~(26)~~ (27) security supervisor;

~~(27)~~ (28) skills development specialist;

~~(28)~~ (29) social worker senior;

~~(29)~~ (30) social worker specialist;

~~(30)~~ (31) social worker specialist, senior;

~~(31)~~ (32) special education program assistant;

~~(32)~~ (33) speech pathology clinician;

~~(33)~~ (34) work therapy assistant; and

~~(34)~~ (35) work therapy program coordinator.

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Sec. 8. Minnesota Statutes 2012, section 352.91, is amended by adding a subdivision to read:

Subd. 3j. State-operated forensic services program. For purposes of this section, "state-operated forensic services program" means the Minnesota Security Hospital, the forensic nursing home, the forensic transition service, and the competency restoration program.

ARTICLE 6

TRA-DTRFA CONSOLIDATION

Section 1. Minnesota Statutes 2012, section 13.632, subdivision 1, is amended to read:

Subdivision 1. Beneficiary and survivor data. The following data on beneficiaries and survivors of the St. Paul Teachers Retirement Fund Association ~~and the Duluth Teachers Retirement Fund Association~~ members are private data on individuals: home address, date of birth, direct deposit number, and tax withholding data.

Sec. 2. Minnesota Statutes 2012, section 122A.18, subdivision 7a, is amended to read:

Subd. 7a. Permission to substitute teach. (a) The Board of Teaching may allow a person who is enrolled in and making satisfactory progress in a board-approved teacher program and who has successfully completed student teaching to be employed as a short-call substitute teacher.

(b) The Board of Teaching may issue a lifetime qualified short-call substitute teaching license to a person who:

(1) was a qualified teacher under section 122A.16 while holding a continuing five-year teaching license issued by the board, and receives a retirement annuity from the Teachers Retirement Association~~, Minneapolis Teachers Retirement Fund Association,~~ or the St. Paul Teachers Retirement Fund Association~~, or Duluth Teachers Retirement Fund Association~~;

(2) holds an out-of-state teaching license and receives a retirement annuity as a result of the person's teaching experience; or

(3) held a continuing five-year license issued by the board, taught at least three school years in an accredited nonpublic school in Minnesota, and receives a retirement annuity as a result of the person's teaching experience.

A person holding a lifetime qualified short-call substitute teaching license is not required to complete continuing education clock hours. A person holding this license may reapply to the board for a continuing five-year license and must again complete continuing education clock hours one school year after receiving the continuing five-year license.

Sec. 3. Minnesota Statutes 2013 Supplement, section 353.01, subdivision 2b, is amended to read:

(1) persons whose salary from one governmental subdivision never exceeds $425 in a month;

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(3) election officers or election judges;

(4) patient and inmate personnel who perform services for a governmental subdivision;

(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;

(6) employees who are employed by reason of work emergency caused by fire, flood, storm, or similar disaster;

(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,~~ and the St. Paul Teachers Retirement Fund Association. 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;

(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;

(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;

(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;

(11) students who are serving for up to five years in an internship or residency program sponsored by a governmental subdivision, including an accredited educational institution;

(12) persons who hold a part-time adult supplementary technical college license who render part-time teaching service in a technical college;

(13) except for employees of Hennepin County or Hennepin Healthcare System, Inc., foreign citizens who are employed by a governmental subdivision under a work permit, or an H-1b visa initially issued or extended for a combined period less than three years of employment. Upon extension of the employment beyond the three-year period, the foreign citizens must be reported for membership beginning the first of the month thereafter provided the monthly earnings threshold as provided under subdivision 2a is met;

(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;

(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 general

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employees retirement plan or the public employees police and fire plan, whichever applies, on the basis of compensation received from public employment service other than service as volunteer ambulance service personnel;

(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, 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 general employees retirement plan or the public employees police and fire plan, whichever applies, on the basis of compensation received from public employment activities other than those as a volunteer firefighter;

(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;

(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 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;

(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;

(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;

(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;

(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 up to five years, 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;

(23) independent contractors and the employees of independent contractors;

(24) reemployed annuitants of the association during the course of that reemployment; and

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(25) persons appointed to serve on a board or commission of a governmental subdivision or an instrumentality thereof.

Sec. 4. Minnesota Statutes 2012, section 354.05, subdivision 2, is amended to read:

Subd. 2. Teacher. (a) "Teacher" means:

(1) a person who renders service as a teacher, supervisor, principal, superintendent, librarian, nurse, counselor, social worker, therapist, or psychologist in a public school of the state located outside of the corporate limits of ~~the city of Duluth or~~ the city of St. Paul, or in any charter school, irrespective of the location of the school, or in any charitable, penal, or correctional institutions of a governmental subdivision, or who is engaged in educational administration in connection with the state public school system, but excluding the University of Minnesota, whether the position be a public office or an employment, and not including the members or officers of any general governing or managing board or body;

(2) an employee of the Teachers Retirement Association;

(3) a person who renders teaching service on a part-time basis and who also renders other services for a single employing unit. A person whose teaching service comprises at least 50 percent of the combined employment salary is a member of the association for all services with the single employing unit. If the person's teaching service comprises less than 50 percent of the combined employment salary, the executive director must determine whether all or none of the combined service is covered by the association; or

(i) a president, vice-president, or dean;

(ii) a manager or a professional in an academic or an academic support program other than specified in item (i);

(iii) an administrative or a service support faculty position; or

(iv) a teacher or a research assistant.

(b) "Teacher" does not mean:

(1) a person who works for a school or institution as an independent contractor as defined by the Internal Revenue Service;

(3) a person exempt from licensure under section 122A.30.

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Sec. 5. Minnesota Statutes 2012, section 354.05, subdivision 13, is amended to read:

Subd. 13. Allowable service. "Allowable service" means:

(1) any service rendered by a teacher for which on or before July 1, 1957, the teacher's account in the retirement fund was credited by reason of employee contributions in the form of salary deductions, payments in lieu of salary deductions, or in any other manner authorized by Minnesota Statutes 1953, sections 135.01 to 135.13, as amended by Laws 1955, chapters 361, 549, 550, 611~~, or~~;

(2) any service rendered by a teacher for which on or before July 1, 1961, the teacher elected to obtain credit for service by making payments to the fund ~~pursuant to~~ under Minnesota Statutes 1980, section 354.09 and section 354.51~~, or~~;

(3) any service rendered by a teacher after July 1, 1957, for any calendar month when the member receives salary from which deductions are made, deposited and credited in the fund~~, or~~;

(4) any service rendered by a person after July 1, 1957, for any calendar month where payments in lieu of salary deductions are made, deposited and credited into the fund as provided in Minnesota Statutes 1980, section 354.09, subdivision 4, and section 354.53~~, or~~;

(5) any service rendered by a teacher for which the teacher elected to obtain credit for service by making payments to the fund ~~pursuant to~~ under Minnesota Statutes 1980, section 354.09, subdivisions 1 and 4, sections 354.50, 354.51, Minnesota Statutes 1957, section 135.41, subdivision 4, Minnesota Statutes 1971, section 354.09, subdivision 2, or Minnesota Statutes, 1973 Supplement, section 354.09, subdivision 3~~, or~~;

(6) both service during years of actual membership in the course of which contributions were currently made and service in years during which the teacher was not a member but for which the teacher later elected to obtain credit by making payments to the fund as permitted by any law then in effect~~, or~~;

(7) any service rendered where contributions were made and no credit was established because of the limitations contained in Minnesota Statutes 1957, section 135.09, subdivision 2, as determined by the ratio between the amounts of money credited to the teacher's account in a fiscal year and the maximum retirement contribution allowable for that year~~, or~~;

(8) MS 2002 [Expired]

(9) a period of time during which a teacher was on strike without pay, not to exceed a period of one year, if payment in lieu of salary deductions is made under section 354.72~~, or~~;

(10) a period of service before July 1, 2006, that was properly credited as allowable service by the Minneapolis Teachers Retirement Fund Association, and that was rendered by a teacher as an employee of Special School District No. 1, Minneapolis, or by an employee of the Minneapolis Teachers Retirement Fund Association who was a member of the Minneapolis Teachers Retirement Fund Association by virtue of that employment, who has not begun receiving an annuity or other retirement benefit from the former Minneapolis Teachers Retirement Fund Association calculated in whole or in part on that service before July 1, 2006, and who has not taken a refund of member contributions related to that service unless the refund is repaid under section 354.50, subdivision 4. Service as an employee of Special School District No. 1, Minneapolis, on or after July 1, 2006, is "allowable service" only as provided by this chapter.; or

(11) a period of service before July 1, 2015, that was properly credited as allowable service by the Duluth Teachers Retirement Fund Association, and that was rendered by a teacher as an employee of Independent School District No. 709, Duluth, or by an employee of the Duluth Teachers Retirement Fund Association who was a

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member of the Duluth Teachers Retirement Fund Association by virtue of that employment, who has not begun receiving an annuity or other retirement benefit from the former Duluth Teachers Retirement Fund Association calculated in whole or in part on that service before July 1, 2015, and who has not taken a refund of member contributions related to that service unless the refund is repaid under section 354.50, subdivision 4. Service as an employee of Independent School District No. 709, Duluth, on or after July 1, 2015, is "allowable service" only as provided by this chapter.

Sec. 6. Minnesota Statutes 2012, 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 the following percentage of the member's salary:

Period	Basic Program	Coordinated Program

~~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	7.0 percent
after June 30, 2014	11.0 percent	7.5 percent

~~(b) For a coordinated member, the employee contribution is 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)~~ (b) 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)~~ (c) 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.

~~(e)~~ (d) 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.

Sec. 7. Minnesota Statutes 2012, 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, is an amount equal to the applicable following percentage of salary of each coordinated member and the applicable ~~following~~ percentage of salary of each basic member: specified in paragraph (c).

~~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~~

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

(b) The regular employer contribution to the fund by Independent School District No. 709, Duluth, is an amount equal to the applicable percentage of salary of each old law or new law coordinated member specified for the coordinated program in paragraph (c).

~~(b)~~ (c) The employer contribution to the fund for every other employer is an amount equal to the applicable following percentage of the salary of each coordinated member and the applicable following percentage of the 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

~~(c)~~ (d) 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)~~ (e) 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), and (c) must be adjusted accordingly.

Sec. 8. Minnesota Statutes 2013 Supplement, section 354.436, is amended to read:

354.436 DIRECT STATE AID ON BEHALF OF THE FORMER ~~MINNEAPOLIS~~ FIRST CLASS CITY TEACHERS RETIREMENT FUND ~~ASSOCIATION~~ ASSOCIATIONS.

Subdivision 1. Aid authorization. The state shall pay $12,954,000 to the Teachers Retirement Association on behalf of the former Minneapolis Teachers Retirement Fund Association and shall pay $15,346,000 during fiscal year 2015 to the Teachers Retirement Association for the credit of the Duluth Teachers Retirement Fund Association and, after fiscal year 2015, shall pay $15,346,000 on behalf of the Duluth Teachers Retirement Fund Association.

Subd. 2. Aid appropriation. The commissioner of management and budget shall pay the aid amounts under subdivision 1 annually on October 1. The amount required is appropriated annually from the general fund to the commissioner of management and budget.

Subd. 3. Aid expiration. The aid amounts specified in this section ~~terminates~~ terminate and this section expires on the October 1 next following the later of the following dates: (1) when the current assets of the Teachers Retirement Association fund equal or exceed the actuarial accrued liabilities of the fund as determined in the most recent actuarial valuation report for the Teachers Retirement Association fund by the actuary retained under section 356.214~~, or on the established date for full funding under section 356.215, subdivision 11, whichever occurs earlier~~; or (2) when the member and employer contribution rates are first determined to be eligible for a reduction under section 354.42, subdivisions 4a, 4b, 4c, and 4d.

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Sec. 9. Minnesota Statutes 2013 Supplement, section 354.44, subdivision 6, is amended to read:

Subd. 6. Computation of formula program retirement annuity. (a) The formula retirement annuity must be computed in accordance with the applicable provisions of the formulas stated in paragraph (b) or (d) on the basis of each member's average salary under section 354.05, subdivision 13a, for the period of the member's formula service credit.

(b) This paragraph, in conjunction with paragraph (c), applies to a person who first became a member of the association or a member of a pension fund listed in section 356.30, subdivision 3, before July 1, 1989, unless paragraph (d), in conjunction with paragraph (e), produces a higher annuity amount, in which case paragraph (d) applies. The average salary as defined in section 354.05, subdivision 13a, multiplied by the following percentages per year of formula service credit shall determine the amount of the annuity to which the member qualifying therefor is entitled for service rendered before July 1, 2006:

Period	Coordinated Member	Basic Member

Each year of service during first ten	1.2 percent per year	2.2 percent per year
Each year of service thereafter	1.7 percent per year	2.7 percent per year

For service rendered on or after July 1, 2006, by a member other than a member who was a member of the former Duluth Teachers Retirement Fund Association between January 1, 2006, and June 30, 2015, and for service rendered on or after July 1, 2013, by a member who was a member of the former Duluth Teachers Retirement Fund Association between January 1, 2013, and June 30, 2015, the average salary as defined in section 354.05, subdivision 13a, multiplied by the following percentages per year of service credit, determines the amount the annuity to which the member qualifying therefor is entitled:

Period	Coordinated Member	Basic Member

Each year of service during first ten	1.4 percent per year	2.2 percent per year
Each year of service after ten years of service	1.9 percent per year	2.7 percent per year

(c)(i) This paragraph applies only to a person who first became a member of the association or a member of a pension fund listed in section 356.30, subdivision 3, before July 1, 1989, and whose annuity is higher when calculated under paragraph (b), in conjunction with this paragraph than when calculated under paragraph (d), in conjunction with paragraph (e).

(ii) Where any member retires prior to normal retirement age under a formula annuity, the member shall be paid a retirement annuity in an amount equal to the normal annuity provided in paragraph (b) reduced by one-quarter of one percent for each month that the member is under normal retirement age at the time of retirement except that for any member who has 30 or more years of allowable service credit, the reduction shall be applied only for each month that the member is under age 62.

(iii) Any member whose attained age plus credited allowable service totals 90 years is entitled, upon application, to a retirement annuity in an amount equal to the normal annuity provided in paragraph (b), without any reduction by reason of early retirement.

(d) This paragraph applies to a member who has become at least 55 years old and first became a member of the association after June 30, 1989, and to any other member who has become at least 55 years old and whose annuity amount when calculated under this paragraph and in conjunction with paragraph (e), is higher than it is when calculated under paragraph (b), in conjunction with paragraph (c). For a basic member, the average salary, as defined in section 354.05, subdivision 13a, multiplied by 2.7 percent for each year of service for a basic member determines the amount of the retirement annuity to which the basic member is entitled. The annuity of a basic

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member who was a member of the former Minneapolis Teachers Retirement Fund Association as of June 30, 2006, must be determined according to the annuity formula under the articles of incorporation of the former Minneapolis Teachers Retirement Fund Association in effect as of that date. For a coordinated member, the average salary, as defined in section 354.05, subdivision 13a, multiplied by 1.7 percent for each year of service rendered before July 1, 2006, and by 1.9 percent for each year of service rendered on or after July 1, 2006, for a member other than a member who was a member of the former Duluth Teachers Retirement Fund Association between January 1, 2006, and June 30, 2015, and by 1.9 percent for each year of service rendered on or after July 1, 2013, for a member of the former Duluth Teachers Retirement Fund Association between January 1, 2013, and June 30, 2015, determines the amount of the retirement annuity to which the coordinated member is entitled.

(e) This paragraph applies to a person who has become at least 55 years old and first becomes a member of the association after June 30, 1989, and to any other member who has become at least 55 years old and whose annuity is higher when calculated under paragraph (d) in conjunction with this paragraph than when calculated under paragraph (b), in conjunction with paragraph (c). An employee who retires under the formula annuity before the normal retirement age shall be paid the normal annuity provided in paragraph (d) reduced so that the reduced annuity is the actuarial equivalent of the annuity that would be payable to the employee if the employee deferred receipt of the annuity and the annuity amount were augmented at an annual rate of three percent compounded annually from the day the annuity begins to accrue until the normal retirement age 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. Except in regards to section 354.46, this paragraph remains in effect until June 30, 2015.

