1.1    .................... moves to amend H.F. No. 3082; S.F. No. 2720, as follows:
1.2Delete everything after the enacting clause and insert:


1.5    Section 1. Minnesota Statutes 2006, section 11A.18, is amended by adding a
1.6subdivision to read:
1.7    Subd. 2a. Composite funded ratio. (a) Annually, following June 30, the executive
1.8director of the State Board of Investment shall determine the composite funded ratio
1.9of the postretirement investment fund. The composite funded ratio must be stated as a
1.10percentage and must be calculated using:
1.11    (1) the total fair market value of the postretirement investment fund as of June 30,
1.12calculated in accordance with generally accepted accounting principles; divided by
1.13    (2) the total reserves required as of June 30 for the annuities or benefits payable from
1.14the postretirement investment fund on that June 30 to all recipients of participating public
1.15pension plans or funds, as determined by the actuary retained under section 356.214 using
1.16the applicable assumptions in section 356.215.
1.17    (b) The executive director of the State Board of Investment shall certify the
1.18composite funded ratio to the executive directors of the plans participating in the
1.19Minnesota postretirement investment fund and to the executive director of the Legislative
1.20Commission on Pensions and Retirement by November 30 annually.
1.21EFFECTIVE DATE.This section is effective June 30, 2008.

1.22    Sec. 2. Minnesota Statutes 2006, section 11A.18, subdivision 9, is amended to read:
1.23    Subd. 9. Calculation of postretirement adjustment. (a) Annually, following June
1.2430, the state board shall use the procedures in paragraphs (b), (c), and (d) to determine
2.1whether a postretirement adjustment under this subdivision is payable and to determine
2.2the amount of any postretirement adjustment under this subdivision.
2.3    (b) (1) If the Consumer Price Index for urban wage earners and clerical workers all
2.4items index published by the Bureau of Labor Statistics of the United States Department
2.5of Labor increases from June 30 of the preceding year to June 30 of the current year, the
2.6state board shall certify the percentage increase.
2.7     (2) The amount certified must not exceed the lesser of the difference between the
2.8preretirement interest assumption and postretirement interest assumption in section
2.9356.215, subdivision 8, paragraph (a), or 2.5 percent for the Minneapolis Employees
2.10Retirement Fund, the amount certified must not exceed 3.5 percent..
2.11    (c) If the amount calculated under paragraph (b), clause (1), is greater than the
2.12maximum amount allowable under paragraph (b), clause (2), in addition to any percentage
2.13increase certified under paragraph (b), the board shall use the following procedures to
2.14determine if a postretirement adjustment is payable under this paragraph:
2.15    (1) the state board shall determine the total fair market value of the fund on June
2.1630 of that year;
2.17    (2) the amount of reserves required as of the current June 30 for the annuity or
2.18benefit payable to an annuitant and benefit recipient of the participating public pension
2.19plans or funds must be determined by the actuary retained under section 356.214. An
2.20annuitant or benefit recipient who has been receiving an annuity or benefit for at least 12
2.21full months as of the current June 30 is eligible to receive a full postretirement adjustment.
2.22An annuitant or benefit recipient who has been receiving an annuity or benefit for at
2.23least one full month, but less than 12 full months as of the current June 30, is eligible to
2.24receive a partial postretirement adjustment. Each fund shall report separately the amount
2.25of the reserves for those annuitants and benefit recipients who are eligible to receive
2.26a full postretirement benefit adjustment. This amount is known as "eligible reserves."
2.27Each fund shall also report separately the amount of the reserves for those annuitants
2.28and benefit recipients who are not eligible to receive a postretirement adjustment. This
2.29amount is known as "noneligible reserves." For an annuitant or benefit recipient who is
2.30eligible to receive a partial postretirement adjustment, each fund shall report separately
2.31as additional "eligible reserves" an amount that bears the same ratio to the total reserves
2.32required for the annuitant or benefit recipient as the number of full months of annuity
2.33or benefit receipt as of the current June 30 bears to 12 full months. The remainder of
2.34the annuitant's or benefit recipient's reserves must be separately reported as additional
2.35"noneligible reserves." The amount of "eligible" and "noneligible" required reserves
3.1must be certified to the board by the actuary retained under section 356.214 as soon as is
3.2practical following the current June 30;
3.3    (3) the state board shall determine the percentage increase certified under paragraph
3.4(b) multiplied by the eligible required reserves, as adjusted for mortality gains and losses
3.5under subdivision 11, determined under clause (2);
3.6    (4) the state board shall add the amount of reserves required for the annuities or
3.7benefits payable to annuitants and benefit recipients of the participating public pension
3.8plans or funds as of the current June 30 to the amount determined under clause (3);
3.9    (5) the state board shall subtract the amount determined under clause (4) from the
3.10total fair market value of the fund determined under clause (1);
3.11    (6) the state board shall adjust the amount determined under clause (5) by the
3.12cumulative current balance determined under clause (8) and any negative balance carried
3.13forward under clause (9);
3.14    (7) a positive amount resulting from the calculations in clauses (1) to (6) is the
3.15excess market value. A negative amount is the negative balance;
3.16    (8) the state board shall allocate one-fifth of the excess market value or one-fifth
3.17of the negative balance to each of five consecutive years, beginning with the fiscal year
3.18ending the current June 30; and
3.19    (9) to calculate the postretirement adjustment under this paragraph based on
3.20investment performance for a fiscal year, the state board shall add together all excess
3.21market value allocated to that year and subtract from the sum all negative balances
3.22allocated to that year. If this calculation results in a negative number, the entire negative
3.23balance must be carried forward and allocated to the next year. If the resulting amount is
3.24positive, a postretirement adjustment is payable under this paragraph. The board shall
3.25express a positive amount as a percentage of the total eligible required reserves certified to
3.26the board under clause (2). The percentage determined under this paragraph is not payable
3.27unless the amount calculated under paragraph (b), clause (1), is greater than 2.5 percent
3.28and must not exceed the difference by which the amount calculated under paragraph (b),
3.29clause (1), exceeds 2.5 percent.
3.30    (d) The state board shall determine the amount of any postretirement adjustment
3.31which is payable using the following procedure:
3.32    (1) The total "eligible" required reserves as of the first of January next following the
3.33end of the fiscal year for the annuitants and benefit recipients eligible to receive a full or
3.34partial postretirement adjustment as determined by clause (2) must be certified to the state
3.35board by the actuary retained under section 356.214. The total "eligible" required reserves
3.36must be determined by the actuary retained under section 356.214 on the assumption that
4.1all annuitants and benefit recipients eligible to receive a full or partial postretirement
4.2adjustment will be alive on the January 1 in question; and
4.3    (2) The state board shall add the percentage certified under paragraph (b) to any
4.4positive percentage calculated under paragraph (c). The board shall not subtract from the
4.5percentage certified under paragraph (b) any negative amount calculated under paragraph
4.6(c). The sum of these percentages must be carried to five decimal places and must be
4.7certified to each participating public pension fund or plan as the full postretirement
4.8adjustment percentage. The full postretirement adjustment percentage certified to each
4.9participating public pension plan or fund must not exceed five percent. For the Minneapolis
4.10Employees Retirement Fund, no maximum percentage adjustment is applicable.
4.11    (e) A retirement annuity payable in the event of retirement before becoming eligible
4.12for Social Security benefits as provided in section 352.116, subdivision 3; 353.29,
4.13subdivision 6 ; or 354.35 must be treated as the sum of a period certain retirement annuity
4.14and a life retirement annuity for the purposes of any postretirement adjustment. The
4.15period certain retirement annuity plus the life retirement annuity must be the annuity
4.16amount payable until age 62 or 65, whichever applies. A postretirement adjustment
4.17granted on the period certain retirement annuity must terminate when the period certain
4.18retirement annuity terminates.
4.19EFFECTIVE DATE.This section is effective June 30, 2008.

4.20    Sec. 3. Minnesota Statutes 2006, section 11A.18, is amended by adding a subdivision
4.21to read:
4.22    Subd. 9a. Lost purchasing power increase. (a) This subdivision applies for fiscal
4.23years ending June 30 in which all of the following conditions exist:
4.24    (1) the composite funded ratio for the postretirement investment fund as of June 30,
4.25as certified by the executive director of the State Board of Investment under subdivision
4.262a is more than 90 percent;
4.27    (2) the State Board of Investment determines that the time weighted total rate of
4.28return on investment of assets in the postretirement investment fund for the fiscal year
4.29ending June 30 exceeds 8.5 percent; and
4.30    (3) the postretirement adjustment percentage certified under subdivision 9, paragraph
4.31(b), is less than 2.5 percent.
4.32    (b) The lost purchasing power postretirement increase is payable the following
4.33January 1.
4.34    (c) Each participating public pension plan must annually calculate:
5.1    (1) the cumulative postretirement adjustment percentage applied to the annuity or
5.2benefit paid to each eligible annuitant and benefit recipient since the person first received a
5.3postretirement adjustment; and
5.4    (2) the increase in the Consumer Price Index for urban wage earners and clerical
5.5workers all items index published by the Bureau of Labor Statistics of the United
5.6States Department of Labor from June 30 of the year before the person first received a
5.7postretirement adjustment to June 30 of the current year. If a person received a prorated
5.8increase under subdivision 9, paragraph (c), clause (2), the same ratio of the number
5.9of months receiving a monthly benefit to 12 months must be applied to the inflation
5.10calculation for the fiscal year used to calculate the prorated amount of lost purchasing
5.11power for that period.
5.12    (d) If the percentage in paragraph (c), clause (2), is greater than the percentage in
5.13paragraph (c), clause (1), with respect to an eligible annuitant or benefit recipient, and
5.14the conditions in paragraph (a) exist, that person is eligible to receive an increase under
5.15this subdivision.
5.16    (e) The percentage increase payable to an eligible annuitant or benefit recipient
5.17under this subdivision may not exceed the difference between 2.5 percent and the amount
5.18certified under subdivision 9 or the amount calculated under paragraph (c), whichever is
5.19lower. The percentage increase otherwise payable under this subdivision must be reduced
5.20as provided in paragraph (f).
5.21    (f) The actuary retained under section 356.214 must determine:
5.22    (1) the reserves that would be required to pay in full the adjustments determined
5.23under paragraph (c); and
5.24    (2) the excess market value necessary to maintain the accrued liability composite
5.25funding ratio determined under subdivision 2a is at least 90 percent. If the calculated result
5.26under clause (1) of this paragraph is greater than the calculated result under clause (2), the
5.27increase payable to each eligible annuitant or benefit recipient under this subdivision must
5.28be reduced to that portion of the full potential increase amount that equals the ratio that the
5.29calculated result under clause (2) bears to the calculated result under clause (1).
5.30    (g) A percentage increase certified under this subdivision must be added to the
5.31percentage certified under subdivision 9, and the total resulting percentage must be
5.32certified to each participating public pension plan as the full postretirement adjustment
5.33percentage.
5.34EFFECTIVE DATE.This section is effective June 30, 2008.

6.1    Sec. 4. Minnesota Statutes 2006, section 11A.18, is amended by adding a subdivision
6.2to read:
6.3    Subd. 9b. Excess assets trigger. If the composite funded ratio of the postretirement
6.4investment fund determined under subdivision 2a is 115 percent or greater as of June 30 of
6.5any year, the governing bodies of the retirement plans participating in the postretirement
6.6investment fund must jointly report to the Legislative Commission on Pensions and
6.7Retirement by the next January 15. The report must evaluate and make recommendations
6.8with respect to the overall benefits and funding of the retirement funds for both active
6.9employees and benefit recipients.
6.10EFFECTIVE DATE.This section is effective June 30, 2008.

6.11    Sec. 5. Minnesota Statutes 2006, section 356.41, is amended to read:
6.12356.41 BENEFIT ADJUSTMENTS FOR CERTAIN DISABILITY AND
6.13SURVIVOR BENEFITS.
6.14    (a) Disability benefits payable to a disabilitant, if not otherwise included in the
6.15participation in the Minnesota postretirement investment fund, and survivor benefits
6.16payable to a survivor from any public pension plan which participates in the Minnesota
6.17postretirement investment fund must be adjusted in the same manner, at the same times
6.18and in the same amounts as are benefits payable from the Minnesota postretirement
6.19investment fund to comparable eligible benefit recipients of that public pension plan.
6.20    (b) If a disability benefit is not included in the participation in the Minnesota
6.21postretirement investment fund, the disability benefit is recomputed as a retirement
6.22annuity and the recipient would have been eligible for an adjustment under this section if
6.23the disability benefit was not recomputed, the recipient remains eligible for the adjustment
6.24under this section after the recomputation.
6.25    (c) For the survivor of a deceased annuitant who receives a survivor benefit
6.26calculated under a prior law rather than the second portion of a joint and survivor
6.27annuity, any period of receipt of a retirement annuity by the annuitant must be utilized in
6.28determining the period of receipt for eligibility to receive an adjustment under this section.
6.29    (d) No recipient, however, is entitled to more than one adjustment under this section
6.30or section 11A.18 applicable to one benefit at one time during a year by reason of this
6.31section.
6.32EFFECTIVE DATE.This section is effective June 30, 2008.

6.33    Sec. 6. Minnesota Statutes 2007 Supplement, section 422A.06, subdivision 8, is
6.34amended to read:
7.1    Subd. 8. Retirement benefit fund. (a) The retirement benefit fund consists of
7.2amounts held for payment of retirement allowances for members retired under this chapter,
7.3including any transfer amount payable under subdivision 3, paragraph (c).
7.4    (b) Unless subdivision 3, paragraph (c), applies, assets equal to the required
7.5reserves for retirement allowances under this chapter determined in accordance with the
7.6appropriate mortality table adopted by the board of trustees based on the experience of the
7.7fund as recommended by the actuary retained under section 356.214 must be transferred
7.8from the deposit accumulation fund to the retirement benefit fund as of the last business
7.9day of the month in which the retirement allowance begins. The income from investments
7.10of these assets must be allocated to this fund and any interest charge under subdivision
7.113, paragraph (c), must be credited to the fund. There must be paid from this fund the
7.12retirement annuities authorized by law. A required reserve calculation for the retirement
7.13benefit fund must be made by the actuary retained under section 356.214 and must be
7.14certified to the retirement board by the actuary retained under section 356.214.
7.15    (c) The retirement benefit fund must be governed by the applicable laws governing
7.16the accounting and audit procedures, investment, actuarial requirements, calculation and
7.17payment of postretirement benefit adjustments, discharge of any deficiency in the assets
7.18of the fund when compared to the actuarially determined required reserves, and other
7.19applicable operations and procedures regarding the Minnesota postretirement investment
7.20fund in effect on June 30, 1997, established under Minnesota Statutes 1996, section
7.2111A.18, and any legal or administrative interpretations of those laws of the State Board
7.22of Investment, the legal advisor to the Board of Investment and the executive director of
7.23the State Board of Investment in effect on June 30, 1997. If a deferred yield adjustment
7.24account is established for the Minnesota postretirement investment fund before June 30,
7.251997, under Minnesota Statutes 1996, section 11A.18, subdivision 5, the retirement board
7.26shall also establish and maintain a deferred yield adjustment account within this fund.
7.27    (c) There is hereby established a deferred yield adjustment account which must be
7.28increased by the sale or disposition of any debt securities at less than book value and must
7.29be decreased by the sale or disposition of debt securities at more than book value. At the
7.30end of each fiscal year, a portion of the balance of this account must be offset against the
7.31investment income for that year. The annual portion of the balance to be offset must be
7.32proportional to the reciprocal of the average remaining life of the bonds sold, unless the
7.33amounts are offset by gains on the future sales of these securities. The amount of this
7.34account must be included in the recognized value of assets other than corporate stocks
7.35and all other equity investments. In any fiscal year in which the gains on the sales of debt
7.36securities exceed the discounts realized on the sales of such securities, the excess must
8.1be used to reduce the balance of the account. If the realized capital gains are sufficient
8.2to reduce the balance of the account to zero, any excess gains must be available for the
8.3calculation of postretirement adjustments.
8.4    (d) (1) Annually, following June 30, the board shall use the procedures in clauses
8.5(2), (3), and (4) to determine whether a postretirement adjustment is payable and to
8.6determine the amount of any postretirement adjustment.
8.7    (2) If the Consumer Price Index for urban wage earners and clerical workers all
8.8items index published by the Bureau of Labor Statistics of the United States Department
8.9of Labor increases from June 30 of the preceding year to June 30 of the current year, the
8.10board shall certify the percentage increase. The amount certified must not exceed the
8.11lesser of the difference between the preretirement interest assumption and postretirement
8.12interest assumption in section 356.215, subdivision 8, paragraph (a), or 3.5 percent.
8.13    (3) In addition to any percentage increase certified under paragraph (b), the board
8.14shall use the following procedures to determine if a postretirement adjustment is payable
8.15under this paragraph:
8.16    (i) The board shall determine the market value of the fund on June 30 of that year;
8.17    (ii) The amount of reserves required as of the current June 30 for the annuity or
8.18benefit payable to an annuitant and benefit recipient must be determined by the actuary
8.19retained under section 356.214. An annuitant or benefit recipient who has been receiving
8.20an annuity or benefit for at least 12 full months as of the current June 30 is eligible to
8.21receive a full postretirement adjustment. An annuitant or benefit recipient who has been
8.22receiving an annuity or benefit for at least one full month, but less than 12 full months as of
8.23the current June 30, is eligible to receive a partial postretirement adjustment. The amount
8.24of the reserves for those annuitants and benefit recipients who are eligible to receive a
8.25full postretirement benefit adjustment is known as "eligible reserves." The amount of
8.26the reserves for those annuitants and benefit recipients who are not eligible to receive a
8.27postretirement adjustment is known as "noneligible reserves." For an annuitant or benefit
8.28recipient who is eligible to receive a partial postretirement adjustment, additional "eligible
8.29reserves" is an amount that bears the same ratio to the total reserves required for the
8.30annuitant or benefit recipient as the number of full months of annuity or benefit receipt as
8.31of the current June 30 bears to 12 full months. The remainder of the annuitant's or benefit
8.32recipient's reserves are "noneligible reserves";
8.33    (iii) The board shall determine the percentage increase certified under clause (2)
8.34multiplied by the eligible required reserves, as adjusted for mortality gains and losses,
8.35determined under subclause (ii);
9.1    (iv) The board shall add the amount of reserves required for the annuities or benefits
9.2payable to annuitants and benefit recipients of the participating public pension plans or
9.3funds as of the current June 30 to the amount determined under subclause (iii);
9.4    (v) The board shall subtract the amount determined under subclause (iv) from the
9.5market value of the fund determined under subclause (i);
9.6    (vi) The board shall adjust the amount determined under subclause (v) by the
9.7cumulative current balance determined under subclause (viii) and any negative balance
9.8carried forward under subclause (ix);
9.9    (vii) A positive amount resulting from the calculations in subclauses (i) to (vi) is the
9.10excess market value. A negative amount is the negative balance;
9.11    (viii) The board shall allocate one-fifth of the excess market value or one-fifth of
9.12the negative balance to each of five consecutive years, beginning with the fiscal year
9.13ending the current June 30; and
9.14    (ix) To calculate the postretirement adjustment under this paragraph based on
9.15investment performance for a fiscal year, the board shall add together all excess market
9.16value allocated to that year and subtract from the sum all negative balances allocated to
9.17that year. If this calculation results in a negative number, the entire negative balance must
9.18be carried forward and allocated to the next year. If the resulting amount is positive, a
9.19postretirement adjustment is payable under this paragraph. The board shall express a
9.20positive amount as a percentage of the total eligible required reserves certified to the
9.21board under subclause (ii).
9.22    (4) The board shall determine the amount of any postretirement adjustment which
9.23is payable using the following procedure:
9.24    (i) The total "eligible" required reserves as of the first of January next following the
9.25end of the fiscal year for the annuitants and benefit recipients eligible to receive a full or
9.26partial postretirement adjustment as determined by subclause (ii) must be certified to the
9.27board by the actuary retained under section 356.214. The total "eligible" required reserves
9.28must be determined by the actuary retained under section 356.214 on the assumption that
9.29all annuitants and benefit recipients eligible to receive a full or partial postretirement
9.30adjustment will be alive on the January 1 in question; and
9.31    (ii) The board shall add the percentage certified under clause (2) to any positive
9.32percentage calculated under clause (3). The board shall not subtract from the percentage
9.33certified under paragraph (b) any negative amount calculated under clause (3). The sum
9.34of these percentages must be carried to five decimal places and must be certified as the
9.35full postretirement adjustment percentage.
10.1    (e) The board shall determine the amount of the postretirement adjustment payable
10.2to each eligible annuitant and benefit recipient. The dollar amount of the postretirement
10.3adjustment must be calculated by applying the certified postretirement adjustment
10.4percentage to the amount of the monthly annuity or benefit payable to each eligible
10.5annuitant or benefit recipient eligible for a full adjustment.
10.6    The dollar amount of the partial postretirement adjustment payable to each annuitant
10.7or benefit recipient eligible for a partial adjustment must be calculated by first determining
10.8a partial percentage amount that bears the same ratio to the certified full adjustment
10.9percentage amount as the number of full months of annuity or benefit receipt as of the
10.10current June 30 bears to 12 full months. The partial percentage amount determined
10.11must then be applied to the amount of the monthly annuity or benefit payable to each
10.12annuitant or benefit recipient eligible to receive a partial postretirement adjustment. The
10.13postretirement adjustments are payable on January 1 following the calculations required
10.14under this section and must thereafter be included in the monthly annuity or benefit paid to
10.15the recipient. Any adjustments under this section must be paid automatically unless the
10.16intended recipient files a written notice with the applicable participating public pension
10.17fund or plan requesting that the adjustment not be paid.
10.18    (f) As of June 30 annually, the actuary retained under section 356.214 shall calculate
10.19the amount of required reserves representing any mortality gains and any mortality losses
10.20incurred during the fiscal year and report the results of those calculations to the plan.
10.21The actuary shall report separately the amount of the reserves for annuitants and benefit
10.22recipients who are eligible for a postretirement benefit adjustment and the amount of
10.23reserves for annuitants and benefit recipients who are not eligible for a postretirement
10.24benefit adjustment. If the net amount of required reserves represents a mortality gain,
10.25the board shall sell sufficient securities or transfer sufficient available cash to equal the
10.26amount. If the amount of required reserves represents a mortality loss, the plan shall
10.27transfer an amount equal to the amount of the net mortality loss. The amount of the
10.28transfers must be determined before any postretirement benefit adjustments have been
10.29made. All transfers resulting from mortality adjustments must be completed annually
10.30by December 31 for the preceding June 30. Interest is payable on any transfers after
10.31December 31 based upon the preretirement interest assumption for the participating plan
10.32or fund as specified in section 356.215, subdivision 8, stated as a monthly rate. Book
10.33values of the assets of the fund must be determined only after all adjustments for mortality
10.34gains and losses for the fiscal year have been made.
11.1    (g) All money necessary to meet the requirements of the certification of withdrawals
11.2and all money necessary to pay postretirement adjustments under this section are hereby
11.3and from time to time appropriated from the postretirement investment fund to the board.
11.4    (d) (h) Annually, following the calculation of any postretirement adjustment
11.5payable from the retirement benefit fund, the board of trustees shall submit a report to
11.6the executive director of the Legislative Commission on Pensions and Retirement and
11.7to the commissioner of finance indicating the amount of any postretirement adjustment
11.8and the underlying calculations on which that postretirement adjustment amount is based,
11.9including the amount of dividends, the amount of interest, and the amount of net realized
11.10capital gains or losses utilized in the calculations.
11.11    (e) (i) With respect to a former contributing member who began receiving a
11.12retirement annuity or disability benefit under section 422A.151, paragraph (a), clause (2),
11.13after June 30, 1997, or with respect to a survivor of a former contributing member who
11.14began receiving a survivor benefit under section 422A.151, paragraph (a), clause (2),
11.15after June 30, 1997, the reserves attributable to the one percent lower amount of the
11.16cost-of-living adjustment payable to those annuity or benefit recipients annually must
11.17be transferred back to the deposit accumulation fund to the credit of the Metropolitan
11.18Airports Commission. The calculation of this annual reduced cost-of-living adjustment
11.19reserve transfer must be reviewed by the actuary retained under section 356.214.
11.20EFFECTIVE DATE.This section is effective June 30, 2008.


11.23    Section 1. [11A.181] DISSOLUTION OF MINNESOTA POSTRETIREMENT
11.24INVESTMENT FUND.
11.25    Subdivision 1. Conditions for dissolution. The postretirement investment fund
11.26established in section 11A.18 must be dissolved according to the schedule in subdivision 2
11.27if the composite funded ratio calculated as of June 30 of that year under section 11A.18,
11.28subdivision 2a, is:
11.29    (1) less than 85 percent and was less than 85 percent as of June 30 of the immediately
11.30preceding year; or
11.31    (2) less than 80 percent.
11.32    Subd. 2. Transition. If conditions for dissolution of the postretirement investment
11.33fund under subdivision 1 apply:
11.34    (1) the retirement plans shall not transfer reserves as required under sections 11A.18,
11.35subdivision 6; 352.119, subdivision 1; 352B.26, subdivision 3; 353.271, subdivision 2;
12.1354.63, subdivision 2; and 490.123, subdivision 1e, to the postretirement investment
12.2fund after December 31 of the calendar year in which conditions for dissolution under
12.3subdivision 1 occur;
12.4    (2) the retirement plans shall not transfer additional funds to the Minnesota
12.5postretirement investment fund as a result of the calculation by the actuary retained under
12.6section 356.214 of a net mortality losses under section 11A.18, subdivision 11;
12.7    (3) the assets of the postretirement investment fund must be transferred back to each
12.8participating public retirement plan on June 30 of the year following the year in which
12.9conditions for dissolution under subdivision 1 occur. The assets to be transferred to each
12.10public retirement plan must be based on each plan's participation in the postretirement
12.11fund as determined under section 11A.18, subdivision 7, on the June 30 when the transfer
12.12back to the plan occurs; and
12.13    (4) The postretirement investment fund ceases to exist upon the transfer of all assets
12.14as required in clause (3).
12.15    Subd. 3. Postretirement adjustments. (a) Notwithstanding section 11A.18 or any
12.16other law to the contrary, if the postretirement investment fund is dissolved, postretirement
12.17adjustments are payable only as follows:
12.18    (1) a postretirement increase of 2.5 percent must be applied each year, effective
12.19January 1, to the monthly annuity or benefit of each annuitant and benefit recipient who
12.20has been receiving an annuity or a benefit for at least 12 full months as of the prior
12.21January 1; and
12.22    (2) for each annuitant or benefit recipient who has been receiving an annuity or a
12.23benefit for at least one full month, an annual postretirement increase of one-twelfth of 2.5
12.24percent for each month the person has been receiving an annuity or benefit must be applied,
12.25effective January 1 of the year in which the person has been retired for less than 12 months.
12.26    (b) The increases provided by this subdivision commence on the first January 1
12.27occurring after the postretirement fund is dissolved under subdivision 2.
12.28EFFECTIVE DATE.This section is effective June 30, 2008.

12.29    Sec. 2. PROPOSED STATUTORY CHANGES.
12.30    By November 30 of the year in which conditions for dissolution of the postretirement
12.31investment fund first occur, the executive directors of the retirement systems that
12.32participate in the postretirement investment fund must report to the Legislative
12.33Commission on Pensions and Retirement a draft of proposed legislation that would make
12.34changes in statute necessary to conform with dissolution of the postretirement investment
12.35fund.
13.1EFFECTIVE DATE.This section is effective June 30, 2008.


13.5    Section 1. Minnesota Statutes 2007 Supplement, section 43A.346, subdivision 1,
13.6is amended to read:
13.7    Subdivision 1. Definition. For purposes of this section, "terminated state employee"
13.8means a person currently occupying who occupied a civil service position in the executive
13.9or legislative branch of state government, the Minnesota State Retirement System, the
13.10Public Employees Retirement Association, or the Office of the Legislative Auditor, or a
13.11person who was employed by the Metropolitan Council.
13.12EFFECTIVE DATE.This section is effective July 1, 2008.

13.13    Sec. 2. Minnesota Statutes 2007 Supplement, section 43A.346, subdivision 2, is
13.14amended to read:
13.15    Subd. 2. Eligibility. (a) This section applies to a terminated state or Metropolitan
13.16Council employee who:
13.17    (1) for at least the five years immediately preceding separation under clause (2), has
13.18been was regularly scheduled to work 1,044 or more hours per year in a position covered
13.19by a pension plan administered by the Minnesota State Retirement System or the Public
13.20Employees Retirement Association;
13.21    (2) terminates terminated state or Metropolitan Council employment;
13.22    (3) at the time of termination under clause (2), meets met the age and service
13.23requirements necessary to receive an unreduced retirement annuity from the plan and
13.24satisfies satisfied requirements for the commencement of the retirement annuity or, for
13.25an a terminated employee under the unclassified employees retirement plan, meets met
13.26the age and service requirements necessary to receive an unreduced retirement annuity
13.27from the plan and satisfies satisfied requirements for the commencement of the retirement
13.28annuity or elects elected a lump-sum payment; and
13.29    (4) agrees to accept a postretirement option position with the same or a different
13.30appointing authority, working a reduced schedule that is both (i) a reduction of at least 25
13.31percent from the employee's number of previously regularly scheduled work hours; and
13.32(ii) 1,044 hours or less in state or Metropolitan Council service.
13.33    (b) For purposes of this section, an unreduced retirement annuity includes a
13.34retirement annuity computed under a provision of law which permits retirement, without
14.1application of an earlier retirement reduction factor, whenever age plus years of allowable
14.2service total at least 90.
14.3    (c) For purposes of this section, as it applies to staff of the Public Employees
14.4Retirement Association who are at least age 62, the length of separation requirement and
14.5termination of service requirement prohibiting return to work agreements under section
14.6353.01, subdivisions 11a and 28, are not applicable.
14.7EFFECTIVE DATE.This section is effective July 1, 2008.

14.8    Sec. 3. Minnesota Statutes 2006, section 43A.346, subdivision 4, is amended to read:
14.9    Subd. 4. Annuity reduction not applicable. Notwithstanding any law to the
14.10contrary, when an eligible state employee in a postretirement option position under this
14.11section commences receipt of the annuity, the provisions of section 352.115, subdivision
14.1210 , or 353.37 governing annuities of reemployed annuitants, shall not apply for the
14.13duration of a terminated state employee's employment in the a postretirement option
14.14position.
14.15EFFECTIVE DATE.This section is effective July 1, 2008.

14.16    Sec. 4. Minnesota Statutes 2006, section 43A.346, subdivision 5, is amended to read:
14.17    Subd. 5. Appointing authority discretion. The appointing authority has sole
14.18discretion to determine if and the extent to which a postretirement option position under
14.19this section is available to a terminated state employee. Any offer of such a position
14.20must be made in writing to the employee person by the appointing authority on a form
14.21prescribed by the Department of Employee Relations and the Minnesota State Retirement
14.22System or the Public Employees Retirement Association. If the person is under age 62, an
14.23offer of a postretirement option position and any related verbal offer or agreement must
14.24not be made until at least 30 days after the person terminated employment. The appointing
14.25authority may not require a person to waive any rights under a collective bargaining
14.26agreement or unrepresented employee compensation plan as a condition of participation.
14.27EFFECTIVE DATE.This section is effective July 1, 2008.

14.28    Sec. 5. Minnesota Statutes 2006, section 43A.346, subdivision 6, is amended to read:
14.29    Subd. 6. Duration. Postretirement option employment shall be for an initial
14.30period not to exceed one year. During that period, the appointing authority may not
14.31modify the conditions specified in the written offer without the employee's agreement
14.32person's consent, except as required by law or by the collective bargaining agreement or
14.33compensation plan applicable to the employee person. At the end of the initial period,
15.1the appointing authority has sole discretion to determine if the offer of a postretirement
15.2option position will be renewed, renewed with modifications, or terminated. If the person
15.3is under age 62, an offer of renewal and any related verbal offer or agreement must not
15.4be made until at least 30 days after termination of the person's previous postretirement
15.5option employment. Postretirement option employment may be renewed for periods of
15.6up to one year, not to exceed a total duration of five years. No person shall be employed
15.7in one or a combination of postretirement option positions under this section for a total
15.8of more than five years.
15.9EFFECTIVE DATE.This section is effective July 1, 2008.

15.10    Sec. 6. Minnesota Statutes 2006, section 43A.346, subdivision 7, is amended to read:
15.11    Subd. 7. Copy to fund. The appointing authority shall provide the Minnesota
15.12State Retirement System or the Public Employees Retirement Association with a copy of
15.13the offer, the terminated state employee's acceptance of the terms, and any subsequent
15.14renewal agreement.
15.15EFFECTIVE DATE.This section is effective July 1, 2008.

15.16    Sec. 7. Minnesota Statutes 2006, section 354.05, subdivision 37, is amended to read:
15.17    Subd. 37. Termination of teaching service. "Termination of teaching service"
15.18means the withdrawal of a member from active teaching service by resignation or the
15.19termination of the member's teaching contract by the employer. A member is not
15.20considered to have terminated teaching service, if before the age of 62, and before the
15.21effective date of the termination or retirement, the member has entered into a contract to
15.22resume teaching service with an employing unit covered by the provisions of this chapter.
15.23A contract to return to work after retirement for an active member who has attained age
15.2462 must comply with the provisions of section 354.444.
15.25EFFECTIVE DATE.This section is effective July 1, 2008.

15.26    Sec. 8. Minnesota Statutes 2006, section 354.44, subdivision 5, is amended to read:
15.27    Subd. 5. Resumption of teaching service after retirement. (a) Any person who
15.28retired under the provisions of this chapter and has thereafter resumed teaching in any
15.29employer unit to which this chapter applies is eligible to continue to receive payments in
15.30accordance with the annuity except that all or a portion of the annuity payments must be
15.31reduced deferred during the calendar year immediately following any calendar year in
15.32which the person's income salary from the teaching service is in an amount greater than the
15.33annual maximum earnings allowable for that age for the continued receipt of full benefit
16.1amounts monthly under the federal old age, survivors and disability insurance program
16.2as set by the secretary of health and human services under United States Code, title 42,
16.3section 403 $46,000. The amount of the reduction must be annuity deferral is one-half of
16.4the salary amount in excess of the applicable reemployment income maximum specified in
16.5this subdivision $46,000 and must be deducted from the annuity payable for the calendar
16.6year immediately following the calendar year in which the excess amount was earned. If
16.7the person has not yet reached the minimum age for the receipt of Social Security benefits,
16.8the maximum earnings for the person must be equal to the annual maximum earnings
16.9allowable for the minimum age for the receipt of Social Security benefits.
16.10    (b) If the person is retired for only a fractional part of the calendar year during
16.11the initial year of retirement, the maximum reemployment income salary exempt from
16.12triggering a deferral as specified in this subdivision must be prorated for that calendar year.
16.13    (c) After a person has reached the Social Security full normal retirement age, no
16.14reemployment income maximum deferral requirement is applicable regardless of the
16.15amount of income salary.
16.16    (d) The amount of the retirement annuity reduction deferral must be handled or
16.17disposed of as provided in section 356.47.
16.18    (e) For the purpose of this subdivision, income salary from teaching service includes,
16.19but is not limited to:
16.20    (1) all income for services performed as a consultant or an independent contractor
16.21for an employer unit covered by the provisions of this chapter; and
16.22    (2) the greater of either the income received or an amount based on the rate paid
16.23with respect to an administrative position, consultant, or independent contractor in an
16.24employer unit with approximately the same number of pupils and at the same level as the
16.25position occupied by the person who resumes teaching service.
16.26EFFECTIVE DATE.This section is effective January 1, 2008.

16.27    Sec. 9. [354.444] RETURN TO WORK AGREEMENT.
16.28    Subdivision 1. Authorization. Notwithstanding any other provisions in this chapter,
16.29an eligible person as specified in subdivision 2 is authorized to commence receipt of a
16.30retirement annuity from the association and enter into an agreement to return to work.
16.31This provision must be administered in accordance with the federal Internal Revenue
16.32Code and applicable rulings.
16.33    Subd. 2. Eligibility. An eligible person is a person who:
16.34    (1) is a teacher as defined by section 354.05, subdivision 2, who is at least age 62;
16.35    (2) enters into a written agreement with the employing unit to return to work; and
17.1    (3) retires under the provisions of section 354.44 and begins to draw an annuity
17.2from the Teacher's Retirement Association.
17.3    Subd. 3. Work agreement. Participation, the amount of time worked, and
17.4the duration of participation under this section must be mutually agreed upon by the
17.5employing unit and the employee. The employing unit may require up to a one-year notice
17.6of intent to participate in the program as a condition of participation. The employing unit
17.7shall determine the time of year the employee shall work. Unless otherwise specified in
17.8this section, the employing unit may not require a person to waive any rights under a
17.9collective bargaining agreement as a condition of participation under this section.
17.10    Subd. 4. Exclusion. For purposes of this section, "employing unit" does not include
17.11the Minnesota State Colleges and Universities system.
17.12    Subd. 5. No service credit or contribution. Notwithstanding any law to the
17.13contrary, an eligible person under this section may not, based on employment to which
17.14this section applies, contribute to or earn further service credit in the Teachers Retirement
17.15Association.
17.16    Subd. 6. Annuity application procedure. A participant in the program specified in
17.17this section must apply for a retirement annuity under the application procedure specified
17.18in section 354.44, subdivisions 3 and 4. A copy of the written agreement with the
17.19employing unit must be included with the person's retirement annuity application. This
17.20written agreement must include the termination date and reemployment date. The filing
17.21of the initial executed agreement must occur before reemployment under the agreement
17.22commences. The reemployment date must be after the member's accrual date.
17.23    Subd. 7. Annuity treatment. For purposes of the annuity deferral under section
17.24354.44, subdivision 5, an eligible person under this section is a reemployed annuitant.
17.25    Subd. 8. Continuing rights. A person who returns to work under this section is a
17.26member of the appropriate bargaining unit and is covered by the appropriate collective
17.27bargaining contract. Except as provided in this section, the person's coverage is subject to
17.28any part of the contract limiting rights of part-time employees.
17.29EFFECTIVE DATE.This section is effective July 1, 2008.