(f) After June 30, 2020, this paragraph applies to a person who has become at least 55 years old and first becomes a member of the association after June 30, 1989, and to any other member who has become at least 55 years old and whose annuity is higher when calculated under paragraph (d) in conjunction with this paragraph than when calculated under paragraph (b) in conjunction with paragraph (c). An employee who retires under the formula annuity before the normal retirement age is entitled to receive the normal annuity provided in paragraph (d). For a person who is at least age 62 or older and has at least 30 years of service, the annuity must be reduced by an early reduction factor of six percent per year of the annuity that would be payable to the employee if the employee deferred receipt of the annuity and the annuity amount were augmented at an annual rate of three percent compounded annually from the day the annuity begins to accrue until the normal retirement age if the employee became an employee before July 1, 2006, and at 2.5 percent compounded annually if the employee became an employee after June 30, 2006. For a person who is not at least age 62 or older and does not have at least 30 years of service, the annuity would be reduced by an early reduction factor of four percent per year for ages 55 through 59 and seven percent per year of the annuity that would be payable to the employee if the employee deferred receipt of the annuity and the annuity amount were augmented at an annual rate of three percent compounded annually from the day the annuity begins to accrue until the normal retirement age if the employee became an employee before July 1, 2006, and at 2.5 percent compounded annually if the employee became an employee after June 30, 2006.

(g) After June 30, 2015, and before July 1, 2020, for a person who would have a reduced retirement annuity under either paragraph (e) or (f) if they were applicable, the employee is entitled to receive a reduced annuity which must be calculated using a blended reduction factor augmented monthly by 1/60 of the difference between the reduction required under paragraph (e) and the reduction required under paragraph (f).

(h) No retirement annuity is payable to a former employee with a salary that exceeds 95 percent of the governor's salary unless and until the salary figures used in computing the highest five successive years average salary under paragraph (a) have been audited by the Teachers Retirement Association and determined by the executive director to comply with the requirements and limitations of section 354.05, subdivisions 35 and 35a.

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Sec. 10. [354.73] RETIREMENT COVERAGE RELATED TO THE FORMER DULUTH TEACHERS RETIREMENT FUND ASSOCIATION.

Subdivision 1. Application. This section applies to the retirement coverage of members of the former Duluth Teachers Retirement Fund Association transferred to the Teachers Retirement Association by section 46.

Subd. 2. Teachers Retirement Association as successor in interest. The Teachers Retirement Association is the successor in interest to all claims which the former Duluth Teachers Retirement Fund Association may have or may have been able to assert against any person on June 30, 2015, and is the successor in interest to all claims which could have been asserted against the former Duluth Teachers Retirement Fund Association, subject to the following:

(1) the Teachers Retirement Association is not liable for any claim against the Duluth Teachers Retirement Fund Association, its former board or board members, which is founded upon a claim of breach of fiduciary duty, where the act or acts constituting the claimed breach were not done in good faith;

(2) the Teachers Retirement Association may assert any applicable defense to any claim in any judicial or administrative proceeding that the former Duluth Teachers Retirement Fund Association or its board would otherwise have been entitled to assert;

(3) the Teachers Retirement Association may assert any applicable defense that it may assert in its capacity as a statewide agency; and

(4) the Teachers Retirement Association shall indemnify any former fiduciary of the Duluth Teachers Retirement Fund Association consistent with section 356A.11.

Subd. 3. Benefit calculation. (a) For every deferred, inactive, disabled, and retired member of the Duluth Teachers Retirement Fund Association transferred under subdivision 1, and the survivors of these members, annuities or benefits earned before July 1, 2015, other than future postretirement adjustments, must be calculated and paid by the Teachers Retirement Association under the laws, articles of incorporation, and bylaws of the former Duluth Teachers Retirement Fund Association that were in effect relative to the person on the date of the person's termination of active service covered by the former Duluth Teachers Retirement Fund Association.

(b) Former Duluth Teachers Retirement Fund Association members who retired before July 1, 2015, must receive postretirement adjustments after January 1, 2015, only as provided in section 356.415. All other benefit recipients of the former Duluth Teachers Retirement Fund Association must receive postretirement adjustments after December 31, 2015, only as provided in section 356.415.

(c) This consolidation does not impair or diminish benefits for an active, deferred, or retired member or a survivor of an active, deferred, or retired member under the former Duluth Teachers Retirement Fund Association in existence at the time of the consolidation, except that any future postretirement adjustments must be paid after July 1, 2015, in accordance with paragraph (b), and all benefits based on service on or after July 1, 2015, must be determined only by laws governing the Teachers Retirement Association.

Sec. 11. Minnesota Statutes 2012, section 354A.011, subdivision 11, is amended to read:

Subd. 11. Coordinated member. "Coordinated member" means any member of the teachers retirement fund association who is covered by any agreement or modification made between the state and the Secretary of Health, Education and Welfare making the provisions of the federal Old Age, Survivors and Disability Insurance Act applicable to certain teachers except in the case of a member of the Duluth Teachers Retirement Fund Association, in which it means additionally that the member either first became a member prior to July 1, 1981, and elected to be covered by the new law coordinated program of the Duluth Teachers Retirement Fund Association or first became a member on or subsequent to July 1, 1981.

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Sec. 12. Minnesota Statutes 2012, section 354A.011, subdivision 15a, is amended to read:

Subd. 15a. Normal retirement age. "Normal retirement age" means age 65 for a person who first became a member of the coordinated program of the St. Paul Teachers Retirement Fund Association ~~or the new law coordinated program of the Duluth Teachers Retirement Fund Association~~ or a member of a pension fund listed in section 356.30, subdivision 3, before July 1, 1989. For a person who first became a member of the coordinated program of the St. Paul Teachers Retirement Fund Association ~~or the new law coordinated program of the Duluth Teachers Retirement Fund Association~~ after June 30, 1989, normal retirement age means the higher of age 65 or retirement age, as defined in United States Code, title 42, section 416(l), as amended, but not to exceed age 66. For a person who is a member of the basic program of the St. Paul Teachers Retirement Fund Association ~~or the old law coordinated program of the Duluth Teachers Retirement Fund Association~~, normal retirement age means the age at which a teacher becomes eligible for a normal retirement annuity computed upon meeting the age and service requirements specified in the applicable provisions of the articles of incorporation or bylaws of the ~~respective~~ teachers retirement fund association.

Sec. 13. Minnesota Statutes 2012, section 354A.011, subdivision 27, is amended to read:

Subd. 27. Teacher. (a) "Teacher" means any person who renders service for a public school district, other than a charter school, located in the corporate limits of ~~Duluth or~~ St. Paul, as any of the following:

(1) a full-time employee in a position for which a valid license from the state Department of Education is required;

(2) an employee of the teachers retirement fund association located in the city of ~~the first class~~ St. Paul;

(3) a part-time employee in a position for which a valid license from the state Department of Education is required; or

(b) The term does not mean any person who renders service in the school district as any of the following:

(1) an independent contractor or the employee of an independent contractor;

(2) an employee who is a full-time teacher covered by the Teachers Retirement Association ~~or by another teachers retirement fund association established pursuant to this chapter or~~ under chapter 354;

(3) an employee who is exempt from licensure pursuant to section 122A.30;

(4) an employee who is a teacher in a technical college located in a city of the first class unless the person elects coverage by the ~~applicable~~ first class city teacher retirement fund association under section 354B.21, subdivision 2;

(5) a teacher employed by a charter school, irrespective of the location of the school; or

(6) an employee who is a part-time teacher in a technical college in a the city of ~~the first class~~ St. Paul and who has elected coverage by the ~~applicable~~ first class city teacher retirement fund association under section 354B.21, subdivision 2, but (i) the teaching service is incidental to the regular nonteaching occupation of the person; (ii) the applicable technical college stipulates annually in advance that the part-time teaching service will not exceed 300 hours in a fiscal year; and (iii) the part-time teaching actually does not exceed 300 hours in the fiscal year to which the certification applies.

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Sec. 14. Minnesota Statutes 2012, section 354A.021, subdivision 1, is amended to read:

Subdivision 1. Establishment. There is established a teachers retirement fund association in ~~each of~~ the ~~cities~~ city of ~~Duluth and~~ St. Paul. The ~~associations shall be~~ association is known ~~respectively~~ as the ~~"Duluth Teachers Retirement Fund Association" and the~~ "St. Paul Teachers Retirement Fund Association." ~~Each~~ The association ~~shall be~~ is a continuation of the teachers retirement fund association with the same corporate name established ~~pursuant to~~ under the authorization contained in Laws 1909, chapter 343, section 1.

Sec. 15. [354A.022] AUTHORIZATION TO CERTIFY FUNDS TO STATE BOARD OF INVESTMENT.

Subdivision 1. Certification of funds to State Board of Investment. The chief administrative officer of the Duluth Teachers Retirement Fund Association, from time to time, may certify to the State Board of Investment those portions of the assets of the retirement plan that are not needed for administrative expenses or benefit payments. Assets certified to the State Board of Investment must be invested under sections 11A.14 and 11A.23. The chief administrative officer of the Duluth Teachers Retirement Fund Association may certify assets for withdrawal from the State Board of Investment only to make benefit payments or to pay administrative expenses or investment expenses of existing direct real estate holdings or assets that are noncompliant with State Board of Investment objectives or limitations.

Subd. 2. Investment of certified funds. Assets certified to the State Board of Investment are deemed to be from a covered retirement fund required to be invested by the State Board of Investment under section 11A.23.

Subd. 3. Expiration. This section expires June 30, 2015, if the consolidation provisions receive the local approvals in section 49 and all other requirements of section 49 are met.

Sec. 16. Minnesota Statutes 2012, section 354A.092, is amended to read:

354A.092 SABBATICAL LEAVE.

Any teacher in the coordinated program of the St. Paul Teachers Retirement Fund Association ~~or any teacher in the new law coordinated program of the Duluth Teachers Retirement Fund Association~~ who is granted a sabbatical leave ~~shall be~~ is entitled to receive allowable service credit in the ~~applicable~~ association for periods of sabbatical leave. To obtain the service credit, the teacher on sabbatical leave shall make an employee contribution to the ~~applicable~~ association. No teacher ~~shall be~~ is entitled to receive more than three years of allowable service credit ~~pursuant to~~ under this section for a period or periods of sabbatical leave during any ten consecutive ~~fiscal or calendar~~ years~~, whichever is the applicable plan year for the teachers retirement fund association~~. If the teacher granted a sabbatical leave makes the employee contribution for a period of sabbatical leave ~~pursuant to~~ under this section, the employing unit shall make an employer contribution on behalf of the teacher to the ~~applicable~~ association for that period of sabbatical leave in the manner described in section 354A.12, subdivision 2a. The employee and employer contributions ~~shall~~ must be in an amount equal to the employee and employer contribution rates in effect for other active members of the association covered by the same program applied to a salary figure equal to the teacher's actual covered salary for the plan year immediately preceding the sabbatical leave period. Payment of the employee contribution authorized ~~pursuant to~~ under this section ~~shall~~ must be made by the teacher on or before June 30 of year next following the year in which the sabbatical leave terminated and ~~shall~~ must be made without interest. For sabbatical leaves taken after June 30, 1986, the required employer contributions ~~shall~~ must be paid by the employing unit within 30 days after notification by the association of the amount due. If the employee contributions for the sabbatical leave period are less than an amount equal to the applicable contribution rate applied to a salary figure equal to the teacher's actual covered salary for the plan year immediately preceding the sabbatical leave period, service credit ~~shall~~ must be prorated. The prorated service credit ~~shall~~ must be determined by the ratio between the amount of the actual payment which was made and the full contribution amount payable ~~pursuant to~~ under this section.

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Sec. 17. Minnesota Statutes 2012, section 354A.093, subdivision 1, is amended to read:

Subdivision 1. Eligibility. Any teacher in the coordinated program of the St. Paul Teachers Retirement Fund Association ~~or any teacher in the new law coordinated program of the Duluth Teachers Retirement Fund Association~~ who is absent from employment by reason of service in the uniformed services as defined in United States Code, title 38, section 4303(13) and who returns to the employer providing active teaching service upon discharge from uniformed service within the time frames required under United States Code, title 38, section 4312(e), may receive allowable service credit in the ~~applicable~~ association for all or a portion of the period of uniformed service, provided that the teacher did not separate from uniformed service with a dishonorable or bad conduct discharge or under other than honorable conditions.

Sec. 18. Minnesota Statutes 2012, section 354A.096, is amended to read:

354A.096 MEDICAL LEAVE.

Any teacher in the coordinated program of the St. Paul Teachers Retirement Fund Association ~~or the new law coordinated program of the Duluth Teachers Retirement Fund Association~~ who is on an authorized medical leave of absence and subsequently returns to teaching service is entitled to receive allowable service credit, not to exceed one year, for the period of leave, upon making the prescribed payment to the fund. This payment must include the required employee and employer contributions at the rates specified in section 354A.12, subdivisions 1 and 2a, as applied to the member's average full-time monthly salary rate on the date the leave of absence commenced plus annual interest at the rate of 8.5 percent per year from the end of the fiscal year during which the leave terminates to the end of the month during which payment is made. The member must pay the total amount required unless the employing unit, at its option, pays the employer contributions. The total amount required must be paid by the end of the fiscal year following the fiscal year in which the leave of absence terminated or before the member retires, whichever is earlier. Payment must be accompanied by a copy of the resolution or action of the employing authority granting the leave and the employing authority, upon granting the leave, must certify the leave to the association in a manner specified by the executive director. A member may not receive more than one year of allowable service credit during any fiscal year by making payment under this section. A member may not receive disability benefits under section 354A.36 and receive allowable service credit under this section for the same period of time.

Sec. 19. Minnesota Statutes 2013 Supplement, 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 the St. Paul Teachers Retirement Fund Association 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~~
	~~before July 1, 2013~~	~~6.5 percent~~
	~~effective July 1, 2013~~	~~7.0 percent~~
	~~effective July 1, 2014~~	~~7.5 percent~~

St. Paul Teachers Retirement Fund Association

	~~basic program after June 30, 2012~~	~~8.5 percent~~
	~~basic program after June 30, 2013~~	~~8.75 percent~~
Journal of the House - 79th Day - Monday, March 31, 2014 - Top of Page 8286	basic program after June 30, 2014	9.0 percent
	basic program after June 30, 2015	9.5 percent
	basic program after June 30, 2016	10.0 percent
	~~coordinated program after June 30, 2012~~	~~6.0 percent~~
	~~coordinated program after June 30, 2013~~	~~6.25 percent~~
	coordinated program after June 30, 2014	6.5 percent
	coordinated program after June 30, 2015	7.0 percent
	coordinated program after June 30, 2016	7.5 percent

(b) Contributions ~~shall~~ must be made by deduction from salary and must be remitted directly to the ~~respective~~ St. Paul 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.

Sec. 20. Minnesota Statutes 2012, section 354A.12, subdivision 2, is amended to read:

Subd. 2. Retirement contribution levy disallowed. Except as provided in section 423A.02, subdivision 3, with respect to Independent School District No. 625, notwithstanding any law to the contrary, levies for the St. Paul Teachers Retirement Fund ~~associations in the cities of Duluth and St. Paul~~ Association, including levies for any employer Social Security taxes for teachers covered by the ~~Duluth Teachers Retirement Fund Association or the~~ St. Paul Teachers Retirement Fund Association, are disallowed.

Sec. 21. Minnesota Statutes 2013 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 the teachers retirement fund ~~associations~~ association:

(1) for any coordinated member of ~~one of~~ the ~~following~~ St. Paul Teachers Retirement Fund ~~associations in a city of the first class~~ Association, 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~~

	~~before July 1, 2013~~	~~6.79 percent~~
	~~effective July 1, 2013~~	~~7.29 percent~~
	~~effective July 1, 2014~~	~~7.50 percent~~

~~St. Paul Teachers Retirement Fund Association~~

	~~after June 30, 2012~~	~~5.0 percent~~
	~~after June 30, 2013~~	~~5.25 percent~~
	after June 30, 2014	5.5 percent
	after June 30, 2015	6.0 percent
	after June 30, 2016	6.25 percent
	after June 30, 2017	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 according to the schedule below:

Journal of the House - 79th Day - Monday, March 31, 2014 - Top of Page 8287	~~after June 30, 2012~~	~~8.5 percent of salary~~
	~~after June 30, 2013~~	~~8.75 percent of salary~~
	after June 30, 2014	9.0 percent of salary
	after June 30, 2015	9.5 percent of salary
	after June 30, 2016	9.75 percent of salary
	after June 30, 2017	10.0 percent of salary

(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 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~~ 3.84 percent of the coordinated member's salary~~, as provided below:~~.

~~St. Paul Teachers Retirement Fund Association~~

~~3.84 percent~~

(b) The regular and additional employer contributions must be remitted directly to the ~~respective~~ St. Paul 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.

Sec. 22. Minnesota Statutes 2013 Supplement, section 354A.12, subdivision 3a, is amended to read:

Subd. 3a. Special direct state aid to first class city teachers retirement fund associations. (a) The state shall pay ~~$346,000 as special direct state aid to the Duluth Teachers Retirement Fund Association and~~ $2,827,000 to the St. Paul Teachers Retirement Fund Association.

(b) The ~~aids~~ aid under this subdivision ~~are~~ is payable October 1 annually. The commissioner of management and budget shall pay the ~~aids~~ aid specified in this subdivision. The ~~amounts~~ amount required ~~are~~ is appropriated annually from the general fund to the commissioner of management and budget.

Sec. 23. Minnesota Statutes 2012, section 354A.31, subdivision 1, is amended to read:

Subdivision 1. Age and service requirements. Any coordinated member or former coordinated member of the ~~Duluth Teachers Retirement Fund Association or of the~~ St. Paul Teachers Retirement Fund Association who has ceased to render teaching service for ~~the~~ Independent School District ~~in which the teachers retirement fund association exists~~ No. 625, who is vested and who has either attained the age of at least 55 years or received credit for not less than 30 years of allowable service regardless of age, ~~shall be~~ is entitled upon written application to a retirement annuity.

Sec. 24. Minnesota Statutes 2012, section 354A.32, subdivision 1, is amended to read:

Subdivision 1. Optional forms generally. The board of the St. Paul Teachers Retirement Fund Association shall establish for the coordinated program ~~and the board of the Duluth Teachers Retirement Fund Association shall establish for the new law coordinated program~~ an optional retirement annuity which ~~shall~~ must take the form of a

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joint and survivor annuity. ~~Each~~ The board may also, in its discretion, establish an optional annuity which ~~shall~~ may take the form of an annuity payable for a period certain and for life thereafter. ~~Each~~ The board shall also establish an optional retirement annuity that guarantees payment of the balance of the annuity recipient's accumulated deductions to a designated beneficiary upon the death of the annuity recipient. Except as provided in subdivision 1a, the optional annuity forms ~~shall~~ must be the actuarial equivalent of the normal forms provided in section 354A.31. In establishing these optional annuity forms, the board shall obtain the written recommendation of the actuary retained under section 356.214. The recommendation ~~shall~~ must be a part of the permanent records of the board.

Sec. 25. Minnesota Statutes 2012, 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~~ before retirement or ~~prior to~~ before 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~~ under subdivision 2, a refund ~~shall~~ must 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~~ must 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.

Sec. 26. Minnesota Statutes 2012, section 354A.37, subdivision 3, is amended to read:

Subd. 3. Computation of refund amount. A former coordinated member who qualifies for a refund under subdivision 1 ~~shall~~ is entitled to 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, if the person is a former member of the Duluth Teachers Retirement Fund Association, or to~~ July 1, 2011, if the person is a former member of the St. Paul Teachers Retirement Fund Association, and four percent per annum compounded annually thereafter.

Sec. 27. Minnesota Statutes 2012, 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~~ is entitled to a refund in lieu of a proportionate annuity under section 356.32. The refund must be equal to the coordinated member's accumulated employee contributions plus interest at the rate of six percent compounded annually to ~~July 1, 2010, if the person is a former member of the Duluth Teachers Retirement Fund Association, or to~~ July 1, 2011, if the person is a former member of the St. Paul Teachers Retirement Fund Association, and four percent per annum compounded annually thereafter.

Sec. 28. Minnesota Statutes 2012, section 354A.39, is amended to read:

354A.39 SERVICE IN OTHER PUBLIC RETIREMENT FUNDS; ANNUITY.

Any person who has been a member of 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 Minnesota State Patrol Retirement Association, the legislators retirement plan, the constitutional officers retirement plan, ~~the Duluth Teachers Retirement Fund Association new law coordinated program,~~ the St. Paul Teachers Retirement Fund Association coordinated program, or any other public employee retirement system in the state of Minnesota having a like provision, but excluding all other funds providing

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retirement benefits for police officers or firefighters, is entitled, when qualified, to an annuity from each fund if the person's total allowable service in all of the funds or in any two or more of the funds totals three or more years, provided that no portion of the allowable service upon which the retirement annuity from one fund is based is used again in the computation for a retirement annuity from another fund and provided further that the person has not taken a refund from any of funds or associations since the person's membership in the fund or association has terminated. The annuity from each fund or association must be determined by the appropriate provisions of the law governing each fund or association, except that the requirement that a person must have at least three years of allowable service in the respective fund or association does not apply for the purposes of this section, provided that the aggregate service in two or more of these funds equals three or more years.

Sec. 29. Minnesota Statutes 2012, section 354A.41, is amended to read:

354A.41 ADMINISTRATION OF COORDINATED PROGRAM.

Subdivision 1. Administrative provisions. The provisions of the articles of incorporation and bylaws of the St. Paul Teachers Retirement Fund Association relating to the administration of the fund shall govern the administration of the coordinated and basic programs and the provisions of the articles of incorporation and bylaws of the Duluth Teachers Retirement Fund Association relating to the administration of the fund shall govern the administration of the new law coordinated program in instances where the administrative provisions are not inconsistent with ~~the provisions of~~ sections 354A.31 to 354A.41, including but not limited to provisions relating to the composition and function of the board of trustees, the investment of assets of the St. Paul Teachers Retirement Fund Association, and the definition of the plan year. The administrative provisions in the articles of incorporation and the bylaws of the Minneapolis Teachers Retirement Fund Association pertaining to the granting of pension benefits of the basic and coordinated programs are no longer in effect after June 30, 2006, and the administrative provisions of the Duluth Teachers Retirement Fund Association pertaining to retirement benefits of the old law coordinated program are no longer in effect after June 30, 2015.

Subd. 2. Actuarial valuations. In any actuarial valuation of the St. Paul Teachers Retirement Fund Association~~, or the Duluth Teachers Retirement Fund Association~~ under section 356.215 prepared by the actuary retained under section 356.214 or supplemental actuarial valuation prepared by an approved actuary retained by the St. Paul Teachers Retirement Fund Association, there ~~shall~~ must be included a finding of the condition of the fund showing separately the basic and coordinated programs ~~or the old law coordinated and new law coordinated programs, as appropriate~~. The finding ~~shall~~ must include the level normal cost and the applicable employee and employer contribution rates for each program.

Sec. 30. Minnesota Statutes 2012, section 354B.21, subdivision 3a, is amended to read:

Subd. 3a. Plan coverage and election; certain past service technical college faculty. (a) Notwithstanding subdivision 3, if an employee of the board was employed in a faculty position in a technical college on June 30, 1997, with coverage by the Teachers Retirement Association, the employee retains that coverage. If the employee was a technical college faculty member on June 30, 1995, covered by a first class city teacher retirement fund established under chapter 354A, the retirement coverage continues with the ~~Duluth Teachers Retirement Fund Association or the~~ St. Paul Teachers Retirement Fund Association, whichever is applicable. If the person was a technical college faculty member on June 30, 1995, covered by the former Minneapolis Teachers Retirement Fund Association or the former Duluth Teachers Retirement Fund Association, the Teachers Retirement Association shall provide coverage.

(b) An employee under paragraph (a) who has coverage by ~~a first class city teacher~~ the St. Paul Teachers Retirement Fund Association retains that coverage for the duration of the person's employment by the board unless, within one year of a change in employment within the Minnesota State Colleges and Universities system, the person elects the individual retirement account plan for all future employment by the board. The election is irrevocable.

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Sec. 31. Minnesota Statutes 2012, section 355.01, subdivision 2c, is amended to read:

Subd. 2c. Duluth teacher. "Duluth teacher" means a person employed by Independent School District No. 709, Duluth, who holds a position covered by the ~~Duluth~~ Teachers Retirement ~~Fund~~ Association ~~established~~ under ~~chapter 354A~~ section 354.73 and section 46.

Sec. 32. Minnesota Statutes 2013 Supplement, section 356.20, subdivision 2, is amended to read:

Subd. 2. Covered public pension plans and funds. This section applies to the following public pension plans:

(1) the general state employees retirement plan of the Minnesota State Retirement System;

(2) the general employees retirement plan of the Public Employees Retirement Association;

(3) the Teachers Retirement Association;

(4) the State Patrol retirement plan;

(5) the St. Paul Teachers Retirement Fund Association;

~~(6) the Duluth Teachers Retirement Fund Association;~~

~~(7)~~ (6) the University of Minnesota faculty retirement plan;

~~(8)~~ (7) the University of Minnesota faculty supplemental retirement plan;

~~(9)~~ (8) the judges retirement fund;

~~(10)~~ (9) the Bloomington Fire Department Relief Association;

~~(11)~~ (10) a volunteer firefighter relief association governed by section 424A.091;

~~(12)~~ (11) the public employees police and fire plan of the Public Employees Retirement Association;

~~(13)~~ (12) the correctional state employees retirement plan of the Minnesota State Retirement System;

~~(14)~~ (13) the local government correctional service retirement plan of the Public Employees Retirement Association; and

~~(15)~~ (14) the voluntary statewide lump-sum volunteer firefighter retirement plan.

Sec. 33. Minnesota Statutes 2013 Supplement, section 356.214, subdivision 1, is amended to read:

Subdivision 1. Actuary retention. (a) The governing board or managing or administrative official of each public pension plan and retirement fund or plan enumerated in paragraph (b) shall contract with an established actuarial consulting firm to conduct annual actuarial valuations and related services. The principal from the actuarial consulting firm on the contract must be an approved actuary under section 356.215, subdivision 1, paragraph (c).

(b) Actuarial services must include the preparation of actuarial valuations and related actuarial work for the following retirement plans:

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(1) the teachers retirement plan, Teachers Retirement Association;

(2) the general state employees retirement plan, Minnesota State Retirement System;

(3) the correctional employees retirement plan, Minnesota State Retirement System;

(4) the State Patrol retirement plan, Minnesota State Retirement System;

(5) the judges retirement plan, Minnesota State Retirement System;

(6) the general employees retirement plan, Public Employees Retirement Association, including the MERF division;

(7) the public employees police and fire plan, Public Employees Retirement Association;

~~(8) the Duluth teachers retirement plan, Duluth Teachers Retirement Fund Association;~~

~~(9)~~ (8) the St. Paul teachers retirement plan, St. Paul Teachers Retirement Fund Association;

~~(10)~~ (9) the legislators retirement plan, Minnesota State Retirement System; and

~~(11)~~ (10) the local government correctional service retirement plan, Public Employees Retirement Association.

(c) The actuarial valuation for the legislators retirement plan must include a separate calculation of total plan actuarial accrued liabilities due to constitutional officer coverage under section 3A.17.

(d) The contracts must require completion of the annual actuarial valuation calculations on a fiscal year basis, with the contents of the actuarial valuation calculations as specified in section 356.215, and in conformity with the standards for actuarial work adopted by the Legislative Commission on Pensions and Retirement.

The contracts must require completion of annual experience data collection and processing and a quadrennial published experience study for the plans listed in paragraph (b), clauses (1), (2), and (6), as provided for in the standards for actuarial work adopted by the commission. The experience data collection, processing, and analysis must evaluate the following:

(1) individual salary progression;

(2) the rate of return on investments based on the current asset value;

(3) payroll growth;

(4) mortality;

(5) retirement age;

(6) withdrawal; and

(7) disablement.

(e) The actuary shall annually prepare a report to the governing or managing board or administrative official and the legislature, summarizing the results of the actuarial valuation calculations. The actuary shall include with the report any recommendations concerning the appropriateness of the support rates to achieve proper funding of the

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retirement plans by the required funding dates. The actuary shall, as part of the quadrennial experience study, include recommendations on the appropriateness of the actuarial valuation assumptions required for evaluation in the study.

(f) If the actuarial gain and loss analysis in the actuarial valuation calculations indicates a persistent pattern of sizable gains or losses, the governing or managing board or administrative official shall direct the actuary to prepare a special experience study for a plan listed in paragraph (b), clause (3), (4), (5), (7), (8), (9), or (10), ~~or (11),~~ in the manner provided for in the standards for actuarial work adopted by the commission.

Sec. 34. Minnesota Statutes 2013 Supplement, 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:

(1) select and ultimate interest rate assumption

plan	ultimate preretirement interest rate assumption	ultimate postretirement interest rate 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, and for the constitutional officers calculation of total plan liabilities	0.0	0.0
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
~~Duluth teachers retirement plan~~	~~8.5~~	~~8.5~~
St. Paul teachers retirement plan	8.5	8.5

Except for the legislators retirement plan and the constitutional officers calculation of total plan liabilities, the select preretirement interest rate assumption for the period after June 30, 2012, through June 30, 2017, is 8.0 percent. Except for the legislators retirement plan and the constitutional officers calculation of total plan liabilities, the select postretirement interest rate assumption for the period after June 30, 2012, through June 30, 2017, is 5.5 percent, except for ~~the Duluth teachers retirement plan and~~ the St. Paul teachers retirement plan, each with a select postretirement interest rate assumption for the period after June 30, 2012, through June 30, 2017, of 8.0 percent.

(2) single rate preretirement and postretirement interest rate assumption

plan	interest rate assumption

Bloomington Fire Department Relief Association	6.0
local monthly benefit volunteer firefighters relief associations	5.0

(b) 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

Journal of the House - 79th Day - Monday, March 31, 2014 - Top of Page 8293 plan	future salary increase assumption

legislators retirement plan		5.0%
judges retirement plan		3.0
Bloomington Fire Department Relief Association		4.0

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

plan	future salary increase assumption

local government correctional service retirement plan	assumption C B
~~Duluth teachers retirement plan~~	~~assumption A~~
St. Paul teachers retirement plan	assumption B A

For plans other than the ~~Duluth~~ St. Paul teachers retirement plan and the local government correctional service retirement plan, 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 ten years and the designated integer is ten ~~for the Duluth Teachers Retirement Fund Association and~~ for the local government correctional service retirement plan and 15 for the St. Paul Teachers Retirement Fund Association. The designated percentage rate is 0.2 percent for 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.