17.30    Sec. 10. Minnesota Statutes 2006, section 354A.31, subdivision 3, is amended to read:
17.31    Subd. 3. Resumption of teaching after commencement of a retirement annuity.
17.32    (a) Any person who retired and is receiving a coordinated program retirement annuity
17.33under the provisions of sections 354A.31 to 354A.41 or any person receiving a basic
17.34program retirement annuity under the governing sections in the articles of incorporation
18.1or bylaws and who has resumed teaching service for the school district in which the
18.2teachers retirement fund association exists is entitled to continue to receive retirement
18.3annuity payments, except that all or a portion of the annuity payments must be reduced
18.4deferred during the calendar year immediately following the calendar year in which the
18.5person's income salary from the teaching service is in an amount greater than the annual
18.6maximum earnings allowable for that age for the continued receipt of full benefit amounts
18.7monthly under the federal old age, survivors, and disability insurance program as set by
18.8the secretary of health and human services under United States Code, title 42, section 403
18.9$46,000. The amount of the reduction must be annuity deferral is one-third the salary
18.10amount in excess of the applicable reemployment income maximum specified in this
18.11subdivision $46,000 and must be deducted from the annuity payable for the calendar year
18.12immediately following the calendar year in which the excess amount was earned. If the
18.13person has not yet reached the minimum age for the receipt of Social Security benefits,
18.14the maximum earnings for the person must be equal to the annual maximum earnings
18.15allowable for the minimum age for the receipt of Social Security benefits.
18.16    (b) If the person is retired for only a fractional part of the calendar year during
18.17the initial year of retirement, the maximum reemployment income salary exempt from
18.18triggering a deferral as specified in this subdivision must be prorated for that calendar year.
18.19    (c) After a person has reached the Social Security normal retirement age of 70, no
18.20reemployment income maximum deferral requirement is applicable regardless of the
18.21amount of any compensation received for teaching service for the school district in which
18.22the teachers retirement fund association exists.
18.23    (d) The amount of the retirement annuity reduction deferral must be handled or
18.24disposed of as provided in section 356.47.
18.25    (e) For the purpose of this subdivision, income salary from teaching service
18.26includes: (i) all income for services performed as a consultant or independent contractor;
18.27or income resulting from working with the school district in any capacity; and (ii) the
18.28greater of either the income received or an amount based on the rate paid with respect to
18.29an administrative position, consultant, or independent contractor in the school district in
18.30which the teachers retirement fund association exists and at the same level as the position
18.31occupied by the person who resumes teaching service.
18.32    (f) On or before February 15 of each year, each applicable employing unit shall
18.33report to the teachers retirement fund association the amount of postretirement income
18.34salary as defined in this subdivision, earned as a teacher, consultant, or independent
18.35contractor during the previous calendar year by each retiree of the teachers retirement
19.1fund association for teaching service performed after retirement. The report must be in
19.2a format approved by the executive secretary or director.
19.3EFFECTIVE DATE.This section is effective January 1, 2008.

19.4    Sec. 11. PERA POLICE AND FIRE; TEMPORARY EXEMPTION FROM
19.5REEMPLOYED ANNUITANT EARNINGS LIMITATIONS.
19.6    Notwithstanding any provision of Minnesota Statutes, section 353.37, to the
19.7contrary, a person who is receiving a retirement annuity from the public employees
19.8police and fire plan and who is employed as a sworn peace officer by the Metropolitan
19.9Airports Commission is exempt from the limitation on reemployed annuitant exempt
19.10earnings under Minnesota Statutes, section 353.37, for the period January 1, 2008, until
19.11December 31, 2009.
19.12EFFECTIVE DATE.This section is effective the day following final enactment.

19.13    Sec. 12. BYLAW REVISION AUTHORIZATION.
19.14    Consistent with section 10 and Minnesota Statutes, section 354A.12, subdivision 4,
19.15the St. Paul Teachers Retirement Fund Association and the Duluth Teachers Retirement
19.16Fund Association are authorized to revise their bylaws or articles of incorporation
19.17to specify that a person receiving a basic program retirement annuity or an old law
19.18coordinated program annuity under the governing sections in the articles of incorporation
19.19or bylaws who has resumed teaching service for the school district is entitled to continue
19.20receiving retirement annuity payments, except that all or a portion of the annuity payments
19.21must be deferred during the calendar year immediately following the calendar year in
19.22which the person's salary from the reemployment exceeds $46,000. The amount of the
19.23annuity deferral is one-third of the salary amount in excess of $46,000. After a person has
19.24reached Social Security normal retirement age, the deferral requirement no longer applies.
19.25Any deferral amounts must be treated as specified in Minnesota Statutes, section 356.47.
19.26EFFECTIVE DATE.This section is effective July 1, 2008.


19.29    Section 1. Minnesota Statutes 2006, section 352.12, subdivision 2, is amended to read:
19.30    Subd. 2. Surviving spouse benefit. (a) If an employee or former employee has
19.31credit for at least three years allowable service and dies before an annuity or disability
19.32benefit has become payable, notwithstanding any designation of beneficiary to the contrary,
19.33the surviving spouse of the employee may elect to receive, in lieu of the refund with
20.1interest under subdivision 1, an annuity equal to the joint and 100 percent survivor annuity
20.2which the employee or former employee could have qualified for on the date of death.
20.3    (b) If the employee was under age 55 and has credit for at least 30 years of allowable
20.4service on the date of death, the surviving spouse may elect to receive a 100 percent joint
20.5and survivor annuity based on the age of the employee and surviving spouse on the date
20.6of death. The annuity is payable using the full early retirement reduction under section
20.7352.116, subdivision 1 , paragraph (a), to age 55 and one-half of the early retirement
20.8reduction from age 55 to the age payment begins.
20.9    (c) If the employee was under age 55 and has credit for at least three years of
20.10allowable service credit on the date of death but did not yet qualify for retirement, the
20.11surviving spouse may elect to receive a 100 percent joint and survivor annuity based on
20.12the age of the employee and surviving spouse at the time of death. The annuity is payable
20.13using the full early retirement reduction under section 352.116, subdivision 1 or 1a, to age
20.1455 and one-half of the early retirement reduction from age 55 to the age payment begins.
20.15    (d) The surviving spouse eligible for benefits under paragraph (a) may apply for the
20.16annuity at any time after the date on which the employee or former employee would
20.17have attained the required age for retirement based on the allowable service earned.
20.18The surviving spouse eligible for surviving spouse benefits under paragraph (b) or (c)
20.19may apply for the annuity at any time after the employee's death. The annuity must be
20.20computed under sections 352.115, subdivisions 1, 2, and 3, and 352.116, subdivisions 1,
20.211a, and 3 . Sections 352.22, subdivision 3, and 352.72, subdivision 2, apply to a deferred
20.22annuity or surviving spouse benefit payable under this subdivision. The annuity must cease
20.23with the last payment received by the surviving spouse in the lifetime of the surviving
20.24spouse, or upon expiration of a term certain benefit payment to a surviving spouse under
20.25subdivision 2a. An amount equal to the excess, if any, of the accumulated contributions
20.26credited to the account of the deceased employee in excess of the total of the benefits paid
20.27and payable to the surviving spouse must be paid to the deceased employee's or former
20.28employee's last designated beneficiary or, if none, as specified under subdivision 1.
20.29    (e) Any employee or former employee may request in writing, with the signed
20.30consent of the spouse, that this subdivision not apply and that payment be made only to a
20.31designated beneficiary as otherwise provided by this chapter.
20.32EFFECTIVE DATE.This section is effective the day following final enactment.

20.33    Sec. 2. Minnesota Statutes 2006, section 352.931, subdivision 1, is amended to read:
20.34    Subdivision 1. Surviving spouse benefit. (a) If the correctional employee was at
20.35least age 50, has credit for at least three years of allowable service, and dies before an
21.1annuity or disability benefit has become payable, notwithstanding any designation of
21.2beneficiary to the contrary, the surviving spouse of the employee may elect to receive,
21.3in lieu of the refund under section 352.12, subdivision 1, an annuity for life equal to the
21.4joint and 100 percent survivor annuity which the employee could have qualified for had
21.5the employee terminated service on the date of death. The election may be made at any
21.6time after the date of death of the employee. The surviving spouse benefit begins to
21.7accrue as of the first of the month next following the date on which the application for
21.8the benefit was filed.
21.9    (b) If the employee was under age 50, dies, and had credit for at least three years of
21.10allowable service credit on the date of death but did not yet qualify for retirement, the
21.11surviving spouse may elect to receive a 100 percent joint and survivor annuity based on
21.12the age of the employee and surviving spouse at the time of death. The annuity is payable
21.13using the early retirement reduction under section 352.93, subdivision 2a, to age 50, and
21.14one-half of the early retirement reduction from age 50 to the age payment begins. The
21.15surviving spouse eligible for surviving spouse benefits under this paragraph may apply
21.16for the annuity at any time after the employee's death. Sections 352.22, subdivision 3,
21.17and 352.72, subdivision 2, apply to a deferred annuity or surviving spouse benefit payable
21.18under this subdivision.
21.19    (c) The annuity must cease with the last payment received by the surviving spouse
21.20in the lifetime of the surviving spouse. Any employee may request in writing, with the
21.21signed consent of the spouse, that this subdivision not apply and that payment be made
21.22only to a designated beneficiary as otherwise provided by this chapter.
21.23EFFECTIVE DATE.This section is effective the day following final enactment.

21.24    Sec. 3. Minnesota Statutes 2006, section 353.30, subdivision 3, is amended to read:
21.25    Subd. 3. Optional retirement annuity forms. The board of trustees shall establish
21.26optional annuities which shall take the form of a joint and survivor annuity. Except as
21.27provided in subdivision 3a, the optional annuity forms shall be actuarially equivalent to
21.28the forms provided in section 353.29 and subdivisions 1, 1a, 1b, 1c, and 5. In establishing
21.29those optional forms, the board shall obtain the written recommendation of the actuary
21.30retained under section 356.214. The recommendations shall be a part of the permanent
21.31records of the board. A member or former member may select an optional form of
21.32annuity, subject to the provisions of section 356.46, in lieu of accepting any other form of
21.33annuity which might otherwise be available.
21.34EFFECTIVE DATE.This section is effective January 1, 2009.

22.1    Sec. 4. Minnesota Statutes 2007 Supplement, section 353.32, subdivision 1a, is
22.2amended to read:
22.3    Subd. 1a. Surviving spouse optional annuity. (a) If a member or former member
22.4who has credit for not less than three years of allowable service and dies before the
22.5annuity or disability benefit begins to accrue under section 353.29, subdivision 7, or
22.6353.33, subdivision 2 , notwithstanding any designation of beneficiary to the contrary, the
22.7surviving spouse may elect to receive, instead of a refund with interest under subdivision
22.81, or surviving spouse benefits otherwise payable under section 353.31, an annuity equal
22.9to a 100 percent joint and survivor annuity computed consistent with section 353.30,
22.10subdivision 1a , 1c, or 5, whichever is applicable.
22.11    (b) If a member first became a public employee or a member of a pension fund listed
22.12in section 356.30, subdivision 3, before July 1, 1989, and has credit for at least 30 years
22.13of allowable service on the date of death, the surviving spouse may elect to receive a
22.14100 percent joint and survivor annuity computed using section 353.30, subdivision 1b,
22.15except that the early retirement reduction under that provision will be applied from age
22.1662 back to age 55 and one-half of the early retirement reduction from age 55 back to
22.17the age payment begins.
22.18    (c) If a member who was under age 55 and has credit for at least three years
22.19of allowable service dies, but did not qualify for retirement on the date of death, the
22.20surviving spouse may elect to receive a 100 percent joint and survivor annuity computed
22.21using section 353.30, subdivision 1c or 5, as applicable, except that the early retirement
22.22reduction specified in the applicable subdivision will be applied to age 55 and one-half of
22.23the early retirement reduction from age 55 back to the age payment begins.
22.24    (d) Notwithstanding the definition of surviving spouse in section 353.01, subdivision
22.2520 , a former spouse of the member, if any, is entitled to a portion of the monthly surviving
22.26spouse optional annuity if stipulated under the terms of a marriage dissolution decree filed
22.27with the association. If there is no surviving spouse or child or children, a former spouse
22.28may be entitled to a lump-sum refund payment under subdivision 1, if provided for in a
22.29marriage dissolution decree, but not a monthly surviving spouse optional annuity, despite
22.30the terms of a marriage dissolution decree filed with the association.
22.31    (e) The surviving spouse eligible for surviving spouse benefits under paragraph (a)
22.32may apply for the annuity at any time after the date on which the deceased employee
22.33would have attained the required age for retirement based on the employee's allowable
22.34service. The surviving spouse eligible for surviving spouse benefits under paragraph (b) or
22.35(c) may apply for an annuity any time after the member's death.
23.1    (f) Sections 353.34, subdivision 3, and 353.71, subdivision 2, apply to a deferred
23.2annuity or surviving spouse benefit payable under this subdivision.
23.3    (g) An amount equal to any excess of the accumulated contributions that were
23.4credited to the account of the deceased employee over and above the total of the annuities
23.5paid and payable to the surviving spouse must be paid to the surviving spouse's estate.
23.6    (h) A member may specify in writing, with the signed consent of the spouse, that
23.7this subdivision does not apply and that payment may be made only to the designated
23.8beneficiary as otherwise provided by this chapter. The waiver of a surviving spouse
23.9annuity under this section does not make a dependent child eligible for benefits under
23.10subdivision 1c.
23.11    (i) If the deceased member or former member first became a public employee or a
23.12member of a public pension plan listed in section 356.30, subdivision 3, on or after July
23.131, 1989, a survivor annuity computed under paragraph (a) or (c) must be computed as
23.14specified in section 353.30, subdivision 5, except for the revised early retirement reduction
23.15specified in paragraph (c), if paragraph (c) is the applicable provision.
23.16    (j) For any survivor annuity determined under this subdivision, the payment is to be
23.17based on the total allowable service that the member had accrued as of the date of death
23.18and the age of the member and surviving spouse on that date.
23.19EFFECTIVE DATE.This section is effective the day following final enactment.

23.20    Sec. 5. Minnesota Statutes 2007 Supplement, section 353.657, subdivision 2a, is
23.21amended to read:
23.22    Subd. 2a. Death while eligible survivor benefit. (a) If a member or former
23.23member who has attained the age of at least 50 years and has credit for not less than
23.24three years allowable service or who has credit for at least 30 years of allowable service,
23.25regardless of age attained, dies before the annuity or disability benefit becomes payable,
23.26notwithstanding any designation of beneficiary to the contrary, the surviving spouse may
23.27elect to receive a death while eligible survivor benefit.
23.28    (b) Notwithstanding the definition of surviving spouse in section 353.01, subdivision
23.2920 , a former spouse of the member, if any, is entitled to a portion of the death while
23.30eligible survivor benefit if stipulated under the terms of a marriage dissolution decree
23.31filed with the association. If there is no surviving spouse or child or children, a former
23.32spouse may be entitled to a lump-sum refund payment under section 353.32, subdivision
23.331 , if provided for in a marriage dissolution decree but not a death while eligible survivor
23.34benefit despite the terms of a marriage dissolution decree filed with the association.
24.1    (c) The benefit may be elected instead of a refund with interest under section 353.32,
24.2subdivision 1 , or surviving spouse benefits otherwise payable under subdivisions 1 and
24.32. The benefit must be an annuity equal to the 100 percent joint and survivor annuity
24.4which the member could have qualified for on the date of death, computed as provided in
24.5sections 353.651, subdivisions 2 and 3, and 353.30, subdivision 3.
24.6    (d) The surviving spouse may apply for the annuity at any time after the date
24.7on which the deceased employee would have attained the required age for retirement
24.8based on the employee's allowable service. Sections 353.34, subdivision 3, and 353.71,
24.9subdivision 2 , apply to a deferred annuity payable under this subdivision.
24.10    (e) No payment accrues beyond the end of the month in which entitlement to
24.11such annuity has terminated. An amount equal to the excess, if any, of the accumulated
24.12contributions which were credited to the account of the deceased employee over and
24.13above the total of the annuities paid and payable to the surviving spouse must be paid to
24.14the deceased member's last designated beneficiary or, if none, to the legal representative of
24.15the estate of such deceased member.
24.16    (f) Any member may request in writing, with the signed consent of the spouse, that
24.17this subdivision not apply and that payment be made only to the designated beneficiary, as
24.18otherwise provided by this chapter.
24.19    (g) For a member who is employed as a full-time firefighter by the Department of
24.20Military Affairs of the state of Minnesota, allowable service as a full-time state Military
24.21Affairs Department firefighter credited by the Minnesota State Retirement System may be
24.22used in meeting the minimum allowable service requirement of this subdivision.
24.23EFFECTIVE DATE.This section is effective the day following final enactment.

24.24    Sec. 6. Minnesota Statutes 2006, section 353E.07, subdivision 7, is amended to read:
24.25    Subd. 7. Election that section does not apply. A member may specify in writing,
24.26with the signed consent of the spouse, that this section does not apply and that payment
24.27must be made only to the designated beneficiary, as otherwise provided by this chapter.
24.28EFFECTIVE DATE.This section is effective the day following final enactment.

24.29    Sec. 7. Minnesota Statutes 2006, section 356.46, as amended by Laws 2007, chapter
24.30134, article 2, section 44, is amended to read:
24.31356.46 APPLICATION FOR RETIREMENT ANNUITY; PROCEDURE
24.32FOR ELECTING ANNUITY FORM; MANDATORY JOINT AND SURVIVOR
24.33OPTIONAL ANNUITY FORM.
25.1    Subdivision 1. Definitions. As used in this section, each of the following terms shall
25.2have the meaning given.
25.3    (a) "Annuity form" means the payment procedure and duration of a retirement
25.4annuity or disability benefit available to a member of a public pension fund plan, based on
25.5the period over which a retirement annuity or disability benefit is payable, determined by
25.6the number of persons to whom the retirement annuity or disability benefit is payable, and
25.7the amount of the retirement annuity or disability benefit which is payable to each person.
25.8    (b) "Joint and survivor optional annuity" means an optional annuity form which
25.9provides a retirement annuity or disability benefit to a retired member or disabilitant
25.10and the spouse of the member or disabilitant on a joint basis during the lifetime of the
25.11retired member or disabilitant and all or a portion of the original retirement annuity or
25.12disability benefit amount to the surviving spouse in the event of the death of the retired
25.13member or disabilitant.
25.14    (c) "Optional annuity form" means an annuity form which is elected by a member
25.15and is not provided automatically as the standard annuity form of the public pension plan.
25.16    (d) "Public pension plan" means a public pension plan as defined under section
25.17356.63, paragraph (b) .
25.18    (e) "Retirement annuity" means a series of monthly payments to which a former or
25.19retired member of a public pension fund plan is entitled due to attaining a specified age
25.20and acquiring credit for a specified period of service, which includes a retirement annuity,
25.21retirement allowance, or service pension.
25.22    (f) "Disability benefit" means a series of monthly payments to which a former or
25.23disabled member of a public pension fund plan is entitled due to a physical or mental
25.24inability to engage in specified employment.
25.25    Subd. 2. Provision of information on annuity forms. (a) Every public pension
25.26plan which provides for an annuity form other than a single life retirement annuity as an
25.27option which can be elected by an active, disabled, or retiring member shall provide as a
25.28part of, or accompanying the annuity application form, a written statement summarizing
25.29the optional annuity forms which are available, a general indication of the consequences
25.30of selecting one annuity form over another, a calculation of the actuarial reduction in the
25.31amount of the retirement annuity which would be required for each optional annuity
25.32form, and the procedure to be followed to obtain more information from the public
25.33pension fund plan administration concerning the optional all annuity forms provided by
25.34the plan. If the public pension plan offers joint and survivor optional annuity forms, the
25.35annuity application and accompanying information must include a statement informing
25.36the member and the member's spouse that, notwithstanding any law to the contrary,
26.1unless the spouse waives any rights to an optional annuity by a notarized statement on
26.2the annuity application or other form provided by the pension plan administration, the
26.3public pension plan administration shall assume that the member selected the 50 percent
26.4joint and survivor optional annuity form.
26.5    (b) In lieu of the notarized statement requirement referred to in paragraph (a), the
26.6pension plan administration may accept a statement which has been verified, including
26.7electronic verification, by administrators of the pension plan.
26.8    Subd. 3. Requirement of notice to member's spouse. (a) Except as specified
26.9in paragraph (c), if a Every public pension plan administration that provides optional
26.10retirement annuity forms which include for a joint and survivor optional retirement or
26.11disability annuity form potentially applicable to the surviving spouse of a member, the
26.12executive director of the public pension plan shall send a copy of the written statement
26.13required by subdivision 2 to the spouse of the member before the member's election
26.14selection of a retirement annuity the form of retirement or disability benefit.
26.15    (b) Following the election selection of a retirement or disability annuity by the
26.16member, a copy of the completed retirement annuity application and retirement annuity
26.17beneficiary form, if applicable, must be sent by the executive director of the public
26.18pension plan to the spouse of the retiring or disabled member. A signed acknowledgment
26.19must be required from the spouse confirming receipt of a copy of the completed retirement
26.20annuity application and retirement annuity beneficiary form, unless the spouse's signature
26.21confirming acknowledging the receipt annuity form selected is on the annuity application
26.22or other form as designated by the plan. If the required signed acknowledgment is public
26.23pension plan administration has not received from the spouse within 30 days, a signed
26.24acknowledgment, because the annuity application or other form as designated by the public
26.25pension plan administration did not include the spouse's signature, the executive director
26.26of the public pension plan must send another copy of the completed retirement annuity
26.27application notify the member and retirement annuity beneficiary form, if applicable, to
26.28the member's spouse that the 50 percent joint and survivor annuity form, or a higher joint
26.29and survivor form if selected, shall be paid if the spouse does not acknowledge the annuity
26.30form selected by the member by responding to the second notice sent to the spouse within
26.3130 days. The second notice must be sent by certified mail with restricted delivery.
26.32    (c) If a public pension plan administration receives notice that the provisions of
26.33this section have not been complied with, or if a member selects a benefit form without
26.34the valid consent of the member's spouse, the executive director of the public pension
26.35plan shall suspend the payment of monthly benefits and shall take all actions necessary
26.36to comply with this subdivision.
27.1    (d) For the Teachers Retirement Association, the statement to the spouse that is
27.2required under paragraph (a) must be sent before or upon the member's election of an
27.3annuity.
27.4    Subd. 4. Plan exclusions. This section does not apply to:
27.5    (1) any volunteer fire relief association to which sections 69.771 to 69.776 apply; and
27.6    (2) any plan under which the applicable surviving spouse would receive automatic
27.7surviving spouse coverage if a joint and survivor annuity were not elected.
27.8    Subd. 5. Disabilitant survivor treatment. This section should not be interpreted as
27.9prohibiting payment of a survivor annuity to the spouse of a deceased disabilitant, in lieu of
27.10any other annuity, if laws specific to the plan provide for a higher surviving spouse annuity.
27.11    Subd. 6. Limitations due to marriage dissolution. The requirement to pay a 50
27.12percent joint and survivor annuity is void if there is a court order to the contrary.
27.13    Subd. 7. Liability waiver. The pension fund and plan, its employees, and any agent
27.14working on behalf of the plan administration are not liable for harm caused by any act of
27.15fraud committed by the retiring member or current or previous spouse, or any information
27.16withheld from, or incorrect information supplied to the plan administration.
27.17EFFECTIVE DATE.This section is effective January 1, 2009, and applies to
27.18annuities that are elected and commence on or after that date.


27.21    Section 1. Minnesota Statutes 2007 Supplement, section 352.01, subdivision 2a,
27.22is amended to read:
27.23    Subd. 2a. Included employees. (a) "State employee" includes:
27.24    (1) employees of the Minnesota Historical Society;
27.25    (2) employees of the State Horticultural Society;
27.26    (3) employees of the Minnesota Crop Improvement Association;
27.27    (4) employees of the adjutant general who are paid from federal funds and who are
27.28not covered by any federal civilian employees retirement system;
27.29    (5) employees of the Minnesota State Colleges and Universities employed under the
27.30university or college activities program;
27.31    (6) currently contributing employees covered by the system who are temporarily
27.32employed by the legislature during a legislative session or any currently contributing
27.33employee employed for any special service as defined in subdivision 2b, clause (8);
28.1    (7) employees of the legislature appointed without a limit on the duration of their
28.2employment and persons employed or designated by the legislature or by a legislative
28.3committee or commission or other competent authority to conduct a special inquiry,
28.4investigation, examination, or installation;
28.5    (8) trainees who are employed on a full-time established training program
28.6performing the duties of the classified position for which they will be eligible to receive
28.7immediate appointment at the completion of the training period;
28.8    (9) employees of the Minnesota Safety Council;
28.9    (10) any employees on authorized leave of absence from the Transit Operating
28.10Division of the former Metropolitan Transit Commission who are employed by the
28.11labor organization which is the exclusive bargaining agent representing employees of
28.12the Transit Operating Division;
28.13    (11) employees of the Metropolitan Council, Metropolitan Parks and Open Space
28.14Commission, Metropolitan Sports Facilities Commission, Metropolitan Mosquito Control
28.15Commission, or Metropolitan Radio Board unless excluded or covered by another public
28.16pension fund or plan under section 473.415, subdivision 3;
28.17    (12) judges of the Tax Court;
28.18    (13) personnel employed on June 30, 1992, by the University of Minnesota in the
28.19management, operation, or maintenance of its heating plant facilities, whose employment
28.20transfers to an employer assuming operation of the heating plant facilities, so long as the
28.21person is employed at the University of Minnesota heating plant by that employer or by its
28.22successor organization;
28.23    (14) seasonal help in the classified service employed by the Department of Revenue;
28.24    (15) persons employed by the Department of Commerce as a peace officer in
28.25the Insurance Fraud Prevention Division under section 45.0135 who have attained the
28.26mandatory retirement age specified in section 43A.34, subdivision 4;
28.27    (16) employees of the University of Minnesota unless excluded under subdivision
28.282b, clause (3); and
28.29    (17) employees of the Middle Management Association whose employment began
28.30after July 1, 2007, and to whom section 352.029 does not apply.; and
28.31    (18) employees of the Minnesota Government Engineers Council to whom section
28.32352.029 does not apply.
28.33    (b) Employees specified in paragraph (a), clause (13), are included employees under
28.34paragraph (a) if employer and employee contributions are made in a timely manner in the
28.35amounts required by section 352.04. Employee contributions must be deducted from
28.36salary. Employer contributions are the sole obligation of the employer assuming operation
29.1of the University of Minnesota heating plant facilities or any successor organizations to
29.2that employer.

29.3    Sec. 2. Minnesota Statutes 2007 Supplement, section 352.017, subdivision 2, is
29.4amended to read:
29.5    Subd. 2. Purchase procedure. (a) An employee covered by a plan specified in
29.6this chapter may purchase credit for allowable service in that plan for a period specified
29.7in subdivision 1 if the employee makes a payment as specified in paragraph (b) or (c),
29.8whichever applies. The employing unit, at its option, may pay the employer portion of the
29.9amount specified in paragraph (b) on behalf of its employees.
29.10    (b) If payment is received by the executive director within one year from the end of
29.11date the employee returned to work following the authorized leave, the payment amount is
29.12equal to the employee and employer contribution rates specified in law for the applicable
29.13plan at the end of the leave period multiplied by the employee's hourly rate of salary on
29.14the date of return from the leave of absence and by the days and months of the leave of
29.15absence for which the employee wants is eligible for allowable service credit. Payments
29.16made under this paragraph The payment must include compound interest at a monthly
29.17rate of 0.71 percent from the last day of the leave period until the last day of the month in
29.18which payment is received. If payment is received by the executive director after one year,
29.19the payment amount is the amount determined under section 356.551. Payment under this
29.20paragraph must be made before the date of termination from public employment covered
29.21under chapter 352.
29.22    (c) If payment is received by the executive director after one year, the payment
29.23amount is the amount determined under section 356.551. If the employee terminates
29.24employment covered by this chapter during the leave or following the leave rather than
29.25returning to covered employment, payment must be received by the executive director
29.26within 30 days after the termination date. The payment amount is equal to the employee
29.27and employer contribution rates specified in law for the applicable plan on the day prior to
29.28termination date, multiplied by the employee's hourly rate of salary on that date and by the
29.29days and months of the leave of absence prior to termination.
29.30EFFECTIVE DATE.This section is effective retroactively from July 1, 2007.

29.31    Sec. 3. Minnesota Statutes 2006, section 352.03, subdivision 4, is amended to read:
29.32    Subd. 4. Duties and powers of board of directors. (a) The board shall:
29.33    (1) elect a chair;
29.34    (2) appoint an executive director;
30.1    (3) establish rules to administer this chapter and chapters 3A, 352B, 352C, 352D,
30.2and 490 and transact the business of the system, subject to the limitations of law;
30.3    (4) consider and dispose of, or take any other action the board of directors deems
30.4appropriate concerning denials of applications for annuities or disability benefits under
30.5this chapter, and complaints of employees and others pertaining to the retirement of
30.6employees and the operation of the system;
30.7    (5) advise the director on any matters relating to the system and carrying out
30.8functions and purposes of this chapter. The board's advice shall control; and
30.9    (6) (5) oversee the administration of the state deferred compensation plan established
30.10in section 352.96; and
30.11    (6) oversee the administration of the health care savings plan established in section
30.12352.98.
30.13    The director and assistant director must be in the unclassified service but appointees
30.14may be selected from civil service lists if desired. The salary of the executive director
30.15must be as provided by section 15A.0815. The salary of the assistant director must be set
30.16in accordance with section 43A.18, subdivision 3.
30.17    (b) The board shall advise the director on any matters relating to the system and
30.18carrying out functions and purposes of this chapter. The board's advice shall control.
30.19EFFECTIVE DATE.This section is effective the day after final enactment.

30.20    Sec. 4. Minnesota Statutes 2006, section 352.03, subdivision 5, is amended to read:
30.21    Subd. 5. Executive director; assistant director. (a) The executive director, in this
30.22chapter called the director, of the system must be appointed by the board on the basis of
30.23fitness, experience in the retirement field, and leadership ability. The director must have
30.24had at least five years' experience on the administrative staff of a major retirement system.
30.25    (b) The executive director and assistant director must be in the unclassified service
30.26but appointees may be selected from civil service lists if desired. The salary of the
30.27executive director must be as provided by section 15A.0815. The salary of the assistant
30.28director must be set in accordance with section 43A.18, subdivision 3.
30.29EFFECTIVE DATE.This section is effective the day after final enactment.

30.30    Sec. 5. Minnesota Statutes 2006, section 352.22, subdivision 10, is amended to read:
30.31    Subd. 10. Other refunds. Former employees covered by the system are entitled
30.32to apply for refunds if they are or become members of the State Patrol retirement fund,
30.33the state Teachers Retirement Association, or employees of the University of Minnesota
30.34excluded from coverage under the system by action of the Board of Regents; or employees
31.1of the adjutant general who under federal law effectually elect membership in a federal
31.2retirement system; or officers or employees of the senate or house of representatives,
31.3excluded from coverage under section 352.01, subdivision 2b, clause (7). The refunds
31.4must include accumulated contributions plus interest as provided in subdivision 2. These
31.5employees may apply for a refund once 30 days or more have elapsed after their coverage
31.6ceases, even if they continue in state service but in positions not covered by this chapter.
31.7EFFECTIVE DATE.This section is effective the day following final enactment.

31.8    Sec. 6. Minnesota Statutes 2007 Supplement, section 352.955, subdivision 3, is
31.9amended to read:
31.10    Subd. 3. Payment of additional equivalent contributions; post-June 30, 2007,
31.11coverage transfers. (a) An eligible employee who was is transferred to plan coverage
31.12after June 30, 2007, and who elects to transfer past service credit under this section must
31.13pay an additional member contribution for that prior service period. The additional
31.14member contribution is (1) the difference between the member contribution rate or rates
31.15for the general state employees retirement plan of the Minnesota State Retirement System
31.16for the period of employment covered by the service credit to be transferred and the
31.17member contribution rate or rates for the correctional state employees retirement plan
31.18for the most recent 12 month period of employment covered by the service credit to be
31.19transferred, plus annual compound interest at the rate of 8.5 percent, and (2) the amount
31.20computed under paragraph (b), plus the greater of the amount computed under paragraph
31.21(c), or 40 percent of the unfunded actuarial accrued liability attributable to the past service
31.22credit transfer. The unfunded actuarial accrued liability attributable to the past service
31.23credit transfer is the present value of the benefit obtained by the transfer of the service
31.24credit to the correctional state employees retirement plan reduced by the amount of the
31.25asset transfer under subdivision 4, by the amount of the member contribution equivalent
31.26payment under clause (1), and by the amount of the employer contribution equivalent
31.27payment under paragraph (c), clause (1).
31.28    (b) The executive director shall compute, for the most recent 12 months of service
31.29credit eligible for transfer, or for the entire period eligible for transfer if less than 12
31.30months, the difference between the employee contribution rate or rates for the general state
31.31employees retirement plan and the employee contribution rate or rates for the correctional
31.32state employees retirement plan applied to the eligible employee's salary during that
31.33transfer period, plus compound interest at a monthly rate of 0.71 percent.
31.34    (c) The executive director shall compute, for any service credit being transferred
31.35on behalf of the eligible employee and not included under paragraph (b), the difference
32.1between the employee contribution rate or rates for the general state employees retirement
32.2plan and the employee contribution rate or rates for the correctional state employees
32.3retirement plan applied to the eligible employee's salary during that transfer period, plus
32.4compound interest at a monthly rate of 0.71 percent.
32.5    (d) The executive director shall compute an amount using the process specified in
32.6paragraph (b), but based on differences in employer contribution rates between the general
32.7state employees retirement plan and the correctional state employees retirement plan
32.8rather than employee contribution rates.
32.9    (e) The executive director shall compute an amount using the process specified in
32.10paragraph (c), but based on differences in employer contribution rates between the general
32.11state employees retirement plan and the correctional state employees retirement plan
32.12rather than employee contribution rates.
32.13    (f) The additional equivalent member contribution under this subdivision must be
32.14paid in a lump sum. Payment must accompany the election to transfer the prior service
32.15credit. No transfer election or additional equivalent member contribution payment may be
32.16made by a person or accepted by the executive director after the one year anniversary date
32.17of the effective date of the retirement coverage transfer, or the date on which the eligible
32.18employee terminates state employment, whichever is earlier.
32.19    (c) (g) If an eligible employee elects to transfer past service credit under this section
32.20and pays the additional equivalent member contribution amount under subdivision 2
32.21paragraph (a), the applicable department shall pay an additional equivalent employer
32.22contribution amount. The additional employer contribution is (1) the difference between
32.23the employer contribution rate or rates for the general state employees retirement plan
32.24for the period of employment covered by the service credit to be transferred and the
32.25employer contribution rate or rates for the correctional state employees retirement
32.26plan for the period of employment covered by the service credit to be transferred, plus
32.27annual compound interest at the rate of 8.5 percent, and (2) the amount computed under
32.28paragraph (d), plus the greater of the amount computed under paragraph (e), or 60 percent
32.29of the unfunded actuarial accrued liability attributable to the past service credit transfer
32.30calculated as provided in paragraph (a), clause (2).
32.31    (h) The unfunded actuarial accrued liability attributable to the past service credit
32.32transfer is the present value of the benefit obtained by the transfer of the service credit
32.33to the correctional state employees retirement plan reduced by the amount of the asset
32.34transfer under subdivision 4, by the amount of the member contribution equivalent
32.35payment computed under paragraph (b), and by the amount of the employer contribution
32.36equivalent payment computed under paragraph (d).
33.1    (d) (i) The additional equivalent employer contribution under this subdivision must
33.2be paid in a lump sum and must be paid within 30 days of the date on which the executive
33.3director of the Minnesota State Retirement System certifies to the applicable department
33.4that the employee paid the additional equivalent member contribution.
33.5EFFECTIVE DATE.This section is effective the day following final enactment.

33.6    Sec. 7. Minnesota Statutes 2007 Supplement, section 352.955, subdivision 5, is
33.7amended to read:
33.8    Subd. 5. Effect of the asset transfer. Upon the transfer of assets under subdivision
33.94, the service credit in the general state employees retirement plan of the Minnesota State
33.10Retirement System related to the period being transferred is forfeited and may not be
33.11reinstated. The transferred service credit and the transferred assets must be credited to the
33.12correctional state employees retirement plan and fund, respectively.
33.13EFFECTIVE DATE.This section is effective the day following final enactment.

33.14    Sec. 8. Minnesota Statutes 2006, section 352.98, subdivision 1, is amended to read:
33.15    Subdivision 1. Plan created. This section must be administered by the executive
33.16director of the system with the advice and consent of the board of directors. The Minnesota
33.17State Retirement System executive director shall establish a plan or plans, known as health
33.18care savings plans, through which public employers and employees may an officer or
33.19employee of the state or of a political subdivision, including officers or employees covered
33.20by a plan or fund specified in chapter 353D, 354B, 354D, 424A, or section 356.20,
33.21subdivision 2, save to cover health care costs. For purposes of this section, a volunteer
33.22firefighter is an employee. The Minnesota State Retirement System executive director shall
33.23make available one or more trusts, including a governmental trust or governmental trusts,
33.24authorized under the Internal Revenue Code to be eligible for tax-preferred or tax-free
33.25treatment through which employers and employees can save to cover health care costs.
33.26EFFECTIVE DATE.This section is effective the day following final enactment.