The ultimate future salary increase assumption is:

age	A	B A	C B
16	~~6.00%~~	5.90%	9.00%
17	~~6.00~~	5.90	9.00
18	~~6.00~~	5.90	9.00
19	~~6.00~~	5.90	9.00
20	~~6.00~~	5.90	9.00
21	~~6.00~~	5.90	8.75
22	~~6.00~~	5.90	8.50
23	~~6.00~~	5.85	8.25
24	~~6.00~~	5.80	8.00
25	~~6.00~~	5.75	7.75
26	~~6.00~~	5.70	7.50
27	~~6.00~~	5.65	7.25
28	~~6.00~~	5.60	7.00
29	~~6.00~~	5.55	6.75
30	~~6.00~~	5.50	6.75
Journal of the House - 79th Day - Monday, March 31, 2014 - Top of Page 8294 31	~~6.00~~	5.45	6.50
32	~~6.00~~	5.40	6.50
33	~~6.00~~	5.35	6.50
34	~~6.00~~	5.30	6.25
35	~~6.00~~	5.25	6.25
36	~~5.86~~	5.20	6.00
37	~~5.73~~	5.15	6.00
38	~~5.59~~	5.10	6.00
39	~~5.45~~	5.05	5.75
40	~~5.31~~	5.00	5.75
41	~~5.18~~	4.95	5.75
42	~~5.04~~	4.90	5.50
43	~~4.90~~	4.85	5.25
44	~~4.76~~	4.80	5.25
45	~~4.63~~	4.75	5.00
46	~~4.49~~	4.70	5.00
47	~~4.35~~	4.65	5.00
48	~~4.21~~	4.60	5.00
49	~~4.08~~	4.55	5.00
50	~~3.94~~	4.50	5.00
51	~~3.80~~	4.45	5.00
52	~~3.66~~	4.40	5.00
53	~~3.53~~	4.35	5.00
54	~~3.39~~	4.30	5.00
55	~~3.25~~	4.25	4.75
56	~~3.25~~	4.20	4.75
57	~~3.25~~	4.15	4.50
58	~~3.25~~	4.10	4.25
59	~~3.25~~	4.05	4.25
60	~~3.25~~	4.00	4.25
61	~~3.25~~	4.00	4.25
62	~~3.25~~	4.00	4.25
63	~~3.25~~	4.00	4.25
64	~~3.25~~	4.00	4.25
65	~~3.25~~	4.00	4.00
66	~~3.25~~	4.00	4.00
67	~~3.25~~	4.00	4.00
68	~~3.25~~	4.00	4.00
69	~~3.25~~	4.00	4.00
70	~~3.25~~	4.00	4.00

(3) service-related ultimate future salary increase assumption

	general state employees retirement plan of the Minnesota State Retirement System										assumption A
	general employees retirement plan of the Public Employees Retirement Association										assumption B
	Teachers Retirement Association										assumption C
	public employees police and fire retirement plan										assumption D
	State Patrol retirement plan										assumption E
	correctional state employees retirement plan of the Minnesota State Retirement System										assumption F
Journal of the House - 79th Day - Monday, March 31, 2014 - Top of Page 8295 service length		A		B		C		D		E		F

1		10.50%		12.03%		12.00%		13.00%		8.00%		6.00%
2			8.10		8.90		9.00	11.00		7.50		5.85
3			6.90		7.46		8.00		9.00	7.00		5.70
4			6.20		6.58		7.50		8.00	6.75		5.55
5			5.70		5.97		7.25		6.50	6.50		5.40
6			5.30		5.52		7.00		6.10	6.25		5.25
7			5.00		5.16		6.85		5.80	6.00		5.10
8			4.70		4.87		6.70		5.60	5.85		4.95
9			4.50		4.63		6.55		5.40	5.70		4.80
10			4.40		4.42		6.40		5.30	5.55		4.65
11			4.20		4.24		6.25		5.20	5.40		4.55
12			4.10		4.08		6.00		5.10	5.25		4.45
13			4.00		3.94		5.75		5.00	5.10		4.35
14			3.80		3.82		5.50		4.90	4.95		4.25
15			3.70		3.70		5.25		4.80	4.80		4.15
16			3.60		3.60		5.00		4.80	4.65		4.05
17			3.50		3.51		4.75		4.80	4.50		3.95
18			3.50		3.50		4.50		4.80	4.35		3.85
19			3.50		3.50		4.25		4.80	4.20		3.75
20			3.50		3.50		4.00		4.80	4.05		3.75
21			3.50		3.50		3.90		4.70	4.00		3.75
22			3.50		3.50		3.80		4.60	4.00		3.75
23			3.50		3.50		3.70		4.50	4.00		3.75
24			3.50		3.50		3.60		4.50	4.00		3.75
25			3.50		3.50		3.50		4.50	4.00		3.75
26			3.50		3.50		3.50		4.50	4.00		3.75
27			3.50		3.50		3.50		4.50	4.00		3.75
28			3.50		3.50		3.50		4.50	4.00		3.75
29			3.50		3.50		3.50		4.50	4.00		3.75
30 or more			3.50		3.50		3.50		4.50	4.00		3.75

(c) 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:

plan	payroll growth assumption

general state employees retirement plan of the Minnesota State Retirement System	3.75%
correctional state employees retirement plan	3.75
State Patrol retirement plan	3.75
judges retirement plan	3.00
general employees retirement plan of the Public Employees Retirement Association	3.75
public employees police and fire retirement plan	3.75
local government correctional service retirement plan	3.75
teachers retirement plan	3.75
~~Duluth teachers retirement plan~~	~~3.50~~
St. Paul teachers retirement plan	4.00

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(d) 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.

Sec. 35. Minnesota Statutes 2013 Supplement, section 356.219, subdivision 8, is amended to read:

Subd. 8. Timing of reports. (a) For the Bloomington Fire Department Relief Association and the volunteer firefighter relief associations, the information required under this section must be submitted by the due date for reports required under section 69.051, subdivision 1 or 1a, as applicable. If a relief association satisfies the definition of a fully invested plan under subdivision 1, paragraph (b), for the calendar year covered by the report required under section 69.051, subdivision 1 or 1a, as applicable, the chief administrative officer of the covered pension plan shall certify that compliance on a form prescribed by the state auditor. The state auditor shall transmit annually to the State Board of Investment a list or lists of covered pension plans which submitted certifications in order to facilitate reporting by the State Board of Investment under paragraph (c).

(b) For the St. Paul Teachers Retirement Fund Association~~, the Duluth Teachers Retirement Fund Association,~~ and the University of Minnesota faculty supplemental retirement plan, the information required under this section must be submitted to the state auditor by June 1 of each year.

(c) The State Board of Investment, on behalf of pension funds specified in subdivision 1, paragraph (c), ~~must~~ shall report information required under this section by September 1 of each year.

Sec. 36. Minnesota Statutes 2013 Supplement, section 356.30, subdivision 3, is amended to read:

Subd. 3. Covered plans. This section applies to the following retirement plans:

(1) the general state employees retirement plan of the Minnesota State Retirement System, established under chapter 352;

(2) the correctional state employees retirement plan of the Minnesota State Retirement System, established under chapter 352;

(3) the unclassified employees retirement program, established under chapter 352D;

(4) the State Patrol retirement plan, established under chapter 352B;

(5) the legislators retirement plan, established under chapter 3A, including constitutional officers as specified in that chapter;

(6) the general employees retirement plan of the Public Employees Retirement Association, established under chapter 353, including the MERF division of the Public Employees Retirement Association;

(7) the public employees police and fire retirement plan of the Public Employees Retirement Association, established under chapter 353;

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(8) the local government correctional service retirement plan of the Public Employees Retirement Association, established under chapter 353E;

(9) the Teachers Retirement Association, established under chapter 354;

(10) the St. Paul Teachers Retirement Fund Association, established under chapter 354A; and

~~(11) the Duluth Teachers Retirement Fund Association, established under chapter 354A; and~~

~~(12)~~ (11) the judges retirement fund, established by chapter 490.

Sec. 37. Minnesota Statutes 2012, section 356.302, subdivision 7, is amended to read:

Subd. 7. Covered retirement plans. This section applies to the following retirement plans:

(1) the general state employees retirement plan of the Minnesota State Retirement System, established by chapter 352;

(2) the unclassified state employees retirement program of the Minnesota State Retirement System, established by chapter 352D;

(3) the general employees retirement plan of the Public Employees Retirement Association, established by chapter 353, including the MERF division of the Public Employees Retirement Association;

(4) the Teachers Retirement Association, established by chapter 354;

~~(5) the Duluth Teachers Retirement Fund Association, established by chapter 354A;~~

~~(6)~~ (5) the St. Paul Teachers Retirement Fund Association, established by chapter 354A;

~~(7)~~ (6) the state correctional employees retirement plan of the Minnesota State Retirement System, established by chapter 352;

~~(8)~~ (7) the State Patrol retirement plan, established by chapter 352B;

~~(9)~~ (8) the public employees police and fire plan of the Public Employees Retirement Association, established by chapter 353;

~~(10)~~ (9) the local government correctional service retirement plan of the Public Employees Retirement Association, established by chapter 353E; and

~~(11)~~ (10) the judges retirement plan, established by chapter 490.

Sec. 38. Minnesota Statutes 2012, section 356.303, subdivision 4, is amended to read:

Subd. 4. Covered retirement plans. This section applies to the following retirement plans:

(1) the legislators retirement plan, established by chapter 3A;

(2) the general state employees retirement plan of the Minnesota State Retirement System, established by chapter 352;

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(3) the correctional state employees retirement plan of the Minnesota State Retirement System, established by chapter 352;

(4) the State Patrol retirement plan, established by chapter 352B;

(5) the elective state officers retirement plan, established by chapter 352C;

(6) the unclassified state employees retirement program, established by chapter 352D;

(7) the general employees retirement plan of the Public Employees Retirement Association, established by chapter 353, including the MERF division of the Public Employees Retirement Association;

(8) the public employees police and fire plan of the Public Employees Retirement Association, established by chapter 353;

(9) the local government correctional service retirement plan of the Public Employees Retirement Association, established by chapter 353E;

(10) the Teachers Retirement Association, established by chapter 354;

~~(11) the Duluth Teachers Retirement Fund Association, established by chapter 354A;~~

~~(12)~~ (11) the St. Paul Teachers Retirement Fund Association, established by chapter 354A; and

~~(13)~~ (12) the judges retirement fund, established by chapter 490.

Sec. 39. Minnesota Statutes 2012, section 356.32, subdivision 2, is amended to read:

Subd. 2. Covered retirement plans. The provisions of this section apply to the following retirement plans:

(1) the general state employees retirement plan of the Minnesota State Retirement System, established under chapter 352;

(2) the correctional state employees retirement plan of the Minnesota State Retirement System, established under chapter 352;

(3) the State Patrol retirement plan, established under chapter 352B;

(4) the general employees retirement plan of the Public Employees Retirement Association, established under chapter 353, including the MERF division of the Public Employees Retirement Association;

(5) the public employees police and fire plan of the Public Employees Retirement Association, established under chapter 353;

(6) the Teachers Retirement Association, established under chapter 354; and

~~(7) the Duluth Teachers Retirement Fund Association, established under chapter 354A; and~~

~~(8)~~ (7) the St. Paul Teachers Retirement Fund Association, established under chapter 354A.

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Sec. 40. Minnesota Statutes 2013 Supplement, section 356.401, subdivision 3, is amended to read:

Subd. 3. Covered retirement plans. The provisions of this section apply to the following retirement plans:

(1) the legislators retirement plan, established by chapter 3A, including constitutional officers as specified in that chapter;

(2) the general state employees retirement plan of the Minnesota State Retirement System, established by chapter 352;

(3) the correctional state employees retirement plan of the Minnesota State Retirement System, established by chapter 352;

(4) the State Patrol retirement plan, established by chapter 352B;

(5) the unclassified state employees retirement program, established by chapter 352D;

(6) the general employees retirement plan of the Public Employees Retirement Association, established by chapter 353, including the MERF division of the Public Employees Retirement Association;

(7) the public employees police and fire plan of the Public Employees Retirement Association, established by chapter 353;

(8) the public employees defined contribution plan, established by chapter 353D;

(9) the local government correctional service retirement plan of the Public Employees Retirement Association, established by chapter 353E;

(10) the voluntary statewide lump-sum volunteer firefighter retirement plan, established by chapter 353G;

(11) the Teachers Retirement Association, established by chapter 354;

~~(12) the Duluth Teachers Retirement Fund Association, established by chapter 354A;~~

~~(13)~~ (12) the St. Paul Teachers Retirement Fund Association, established by chapter 354A;

~~(14)~~ (13) the individual retirement account plan, established by chapter 354B;

~~(15)~~ (14) the higher education supplemental retirement plan, established by chapter 354C; and

~~(16)~~ (15) the judges retirement fund, established by chapter 490.

Sec. 41. Minnesota Statutes 2012, section 356.42, subdivision 3, is amended to read:

Subd. 3. Covered retirement plans. The postretirement adjustment provided in this section applies to the following retirement funds:

(1) the general employees retirement plans of the Public Employees Retirement Association;

(2) the public employees police and fire plan of the Public Employees Retirement Association;

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(3) the teachers retirement association;

(4) the State Patrol retirement plan;

(5) the state employees retirement plan of the Minnesota State Retirement System; and

(6) the St. Paul Teachers Retirement Fund Association established under chapter 354A~~; and~~.

~~(7) the Duluth Teachers Retirement Fund Association established under chapter 354A.~~

Sec. 42. Minnesota Statutes 2012, section 356.465, subdivision 3, is amended to read:

Subd. 3. Covered retirement plans. The provisions of this section apply to the following retirement plans:

(1) the general state employees retirement plan of the Minnesota State Retirement System established under chapter 352;

(2) the correctional state employees retirement plan of the Minnesota State Retirement System established under chapter 352;

(3) the State Patrol retirement plan established under chapter 352B;

(4) the legislators retirement plan established under chapter 3A;

(5) the judges retirement plan established under chapter 490;

(6) the general employees retirement plan of the Public Employees Retirement Association established under chapter 353, including the MERF division of the Public Employees Retirement Association;

(7) the public employees police and fire plan of the Public Employees Retirement Association established under chapter 353;

(8) the teachers retirement plan established under chapter 354;

~~(9) the Duluth Teachers Retirement Fund Association established under chapter 354A;~~

~~(10)~~ (9) the St. Paul Teachers Retirement Fund Association established under chapter 354A; and

~~(11)~~ (10) the local government correctional service retirement plan of the Public Employees Retirement Association established under chapter 353E.

Sec. 43. Minnesota Statutes 2012, 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. 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~~

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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 with no interest accrual after June 30, 2010. For the St. Paul Teachers Retirement Fund Association, the annual interest is the rate of six percent from the date that the amount was deducted from the retirement annuity to the date of payment or June 30, 2011, whichever is earlier, and with no interest accrual after June 30, 2011.

(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 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.

Sec. 44. Minnesota Statutes 2012, section 356.99, subdivision 1, is amended to read:

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.

(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.

Sec. 45. Minnesota Statutes 2013 Supplement, section 423A.02, subdivision 3, is amended to read:

Subd. 3. Reallocation of amortization state aid. (a) Seventy percent of the difference between $5,720,000 and the current year amortization aid distributed under subdivision 1 that is not distributed for any reason to a municipality must be distributed by the commissioner of revenue according to this paragraph. The commissioner shall distribute 50 60 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 must be made on July 15 each fiscal year. If the St. Paul Teachers Retirement Fund Association or the Duluth Teachers Retirement Fund Association becomes fully funded, the association's eligibility for its portion of 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.

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(b) In order to receive amortization aid under paragraph (a), before June 30 annually Independent School District No. 625, St. Paul, must make an additional contribution of $800,000 each year to the St. Paul Teachers Retirement Fund Association.

(c) Thirty percent of the difference between $5,720,000 and the current year amortization aid under subdivision 1a that is not distributed for any reason to a municipality 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.

Sec. 46. CONSOLIDATION OF DULUTH TEACHERS RETIREMENT FUND ASSOCIATION.

Subdivision 1. Membership transfer. All active, inactive, and retired members of the Duluth Teachers Retirement Fund Association are transferred to the Teachers Retirement Association and are no longer members of the Duluth Teachers Retirement Fund Association as of July 1, 2015.

Subd. 2. Teachers Retirement Association membership. A person first hired as a teacher by Independent School District No. 709, Duluth, after June 30, 2015, and who is a teacher as defined in Minnesota Statutes, section 354.05, subdivision 2, is a member of the Teachers Retirement Association for the person's subsequent teaching service.