33.27    Sec. 9. Minnesota Statutes 2006, section 352.98, subdivision 2, is amended to read:
33.28    Subd. 2. Contracting authorized. The Minnesota State Retirement System is
33.29authorized to executive director shall administer the plan and to contract with public and
33.30private entities to provide investment services, record keeping, benefit payments, and other
33.31functions necessary for the administration of the plan. If allowed by the Minnesota State
33.32Board of Investment, the Minnesota State Board of Investment supplemental investment
33.33funds may be offered as investment options under the health care savings plan or plans.
34.1EFFECTIVE DATE.This section is effective the day following final enactment.

34.2    Sec. 10. Minnesota Statutes 2006, section 352.98, subdivision 3, is amended to read:
34.3    Subd. 3. Contributions. (a) Contributions to the plan must be determined through
34.4defined in a personnel policy or in a collective bargaining agreement of a public employer
34.5with the exclusive representative of the covered employees in an appropriate unit or
34.6political subdivision. The Minnesota State Retirement System executive director may
34.7offer different types of trusts permitted under the Internal Revenue Code to best meet the
34.8needs of different employee employer units.
34.9    (b) Contributions to the plan by or on behalf of the employee participant must
34.10be held in trust for reimbursement of employee and dependent eligible health-related
34.11expenses for participants and their dependents following retirement termination from
34.12public employment or during active employment. The Minnesota State Retirement
34.13System executive director shall maintain a separate account of the contributions made by
34.14or on behalf of each participant and the earnings thereon. The Minnesota State Retirement
34.15System executive director shall make available a limited range of investment options,
34.16and each employee participant may direct the investment of the accumulations in the
34.17employee's participant's account among the investment options made available by the
34.18Minnesota State Retirement System executive director. At the request of a participating
34.19employer and employee group, the Minnesota State Retirement System may determine
34.20how the assets of the affected employer and employee group should be invested.
34.21    (c) This section does not obligate a public employer to meet and negotiate in good
34.22faith with the exclusive bargaining representative of any public employee group regarding
34.23an employer contribution to a postretirement or active employee health care savings plan
34.24authorized by this section and section 356.24, subdivision 1, clause (7). It is not the intent
34.25of the legislature to authorize the state to incur new funding obligations for the costs of
34.26retiree health care or the costs of administering retiree health care plans or accounts.
34.27EFFECTIVE DATE.This section is effective the day following final enactment.

34.28    Sec. 11. Minnesota Statutes 2006, section 352.98, subdivision 4, is amended to read:
34.29    Subd. 4. Reimbursement for health-related expenses. The Minnesota State
34.30Retirement System executive director shall reimburse employees participants at least
34.31quarterly for submitted eligible health-related expenses, as required allowable by federal
34.32and state law, until the employee participant exhausts the accumulation in the employee's
34.33participant's account. If an employee a participant dies prior to exhausting the employee's
34.34participant's account balance, the employee's participant's spouse or dependents are
35.1eligible to be reimbursed for health care expenses from the account until the account
35.2balance is exhausted. If an account balance remains after the death of a participant and
35.3all of the participant's legal dependents, the remainder of the account must be paid to the
35.4employee's participant's beneficiaries or, if none, to the employee's participant's estate.
35.5EFFECTIVE DATE.This section is effective the day following final enactment.

35.6    Sec. 12. Minnesota Statutes 2006, section 352.98, subdivision 5, is amended to read:
35.7    Subd. 5. Fees. The Minnesota state retirement plan executive director is authorized
35.8to charge uniform fees to participants to cover the ongoing cost of operating the plan.
35.9Any fees not needed must revert to participant accounts or be used to reduce plan fees
35.10the following year.
35.11EFFECTIVE DATE.This section is effective the day following final enactment.

35.12    Sec. 13. Minnesota Statutes 2006, section 352D.075, subdivision 2a, is amended to
35.13read:
35.14    Subd. 2a. Surviving spouse coverage term certain. In lieu of the annuity under
35.15subdivision 2, clause (2) or (3), or in lieu of a distribution under subdivision 2, clause (1),
35.16the surviving spouse of a deceased participant may elect to receive survivor coverage in
35.17the form of a term certain annuity of five, six ten, 15, or 20 years, based on the value of
35.18the remaining shares. The monthly term certain annuity must be calculated under section
35.19352D.06, subdivision 1 .
35.20EFFECTIVE DATE.This section is effective the day following final enactment.

35.21    Sec. 14. Minnesota Statutes 2007 Supplement, section 353.01, subdivision 2b, is
35.22amended to read:
35.23    Subd. 2b. Excluded employees. The following public employees are not eligible
35.24to participate as members of the association with retirement coverage by the public
35.25employees retirement plan, the local government correctional employees retirement plan
35.26under chapter 353E, or the public employees police and fire retirement plan:
35.27    (1) public officers, other than county sheriffs, who are elected to a governing body,
35.28or persons who are appointed to fill a vacancy in an elective office of a governing body,
35.29whose term of office commences on or after July 1, 2002, for the service to be rendered
35.30in that elective position;
35.31    (2) election officers or election judges;
35.32    (3) patient and inmate personnel who perform services for a governmental
35.33subdivision;
36.1    (4) except as otherwise specified in subdivision 12a, employees who are hired for
36.2a temporary position as defined under subdivision 12a, and employees who resign from
36.3a nontemporary position and accept a temporary position within 30 days in the same
36.4governmental subdivision;
36.5    (5) employees who are employed by reason of work emergency caused by fire,
36.6flood, storm, or similar disaster;
36.7    (6) employees who by virtue of their employment in one governmental subdivision
36.8are required by law to be a member of and to contribute to any of the plans or funds
36.9administered by the Minnesota State Retirement System, the Teachers Retirement
36.10Association, the Duluth Teachers Retirement Fund Association, the St. Paul Teachers
36.11Retirement Fund Association, the Minneapolis Employees Retirement Fund, or any police
36.12or firefighters relief association governed by section 69.77 that has not consolidated
36.13with the Public Employees Retirement Association, or any local police or firefighters
36.14consolidation account who have not elected the type of benefit coverage provided by the
36.15public employees police and fire fund under sections 353A.01 to 353A.10, or any persons
36.16covered by section 353.665, subdivision 4, 5, or 6, who have not elected public employees
36.17police and fire plan benefit coverage. This clause must not be construed to prevent a person
36.18from being a member of and contributing to the Public Employees Retirement Association
36.19and also belonging to and contributing to another public pension plan or fund for other
36.20service occurring during the same period of time. A person who meets the definition of
36.21"public employee" in subdivision 2 by virtue of other service occurring during the same
36.22period of time becomes a member of the association unless contributions are made to
36.23another public retirement fund on the salary based on the other service or to the Teachers
36.24Retirement Association by a teacher as defined in section 354.05, subdivision 2;
36.25    (7) persons who are members of a religious order and are excluded from coverage
36.26under the federal Old Age, Survivors, Disability, and Health Insurance Program for the
36.27performance of service as specified in United States Code, title 42, section 410(a)(8)(A),
36.28as amended through January 1, 1987, if no irrevocable election of coverage has been made
36.29under section 3121(r) of the Internal Revenue Code of 1954, as amended;
36.30    (8) employees of a governmental subdivision who have not reached the age of
36.3123 and are enrolled on a full-time basis to attend or are attending classes on a full-time
36.32basis at an accredited school, college, or university in an undergraduate, graduate, or
36.33professional-technical program, or a public or charter high school;
36.34    (9) resident physicians, medical interns, and pharmacist residents and pharmacist
36.35interns who are serving in a degree or residency program in public hospitals or clinics;
37.1    (10) students who are serving in an internship or residency program sponsored
37.2by an accredited educational institution;
37.3    (11) persons who hold a part-time adult supplementary technical college license who
37.4render part-time teaching service in a technical college;
37.5    (12) except for employees of Hennepin County or Hennepin Healthcare System,
37.6Inc., foreign citizens working for a governmental subdivision with a work permit of less
37.7than three years, or an H-1b visa valid for less than three years of employment. Upon
37.8notice to the association that the work permit or visa extends beyond the three-year period,
37.9the foreign citizens must be reported for membership from the date of the extension;
37.10    (13) public hospital employees who elected not to participate as members of the
37.11association before 1972 and who did not elect to participate from July 1, 1988, to October
37.121, 1988;
37.13    (14) except as provided in section 353.86, volunteer ambulance service personnel,
37.14as defined in subdivision 35, but persons who serve as volunteer ambulance service
37.15personnel may still qualify as public employees under subdivision 2 and may be members
37.16of the Public Employees Retirement Association and participants in the public employees
37.17retirement fund or the public employees police and fire fund, whichever applies, on the
37.18basis of compensation received from public employment service other than service as
37.19volunteer ambulance service personnel;
37.20    (15) except as provided in section 353.87, volunteer firefighters, as defined in
37.21subdivision 36, engaging in activities undertaken as part of volunteer firefighter duties;
37.22provided that a person who is a volunteer firefighter may still qualify as a public
37.23employee under subdivision 2 and may be a member of the Public Employees Retirement
37.24Association and a participant in the public employees retirement fund or the public
37.25employees police and fire fund, whichever applies, on the basis of compensation received
37.26from public employment activities other than those as a volunteer firefighter;
37.27    (16) pipefitters and associated trades personnel employed by Independent School
37.28District No. 625, St. Paul, with coverage under a collective bargaining agreement by the
37.29pipefitters local 455 pension plan who were either first employed after May 1, 1997, or,
37.30if first employed before May 2, 1997, elected to be excluded under Laws 1997, chapter
37.31241, article 2, section 12;
37.32    (17) electrical workers, plumbers, carpenters, and associated trades personnel
37.33employed by Independent School District No. 625, St. Paul, or the city of St. Paul,
37.34who have retirement coverage under a collective bargaining agreement by the Electrical
37.35Workers Local 110 pension plan, the United Association Plumbers Local 34 pension plan,
37.36or the Carpenters Local 87 pension plan who were either first employed after May 1,
38.12000, or, if first employed before May 2, 2000, elected to be excluded under Laws 2000,
38.2chapter 461, article 7, section 5;
38.3    (18) bricklayers, allied craftworkers, cement masons, glaziers, glassworkers,
38.4painters, allied tradesworkers, and plasterers employed by the city of St. Paul or
38.5Independent School District No. 625, St. Paul, with coverage under a collective
38.6bargaining agreement by the Bricklayers and Allied Craftworkers Local 1 pension plan,
38.7the Cement Masons Local 633 pension plan, the Glaziers and Glassworkers Local L-1324
38.8pension plan, the Painters and Allied Trades Local 61 pension plan, or the Twin Cities
38.9Plasterers Local 265 pension plan who were either first employed after May 1, 2001, or if
38.10first employed before May 2, 2001, elected to be excluded under Laws 2001, First Special
38.11Session chapter 10, article 10, section 6;
38.12    (19) plumbers employed by the Metropolitan Airports Commission, with coverage
38.13under a collective bargaining agreement by the Plumbers Local 34 pension plan, who either
38.14were first employed after May 1, 2001, or if first employed before May 2, 2001, elected to
38.15be excluded under Laws 2001, First Special Session chapter 10, article 10, section 6;
38.16    (20) employees who are hired after June 30, 2002, to fill seasonal positions under
38.17subdivision 12b which are limited in duration by the employer to 185 consecutive calendar
38.18days or less in each year of employment with the governmental subdivision;
38.19    (21) persons who are provided supported employment or work-study positions
38.20by a governmental subdivision and who participate in an employment or industries
38.21program maintained for the benefit of these persons where the governmental subdivision
38.22limits the position's duration to three years or less, including persons participating in a
38.23federal or state subsidized on-the-job training, work experience, senior citizen, youth, or
38.24unemployment relief program where the training or work experience is not provided as a
38.25part of, or for, future permanent public employment;
38.26    (22) independent contractors and the employees of independent contractors; and
38.27    (23) reemployed annuitants of the association during the course of that
38.28reemployment.
38.29EFFECTIVE DATE.This section is effective the day following final enactment.

38.30    Sec. 15. Minnesota Statutes 2006, section 353.01, subdivision 10, is amended to read:
38.31    Subd. 10. Salary. (a) Subject to the limitations of section 356.611, "salary" means:
38.32    (1) the periodic compensation of a public employee, before deductions for deferred
38.33compensation, supplemental retirement plans, or other voluntary salary reduction
38.34programs, and also means "wages" and includes net income from fees;
39.1    (2) for a public employee who is covered by a supplemental retirement plan under
39.2section 356.24, subdivision 1, clause (8), (9), or (10), which require all plan contributions
39.3be made by the employer, the contribution to the applicable supplemental retirement plan
39.4when an agreement between the parties establishes that the contribution is from will either
39.5result in a mandatory withholdings from reduction of employees' wages through payroll
39.6withholdings, or be made in lieu of an amount that would otherwise be paid as wages; and
39.7    (3) for a public employee who has prior service covered by a local police or
39.8firefighters relief association that has consolidated with the Public Employees Retirement
39.9Association or to which section 353.665 applies and who has elected coverage either
39.10under the public employees police and fire fund benefit plan under section 353A.08
39.11following the consolidation or under section 353.665, subdivision 4, the rate of salary
39.12upon which member contributions to the special fund of the relief association were made
39.13prior to the effective date of the consolidation as specified by law and by bylaw provisions
39.14governing the relief association on the date of the initiation of the consolidation procedure
39.15and the actual periodic compensation of the public employee after the effective date of
39.16consolidation.
39.17    (b) Salary does not mean:
39.18    (1) the fees paid to district court reporters, unused annual vacation or sick leave
39.19payments, in lump-sum or periodic payments, severance payments, reimbursement of
39.20expenses, lump-sum settlements not attached to a specific earnings period, or workers'
39.21compensation payments;
39.22    (2) employer-paid amounts used by an employee toward the cost of insurance
39.23coverage, employer-paid fringe benefits, flexible spending accounts, cafeteria plans, health
39.24care expense accounts, day care expenses, or any payments in lieu of any employer-paid
39.25group insurance coverage, including the difference between single and family rates that
39.26may be paid to a member with single coverage and certain amounts determined by the
39.27executive director to be ineligible;
39.28    (3) the amount equal to that which the employing governmental subdivision would
39.29otherwise pay toward single or family insurance coverage for a covered employee when,
39.30through a contract or agreement with some but not all employees, the employer:
39.31    (i) discontinues, or for new hires does not provide, payment toward the cost of the
39.32employee's selected insurance coverages under a group plan offered by the employer;
39.33    (ii) makes the employee solely responsible for all contributions toward the cost of
39.34the employee's selected insurance coverages under a group plan offered by the employer,
39.35including any amount the employer makes toward other employees' selected insurance
39.36coverages under a group plan offered by the employer; and
40.1    (iii) provides increased salary rates for employees who do not have any
40.2employer-paid group insurance coverages;
40.3    (4) except as provided in section 353.86 or 353.87, compensation of any kind paid to
40.4volunteer ambulance service personnel or volunteer firefighters, as defined in subdivision
40.535 or 36; and
40.6    (5) the amount of compensation that exceeds the limitation provided in section
40.7356.611; and
40.8    (6) amounts paid by a federal or state grant for which the grant specifically
40.9prohibits grant proceeds from being used to make pension plan contributions, unless the
40.10contributions to the plan are made from sources other than the federal or state grant.
40.11    (c) Amounts provided to an employee by the employer through a grievance
40.12proceeding or a legal settlement are salary only if the settlement is reviewed by the
40.13executive director and the amounts are determined by the executive director to be
40.14consistent with paragraph (a) and prior determinations.
40.15EFFECTIVE DATE.This section is effective the day following final enactment.

40.16    Sec. 16. Minnesota Statutes 2006, section 353.01, subdivision 11a, is amended to read:
40.17    Subd. 11a. Termination of public service. (a) "Termination of public service"
40.18occurs (1) when a member resigns or is dismissed from public service by the employing
40.19governmental subdivision and the employee does not, within 30 days of the date
40.20the employment relationship ended, return to an employment position in the same
40.21governmental subdivision; or (2) when the employer-employee relationship is severed due
40.22to the expiration of a layoff under subdivision 12 or 12c.
40.23    (b) The termination of public service must be recorded in the association records
40.24upon receipt of an appropriate notice from the governmental subdivision.
40.25    (c) A termination of public service does not occur if, prior to termination of service,
40.26the member has an agreement, verbal or written, to return to a governmental subdivision
40.27as an employee, independent contractor, or employee of an independent contractor.
40.28EFFECTIVE DATE.This section is effective the day following final enactment.

40.29    Sec. 17. Minnesota Statutes 2006, section 353.01, is amended by adding a subdivision
40.30to read:
40.31    Subd. 16b. Uncredited military service credit purchase. (a) A public employee
40.32who has at least three years of allowable service with the Public Employees Retirement
40.33Association or the public employees police and fire plan and who performed service in
40.34the United States armed forces before becoming a public employee, or who failed to
41.1obtain service credit for a military leave of absence under subdivision 16, paragraph (h), is
41.2entitled to purchase allowable service credit for the initial period of enlistment, induction,
41.3or call to active duty without any voluntary extension by making payment under section
41.4356.551 if the public employee has not purchased service credit from any other Minnesota
41.5defined benefit public employee pension plan for the same period of service.
41.6    (b) A public employee who desires to purchase service credit under paragraph
41.7(a) must apply with the executive director to make the purchase. The application must
41.8include all necessary documentation of the public employee's qualifications to make the
41.9purchase, signed written permission to allow the executive director to request and receive
41.10necessary verification of applicable facts and eligibility requirements, and any other
41.11relevant information that the executive director may require.
41.12    (c) Allowable service credit for the purchase period must be granted by the public
41.13employees association or the public employees police and fire plan, whichever applies, to
41.14the purchasing public employee upon receipt of the purchase payment amount. Payment
41.15must be made before the effective date of retirement of the public employee.
41.16EFFECTIVE DATE; REPEALER.(a) This section is effective the day following
41.17final enactment.
41.18    (b) This section is repealed July 1, 2013.

41.19    Sec. 18. Minnesota Statutes 2007 Supplement, section 353.0161, subdivision 2,
41.20is amended to read:
41.21    Subd. 2. Purchase procedure. (a) An employee covered by a plan specified in
41.22subdivision 1 may purchase credit for allowable service in that plan for a period specified
41.23in subdivision 1 if the employee makes a payment as specified in paragraph (b) or (c),
41.24whichever applies. The employing unit, at its option, may pay the employer portion of the
41.25amount specified in paragraph (b) on behalf of its employees.
41.26    (b) If payment is received by the executive director within one year from the end
41.27of date the member returned to work following the authorized leave, or within 30 days
41.28after the date of termination of public service if the member did not return to work, the
41.29payment amount is equal to the employee and employer contribution rates specified in
41.30law for the applicable plan at the end of the leave period, or at termination of public
41.31service, whichever is earlier, multiplied by the employee's hourly rate of average monthly
41.32salary on the date upon which deductions were paid during the six months, or portion
41.33thereof, before the commencement of return from the leave of absence and by the days
41.34and number of months of the leave of absence for which the employee wants allowable
41.35service credit. Payments made under this paragraph must include compound interest at
42.1a monthly rate of 0.71 percent from the last day of the leave period until the last day of
42.2the month in which payment is received.
42.3    (c) If payment is received by the executive director after one year, the payment
42.4amount is the amount determined under section 356.551. Payment under this paragraph
42.5must be made before the date the person terminates public service under section 353.01,
42.6subdivision 11a.
42.7EFFECTIVE DATE.This section is effective retroactively from July 1, 2007.

42.8    Sec. 19. Minnesota Statutes 2006, section 353.27, is amended by adding a subdivision
42.9to read:
42.10    Subd. 7c. Limitation on additional plan coverage. No deductions for any
42.11plan under this chapter or chapter 353E may be taken from the salary of a person who
42.12is employed by a governmental subdivision under 353.01, subdivision 6, and who is
42.13receiving disability benefit payments from any plan under this chapter or chapter 353E
42.14unless the person waives the right to further disability benefit payments.
42.15EFFECTIVE DATE.This section is effective the day following final enactment.

42.16    Sec. 20. Minnesota Statutes 2007 Supplement, section 353.27, subdivision 14, is
42.17amended to read:
42.18    Subd. 14. Treatment of periods before initial coverage date. (a) If an entity is
42.19determined to be a governmental subdivision due to receipt of a written notice of eligibility
42.20from the association, that employer and its employees are subject to the requirements
42.21of subdivision 12, effective retroactively to the date that the executive director of
42.22the association determines that the entity first met the definition of a governmental
42.23subdivision, if that date predates the notice of eligibility.
42.24    (b) If the retroactive time period under paragraph (a) exceeds three years, an
42.25employee is authorized to purchase service credit in the applicable Public Employees
42.26Retirement Association plan for the portion of the period in excess of three years, by
42.27making payment under section 356.551. Notwithstanding section 356.551, subdivision 2,
42.28regarding time limits on purchases, payment may be made anytime before termination of
42.29public service.
42.30    (c) This subdivision does not apply if the applicable employment under paragraph
42.31(a) included coverage by any public or private defined benefit or defined contribution
42.32retirement plan, other than a volunteer firefighters relief association. If this paragraph
42.33applies, an individual is prohibited from purchasing service credit for any period or
42.34periods specified in paragraph (a).
43.1EFFECTIVE DATE.This section is effective the day following final enactment.

43.2    Sec. 21. Minnesota Statutes 2006, section 353.33, subdivision 5, is amended to read:
43.3    Subd. 5. Benefits paid under workers' compensation law. (a) Disability benefits
43.4paid shall be coordinated with any amounts, other than those amounts excluded under
43.5paragraph (b), received or receivable under workers' compensation law, such as temporary
43.6total, permanent total, temporary partial, permanent partial, or economic recovery
43.7compensation benefits, in either periodic or lump sum payments from the employer
43.8under applicable workers' compensation laws, after deduction of amount of attorney
43.9fees, authorized under applicable workers' compensation laws, paid by a disabilitant. If
43.10the total of the single life annuity actuarial equivalent disability benefit and the workers'
43.11compensation benefit exceeds: (1) the salary the disabled member received as of the date
43.12of the disability or (2) the salary currently payable for the same employment position or
43.13an employment position substantially similar to the one the person held as of the date of
43.14the disability, whichever is greater, the disability benefit must be reduced to that amount
43.15which, when added to the workers' compensation benefits, does not exceed the greater of
43.16the salaries described in clauses (1) and (2).
43.17    (b) Permanent partial disability payments provided for in section 176.101,
43.18subdivision 2a, and retraining payments provided for in section 176.102, subdivision 11,
43.19must not be offset from disability payments due under paragraph (a) if the amounts of
43.20the permanent partial or retraining payments are reported to the executive director in a
43.21manner specified by the executive director.
43.22EFFECTIVE DATE.This section is effective the day following final enactment.

43.23    Sec. 22. Minnesota Statutes 2006, section 353.656, subdivision 2, is amended to read:
43.24    Subd. 2. Benefits paid under workers' compensation law. (a) If a member, as
43.25described in subdivision 1, is injured under circumstances which entitle the member to
43.26receive benefits under the workers' compensation law, the member shall receive the same
43.27benefits as provided in subdivision 1, with disability benefits paid reimbursed and future
43.28benefits reduced by all periodic or lump sum amounts, other than those amounts excluded
43.29under paragraph (b), paid to the member under the workers' compensation law, after
43.30deduction of amount of attorney fees, authorized under applicable workers' compensation
43.31laws, paid by a disabilitant if the total of the single life annuity actuarial equivalent
43.32disability benefit and the workers' compensation benefit exceeds: (1) the salary the
43.33disabled member received as of the date of the disability or (2) the salary currently payable
43.34for the same employment position or an employment position substantially similar to the
44.1one the person held as of the date of the disability, whichever is greater. The disability
44.2benefit must be reduced to that amount which, when added to the workers' compensation
44.3benefits, does not exceed the greater of the salaries described in clauses (1) and (2).
44.4    (b) Permanent partial disability payments provided for in section 176.101,
44.5subdivision 2a, and retraining payments provided for in section 176.102, subdivision 11,
44.6must not be offset from disability payments due under paragraph (a) if the amounts of
44.7the permanent partial or retraining payments are reported to the executive director in a
44.8manner specified by the executive director.
44.9EFFECTIVE DATE.This section is effective the day following final enactment.

44.10    Sec. 23. Minnesota Statutes 2006, section 353D.05, subdivision 2, is amended to read:
44.11    Subd. 2. Investment options. (a) A participant may elect to purchase shares in
44.12the income share account, the growth share account, the international share account,
44.13the money market account, the bond market account, the fixed interest account, or the
44.14common stock index account established by section 11A.17, or a combination of those
44.15accounts. The participant may elect to purchase shares in a combination of those accounts
44.16by specifying the percentage of the total contributions to be used to purchase shares in
44.17each of the accounts.
44.18    (b) A participant or a former participant may indicate in writing a choice of options
44.19for subsequent purchases of shares. After a choice is made, until the participant or former
44.20participant makes a different written indication, the executive director of the association
44.21shall purchase shares in the supplemental investment account or accounts specified by
44.22the participant. If no initial option is indicated by a participant or the specifications made
44.23by the participant exceeds 100 percent to be invested in more than one account, the
44.24executive director shall invest all contributions made by or on behalf of a participant in
44.25the income share account. If the specifications are less than 100 percent, the executive
44.26director shall invest the remaining percentage in the income share account. A choice of
44.27investment options is effective the first of the month following the date of receipt of the
44.28signed written choice of options.
44.29    (c) Shares in the fixed interest account attributable to any guaranteed investment
44.30contract as of July 1, 1994, may not be withdrawn from the fund or transferred to another
44.31account until the guaranteed investment contract has expired, unless the participant
44.32qualifies for a benefit payment under section 353D.07.
44.33    (d) A participant or former participant may also change the investment options
44.34selected for all or a portion of the individual's previously purchased shares in accounts,
44.35subject to the provisions of paragraph (c) concerning the fixed interest account. A change
45.1under this paragraph is effective the first of the month following the date of receipt of a
45.2signed written choice of options.
45.3    (e) The change or selection of an investment option or the transfer of all or a portion
45.4of the deceased or former participant's shares in the income share, growth share, common
45.5stock index, bond market, international share, money market, or fixed interest accounts
45.6must not be made following death of the participant or former participant.
45.7EFFECTIVE DATE.This section is effective the day following final enactment.

45.8    Sec. 24. [353D.071] FEDERAL COMPLIANCE.
45.9    Subdivision 1. Definitions. (a) For purposes of this section, the following terms
45.10have the meanings given to them.
45.11    (b) "Designated beneficiary" means the person designated as the beneficiary under
45.12section 353D.07, subdivision 5, and who is the designated beneficiary under section
45.13401(a)(9) of the Internal Revenue Code and section 1.401(a)(9)-1, Q&A-4 of the Treasury
45.14regulations.
45.15    (c) "Distribution calendar year" means a calendar year for which a minimum
45.16distribution is required. For distributions beginning before the member's death, the first
45.17distribution calendar year is the calendar year immediately preceding the calendar year
45.18which contains the member's required beginning date. For distributions beginning after
45.19the member's death, the first distribution calendar year is the calendar year in which
45.20distributions are required to begin under subdivision 2, paragraph (c). The required
45.21minimum distribution for the member's first distribution calendar year shall be made on or
45.22before the member's required beginning date.
45.23    (d) "Member's account balance" means the account balance as of the last valuation
45.24date in the valuation calendar year increased by the amount of any contributions made
45.25and allocated to the account balance as of dates in the valuation calendar year after the
45.26valuation date and decreased by distributions made in the valuation calendar year after
45.27the valuation date. The account balance for the valuation calendar year includes any
45.28amounts rolled over or transferred to the plan either in the valuation calendar year or in the
45.29distribution calendar year if distributed or transferred in the valuation calendar year.
45.30    (e) "Required beginning date" means the later of April 1 of the calendar year
45.31following the calendar year that the member attains age 70.5 or April 1 of the calendar
45.32year following the calendar year in which the member terminates employment.
45.33    (f) "Valuation calendar year" means the calendar year immediately preceding the
45.34distribution calendar year.
46.1    Subd. 2. Required Minimum Distributions. (a) The provisions of this subdivision
46.2shall apply for purposes of determining required minimum distributions for calendar years
46.3beginning with the 2003 calendar year and will take precedence over any inconsistent
46.4provisions of the plan. All distributions required under this section will be determined and
46.5made in accordance with the treasury regulations under section 401(a)(9) of the Internal
46.6Revenue Code, including regulations providing special rules for governmental plans, as
46.7defined under Internal Revenue Code section 414(d), that comply with a reasonable good
46.8faith interpretation of the minimum distribution requirements.
46.9    (b) The member's entire interest will be distributed to the member in a lump sum no
46.10later than the member's required beginning date.
46.11    (c) If the member dies before the required minimum distribution is made, the
46.12member's entire interest will be distributed in a lump sum no later than as follows:
46.13    (1) If the member's surviving spouse is the member's sole designated beneficiary, the
46.14distribution must be made by December 31 of the calendar year immediately following the
46.15calendar year in which the member died, or by December 31 of the calendar year in which
46.16the member would have attained age 70.5, whichever is later;
46.17    (2) If the member's surviving spouse is not the member's sole beneficiary, or if
46.18there is no designated beneficiary as of September 30 of the year following the year of
46.19the member's death, the member's entire interest shall be distributed by December 31
46.20of the calendar year containing the fifth anniversary of the member's death as directed
46.21under 353D.07, subdivision 5; or
46.22    (3) If the member's surviving spouse is the member's sole designated beneficiary and
46.23the surviving spouse dies after the member but before the account balance is distributed
46.24to the surviving spouse, paragraph (c), clause (2), shall apply as if the surviving spouse
46.25were the member.
46.26    (d) For purposes of paragraph (c), unless clause (3) applies, distributions are
46.27considered to be made on the member's required beginning date. If paragraph (c), clause
46.28(3), applies, distributions are considered to begin on the date distributions are required to
46.29be made to the surviving spouse under paragraph (c), clause (1).
46.30EFFECTIVE DATE.This section is effective the day following final enactment.

46.31    Sec. 25. Minnesota Statutes 2007 Supplement, section 353F.02, subdivision 4, is
46.32amended to read:
46.33    Subd. 4. Medical facility. "Medical facility" means:
46.34    (1) Bridges Medical Services;
46.35    (2) the City of Cannon Falls Hospital;
47.1    (3) Clearwater County Memorial Hospital doing business as Clearwater Health
47.2Services in Bagley;
47.3    (4) the Dassel Lakeside Community Home;
47.4    (5) the Fair Oaks Lodge, Wadena;
47.5    (6) the Glencoe Area Health Center;
47.6    (7) the Hutchinson Area Health Care;
47.7    (8) the Kanabec Hospital;
47.8    (9) the Lakefield Nursing Home;
47.9    (10) (9) the Lakeview Nursing Home in Gaylord;
47.10    (11) (10) the Luverne Public Hospital;
47.11    (12) the Northfield Hospital;
47.12    (13) (11) the Oakland Park Nursing Home;
47.13    (14) (12) the RenVilla Nursing Home;
47.14    (15) the Renville County Hospital in Olivia;
47.15    (16) (13) the St. Peter Community Healthcare Center; and
47.16    (17) (14) the Waconia-Ridgeview Medical Center.
47.17EFFECTIVE DATE.This section is effective the day following final enactment.

47.18    Sec. 26. [353F.025] CERTIFICATION AND DECERTIFICATION OF MEDICAL
47.19FACILITIES AND OTHER PUBLIC EMPLOYING UNITS.
47.20    Subdivision 1. Eligibility determination. (a) The chief clerical officer of a
47.21governmental subdivision may submit a resolution from the governing body to the
47.22executive director of the Public Employees Retirement Association which supports
47.23providing coverage under this chapter for employees of that governmental subdivision
47.24who are privatized, and which states that the governing body will pay for actuarial
47.25calculations, as further specified in paragraph (c).
47.26    (b) The governing body must also provide a copy of any applicable purchase or
47.27lease agreement and any other information requested by the executive director to allow the
47.28executive director to verify that under the proposed employer change, the new employer
47.29does not qualify as a governmental subdivision under section 353.01, subdivision 6,
47.30making the employees ineligible for continued coverage as active members of the general
47.31employees retirement plan of the Public Employees Retirement Association.
47.32    (c) Following receipt of a resolution and a determination by the executive director
47.33that the new employer is not a governmental subdivision, the executive director shall
47.34direct the consulting actuary retained under section 356.214 to determine whether the
47.35general employees retirement plan of the Public Employees Retirement Association is
48.1expected to receive a net gain if privatization occurs, by determining whether the actuarial
48.2liability of the special benefit coverage provided under this chapter, if extended to the
48.3applicable employees under the privatization, is less than the actuarial gain otherwise to
48.4accrue to the plan. The date of the actuarial calculations used to make this determination
48.5must be within one year of the effective date, as defined in section 353F.02, subdivision 3.
48.6    Subd. 2. Recommendation to legislature. (a) If the actuarial calculations under
48.7subdivision 1, paragraph (c), indicate that a net gain to the general employees retirement
48.8plan of the Public Employees Retirement Association is expected due to the privatization,
48.9the executive director shall forward a recommendation and supporting documentation to
48.10the chair of the Legislative Commission on Pensions and Retirement, the chair of the
48.11Governmental Operations, Reform, Technology and Elections Committee of the house of
48.12representatives, the chair of the State and Local Government Operations and Oversight
48.13Committee of the senate, and the executive director of the Legislative Commission on
48.14Pensions and Retirement. The recommendation must be in the form of an addition to
48.15the definition of "medical facility" under section 353F.02, subdivision 4, or to "other
48.16public employing unit" under section 353F.02, subdivision 5, whichever is applicable.
48.17The recommendation must be forwarded to the legislature before January 15 for the
48.18recommendation to be considered in that year's legislative session.
48.19    (b) If a medical facility or other public employing unit listed under section 353F.02,
48.20subdivision 4 or 5, fails to privatize within one year of the final enactment date of the
48.21legislation adding the entity to the applicable definition, its inclusion under this chapter
48.22is voided, and the executive director shall include in the proposed legislation under
48.23paragraph (a) a recommendation that the applicable entity be stricken from the definition.
48.24    Subd. 3. Date of application. For any privatization added to this chapter after the
48.25effective date of this section, the first date of coverage is the effective date as defined in
48.26section 353F.02, subdivision 3.
48.27EFFECTIVE DATE.This section is effective the day following final enactment.

48.28    Sec. 27. Minnesota Statutes 2007 Supplement, section 354.096, subdivision 2, is
48.29amended to read:
48.30    Subd. 2. Payment. (a) Notwithstanding any laws to the contrary, a member who
48.31is granted a family leave under United States Code, title 42, section 12631, may receive
48.32allowable service credit for the leave by making payment of the employee, employer, and
48.33additional employer contributions at the rates under section 354.42, during the leave
48.34period as applied to the member's average full-time monthly salary rate on the date the
48.35leave commenced under section 354.72.
49.1    (b) If payment is made after the leave terminates, section 354.72 applies.
49.2EFFECTIVE DATE.This section is effective July 1, 2008.

49.3    Sec. 28. Minnesota Statutes 2006, section 354.33, subdivision 5, is amended to read:
49.4    Subd. 5. Retirees not eligible for federal benefits. Notwithstanding the provisions
49.5of section 354.55, subdivision 3, When any person retires after July 1, 1973, who (1)
49.6has ten or more years of allowable service, and (2) does not have any retroactive Social
49.7Security coverage by reason of the person's position in the retirement system, and (3) does
49.8not qualify for federal old age and survivor primary benefits at the time of retirement, the
49.9annuity must be computed under section 354.44, subdivision 2, of the law in effect on
49.10June 30, 1969, except that accumulations after June 30, 1957, must be calculated using the
49.11same mortality table and interest assumption as are used to transfer the required reserves
49.12to the Minnesota postretirement investment fund.
49.13EFFECTIVE DATE.This section is effective the day following final enactment.

49.14    Sec. 29. Minnesota Statutes 2007 Supplement, section 354.72, subdivision 2, is
49.15amended to read:
49.16    Subd. 2. Purchase procedure. (a) A teacher may purchase credit for allowable and
49.17formula service in the plan for a period specified in subdivision 1 if the teacher makes a
49.18payment as specified in paragraph (b) or, (c), or (d), whichever applies. The employing
49.19unit, at its option, may pay the employer portion of the amount specified in paragraph (b)
49.20on behalf of its employees.
49.21    (b) If payment is received by the executive director within one year from the end
49.22by June 30 of the fiscal year of the strike period or authorized leave included under section
49.23354.093 , 354.095, or 354.096, or payment must equal the total employee and employer
49.24contribution rates, including amortization contribution rates if applicable, multiplied by the
49.25member's average monthly salary rate on the date the leave or strike period commenced,
49.26or for an extended leave under section 354.094, on the salary received during the year
49.27immediately preceding the initial year of the leave, multiplied by the months and portions
49.28of a month of the leave or strike period for which the teacher seeks allowable service credit.
49.29    (c) If payment is made after June 30 and before the following June 30 for a strike
49.30period or for leaves of absence under section 354.093, 354.095, or 354.096, or for an
49.31extended leave of absence under section 354.094, the payment must equal the total
49.32employee and employer contributions, including amortization contributions if applicable,
49.33given the contribution rates in section 354.42, multiplied by the member's average
49.34monthly salary rate on the commencement of the leave or period of strike, multiplied by
50.1the months and portions of a month of the leave of absence or period of strike for which
50.2the teacher seeks allowable service credit. Payments made under this paragraph must
50.3include the amount determined in paragraph (b) plus compound interest at a monthly rate
50.4of 0.71 percent from the last day of the leave period or strike period, or from June 30 for
50.5an extended leave of absence under section 354.094, until the last day of the month in
50.6which payment is received.
50.7    (c) (d) If payment is received by the executive director after the applicable last
50.8permitted date under paragraph (b) (c), the payment amount is the amount determined
50.9under section 356.551. Notwithstanding payment deadlines specified in section 356.551,
50.10payment under this section may be made anytime before the effective date of retirement.
50.11EFFECTIVE DATE.This section is effective retroactively from July 1, 2007.

50.12    Sec. 30. Minnesota Statutes 2006, section 356.47, subdivision 3, is amended to read:
50.13    Subd. 3. Payment. (a) Upon the retired member attaining the age of 65 years
50.14or upon the first day of the month next following the month occurring Beginning one
50.15year after the termination of the reemployment withholding period ends relating to the
50.16reemployment that gave rise to the limitation, whichever is later, and the filing of a written
50.17application, the retired member is entitled to the payment, in a lump sum, of the value
50.18of the person's amount under subdivision 2, plus interest at the compound annual rate
50.19of six percent from the date that the amount was deducted from the retirement annuity
50.20to the date of payment.
50.21    (b) The written application must be on a form prescribed by the chief administrative
50.22officer of the applicable retirement plan.
50.23    (c) If the retired member dies before the payment provided for in paragraph (a) is
50.24made, the amount is payable, upon written application, to the deceased person's surviving
50.25spouse, or if none, to the deceased person's designated beneficiary, or if none, to the
50.26deceased person's estate.
50.27    (d) In lieu of the direct payment of the person's amount under subdivision 2, on
50.28or after the payment date under paragraph (a), if the federal Internal Revenue Code so
50.29permits, the retired member may elect to have all or any portion of the payment amount
50.30under this section paid in the form of a direct rollover to an eligible retirement plan as
50.31defined in section 402(c) of the federal Internal Revenue Code that is specified by the
50.32retired member. If the retired member dies with a balance remaining payable under this
50.33section, the surviving spouse of the retired member, or if none, the deceased person's
50.34designated beneficiary, or if none, the administrator of the deceased person's estate may
50.35elect a direct rollover under this paragraph.
51.1EFFECTIVE DATE.This section is effective retroactively from January 1, 2008.

51.2    Sec. 31. Minnesota Statutes 2006, section 356.551, subdivision 2, is amended to read:
51.3    Subd. 2. Determination. (a) Unless the minimum purchase amount set forth in
51.4paragraph (c) applies, the prior service credit purchase amount is an amount equal to the
51.5actuarial present value, on the date of payment, as calculated by the chief administrative
51.6officer of the pension plan and reviewed by the actuary retained under section 356.214,
51.7of the amount of the additional retirement annuity obtained by the acquisition of the
51.8additional service credit in this section.
51.9    (b) Calculation of this amount must be made using the preretirement interest rate
51.10applicable to the public pension plan specified in section 356.215, subdivision 8, and
51.11the mortality table adopted for the public pension plan. The calculation must assume
51.12continuous future service in the public pension plan until, and retirement at, the age at
51.13which the minimum requirements of the fund for normal retirement or retirement with an
51.14annuity unreduced for retirement at an early age, including section 356.30, are met with
51.15the additional service credit purchased. The calculation must also assume a full-time
51.16equivalent salary, or actual salary, whichever is greater, and a future salary history that
51.17includes annual salary increases at the applicable salary increase rate for the plan specified
51.18in section 356.215, subdivision 4d.
51.19    (c) The prior service credit purchase amount may not be less than the amount
51.20determined by applying the current employee or member contribution rate, the employer
51.21contribution rate, and the additional employer contribution rate, if any, to the person's
51.22current annual salary and multiplying that result by the number of whole and fraction
51.23years of service to be purchased.
51.24    (c) The prior service credit purchase amount may not be less than the amount
51.25determined by applying, for each year or fraction of a year being purchased, the sum of the
51.26employee contribution rate, the employer contribution rate, and the additional employer
51.27contribution rate, if any, applicable during that period, to the person's annual salary during
51.28that period, or fractional portion of a year's salary, if applicable, plus interest at the annual
51.29rate of 8.5 percent compounded annually from the end of the year in which contributions
51.30would otherwise have been made to the date on which the payment is received.
51.31    (d) Unless otherwise provided by statutes governing a specific plan, payment must
51.32be made in one lump sum within one year of the prior service credit authorization or prior
51.33to the member's effective date of retirement, whichever is earlier. Payment of the amount
51.34calculated under this section must be made by the applicable eligible person.
52.1    (e) However, the current employer or the prior employer may, at its discretion, pay
52.2all or any portion of the payment amount that exceeds an amount equal to the employee
52.3contribution rates in effect during the period or periods of prior service applied to the
52.4actual salary rates in effect during the period or periods of prior service, plus interest at the
52.5rate of 8.5 percent a year compounded annually from the date on which the contributions
52.6would otherwise have been made to the date on which the payment is made. If the
52.7employer agrees to payments under this subdivision, the purchaser must make the
52.8employee payments required under this subdivision within 90 days of the prior service
52.9credit authorization. If that employee payment is made, the employer payment under this
52.10subdivision must be remitted to the chief administrative officer of the public pension plan
52.11within 60 days of receipt by the chief administrative officer of the employee payments
52.12specified under this subdivision.
52.13EFFECTIVE DATE.This section is effective the day following final enactment.

52.14    Sec. 32. Minnesota Statutes 2006, section 356.611, subdivision 2, is amended to read:
52.15    Subd. 2. Federal compensation limits. (a) For members of a covered pension plan
52.16enumerated in section 356.30, subdivision 3, and of the plan established under chapter
52.17353D, compensation in excess of the limitation specified in section 401(a)(17) of the
52.18Internal Revenue Code, as amended, for changes in the cost of living under section
52.19401(a)(17)(B) of the Internal Revenue Code, may not be included for contribution and
52.20benefit computation purposes.
52.21    (b) Notwithstanding paragraph (a), for members specified in paragraph (a) who first
52.22contributed to a covered plan specified in that paragraph before July 1, 1995, the annual
52.23compensation limit specified in Internal Revenue Code 401(a)(17) on June 30, 1993,
52.24applies if that provides a greater allowable annual compensation.
52.25EFFECTIVE DATE.This section is effective the day following final enactment.

52.26    Sec. 33. Minnesota Statutes 2006, section 356.611, is amended by adding a subdivision
52.27to read:
52.28    Subd. 3a. Maximum annual addition limitation. The annual additions on behalf
52.29of a member to the plan established under chapter 352D or 353D for any limitation year
52.30beginning after December 31, 2001, shall not exceed the lesser of one hundred percent
52.31of the member's compensation, as defined for purposes of section 415 (c) of the Internal
52.32Revenue Code; or $40,000, as adjusted by the United States secretary of the treasury under
52.33section 415(d) of the Internal Revenue Code.
52.34EFFECTIVE DATE.This section is effective the day following final enactment.

53.1    Sec. 34. Laws 2002, chapter 392, article 2, section 4, is amended to read:
53.2    Sec. 4. EFFECTIVE DATE.
53.3    (a) Sections 1, 2, and 3 are effective retroactive to July 1, 2001.
53.4    (b) The authority to obtain credit for allowable service under section 1, clause (11);
53.5and section 2, paragraph (a), clause (8); and section 3, clause (9), expires 12 months
53.6after the date of enactment.
53.7EFFECTIVE DATE.This section is effective retroactively without interruption
53.8from July 1, 2002.

53.9    Sec. 35. Laws 2006, chapter 271, article 5, section 5, is amended to read:
53.10    Sec. 5. EFFECTIVE DATE.
53.11    (a) Sections 1, 3, and 4 are effective the day following final enactment and section 3
53.12has effect retroactively from July 25, 2005.
53.13    (b) Section 2 with respect to the Cannon Falls Hospital District is effective upon the
53.14latter of:
53.15    (1) the day after the governing body of the Cannon Falls Hospital District and its
53.16chief clerical officer meet the requirements under Minnesota Statutes, section 645.021,
53.17subdivisions 2 and 3; and
53.18    (2) the first day of the month following certification to the Cannon Falls Hospital
53.19District by the executive director of the Public Employees Retirement Association that the
53.20actuarial accrued liability of the special benefit coverage proposed for extension to the
53.21privatized City of Cannon Falls Hospital employees under section 1 does not exceed the
53.22actuarial gain otherwise to be accrued by the Public Employees Retirement Association, as
53.23calculated by the consulting actuary retained under Minnesota Statutes, section 356.214.
53.24The cost of the actuarial calculations must be borne by the current employer or by the
53.25entity which is the employer following the privatization.
53.26    (c) Section 2, with respect to Clearwater County Memorial Hospital, is effective
53.27upon the latter of:
53.28    (1) the day after the governing body of Clearwater County and its chief clerical
53.29officer meet the requirements under Minnesota Statutes, section 645.021, subdivisions 2
53.30and 3, except that the certificate of approval must be filed before January 1, 2009; and
53.31    (2) the first day of the month following certification to Clearwater County by the
53.32executive director of the Public Employees Retirement Association that the actuarial
53.33accrued liability of the special benefit coverage proposed for extension to the privatized
53.34Clearwater Health Services employees under section 2 does not exceed the actuarial gain
53.35otherwise to be accrued by the Public Employees Retirement Association, as calculated by
54.1the consulting actuary retained under Minnesota Statutes, section 356.214. The cost of
54.2the actuarial calculations must be borne by the current employer or by the entity which is
54.3the employer following the privatization.
54.4    (d) Section 2 with respect to the Dassel Lakeside Community Home is effective
54.5upon the latter of:
54.6    (1) the day after the governing body of the city of Dassel and its chief clerical officer
54.7timely complete compliance with Minnesota Statutes, section 645.021, subdivisions 2
54.8and 3; and
54.9    (2) the first day of the month next following certification to the Dassel City
54.10Council by the executive director of the Public Employees Retirement Association that
54.11the actuarial accrued liability of the special benefit coverage proposed for extension to
54.12the privatized Dassel Lakeside Community Home employees under section 2 does not
54.13exceed the actuarial gain otherwise to be accrued by the Public Employees Retirement
54.14Association, as calculated by the consulting actuary retained under Minnesota Statutes,
54.15section 356.214. The cost of the actuarial calculations must be borne by the city of Dassel
54.16or by the entity which is the employer following the privatization.
54.17EFFECTIVE DATE.This section is effective the day following final enactment.

54.18    Sec. 36. REPEALER.
54.19(a) Minnesota Statutes 2006, sections 354.44, subdivision 6a; 354.465; 354.51,
54.20subdivision 4; and 354.55, subdivisions 2, 3, 6, 12, and 15, are repealed effective July
54.211, 2008.
54.22(b) Minnesota Statutes 2006, sections 354A.091, subdivisions 1a and 1b; and
54.23355.629, are repealed effective July 1, 2008.
54.24(c) Laws 2005, First Special Session chapter 8, article 1, section 23, is repealed
54.25retroactive from July 26, 2005.


54.28    Section 1. Minnesota Statutes 2007 Supplement, section 352.91, subdivision 3d,
54.29is amended to read:
54.30    Subd. 3d. Other correctional personnel. (a) "Covered correctional service" means
54.31service by a state employee in one of the employment positions at a correctional facility or
54.32at the Minnesota Security Hospital specified in paragraph (b) if at least 75 percent of the
54.33employee's working time is spent in direct contact with inmates or patients and the fact of
54.34this direct contact is certified to the executive director by the appropriate commissioner.
55.1    (b) The employment positions are as follows:
55.2    (1) baker;
55.3    (2) central services administrative specialist, intermediate;
55.4    (3) central services administrative specialist, principal;
55.5    (4) chaplain;
55.6    (5) chief cook;
55.7    (6) cook;
55.8    (7) cook coordinator;
55.9    (8) corrections program therapist 1;
55.10    (9) corrections program therapist 2;
55.11    (10) corrections program therapist 3;
55.12    (11) corrections program therapist 4;
55.13    (12) corrections inmate program coordinator;
55.14    (13) corrections transitions program coordinator;
55.15    (14) corrections security caseworker;
55.16    (15) corrections security caseworker career;
55.17    (16) corrections teaching assistant;
55.18    (17) delivery van driver;
55.19    (18) dentist;
55.20    (19) electrician supervisor;
55.21    (20) general maintenance worker lead;
55.22    (21) general repair worker;
55.23    (22) library/information research services specialist;
55.24    (23) library/information research services specialist senior;
55.25    (24) library technician;
55.26    (25) painter lead;
55.27    (26) plant maintenance engineer lead;
55.28    (27) plumber supervisor;
55.29    (28) psychologist 1;
55.30    (29) psychologist 3;
55.31    (30) recreation therapist;
55.32    (31) recreation therapist coordinator;
55.33    (32) recreation program assistant;
55.34    (33) recreation therapist senior;
55.35    (34) sports medicine specialist;
55.36    (35) work therapy assistant;
56.1    (36) work therapy program coordinator; and
56.2    (37) work therapy technician.
56.3EFFECTIVE DATE.This section is effective the day following final enactment.

56.4    Sec. 2. COVERAGE TRANSFER DATES.
56.5    (a) The coverage transfer under Minnesota Statutes, section 352.91, subdivision 3d,
56.6paragraph (b), clause (20), also covers employment in that position after December 11,
56.72007, for purposes of Minnesota Statutes, section 352.955, subdivisions 1, 3, 4, 5, and 6.
56.8    (b) The coverage change under Minnesota Statutes, section 352.91, subdivision 3d,
56.9paragraph (b), clause (25), is prospective only.
56.10EFFECTIVE DATE.This section is effective the day following final enactment.


56.13    Section 1. Minnesota Statutes 2007 Supplement, section 352D.02, subdivision 1,
56.14is amended to read:
56.15    Subdivision 1. Coverage. (a) Except as specified in paragraph (b), employees
56.16enumerated in paragraph (c), clauses (2), (3), (4), (6) to (14), and (16) to (18), if they are
56.17an elected official or in the unclassified service of the state or Metropolitan Council and
56.18are eligible for coverage under the general state employees retirement plan under chapter
56.19352, are participants in the unclassified program under this chapter unless the employee
56.20gives notice to the executive director of the Minnesota State Retirement System within
56.21one year following the commencement of employment in the unclassified service that the
56.22employee desires coverage under the general state employees retirement plan. For the
56.23purposes of this chapter, an employee who does not file notice with the executive director
56.24is deemed to have exercised the option to participate in the unclassified program.
56.25    (b) Persons referenced in paragraph (c), clause (5), are participants in the unclassified
56.26program under this chapter unless the person was eligible to elect different coverage under
56.27section 3A.07 and elected retirement coverage by the applicable alternative retirement
56.28plan. Persons referenced in paragraph (c), clause (15), are participants in the unclassified
56.29program under this chapter for judicial employment in excess of the service credit limit in
56.30section 490.121, subdivision 22, and are not eligible for the choice of coverage specified
56.31in paragraph (a).
56.32    (c) Enumerated employees and referenced persons are:
56.33    (1) the governor, the lieutenant governor, the secretary of state, the state auditor,
56.34and the attorney general;
57.1    (2) an employee in the Office of the Governor, Lieutenant Governor, Secretary
57.2of State, State Auditor, Attorney General;
57.3    (3) an employee of the State Board of Investment;
57.4    (4) the head of a department, division, or agency created by statute in the unclassified
57.5service, an acting department head subsequently appointed to the position, or an employee
57.6enumerated in section 15A.0815 or 15A.083, subdivision 4;
57.7    (5) a member of the legislature;
57.8    (6) a full-time unclassified employee of the legislature or a commission or agency of
57.9the legislature who is appointed without a limit on the duration of the employment or a
57.10temporary legislative employee having shares in the supplemental retirement fund as a
57.11result of former employment covered by this chapter, whether or not eligible for coverage
57.12under the Minnesota State Retirement System;
57.13    (7) a person who is employed in a position established under section 43A.08,
57.14subdivision 1 , clause (3), or in a position authorized under a statute creating or establishing
57.15a department or agency of the state, which is at the deputy or assistant head of department
57.16or agency or director level;
57.17    (8) the regional administrator, or executive director of the Metropolitan Council,
57.18general counsel, division directors, operations managers, and other positions as designated
57.19by the council, all of which may not exceed 27 positions at the council and the chair;
57.20    (9) the executive director, associate executive director, and not to exceed nine
57.21positions of the Minnesota Office of Higher Education in the unclassified service, as
57.22designated by the Minnesota Office of Higher Education before January 1, 1992, or
57.23subsequently redesignated with the approval of the board of directors of the Minnesota
57.24State Retirement System, unless the person has elected coverage by the individual
57.25retirement account plan under chapter 354B;
57.26    (10) the clerk of the appellate courts appointed under article VI, section 2, of the
57.27Constitution of the state of Minnesota, the state court administrator and judicial district
57.28administrators;
57.29    (11) the chief executive officers of correctional facilities operated by the Department
57.30of Corrections and of hospitals and nursing homes operated by the Department of Human
57.31Services;
57.32    (12) an employee whose principal employment is at the state ceremonial house;
57.33    (13) an employee of the Agricultural Utilization Research Institute;
57.34    (14) an employee of the State Lottery who is covered by the managerial plan
57.35established under section 43A.18, subdivision 3;
58.1    (15) a judge who has exceeded the service credit limit in section 490.121,
58.2subdivision 22 ;
58.3    (16) an employee of Minnesota Technology Incorporated;
58.4    (17) a person employed by the Minnesota State Colleges and Universities as faculty
58.5or in an eligible unclassified administrative position as defined in section 354B.20,
58.6subdivision 6, who was employed by the former state university or the former community
58.7college system before May 1, 1995, and elected unclassified program coverage prior to
58.8May 1, 1995; and
58.9    (18) a person employed by the Minnesota State Colleges and Universities who
58.10was employed in state service before July 1, 1995, who subsequently is employed in an
58.11eligible unclassified administrative position as defined in section 354B.20, subdivision
58.126, and who elects coverage by the unclassified program.
58.13EFFECTIVE DATE.This section is effective January 6, 2009.

58.14    Sec. 2. Minnesota Statutes 2007 Supplement, section 352D.02, subdivision 3, is
58.15amended to read:
58.16    Subd. 3. Transfer to general plan. (a) An employee, other than a judge as
58.17specified in subdivision 1, paragraph (c), clause (15), credited with employee shares in the
58.18unclassified program, after acquiring credit for ten years of allowable service and not later
58.19than one month following the termination of covered employment, may elect to terminate
58.20participation in the unclassified program and be covered by the general plan by filing a
58.21written election with the executive director. The executive director shall then redeem the
58.22employee's total shares and shall credit to the employee's account in the general plan the
58.23amount of contributions that would have been so credited had the employee been covered
58.24by the general plan during the employee's entire covered employment or elective state
58.25service. The balance of money so redeemed and not credited to the employee's account
58.26shall be transferred to the general plan retirement fund, except that (1) the employee
58.27contribution paid to the unclassified program must be compared to (2) the employee
58.28contributions that would have been paid to the general plan for the comparable period, if
58.29the individual had been covered by that plan. If clause (1) is greater than clause (2), the
58.30difference must be refunded to the employee as provided in section 352.22. If clause (2) is
58.31greater than clause (1), the difference must be paid by the employee within six months
58.32of electing general plan coverage or before the effective date of the annuity, whichever
58.33is sooner.
58.34    (b) An election under paragraph (a) to transfer coverage to the general plan is
58.35irrevocable during any period of covered employment.
59.1EFFECTIVE DATE.This section is effective January 6, 2009.


59.4    Section 1. Minnesota Statutes 2007 Supplement, section 353F.02, subdivision 4,
59.5is amended to read:
59.6    Subd. 4. Medical facility. "Medical facility" means:
59.7    (1) Bridges Medical Services;
59.8    (2) the City of Cannon Falls Hospital;
59.9    (3) Clearwater County Memorial Hospital doing business as Clearwater Health
59.10Services in Bagley;
59.11    (4) the Dassel Lakeside Community Home;
59.12    (5) the Fair Oaks Lodge, Wadena;
59.13    (6) the Glencoe Area Health Center;
59.14    (7) the Hutchinson Area Health Care;
59.15    (8) the Kanabec Hospital;
59.16    (9) the Lakefield Nursing Home;
59.17    (10) the Lakeview Nursing Home in Gaylord;
59.18    (11) the Luverne Public Hospital;
59.19    (12) the Northfield Hospital;
59.20    (13) the Oakland Park Nursing Home;
59.21    (14) the RenVilla Nursing Home;
59.22    (15) the Renville County Hospital in Olivia;
59.23    (16) the Rice Memorial Hospital in Willmar, with respect to the Department of
59.24Radiology and the Department of Radiation/Oncology;
59.25    (17) the St. Peter Community Healthcare Center; and
59.26    (17) (18) the Waconia-Ridgeview Medical Center; and
59.27    (19) the Worthington Regional Hospital.

59.28    Sec. 2. EFFECTIVE DATE.
59.29    (a) Section 1, clause (16), is effective the day after the governing body of the city
59.30of Willmar and its chief clerical officer timely comply with Minnesota Statutes, section
59.31645.021, subdivisions 2 and 3.
59.32    (b) Section 1, clause (19), is effective the day after the governing body of the city of
59.33Worthington and its chief clerical officer timely comply with Minnesota Statutes, section
59.34645.021, subdivisions 2 and 3.


60.3    Section 1. Minnesota Statutes 2006, section 354A.12, subdivision 3a, is amended to
60.4read:
60.5    Subd. 3a. Special direct state aid to first class city teachers retirement fund
60.6associations. (a) In fiscal year 1998, The state shall pay $4,827,000 to the St. Paul
60.7Teachers Retirement Fund Association, $17,954,000 to the Minneapolis Teachers
60.8Retirement Fund Association, and $486,000 $346,000 to the Duluth Teachers Retirement
60.9Fund Association. In each fiscal year after fiscal year 2006, these payments to the first
60.10class city teachers retirement fund associations must be, $2,827,000 for to the St. Paul,
60.11$12,954,000 to the Teachers Retirement Fund Association and, for the former Minneapolis
60.12Teachers Retirement Fund Association, and $486,000 for Duluth $12,954,000 to the
60.13Teachers Retirement Association.
60.14    (b) The direct state aids under this subdivision are payable October 1 annually. The
60.15commissioner of finance shall pay the direct state aid. The amount required under this
60.16subdivision is appropriated annually from the general fund to the commissioner of finance.
60.17EFFECTIVE DATE.This section is effective the day following final enactment and
60.18applies retroactively to direct state aid paid or payable during fiscal years 2007 and 2008.

60.19    Sec. 2. Minnesota Statutes 2007 Supplement, section 354A.12, subdivision 3c, is
60.20amended to read:
60.21    Subd. 3c. Termination of supplemental contributions and direct matching
60.22and state aid. (a) The supplemental contributions payable to the Minneapolis Teachers
60.23Retirement Fund Association by Special School District No. 1 and the city of Minneapolis
60.24under section 423A.02, subdivision 3, must continue to be paid to the Teachers Retirement
60.25Association and must continue until the current assets of the fund equal or exceed the
60.26actuarial accrued liability of the fund as determined in the most recent actuarial report
60.27for the fund by the actuary retained under section 356.214 or 2037, whichever occurs
60.28earlier. The supplemental contributions payable to the St. Paul Teachers Retirement
60.29Fund Association by Independent School District No. 625 under section 423A.02,
60.30subdivision 3 , or the direct state aids aid under subdivision 3a to the St. Paul Teachers
60.31Retirement Fund Association terminate at the end of the fiscal year in which the accrued
60.32liability funding ratio for that fund, as determined in the most recent actuarial report for
60.33that fund by the actuary retained under section 356.214, equals or exceeds the accrued
60.34liability funding ratio for the Teachers Retirement Association, as determined in the most
61.1recent actuarial report for the Teachers Retirement Association by the actuary retained
61.2under section 356.214.
61.3    (b) If the state direct matching, state supplemental, or state aid is terminated for a
61.4first class city teachers retirement fund association under paragraph (a), it may not again
61.5be received by that fund.
61.6    (c) If the St. Paul Teachers Retirement Fund Association is funded at an amount
61.7equal to or greater than the funding ratio applicable to the Teachers Retirement Association
61.8when the provisions of paragraph (b) become effective, then any future state aid previously
61.9distributed to that association must be immediately transferred under subdivision 3a is
61.10payable to the Teachers Retirement Association.
61.11EFFECTIVE DATE.This section is effective the day following final enactment and
61.12applies retroactively to direct state aid paid or payable during fiscal years 2007 and 2008.

61.13    Sec. 3. Minnesota Statutes 2006, section 423A.02, subdivision 1b, is amended to read:
61.14    Subd. 1b. Additional amortization state aid. (a) Annually, on October 1, the
61.15commissioner of revenue shall allocate the additional amortization state aid transferred
61.16under section 69.021, subdivision 11, to:
61.17    (1) all police or salaried firefighters relief associations governed by and in full
61.18compliance with the requirements of section 69.77, that had an unfunded actuarial accrued
61.19liability in the actuarial valuation prepared under sections 356.215 and 356.216 as of the
61.20preceding December 31;
61.21    (2) all local police or salaried firefighter consolidation accounts governed by chapter
61.22353A that are certified by the executive director of the public employees retirement
61.23association as having for the current fiscal year an additional municipal contribution
61.24amount under section 353A.09, subdivision 5, paragraph (b), and that have implemented
61.25section 353A.083, subdivision 1, if the effective date of the consolidation preceded May
61.2624, 1993, and that have implemented section 353A.083, subdivision 2, if the effective date
61.27of the consolidation preceded June 1, 1995; and
61.28    (3) the municipalities that are required to make an additional municipal contribution
61.29under section 353.665, subdivision 8, for the duration of the required additional
61.30contribution.
61.31    (b) The commissioner shall allocate the state aid on the basis of the proportional share
61.32of the relief association or consolidation account of the total unfunded actuarial accrued
61.33liability of all recipient relief associations and consolidation accounts as of December 31,
61.341993, for relief associations, and as of June 30, 1994, for consolidation accounts.
62.1    (c) Beginning October 1, 2000, and annually thereafter, the commissioner shall
62.2allocate the state aid, including any state aid in excess of the limitation in subdivision
62.34, on the following basis:
62.4    (1) 64.5 percent to the municipalities to which section 353.665, subdivision
62.58 , paragraph (b), or 353A.09, subdivision 5, paragraph (b), apply for distribution in
62.6accordance with paragraph (b) and subject to the limitation in subdivision 4;
62.7    (2) 34.2 percent to the city of Minneapolis to fund any unfunded actuarial accrued
62.8liability in the actuarial valuation prepared under sections 356.215 and 356.216 as of the
62.9preceding December 31 for the Minneapolis Police Relief Association or the Minneapolis
62.10Fire Department Relief Association; and
62.11    (3) 1.3 percent to the city of Virginia to fund any unfunded actuarial accrued liability
62.12in the actuarial valuation prepared under sections 356.215 and 356.216 as of the preceding
62.13December 31 for the Virginia Fire Department Relief Association.
62.14    If there is no unfunded actuarial accrued liability in both the Minneapolis Police
62.15Relief Association and the Minneapolis Fire Department Relief Association as disclosed
62.16in the most recent actuarial valuations for the relief associations prepared under sections
62.17356.215 and 356.216, the commissioner shall allocate that 34.2 percent of the aid as
62.18follows: 49 percent to the Teachers Retirement Association, 21 percent to the St. Paul
62.19Teachers Retirement Fund Association, and 30 percent as additional funding to support
62.20minimum fire state aid for volunteer firefighters relief associations. If there is no unfunded
62.21actuarial accrued liability in the Virginia Fire Department Relief Association as disclosed
62.22in the most recent actuarial valuation for the relief association prepared under sections
62.23356.215 and 356.216, the commissioner shall allocate that 1.3 percent of the aid as
62.24follows: 49 percent to the Teachers Retirement Association, 21 percent to the St. Paul
62.25Teachers Retirement Fund Association, and 30 percent as additional funding to support
62.26minimum fire state aid for volunteer firefighters relief associations. Upon the final
62.27payment to municipalities required by section 353.665, subdivision 8, paragraph (b),
62.28or 353A.09, subdivision 5, paragraph (b), the commissioner shall allocate that 64.5
62.29percent of the aid as follows: 20 percent to the St. Paul Teachers Retirement Fund
62.30Association, 20 percent to the city of Minneapolis to fund any unfunded actuarial accrued
62.31liability in the actuarial valuation proposed under sections 356.215 and 356.216 as of the
62.32preceding December 31 for the Minneapolis Police Relief Association or the Minneapolis
62.33Firefighters Relief Association, 20 percent for the city of Duluth to pay for any costs
62.34associated with the police and firefighters pensions, and 40 percent as additional funding to
62.35support minimum fire state aid for volunteer firefighters relief associations. The allocation
62.36must be made by the commissioner at the same time and under the same procedures
63.1as specified in subdivision 3. With respect to the St. Paul Teachers Retirement Fund
63.2Association, annually, beginning on July 1, 2005, if the applicable teacher's association
63.3five-year average time-weighted rate of investment return does not equal or exceed the
63.4performance of a composite portfolio assumed passively managed (indexed) invested ten
63.5percent in cash equivalents, 60 percent in bonds and similar debt securities, and 30 percent
63.6in domestic stock calculated using the formula under section 11A.04, clause (11), the aid
63.7allocation to that retirement fund under this section ceases until the five-year annual rate
63.8of investment return equals or exceeds the performance of that composite portfolio.
63.9    (d) The amounts required under this subdivision are annually appropriated to the
63.10commissioner of revenue.
63.11EFFECTIVE DATE.This section is effective August 1, 2008.

63.12    Sec. 4. REPEALER.
63.13(a) Minnesota Statutes 2006, section 354A.12, subdivision 3a, is repealed effective
63.14the first day of the fiscal year next following the fiscal year in which neither the Teachers
63.15Retirement Association nor the St. Paul Teachers Retirement Fund Association has an
63.16unfunded actuarial accrued liability as determined in the actuarial valuation prepared
63.17under Minnesota Statutes, section 356.215, by the actuary retained under Minnesota
63.18Statutes, section 356.214.
63.19(b) Minnesota Statutes 2007 Supplement, section 354A.12, subdivisions 3b and 3c,
63.20are repealed effective the first day of the fiscal year next following the fiscal year in which
63.21neither the Teachers Retirement Association nor the St. Paul Teachers Retirement Fund
63.22Association has an unfunded actuarial accrued liability as determined in the actuarial
63.23valuation prepared under Minnesota Statutes, section 356.215, by the actuary retained
63.24under Minnesota Statutes, section 356.214.


63.27    Section 1. Minnesota Statutes 2006, section 354B.20, is amended by adding a
63.28subdivision to read:
63.29    Subd. 19. Unclaimed plan account amounts. "Unclaimed plan account amounts"
63.30means the accounts of any plan participant who has terminated employment by the
63.31Minnesota State Colleges and Universities System or who has died, or of the surviving
63.32spouse, beneficiary, or estate of the participant if the plan administrator is unable to
63.33locate the applicable recipient in accordance with Internal Revenue Service due diligence
63.34requirements.

64.1    Sec. 2. Minnesota Statutes 2006, section 354B.25, subdivision 5, is amended to read:
64.2    Subd. 5. Individual retirement account plan administrative expenses. (a) The
64.3reasonable and necessary administrative expenses of the individual retirement account
64.4plan may be charged to plan participants by the plan sponsor in the form of an annual
64.5fee, an asset-based fee, a percentage of the contributions to the plan, or a combination
64.6thereof. This amount shall be offset by interest earned on both the plan reserves and
64.7unclaimed funds account.
64.8    (b) Any administrative expense charge that is not actually needed for the
64.9administrative expenses of the individual retirement account plan must be refunded to
64.10member accounts.
64.11    (c) The Board of Trustees shall report annually, before October 1, to the advisory
64.12committee created in subdivision 1a on administrative expenses of the plan. The report
64.13must include a detailed accounting of charges for administrative expenses collected
64.14from plan participants and expenditure of the administrative expense charges. The
64.15administrative expense charges collected from plan participants must be kept in a separate
64.16account from any other funds under control of the Board of Trustees and may be used only
64.17for the necessary and reasonable administrative expenses of the plan.

64.18    Sec. 3. Minnesota Statutes 2006, section 354B.25, is amended by adding a subdivision
64.19to read:
64.20    Subd. 6. Disposition of abandoned public pension amounts. (a) Any unclaimed
64.21plan account amounts are presumed to be abandoned, but are not subject to the provisions
64.22of sections 345.31 to 345.60. If the account remains unclaimed after five years following
64.23the date that the plan administrator first attempts to locate the former member, surviving
64.24spouse, or other beneficiary, the unclaimed plan account amount cancels and must be
64.25credited to the reserve account specified in paragraph (b).
64.26    (b) The board must establish a separate account to receive unclaimed plan account
64.27amounts. A portion of this reserve account and any investment earnings attributable to
64.28this reserve account are to be used to offset the reasonable and necessary expenses of
64.29the individual retirement account plan, including costs incurred in efforts to locate lost
64.30participants, surviving spouses, or other beneficiaries.
64.31    (c) If the unclaimed plan account amount exceeded $25 and the inactive member,
64.32surviving spouse, or beneficiary, whichever is applicable, establishes a valid claim to the
64.33forfeited account, the forfeited account is to be reestablished in an amount equal to the
64.34amount originally forfeited. The board must ensure that the reserve account has sufficient
64.35assets to cover any transfers needed to reestablish accounts.

65.1    Sec. 4. Minnesota Statutes 2006, section 354C.12, subdivision 4, is amended to read:
65.2    Subd. 4. Administrative expenses. (a) The Board of Trustees of the Minnesota
65.3State Colleges and Universities is authorized to pay the necessary and reasonable
65.4administrative expenses of the supplemental retirement plan and may bill participants to
65.5recover these expenses. The administrative fees or charges may be charged to participants
65.6as an annual fee, an asset-based fee, a percentage of contributions to the plan, or a
65.7contribution thereof. This amount shall be offset by interest earned on both the plan
65.8reserves and unclaimed funds account.
65.9    (b) Any recovered or assessed amounts that are not needed for the necessary and
65.10reasonable administrative expenses of the plan must be refunded to member accounts.
65.11    (c) The Board of Trustees shall report annually, before October 1, to the advisory
65.12committee created in section 354B.25, subdivision 1a, on administrative expenses of the
65.13plan. The report must include a detailed accounting of charges for administrative expenses
65.14collected from plan participants and expenditure of the administrative expense charges.
65.15The administrative expense charges collected from plan participants must be kept in a
65.16separate account from any other funds under control of the Board of Trustees and may be
65.17used only for the necessary and reasonable administrative expenses of the plan.

65.18    Sec. 5. [354C.155] UNCLAIMED PLAN ACCOUNT AMOUNTS.
65.19    Section 354B.25, subdivision 6, applies to the supplemental retirement plan.

65.20    Sec. 6. Minnesota Statutes 2006, section 354C.165, is amended to read:
65.21354C.165 PROHIBITION ON LOANS OR PRETERMINATION
65.22DISTRIBUTIONS.
65.23    (a) Except as provided in paragraph (c), No participant may obtain a loan or any
65.24distribution from the plan before the participant terminates the employment that gave
65.25rise to plan coverage.
65.26    (b) No amounts to the credit of the plan are assignable either in law or in equity, or
65.27are subject to execution, levy, attachment, garnishment, or other legal process, except as
65.28provided in section 518.58, 518.581, or 518A.53.
65.29    (c) MS 2002 [Expired]
65.30    (d) Except for a participant in a phased retirement program that is part of an approved
65.31collective bargaining agreement, no participant may obtain a distribution from the plan at a
65.32time before the participant terminates the employment that gave rise to the plan coverage.

65.33    Sec. 7. ACTUARIAL IMPACT STUDY; MNSCU TENURED FACULTY
65.34RETIREMENT PLAN COVERAGE CHANGE.
66.1    (a) The Teachers Retirement Association shall have the actuary retained under
66.2Minnesota Statutes, section 356.214, conduct a study of the likely actuarial impact on the
66.3Teachers Retirement Association of potentially permitting current tenure track faculty
66.4members employed by the Minnesota State Colleges and Universities System who have
66.5not yet attained tenure or its equivalent to elect retroactive and prospective retirement
66.6coverage by the Teachers Retirement Association within one year of attaining tenure or
66.7its equivalent, with the retroactive coverage effected by a service credit purchase under
66.8Minnesota Statutes, section 356.551.
66.9    (b) The actuarial study must include an assessment of the likelihood that tenure
66.10track Minnesota State Colleges and Universities System faculty members would elect
66.11retirement coverage by the Teachers Retirement Association that underlies any election
66.12assumption used in the study based on the experience of Minnesota State Colleges and
66.13Universities System faculty members employed during the most recent ten years. The
66.14Minnesota State Colleges and Universities System shall provide the Teachers Retirement
66.15Association with the data on its faculty members necessary to conduct the study.
66.16    (c) The actuarial study must assess the actuarial accrued liability that could be
66.17assumed by the Teachers Retirement Association from potential service credit purchases
66.18by Minnesota State Colleges and Universities System faculty members attaining tenure
66.19or its equivalent, the likely purchase payments related to those potential Minnesota State
66.20Colleges and Universities System faculty member service credit purchases, and the effect
66.21on the Teachers Retirement Association normal cost rate of the potential prospective
66.22inclusion of Minnesota State Colleges and Universities System faculty members upon
66.23attaining tenure.
66.24    (d) The report required under this section must be filed with the executive director of
66.25the Legislative Commission on Pensions and Retirement on or before January 15, 2009.
66.26EFFECTIVE DATE.This section is effective July 1, 2008.


66.29    Section 1. Minnesota Statutes 2006, section 16A.055, subdivision 5, is amended to
66.30read:
66.31    Subd. 5. Retirement fund reporting. (a) The commissioner may not require a
66.32public retirement fund to use financial or actuarial reporting practices or procedures
66.33different from those required by section 356.20 or 356.215.
66.34    (b) The commissioner may contract with the consulting actuary retained under
66.35section 356.214 for the preparation of quadrennial projection valuations as required
67.1under section 356.215, subdivisions 2 and 2a. The initial projection valuation under
67.2this paragraph, if any, is due on May 1, 2003, and subsequent projection valuations are
67.3due on May 1 each fourth year thereafter. The commissioner of finance shall assess the
67.4applicable statewide and major local retirement plan or plans the cost of the quadrennial
67.5projection valuation.