Subd. 3. Service credit and liability transfer. All allowable service and salary credit of the members and other individuals transferred under subdivision 1 as specified in the records of the Duluth Teachers Retirement Fund Association as of June 30, 2015, is allowable service credit under Minnesota Statutes, section 354.05, subdivision 13, formula service credit under Minnesota Statutes, section 354.05, subdivision 25, and salary credit under Minnesota Statutes, section 354.05, subdivision 35, for the Teachers Retirement Association.

Subd. 4. Transfer of records. On or before June 30, 2015, the chief administrative officer of the Duluth Teachers Retirement Fund Association shall transfer all records and documents relating to the funds and the benefit plans of the association to the executive director of the Teachers Retirement Association. To the extent possible, original copies of all records and documents must be transferred.

Subd. 5. Transfer of assets. (a) On or before December 31, 2014, the chief administrative officer of the Duluth Teachers Retirement Fund Association shall transfer to the State Board of Investment for investment under Minnesota Statutes, section 11A.14, the entire assets of the special retirement fund, except for direct real estate holdings, of the Duluth Teachers Retirement Fund Association.

(b) By August 1, 2014, the chief administrative officer of the Duluth Teachers Retirement Fund Association must provide to the State Board of Investment a list of assets that are intended to be transferred.

(c) The executive director of the State Board of Investment shall review the assets and determine which assets are not in compliance with the requirements and limitations set forth in Minnesota Statutes, sections 11A.09, 11A.14, 11A.23, and 11A.24, or are not appropriate for retention under the established investment objectives of the State Board of Investment. Within 30 days of the date on which the asset transfer occurred, the executive director of the State Board of Investment shall provide the chief administrative officer of the Duluth Teachers Retirement Fund Association with a list of assets that are acceptable for transfer and a list of assets that are noncompliant or inappropriate. Acceptable assets, including cash, must be transferred at market value, and transfers may begin upon the transfer of legal title and notification by the chief administrative officer of the Duluth Teachers Retirement Fund Association to the State Board of Investment.

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(d) Assets deemed to be noncompliant or inappropriate must be retained by the Duluth Teachers Retirement Fund Association. Within 30 days of receipt of the list of noncompliant or inappropriate assets, the chief administrative officer of the Duluth Teachers Retirement Fund Association must provide the executive director of the State Board of Investment with evidence that the chief administrative officer of the Duluth Teachers Retirement Fund Association is taking action to convert noncompliant or inappropriate assets to acceptable assets.

(e) Beginning January 1, 2015, the executive director of the State Board of Investment is authorized to direct the process of transferring legal title of assets for which such change is deemed necessary.

(f) On June 30, 2015, the remaining assets of the special retirement fund of the Duluth Teachers Retirement Fund Association are transferred to the State Board of Investment at market values determined by the executive director of the State Board of Investment. Legal title to transferred assets vests with the State Board of Investment on behalf of the Teachers Retirement Association. The transfer of the assets of the Duluth Teachers Retirement Fund Association special retirement fund must include any investment-related accounts receivable that are determined by the executive director of the State Board of Investment as reasonably capable of being collected and any non-investment-related accounts receivable that are determined by the executive director of the Teachers Retirement Association as reasonably capable of being collected. For accounts receivable that are determined as not reasonably capable of being collected, legal title to the account transfers to Independent School District No. 709, Duluth, as of the date of the determination of the executive director of the State Board of Investment and the executive director of the Teachers Retirement Association. If the accounts receivable transferred to Independent School District No. 709, Duluth, are subsequently recovered by the school district, the superintendent of Independent School District No. 709, Duluth, shall transfer the recovered amount to the executive director of the Teachers Retirement Association, in cash, for deposit in the teachers retirement fund, less the reasonable expenses of the school district related to the recovery. If the board of trustees of the Duluth Teachers Retirement Fund Association establishes a liquidating trust and deposits any of the retirement fund association assets in that trust or if the legislative auditor determines that the transferred assets were in an amount less than the full assets of the retirement fund association other than assets in the tax sheltered annuity program on the date of transfer as specified in paragraph (g), the amount of any untransferred assets are a claim against the state aid otherwise payable to Independent School District No. 709, Duluth, payable to the Teachers Retirement Association by the commissioner of management and budget upon request by the executive director of the Teachers Retirement Association.

(g) As of June 30, 2015, assets of the special retirement fund, except for direct real estate holdings, of the Duluth Teachers Retirement Fund Association are assets of the Teachers Retirement Association to be invested by the State Board of Investment under Minnesota Statutes, section 354.07, subdivision 4.

Subd. 6. Termination of Duluth Teachers Retirement Fund Association special retirement fund. (a) As of June 30, 2015, the Duluth Teachers Retirement Fund Association as a public retirement plan and its special retirement fund ceases to exist.

(b) Contracts, records, and obligations of the Duluth Teachers Retirement Fund Association special retirement fund existing at the time of consolidation with the Teachers Retirement Association are transferred to the Teachers Retirement Association under Minnesota Statutes, section 15.039, subdivisions 5 and 5a, except that contracts, records, and obligations of the Duluth Teachers Retirement Fund Association special retirement fund related to investment and safekeeping of assets are transferred to the State Board of Investment under Minnesota Statutes, section 15.039, subdivisions 5 and 5a. The State Board of Investment has the authority to pay the investment-related liabilities and obligations from the assets transferred from the Duluth Teachers Retirement Fund Association incurred by the Teachers Retirement Association. The legislative auditor shall audit the Duluth Teachers Retirement Fund Association for the fiscal year ending June 30, 2015, as part of the Teachers Retirement Association board's annual financial reporting requirements under Minnesota Statutes, section 356.20. The board of trustees of the Teachers Retirement Association may authorize and contract with either the legislative auditor or the state auditor to perform other audit services. Between April 1, 2015, and June 30, 2015, the Duluth Teachers Retirement Fund Association cannot incur a new or additional enforceable contractual liability or obligation without approval of the executive director of the Teachers Retirement Association.

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Sec. 47. DULUTH TEACHERS RETIREMENT FUND ASSOCIATION EMPLOYEES.

Effective June 30, 2015, the employees of the Duluth Teachers Retirement Fund Association have their employment with the Duluth Teachers Retirement Fund Association terminated and, effective July 1, 2015, unless the former employee elects otherwise, the Duluth Teachers Retirement Fund Association employees, excluding the Executive Director, become employees of the Teachers Retirement Association. The commissioner of management and budget shall place employees from the former Duluth Teachers Retirement Fund Association into state service in their proper classifications, except that employees are appointed without examination and must be compensated at no less than their current hourly salary rate. Employees must have their accumulated, but unused, vacation leave balance as of June 30, 2015, posted to their credit by the Teachers Retirement Association, but if the employee has vacation time in excess of the applicable maximum, no additional vacation may accrue until the employee's balance falls below the maximum permitted by the state for the employee's position. The employees must receive length of service credit for vacation leave accrual for time served at the Duluth Teachers Retirement Fund Association. Duluth Teachers Retirement Fund Association employees who become employees of the Teachers Retirement Association effective on July 1, 2015, must be considered to have completed six months of continuous service for vacation use purposes. Employees of the former Duluth Teachers Retirement Fund Association appointed to the classified service are subject to a probationary period under the collective bargaining agreement or compensation plan applicable to the employee's position at the Teachers Retirement Association. Effective July 1, 2015, all transferred employees must be enrolled in the state employees' group insurance program as provided in Minnesota Statutes, sections 43A.22 to 43A.31, and the commissioner of management and budget shall provide open enrollment in all state employee health and dental insurance plans with no limitation on preexisting conditions except as specified in existing state employee certificates of coverage. The commissioner of management and budget shall provide these transferred employees with the opportunity to purchase optional life and disability insurance as provided by the state group insurance program in accordance with the policies of management and budget.

Sec. 48. REPEALER.

(a) Minnesota Statutes 2012, sections 354A.021, subdivision 5; 354A.108; 354A.24; and 354A.27, subdivision 5, are repealed.

(b) Minnesota Statutes 2013 Supplement, sections 354A.27, subdivisions 6a and 7; and 354A.31, subdivision 4a, are repealed.

Sec. 49. EFFECTIVE DATE.

(a) Section 8, subdivision 1, is effective July 1, 2014. Section 46, subdivision 5, is effective October 1, 2014. Sections 1 to 7, 8, subdivisions 2 and 3, 9 to 14, 16 to 45, 46, subdivisions 1 to 4 and 6, 47, and 48, are effective June 30, 2015, if the following approve the consolidation provisions before October 1, 2014:

(1) the board of trustees of the Duluth Teachers Retirement Fund Association;

(2) the membership of the Duluth Teachers Retirement Fund Association; and

(3) the board of trustees of the Teachers Retirement Association.

(b) An approval under paragraph (a) must be provided in a timely manner in compliance with Minnesota Statutes, section 645.021, subdivisions 2 and 3, to the secretary of state, the state auditor, the legislative auditor, and the revisor of statutes by the chief administrative officer of the Duluth Teachers Retirement Fund Association for an approval under paragraph (a) by the board of trustees of the Duluth Teachers Retirement Fund Association or by the membership of the Duluth Teachers Retirement Fund Association and by the chief administrative officer of the Teachers Retirement Association for an approval under paragraph (a) by the board of trustees of the Teachers Retirement Association.

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ARTICLE 7

FIRST CLASS CITY TEACHER RETIREMENT FUND ASSOCIATION CHANGES

Section 1. Minnesota Statutes 2013 Supplement, section 354A.12, subdivision 3a, is amended to read:

Subd. 3a. ~~Special~~ Direct state aid to first class city teachers retirement fund associations. (a) The state shall pay $346,000 as special direct state aid to the Duluth Teachers Retirement Fund Association and $2,827,000 to the St. Paul Teachers Retirement Fund Association.

(b) In addition to other amounts specified in this subdivision, the state shall pay $7,000,000 as state aid to the St. Paul Teachers Retirement Fund Association.

~~(b)~~ (c) The aids under this subdivision are payable October 1 annually. The commissioner of management and budget shall pay the aids specified in this subdivision. The amounts required are appropriated annually from the general fund to the commissioner of management and budget.

EFFECTIVE DATE. This section is effective September 30, 2014.

Sec. 2. Minnesota Statutes 2013 Supplement, 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 St. Paul Teachers Retirement Fund Association by Independent School District No. 625 under section 423A.02, subdivision 3, and all forms of ~~state~~ aid under subdivision 3a to the St. Paul Teachers Retirement Fund Association 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 ~~June 30, 2037~~ the established date for full funding under section 356.215, subdivision 11, whichever occurs earlier.

(b) The aid to the Duluth Teachers Retirement Fund Association under section 423A.02, subdivision 3, and all forms of state aid under subdivision 3a to the Duluth Teachers Retirement Fund Association 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 the established date for full funding under section 356.215, subdivision 11, whichever occurs earlier.

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

Sec. 3. Minnesota Statutes 2012, 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), but excluding the MERF division of the Public Employees Retirement Association and the legislators retirement plan, 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 and for the MERF division of the Public Employees Retirement Association and the legislators retirement plan, the additional annual contribution must be calculated on a level annual dollar amount basis.

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(b) For any retirement plan other than the general state employees retirement plan of the Minnesota State Retirement System or a retirement plan governed by paragraph (d), (e), (f), (g), (h), (i), or (j), 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.

(c) For any retirement plan other than 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.

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(d) For the MERF division of the Public Employees Retirement Association, the established date for full funding is June 30, 2031.

(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.

(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~~, 2042. In addition to other requirements of this chapter, the annual actuarial valuation must 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.

ARTICLE 8

MNSCU-RELATED PROVISIONS

Section 1. Minnesota Statutes 2012, section 136F.481, is amended to read:

136F.481 EARLY SEPARATION INCENTIVE PROGRAM.

(a) Notwithstanding any provision of law to the contrary, the Board of Trustees of the Minnesota State Colleges and Universities may offer a targeted early separation incentive program for its employees.

(b) The early separation incentive program may include one or both of the following:

(1) cash incentives, not to exceed one year of base salary; or

(2) employer contributions to the postretirement healthcare savings plan established under section 352.98.

(c) To be eligible to receive an incentive, an employee must be at least age 55 and must have at least five years of employment by the Minnesota State Colleges and Universities System. The board of trustees shall establish and periodically revise the eligibility requirements for system employees to receive an incentive. The board of trustees shall file a copy of its proposed revised eligibility requirements with the chairs and ranking members of the senate

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committee on with higher education within its jurisdiction and the ~~Higher Education budget and Policy~~ senate finance division ~~of the senate Committee on Finance~~ with higher education within its jurisdiction and with the chair and ranking members of the ~~Higher Education and Workforce Development Finance and Policy Division of the Finance~~ committee of in the house of representatives with higher education within its jurisdiction and of the house of representatives Committee on Ways and Means, at least 30 days before ~~their~~ the final adoption of the proposed revised eligibility requirements by the board of trustees, shall post the same document on the system Web site at the same time, and shall hold a public hearing on the proposed eligibility requirements. The type and any additional amount of the incentive to be offered may vary by employee classification, as specified by the board.

(d) The president of a college or university, consistent with paragraphs (b) and (c), may designate:

(1) specific departments or programs at the college or university whose employees are eligible to be offered the incentive program; or

(2) positions at the college or university eligible to be offered the incentive program.

(e) The chancellor, consistent with paragraphs (b) and (c), may designate:

(1) system office divisions whose employees are eligible to be offered the incentive program; or

(2) positions at the system office eligible to be offered the incentive program.

(f) Acceptance of the offered incentive must be voluntary on the part of the employee and must be in writing. The incentive may only be offered at the sole discretion of the president of the applicable college or university.

(g) A decision by the president of a college or university or by the chancellor not to offer an incentive may not be challenged.

(h) The cost of the incentive is payable by the college or university on whose behalf the president offered the incentive or from the system office budget if the chancellor offered the incentive. If a college or university is merged, the remaining cost of any early separation incentive must be borne by the successor institution. If a college or university is closed, the remaining cost of any early separation incentive must be borne by the board of trustees.

(i) Annually, the chancellor and the president of each college or university must report on the number and types of early separation incentives which were offered and utilized under this section. The report must be filed annually with the board of trustees and with the Legislative Reference Library on or before September 1.

(j) The early retirement incentive authority under this section expires on June 30, 2019.

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

Sec. 2. Minnesota Statutes 2012, section 352.1155, subdivision 1, is amended to read:

Subdivision 1. Eligibility. Except as indicated in subdivision 4, the annuity reduction provisions of section 352.115, subdivision 10, do not apply to a person who:

(1) retires from the Minnesota State Colleges and Universities system with at least ten years of combined service credit in a system under the jurisdiction of the Board of Trustees of the Minnesota State Colleges and Universities;

(2) was employed on a full-time basis immediately preceding retirement as a faculty member or as an unclassified administrator in that system;

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(3) was not a recipient of an early retirement incentive under section 136F.481;

~~(3)~~ (4) begins drawing an annuity from the general state employees retirement plan of the Minnesota State Retirement System; and

~~(4)~~ (5) returns to work on not less than a one-third time basis and not more than a two-thirds time basis in the system from which the person retired under an agreement in which the person may not earn a salary of more than ~~$46,000~~ $62,000 in a calendar year ~~from~~ through employment after retirement in the system from which the person retired.

EFFECTIVE DATE. This section is effective July 1, 2014.

Sec. 3. Minnesota Statutes 2012, section 352.1155, subdivision 4, is amended to read:

Subd. 4. Exemption limit. For a person eligible under this section who earns more than ~~$46,000~~ $62,000 in a calendar year ~~from~~ through reemployment in the Minnesota State Colleges and Universities system following retirement, the annuity reduction provisions of section 352.115, subdivision 10, apply only to income over ~~$46,000~~ $62,000.

EFFECTIVE DATE. This section is effective July 1, 2014.