67.6    Sec. 2. Minnesota Statutes 2006, section 356.20, subdivision 1, is amended to read:
67.7    Subdivision 1. Report required. (a) The governing or managing board or the
67.8chief administrative officials officer of the each public pension and retirement funds plan
67.9enumerated in subdivision 2 shall annually prepare and file a financial report following the
67.10close of each fiscal year.
67.11    (b) This requirement also applies to any plan or fund which may be a successor to any
67.12organization so enumerated or to any newly formed retirement plan, fund or association
67.13operating under the control or supervision of any public employee group, governmental
67.14unit, or institution receiving a portion of its support through legislative appropriations.
67.15    (c) The report must be prepared under the supervision and at the direction of
67.16the management of each fund plan and must be signed by the presiding officer of the
67.17managing board of the fund plan and the chief administrative official of the fund plan.

67.18    Sec. 3. Minnesota Statutes 2006, section 356.20, subdivision 2, is amended to read:
67.19    Subd. 2. Covered public pension plans and funds. This section applies to the
67.20following public pension plans:
67.21    (1) the general state employees retirement plan of the Minnesota State Retirement
67.22System;
67.23    (2) the general employees retirement plan of the Public Employees Retirement
67.24Association;
67.25    (3) the Teachers Retirement Association;
67.26    (4) the State Patrol retirement plan;
67.27    (5) the St. Paul Teachers Retirement Fund Association;
67.28    (6) the Duluth Teachers Retirement Fund Association;
67.29    (7) the Minneapolis Employees Retirement Fund;
67.30    (8) the University of Minnesota faculty retirement plan;
67.31    (9) the University of Minnesota faculty supplemental retirement plan;
67.32    (10) the judges retirement fund;
67.33    (11) a police or firefighter's relief association specified or described in section 69.77,
67.34subdivision 1a , or;
68.1    (12) a volunteer firefighter relief association governed by section 69.771, subdivision
68.21 ;
68.3    (12) (13) the public employees police and fire plan of the Public Employees
68.4Retirement Association;
68.5    (13) (14) the correctional state employees retirement plan of the Minnesota State
68.6Retirement System; and
68.7    (14) (15) the local government correctional service retirement plan of the Public
68.8Employees Retirement Association.

68.9    Sec. 4. Minnesota Statutes 2006, section 356.20, subdivision 3, is amended to read:
68.10    Subd. 3. Filing requirement. The financial report is a public record. A copy of the
68.11report or a synopsis of the report containing the information required by this section must
68.12be distributed made available annually to each member of the fund and to the governing
68.13body of each governmental subdivision of the state which makes employers contributions
68.14thereto or in whose behalf taxes are levied for the employers' contribution. A signed copy
68.15of the report must be delivered to the executive director of the Legislative Commission
68.16on Pensions and Retirement and to the Legislative Reference Library not later than six
68.17months after the close of each fiscal year or one month following the completion and
68.18delivery to the retirement fund of the actuarial valuation report of the fund by the actuary
68.19retained under section 356.214, if applicable, whichever is later.

68.20    Sec. 5. Minnesota Statutes 2006, section 356.20, subdivision 4, is amended to read:
68.21    Subd. 4. Contents of financial report. (a) The financial report required by
68.22this section must contain financial statements and disclosures that indicate the financial
68.23operations and position of the retirement plan and fund. The report must conform with
68.24generally accepted governmental accounting principles, applied on a consistent basis. The
68.25report must be audited.
68.26    (b) The report must include, as part of its exhibits or its footnotes, an actuarial
68.27disclosure item based on the actuarial valuation calculations prepared by the actuary
68.28retained under section 356.214 or by the actuary retained by the retirement fund or
68.29plan, whichever applies, according to applicable actuarial requirements enumerated in
68.30section 356.215, and specified in the most recent standards for actuarial work adopted
68.31by the Legislative Commission on Pensions and Retirement. The accrued actuarial value
68.32of assets, the actuarial accrued liabilities, including accrued reserves, and the unfunded
68.33actuarial accrued liability of the fund or plan must be disclosed. The disclosure item
68.34must contain a declaration by the actuary retained under section 356.214 or the actuary
68.35retained by the fund or plan, whichever applies, specifying that the required reserves
69.1for any retirement, disability, or survivor benefits provided under a benefit formula are
69.2computed in accordance with the entry age actuarial cost method and in accordance
69.3with the most recent applicable standards for actuarial work adopted by the Legislative
69.4Commission on Pensions and Retirement.
69.5    (b) Assets of the fund or plan contained in the disclosure item must include the
69.6following statement of the actuarial value of current assets as defined in section 356.215,
69.7subdivision 1 :

69.8 69.9				Value at cost		Value at market
69.10	Cash, cash equivalents, and
69.11		short-term securities		.....		.....
69.12	Accounts receivable			.....		.....
69.13	Accrued investment income			.....		.....
69.14	Fixed income investments			.....		.....
69.15	Equity investments other
69.16		than real estate		.....		.....
69.17	Real estate investments			.....		.....
69.18	Equipment			.....		.....
69.19	Participation in the Minnesota
69.20		postretirement investment
69.21		fund or the retirement
69.22		benefit fund		.....		.....
69.23	Other			.....		.....

69.24	Total assets
69.25		Value at cost				.....
69.26		Value at market				.....
69.27 69.28		Actuarial value of current assets				.....

69.29    (c) The unfunded actuarial accrued liability of the fund or plan contained in the
69.30disclosure item must include the following measures of unfunded actuarial accrued
69.31liability, using the actuarial value of current assets:
69.32    (1) the unfunded actuarial accrued liability, determined by subtracting the current
69.33assets and the present value of future normal costs from the total current and expected
69.34future benefit obligations; and
69.35    (2) the unfunded pension benefit obligation, determined by subtracting the current
69.36assets from the actuarial present value of credited projected benefits.
69.37    If the current assets of the fund or plan exceed the actuarial accrued liabilities, the
69.38excess must be disclosed and indicated as a surplus.
69.39    (d) The pension benefit obligations schedule included in the disclosure must contain
69.40the following information on the benefit obligations:
70.1    (1) the pension benefit obligation, determined as the actuarial present value of
70.2credited projected benefits on account of service rendered to date, separately identified
70.3as follows:

70.4		(i)	for annuitants,
70.5			retirement annuities,
70.6			disability benefits,
70.7			surviving spouse and child benefits;
70.8 70.9		(ii)	for former members without vested rights;
70.10 70.11		(iii)	for deferred annuitants' benefits, including any augmentation;
70.12		(iv)	for active employees,
70.13 70.14			accumulated employee contributions, including allocated investment income,
70.15			employer-financed benefits vested,
70.16			employer-financed benefits nonvested,
70.17			total pension benefit obligation; and

70.18    (2) if there are additional benefits not appropriately covered by the foregoing items
70.19of benefit obligations, a separate identification of the obligation.
70.20    (e) (c) The report must contain an itemized exhibit describing the administrative
70.21expenses of the plan, including, but not limited to, the following items, classified on a
70.22consistent basis from year to year, and with any further meaningful detail:
70.23    (1) personnel expenses;
70.24    (2) communication-related expenses;
70.25    (3) office building and maintenance expenses;
70.26    (4) professional services fees; and
70.27    (5) other expenses.
70.28    (f) (d) The report must contain an itemized exhibit describing the investment
70.29expenses of the plan, including, but not limited to, the following items, classified on a
70.30consistent basis from year to year, and with any further meaningful detail:
70.31    (1) internal investment-related expenses; and
70.32    (2) external investment-related expenses.
70.33    (g) (e) Any additional statements or exhibits or more detailed or subdivided
70.34itemization of a disclosure item that will enable the management of the fund plan to
70.35portray a true interpretation of the fund's plan's financial condition must be included in the
70.36additional statements or exhibits.

70.37    Sec. 6. Minnesota Statutes 2006, section 356.20, subdivision 4a, is amended to read:
71.1    Subd. 4a. Financial report for police or firefighters relief association. For any
71.2police or firefighter's relief association referred to in subdivision 2, clause (11) or (12), a
71.3financial report that is duly filed and meeting that meets the requirements of section 69.051
71.4must be is deemed to have met the requirements of subdivision 4.

71.5    Sec. 7. Minnesota Statutes 2006, section 356.214, subdivision 1, is amended to read:
71.6    Subdivision 1. Joint Actuary retention. (a) The chief administrative officers of the
71.7Minnesota State Retirement System, the Public Employees Retirement Association, the
71.8Teachers Retirement Association, the Duluth Teachers Retirement Fund Association, the
71.9Minneapolis Employees Retirement Fund, and the St. Paul Teachers Retirement Fund
71.10Association, jointly, on behalf of the state, its employees, its taxpayers, and its various
71.11public pension plans, governing board or managing or administrative official of each
71.12public pension plan and retirement fund or plan enumerated in paragraph (b) shall contract
71.13with an established actuarial consulting firm to conduct annual actuarial valuations and
71.14related services for the retirement plans named in paragraph (b). The principal from
71.15the actuarial consulting firm on the contract must be an approved actuary under section
71.16356.215, subdivision 1 , paragraph (c). Prior to becoming effective, the contract under this
71.17section is subject to a review and approval by the Legislative Commission on Pensions
71.18and Retirement.
71.19    (b) The contract for Actuarial services must include the preparation of actuarial
71.20valuations and related actuarial work for the following retirement plans:
71.21    (1) the teachers retirement plan, Teachers Retirement Association;
71.22    (2) the general state employees retirement plan, Minnesota State Retirement System;
71.23    (3) the correctional employees retirement plan, Minnesota State Retirement System;
71.24    (4) the State Patrol retirement plan, Minnesota State Retirement System;
71.25    (5) the judges retirement plan, Minnesota State Retirement System;
71.26    (6) the Minneapolis employees retirement plan, Minneapolis Employees Retirement
71.27Fund;
71.28    (7) the public employees retirement plan, Public Employees Retirement Association;
71.29    (8) the public employees police and fire plan, Public Employees Retirement
71.30Association;
71.31    (9) the Duluth teachers retirement plan, Duluth Teachers Retirement Fund
71.32Association;
71.33    (10) the St. Paul teachers retirement plan, St. Paul Teachers Retirement Fund
71.34Association;
71.35    (11) the legislators retirement plan, Minnesota State Retirement System;
72.1    (12) the elective state officers retirement plan, Minnesota State Retirement System;
72.2and
72.3    (13) local government correctional service retirement plan, Public Employees
72.4Retirement Association.
72.5    (c) The contract contracts must require completion of the annual actuarial valuation
72.6calculations on a fiscal year basis, with the contents of the actuarial valuation calculations
72.7as specified in section 356.215, and in conformity with the standards for actuarial work
72.8adopted by the Legislative Commission on Pensions and Retirement.
72.9    The contract contracts must require completion of annual experience data collection
72.10and processing and a quadrennial published experience study for the plans listed in
72.11paragraph (b), clauses (1), (2), and (7), as provided for in the standards for actuarial work
72.12adopted by the commission. The experience data collection, processing, and analysis
72.13must evaluate the following:
72.14    (1) individual salary progression;
72.15    (2) the rate of return on investments based on the current asset value;
72.16    (3) payroll growth;
72.17    (4) mortality;
72.18    (5) retirement age;
72.19    (6) withdrawal; and
72.20    (7) disablement.
72.21    The contract must include provisions for the preparation of cost analyses by the
72.22jointly retained actuary for proposed legislation that include changes in benefit provisions
72.23or funding policies prior to their consideration by the Legislative Commission on Pensions
72.24and Retirement.
72.25    (d) The actuary retained by the joint retirement systems shall annually prepare a
72.26report to the governing or managing board or administrative official and the legislature,
72.27including a commentary on the actuarial valuation calculations for the plans named in
72.28paragraph (b) and summarizing the results of the actuarial valuation calculations. The
72.29actuary shall include with the report the actuary's any recommendations to the legislature
72.30concerning the appropriateness of the support rates to achieve proper funding of the
72.31retirement plans by the required funding dates. The actuary shall, as part of the quadrennial
72.32experience study, include recommendations to the legislature on the appropriateness of the
72.33actuarial valuation assumptions required for evaluation in the study.
72.34    (e) If the actuarial gain and loss analysis in the actuarial valuation calculations
72.35indicates a persistent pattern of sizable gains or losses, as directed by the joint retirement
72.36systems or as requested by the chair of the Legislative Commission on Pensions and
73.1Retirement, the governing or managing board or administrative official shall direct the
73.2actuary shall to prepare a special experience study for a plan listed in paragraph (b),
73.3clause (3), (4), (5), (6), (8), (9), (10), (11), (12), or (13), in the manner provided for in the
73.4standards for actuarial work adopted by the commission.
73.5    (f) The term of the contract between the joint retirement systems and the actuary
73.6retained may not exceed five years. The joint retirement system administrative officers
73.7shall establish procedures for the consideration and selection of contract bidders and
73.8the requirements for the contents of an actuarial services contract under this section.
73.9The procedures and requirements must be submitted to the Legislative Commission on
73.10Pensions and Retirement for review and comment prior to final approval by the joint
73.11administrators. The contract is subject to the procurement procedures under chapter 16C.
73.12The consideration of bids and the selection of a consulting actuarial firm by the chief
73.13administrative officers must occur at a meeting that is open to the public and reasonable
73.14timely public notice of the date and the time of the meeting and its subject matter must
73.15be given.
73.16    (g) The actuarial services contract may not limit the ability of the Minnesota
73.17legislature and its standing committees and commissions to rely on the actuarial results
73.18of the work prepared under the contract.
73.19    (h) The joint retirement systems shall designate one of the retirement system
73.20executive directors as the actuarial services contract manager.

73.21    Sec. 8. Minnesota Statutes 2006, section 356.214, subdivision 3, is amended to read:
73.22    Subd. 3. Reporting to commission. A copy of the actuarial valuations, and
73.23experience studies, and actuarial cost analyses prepared by the actuary retained by the
73.24joint retirement systems under the a contract provided for in this section must be filed with
73.25the executive director of the Legislative Commission on Pensions and Retirement at the
73.26same time that the document is transmitted to the actuarial services contract manager or
73.27to any other document recipient.

73.28    Sec. 9. Minnesota Statutes 2006, section 356.214, is amended by adding a subdivision
73.29to read:
73.30    Subd. 4. Commission to contract with auditing actuary. (a) The Legislative
73.31Commission on Pensions and Retirement may contract with an established actuarial
73.32consulting firm to audit or review the actuarial valuations, experience studies, and actuarial
73.33cost analyses prepared by the actuary retained by the governing or managing boards, or
73.34administrative officials of each of the plans or funds listed in subdivision 1, paragraph
74.1(b). The principal representative from the actuarial consulting firm so engaged must be an
74.2approved actuary under section 356.215, subdivision 1, paragraph (c).
74.3    (b) Any actuarial consulting firm retained under paragraph (a) will, according to a
74.4schedule determined under an agreement with the Legislative Commission on Pensions
74.5and Retirement, audit the valuation reports submitted by the actuary retained by each
74.6governing or managing board or administrative official, and provide an assessment of the
74.7reasonableness, reliability, and areas of concern or potential improvement in the specific
74.8reports reviewed, the procedures utilized by any particular reporting actuary, or general
74.9modifications to standards, procedures, or assumptions that the commission may wish to
74.10consider. Actuarial firms retained by the retirement funds must cooperate fully and make
74.11available any data or other materials necessary for the commission-retained actuary to
74.12conduct an adequate review and to render advice to the commission.

74.13    Sec. 10. Minnesota Statutes 2006, section 356.215, subdivision 1, is amended to read:
74.14    Subdivision 1. Definitions. (a) For the purposes of sections 3.85 and 356.20 to
74.15356.23 , each of the terms in the following paragraphs has the meaning given.
74.16    (b) "Actuarial valuation" means a set of calculations prepared by the an actuary
74.17retained under section 356.214 if so required under section 3.85, or otherwise, by an
74.18approved actuary, to determine the normal cost and the accrued actuarial liabilities of
74.19a benefit plan, according to the entry age actuarial cost method and based upon stated
74.20assumptions including, but not limited to rates of interest, mortality, salary increase,
74.21disability, withdrawal, and retirement and to determine the payment necessary to amortize
74.22over a stated period any unfunded accrued actuarial liability disclosed as a result of the
74.23actuarial valuation of the benefit plan.
74.24    (c) "Approved actuary" means a person who is regularly engaged in the business
74.25of providing actuarial services and who has at least 15 years of service to major public
74.26employee pension or retirement funds or who is a fellow in the Society of Actuaries.
74.27    (d) "Entry age actuarial cost method" means an actuarial cost method under which
74.28the actuarial present value of the projected benefits of each individual currently covered
74.29by the benefit plan and included in the actuarial valuation is allocated on a level basis over
74.30the service of the individual, if the benefit plan is governed by section 69.773, or over the
74.31earnings of the individual, if the benefit plan is governed by any other law, between the
74.32entry age and the assumed exit age, with the portion of the actuarial present value which is
74.33allocated to the valuation year to be the normal cost and the portion of the actuarial present
74.34value not provided for at the valuation date by the actuarial present value of future normal
74.35costs to be the actuarial accrued liability, with aggregation in the calculation process to be
75.1the sum of the calculated result for each covered individual and with recognition given to
75.2any different benefit formulas which may apply to various periods of service.
75.3    (e) "Experience study" means a report providing experience data and an actuarial
75.4analysis of the adequacy of the actuarial assumptions on which actuarial valuations are
75.5based.
75.6    (f) "Current "Actuarial value of assets" means:
75.7    (1) for the July 1, 2001, actuarial valuation, the market value of all assets as of
75.8June 30, 2001, reduced by:
75.9    (i) 30 percent of the difference between the market value of all assets as of June 30,
75.101999, and the actuarial value of assets used in the July 1, 1999, actuarial valuation;
75.11    (ii) 60 percent of the difference between the actual net change in the market value of
75.12assets between June 30, 1999, and June 30, 2000, and the computed increase in the market
75.13value of assets between June 30, 1999, and June 30, 2000, if the assets had increased at
75.14the percentage preretirement interest rate assumption used in the July 1, 1999, actuarial
75.15valuation; and
75.16    (iii) 80 percent of the difference between the actual net change in the market value
75.17of assets between June 30, 2000, and June 30, 2001, and the computed increase in
75.18the market value of assets between June 30, 2000, and June 30, 2001, if the assets had
75.19increased at the percentage preretirement interest rate assumption used in the July 1,
75.202000, actuarial valuation;
75.21    (2) for the July 1, 2002, actuarial valuation, the market value of all assets as of
75.22June 30, 2002, reduced by:
75.23    (i) ten percent of the difference between the market value of all assets as of June 30,
75.241999, and the actuarial value of assets used in the July 1, 1999, actuarial valuation;
75.25    (ii) 40 percent of the difference between the actual net change in the market value of
75.26assets between June 30, 1999, and June 30, 2000, and the computed increase in the market
75.27value of assets between June 30, 1999, and June 30, 2000, if the assets had increased at
75.28the percentage preretirement interest rate assumption used in the July 1, 1999, actuarial
75.29valuation;
75.30    (iii) 60 percent of the difference between the actual net change in the market value
75.31of assets between June 30, 2000, and June 30, 2001, and the computed increase in
75.32the market value of assets between June 30, 2000, and June 30, 2001, if the assets had
75.33increased at the percentage preretirement interest rate assumption used in the July 1, 2000,
75.34actuarial valuation; and
75.35    (iv) 80 percent of the difference between the actual net change in the market value of
75.36assets between June 30, 2001, and June 30, 2002, and the computed increase in the market
76.1value of assets between June 30, 2001, and June 30, 2002, if the assets had increased at
76.2the percentage preretirement interest rate assumption used in the July 1, 2001, actuarial
76.3valuation; or
76.4    (3) for any actuarial valuation after July 1, 2002, the market value of all assets
76.5as of the preceding June 30, reduced by:
76.6    (i) (1) 20 percent of the difference between the actual net change in the market value
76.7of assets between the June 30 that occurred three years earlier and the June 30 that occurred
76.8four years earlier and the computed increase in the market value of assets over that
76.9fiscal year period if the assets had increased at the percentage preretirement interest rate
76.10assumption used in the actuarial valuation for the July 1 that occurred four years earlier;
76.11    (ii) (2) 40 percent of the difference between the actual net change in the market value
76.12of assets between the June 30 that occurred two years earlier and the June 30 that occurred
76.13three years earlier and the computed increase in the market value of assets over that
76.14fiscal year period if the assets had increased at the percentage preretirement interest rate
76.15assumption used in the actuarial valuation for the July 1 that occurred three years earlier;
76.16    (iii) (3) 60 percent of the difference between the actual net change in the market
76.17value of assets between the June 30 that occurred one year earlier and the June 30 that
76.18occurred two years earlier and the computed increase in the market value of assets over
76.19that fiscal year period if the assets had increased at the percentage preretirement interest
76.20rate assumption used in the actuarial valuation for the July 1 that occurred two years
76.21earlier; and
76.22    (iv) (4) 80 percent of the difference between the actual net change in the market
76.23value of assets between the immediately prior June 30 and the June 30 that occurred one
76.24year earlier and the computed increase in the market value of assets over that fiscal year
76.25period if the assets had increased at the percentage preretirement interest rate assumption
76.26used in the actuarial valuation for the July 1 that occurred one year earlier.
76.27    (g) "Unfunded actuarial accrued liability" means the total current and expected
76.28future benefit obligations, reduced by the sum of current the actuarial value of assets and
76.29the present value of future normal costs.
76.30    (h) "Pension benefit obligation" means the actuarial present value of credited
76.31projected benefits, determined as the actuarial present value of benefits estimated to be
76.32payable in the future as a result of employee service attributing an equal benefit amount,
76.33including the effect of projected salary increases and any step rate benefit accrual rate
76.34differences, to each year of credited and expected future employee service.

76.35    Sec. 11. Minnesota Statutes 2006, section 356.215, subdivision 2, is amended to read:
77.1    Subd. 2. Requirements. (a) It is the policy of the legislature that it is necessary
77.2and appropriate to determine annually the financial status of tax supported retirement and
77.3pension plans for public employees. To achieve this goal:,
77.4    (1) the actuary retained under section 356.214 shall prepare annual actuarial
77.5valuations of the retirement plans enumerated in section 356.214, subdivision 1, paragraph
77.6(b), and quadrennial experience studies of the retirement plans enumerated in section
77.7356.214, subdivision 1 , paragraph (b), clauses (1), (2), and (7); and.
77.8    (2) the commissioner of finance may have prepared by the actuary retained by the
77.9commission, two years after each set of quadrennial experience studies, quadrennial
77.10projection valuations of at least one of the retirement plans enumerated in section 6,
77.11subdivision 1, paragraph (b), for which the commissioner determines that the analysis
77.12may be beneficial.
77.13    (b) The governing or managing board or administrative officials of each public
77.14pension and retirement fund or plan enumerated in section 356.20, subdivision 2, clauses
77.15(9), (10) (11), and (12), shall have prepared by an approved actuary annual actuarial
77.16valuations of their respective funds as provided in this section. This requirement also
77.17applies to any fund or plan that is the successor to any organization enumerated in section
77.18356.20, subdivision 2 , or to the governing or managing board or administrative officials
77.19of any newly formed retirement fund, plan, or association operating under the control or
77.20supervision of any public employee group, governmental unit, or institution receiving a
77.21portion of its support through legislative appropriations, and any local police or fire fund
77.22relief association to which section 356.216 applies.

77.23    Sec. 12. Minnesota Statutes 2006, section 356.215, subdivision 3, is amended to read:
77.24    Subd. 3. Reports. (a) The actuarial valuations required annually must be made as of
77.25the beginning of each fiscal year.
77.26    (b) Two copies of the completed valuation must be delivered to the executive
77.27director of the Legislative Commission on Pensions and Retirement, to the commissioner
77.28of finance, and to the Legislative Reference Library, not later than the first day of the sixth
77.29month occurring after the end of the previous fiscal year.
77.30    (c) Two copies of a quadrennial experience study must be filed with the
77.31executive director of the Legislative Commission on Pensions and Retirement, with the
77.32commissioner of finance, and with the Legislative Reference Library, not later than the
77.33first day of the 11th month occurring after the end of the last fiscal year of the four-year
77.34period which the experience study covers.
78.1    (d) For actuarial valuations and experience studies prepared at the direction of the
78.2Legislative Commission on Pensions and Retirement, two copies of the document must be
78.3delivered to the governing or managing board or administrative officials of the applicable
78.4public pension and retirement fund or plan.

78.5    Sec. 13. Minnesota Statutes 2006, section 356.215, subdivision 8, is amended to read:
78.6    Subd. 8. Interest and salary assumptions. (a) The actuarial valuation must use
78.7the applicable following preretirement interest assumption and the applicable following
78.8postretirement interest assumption:

78.9		preretirement	postretirement
78.10		interest rate	interest rate
78.11	plan	assumption	assumption

78.12	general state employees retirement plan		8.5%	6.0%
78.13 78.14	correctional state employees retirement plan		8.5	6.0
78.15	State Patrol retirement plan		8.5	6.0
78.16	legislators retirement plan		8.5	6.0
78.17	elective state officers retirement plan		8.5	6.0
78.18	judges retirement plan		8.5	6.0
78.19 78.20	general public employees retirement plan		8.5	6.0
78.21 78.22	public employees police and fire retirement plan		8.5	6.0
78.23 78.24	local government correctional service retirement plan		8.5	6.0
78.25	teachers retirement plan		8.5	6.0
78.26	Minneapolis employees retirement plan		6.0	5.0
78.27	Duluth teachers retirement plan		8.5	8.5
78.28	St. Paul teachers retirement plan		8.5	8.5
78.29	Minneapolis Police Relief Association		6.0	6.0
78.30	Fairmont Police Relief Association		5.0	5.0
78.31 78.32	Minneapolis Fire Department Relief Association		6.0	6.0
78.33 78.34	Virginia Fire Department Relief Association		5.0	5.0
78.35 78.36	Bloomington Fire Department Relief Association		6.0	6.0
78.37 78.38	local monthly benefit volunteer firefighters relief associations		5.0	5.0

78.39    (b) Before July 1, 2010, the actuarial valuation must use the applicable following
78.40single rate future salary increase assumption, the applicable following modified single
79.1rate future salary increase assumption, or the applicable following graded rate future
79.2salary increase assumption:
79.3    (1) single rate future salary increase assumption

79.4		future salary
79.5	plan	increase assumption

79.6	legislators retirement plan		5.0%
79.7	elective state officers retirement plan		5.0
79.8 79.9	judges retirement plan		5.0 4.0
79.10	Minneapolis Police Relief Association		4.0
79.11	Fairmont Police Relief Association		3.5
79.12 79.13	Minneapolis Fire Department Relief Association		4.0
79.14	Virginia Fire Department Relief Association		3.5
79.15 79.16	Bloomington Fire Department Relief Association		4.0

79.17    (2) modified single rate future salary increase assumption

79.18			future salary
79.19	plan		increase assumption
79.20 79.21 79.22 79.23 79.24	Minneapolis employees retirement plan		the prior calendar year amount increased first by 1.0198 percent to prior fiscal year date and then increased by 4.0 percent annually for each future year

79.25    (3) select and ultimate future salary increase assumption or graded rate future salary
79.26increase assumption

79.27		future salary
79.28	plan	increase assumption
79.29 79.30	general state employees retirement plan	select calculation and assumption A
79.31 79.32	correctional state employees retirement plan	assumption GH
79.33	State Patrol retirement plan	assumption G
79.34 79.35	general public employees retirement plan	select calculation and assumption B
79.36 79.37	public employees police and fire fund retirement plan	assumption C
79.38 79.39	local government correctional service retirement plan	assumption G
79.40	teachers retirement plan	assumption D
79.41	Duluth teachers retirement plan	assumption E
79.42	St. Paul teachers retirement plan	assumption F

80.1The select calculation is: during the ten-year
80.2designated select period, a designated
80.3percent percentage rate is multiplied by the
80.4result of ten the designated integer minus T,
80.5where T is the number of completed years
80.6of service, and is added to the applicable
80.7future salary increase assumption. The
80.8designated select period is five years and
80.9the designated integer is five for the general
80.10state employees retirement plan and the
80.11general public employees retirement plan.
80.12The designated select period is ten years and
80.13the designated integer is ten for all other
80.14retirement plans covered by this clause. The
80.15designated percent percentage rate is 0.2
80.16percent for the correctional state employees
80.17retirement plan, the State Patrol retirement
80.18plan, the public employees police and fire
80.19plan, and the local government correctional
80.20service plan; and 0.3 is 0.6 percent for
80.21the general state employees retirement
80.22plan, and the general public employees
80.23retirement plan,; and is 0.3 percent for the
80.24teachers retirement plan, the Duluth Teachers
80.25Retirement Fund Association, and the St.
80.26Paul Teachers Retirement Fund Association.
80.27The select calculation for the Duluth Teachers
80.28Retirement Fund Association is 8.00 percent
80.29per year for service years one through seven,
80.307.25 percent per year for service years seven
80.31through eight, and 6.50 percent per year for
80.32service years eight through nine.
80.33    The ultimate future salary increase assumption is:

80.34	age	A	B	C	D	E	F	G
80.35	16	6.95%	6.95%	11.50%	8.20%	8.00%	6.90%	7.7500%
80.36	17	6.90	6.90	11.50	8.15	8.00	6.90	7.7500
81.1	18	6.85	6.85	11.50	8.10	8.00	6.90	7.7500
81.2	19	6.80	6.80	11.50	8.05	8.00	6.90	7.7500
81.3	20	6.75	6.40	11.50	6.00	6.90	6.90	7.7500
81.4	21	6.75	6.40	11.50	6.00	6.90	6.90	7.1454
81.5	22	6.75	6.40	11.00	6.00	6.90	6.90	7.0725
81.6	23	6.75	6.40	10.50	6.00	6.85	6.85	7.0544
81.7	24	6.75	6.40	10.00	6.00	6.80	6.80	7.0363
81.8	25	6.75	6.40	9.50	6.00	6.75	6.75	7.0000
81.9	26	6.75	6.36	9.20	6.00	6.70	6.70	7.0000
81.10	27	6.75	6.32	8.90	6.00	6.65	6.65	7.0000
81.11	28	6.75	6.28	8.60	6.00	6.60	6.60	7.0000
81.12	29	6.75	6.24	8.30	6.00	6.55	6.55	7.0000
81.13	30	6.75	6.20	8.00	6.00	6.50	6.50	7.0000
81.14	31	6.75	6.16	7.80	6.00	6.45	6.45	7.0000
81.15	32	6.75	6.12	7.60	6.00	6.40	6.40	7.0000
81.16	33	6.75	6.08	7.40	6.00	6.35	6.35	7.0000
81.17	34	6.75	6.04	7.20	6.00	6.30	6.30	7.0000
81.18	35	6.75	6.00	7.00	6.00	6.25	6.25	7.0000
81.19	36	6.75	5.96	6.80	6.00	6.20	6.20	6.9019
81.20	37	6.75	5.92	6.60	6.00	6.15	6.15	6.8074
81.21	38	6.75	5.88	6.40	5.90	6.10	6.10	6.7125
81.22	39	6.75	5.84	6.20	5.80	6.05	6.05	6.6054
81.23	40	6.75	5.80	6.00	5.70	6.00	6.00	6.5000
81.24	41	6.75	5.76	5.90	5.60	5.90	5.95	6.3540
81.25	42	6.75	5.72	5.80	5.50	5.80	5.90	6.2087
81.26	43	6.65	5.68	5.70	5.40	5.70	5.85	6.0622
81.27	44	6.55	5.64	5.60	5.30	5.60	5.80	5.9048
81.28	45	6.45	5.60	5.50	5.20	5.50	5.75	5.7500
81.29	46	6.35	5.56	5.45	5.10	5.40	5.70	5.6940
81.30	47	6.25	5.52	5.40	5.00	5.30	5.65	5.6375
81.31	48	6.15	5.48	5.35	5.00	5.20	5.60	5.5822
81.32	49	6.05	5.44	5.30	5.00	5.10	5.55	5.5404
81.33	50	5.95	5.40	5.25	5.00	5.00	5.50	5.5000
81.34	51	5.85	5.36	5.25	5.00	5.00	5.45	5.4384
81.35	52	5.75	5.32	5.25	5.00	5.00	5.40	5.3776
81.36	53	5.65	5.28	5.25	5.00	5.00	5.35	5.3167
81.37	54	5.55	5.24	5.25	5.00	5.00	5.30	5.2826
81.38	55	5.45	5.20	5.25	5.00	5.00	5.25	5.2500
81.39	56	5.35	5.16	5.25	5.00	5.00	5.20	5.2500
81.40	57	5.25	5.12	5.25	5.00	5.00	5.15	5.2500
81.41	58	5.25	5.08	5.25	5.10	5.00	5.10	5.2500
81.42	59	5.25	5.04	5.25	5.20	5.00	5.05	5.2500
81.43	60	5.25	5.00	5.25	5.30	5.00	5.00	5.2500
82.1	61	5.25	5.00	5.25	5.40	5.00	5.00	5.2500
82.2	62	5.25	5.00	5.25	5.50	5.00	5.00	5.2500
82.3	63	5.25	5.00	5.25	5.60	5.00	5.00	5.2500
82.4	64	5.25	5.00	5.25	5.70	5.00	5.00	5.2500
82.5	65	5.25	5.00	5.25	5.70	5.00	5.00	5.2500
82.6	66	5.25	5.00	5.25	5.70	5.00	5.00	5.2500
82.7	67	5.25	5.00	5.25	5.70	5.00	5.00	5.2500
82.8	68	5.25	5.00	5.25	5.70	5.00	5.00	5.2500
82.9	69	5.25	5.00	5.25	5.70	5.00	5.00	5.2500
82.10	70	5.25	5.00	5.25	5.70	5.00	5.00	5.2500
82.11	71	5.25	5.00		5.70

82.12	age	A	B	C	D	E	F	G	H
82.13	16	5.95%	5.95%	11.00%	7.70%	8.00%	6.90%	7.7500%	7.2500%
82.14	17	5.90	5.90	11.00	7.65	8.00	6.90	7.7500	7.2500
82.15	18	5.85	5.85	11.00	7.60	8.00	6.90	7.7500	7.2500
82.16	19	5.80	5.80	11.00	7.55	8.00	6.90	7.7500	7.2500
82.17	20	5.75	5.40	11.00	5.50	6.90	6.90	7.7500	7.2500
82.18	21	5.75	5.40	11.00	5.50	6.90	6.90	7.1454	6.6454
82.19	22	5.75	5.40	10.50	5.50	6.90	6.90	7.0725	6.5725
82.20	23	5.75	5.40	10.00	5.50	6.85	6.85	7.0544	6.5544
82.21	24	5.75	5.40	9.50	5.50	6.80	6.80	7.0363	6.5363
82.22	25	5.75	5.40	9.00	5.50	6.75	6.75	7.0000	6.5000
82.23	26	5.75	5.36	8.70	5.50	6.70	6.70	7.0000	6.5000
82.24	27	5.75	5.32	8.40	5.50	6.65	6.65	7.0000	6.5000
82.25	28	5.75	5.28	8.10	5.50	6.60	6.60	7.0000	6.5000
82.26	29	5.75	5.24	7.80	5.50	6.55	6.55	7.0000	6.5000
82.27	30	5.75	5.20	7.50	5.50	6.50	6.50	7.0000	6.5000
82.28	31	5.75	5.16	7.30	5.50	6.45	6.45	7.0000	6.5000
82.29	32	5.75	5.12	7.10	5.50	6.40	6.40	7.0000	6.5000
82.30	33	5.75	5.08	6.90	5.50	6.35	6.35	7.0000	6.5000
82.31	34	5.75	5.04	6.70	5.50	6.30	6.30	7.0000	6.5000
82.32	35	5.75	5.00	6.50	5.50	6.25	6.25	7.0000	6.5000
82.33	36	5.75	4.96	6.30	5.50	6.20	6.20	6.9019	6.4019
82.34	37	5.75	4.92	6.10	5.50	6.15	6.15	6.8074	6.3074
82.35	38	5.75	4.88	5.90	5.40	6.10	6.10	6.7125	6.2125
82.36	39	5.75	4.84	5.70	5.30	6.05	6.05	6.6054	6.1054
82.37	40	5.75	4.80	5.50	5.20	6.00	6.00	6.5000	6.0000
82.38	41	5.75	4.76	5.40	5.10	5.90	5.95	6.3540	5.8540
82.39	42	5.75	4.72	5.30	5.00	5.80	5.90	6.2087	5.7087
82.40	43	5.65	4.68	5.20	4.90	5.70	5.85	6.0622	5.5622
82.41	44	5.55	4.64	5.10	4.80	5.60	5.80	5.9048	5.4078
82.42	45	5.45	4.60	5.00	4.70	5.50	5.75	5.7500	5.2500
82.43	46	5.35	4.56	4.95	4.60	5.40	5.70	5.6940	5.1940
83.1	47	5.25	4.52	4.90	4.50	5.30	5.65	5.6375	5.1375
83.2	48	5.15	4.48	4.85	4.50	5.20	5.60	5.5822	5.0822
83.3	49	5.05	4.44	4.80	4.50	5.10	5.55	5.5404	5.0404
83.4	50	4.95	4.40	4.75	4.50	5.00	5.50	5.5000	5.0000
83.5	51	4.85	4.36	4.75	4.50	4.90	5.45	5.4384	4.9384
83.6	52	4.75	4.32	4.75	4.50	4.80	5.40	5.3776	4.8776
83.7	53	4.65	4.28	4.75	4.50	4.70	5.35	5.3167	4.8167
83.8	54	4.55	4.24	4.75	4.50	4.60	5.30	5.2826	4.7826
83.9	55	4.45	4.20	4.75	4.50	4.50	5.25	5.2500	4.7500
83.10	56	4.35	4.16	4.75	4.50	4.40	5.20	5.2500	4.7500
83.11	57	4.25	4.12	4.75	4.50	4.30	5.15	5.2500	4.7500
83.12	58	4.25	4.08	4.75	4.60	4.20	5.10	5.2500	4.7500
83.13	59	4.25	4.04	4.75	4.70	4.10	5.05	5.2500	4.7500
83.14	60	4.25	4.00	4.75	4.80	4.00	5.00	5.2500	4.7500
83.15	61	4.25	4.00	4.75	4.90	3.90	5.00	5.2500	4.7500
83.16	62	4.25	4.00	4.75	5.00	3.80	5.00	5.2500	4.7500
83.17	63	4.25	4.00	4.75	5.10	3.70	5.00	5.2500	4.7500
83.18	64	4.25	4.00	4.75	5.20	3.60	5.00	5.2500	4.7500
83.19	65	4.25	4.00	4.75	5.20	3.50	5.00	5.2500	4.7500
83.20	66	4.25	4.00	4.75	5.20	3.50	5.00	5.2500	4.7500
83.21	67	4.25	4.00	4.75	5.20	3.50	5.00	5.2500	4.7500
83.22	68	4.25	4.00	4.75	5.20	3.50	5.00	5.2500	4.7500
83.23	69	4.25	4.00	4.75	5.20	3.50	5.00	5.2500	4.7500
83.24	70	4.25	4.00	4.75	5.20	3.50	5.00	5.2500	4.7500
83.25	71	4.25	4.00		5.20

83.26    (c) Before July 2, 2010, the actuarial valuation must use the applicable following
83.27payroll growth assumption for calculating the amortization requirement for the unfunded
83.28actuarial accrued liability where the amortization retirement is calculated as a level
83.29percentage of an increasing payroll:

83.30		payroll growth
83.31	plan	assumption

83.32	general state employees retirement plan		5.004.50%
83.33	correctional state employees retirement plan		5.004.50
83.34	State Patrol retirement plan		5.00 4.50
83.35	legislators retirement plan		5.00 4.50
83.36	elective state officers retirement plan		5.00
83.37	judges retirement plan		5.00 4.00
83.38	general public employees retirement plan		6.004.50
83.39 83.40	public employees police and fire retirement plan		6.00 4.50
83.41 83.42	local government correctional service retirement plan		6.00 4.50
84.1	teachers retirement plan		5.004.50
84.2	Duluth teachers retirement plan		5.004.50
84.3	St. Paul teachers retirement plan		5.00

84.4    (d) After July 1, 2010, the assumptions set forth in paragraphs (b) and (c) continue to
84.5apply, unless a different salary assumption or a different payroll increase assumption:
84.6    (1) has been proposed by the governing board of the applicable retirement plan;
84.7    (2) is accompanied by the concurring recommendation of the actuary retained under
84.8section 356.214, subdivision 1, if applicable, or by the approved actuary preparing the
84.9most recent actuarial valuation report if section 356.214 does not apply; and
84.10    (3) has been approved or deemed approved under subdivision 18.