Sec. 4. Minnesota Statutes 2012, section 354.445, is amended to read:

354.445 NO ANNUITY REDUCTION.

(a) The annuity reduction provisions of section 354.44, subdivision 5, do not apply to a person who:

(2) was employed on a full-time basis immediately preceding retirement as a faculty member or as an unclassified administrator in that system;

(3) was not a recipient of an early retirement incentive under section 136F.481;

~~(3)~~ (4) begins drawing an annuity from the teachers retirement association; and

(b) Initial participation, the amount of time worked, and the duration of participation under this section must be mutually agreed upon by the president of the institution where the person returns to work and the employee. The president may require up to one-year notice of intent to participate in the program as a condition of participation under this section. The president shall determine the time of year the employee shall work. The employer or the president may not require a person to waive any rights under a collective bargaining agreement as a condition of participation under this section.

(c) Notwithstanding any law to the contrary, a person eligible under paragraphs (a) and (b) may not, based on employment to which the waiver in this section applies, earn further service credit in a Minnesota public defined benefit plan and is not eligible to participate in a Minnesota public defined contribution plan, other than a volunteer fire plan governed by chapter 424A. No employer or employee contribution to any of these plans may be made on behalf of such a person.

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(d) For a person eligible under paragraphs (a) and (b) who earns more than ~~$46,000~~ $62,000 in a calendar year ~~from~~ through employment after retirement due to employment by the Minnesota state colleges and universities system, the annuity reduction provisions of section 354.44, subdivision 5, apply only to income over ~~$46,000~~ $62,000.

(e) A person who returns to work under this section is a member of the appropriate bargaining unit and is covered by the appropriate collective bargaining contract. Except as provided in this section, the person's coverage is subject to any part of the contract limiting rights of part-time employees.

EFFECTIVE DATE. This section is effective July 1, 2014.

Sec. 5. Minnesota Statutes 2012, section 354A.31, subdivision 3a, is amended to read:

Subd. 3a. No annuity reduction. (a) The annuity reduction provisions of subdivision 3 do not apply to a person who:

(1) retires from the technical college system with at least ten years of service credit in the system from which the person retires;

(2) was employed on a full-time basis immediately preceding retirement as a technical college faculty member;

(3) was not a recipient of an early retirement incentive under section 136F.481;

~~(3)~~ (4) begins drawing an annuity from a first class city teachers retirement association; and

~~(4)~~ (5) returns to work on not less than a one-third time basis and not more than a two-thirds time basis in the technical college system under an agreement in which the person may not earn a salary of more than ~~$46,000~~ $62,000 in a calendar year ~~from~~ through the technical college system.

(b) Initial participation, the amount of time worked, and the duration of participation under this section must be mutually agreed upon by the employer and the employee. The employer may require up to a one-year notice of intent to participate in the program as a condition of participation under this section. The employer shall determine the time of year the employee shall work.

(c) Notwithstanding any law to the contrary, a person eligible under paragraphs (a) and (b) may not earn further service credit in a first class city teachers retirement association and is not eligible to participate in the individual retirement account plan or the supplemental retirement plan established in chapter 354B as a result of service under this section. No employer or employee contribution to any of these plans may be made on behalf of such a person.

EFFECTIVE DATE. This section is effective July 1, 2014.

Sec. 6. Minnesota Statutes 2012, section 354B.21, subdivision 2, is amended to read:

Subd. 2. Coverage; election. (a) An eligible person employed by the board has the default coverage specified in subdivision 3, or other subdivisions of this section, whichever is applicable, and retains that coverage for the period of covered employment unless a timely election to change that coverage is made as specified in this section.

(b) An eligible person under subdivision 3, paragraph (b) or (c), is authorized to elect prospective Teachers Retirement Association plan coverage.

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(c) An eligible person under subdivision 3, paragraph (d), is authorized to elect prospective coverage by the plan established by this chapter.

(d) The election under paragraph (a) must be made within one year of commencing eligible Minnesota State Colleges and Universities system employment. If an election is not made within the specified election period due to a termination of Minnesota State Colleges and Universities system employment, an election may be made within 90 days of returning to eligible Minnesota State Colleges and Universities system employment. Except as specified in paragraph (f), all elections are irrevocable.

(e) Except as provided in paragraph (f), a purchase of service credit in the Teachers Retirement Association plan for any period or periods of Minnesota State Colleges and Universities system employment occurring before the election under this section is prohibited.

(f) Notwithstanding other paragraphs in this subdivision, a faculty member who is a member of the individual retirement account plan may elect to transfer retirement coverage to the teachers retirement plan within one year of the faculty member first achieving tenure or its equivalent at a Minnesota state college or university. The faculty member electing Teachers Retirement Association coverage under this paragraph must purchase service credit in the Teachers Retirement Association for the entire period of time covered under the individual retirement account plan and the purchase payment amount must be determined under section 356.551. The Teachers Retirement Association may charge a faculty member transferring coverage a reasonable fee to cover the costs associated with computing the actuarial cost of purchasing service credit and making the transfer. A faculty member transferring from the individual retirement account plan to the Teachers Retirement Association may use any balances to the credit of the faculty member in the individual retirement account plan, any balances to the credit of the faculty member in the higher education supplemental retirement plan established under chapter 354C, or any source specified in section 356.441, subdivision 1, to purchase the service credit in the Teachers Retirement Association. If the total amount of payments under this paragraph are less than the total purchase payment amount under section 356.551, the payment amounts must be refunded to the applicable source. The retirement coverage transfer and service credit purchase authority under this paragraph expires with respect to any Minnesota State Colleges and Universities System faculty initially hired after June 30, 2014.

EFFECTIVE DATE. This section is effective July 1, 2014.

Sec. 7. Laws 2009, chapter 169, article 6, section 1, the effective date, is amended to read:

EFFECTIVE DATE~~; SUNSET~~. This section is effective the day following final enactment ~~and expires June 30, 2014~~.

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

ARTICLE 9

POLICE AND FIREFIGHTER PENSION CHANGES

Section 1. Minnesota Statutes 2012, section 353.6511, subdivision 7, is amended to read:

Subd. 7. Postretirement adjustments. Effective January 1, 2012, service pensions and survivor benefits in force are entitled to be recomputed with the number of units specified in subdivision 2, subdivision 4, and subdivision 6. Optional annuities under Minnesota Statutes 2010, section 423C.05, subdivision 8, also are entitled to be recomputed as the actuarial equivalent of the service pensions and survivor benefits with the number of units specified in subdivision 2, subdivision 4, and subdivision 6. Retirement annuities, service pensions, disability benefits, and survivor benefits after December 31, 2015, are eligible for postretirement adjustments under section 356.415, subdivision 1c. The unit value for the calculation of a retirement annuity first payable after December 31,

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2015, is the calendar year 2015 unit value, plus any annual postretirement adjustment percentage amount payable after December 31, 2015, under section 356.415, subdivision 1c, ~~payable after December 31, 2015, and before the date of retirement~~ paragraph (a), clause (1), or, when applicable, under section 356.415, subdivision 1c, paragraph (b), clause (1).

Sec. 2. Minnesota Statutes 2012, section 353.6512, subdivision 7, is amended to read:

Subd. 7. Postretirement adjustments. Retirement annuities, service pensions, disability benefits, and survivor benefits after December 31, 2015, are eligible for postretirement adjustments under section 356.415, subdivision 1c. The unit value for the calculation of a retirement annuity first payable after December 31, 2015, is the calendar year 2015 unit value, plus any annual postretirement adjustment percentage amount payable after December 31, 2015, under section 356.415, subdivision 1c, ~~payable after December 31, 2015, and before the date of retirement~~ paragraph (a), clause (1), or, when applicable, under section 356.415, subdivision 1c, paragraph (b), clause (1).

Sec. 3. Minnesota Statutes 2013 Supplement, section 423A.02, subdivision 3, is amended to read:

Subd. 3. Reallocation of amortization state aid. (a) Seventy percent of the difference between $5,720,000 and the current year amortization aid distributed under subdivision 1 that is not distributed for any reason to a municipality 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 must be made on July 15 each fiscal year. If the St. Paul Teachers Retirement Fund Association or the Duluth Teachers Retirement Fund Association becomes fully funded, the association's eligibility for its portion of 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.

(c) Thirty percent of the difference between $5,720,000 and the current year amortization aid under subdivision 1a 1 that is not distributed for any reason to a municipality 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 retroactively from July 1, 2013.

Sec. 4. Minnesota Statutes 2013 Supplement, section 423A.022, subdivision 2, is amended to read:

Subd. 2. Allocation. (a) Of the total amount appropriated as supplemental state aid:

(1) ~~58.065~~ 58.064 percent must be paid to the executive director of the Public Employees Retirement Association for deposit in the public employees police and fire retirement fund established by section 353.65, subdivision 1;

(2) 35.484 percent must be paid to municipalities other than municipalities solely employing firefighters with retirement coverage provided by the public employees police and fire retirement plan which qualified to receive fire state aid in that calendar year, allocated in proportion to the most recent amount of fire state aid paid under section 69.021, subdivision 7, for the municipality bears to the most recent total fire state aid for all municipalities other than the municipalities solely employing firefighters with retirement coverage provided by the public employees

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police and fire retirement plan paid under section 69.021, subdivision 7, with the allocated amount for fire departments participating in the voluntary statewide lump-sum volunteer firefighter retirement plan paid to the executive director of the Public Employees Retirement Association for deposit in the fund established by section 353G.02, subdivision 3, and credited to the respective account and with the balance paid to the treasurer of each municipality for transmittal within 30 days of receipt to the treasurer of the applicable volunteer firefighter relief association for deposit in its special fund; and

(3) 6.452 percent must be paid to the executive director of the Minnesota State Retirement System for deposit in the state patrol retirement fund.

(b) For purposes of this section, the term "municipalities" includes independent nonprofit firefighting corporations that participate in the voluntary statewide lump-sum volunteer firefighter retirement plan under chapter 353G or with subsidiary volunteer firefighter relief associations operating under chapter 424A.

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

Sec. 5. Minnesota Statutes 2013 Supplement, section 423A.022, subdivision 3, is amended to read:

Subd. 3. Reporting~~; definitions~~. ~~(a)~~ On or before September 1, annually, the executive director of the Public Employees Retirement Association shall report to the commissioner of revenue the following:

(1) the municipalities which employ firefighters with retirement coverage by the public employees police and fire retirement plan;

(2) the number of firefighters with public employees police and fire retirement plan coverage employed by each municipality;

(3) the fire departments covered by the voluntary statewide lump-sum volunteer firefighter retirement plan; and

(4) any other information requested by the commissioner to administer the police and firefighter retirement supplemental state aid program.

(b) For this subdivision, (i) the number of firefighters employed by a municipality who have public employees police and fire retirement plan coverage means the number of firefighters with public employees police and fire retirement plan coverage that were employed by the municipality for not less than 30 hours per week for a minimum of six months prior to December 31 preceding the date of the payment under this section and, if the person was employed for less than the full year, prorated to the number of full months employed; and (ii) the number of active police officers certified for police state aid receipt under section 69.011, subdivisions 2 and 2b, means, for each municipality, the number of police officers meeting the definition of peace officer in section 69.011, subdivision 1, counted as provided and limited by section 69.011, subdivisions 2 and 2b.

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

Sec. 6. ADDITIONAL SUPPLEMENTAL AID REVISION FOR OMITTED 2013 INDEPENDENT NONPROFIT FIREFIGHTING CORPORATIONS.

(a) Notwithstanding any provision of Minnesota Statutes, chapter 423A, to the contrary, this section modifies the allocation of the police and fire supplemental retirement state aid under Minnesota Statutes 2013 Supplement, section 423A.022, for October 1, 2014.

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(b) Before the allocation of the police and fire supplemental retirement state aid is made for October 1, 2014, the commissioner of revenue shall:

(1) determine those fire departments that qualified for fire state aid under Minnesota Statutes 2012, section 69.021, subdivision 7, on October 1, 2013, that did not receive a 2013 allocation of police and fire supplemental retirement state aid, and that were an independent nonprofit firefighting corporation; and

(2) determine the amount of police and fire supplemental retirement state aid under Minnesota Statutes 2013 Supplement, section 423A.022, that the fire departments described in clause (1) would have received on October 1, 2013, if the fire departments had been included in that allocation.

(c) The total amount determined in paragraph (b), clause (2), must be deducted from the amount available for allocation under Minnesota Statutes 2013 Supplement, section 423A.022, subdivision 2, clause (2), and the commissioner of revenue shall pay to the fire departments determined in paragraph (b), clause (1), their respective portion of the total as an additional payment on October 1, 2014.

(d) The remaining amount after the deduction of the total amount under paragraph (c) must be allocated as provided in Minnesota Statutes, section 423A.022, subdivision 2.

Sec. 7. PERA; STUDY OF LOCAL RELIEF ASSOCIATION BENEFITS UNDER CONSOLIDATION.

The executive director of the Public Employees Retirement Association shall report to the Legislative Commission on Pensions and Retirement by February 1, 2015, regarding the situation of former members and surviving spouses of former members, as further specified in this section, of local salaried police and fire relief associations governed by Minnesota Statutes, chapter 423A, that consolidated with the public employees police and fire retirement plan under Minnesota Statutes, chapter 353A, and Laws 1999, chapter 222, article 4.

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

ARTICLE 10

ACTUARIAL ASSUMPTION CHANGES

Section 1. Minnesota Statutes 2013 Supplement, 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~~:

(1) select and ultimate interest rate assumption

plan	ultimate ~~preretirement~~ interest rate assumption	~~ultimate postretirement interest rate 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, and for the constitutional officers calculation of total plan liabilities	0.0	~~0.0~~
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~~
Journal of the House - 79th Day - Monday, March 31, 2014 - Top of Page 8315 teachers retirement plan	8.5	~~6.0~~
Duluth teachers retirement plan	8.5	~~8.5~~
St. Paul teachers retirement plan	8.5	~~8.5~~

Except for the legislators retirement plan and the constitutional officers calculation of total plan liabilities, the select preretirement interest rate assumption for the period after June 30, 2012, through June 30, 2017, is 8.0 percent. Except for the legislators retirement plan and the constitutional officers calculation of total plan liabilities, the select postretirement interest rate assumption for the period after June 30, 2012, through June 30, 2017, is 5.5 percent, except for the Duluth teachers retirement plan and the St. Paul teachers retirement plan, each with a select postretirement interest rate assumption for the period after June 30, 2012, through June 30, 2017, of 8.0 percent.

(2) single rate ~~preretirement and postretirement~~ interest rate assumption

plan	interest rate assumption

Bloomington Fire Department Relief Association	6.0
local monthly benefit volunteer firefighters relief associations	5.0

(b)(1) If funding stability has been attained, the valuation must reflect payment of the postretirement adjustment under section 354A.27, subdivision 7; 354A.29, subdivision 9; or 356.415, subdivision 1.

(2) If funding stability has not been attained, the actuary must estimate when a plan will attain the defined funding stability measure, assuming payment of the postretirement adjustment under section 354A.27, subdivision 7; 354A.29, subdivision 9; or 356.415, subdivision 1, and include in the annual actuarial valuation the liabilities of the plan assuming payment of the postretirement adjustment under section 354A.27, subdivision 7; 354A.29, subdivision 9; or 356.415, subdivision 1, for the applicable period or periods beginning when funding stability is projected to be attained.

~~(b)~~ (c) 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

plan	future salary increase assumption

legislators retirement plan		5.0%
judges retirement plan		3.0
Bloomington Fire Department Relief Association		4.0

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

plan	future salary increase assumption

local government correctional service retirement plan	assumption C
Duluth teachers retirement plan	assumption A
St. Paul teachers retirement plan	assumption B

For plans other than the Duluth teachers retirement plan, the select calculation is: during the designated select period, a designated percentage rate is multiplied by the result of the designated integer

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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 ten years and the designated integer is ten for the Duluth Teachers Retirement Fund Association and for the local government correctional service retirement plan and 15 for the St. Paul Teachers Retirement Fund Association. The designated percentage rate is 0.2 percent for 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.

The ultimate future salary increase assumption is:

age	A	B	C

16	6.00%	5.90%	9.00%
17	6.00	5.90	9.00
18	6.00	5.90	9.00
19	6.00	5.90	9.00
20	6.00	5.90	9.00
21	6.00	5.90	8.75
22	6.00	5.90	8.50
23	6.00	5.85	8.25
24	6.00	5.80	8.00
25	6.00	5.75	7.75
26	6.00	5.70	7.50
27	6.00	5.65	7.25
28	6.00	5.60	7.00
29	6.00	5.55	6.75
30	6.00	5.50	6.75
31	6.00	5.45	6.50
32	6.00	5.40	6.50
33	6.00	5.35	6.50
34	6.00	5.30	6.25
35	6.00	5.25	6.25
36	5.86	5.20	6.00
37	5.73	5.15	6.00
38	5.59	5.10	6.00
39	5.45	5.05	5.75
40	5.31	5.00	5.75
41	5.18	4.95	5.75
42	5.04	4.90	5.50
43	4.90	4.85	5.25
44	4.76	4.80	5.25
45	4.63	4.75	5.00
46	4.49	4.70	5.00
47	4.35	4.65	5.00
48	4.21	4.60	5.00
49	4.08	4.55	5.00
Journal of the House - 79th Day - Monday, March 31, 2014 - Top of Page 8317 50	3.94	4.50	5.00
51	3.80	4.45	5.00
52	3.66	4.40	5.00
53	3.53	4.35	5.00
54	3.39	4.30	5.00
55	3.25	4.25	4.75
56	3.25	4.20	4.75
57	3.25	4.15	4.50
58	3.25	4.10	4.25
59	3.25	4.05	4.25
60	3.25	4.00	4.25
61	3.25	4.00	4.25
62	3.25	4.00	4.25
63	3.25	4.00	4.25
64	3.25	4.00	4.25
65	3.25	4.00	4.00
66	3.25	4.00	4.00
67	3.25	4.00	4.00
68	3.25	4.00	4.00
69	3.25	4.00	4.00
70	3.25	4.00	4.00

(3) service-related ultimate future salary increase assumption

general state employees retirement plan of the Minnesota State Retirement System	assumption A
general employees retirement plan of the Public Employees Retirement Association	assumption B
Teachers Retirement Association	assumption C
public employees police and fire retirement plan	assumption D
State Patrol retirement plan	assumption E
correctional state employees retirement plan of the Minnesota State Retirement System	assumption F

service length	A		B		C		D		E	F

1	10.50%		12.03%		12.00%		13.00%		8.00%	6.00%
2		8.10		8.90		9.00	11.00		7.50	5.85
3		6.90		7.46		8.00		9.00	7.00	5.70
4		6.20		6.58		7.50		8.00	6.75	5.55
5		5.70		5.97		7.25		6.50	6.50	5.40
6		5.30		5.52		7.00		6.10	6.25	5.25
7		5.00		5.16		6.85		5.80	6.00	5.10
8		4.70		4.87		6.70		5.60	5.85	4.95
9		4.50		4.63		6.55		5.40	5.70	4.80
10		4.40		4.42		6.40		5.30	5.55	4.65
11		4.20		4.24		6.25		5.20	5.40	4.55
12		4.10		4.08		6.00		5.10	5.25	4.45
13		4.00		3.94		5.75		5.00	5.10	4.35
14		3.80		3.82		5.50		4.90	4.95	4.25
15		3.70		3.70		5.25		4.80	4.80	4.15
16		3.60		3.60		5.00		4.80	4.65	4.05
Journal of the House - 79th Day - Monday, March 31, 2014 - Top of Page 8318 17		3.50		3.51		4.75		4.80	4.50	3.95
18		3.50		3.50		4.50		4.80	4.35	3.85
19		3.50		3.50		4.25		4.80	4.20	3.75
20		3.50		3.50		4.00		4.80	4.05	3.75
21		3.50		3.50		3.90		4.70	4.00	3.75
22		3.50		3.50		3.80		4.60	4.00	3.75
23		3.50		3.50		3.70		4.50	4.00	3.75
24		3.50		3.50		3.60		4.50	4.00	3.75
25		3.50		3.50		3.50		4.50	4.00	3.75
26		3.50		3.50		3.50		4.50	4.00	3.75
27		3.50		3.50		3.50		4.50	4.00	3.75
28		3.50		3.50		3.50		4.50	4.00	3.75
29		3.50		3.50		3.50		4.50	4.00	3.75
30 or more		3.50		3.50		3.50		4.50	4.00	3.75

~~(c)~~ (d) 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:

plan	payroll growth assumption

general state employees retirement plan of the Minnesota State Retirement System	3.75%
correctional state employees retirement plan	3.75
State Patrol retirement plan	3.75
judges retirement plan	3.00
general employees retirement plan of the Public Employees Retirement Association	3.75
public employees police and fire retirement plan	3.75
local government correctional service retirement plan	3.75
teachers retirement plan	3.75
Duluth teachers retirement plan	3.50
St. Paul teachers retirement plan	4.00

~~(d)~~ (e) The assumptions set forth in paragraphs ~~(b)~~ (c) and ~~(c)~~ (d) 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;

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

EFFECTIVE DATE. This section is effective June 30, 2014, and applies to actuarial valuation reports prepared on or after that date.

Sec. 2. Minnesota Statutes 2012, section 356.215, subdivision 11, is amended to read:

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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), but excluding the MERF division of the Public Employees Retirement Association and the legislators retirement plan, 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)~~ (d). For all other retirement plans and for the MERF division of the Public Employees Retirement Association and the legislators retirement plan, the additional annual contribution must be calculated on a level annual dollar amount basis.

(b) For any retirement plan other than ~~the general state employees retirement plan of the Minnesota State Retirement System or~~ a retirement plan governed by paragraph (d), (e), (f), (g), (h), (i), or (j), or (k), 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.

(c) For any retirement plan ~~other than 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:

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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 MERF division of the Public Employees Retirement Association, the established date for full funding is June 30, 2031.

(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.

(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 must 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.

EFFECTIVE DATE. This section is effective July 1, 2014, and applies to actuarial valuation results prepared on or after that date.

Sec. 3. REPEALER.

Minnesota Statutes 2012, section 356.415, subdivision 3, is repealed.

EFFECTIVE DATE. This section is effective June 30, 2014, and applies to actuarial valuation reports prepared on or after that date.

ARTICLE 11

POSTRETIREMENT ADJUSTMENT TRIGGER PROCEDURES

Section 1. Minnesota Statutes 2013 Supplement, section 354A.27, subdivision 6a, is amended to read:

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Subd. 6a. Postretirement adjustment transition. (a) If the funded ratio of the retirement plan based on the actuarial value of assets is at least 90 percent as reported in the two most recent actuarial ~~valuation~~ valuations prepared under sections 356.214 and 356.215, this subdivision expires and subsequent postretirement adjustments are governed by subdivision 7.

(b) Each annuity or benefit recipient of the retirement plan who has been receiving that annuity or benefit for at least 12 months as of the applicable January 1 is eligible to receive a postretirement adjustment of one percent, payable on January 1.

EFFECTIVE DATE. This section is effective July 1, 2015, unless Minnesota Statutes, section 354A.27, subdivision 6a, is repealed by action of the 2014 legislature.

Sec. 2. Minnesota Statutes 2012, section 354A.29, subdivision 8, is amended to read:

Subd. 8. Calculation of postretirement adjustments; transitional provision. (a) For purposes of computing postretirement adjustments for eligible benefit recipients of the St. Paul Teachers Retirement Fund Association, the accrued liability funding ratio based on the actuarial value of assets of the plan as determined by the two most recent actuarial ~~valuation~~ valuations prepared under sections 356.214 and 356.215 determines the postretirement increase, as follows:

	Funding ratio	Postretirement increase

	Less than 80 percent	1 percent
	At least 80 percent but less than 90 percent	2 percent

(b) The amount determined under paragraph (a) is the full postretirement increase 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 postretirement increase 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 postretirement increase is applied, calculated to the third decimal place.

(c) If the accrued liability funding ratio based on the actuarial value of assets is at least 90 percent in two consecutive actuarial valuations, this subdivision expires and subsequent postretirement increases must be paid as specified in subdivision 9.

EFFECTIVE DATE. This section is effective July 1, 2015.

Sec. 3. Minnesota Statutes 2013 Supplement, section 356.415, subdivision 1a, is amended 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 plans, including constitutional officers as specified in chapter 3A, the general state employees retirement plan, the correctional state employees 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

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(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~~ two prior consecutive actuarial ~~valuation~~ valuations 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 July 1, 2014.

Sec. 4. Minnesota Statutes 2012, section 356.415, subdivision 1d, is amended 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;

(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 before the January 1 increase, 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, for which the person has been retired for at least six months but less than 18 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 before the January 1 increase, 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, for which the person has been retired for at least six months but less than 18 months.

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(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 two most recent prior actuarial ~~valuation~~ valuations 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 July 1, 2015.

Sec. 5. Minnesota Statutes 2013 Supplement, section 356.415, subdivision 1e, is amended 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 one 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 one 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, 2014. Increases under paragraph (a) for the State Patrol retirement plan terminate on December 31 of the calendar year in which ~~the~~ two prior consecutive actuarial ~~valuation~~ valuations 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 85 percent of the actuarial accrued liability of the retirement plan and increases under paragraph (c) recommence after that date.

(c) 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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(d) Increases under paragraph (c) for the State Patrol retirement plan terminate on December 31 of the calendar year in which ~~the~~ two prior consecutive actuarial ~~valuation~~ valuations prepared by the approved actuary under sections 356.214 and 356.215 and the standards for actuarial work adopted 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.

(e) 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 July 1, 2014.

Sec. 6. Minnesota Statutes 2013 Supplement, section 356.415, subdivision 1f, is amended to read:

Subd. 1f. Annual postretirement adjustments; Minnesota State Retirement System judges retirement plan. (a) The increases provided under this subdivision begin on January 1, 2014, and are in lieu of increases under subdivision 1 or 1a for retirement annuity, disability benefit, or survivor benefit recipients of the judges retirement plan.

(b) Retirement annuity, disability benefit, or survivor benefit recipients of the judges retirement plan are entitled to a postretirement adjustment annually on January 1, as follows:

(1) a postretirement increase of 1.75 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 1.75 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.

(c) Increases under this subdivision terminate on December 31 of the calendar year in which ~~the~~ two prior consecutive actuarial ~~valuation~~ valuations 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 judges retirement plan equals or exceeds 70 percent of the actuarial accrued liability of the retirement plan. Increases under subdivision 1 or 1a, whichever is applicable, begin on the January 1 next following that date.

(d) 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 July 1, 2014.

ARTICLE 12

VOLUNTEER FIREFIGHTER RELIEF ASSOCIATION CHANGES

Section 1. Minnesota Statutes 2013 Supplement, section 69.051, subdivision 1a, is amended to read:

Subd. 1a. Financial statement. (a) The board of each volunteer firefighters relief association, as defined in section 424A.001, subdivision 4, that is not required to file a financial report and audit under subdivision 1 must prepare a detailed statement of the financial affairs for the preceding fiscal year of the relief association's special and general funds in the style and form prescribed by the state auditor. The detailed statement must show:

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(1) the sources and amounts of all money received;

(2) all disbursements, accounts payable and accounts receivable;

(3) the amount of money remaining in the treasury;

(4) total assets, including a listing of all investments;

(5) the accrued liabilities; and

(6) all other items necessary to show accurately the revenues and expenditures and financial position of the relief association.

(b) The detailed financial statement required under paragraph (a) must be certified by ~~an independent~~ a certified public accountant or by the state auditor ~~or by the auditor or accountant who regularly examines or audits the financial transactions of the municipality~~. In addition to certifying the financial condition of the special and general funds of the relief association, the accountant or auditor conducting the examination shall give an opinion as to the condition of the special and general funds of the relief association, and shall comment upon any exceptions to the report. The ~~independent~~ accountant ~~or auditor~~ must have at least five years of public accounting, auditing, or similar experience, and must not be an active, inactive, or retired member of the relief association or the fire department.

(1) the municipal clerk or clerk-treasurer of the municipality; or

(2) where applicable, by the municipal clerk or clerk-treasurer of the largest municipality in population which contracts with the independent nonprofit firefighting corporation if the relief association is a subsidiary of an independent nonprofit firefighting corporation and by the secretary of the independent nonprofit firefighting corporation; or

(3) by the chief financial official of the county in which the volunteer firefighter relief association is located or primarily located if the relief association is associated with a fire department that is not located in or associated with an organized municipality.

(d) The volunteer firefighters' relief association board must file the detailed statement required under paragraph (a) in the relief association office for public inspection and present it to the governing body of the municipality within 45 days after the close of the fiscal year, and must submit a copy of the detailed statement to the state auditor within 90 days of the close of the fiscal year.

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

Sec. 2. Minnesota Statutes 2013 Supplement, section 69.051, subdivision 3, is amended to read:

Subd. 3. Report by certain municipalities; exceptions. (a) The chief administrative officer of each municipality which has an organized fire department but which does not have a firefighters' relief association governed by section 69.77 or sections 424A.091 to 424A.095 and which is not exempted under paragraph (b) or (c) shall annually prepare a detailed financial report of the receipts and disbursements by the municipality for fire protection service during the preceding calendar year on a form prescribed by the state auditor. The financial report must contain any information which the state auditor deems necessary to disclose the sources of receipts and the purpose of disbursements for fire protection service. The financial report must be signed by the municipal clerk or clerk-treasurer of the municipality. The financial report must be filed by the municipal clerk or clerk-treasurer with

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the state auditor on or before July 1 annually. The municipality does not qualify initially to receive, and is not entitled subsequently to retain, state aid under this chapter if the financial reporting requirement or the applicable requirements of this chapter or any other statute or special law have not been complied with or are not fulfilled.

(b) Each municipality that has an organized fire department and provides retirement coverage to its firefighters through the voluntary statewide lump-sum volunteer firefighter retirement plan under chapter 353G qualifies to have fire state aid transmitted to and retained in the statewide lump-sum volunteer firefighter retirement fund without filing a detailed financial report if the executive director of the Public Employees Retirement Association certifies compliance by the municipality with the requirements of sections 353G.04 and 353G.08, paragraph (e), and certifies conformity by the applicable fire chief with the requirements of section 353G.07.

(c) Each municipality qualifies to receive fire state aid under this chapter without filing a financial report under paragraph (a) if the municipality:

(1) has an organized fire department;

(2) does not have a volunteer firefighters relief association directly associated with its fire department;

(3) does not participate in the statewide lump-sum volunteer firefighter retirement plan under chapter 353G;

(4) provides retirement coverage to its firefighters through the public employees police and fire retirement plan under sections 353.63 to 353.68; and

(5) is certified by the executive director of the Public Employees Retirement Association to the state auditor to have had an employer contribution under section 353.65, subdivision 3, for its firefighters for the immediately prior calendar year equal to or greater than its fire state aid for the immediately prior calendar year.

EFFECTIVE DATE. This section is effective the day following final enactment and applies to fire state aid payable on October 1, 2014.

Sec. 3. Minnesota Statutes 2012, section 356A.06, subdivision 7, is amended to read:

Subd. 7. Expanded list of authorized investment securities. (a) Authority. A covered pension plan not described by subdivision 6, paragraph (a), is an expanded list plan and shall invest its assets as specified in this subdivision. The governing board of an expanded list plan may select and appoint investment agencies to act for or on its behalf.

(b) Securities generally; investment forms. An expanded list plan is authorized to purchase, sell, lend, and exchange the investment securities authorized under this subdivision, including puts and call options and future contracts traded on a contract market regulated by a governmental agency or by a financial institution regulated by a governmental agency. These securities may be owned directly or through shares in exchange-traded or mutual funds, or as units in commingled trusts, subject to any limitations specified in this subdivision.