84.11    Sec. 14. Minnesota Statutes 2006, section 356.215, subdivision 11, is amended to read:
84.12    Subd. 11. Amortization contributions. (a) In addition to the exhibit indicating the
84.13level normal cost, the actuarial valuation of the retirement plan must contain an exhibit
84.14for financial reporting purposes indicating the additional annual contribution sufficient
84.15to amortize the unfunded actuarial accrued liability and must contain an exhibit for
84.16contribution determination purposes indicating the additional contribution sufficient to
84.17amortize the unfunded actuarial accrued liability. For funds governed by chapters 3A,
84.18352, 352B, 352C, 353, 354, 354A, and 490 the retirement plans listed in subdivision 8,
84.19paragraph (c), the additional contribution must be calculated on a level percentage of
84.20covered payroll basis by the established date for full funding in effect when the valuation
84.21is prepared. For funds governed by chapter 3A, sections 352.90 through 352.951, chapters
84.22352B, 352C, sections 353.63 through 353.68, and chapters 353C, 354A, and 490, the level
84.23percent additional contribution must be calculated, assuming annual payroll growth of 6.5
84.24percent. For funds governed by sections 352.01 through 352.86 and chapter 354, the level
84.25percent additional contribution must be calculated assuming an annual payroll growth of
84.26five percent. For the fund governed by sections 353.01 through 353.46, the level percent
84.27additional contribution must be calculated assuming an annual payroll growth of six
84.28percent at the applicable percentage rate set forth in subdivision 8, paragraph (c). For all
84.29other funds retirement plans, the additional annual contribution must be calculated on a
84.30level annual dollar amount basis.
84.31    (b) For any fund retirement plan other than the Minneapolis Employees Retirement
84.32Fund and, the general employees retirement plan of the Public Employees Retirement
84.33Association general plan, and the St. Paul Teachers Retirement Fund Association, if
84.34there has not been a change in the actuarial assumptions used for calculating the actuarial
84.35accrued liability of the fund, a change in the benefit plan governing annuities and benefits
85.1payable from the fund, a change in the actuarial cost method used in calculating the
85.2actuarial accrued liability of all or a portion of the fund, or a combination of the three,
85.3which change or changes by itself or by themselves without inclusion of any other items
85.4of increase or decrease produce a net increase in the unfunded actuarial accrued liability of
85.5the fund, the established date for full funding is the first actuarial valuation date occurring
85.6after June 1, 2020.
85.7    (c) For any fund or retirement plan other than the Minneapolis Employees
85.8Retirement Fund and the general employees retirement plan of the Public Employees
85.9Retirement Association general plan, if there has been a change in any or all of the
85.10actuarial assumptions used for calculating the actuarial accrued liability of the fund, a
85.11change in the benefit plan governing annuities and benefits payable from the fund, a
85.12change in the actuarial cost method used in calculating the actuarial accrued liability of all
85.13or a portion of the fund, or a combination of the three, and the change or changes, by itself
85.14or by themselves and without inclusion of any other items of increase or decrease, produce
85.15a net increase in the unfunded actuarial accrued liability in the fund, the established date
85.16for full funding must be determined using the following procedure:
85.17    (i) the unfunded actuarial accrued liability of the fund must be determined in
85.18accordance with the plan provisions governing annuities and retirement benefits and the
85.19actuarial assumptions in effect before an applicable change;
85.20    (ii) the level annual dollar contribution or level percentage, whichever is applicable,
85.21needed to amortize the unfunded actuarial accrued liability amount determined under item
85.22(i) by the established date for full funding in effect before the change must be calculated
85.23using the interest assumption specified in subdivision 8 in effect before the change;
85.24    (iii) the unfunded actuarial accrued liability of the fund must be determined in
85.25accordance with any new plan provisions governing annuities and benefits payable from
85.26the fund and any new actuarial assumptions and the remaining plan provisions governing
85.27annuities and benefits payable from the fund and actuarial assumptions in effect before
85.28the change;
85.29    (iv) the level annual dollar contribution or level percentage, whichever is applicable,
85.30needed to amortize the difference between the unfunded actuarial accrued liability amount
85.31calculated under item (i) and the unfunded actuarial accrued liability amount calculated
85.32under item (iii) over a period of 30 years from the end of the plan year in which the
85.33applicable change is effective must be calculated using the applicable interest assumption
85.34specified in subdivision 8 in effect after any applicable change;
86.1    (v) the level annual dollar or level percentage amortization contribution under item
86.2(iv) must be added to the level annual dollar amortization contribution or level percentage
86.3calculated under item (ii);
86.4    (vi) the period in which the unfunded actuarial accrued liability amount determined
86.5in item (iii) is amortized by the total level annual dollar or level percentage amortization
86.6contribution computed under item (v) must be calculated using the interest assumption
86.7specified in subdivision 8 in effect after any applicable change, rounded to the nearest
86.8integral number of years, but not to exceed 30 years from the end of the plan year in
86.9which the determination of the established date for full funding using the procedure set
86.10forth in this clause is made and not to be less than the period of years beginning in the
86.11plan year in which the determination of the established date for full funding using the
86.12procedure set forth in this clause is made and ending by the date for full funding in effect
86.13before the change; and
86.14    (vii) the period determined under item (vi) must be added to the date as of which
86.15the actuarial valuation was prepared and the date obtained is the new established date
86.16for full funding.
86.17    (d) For the Minneapolis Employees Retirement Fund, the established date for full
86.18funding is June 30, 2020.
86.19    (e) For the general employees retirement plan of the Public Employees Retirement
86.20Association, the established date for full funding is June 30, 2031.
86.21    (f) For the Teachers Retirement Association, the established date for full funding is
86.22June 30, 2037.
86.23    (g) For the correctional state employees retirement plan of the Minnesota State
86.24Retirement System, the established date for full funding is June 30, 2038.
86.25    (h) For the judges retirement plan, the established date for full funding is June
86.2630, 2038.
86.27    (i) For the public employees police and fire retirement plan, the established date
86.28for full funding is June 30, 2038.
86.29    (j) For the St. Paul Teachers Retirement Fund Association, the established date for
86.30full funding is June 30 of the twenty-fifth year from the valuation date. In addition to
86.31other requirements of this chapter, the annual actuarial valuation shall contain an exhibit
86.32indicating the funded ratio and the deficiency or sufficiency in annual contributions when
86.33comparing liabilities to the market value of the assets of the fund as of the close of the
86.34most recent fiscal year.
86.35    (g) (k) For the retirement plans for which the annual actuarial valuation indicates
86.36an excess of valuation assets over the actuarial accrued liability, the valuation assets in
87.1excess of the actuarial accrued liability must be recognized as a reduction in the current
87.2contribution requirements by an amount equal to the amortization of the excess expressed
87.3as a level percentage of pay over a 30-year period beginning anew with each annual
87.4actuarial valuation of the plan.
87.5    (l) In addition to calculating the unfunded actuarial accrued liability of the retirement
87.6plan for financial reporting purposes under paragraphs (a) to (j), the actuarial valuation
87.7of the retirement plan must also include a calculation of the unfunded actuarial accrued
87.8liability of the retirement plan for purposes of determining the amortization contribution
87.9sufficient to amortize the unfunded actuarial liability of the Minnesota Post Retirement
87.10Investment Fund. For this exhibit, the calculation must be the unfunded actuarial accrued
87.11liability net of the postretirement adjustment liability funded from the investment
87.12performance of the Minnesota Post Retirement Investment Fund or the retirement benefit
87.13fund.

87.14    Sec. 15. Minnesota Statutes 2006, section 356.215, subdivision 18, is amended to read:
87.15    Subd. 18. Establishment of actuarial assumptions. (a) Before July 2, 2010, the
87.16actuarial assumptions used for the preparation of actuarial valuations under this section
87.17that are other than those set forth in this section preretirement interest, postretirement
87.18interest, salary increase, and payroll increase may be changed only with the approval of
87.19the Legislative Commission on Pensions and Retirement or after a period of one year has
87.20elapsed since the date on which the proposed assumption change or changes were received
87.21by the Legislative Commission on Pensions and Retirement without commission action.
87.22    (b) After July 1, 2010, the actuarial assumptions used for the preparation of actuarial
87.23valuations under this section that are other than postretirement interest and preretirement
87.24interest may be changed only with the approval of the Legislative Commission on
87.25Pensions and Retirement or after a period of one year has elapsed since the date on which
87.26the proposed assumption change or changes were received by the Legislative Commission
87.27on Pensions and Retirement without commission action.
87.28    (b) (c) A change in the applicable actuarial assumptions may be proposed by the
87.29governing board of the applicable pension fund or relief association, by the actuary
87.30retained by the joint retirement systems under section 356.214, by the actuarial advisor to
87.31a pension fund governed by chapter 352, 353, 354, or 354A, or by the actuary retained by
87.32a local police or firefighters relief association governed by sections 69.77 or 69.771 to
87.3369.776 , if one is retained.

87.34    Sec. 16. Minnesota Statutes 2007 Supplement, section 356.96, subdivision 1, is
87.35amended to read:
88.1    Subdivision 1. Definitions. (a) Unless the language or context clearly indicates that
88.2a different meaning is intended, for the purpose of this section, the terms in paragraphs
88.3(b) to (e) have the meanings given them.
88.4    (b) "Chief administrative officer" means the executive director of a covered pension
88.5plan or the executive director's designee or representative.
88.6    (c) "Covered pension plan" means a plan enumerated in section 356.20, subdivision
88.72, clauses (1) to (4), (10), and (12) to (14) (13) to (15), but does not mean the deferred
88.8compensation plan administered under sections 352.96 and 352.97 or to the postretirement
88.9health care savings plan administered under section 352.98.
88.10    (d) "Governing board" means the Board of Trustees of the Public Employees
88.11Retirement Association, the Board of Trustees of the Teachers Retirement Association, or
88.12the Board of Directors of the Minnesota State Retirement System.
88.13    (e) "Person" includes an active, retired, deferred, or nonvested inactive participant in
88.14a covered pension plan or a beneficiary of a participant, or an individual who has applied
88.15to be a participant or who is or may be a survivor of a participant, or a state agency or
88.16other governmental unit that employs active participants in a covered pension plan.

88.17    Sec. 17. APPROPRIATION; LEGISLATIVE COMMISSION ON PENSIONS
88.18AND RETIREMENT.
88.19    $140,000 is appropriated from the general fund to the Legislative Commission on
88.20Pensions and Retirement in fiscal year 2009 in order to cover the costs of any contract
88.21authorized under Minnesota Statutes, section 356.214, subdivision 4. The commissioner
88.22of finance must include these funds in the base level funding for the commission when
88.23preparing forecasts of general fund spending and revenue and initial budget estimates
88.24each biennium, as long as an actuary remains under contract to the commission under
88.25Minnesota Statutes, section 356.214, subdivision 4.

88.26    Sec. 18. REPEALER.
88.27Minnesota Statutes 2006, sections 356.214, subdivision 2; and 356.215, subdivision
88.282a, are repealed.

88.29    Sec. 19. EFFECTIVE DATE.
88.30    Sections 1 to 18 are effective June 30, 2008, and apply to annual financial reports
88.31and actuarial valuations prepared after June 1, 2008.


89.3    Section 1. Minnesota Statutes 2006, section 123B.02, subdivision 15, is amended to
89.4read:
89.5    Subd. 15. Annuity contract; payroll allocation. At the request of an employee
89.6and as part of the employee's compensation arrangement, the board may purchase an
89.7individual annuity contract for an employee for retirement or other purposes and may
89.8make payroll allocations in accordance with such arrangement for the purpose of paying
89.9the entire premium due and to become due under such contract. The allocation must be
89.10made in a manner which will qualify the annuity premiums, or a portion thereof, for the
89.11benefit afforded under section 403(b) of the current Federal Internal Revenue Code or any
89.12equivalent provision of subsequent federal income tax law. The employee shall own such
89.13contract and the employee's rights under the contract shall be nonforfeitable except for
89.14failure to pay premiums. Section 122A.40 shall not be applicable hereto and the board shall
89.15have no liability thereunder because of its purchase of any individual annuity contracts.
89.16This statute shall be applied in a nondiscriminatory manner to employees of the school
89.17district. The identity and number of the available vendors under federal Internal Revenue
89.18Code section 403(b) is a term and condition of employment under section 179A.03.
89.19EFFECTIVE DATE.This section is effective August 1, 2008.

89.20    Sec. 2. Minnesota Statutes 2006, section 352.03, subdivision 4, is amended to read:
89.21    Subd. 4. Duties and powers of board of directors. The board shall:
89.22    (1) elect a chair;
89.23    (2) appoint an executive director;
89.24    (3) establish rules to administer this chapter and chapters 3A, 352B, 352C, 352D,
89.25and 490 and transact the business of the system, subject to the limitations of law;
89.26    (4) consider and dispose of, or take any other action the board of directors deems
89.27appropriate concerning denials of applications for annuities or disability benefits under
89.28this chapter, and complaints of employees and others pertaining to the retirement of
89.29employees and the operation of the system;
89.30    (5) advise the director on any matters relating to the system and carrying out
89.31functions and purposes of this chapter. The board's advice shall control; and
89.32    (6) oversee the administration of the state deferred compensation plan established in
89.33section 352.96 352.965.
89.34    The director and assistant director must be in the unclassified service but appointees
89.35may be selected from civil service lists if desired. The salary of the executive director
90.1must be as provided by section 15A.0815. The salary of the assistant director must be set
90.2in accordance with section 43A.18, subdivision 3.
90.3EFFECTIVE DATE.This section is effective August 1, 2008.

90.4    Sec. 3. [352.965] MINNESOTA STATE DEFERRED COMPENSATION PLAN.
90.5    Subdivision 1. Establishment. (a) The Minnesota state deferred compensation plan
90.6is established. For purposes of this section, "plan" means the Minnesota state deferred
90.7compensation plan, unless the context clearly indicates otherwise. The Minnesota State
90.8Retirement System shall administer the plan.
90.9    (b) The purpose of the plan is to provide a means for a public employee to contribute
90.10a portion of the employee's compensation to a tax-deferred investment account. The plan
90.11is an eligible tax-deferred compensation plan under section 457(b) of the Internal Revenue
90.12Code, United States Code, title 26, section 457(b), and the applicable regulations under
90.13Code of Federal Regulations, title 26, parts 1.457-3 to 1.457-10.
90.14    (c) The board of directors of the Minnesota State Retirement System is the plan
90.15trustee and the board's executive director is the plan administrator. Fiduciary activities of
90.16the plan must be undertaken in a manner consistent with chapter 356A.
90.17    (d) The executive director with the approval of the board of directors shall adopt and
90.18amend, as required to maintain tax-qualified status, a written plan document specifying the
90.19material terms and conditions for eligibility, benefits, applicable limitations, and the time
90.20and form under which benefit distributions can be made. With the approval of the board
90.21of directors, the executive director may also establish policies and procedures necessary
90.22for the administration of the deferred compensation plan.
90.23    (e) The plan document shall include provisions that are necessary to cause the plan
90.24to be an eligible deferred compensation plan within the meaning of section 457(b).
90.25The plan document may provide additional administrative and substantive provisions
90.26consistent with state law, provided those provisions will not cause the plan to fail to be an
90.27eligible deferred compensation plan within the meaning of section 457(b) and may include
90.28provisions for certain optional features and services.
90.29    (f) The board of directors may authorize the executive director to establish and
90.30administer a Roth 457 plan if authorized by the Internal Revenue Code or a Roth
90.31individual retirement account as defined under section 408A of the Internal Revenue Code.
90.32    (g) All amounts contributed to the deferred compensation plan and all earnings
90.33on those amounts must be held in trust, in custodial accounts, or in qualifying annuity
90.34contracts for the exclusive benefit of the plan participants and beneficiaries, as required by
91.1section 457(g) of the Internal Revenue Code and in accordance with sections 356.001 and
91.2356A.06, subdivision 1.
91.3    (h) The information and data maintained in the accounts of the participants and
91.4beneficiaries are private data and shall not be disclosed to anyone other than the participant
91.5or beneficiary pursuant to a court order or pursuant to section 356.49.
91.6    (i) The plan document is not subject to the rule adoption process under the
91.7Administrative Procedures Act, including section 14.386, but must conform with
91.8applicable federal and state law.
91.9    Subd. 2. Right to participate in the deferred compensation plan. At the request
91.10of an officer or employee of the state, an officer or employee of a political subdivision, or
91.11an employee covered by a retirement fund in section 356.20, subdivision 2, the appointing
91.12authority shall defer the payment of part of the compensation of the public officer or
91.13employee through payroll deduction. The amount to be deferred must be as provided
91.14in a written agreement between the officer or employee and the public employer. The
91.15agreement must be in a form specified by the executive director of the Minnesota State
91.16Retirement System and must be consistent with the requirements for an eligible plan under
91.17federal and state tax laws, regulations, and rulings.
91.18    Subd. 3. Failure to implement plan. The public employer must complete
91.19implementation of the deferred compensation plan within 45 days of the request as
91.20provided in subdivision 2. If the public employer fails to implement the deferred
91.21compensation plan, the public employer may not defer compensation under any existing
91.22or new deferred compensation plan from the date of the request until the date on which the
91.23deferred compensation plan provided for in this section is implemented. Upon the petition
91.24of a public officer or employee, the executive director of the Minnesota State Retirement
91.25System may order the public officer's or employee's public employer to implement the
91.26deferred compensation plan provided for in this section and may enforce that order
91.27in appropriate legal proceedings.
91.28    Subd. 4. Plan investments. (a) Investments under the plan may include:
91.29    (1) shares in the Minnesota supplemental investment fund established in section
91.3011A.17 that are selected to be offered under the plan by the State Board of Investment;
91.31    (2) saving accounts in federally insured financial institutions;
91.32    (3) life insurance contracts, fixed annuity and variable annuity contracts from
91.33companies that are subject to regulation by the commissioner of commerce;
91.34    (4) investment options from open-end investment companies registered under the
91.35federal Investment Company Act of 1940, United States Code, title 15, sections 80a-1
91.36to 80a-64;
92.1    (5) investment options from a firm that is a registered investment advisor under the
92.2Investment Advisers Act of 1940, United States Code, title 15, sections 80b-1 to 80b-21;
92.3    (6) investment options of a bank as defined in United States Code, title 15, section
92.480b-2, subsection (a), paragraph (2), or a bank holding company as defined in the Bank
92.5Holding Company Act of 1956, United States Code, title 12, section 1841, subsection
92.6(a), paragraph (1); or
92.7    (7) a combination of clause (1), (2), (3), (4), (5), or (6), as provided by the plan as
92.8specified by the participant.
92.9    (b) All amounts contributed to the deferred compensation plan and all earnings
92.10on those amounts must be held for the exclusive benefit of the plan participants and
92.11beneficiaries. These amounts must be held in trust, in custodial accounts, or in qualifying
92.12annuity contracts as required by federal law in accordance with section 356A.06,
92.13subdivision 1. This subdivision does not authorize an employer contribution, except as
92.14authorized in section 356.24, subdivision 1, paragraph (a), clause (5). The state, political
92.15subdivision, or other employing unit is not responsible for any loss that may result from
92.16investment of the deferred compensation.
92.17    Subd. 5. State Board of Investment to determine investments. (a) The State
92.18Board of Investment shall determine the investment products to be made available under
92.19the plan and may retain appropriate consulting services to assist in making the selections.
92.20At a minimum, the State Board of Investment shall consider the following:
92.21    (1) the experience and ability of the financial institution to provide benefits and
92.22products that are suited to meet the needs of plan participants;
92.23    (2) the relationship of those benefits and products provided by the financial
92.24institution to their cost;
92.25    (3) the financial strength and stability of the financial institution; and
92.26    (4) the fees and expenses associated with the investment products in comparison to
92.27other products of similar risk and rates of return.
92.28    (b) If the State Board of Investment so elects, it may solicit bids for options under
92.29subdivision 4, clauses (2), (3), (4), (5), and (6). The State Board of Investment may retain
92.30consulting services to assist in soliciting and evaluating bids and in the periodic review of
92.31companies offering options under subdivision 4, clauses (3), (4), (5), and (6). The periodic
92.32review must occur at least every two years. The State Board of Investment may annually
92.33establish a budget for its costs in soliciting, evaluation, and periodic review processes. All
92.34options in subdivision 4 must be presented in an unbiased manner and in a manner that
92.35conforms to rules adopted by the executive director, be reported on a periodic basis to all
92.36participants in the deferred compensation plan, and not be the subject of unreasonable
93.1solicitation of participants in the plan. The State Board of Investment may charge a
93.2proportional share of all costs related to the periodic review to each company currently
93.3under contract and may charge a proportional share of all costs related to soliciting and
93.4evaluating bids to each company selected by the State Board of Investment.
93.5    (c) Under the procedures set forth in the plan document, participants may select the
93.6funds or combination of funds within which to invest and may reallocate those investments
93.7as provided in the plan document and procedures established by the executive director.
93.8    (d) This section does not authorize an employer contribution, except as authorized in
93.9section 356.24, subdivision 1, paragraph (a), clause (5).
93.10    (e) The state, the Minnesota State Retirement System, the executive director and
93.11board of directors of the system, the State Board of Investment, and participating public
93.12employers are not liable and not responsible for any loss that may result from investment
93.13of the deferred compensation or the investment choices made by the participants.
93.14    Subd. 6. Plan administrative expenses. (a) The reasonable and necessary
93.15administrative expenses of the deferred compensation plan may be charged to plan
93.16participants in the form of an annual fee, an asset-based fee, a percentage of the
93.17contributions to the plan, or a combination thereof, as set forth in the plan document. The
93.18executive director of the system at the direction of the board of directors shall establish
93.19procedures to carry out this section including allocation of administrative costs of the plan
93.20to participants. Processes and procedures shall be set forth in the plan document. Fees
93.21cannot be charged on contributions and investment returns attributable to contributions
93.22made to the Minnesota supplemental investment funds before July 1, 1992.
93.23    (b) The plan document must conform to federal and state tax laws, regulations, and
93.24rulings, and is not subject to the Administrative Procedure Act.
93.25    (c) The executive director may contract with a third party to perform administrative
93.26and record keeping functions. The executive director may solicit bids and negotiate such
93.27contracts.
93.28    (d) The board of directors may authorize a third-party investment consultant to
93.29provide investment information and advice, provided that the offering of such information
93.30and advice is consistent with the investment advice requirements applicable to private
93.31plans under Title VI, subtitle A, of the Pension Protection Act of 2006, Public Law
93.32109-280, section 601.
93.33    Subd. 7. Other laws not applicable. Except as provided in this section, no
93.34provisions of this chapter or other law specifically referring to this chapter applies to this
93.35section unless the Minnesota deferred compensation plan is specifically referenced.
94.1    Subd. 8. Exemption from process. No amount of deferred compensation is
94.2assignable or subject to execution, levy, attachment, garnishment, or other legal process,
94.3except as provided in section 518.58, 518.581, or 518A.53.
94.4    Subd. 9. Missing participants. The plan document shall establish procedures to
94.5assist in locating participants. If a participant cannot be located the participant's benefits
94.6shall be deemed abandoned and the provisions of section 356.65 shall apply to their
94.7disposition.
94.8EFFECTIVE DATE.This section is effective August 1, 2008.

94.9    Sec. 4. Minnesota Statutes 2006, section 352.97, is amended to read:
94.10352.97 PRIOR DEFERRED COMPENSATION PLANS; CONSTRUCTION.
94.11    Sections 352.96 352.965 and 352.97 do not preempt, prohibit, ratify, or approve any
94.12other deferred compensation plan established before or after June 3, 1975.

94.13    Sec. 5. Minnesota Statutes 2006, section 353D.12, subdivision 4, is amended to read:
94.14    Subd. 4. Authorized rollovers. To the extent allowed by federal law, the employee
94.15purchase amount may be made with funds distributed from: (1) a plan qualified under
94.16section 401(a) of the federal Internal Revenue Code, as amended; (2) an annuity qualified
94.17under section 403(a) of the federal Internal Revenue Code, as amended; (3) an individual
94.18retirement account used solely to receive a nontaxable rollover from that type of plan or
94.19annuity; (4) the state deferred compensation plan authorized under section 352.96 352.965
94.20and qualified under section 457 of the federal Internal Revenue Code, as amended; or (5)
94.21another tax qualified plan or annuity that authorizes rollovers. The participating elected
94.22local government official shall supply sufficient written documentation that the transfer
94.23amounts are eligible for tax-free rollover treatment. An authorized tax-free rollover, plus
94.24any other purchase amount payments under this section, including subdivision 6, may not
94.25exceed the limitation in subdivision 2, paragraph (a). Notwithstanding any provision of
94.26state law or rule to the contrary, to the extent permitted under federal law, the employee
94.27purchase amount may be transferred from the state deferred compensation plan before the
94.28employee terminates public employment.
94.29EFFECTIVE DATE.This section is effective August 1, 2008.

94.30    Sec. 6. Minnesota Statutes 2006, section 356.24, subdivision 1, is amended to read:
94.31    Subdivision 1. Restriction; exceptions. (a) It is unlawful for a school district
94.32or other governmental subdivision or state agency to levy taxes for, or to contribute
94.33public funds to a supplemental pension or deferred compensation plan that is established,
95.1maintained, and operated in addition to a primary pension program for the benefit of the
95.2governmental subdivision employees other than:
95.3    (1) to a supplemental pension plan that was established, maintained, and operated
95.4before May 6, 1971;
95.5    (2) to a plan that provides solely for group health, hospital, disability, or death
95.6benefits;
95.7    (3) to the individual retirement account plan established by chapter 354B;
95.8    (4) to a plan that provides solely for severance pay under section 465.72 to a retiring
95.9or terminating employee;
95.10    (5) for employees other than personnel employed by the Board of Trustees of the
95.11Minnesota State Colleges and Universities and covered under the Higher Education
95.12Supplemental Retirement Plan under chapter 354C, but including city managers covered
95.13by an alternative retirement arrangement under section 353.028, subdivision 3, paragraph
95.14(a), or by the defined contribution plan of the Public Employees Retirement Association
95.15under section 353.028, subdivision 3, paragraph (b), if the supplemental plan coverage is
95.16provided for in a personnel policy of the public employer or in the collective bargaining
95.17agreement between the public employer and the exclusive representative of public
95.18employees in an appropriate unit or in the individual employment contract between a city
95.19and a city manager, and if for each available investment all fees and historic rates of return
95.20for the prior one-, three-, five-, and ten-year periods, or since inception, are disclosed in an
95.21easily comprehended document not to exceed two pages, in an amount matching employee
95.22contributions on a dollar for dollar basis, but not to exceed an employer contribution of
95.23$2,000 a one-half of the available elective deferral permitted per year per employee,
95.24under the Internal Revenue Code:
95.25    (i) to the state of Minnesota deferred compensation plan under section 352.96
95.26352.965; or
95.27    (ii) in payment of the applicable portion of the contribution made to any investment
95.28eligible under section 403(b) of the Internal Revenue Code, if the employing unit has
95.29complied with any applicable pension plan provisions of the Internal Revenue Code with
95.30respect to the tax-sheltered annuity program during the preceding calendar year; or
95.31    (iii) any other deferred compensation plan offered by the employer under section
95.32457 of the Internal Revenue Code;
95.33    (6) for personnel employed by the Board of Trustees of the Minnesota State Colleges
95.34and Universities and not covered by clause (5), to the supplemental retirement plan under
95.35chapter 354C, if the supplemental plan coverage is provided for in a personnel policy
95.36or in the collective bargaining agreement of the public employer with the exclusive
96.1representative of the covered employees in an appropriate unit, in an amount matching
96.2employee contributions on a dollar for dollar basis, but not to exceed an employer
96.3contribution of $2,700 a year for each employee;
96.4    (7) to a supplemental plan or to a governmental trust to save for postretirement
96.5health care expenses qualified for tax-preferred treatment under the Internal Revenue
96.6Code, if the supplemental plan coverage is provided for in a personnel policy or in the
96.7collective bargaining agreement of a public employer with the exclusive representative of
96.8the covered employees in an appropriate unit;
96.9    (8) to the laborers national industrial pension fund or to a laborers local pension
96.10fund for the employees of a governmental subdivision who are covered by a collective
96.11bargaining agreement that provides for coverage by that fund and that sets forth a fund
96.12contribution rate, but not to exceed an employer contribution of $5,000 per year per
96.13employee;
96.14    (9) to the plumbers and pipefitters national pension fund or to a plumbers and
96.15pipefitters local pension fund for the employees of a governmental subdivision who are
96.16covered by a collective bargaining agreement that provides for coverage by that fund and
96.17that sets forth a fund contribution rate, but not to exceed an employer contribution of
96.18$5,000 per year per employee;
96.19    (10) to the international union of operating engineers pension fund for the employees
96.20of a governmental subdivision who are covered by a collective bargaining agreement that
96.21provides for coverage by that fund and that sets forth a fund contribution rate, but not to
96.22exceed an employer contribution of $5,000 per year per employee;
96.23    (11) to a supplemental plan organized and operated under the federal Internal
96.24Revenue Code, as amended, that is wholly and solely funded by the employee's
96.25accumulated sick leave, accumulated vacation leave, and accumulated severance pay; or
96.26    (12) to the International Association of Machinists national pension fund for the
96.27employees of a governmental subdivision who are covered by a collective bargaining
96.28agreement that provides for coverage by that fund and that sets forth a fund contribution
96.29rate, but not to exceed an employer contribution of $5,000 per year per employee.; or
96.30    (13) for employees of United Hospital District, Blue Earth, to the state of Minnesota
96.31deferred compensation program, if the employee makes a contribution, in an amount that
96.32does not exceed the total percentage of covered salary under section 353.27, subdivisions
96.333 and 3a.
96.34    (b) No governmental subdivision may make a contribution to a deferred
96.35compensation plan operating under section 457 of the Internal Revenue Code for volunteer
97.1or emergency on-call firefighters in lieu of providing retirement coverage under the federal
97.2old age, survivors, and disability insurance program.
97.3EFFECTIVE DATE.Paragraph (a), clause (13), is effective July 1, 2008. The
97.4balance of this section is effective August 1, 2008.

97.5    Sec. 7. Minnesota Statutes 2007 Supplement, section 356.96, subdivision 1, is
97.6amended to read:
97.7    Subdivision 1. Definitions. (a) Unless the language or context clearly indicates that
97.8a different meaning is intended, for the purpose of this section, the terms in paragraphs
97.9(b) to (e) have the meanings given them.
97.10    (b) "Chief administrative officer" means the executive director of a covered pension
97.11plan or the executive director's designee or representative.
97.12    (c) "Covered pension plan" means a plan enumerated in section 356.20, subdivision
97.132, clauses (1) to (4), (10), and (12) to (14), but does not mean the deferred compensation
97.14plan administered under sections 352.96 352.965 and 352.97 or to the postretirement
97.15health care savings plan administered under section 352.98.
97.16    (d) "Governing board" means the Board of Trustees of the Public Employees
97.17Retirement Association, the Board of Trustees of the Teachers Retirement Association, or
97.18the Board of Directors of the Minnesota State Retirement System.
97.19    (e) "Person" includes an active, retired, deferred, or nonvested inactive participant in
97.20a covered pension plan or a beneficiary of a participant, or an individual who has applied
97.21to be a participant or who is or may be a survivor of a participant, or a state agency or
97.22other governmental unit that employs active participants in a covered pension plan.
97.23EFFECTIVE DATE.This section is effective August 1, 2008.

97.24    Sec. 8. Minnesota Statutes 2006, section 356B.10, subdivision 3, is amended to read:
97.25    Subd. 3. Contracting procedures. (a) The commissioner may enter into a contract
97.26for facilities with a contractor to furnish the architectural, engineering, and related services
97.27as well as the labor, materials, supplies, equipment, and related construction services on
97.28the basis of a request for qualifications and competitive responses received through a
97.29request for proposals process that must include the items listed in paragraphs (b) to (i).
97.30    (b) Before issuing a request for qualifications and a request for proposals, the
97.31commissioner, with the assistance of the boards, shall prepare performance criteria and
97.32specifications that include:
97.33    (1) a general floor plan or layout indicating the general dimensions of the public
97.34building and space requirements;
98.1    (2) design criteria for the exterior and site area;
98.2    (3) performance specifications for all building systems and components to ensure
98.3quality and cost efficiencies;
98.4    (4) conceptual floor plans for systems space;
98.5    (5) preferred types of interior finishes, styles of windows, lighting and outlets, doors,
98.6and features such as built-in counters and telephone wiring;
98.7    (6) mechanical and electrical requirements;
98.8    (7) special interior features required; and
98.9    (8) a completion schedule.
98.10    (c) The commissioner shall first solicit statements of qualifications from eligible
98.11contractors and select more than one qualified contractor based upon experience, technical
98.12competence, past performance, capability to perform, and other appropriate facts.
98.13Contractors selected under this process must be, employ, or have as a partner, member,
98.14coventurer, or subcontractor, persons licensed and registered under chapter 326 to provide
98.15the services required to design and complete the project. The commissioner does not
98.16have to select any of the respondents if none reasonably fulfill the criteria set forth in
98.17this paragraph.
98.18    (d) The contractors selected shall be asked to respond to a request for proposals.
98.19Responses must include site plans, design concept, elevation, statement of material to
98.20be used, floor layouts, a detailed development budget, and a total cost to complete the
98.21project. The proposal must indicate that the contractor obtained at least two proposals
98.22from subcontractors for each item of work and must set forth how the subcontractors
98.23were selected. The commissioner, with the assistance of the boards, shall evaluate the
98.24proposals based upon design, cost, quality, aesthetics, and the best overall value to the
98.25state pension funds. The commissioner need not select any of the proposals submitted
98.26and reserves the right to reject any and all proposals, and may terminate the process or
98.27revise the request for proposals and solicit new proposals if the commissioner determines
98.28that the best interests of the pension funds would be better served by doing so. Proposals
98.29submitted are nonpublic data until the contract is awarded.
98.30    (e) The contractor selected must comply with sections 574.26 to 574.261. Before
98.31executing a final contract, the contractor selected shall certify a firm construction price
98.32and completion date.
98.33    (f) The commissioner may consider building sites in the city of St. Paul and
98.34surrounding suburbs.
98.35    (g) Any land, building, or facility leased, constructed, or acquired and any leasehold
98.36interest acquired under this section must be held by the state in trust for the three retirement
99.1systems as tenants in common. Each retirement system fund must consider its interest as a
99.2fixed asset of its pension fund in accordance with governmental accounting standards.
99.3    (h) The commissioner may lease to another governmental subdivision, to a private
99.4company under contract with the State Board of Investment, or with the Board of Directors
99.5of the Minnesota State Retirement System, whichever applies, to provide deferred
99.6compensation services under section 352.96 352.965, any portion of the funds' building
99.7and lands that is not required for their direct use upon terms and conditions they deem to
99.8be in the best interest of the pension funds. Any income accruing from the rentals must
99.9be separately accounted for and utilized to offset ongoing administrative expenses and
99.10any excess must be carried forward for future administrative expenses. The commissioner
99.11may also enter into lease agreements for the establishment of satellite offices should the
99.12boards find them to be necessary in order to assure their members reasonable access to
99.13their services. The commissioner may lease under section 16B.24 any portion of the
99.14facilities not required for the direct use of the boards.
99.15    (i) The boards shall formulate and adopt a written working agreement that sets forth
99.16the nature of each retirement system's ownership interest, the duties and obligations of
99.17each system toward the construction, operation, and maintenance costs of its facilities, and
99.18identifies one retirement fund to serve as manager for operating and maintenance purposes.
99.19The boards may contract with independent third parties for maintenance-related activities,
99.20services, and supplies, and may use the services of the Department of Administration
99.21where economically feasible to do so. If the boards cannot agree or resolve a dispute
99.22about operations or maintenance of the facilities, they may request the commissioner of
99.23administration to appoint a representative from the department's real estate management
99.24division to serve as arbitrator of the dispute with authority to issue a written resolution
99.25of the dispute.
99.26EFFECTIVE DATE.This section is effective August 1, 2008.