(c) Government obligations. An expanded list plan is authorized to invest funds in governmental bonds, notes, bills, mortgages, and other evidences of indebtedness if the issue is backed by the full faith and credit of the issuer or the issue is rated among the top four quality rating categories by a nationally recognized rating agency. The obligations in which funds may be invested under this paragraph are guaranteed or insured issues of:

(1) the United States, one of its agencies, one of its instrumentalities, or an organization created and regulated by an act of Congress;

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(2) the Dominion of Canada or one of its provinces if the principal and interest are payable in United States dollars;

(3) a state or one of its municipalities, political subdivisions, agencies, or instrumentalities; and

(4) a United States government-sponsored organization of which the United States is a member if the principal and interest are payable in United States dollars.

(d) Investment-grade corporate obligations. An expanded list plan is authorized to invest funds in bonds, notes, debentures, transportation equipment obligations, or any other longer term evidences of indebtedness issued or guaranteed by a corporation organized under the laws of the United States or any of its states, or the Dominion of Canada or any of its provinces if:

(1) the principal and interest are payable in United States dollars; and

(2) the obligations are rated among the top four quality categories by a nationally recognized rating agency.

(e) Below-investment-grade corporate obligations. An expanded list plan is authorized to invest in unrated corporate obligations or in corporate obligations that are not rated among the top four quality categories by a nationally recognized rating agency if:

(1) the aggregate value of these obligations does not exceed five percent of the covered pension plan's market value;

(2) the covered pension plan's participation is limited to 50 percent of a single offering subject to this paragraph; and

(3) the covered pension plan's participation is limited to 25 percent of an issuer's obligations subject to this paragraph.

(f) Other obligations. (1) An expanded list plan is authorized to invest funds in:

(i) bankers acceptances and deposit notes if issued by a United States bank that is rated in the highest four quality categories by a nationally recognized rating agency;

(ii) certificates of deposit if issued by a United States bank or savings institution rated in the highest four quality categories by a nationally recognized rating agency or whose certificates of deposit are fully insured by federal agencies, or if issued by a credit union in an amount within the limit of the insurance coverage provided by the National Credit Union Administration;

(iii) commercial paper if issued by a United States corporation or its Canadian subsidiary and if rated in the highest two quality categories by a nationally recognized rating agency;

(iv) mortgage securities and asset-backed securities if rated in the top four quality categories by a nationally recognized rating agency;

(v) repurchase agreements and reverse repurchase agreements if collateralized with letters of credit or securities authorized in this section;

(vi) guaranteed investment contracts if issued by an insurance company or a bank that is rated in the top four quality categories by a nationally recognized rating agency or alternative guaranteed investment contracts if the underlying assets comply with the requirements of this subdivision;

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(vii) savings accounts if fully insured by a federal agency; and

(viii) guaranty fund certificates, surplus notes, or debentures if issued by a domestic mutual insurance company.

(2) Sections 16A.58, 16C.03, subdivision 4, and 16C.05 do not apply to certificates of deposit and collateralization agreements executed by the covered pension plan under clause (1), item (ii).

(3) In addition to investments authorized by clause (1), item (iv), an expanded list plan is authorized to purchase from the Minnesota Housing Finance Agency all or any part of a pool of residential mortgages, not in default, that has previously been financed by the issuance of bonds or notes of the agency. The covered pension plan may also enter into a commitment with the agency, at the time of any issue of bonds or notes, to purchase at a specified future date, not exceeding 12 years from the date of the issue, the amount of mortgage loans then outstanding and not in default that have been made or purchased from the proceeds of the bonds or notes. The covered pension plan may charge reasonable fees for any such commitment and may agree to purchase the mortgage loans at a price sufficient to produce a yield to the covered pension plan comparable, in its judgment, to the yield available on similar mortgage loans at the date of the bonds or notes. The covered pension plan may also enter into agreements with the agency for the investment of any portion of the funds of the agency. The agreement must cover the period of the investment, withdrawal privileges, and any guaranteed rate of return.

(g) Corporate stocks. An expanded list plan is authorized to invest in stocks or convertible issues of any corporation organized under the laws of the United States or any of its states, any corporation organized under the laws of the Dominion of Canada or any of its provinces, or any corporation listed on an exchange that is regulated by an agency of the United States or of the Canadian national government.

An investment in any corporation must not exceed five percent of the total outstanding shares of that corporation, except that an expanded list plan may hold up to 20 percent of the shares of a real estate investment trust and up to 20 percent of the shares of a closed mutual fund.

(h) Other investments. (1) In addition to the investments authorized in paragraphs (b) to (g), and subject to the provisions in clause (2), an expanded list plan is authorized to invest funds in:

(i) equity and debt investment businesses through participation in limited partnerships, trusts, private placements, limited liability corporations, limited liability companies, limited liability partnerships, and corporations;

(ii) real estate ownership interests or loans secured by mortgages or deeds of trust or shares of real estate investment trusts, through investment in limited partnerships, bank-sponsored collective funds, trusts, mortgage participation agreements, and insurance company commingled accounts, including separate accounts;

(iii) resource investments through limited partnerships, trusts, private placements, limited liability corporations, limited liability companies, limited liability partnerships, and corporations; and

(iv) international securities.

(2) The investments authorized in clause (1) must conform to the following provisions:

(i) the aggregate value of all investments made under clause (1), items (i), (ii), and (iii), may not exceed 35 percent of the market value of the fund for which the expanded list plan is investing;

(ii) there must be at least four unrelated owners of the investment other than the expanded list plan for investments made under clause (1), item (i), (ii), or (iii);

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(iii) the expanded list plan's participation in an investment vehicle is limited to 20 percent thereof for investments made under clause (1), item (i), (ii), or (iii);

(iv) the expanded list plan's participation in a limited partnership does not include a general partnership interest or other interest involving general liability. The expanded list plan may not engage in any activity as a limited partner which creates general liability; ~~and~~

(v) the aggregate value of all unrated obligations and obligations that are not rated among the top four quality categories by a nationally recognized rating agency authorized by paragraph (f) and clause (1), item (iv), must not exceed five percent of the covered plan's market value; and

(vi) for volunteer firefighter relief associations, emerging market equity and international debt investments authorized under clause (1), item (iv), must not exceed 15 percent of the association's special fund market value.

(i) Supplemental plan investments. The governing body of an expanded list plan may certify assets to the State Board of Investment for investment under section 11A.17.

(j) Asset mix limitations. The aggregate value of an expanded list plan's investments under paragraphs (g) and (h) and equity investments under paragraph (i), regardless of the form in which these investments are held, must not exceed 85 percent of the covered plan's market value.

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

Sec. 4. Minnesota Statutes 2012, section 356A.06, subdivision 7a, is amended to read:

Subd. 7a. Restrictions. Any agreement to lend securities must be concurrently collateralized with cash or securities with a market value of not less than 100 percent of the market value of the loaned securities at the time of the agreement. For a covered pension authorized to purchase put and call options and futures contracts under subdivision 7, any agreement for put and call options and futures contracts may only be entered into with a fully offsetting amount of cash or securities. Only securities authorized by this section, excluding those under subdivision 7, paragraph ~~(g)~~ (h), clause (1), items (i) to (iv), may be accepted as collateral or offsetting securities.

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

Sec. 5. Minnesota Statutes 2012, section 424A.015, is amended by adding a subdivision to read:

Subd. 6. Governing benefit plan provisions. A service pension or ancillary benefit payable under this chapter is governed by and must be calculated under the general statute, special law, relief association articles of incorporation, and relief association bylaw provisions applicable on the date on which the member separated from active service with the fire department and active membership in the relief association.

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

Sec. 6. Minnesota Statutes 2012, section 424A.016, subdivision 4, is amended to read:

Subd. 4. Individual accounts. (a) An individual account must be established for each firefighter who is a member of the relief association.

(b) To each individual active member account must be credited an equal share of:

(1) any amounts of fire state aid received by the relief association;

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(2) any amounts of municipal contributions to the relief association raised from levies on real estate or from other available municipal revenue sources exclusive of fire state aid; and

(3) any amounts equal to the share of the assets of the special fund to the credit of:

(i) any former member who terminated active service with the fire department to which the relief association is associated before meeting the minimum service requirement provided for in subdivision 2, paragraph (b), and has not returned to active service with the fire department for a period no shorter than five years; or

(ii) any retired member who retired before obtaining a full nonforfeitable interest in the amounts credited to the individual member account under subdivision 2, paragraph (b), and any applicable provision of the bylaws of the relief association. In addition, any investment return on the assets of the special fund must be credited in proportion to the share of the assets of the special fund to the credit of each individual active member account. Administrative expenses of the relief association payable from the special fund may be deducted from individual accounts in a manner specified in the bylaws of the relief association.

(c) If the bylaws so permit and as the bylaws define, the relief association may credit any investment return on the assets of the special fund to the accounts of inactive members.

(d) Amounts to be credited to individual accounts must be allocated uniformly for all years of active service and allocations must be made for all years of service, except for caps on service credit if so provided in the bylaws of the relief association. Amounts forfeited under paragraph (b), clause (3), before a resumption of active service and membership under section 424A.01, subdivision 6, remain forfeited and may not be reinstated upon the resumption of active service and membership. The allocation method may utilize monthly proration for fractional years of service, as the bylaws or articles of incorporation of the relief association so provide. The bylaws or articles of incorporation may define a "month," but the definition must require a calendar month to have at least 16 days of active service. If the bylaws or articles of incorporation do not define a "month," a "month" is a completed calendar month of active service measured from the member's date of entry to the same date in the subsequent month.

(e) At the time of retirement under subdivision 2 and any applicable provision of the bylaws of the relief association, a retiring member is entitled to that portion of the assets of the special fund to the credit of the member in the individual member account which is nonforfeitable under subdivision 3 and any applicable provision of the bylaws of the relief association based on the number of years of service to the credit of the retiring member.

(f) Annually, the secretary of the relief association shall certify the individual account allocations to the state auditor at the same time that the annual financial statement or financial report and audit of the relief association, whichever applies, is due under section 69.051.

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

Sec. 7. Minnesota Statutes 2013 Supplement, section 424A.016, subdivision 6, is amended to read:

Subd. 6. Deferred service pensions. (a) A member of a relief association is entitled to a deferred service pension if the member separates from active service and membership and has completed the minimum service and membership requirements in subdivision 2. The requirement that a member separate from active service and membership is waived for persons who have discontinued their volunteer firefighter duties and who are employed on a full-time basis under section 424A.015, subdivision 1.

(b) The deferred service pension is payable when the former member reaches at least age 50, or at least the minimum age specified in the bylaws governing the relief association if that age is greater than age 50, and when the former member makes a valid written application.

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(c) A defined contribution relief association may, if its governing bylaws so provide, credit interest or additional investment performance on the deferred lump-sum service pension during the period of deferral. If provided for in the bylaws, the interest must be paid:

(1) at the investment performance rate actually earned on that portion of the assets if the deferred benefit amount is invested by the relief association in a separate account established and maintained by the relief association;

(2) at the investment performance rate actually earned on that portion of the assets if the deferred benefit amount is invested in a separate investment vehicle held by the relief association; or

(3) at the investment return on the assets of the special fund of the defined contribution volunteer firefighter relief association in proportion to the share of the assets of the special fund to the credit of each individual deferred member account through the accounting date on which the investment return is recognized by and credited to the special fund.

(d) Unless the bylaws of a relief association that has elected to pay interest or additional investment performance on deferred lump-sum service pensions under paragraph (c) specifies a different interest or additional investment performance method, including the interest or additional investment performance period starting date and ending date, the interest or additional investment performance on a deferred service pension is creditable as follows:

(1) for a relief association that has elected to pay interest or additional investment performance under paragraph (c), clause (1) or (3), beginning on the date that the member separates from active service and membership and ending on the accounting date immediately before the deferred member commences receipt of the deferred service pension; or

(2) for a relief association that has elected to pay interest or additional investment performance under paragraph (c), clause (2), beginning on the date that the member separates from active service and membership and ending on the date that the separate investment vehicle is valued immediately before the date on which the deferred member commences receipt of the deferred service pension.

(e) The deferred service pension is governed by and must be calculated under the general statute, special law, relief association articles of incorporation, and relief association bylaw provisions applicable on the date on which the member separated from active service with the fire department and active membership in the relief association.

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

Sec. 8. Minnesota Statutes 2012, section 424A.016, subdivision 7, is amended to read:

Subd. 7. Limitation on ancillary benefits. (a) A defined contribution relief association may only pay an ancillary benefit which would constitute an authorized disbursement as specified in section 424A.05. The ancillary benefit for active members must equal the vested and nonvested amount of the individual account of the member.

(b) For deferred members, the ancillary benefit must equal the vested amount of the individual account of the member. For the recipient of installment payments of a service pension, the ancillary benefit must equal the remaining balance in the individual account of the recipient.

(c) If the bylaws permit and as defined by the bylaws, the relief association may pay an ancillary benefit to, or on behalf of, a member who is not active or deferred.

(d) (1) If a survivor or death benefit is payable under the articles of incorporation or bylaws, the benefit must be paid:

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(i) as a survivor benefit to the surviving spouse of the deceased firefighter;

(ii) as a survivor benefit to the surviving children of the deceased firefighter if no surviving spouse;

(iii) as a survivor benefit to a designated beneficiary of the deceased firefighter if no surviving spouse or surviving children; or

(iv) as a death benefit to the estate of the deceased active or deferred firefighter if no surviving spouse, no surviving children, and no beneficiary designated.

(2) If there are no surviving children, the surviving spouse may waive, in writing, wholly or partially, the spouse's entitlement to a survivor benefit.

~~(d)~~ (e) For purposes of this section, for a defined contribution volunteer fire relief association, a trust created under chapter 501B may be a designated beneficiary. If a trust payable to the surviving children organized under chapter 501B has been established as authorized by this section and there is no surviving spouse, the survivor benefit may be paid to the trust, notwithstanding the requirements of this section.

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

Sec. 9. Minnesota Statutes 2013 Supplement, section 424A.02, subdivision 3, is amended to read:

Subd. 3. Flexible service pension maximums. (a) Annually on or before August 1 as part of the certification of the financial requirements and minimum municipal obligation determined under section 424A.092, subdivision 4, or 424A.093, subdivision 5, as applicable, the secretary or some other official of the relief association designated in the bylaws of each defined benefit relief association shall calculate and certify to the governing body of the applicable ~~qualified~~ municipality the average amount of available financing per active covered firefighter for the most recent three-year period. The amount of available financing includes any amounts of fire state aid received or receivable by the relief association, any amounts of municipal contributions to the relief association raised from levies on real estate or from other available revenue sources exclusive of fire state aid, and one-tenth of the amount of assets in excess of the accrued liabilities of the relief association calculated under section 424A.092, subdivision 2; 424A.093, subdivisions 2 and 4; or 424A.094, subdivision 2, if any.

(b) The maximum service pension which the defined benefit relief association has authority to provide for in its bylaws for payment to a member retiring after the calculation date when the minimum age and service requirements specified in subdivision 1 are met must be determined using the table in paragraph (c) or (d), whichever applies.

(c) For a defined benefit relief association where the governing bylaws provide for a monthly service pension to a retiring member, the maximum monthly service pension amount per month for each year of service credited that may be provided for in the bylaws is the greater of the service pension amount provided for in the bylaws on the date of the calculation of the average amount of the available financing per active covered firefighter or the maximum service pension figure corresponding to the average amount of available financing per active covered firefighter:

Minimum Average Amount of Available Financing per Firefighter		Maximum Service Pension Amount Payable per Month for Each Year of Service

$ ...		$ .25
41		.50
81		1.00
122		1.50
Journal of the House - 79th Day - Monday, March 31, 2014 - Top of Page 8333 162		2.00
203		2.50
243		3.00
284		3.50
324		4.00
365		4.50
405		5.00
486		6.00
567		7.00
648		8.00
729		9.00
810		10.00
891		11.00
972		12.00
1053		13.00
1134		14.00
1215		15.00
1296		16.00
1377		17.00
1458		18.00
1539		19.00
1620