99.27    Sec. 9. Minnesota Statutes 2006, section 363A.36, subdivision 1, is amended to read:
99.28    Subdivision 1. Scope of application. (a) For all contracts for goods and services in
99.29excess of $100,000, no department or agency of the state shall accept any bid or proposal
99.30for a contract or agreement from any business having more than 40 full-time employees
99.31within this state on a single working day during the previous 12 months, unless the
99.32commissioner is in receipt of the business' affirmative action plan for the employment of
99.33minority persons, women, and qualified disabled individuals. No department or agency of
99.34the state shall execute any such contract or agreement until the affirmative action plan
99.35has been approved by the commissioner. Receipt of a certificate of compliance issued by
100.1the commissioner shall signify that a firm or business has an affirmative action plan that
100.2has been approved by the commissioner. A certificate shall be valid for a period of two
100.3years. A municipality as defined in section 466.01, subdivision 1, that receives state
100.4money for any reason is encouraged to prepare and implement an affirmative action plan
100.5for the employment of minority persons, women, and the qualified disabled and submit the
100.6plan to the commissioner.
100.7    (b) This paragraph applies to a contract for goods or services in excess of $100,000
100.8to be entered into between a department or agency of the state and a business that is
100.9not subject to paragraph (a), but that has more than 40 full-time employees on a single
100.10working day during the previous 12 months in the state where the business has its primary
100.11place of business. A department or agency of the state may not execute a contract or
100.12agreement with a business covered by this paragraph unless the business has a certificate
100.13of compliance issued by the commissioner under paragraph (a) or the business certifies
100.14that it is in compliance with federal affirmative action requirements.
100.15    (c) This section does not apply to contracts entered into by the State Board of
100.16Investment for investment options under section 352.96 352.965, subdivision 4.
100.17EFFECTIVE DATE.This section is effective August 1, 2008.

100.18    Sec. 10. Minnesota Statutes 2006, section 383B.914, subdivision 7, is amended to read:
100.19    Subd. 7. Participation in state deferred compensation plan. (a) Existing
100.20employees of the corporation, at the election of the corporation, if otherwise qualified,
100.21are eligible to participate in the Hennepin County supplemental retirement plan under
100.22sections 383B.46 and 383B.52.
100.23    (b) Existing and future employees of the corporation, at the election of the
100.24corporation, are eligible to participate in the Minnesota state deferred compensation
100.25plan under section 352.96 352.965, the postretirement health care savings plan under
100.26section 352.98, and all other deferred compensation arrangements for which all persons
100.27employed by the county whose employment is accounted for in the county enterprise fund
100.28for HCMC were eligible.
100.29EFFECTIVE DATE.This section is effective August 1, 2008.

100.30    Sec. 11. Minnesota Statutes 2006, section 518.003, subdivision 8, is amended to read:
100.31    Subd. 8. Public pension plan. "Public pension plan" means a pension plan or
100.32fund specified in section 356.20, subdivision 2, or 356.30, subdivision 3, the deferred
100.33compensation plan specified in section 352.96 352.965, or any retirement or pension plan
100.34or fund, including a supplemental retirement plan or fund, established, maintained, or
101.1supported by a governmental subdivision or public body whose revenues are derived from
101.2taxation, fees, assessments, or from other public sources.
101.3EFFECTIVE DATE.This section is effective August 1, 2008.

101.4    Sec. 12. REPEALER.
101.5Minnesota Statutes 2006, section 352.96; and Minnesota Rules, parts 7905.0100;
101.67905.0200; 7905.0300; 7905.0400; 7905.0500; 7905.0600; 7905.0700; 7905.0800;
101.77905.0900; 7905.1000; 7905.1100; 7905.1200; 7905.1300; 7905.1400; 7905.1500;
101.87905.1600; 7905.1700; 7905.1800; 7905.1900; 7905.2000; 7905.2100; 7905.2200;
101.97905.2300; 7905.2400; 7905.2450; 7905.2500; 7905.2560; 7905.2600; 7905.2700;
101.107905.2800; and 7905.2900, are repealed.
101.11EFFECTIVE DATE.This section is effective August 1, 2008.


101.15    Section 1. Minnesota Statutes 2007 Supplement, section 353.656, subdivision 1,
101.16is amended to read:
101.17    Subdivision 1. Duty disability; computation of benefits. (a) A member of the
101.18police and fire plan who is determined to qualify for duty disability as defined in section
101.19353.01 , subdivision 41, shall receive disability benefits during the period of such disability
101.20in an amount equal to 60 percent of the average salary as defined in section 353.01,
101.21subdivision 17a , plus an additional percent specified under section 356.315, subdivision 6,
101.22of that average salary for each year of service in excess of 20 years.
101.23    (b) To be eligible for a benefit under paragraph (a), the member must have:
101.24    (1) not met the requirements for a retirement annuity under section 353.651,
101.25subdivision 1; or
101.26    (2) met the requirements under that subdivision, but does not have at least 20 years
101.27of allowable service credit.
101.28    (c) If paragraph (b), clause (2), applies, the disability benefit must be paid for a
101.29period of 60 months from the disability benefit accrual date and at the end of that period
101.30is subject to provisions of subdivision 5a.
101.31    (d) If the disability under this subdivision occurs before the member has at least five
101.32years of allowable service credit in the police and fire plan, the disability benefit must be
101.33computed on the average salary from which deductions were made for contribution to
101.34the police and fire fund.
102.1EFFECTIVE DATE.This section is effective retroactively from July 1, 2007.


102.5    Section 1. [423A.021] DEFINED POSTRETIREMENT BENEFITS.
102.6    Subdivision 1. Pension unit increase. For a salaried firefighters relief association in
102.7a city of the first class with a population greater than 300,000, when the actuarial value
102.8of assets of the special fund first exceeds 110 percent of the actuarial accrued liabilities,
102.9according to an annual actuarial valuation occurring after the effective date of this section
102.10and performed in accordance with sections 356.215 and 356.216, each service pensioner,
102.11joint survivor annuitant, and surviving spouse member is entitled to a permanent benefit
102.12increase. The revised benefit is an increase of one unit for a service pensioner, not to
102.13exceed 43 units, an increase from 22 to 23 units for a surviving spouse benefit, and an
102.14increase from 42.3 to 43.2 units for unmarried service pensioners. The association shall
102.15pay the increased benefit beginning January 1 of the year following the year for which the
102.16valuation was prepared. If adding an additional unit results in raising total units past the
102.17maximum, a partial unit may be added to reach the maximum. For joint survivor annuities,
102.18this subdivision authorizes a benefit increase actuarially equivalent to one unit.
102.19    Subd. 2. Unit precedence. The additional benefit provided for in subdivision
102.201 shall take precedence over any other benefit provided when the fund reaches 110
102.21percent funding. In preparing the actuarial valuation under sections 356.215 and 356.216,
102.22the actuary for the fund shall first account for the benefit provided in subdivision 1 in
102.23determining the plan's funded ratio. No other benefit payments may be made by the
102.24association until the actuarial impact of the benefit provided for in subdivision 1 has been
102.25determined and factored into the funding ratio.
102.26    Subd. 3. Excess investment income. For a salaried firefighters relief association in
102.27a city of the first class with a population greater than 300,000 that no longer is entitled to
102.28state general fund aid pursuant to section 423A.02, the association shall apply any assets
102.29that constitute excess investment income to the payment of a supplemental postretirement
102.30benefit to an eligible member notwithstanding any other limitation of law. Any amount
102.31of excess investment income not otherwise used to the payment of a supplemental
102.32postretirement benefit to an eligible member shall be applied to reduce the municipality's
102.33property tax levy to the association in the year following the payment of the postretirement
102.34benefit. A supplemental postretirement benefit is a lump sum payment equal to the
102.35monthly benefit provided to the benefit recipient in the month prior to payment of the
103.1supplemental postretirement benefit. A supplemental postretirement benefit payable under
103.2this section is in lieu of any benefit payable under section 423C.06, subdivision 2. No
103.3supplemental postretirement benefit is payable under this section if a benefit is payable
103.4under section 423C.06, subdivision 3.


103.7    Section 1. Minnesota Statutes 2006, section 6.67, is amended to read:
103.86.67 PUBLIC ACCOUNTANTS; REPORT OF EVIDENCE POINTING TO
103.9MISCONDUCT.
103.10    Whenever a public accountant in the course of auditing the books and affairs of a
103.11county, city, town, school district, or other public corporations, shall discover corporation,
103.12or local public pension plan governed by section 69.77, sections 69.771 to 69.775, or
103.13chapter 354A, 422A, 423B, 423C, or 424A, discovers evidence pointing to nonfeasance,
103.14misfeasance, or malfeasance, on the part of an officer or employee in the conduct of duties
103.15and affairs, the public accountant shall promptly make a report of such discovery to the
103.16state auditor and the county attorney of the county in which the governmental unit is
103.17situated and the public accountant shall also furnish a copy of the report of audit upon
103.18completion to said officers. The county attorney shall act on such report in the same
103.19manner as required by law for reports made to the county attorney by the state auditor.
103.20EFFECTIVE DATE.This section is effective the day following final enactment.

103.21    Sec. 2. Minnesota Statutes 2006, section 69.011, subdivision 1, is amended to read:
103.22    Subdivision 1. Definitions. Unless the language or context clearly indicates that a
103.23different meaning is intended, the following words and terms shall for the purposes of this
103.24chapter and chapters 423, 423A, 424 and 424A have the meanings ascribed to them:
103.25    (a) "Commissioner" means the commissioner of revenue.
103.26    (b) "Municipality" means:
103.27    (1) a home rule charter or statutory city;
103.28    (2) an organized town;
103.29    (3) a park district subject to chapter 398;
103.30    (4) the University of Minnesota;
103.31    (5) for purposes of the fire state aid program only, an American Indian tribal
103.32government entity located within a federally recognized American Indian reservation;
104.1    (6) for purposes of the police state aid program only, an American Indian tribal
104.2government with a tribal police department which exercises state arrest powers under
104.3section 626.90, 626.91, 626.92, or 626.93;
104.4    (7) for purposes of the police state aid program only, the Metropolitan Airports
104.5Commission with respect to peace officers covered under chapter 422A; and
104.6    (8) for purposes of the police state aid program only, the Department of Natural
104.7Resources and the Department of Public Safety with respect to peace officers covered
104.8under chapter 352B.
104.9    (c) "Minnesota Firetown Premium Report" means a form prescribed by the
104.10commissioner containing space for reporting by insurers of fire, lightning, sprinkler
104.11leakage and extended coverage premiums received upon risks located or to be performed
104.12in this state less return premiums and dividends.
104.13    (d) "Firetown" means the area serviced by any municipality having a qualified fire
104.14department or a qualified incorporated fire department having a subsidiary volunteer
104.15firefighters' relief association.
104.16    (e) "Market value" means latest available market value of all property in a taxing
104.17jurisdiction, whether the property is subject to taxation, or exempt from ad valorem
104.18taxation obtained from information which appears on abstracts filed with the commissioner
104.19of revenue or equalized by the State Board of Equalization.
104.20    (f) "Minnesota Aid to Police Premium Report" means a form prescribed by the
104.21commissioner for reporting by each fire and casualty insurer of all premiums received
104.22upon direct business received by it in this state, or by its agents for it, in cash or otherwise,
104.23during the preceding calendar year, with reference to insurance written for insuring against
104.24the perils contained in auto insurance coverages as reported in the Minnesota business
104.25schedule of the annual financial statement which each insurer is required to file with
104.26the commissioner in accordance with the governing laws or rules less return premiums
104.27and dividends.
104.28    (g) "Peace officer" means any person:
104.29    (1) whose primary source of income derived from wages is from direct employment
104.30by a municipality or county as a law enforcement officer on a full-time basis of not less
104.31than 30 hours per week;
104.32    (2) who has been employed for a minimum of six months prior to December 31
104.33preceding the date of the current year's certification under subdivision 2, clause (b);
104.34    (3) who is sworn to enforce the general criminal laws of the state and local
104.35ordinances;
105.1    (4) who is licensed by the Peace Officers Standards and Training Board and is
105.2authorized to arrest with a warrant; and
105.3    (5) who is a member of a local police relief association to which section 69.77
105.4applies, the State Patrol retirement plan, the public employees police and fire fund, or the
105.5Minneapolis Employees Retirement Fund.
105.6    (h) "Full-time equivalent number of peace officers providing contract service" means
105.7the integral or fractional number of peace officers which would be necessary to provide
105.8the contract service if all peace officers providing service were employed on a full-time
105.9basis as defined by the employing unit and the municipality receiving the contract service.
105.10    (i) "Retirement benefits other than a service pension" means any disbursement
105.11authorized under section 424A.05, subdivision 3, clauses (2), and (3), and (4).
105.12    (j) "Municipal clerk, municipal clerk-treasurer, or county auditor" means the person
105.13who was elected or appointed to the specified position or, in the absence of the person,
105.14another person who is designated by the applicable governing body. In a park district,
105.15the clerk is the secretary of the board of park district commissioners. In the case of the
105.16University of Minnesota, the clerk is that official designated by the Board of Regents.
105.17For the Metropolitan Airports Commission, the clerk is the person designated by the
105.18commission. For the Department of Natural Resources or the Department of Public Safety,
105.19the clerk is the respective commissioner. For a tribal police department which exercises
105.20state arrest powers under section 626.90, 626.91, 626.92, or 626.93, the clerk is the person
105.21designated by the applicable American Indian tribal government.
105.22EFFECTIVE DATE.This section is effective January 1, 2009.

105.23    Sec. 3. Minnesota Statutes 2006, section 356A.06, subdivision 1, is amended to read:
105.24    Subdivision 1. Authorized holder of assets; title to assets. (a) Assets of a covered
105.25pension plan may be held only by:
105.26    (1) the plan treasurer,;
105.27    (2) the State Board of Investment,;
105.28    (3) the depository agent of the plan,;
105.29    (4) a security broker or the broker's agent with, in either case, insurance equal to or
105.30greater than the plan assets held from the Securities Investor Protection Corporation or
105.31from excess insurance coverage; or
105.32    (5) the depository agent of the State Board of Investment.
105.33    (b) Legal title to plan assets must be vested in the plan, the State Board of
105.34Investment, the governmental entity that sponsors the plan, the nominee of the plan, or
106.1the depository agent. The holder of legal title shall function as a trustee for a person or
106.2entity with a beneficial interest in the assets of the plan.
106.3EFFECTIVE DATE.This section is effective the day following final enactment.

106.4    Sec. 4. Minnesota Statutes 2006, section 356A.06, subdivision 7, is amended to read:
106.5    Subd. 7. Expanded list of authorized investment securities. (a) Authority.
106.6 Except to the extent otherwise authorized by law, a covered pension plan not described by
106.7subdivision 6, paragraph (a), shall invest its assets only in accordance with this subdivision.
106.8    (b) Securities generally. The covered pension plan has the authority to purchase,
106.9sell, lend, or exchange the securities specified in paragraphs (c) to (i), including puts and
106.10call options and future contracts traded on a contract market regulated by a governmental
106.11agency or by a financial institution regulated by a governmental agency. These securities
106.12may be owned as units in commingled trusts that own the securities described in
106.13paragraphs (c) to (i), including real estate investment trusts and insurance company
106.14commingled accounts, including separate accounts.
106.15    (c) Government obligations. The covered pension plan may invest funds in
106.16governmental bonds, notes, bills, mortgages, and other evidences of indebtedness if the
106.17issue is backed by the full faith and credit of the issuer or the issue is rated among the top
106.18four quality rating categories by a nationally recognized rating agency. The obligations in
106.19which funds may be invested under this paragraph include guaranteed or insured issues
106.20of (1) the United States, its agencies, its instrumentalities, or organizations created and
106.21regulated by an act of Congress; (2) Canada and its provinces, provided the principal and
106.22interest is payable in United States dollars; (3) the states and their municipalities, political
106.23subdivisions, agencies, or instrumentalities; (4) the International Bank for Reconstruction
106.24and Development, the Inter-American Development Bank, the Asian Development Bank,
106.25the African Development Bank, or any other United States government sponsored
106.26organization of which the United States is a member, provided the principal and interest is
106.27payable in United States dollars.
106.28    (d) Corporate obligations. The covered pension plan may invest funds in bonds,
106.29notes, debentures, transportation equipment obligations, or any other longer term
106.30evidences of indebtedness issued or guaranteed by a corporation organized under the laws
106.31of the United States or any state thereof, or the Dominion of Canada or any province
106.32thereof if they conform to the following provisions:
106.33    (1) the principal and interest of obligations of corporations incorporated or organized
106.34under the laws of the Dominion of Canada or any province thereof must be payable in
106.35United States dollars; and
107.1    (2) obligations must be rated among the top four quality categories by a nationally
107.2recognized rating agency.
107.3    (e) Other obligations. (1) The covered pension plan may invest funds in
107.4bankers acceptances, certificates of deposit, deposit notes, commercial paper, mortgage
107.5participation certificates and pools, asset backed securities, repurchase agreements and
107.6reverse repurchase agreements, guaranteed investment contracts, savings accounts, and
107.7guaranty fund certificates, surplus notes, or debentures of domestic mutual insurance
107.8companies if they conform to the following provisions:
107.9    (i) bankers acceptances and deposit notes of United States banks are limited to those
107.10issued by banks rated in the highest four quality categories by a nationally recognized
107.11rating agency;
107.12    (ii) certificates of deposit are limited to those issued by (A) United States banks and
107.13savings institutions that are rated in the highest four quality categories by a nationally
107.14recognized rating agency or whose certificates of deposit are fully insured by federal
107.15agencies; or (B) credit unions in amounts up to the limit of insurance coverage provided
107.16by the National Credit Union Administration;
107.17    (iii) commercial paper is limited to those issued by United States corporations or
107.18their Canadian subsidiaries and rated in the highest two quality categories by a nationally
107.19recognized rating agency;
107.20    (iv) mortgage participation or pass through certificates evidencing interests in pools
107.21of first mortgages or trust deeds on improved real estate located in the United States where
107.22the loan to value ratio for each loan as calculated in accordance with section 61A.28,
107.23subdivision 3 , does not exceed 80 percent for fully amortizable residential properties and
107.24in all other respects meets the requirements of section 61A.28, subdivision 3;
107.25    (v) collateral for repurchase agreements and reverse repurchase agreements is
107.26limited to letters of credit and securities authorized in this section;
107.27    (vi) guaranteed investment contracts are limited to those issued by insurance
107.28companies or banks rated in the top four quality categories by a nationally recognized
107.29rating agency or to alternative guaranteed investment contracts where the underlying
107.30assets comply with the requirements of this subdivision;
107.31    (vii) savings accounts are limited to those fully insured by federal agencies; and
107.32    (viii) asset backed securities must be rated in the top four quality categories by a
107.33nationally recognized rating agency.
107.34    (2) Sections 16A.58, 16C.03, subdivision 4, and 16C.05 do not apply to certificates
107.35of deposit and collateralization agreements executed by the covered pension plan under
107.36clause (1), item (ii).
108.1    (3) In addition to investments authorized by clause (1), item (iv), the covered
108.2pension plan may purchase from the Minnesota Housing Finance Agency all or any part of
108.3a pool of residential mortgages, not in default, that has previously been financed by the
108.4issuance of bonds or notes of the agency. The covered pension plan may also enter into
108.5a commitment with the agency, at the time of any issue of bonds or notes, to purchase
108.6at a specified future date, not exceeding 12 years from the date of the issue, the amount
108.7of mortgage loans then outstanding and not in default that have been made or purchased
108.8from the proceeds of the bonds or notes. The covered pension plan may charge reasonable
108.9fees for any such commitment and may agree to purchase the mortgage loans at a price
108.10sufficient to produce a yield to the covered pension plan comparable, in its judgment,
108.11to the yield available on similar mortgage loans at the date of the bonds or notes. The
108.12covered pension plan may also enter into agreements with the agency for the investment
108.13of any portion of the funds of the agency. The agreement must cover the period of the
108.14investment, withdrawal privileges, and any guaranteed rate of return.
108.15    (f) Corporate stocks. The covered pension plan may invest funds in stocks or
108.16convertible issues of any corporation organized under the laws of the United States or the
108.17states thereof, any corporation organized under the laws of the Dominion of Canada or its
108.18provinces, or any corporation listed on an exchange regulated by an agency of the United
108.19States or of the Canadian national government, if they conform to the following provisions:
108.20    (1) the aggregate value of investments under this paragraph, plus paragraphs (g) and
108.21(k), plus equity investments under paragraphs (h), (i), and (j), as adjusted for realized
108.22gains and losses, must not exceed 85 percent of the market or book value, whichever is
108.23less, of a fund; and
108.24    (2) investments must not exceed five percent of the total outstanding shares of
108.25any one corporation.
108.26    (g) Developed market foreign stocks investments. In addition to investments
108.27authorized under paragraph (f), the covered pension fund may invest in foreign stock sold
108.28on an exchange in any developed market country that is included in the Europe, Australia,
108.29and Far East Index.
108.30    (h) Commingled or mutual investments. The covered pension plan may invest
108.31in index funds or mutual funds, including index mutual funds, through bank-sponsored
108.32collective funds and shares of open-end investment companies registered under the
108.33Federal Investment Company Act of 1940, if the investments of the index or of the mutual
108.34fund to the extent that these funds comply with paragraphs (c) to (j).
108.35    (i) Real estate investment trust; related investments. The covered pension plan
108.36may invest in real estate investment trusts secured by mortgages or deeds of trust and
109.1sold on an exchange, and insurance company commingled accounts, including separate
109.2accounts, of a debt or equity nature.
109.3    (j) Exchange traded funds. The covered pension plan may invest funds in exchange
109.4traded funds, subject to the maximums, the requirements, and the limitations set forth in
109.5paragraphs (c) to (i), as applicable.
109.6    (k) Other investments. (1) In addition to the investments authorized in paragraphs
109.7(b) to (j), and subject to the provisions in clause (2), the covered pension plan may invest
109.8funds in:
109.9    (i) venture capital investment businesses through participation in limited partnerships
109.10and corporations;
109.11    (ii) real estate ownership interests or loans secured by mortgages or deeds of trust
109.12through investment in limited partnerships or bank sponsored collective funds;
109.13    (iii) regional and mutual funds through bank sponsored collective funds and
109.14open-end investment companies registered under the Federal Investment Company Act
109.15of 1940 which do to the extent that a fund or a portion of a fund does not qualify under
109.16paragraph (h);
109.17    (iv) resource investments through limited partnerships, private placements, and
109.18corporations; and
109.19    (v) international debt securities and emerging market equity securities.
109.20    (2) The investments authorized in clause (1) must conform to the following
109.21provisions:
109.22    (i) the aggregate value of all investments made according to clause (1), including
109.23allocated amounts of index and mutual funds, may not exceed 20 percent of the market
109.24value of the fund for which the covered pension plan is investing;
109.25    (ii) there must be at least four unrelated owners of the investment other than the
109.26covered pension plan for investments made under clause (1), item (i), (ii), (iii), or (iv);
109.27    (iii) covered pension plan participation in an investment vehicle is limited to 20
109.28percent thereof for investments made under clause (1), item (i), (ii), (iii), or (iv); and
109.29    (iv) covered pension plan participation in a limited partnership does not include a
109.30general partnership interest or other interest involving general liability. The covered
109.31pension plan may not engage in any activity as a limited partner which creates general
109.32liability.
109.33EFFECTIVE DATE.This section is effective the day following final enactment.

109.34    Sec. 5. Minnesota Statutes 2006, section 356A.06, subdivision 8b, is amended to read:
110.1    Subd. 8b. Disclosure of investment authority; receipt of statement. (a) For
110.2this subdivision, the term "broker" means a broker, broker-dealer, investment advisor,
110.3investment manager, or third party agent who transfers, purchases, sells, or obtains
110.4investment securities for, or on behalf of, a covered pension plan.
110.5    (b) Before a covered pension plan may complete an investment transaction with or
110.6in accord with the advice of a broker, the covered pension plan shall provide annually to
110.7the broker a written statement of investment restrictions applicable under state law to the
110.8covered pension plan or applicable under the pension plan governing board investment
110.9policy.
110.10    (c) A broker must acknowledge in writing annually the receipt of the statement of
110.11investment restrictions and must agree to handle the covered pension plan's investments
110.12and assets in accord with the provided investment restrictions. A covered pension plan
110.13may not enter into or continue a business arrangement with a broker until the broker has
110.14provided this written acknowledgment to the chief administrative officer of the covered
110.15pension plan.
110.16    (d) If any portion of the plan's assets are held by a security broker or its agent, the
110.17security broker or its agent must acknowledge in writing annually that sufficient insurance
110.18has been obtained from the Securities Investor Protection Corporation, supplemented by
110.19additional insurance, if necessary, to cover the full amount of covered pension plan assets
110.20held by the security broker or its agent. Uniform acknowledgment forms prepared by the
110.21state auditor shall be used by covered pension plans and brokers to meet the requirements
110.22of this subdivision.
110.23EFFECTIVE DATE.This section is effective the day following final enactment.

110.24    Sec. 6. Minnesota Statutes 2006, section 424A.001, is amended by adding a
110.25subdivision to read:
110.26    Subd. 1a. Ancillary benefit. "Ancillary benefit" means a benefit other than a service
110.27pension that is permitted by law and that is provided for in the relief association bylaws.
110.28EFFECTIVE DATE.This section is effective January 1, 2009.

110.29    Sec. 7. Minnesota Statutes 2006, section 424A.001, subdivision 6, is amended to read:
110.30    Subd. 6. Surviving spouse. For purposes of this chapter, and the governing bylaws
110.31of any relief association to which this chapter applies, the term "surviving spouse" means
110.32any person who was the dependent spouse of a deceased active member or retired former
110.33member living with the member at the time of the death of the active member or retired
110.34former member for at least one year prior to the date on which the member terminated
111.1active service and membership the spouse of a deceased member who was legally married
111.2to the member at the time of death.
111.3EFFECTIVE DATE.This section is effective January 1, 2009.

111.4    Sec. 8. Minnesota Statutes 2006, section 424A.02, subdivision 3, is amended to read:
111.5    Subd. 3. Flexible service pension maximums. (a) Annually on or before August
111.61 as part of the certification of the financial requirements and minimum municipal
111.7obligation determined under section 69.772, subdivision 4, or 69.773, subdivision 5, as
111.8applicable, the secretary or some other official of the relief association designated in
111.9the bylaws of each relief association shall calculate and certify to the governing body
111.10of the applicable qualified municipality the average amount of available financing per
111.11active covered firefighter for the most recent three-year period. The amount of available
111.12financing shall include any amounts of fire state aid received or receivable by the relief
111.13association, any amounts of municipal contributions to the relief association raised from
111.14levies on real estate or from other available revenue sources exclusive of fire state aid,
111.15and one-tenth of the amount of assets in excess of the accrued liabilities of the relief
111.16association calculated under section 69.772, subdivision 2; 69.773, subdivisions 2 and 4;
111.17or 69.774, subdivision 2, if any.
111.18    (b) The maximum service pension which the relief association has authority to
111.19provide for in its bylaws for payment to a member retiring after the calculation date when
111.20the minimum age and service requirements specified in subdivision 1 are met must be
111.21determined using the table in paragraph (c) or (d), whichever applies.
111.22    (c) For a relief association where the governing bylaws provide for a monthly
111.23service pension to a retiring member, the maximum monthly service pension amount
111.24per month for each year of service credited that may be provided for in the bylaws is
111.25the greater of the service pension amount provided for in the bylaws on the date of the
111.26calculation of the average amount of the available financing per active covered firefighter
111.27or the maximum service pension figure corresponding to the average amount of available
111.28financing per active covered firefighter:

111.29 111.30 111.31	Minimum Average Amount of Available Financing per Firefighter		Maximum Service Pension Amount Payable per Month for Each Year of Service
111.32	$ ...		$ .25
111.33	41		.50
111.34	81		1.00
111.35	122		1.50
111.36	162		2.00
111.37	203		2.50
112.1	243		3.00
112.2	284		3.50
112.3	324		4.00
112.4	365		4.50
112.5	405		5.00
112.6	486		6.00
112.7	567		7.00
112.8	648		8.00
112.9	729		9.00
112.10	810		10.00
112.11	891		11.00
112.12	972		12.00
112.13	1053		13.00
112.14	1134		14.00
112.15	1215		15.00
112.16	1296		16.00
112.17	1377		17.00
112.18	1458		18.00
112.19	1539		19.00
112.20	1620		20.00
112.21	1701		21.00
112.22	1782		22.00
112.23	1823		22.50
112.24	1863		23.00
112.25	1944		24.00
112.26	2025		25.00
112.27	2106		26.00
112.28	2187		27.00
112.29	2268		28.00
112.30	2349		29.00
112.31	2430		30.00
112.32	2511		31.00
112.33	2592		32.00
112.34	2673		33.00
112.35	2754		34.00
112.36	2834		35.00
112.37	2916		36.00
112.38	2997		37.00
112.39	3078		38.00
112.40	3159		39.00
112.41	3240		40.00
112.42	3321		41.00
112.43	3402		42.00
113.1	3483		43.00
113.2	3564		44.00
113.3	3645		45.00
113.4	3726		46.00
113.5	3807		47.00
113.6	3888		48.00
113.7	3969		49.00
113.8	4050		50.00
113.9	4131		51.00
113.10	4212		52.00
113.11	4293		53.00
113.12	4374		54.00
113.13	4455		55.00
113.14	4536		56.00
113.15	Effective beginning December 31, 2008
113.16	4617		57.00
113.17	4698		58.00
113.18	4779		59.00
113.19	4860		60.00
113.20	4941		61.00
113.21	5022		62.00
113.22	5103		63.00
113.23	5184		64.00
113.24	5265		65.00
113.25	Effective beginning December 31, 2009
113.26	5346		66.00
113.27	5427		67.00
113.28	5508		68.00
113.29	5589		69.00
113.30	5670		70.00
113.31	5751		71.00
113.32	5832		72.00
113.33	5913		73.00
113.34	5994		74.00
113.35	Effective beginning December 31, 2010
113.36	6075		75.00
113.37	6156		76.00
113.38	6237		77.00
113.39	6318		78.00
113.40	6399		79.00
113.41	6480		80.00
113.42	6561		81.00
113.43	6642		82.00
114.1	6723		83.00
114.2	Effective beginning December 31, 2011
114.3	6804		84.00
114.4	6885		85.00
114.5	6966		86.00
114.6	7047		87.00
114.7	7128		88.00
114.8	7209		89.00
114.9	7290		90.00
114.10	7371		91.00
114.11	7452		92.00
114.12	Effective beginning December 31, 2012
114.13	7533		93.00
114.14	7614		94.00
114.15	7695		95.00
114.16	7776		96.00
114.17	7857		97.00
114.18	7938		98.00
114.19	8019		99.00
114.20	8100		100.00
114.21 114.22	any amount in excess of 8100		100.00

114.23    (d) For a relief association in which the governing bylaws provide for a lump sum
114.24service pension to a retiring member, the maximum lump sum service pension amount for
114.25each year of service credited that may be provided for in the bylaws is the greater of the
114.26service pension amount provided for in the bylaws on the date of the calculation of the
114.27average amount of the available financing per active covered firefighter or the maximum
114.28service pension figure corresponding to the average amount of available financing per
114.29active covered firefighter for the applicable specified period:

114.30 114.31 114.32	Minimum Average Amount of Available Financing per Firefighter		Maximum Lump Sum Service Pension Amount Payable for Each Year of Service
114.33	$ ...		$ 10
114.34	11		20
114.35	16		30
114.36	23		40
114.37	27		50
114.38	32		60
114.39	43		80
114.40	54		100
114.41	65		120
114.42	77		140
115.1	86		160
115.2	97		180
115.3	108		200
115.4	131		240
115.5	151		280
115.6	173		320
115.7	194		360
115.8	216		400
115.9	239		440
115.10	259		480
115.11	281		520
115.12	302		560
115.13	324		600
115.14	347		640
115.15	367		680
115.16	389		720
115.17	410		760
115.18	432		800
115.19	486		900
115.20	540		1000
115.21	594		1100
115.22	648		1200
115.23	702		1300
115.24	756		1400
115.25	810		1500
115.26	864		1600
115.27	918		1700
115.28	972		1800
115.29	1026		1900
115.30	1080		2000
115.31	1134		2100
115.32	1188		2200
115.33	1242		2300
115.34	1296		2400
115.35	1350		2500
115.36	1404		2600
115.37	1458		2700
115.38	1512		2800
115.39	1566		2900
115.40	1620		3000
115.41	1672		3100
115.42	1726		3200
115.43	1753		3250
116.1	1780		3300
116.2	1820		3375
116.3	1834		3400
116.4	1888		3500
116.5	1942		3600
116.6	1996		3700
116.7	2023		3750
116.8	2050		3800
116.9	2104		3900
116.10	2158		4000
116.11	2212		4100
116.12	2265		4200
116.13	2319		4300
116.14	2373		4400
116.15	2427		4500
116.16	2481		4600
116.17	2535		4700
116.18	2589		4800
116.19	2643		4900
116.20	2697		5000
116.21	2751		5100
116.22	2805		5200
116.23	2859		5300
116.24	2913		5400
116.25	2967		5500
116.26	3021		5600
116.27	3075		5700
116.28	3129		5800
116.29	3183		5900
116.30	3237		6000
116.31	3291		6100
116.32	3345		6200
116.33	3399		6300
116.34	3453		6400
116.35	3507		6500
116.36	3561		6600
116.37	3615		6700
116.38	3669		6800
116.39	3723		6900
116.40	3777		7000
116.41	3831		7100
116.42	3885		7200
116.43	3939		7300
117.1	3993		7400
117.2	4047		7500
117.3	Effective beginning December 31, 2008
117.4	4101		7600
117.5	4155		7700
117.6	4209		7800
117.7	4263		7900
117.8	4317		8000
117.9	4371		8100
117.10	4425		8200
117.11	4479		8300
117.12	Effective beginning December 31, 2009
117.13	4533		8400
117.14	4587		8500
117.15	4641		8600
117.16	4695		8700
117.17	4749		8800
117.18	4803		8900
117.19	4857		9000
117.20	4911		9100
117.21	Effective beginning December 31, 2010
117.22	4965		9200
117.23	5019		9300
117.24	5073		9400
117.25	5127		9500
117.26	5181		9600
117.27	5235		9700
117.28	5289		9800
117.29	5343		9900
117.30	5397		10,000
117.31 117.32	any amount in excess of 5397		10,000

117.33    (e) For a relief association in which the governing bylaws provide for a monthly
117.34benefit service pension as an alternative form of service pension payment to a lump sum
117.35service pension, the maximum service pension amount for each pension payment type
117.36must be determined using the applicable table contained in this subdivision.
117.37    (f) If a relief association establishes a service pension in compliance with the
117.38applicable maximum contained in paragraph (c) or (d) and the minimum average amount
117.39of available financing per active covered firefighter is subsequently reduced because of a
117.40reduction in fire state aid or because of an increase in the number of active firefighters, the
117.41relief association may continue to provide the prior service pension amount specified in
117.42its bylaws, but may not increase the service pension amount until the minimum average
118.1amount of available financing per firefighter under the table in paragraph (c) or (d),
118.2whichever applies, permits.
118.3    (g) No relief association is authorized to provide a service pension in an amount
118.4greater than the largest applicable flexible service pension maximum amount even if
118.5the amount of available financing per firefighter is greater than the financing amount
118.6associated with the largest applicable flexible service pension maximum.

118.7    Sec. 9. Minnesota Statutes 2006, section 424A.02, subdivision 7, is amended to read:
118.8    Subd. 7. Deferred service pensions. (a) A member of a relief association is entitled
118.9to a deferred service pension if the member:
118.10    (1) has completed the lesser of the minimum period of active service with the fire
118.11department specified in the bylaws or 20 years of active service with the fire department;
118.12    (2) has completed at least five years of active membership in the relief association;
118.13and
118.14    (3) separates from active service and membership before reaching age 50 or the
118.15minimum age for retirement and commencement of a service pension specified in the
118.16bylaws governing the relief association if that age is greater than age 50.
118.17    (b) The deferred service pension is payable when the former member reaches age
118.1850, or the minimum age specified in the bylaws governing the relief association if that age
118.19is greater than age 50, and when the former member makes a valid written application.
118.20    (c) A relief association that provides a lump sum service pension governed by
118.21subdivision 3 may, when its governing bylaws so provide, pay interest on the deferred
118.22lump sum service pension during the period of deferral. If provided for in the bylaws,
118.23interest must be paid in one of the following manners:
118.24    (1) at the investment performance rate actually earned on that portion of the assets
118.25if the deferred benefit amount is invested by the relief association in a separate account
118.26established and maintained by the relief association or if the deferred benefit amount is
118.27invested in a separate investment vehicle held by the relief association; or
118.28    (2) at an interest rate of up to five percent, compounded annually, as set by the board
118.29of directors and approved as provided in subdivision 10; or.
118.30    (3) at a rate equal to the actual time weighted total rate of return investment
118.31performance of the special fund as reported by the Office of the State Auditor under
118.32section 356.219, up to five percent, compounded annually, and applied consistently for
118.33all deferred service pensioners.
118.34    A relief association may not use the method provided for in clause (3), until it has
118.35modified its bylaws to be consistent with that clause.
119.1    (d) Interest under paragraph (c), clause (2) or (3), is payable from the first day of
119.2the month next following the date on which the municipality has approved the deferred
119.3service pension interest rate established by the board of trustees or from the first day of the
119.4month next following the date on which the member separated from active fire department
119.5service and relief association membership, whichever is later, to the last day of the month
119.6immediately before the month in which the deferred member becomes eligible to begin
119.7receipt of the service pension and applies for the deferred service pension.
119.8    (e) A relief association that provides a defined contribution service pension may,
119.9if its governing bylaws so provide, credit interest or additional investment performance
119.10on the deferred lump sum service pension during the period of deferral. If provided for
119.11in the bylaws, the interest must be paid in one of the manners specified in paragraph
119.12(c) or alternatively the relief association may credit any investment return on the assets
119.13of the special fund of the defined contribution volunteer firefighter relief association in
119.14proportion to the share of the assets of the special fund to the credit of each individual
119.15deferred member account through the date on which the investment return is recognized
119.16by and credited to the special fund.
119.17    (f) For a deferred service pension that is transferred to a separate account established
119.18and maintained by the relief association or separate investment vehicle held by the relief
119.19association, the deferred member bears the full investment risk subsequent to transfer and
119.20in calculating the accrued liability of the volunteer firefighters relief association that pays
119.21a lump sum service pension, the accrued liability for deferred service pensions is equal
119.22to the separate relief association account balance or the fair market value of the separate
119.23investment vehicle held by the relief association.
119.24    (g) The deferred service pension is governed by and must be calculated under
119.25the general statute, special law, relief association articles of incorporation, and relief
119.26association bylaw provisions applicable on the date on which the member separated from
119.27active service with the fire department and active membership in the relief association.
119.28EFFECTIVE DATE.This section is effective the day following final enactment.

119.29    Sec. 10. Minnesota Statutes 2006, section 424A.02, subdivision 9, is amended to read:
119.30    Subd. 9. Limitation on ancillary benefits. Any relief association, including
119.31any volunteer firefighters relief association governed by section 69.77 or any volunteer
119.32firefighters division of a relief association governed by chapter 424, may only pay
119.33ancillary benefits which would constitute an authorized disbursement as specified in
119.34section 424A.05 subject to the following requirements or limitations:
120.1    (1) with respect to a relief association in which governing bylaws provide for a
120.2lump sum service pension to a retiring member, no ancillary benefit may be paid to any
120.3former member or paid to any person on behalf of any former member after the former
120.4member (i) terminates active service with the fire department and active membership
120.5in the relief association; and (ii) commences receipt of a service pension as authorized
120.6under this section; and
120.7    (2) with respect to any relief association, no ancillary benefit paid or payable to any
120.8member, to any former member, or to any person on behalf of any member or former
120.9member, may exceed in amount the total earned service pension of the member or former
120.10member. The total earned service pension must be calculated using by multiplying
120.11the service pension amount specified in the bylaws of the relief association and at the
120.12time of death or disability, whichever applies, by the years of service credited to the
120.13member or former member. The years of service must be determined as of (i) the date
120.14the member or former member became entitled to the ancillary benefit; or (ii) the date
120.15the member or former member died entitling a survivor or the estate of the member or
120.16former member to an ancillary benefit. The ancillary benefit must be calculated (i) without
120.17regard to whether the member or former member had attained the minimum amount of
120.18service and membership credit specified in the governing bylaws; and (ii) without regard
120.19to the percentage amounts specified in subdivision 2;. For active members, the amount
120.20of a permanent disability benefit or a survivor benefit must be equal to the member's
120.21total earned service pension except that the bylaws of any relief association may provide
120.22for the payment of a survivor benefit in an amount not to exceed five times the yearly
120.23service pension amount specified in the bylaws on behalf of any member who dies before
120.24having performed five years of active service in the fire department with which the relief
120.25association is affiliated.
120.26EFFECTIVE DATE.This section is effective January 1, 2009.

120.27    Sec. 11. Minnesota Statutes 2006, section 424A.05, subdivision 3, is amended to read:
120.28    Subd. 3. Authorized disbursements from the special fund. (a) Disbursements
120.29from the special fund are not permitted to be made for any purpose other than one of
120.30the following:
120.31    (1) for the payment of service pensions to retired members of the relief association if
120.32authorized and paid under law and the bylaws governing the relief association;
120.33    (2) for the payment of temporary or permanent disability benefits to disabled
120.34members of the relief association if authorized and paid pursuant to law and specified in
120.35amount in the bylaws governing the relief association;
121.1    (3) for the payment of survivor benefits to surviving spouses and surviving children,
121.2or if none, to designated beneficiaries, of deceased members of the relief association,
121.3and if survivors and if no designated beneficiary, for the payment of a death benefit to
121.4the estate of the deceased active firefighter, if authorized by and paid pursuant to law and
121.5specified in amount in the bylaws governing the relief association;
121.6    (4) for the payment of any funeral benefits to the surviving spouse, or if no surviving
121.7spouse, the estate, of the deceased member of the relief association if authorized by law
121.8and specified in amount in the bylaws governing the relief association;
121.9    (5) for the payment of the fees, dues and assessments to the Minnesota State Fire
121.10Department Association, to the Minnesota Area Relief Association Coalition, and to
121.11the state Volunteer Firefighters Benefit Association in order to entitle relief association
121.12members to membership in and the benefits of these associations or organizations; and
121.13    (6) (5) for the payment of administrative expenses of the relief association as
121.14authorized under section 69.80.
121.15    (b) For purposes of this chapter, a designated beneficiary must be a natural person.
121.16EFFECTIVE DATE.This section is effective January 1, 2009.

121.17    Sec. 12. VOLUNTARY STATEWIDE VOLUNTEER FIREFIGHTER
121.18RETIREMENT PLAN ADVISORY BOARD.
121.19    Subdivision 1. Definitions. (a) For purposes of this article, unless the context clearly
121.20indicates otherwise, the terms or phrases in this subdivision have the meanings given them.
121.21    (b) "Board" means the voluntary statewide lump-sum volunteer firefighter retirement
121.22plan advisory board established under subdivision 2.
121.23    (c) "Executive director" means the executive director of the Public Employees
121.24Retirement Association.
121.25    (d) "Fire department" means the agency or department of a municipality or an
121.26independent nonprofit firefighting corporation that is charged with the prevention and
121.27suppression of fire and other related emergency activities.
121.28    (e) "Firetown" means the area serviced by any municipality having a qualified fire
121.29department or a qualified incorporated fire department having a subsidiary volunteer
121.30firefighters relief association.
121.31    Subd. 2. Establishment. The voluntary statewide lump-sum volunteer firefighter
121.32retirement plan advisory board is established.
121.33    Subd. 3. Membership. (a) The voluntary statewide lump-sum volunteer firefighter
121.34retirement plan advisory board consists of six persons. The members of the board must
121.35be appointed as follows:
122.1    (1) board seat A: a volunteer firefighter from a firetown with a population under
122.25,000 appointed by the president of the Minnesota State Fire Departments Association;
122.3    (2) board seat B: a volunteer firefighter from a firetown with a population greater
122.4than 5,000 and less than 9,001 appointed by the president of the Minnesota State Fire
122.5Chiefs Association;
122.6    (3) board seat C: a volunteer firefighter from a firetown with a population greater
122.7than 9,000 and less than 20,000 appointed by the president of the Minnesota State Fire
122.8Departments Association;
122.9    (4) board seat D: a volunteer firefighter from a firetown with a population greater
122.10than 19,999 appointed by the president of the Minnesota State Fire Chiefs Association;
122.11    (5) board seat E: a person appointed by the president of the League of Minnesota
122.12Cities; and
122.13    (6) board seat F: a person appointed by the president of the Minnesota Association
122.14of Townships.
122.15    (b) The members of the board shall serve until August 1, 2009.
122.16    (c) Service as a member of the board is uncompensated and does not qualify for
122.17the reimbursement of expenses or for any per diem allowance by the state or the Public
122.18Employees Retirement Association.
122.19    (d) A vacancy on the board must be filled by appointment by the governor in
122.20accordance with the requirements specified in paragraph (a).
122.21    Subd. 4. Board duties. (a) The board shall:
122.22    (1) elect a chair; and
122.23    (2) with the advice and administrative support of the executive director, draft
122.24legislative recommendations for establishment, organization, and administration of the
122.25voluntary statewide lump-sum volunteer firefighter retirement plan consistent with
122.26this section, Minnesota Statutes, chapters 356 and 356A, and any other limitation or
122.27requirement of law.
122.28    Subd. 5. Information from municipalities and fire departments. Municipalities
122.29and fire departments with volunteer firefighters who would be covered by the plan shall
122.30provide all relevant information and records that the board or the executive director
122.31requires to perform their duties.
122.32EFFECTIVE DATE.This section is effective the day following final enactment.

122.33    Sec. 13. REPEALER OF PRIOR INCONSISTENT SPECIAL VOLUNTEER
122.34FIRE RELIEF ASSOCIATION ANCILLARY BENEFIT LEGISLATION.
123.1    Subdivision 1. Anoka. Laws 1969, chapter 352, section 1, subdivisions 3, 4,
123.25, 6, are repealed.
123.3    Subd. 2. Butterfield. Laws 1975, chapter 185, section 1, is repealed.
123.4    Subd. 3. Coon Rapids. Laws 1973, chapter 304, section 1, subdivisions 3, 4, 5,
123.56, 7, 8, 9, are repealed.
123.6    Subd. 4. Edina. Laws 1965, chapter 592, sections 3 as amended by Laws 1969,
123.7chapter 644, section 2, Laws 1975, chapter 229, section 2; 4 as amended by Laws 1969,
123.8chapter 644, section 2, Laws 1975, chapter 229, section 3, Laws 1985, chapter 261, section
123.937, Laws 1991, chapter 125, section 1; Laws 1985, chapter 261, section 37 as amended by
123.10Laws 1991, chapter 125, section 1; Laws 1991, chapter 125, section 1, are repealed.
123.11    Subd. 5. Fairmont. Laws 1967, chapter 575, sections 2 as amended by Laws 1979,
123.12chapter 201, section 23; 3; 4, are repealed.
123.13    Subd. 6. Falcon Heights. Laws 1969, chapter 526, sections 3; 4; 5 as amended by
123.14Laws 1974, chapter 208, section 2; 7 as amended by Laws 1974, chapter 208, section
123.153, are repealed.
123.16    Subd. 7. Golden Valley. Laws 1971, chapter 140, sections 2 as amended by Laws
123.171973, chapter 30, section 2; 3 as amended by Laws 1973, chapter 30, section 3; 4 as
123.18amended by Laws 1973, chapter 30, section 4; 5 as amended by Laws 1973, chapter 30,
123.19section 5, Laws 1993, chapter 244, article 4, section 1, are repealed.
123.20    Subd. 8. Wayzata. Laws 1973, chapter 472, section 1 as amended by Laws 1976,
123.21chapter 272, section 1, Laws 1979, chapter 201, section 33, is repealed.
123.22    Subd. 9. White Bear Lake. Laws 1971, chapter 214, section 1, subdivisions 1,
123.232, 3, 4, 5, are repealed.
123.24EFFECTIVE DATE; LOCAL APPROVAL.(a) Subdivision 1 is effective the day
123.25after the governing body of Anoka and its chief clerical officer timely complete their
123.26compliance with Minnesota Statutes, section 645.021, subdivisions 2 and 3, after June
123.2730, 2009.
123.28    (b) Subdivision 2 is effective the day after the governing body of Butterfield and its
123.29chief clerical officer timely complete their compliance with Minnesota Statutes, section
123.30645.021, subdivisions 2 and 3, after June 30, 2009.
123.31    (c) Subdivision 3 is effective the day after the governing body of Coon Rapids and
123.32its chief clerical officer timely complete their compliance with Minnesota Statutes, section
123.33645.021, subdivisions 2 and 3, after June 30, 2009.
124.1    (d) Subdivision 4 is effective the day after the governing body of Edina and its
124.2chief clerical officer timely complete their compliance with Minnesota Statutes, section
124.3645.021, subdivisions 2 and 3, after June 30, 2009.
124.4    (e) Subdivision 5 is effective the day after the governing body of Fairmont and its
124.5chief clerical officer timely complete their compliance with Minnesota Statutes, section
124.6645.021, subdivisions 2 and 3, after June 30, 2009.
124.7    (f) Subdivision 6 is effective the day after the governing body of Falcon Heights
124.8and its chief clerical officer timely complete their compliance with Minnesota Statutes,
124.9section 645.021, subdivisions 2 and 3, after June 30, 2009.
124.10    (g) Subdivision 7 is effective the day after the governing body of Golden Valley and
124.11its chief clerical officer timely complete their compliance with Minnesota Statutes, section
124.12645.021, subdivisions 2 and 3, after June 30, 2009.
124.13    (h) Subdivision 8 is effective the day after the governing body of Wayzata and its
124.14chief clerical officer timely complete their compliance with Minnesota Statutes, section
124.15645.021, subdivisions 2 and 3, after June 30, 2009.
124.16    (i) Subdivision 9 is effective the day after the governing body of White Bear Lake
124.17and its chief clerical officer timely complete their compliance with Minnesota Statutes,
124.18section 645.021, subdivisions 2 and 3, after June 30, 2009.


124.21    Section 1. [356.91] VOLUNTARY MEMBERSHIP DUES DEDUCTION.
124.22    (a) Upon written authorization of a person receiving an annuity from a public
124.23pension fund administered by the Minnesota State Retirement System, the Public
124.24Employees Retirement Association, or the Minneapolis Employees Retirement Fund, the
124.25executive director of the public pension fund may deduct from the retirement annuity an
124.26amount requested by the annuitant to be paid as dues to any labor organization that is an
124.27exclusive bargaining agent representing public employees or an organization representing
124.28retired public employees of which the annuitant is a member and shall pay the amount to
124.29the organization so designated by the annuitant.
124.30    (b) A pension fund and the plan fiduciaries which authorize or administer deductions
124.31of dues payments under paragraph (a) is not liable for failure to properly deduct or transmit
124.32the dues amounts, provided that the fund and the fiduciaries have acted in good faith.
124.33    (c) The deductions under paragraph (a) may occur no more frequently than two
124.34times per year.
125.1    (d) Any labor organization specified in paragraph (a) shall reimburse the public
125.2pension fund for the administrative expense of withholding premium amounts.
125.3EFFECTIVE DATE.This section is effective the day following final enactment.


125.6    Section 1. PUBLIC EMPLOYEES RETIREMENT ASSOCIATION COVERAGE
125.7TERMINATION.
125.8    Subdivision 1. Eligibility. (a) An eligible individual specified in paragraph (b)
125.9is authorized to apply for a retirement annuity, provided necessary age and service
125.10requirements are met, under Minnesota Statutes, section 353.29 or 353.30, as applicable,
125.11as further specified under subdivision 2.
125.12    (b) An eligible individual is an individual who:
125.13    (1) was employed by Independent School District No. 535, Rochester, on October 6,
125.141993, and became a member of the Public Employees Retirement Association coordinated
125.15plan;
125.16    (2) terminated from Independent School District No. 535, Rochester, on December
125.1731, 2003;
125.18    (3) was elected to the Rochester City Council on April 22, 2003, and sworn in on
125.19May 5, 2003;
125.20    (4) was reelected to the Rochester City Council and took office in November 2004;
125.21    (5) continued to work for Olmsted County on a contract basis, while serving on
125.22the city council;
125.23    (6) elected under law then applicable to have Public Employees Retirement
125.24Association coordinated plan coverage for the city council elected service; and
125.25    (7) terminated Independent School District No. 535, Rochester, employment but is
125.26unable to commence receipt of a Public Employees Retirement Association coordinated
125.27plan annuity because of the continuing Public Employees Retirement Association
125.28coordinated plan coverage for the elected city council service and for Olmsted County.
125.29    Subd. 2. Retirement annuity. (a) Notwithstanding an irrevocable election to
125.30participate in the Public Employees Retirement Association coordinated plan as an elected
125.31official and continuation of elected service, an eligible individual under subdivision 1,
125.32paragraph (b), is deemed to have terminated membership under Minnesota Statutes, section
125.33353.01, subdivision 11b, following termination of the Olmsted County employment.
125.34    (b) If the requirements of paragraph (a) are satisfied, the eligible individual may
125.35apply for a retirement annuity under Minnesota Statutes, section 353.29 or 353.30, as
126.1applicable. In computing the annuity, the Public Employees Retirement Association
126.2must exclude salary due to the elected Rochester City Council service. Deferred annuity
126.3augmentation under Minnesota Statutes, section 353.71, applies to this annuity.
126.4    Subd. 3. Treatment of Rochester City Council contributions to the Public
126.5Employees Retirement Association. (a) All employee contributions to the Public
126.6Employees Retirement Association coordinated plan by an eligible individual in
126.7subdivision 1, paragraph (b), due to the elected Rochester City Council service, and all
126.8corresponding employer contributions, must be determined.
126.9    (b) An eligible individual under subdivision 1, paragraph (b), must elect, within
126.10one year of the effective date of this section or upon termination of elective service,
126.11whichever is earlier, a refund under Minnesota Statutes, section 353.34, subdivision 2,
126.12of employee contributions determined under paragraph (a), or coverage by the public
126.13employees defined contribution plan under Minnesota Statutes, chapter 353D, as further
126.14specified in paragraph (c).
126.15    (c) If public employee defined contribution plan coverage is elected under paragraph
126.16(b), contributions to that plan commence as of the first day of the pay period following
126.17this election, and accumulated employee and employer contributions determined under
126.18paragraph (a) must be transferred with six percent annual interest to an account for the
126.19eligible individual in the public employees defined contribution plan.
126.20    (d) If no election is made by an eligible individual by the required date in paragraph
126.21(b), the individual is assumed to have elected the refund indicated in paragraph (b).
126.22    (e) Upon an election under paragraph (b), or a mandatory refund under paragraph
126.23(d), all rights in the Public Employees Retirement Association coordinated plan due to
126.24elected Rochester City Council service are forfeited and may not be reestablished.
126.25EFFECTIVE DATE.This section is effective the day following final enactment.

126.26    Sec. 2. PERA-GENERAL; ST. PAUL PUBLIC WORKS EMPLOYEE;
126.27RETIREMENT ANNUITY REVOCATION.
126.28    (a) Notwithstanding any provision of Minnesota Statutes, chapter 353, to the
126.29contrary, an eligible person described in paragraph (b) is entitled to withdraw a retirement
126.30annuity application previously filed with the general employees retirement plan of
126.31the Public Employees Retirement Association and to apply for a disability benefit if
126.32determined to have been totally and permanently disabled as of the date of the termination
126.33of active employment.
126.34    (b) An eligible person is a person who:
126.35    (1) was born on March 9, 1949;
127.1    (2) was an employee of the Department of Public Works of the city of St. Paul
127.2prior to terminating active employment;
127.3    (3) suffered an employment-related shoulder injury on May 9, 2006;
127.4    (4) suffers from and has been treated for stress and related disorders; and
127.5    (5) filed an application for a retirement annuity from the general employees
127.6retirement plan of the Public Employees Retirement Association on December 12, 2006,
127.7without being provided with a disability benefit application and without being provided
127.8with any benefit counseling by the Public Employees Retirement Association.
127.9    (c) If the eligible person, upon withdrawing the retirement annuity application
127.10in writing and upon filing a disability benefit application with the Public Employees
127.11Retirement Association, is determined to have been totally and permanently disabled as
127.12of the date of the termination of active employment under Minnesota Statutes, sections
127.13353.01, subdivision 19, and 353.33, the eligible person is entitled to receive a disability
127.14benefit effective retroactively from the date on which the eligible person terminated active
127.15employment, under the same annuity option selection made on December 12, 2006. The
127.16amount of any increased benefit amount between the date of the termination of active
127.17employment and the disability determination date is payable in a lump sum as soon as
127.18is practicable following the disability determination date.
127.19    (d) If the previously filed retirement annuity application is withdrawn under this
127.20section and the eligible person is determined not to have been totally and permanently
127.21disabled as of the date of the termination of active employment, the prior retirement
127.22annuity application is reinstated.
127.23    (e) The authority to withdraw a previously filed retirement annuity application under
127.24this section expires on January 1, 2009.
127.25EFFECTIVE DATE.This section is effective the day following final enactment
127.26and applies to any eligible person who was a public employee on December 1, 2006.

127.27    Sec. 3. PERA-P&F; TRANSFER OF SERVICE CREDIT FOR PRIOR MAPLE
127.28GROVE CITY EMPLOYMENT PERIOD.
127.29    Subdivision 1. Authorization. An eligible person described in subdivision 2 is
127.30authorized to have service credit transferred under subdivision 3 upon the payment of the
127.31additional amounts required under subdivision 4 and upon the substantiation of the nature
127.32of the employment under subdivision 5.
127.33    Subd. 2. Eligible person. For purposes of this section, an eligible person is a
127.34person who:
127.35    (1) was born on April 12, 1956;
128.1    (2) was initially employed by the city of Maple Grove on February 16, 1988;
128.2    (3) was employed as a full-time fire inspector by the fire-rescue department of the
128.3city of Maple Grove, including daytime response to fire calls, with retirement coverage
128.4by the coordinated program of the general employees retirement plan of the Public
128.5Employees Retirement Association, on April 2, 1990; and
128.6    (4) was transferred to retirement coverage by the public employees police and fire
128.7retirement plan as a fire inspector by Maple Grove city council action on January 1, 1996.
128.8    Subd. 3. Service credit transfer. (a) An eligible person, upon filing a written
128.9application as prescribed by the executive director of the Public Employees Retirement
128.10Association and upon compliance with subdivisions 4 and 5, shall have service credit
128.11for the period from April 2, 1990, to January 1, 1996, transferred from the coordinated
128.12program of the general employees retirement plan to the public employees police and
128.13fire retirement plan on the first of the month next following the receipt of the additional
128.14payments under subdivision 4.
128.15    (b) Upon the transfer of service credit under paragraph (a), the service credit of
128.16the eligible person in the coordinated program of the general employees retirement
128.17plan for the period from April 2, 1990, to January 1, 1996, is forfeited and may not be
128.18subsequently restored under Minnesota Statutes, section 353.35, or any other applicable
128.19provision of law.
128.20    Subd. 4. Additional payment amounts. (a) Accompanying the written application
128.21under subdivision 3, the eligible person shall include an additional member contribution
128.22payment for the period from April 2, 1990, to January 1, 1996. The additional member
128.23contribution payment amount is the difference between the member contribution rate
128.24under Minnesota Statutes, section 353.65, subdivision 2, and the member contribution rate
128.25under Minnesota Statutes, section 353.27, subdivision 2, applied to the eligible person's
128.26total covered salary for the period from April 2, 1990, to January 1, 1996, plus annual
128.27compound interest from August 1, 1993, to the date on which the payment is made at the
128.28rate of 8.5 percent.
128.29    (b) Upon receipt of the additional member contributions under paragraph (a), the
128.30executive director of the Public Employees Retirement Association shall notify the city
128.31of Maple Grove that the payment was made and the amount of the additional employer
128.32contribution. Within 30 days of the receipt of the notification from the Public Employees
128.33Retirement Association, the city of Maple Grove shall pay the additional employer
128.34contribution amount. The amount is the difference between the present value of the
128.35eligible person's combined retirement annuity from the coordinated program of the general
128.36employees retirement plan and from the public employees police and fire retirement plan
129.1as of the end of the month preceding the payment of the additional member contribution
129.2amount and the present value of the potential retirement annuity from the public employees
129.3police and fire retirement plan if the service credit transfer occurred as of the same date,
129.4reduced by the amount of the retirement plan asset transfer under paragraph (c) and by the
129.5amount of the additional member contribution amount. The present value computation
129.6must be made by the actuary retained under Minnesota Statutes, section 356.214, and must
129.7utilize the applicable actuarial assumptions under Minnesota Statutes, section 356.215.
129.8The additional employer contribution amount must be paid in a lump sum. If the additional
129.9employer contribution payment is not made in a timely fashion, the executive director of
129.10the Public Employees Retirement Association shall notify the commissioners of finance
129.11and revenue of that fact and the commissioners shall deduct the required amount from any
129.12state aid or other state payment amount applicable to the city, plus interest on the amount
129.13at the rate of one percent per month from the payment due date to the actual payment date.
129.14    (c) Upon the receipt of the additional member contribution under paragraph (a), the
129.15executive director shall transfer an amount equal to double the eligible person's member
129.16contributions to the coordinated program of the general employees retirement plan for the
129.17period from April 2, 1990, to January 1, 1996, plus compound interest at the annual rate
129.18of 8.5 percent from August 1, 1993, to the date of transfer from the general employees
129.19retirement fund to the public employees police and fire retirement fund.
129.20    Subd. 5. Public safety employment substantiation. Service credit is transferrable
129.21under this section only if the employment for the city of Maple Grove by the eligible
129.22person during the period from April 2, 1990, to January 1, 1996, is documented as
129.23constituting firefighter employment sufficient to qualify for public employees police and
129.24fire retirement plan membership and eligibility if the city of Maple Grove had adopted the
129.25resolution under Minnesota Statutes, section 353.64, subdivision 2, as of April 2, 1990.
129.26The city of Maple Grove and the eligible person must provide any relevant documentation
129.27required by the executive director of the Public Employees Retirement Association.
129.28    Subd. 6. Expiration. Authority to transfer service credit under this section expires
129.29on July 1, 2009.
129.30EFFECTIVE DATE.This section is effective the day following final enactment.

129.31    Sec. 4. TEACHERS RETIREMENT ASSOCIATION COVERAGE ELECTION
129.32FOR CERTAIN MNSCU FACULTY MEMBERS.
129.33    (a) Notwithstanding any provision to the contrary of Minnesota Statutes, chapter
129.34354B, an eligible person described in paragraph (b) may elect prospective and retroactive
129.35retirement coverage under paragraph (c).
130.1    (b) An eligible person is a person who:
130.2    (1) was born on December 9, 1954;
130.3    (2) was initially employed by the Minnesota State Colleges and Universities system
130.4on a part-time basis at Metropolitan State University on January 12, 2004;
130.5    (3) was first employed in excess of 25 percent of full-time employment by the
130.6Minnesota State Colleges and Universities system on August 27, 2005;
130.7    (4) was covered by the higher education individual retirement account plan because
130.8of a failure of the Minnesota State Colleges and Universities system to advise about the
130.9default retirement coverage provision of Minnesota Statutes, section 354B.21, subdivision
130.103; and
130.11    (5) became a full-time employee of the Minnesota State Colleges and Universities
130.12system as a full-time faculty member at Metropolitan State University on July 17, 2007.
130.13    (c) An eligible person may elect retirement coverage by the Teachers Retirement
130.14Association rather than the higher education individual retirement account plan for faculty
130.15employment rendered after the date of the retirement coverage election under this section
130.16and for past Minnesota State Colleges and Universities system faculty employment from
130.17January 12, 2004, until the date of the retirement coverage election. The election must
130.18be made in writing, must be filed with the executive director of the Teachers Retirement
130.19Association, and must be accompanied with any relevant documentation required by the
130.20executive director of the Teachers Retirement Association.
130.21    (d) If an eligible person makes the retirement coverage election under paragraph (c),
130.22the eligible person's member contributions to the higher education individual retirement
130.23account plan must be transferred to the Teachers Retirement Association, with any earned
130.24investment returns on those contributions. If the transferred member contributions and
130.25investment earnings are less than the calculated amount of the member contribution that
130.26the eligible person would have made to the Teachers Retirement Association on the
130.27eligible person's compensation from the Minnesota State Colleges and Universities system
130.28for the period from on August 27, 2005, to the date of the retirement coverage election, if
130.29the person had been covered by the Teachers Retirement Association during the period,
130.30plus annual compound interest at the rate of 8.5 percent, the eligible person shall pay the
130.31balance of that calculated member contribution obligation within 30 days of the retirement
130.32coverage election. Any payment may be made through an institution-to-institution
130.33transfer from the eligible person's account in the Minnesota state deferred compensation
130.34program or the eligible person's tax-sheltered savings account under the federal Internal
130.35Revenue Code, section 403(b).
131.1    (e) Upon the transfer of the equivalent member contribution amount and any
131.2additional payments under paragraph (d), the balance of the eligible person's higher
131.3education individual retirement account plan account must be transferred to the Teachers
131.4Retirement Association. If the amounts under paragraph (d) and the individual retirement
131.5account plan account balance under this paragraph are less than the prior service credit
131.6purchase payment amount calculated under Minnesota Statutes, section 356.551, the
131.7Minnesota State Colleges and Universities system shall pay that difference within 60 days
131.8of the retirement coverage election date.
131.9    (f) Upon the transfers and payments under paragraphs (d) and (e), the eligible
131.10person must be credited by the Teachers Retirement Association with allowable and
131.11formula service for Minnesota State Colleges and Universities system employment since
131.12January 12, 2004.
131.13    (g) The authority to make a retirement coverage election under this section expires
131.14on January 1, 2009.
131.15EFFECTIVE DATE.This section is effective the day following final enactment.

131.16    Sec. 5. TEACHERS RETIREMENT ASSOCIATION; SERVICE CREDIT
131.17PURCHASE AUTHORIZATION.
131.18    (a) Notwithstanding any provision of Minnesota Statutes, chapter 354, to the
131.19contrary, an eligible person described in paragraph (b) may purchase allowable and
131.20formula service credit under Minnesota Statutes, section 354.05, subdivisions 13 and 25,
131.21from the Teachers Retirement Association, for the period of prior out-of-state teaching
131.22service specified in paragraph (c), by making the payment required under paragraph (d).
131.23    (b) An eligible person is a person who:
131.24    (1) was born on April 7, 1976;
131.25    (2) was a teacher at the Edwardsville High School in O'Fallon, Illinois, during the
131.261998-1999, 1999-2000, 2000-2001, and 2001-2002 school years;
131.27    (3) was a teacher for Independent School District No. 196, Rosemount, at the
131.28Apple Valley High School during the 2002-2003, 2003-2004, 2004-2005, 2005-2006,
131.29and 2006-2007 school years; and
131.30    (4) was on a leave of absence from Independent School District No. 196,
131.31Rosemount, for the 2007-2008 school year.
131.32    (c) The period of prior service credit available for purchase is up to 4.188 years,
131.33representing Illinois teaching service rendered during the 1998-1999, 1999-2000,
131.342000-2001, and 2001-2002 school years. The prior service credit may not exceed one year
131.35of service credit in any school year and may not include any prior teaching service that
132.1entitles the eligible person to a current or deferred age and service retirement annuity or
132.2disability benefit from the Illinois Teachers Retirement System or that was previously
132.3subject to a prior service credit purchase from another defined benefit public employee
132.4retirement plan.
132.5    (d) The purchase payment amount under this section is the amount calculated under
132.6Minnesota Statutes, section 356.551. If permitted by federal law and Illinois state law, the
132.7purchase payment obligation may be met in whole or in part by an institution to institution
132.8transfer of the eligible person's account balance in the Illinois Teachers Retirement System.
132.9    (e) The election to purchase prior service credit under this section must be made
132.10in writing and must be filed with the executive director of the Teachers Retirement
132.11Association. The executive director of the Teachers Retirement System may require the
132.12documentation of the applicability of this section and any other relevant information
132.13from the eligible person.
132.14EFFECTIVE DATE; EXPIRATION.This section is effective the day following
132.15final enactment and expires on January 1, 2010.

132.16    Sec. 6. REVISED TOTAL AND PERMANENT DISABILITY BENEFIT,
132.17MINNEAPOLIS BOMB SQUAD DISABILITANT.
132.18    (a) Notwithstanding Minnesota Statutes 2007 Supplement, section 353.656,
132.19subdivision 1a, to the contrary, an eligible person specified in paragraph (b) is entitled
132.20to the benefit specified in paragraph (c).
132.21    (b) An eligible person is a person who:
132.22    (1) was born on September 9, 1964;
132.23    (2) was injured on February 9, 2005, while working as a police officer on the city of
132.24Minneapolis bomb squad, causing traumatic brain injury;
132.25    (3) because of ineligibility for coverage under the federal Old Age, Survivors, and
132.26Disability Insurance Program, is not eligible for federal Old Age, Survivors, and Disability
132.27Insurance Program disability benefits; and
132.28    (4) commenced receiving public employees police and fire retirement plan disability
132.29benefits on August 12, 2006.
132.30    (c) The disability benefit payable to an eligible person specified in paragraph (b) is
132.3175 percent of average salary as defined in Minnesota Statutes, section 353.01, subdivision
132.3217a. The benefit specified in this paragraph commences on the first day of the month after
132.33the effective date, and is in lieu of the disability benefit otherwise provided by law.
132.34EFFECTIVE DATE.This section is effective the day following final enactment.

133.1    Sec. 7. PERA CONSOLIDATED INDEPENDENT SCHOOL DISTRICT NO.
133.22859, GLENCOE/SILVER LAKE, ANNUITANT WAIVER OF REPAYMENT
133.3REQUIREMENT.
133.4    (a) Notwithstanding any provisions of Minnesota Statutes 2008, section 353.01,
133.5subdivision 28, to the contrary, an eligible person described in paragraph (b) must be
133.6considered by the executive director of the Public Employees Retirement Association to
133.7have retired on September 30, 2003, although the person rendered service in October
133.82003 as an employee of an independent contractor which provided services to the same
133.9governmental subdivision from which the individual terminated service on September
133.1030, 2003.
133.11    (b) An eligible person is a person who:
133.12    (1) was born on November 13, 1944;
133.13    (2) was hired on August 17, 1964, by Independent School District No. 422,
133.14Glencoe, predecessor of the now consolidated Independent School District No. 2859,
133.15Glencoe/Silver Lake, with coverage by the general employees retirement plan of the
133.16Public Employees Retirement Association;
133.17    (3) terminated employment as manager of the grounds and transportation for the
133.18school district on September 30, 2003; and
133.19    (4) relying upon incomplete or erroneous information provided by the Public
133.20Employees Retirement Association regarding separation from service requirements as it
133.21applies to independent contractor employment, became an employee in October 2003 of
133.22the independent contractor providing bus service for the same school district.
133.23    (c) Notwithstanding Minnesota Statutes, section 353.27, subdivision 7b, an eligible
133.24person described in paragraph (b) must not be required to repay, through suspension
133.25or reduction of the annuity or any other means, any Public Employees Retirement
133.26Association general plan retirement annuity amount received before December 31, 2004.
133.27EFFECTIVE DATE.This section is effective the day following final enactment.

133.28    Sec. 8. PERA-GENERAL; CITY OF ST. PAUL EMPLOYEE SERVICE CREDIT
133.29PURCHASE.
133.30    (a) An eligible person described in paragraph (b) is entitled to purchase allowable
133.31service credit from the general employees retirement plan of the Public Employees
133.32Retirement Association for the period of employment by the city of St. Paul between
133.33May 1, 1982, and March 31, 1984, that qualified as employment by a public employee
133.34under Minnesota Statutes 1982, section 353.01, subdivision 2, that was not previously
133.35credited by the retirement plan.
134.1    (b) An eligible person is a person who:
134.2    (1) was born on March 25, 1960;
134.3    (2) was first employed by the city of St. Paul on April 23, 1979;
134.4    (3) qualified for Public Employees Retirement Association general plan coverage in
134.5May 1982 but was not reported by the city of St. Paul to the Public Employees Retirement
134.6Association for coverage until April 1984; and
134.7    (4) became a member of the general employees retirement plan of the Public
134.8Employees Retirement Association in April 1984.
134.9    (c) The eligible person described in paragraph (b) is authorized to apply with the
134.10executive director of the Public Employees Retirement Association to make the service
134.11credit purchase under this section. The application must be in writing and must include
134.12all necessary documentation of the applicability of this section and any other relevant
134.13information that the executive director may require.
134.14    (d) Allowable service credit under Minnesota Statutes, section 353.01, subdivision
134.1516, must be granted by the general employees retirement plan of the Public Employees
134.16Retirement Association to the account of the eligible person upon the receipt of the prior
134.17service credit purchase payment amount required under Minnesota Statutes, section
134.18356.551.
134.19    (e) Of the prior service credit purchase payment amount under Minnesota Statutes,
134.20section 356.551, the eligible person must pay an amount equal to the employee
134.21contribution rate or rates in effect during the uncredited employment period applied to the
134.22actual salary rates in effect during the period, plus annual compound interest at the rate
134.23of 8.5 percent from the date the member contribution payment should have been made
134.24if made in a timely fashion until the date on which the contribution is actually made. If
134.25the equivalent member contribution payment, plus interest, is made, the city of St. Paul
134.26shall pay the balance of the total prior service credit purchase payment amount under
134.27Minnesota Statutes, section 356.551, within 60 days of notification by the executive
134.28director of the Public Employees Retirement Association that the member contribution
134.29equivalent payment has been received by the association.
134.30    (f) Authority for an eligible person to make a prior service credit purchase under
134.31this section expires on June 30, 2009, or upon termination of employment covered by the
134.32Public Employees Retirement Association, whichever is earlier.
134.33    (g) If the city of St. Paul fails to pay its portion of the prior service credit purchase
134.34payment amount under paragraph (e), the executive director of the Public Employees
134.35Retirement Association must notify the commissioners of finance and revenue of that fact
134.36and the commissioners shall order the deduction of the required payment amount from
135.1the next payment of any state aid to the city of St. Paul and the commissioners shall
135.2transmit the applicable amount to the general employees retirement fund of the Public
135.3Employees Retirement Association.
135.4EFFECTIVE DATE.This section is effective the day following final enactment.

135.5    Sec. 9. ST. PAUL SCHOOL BOARD; PRIOR SERVICE PURCHASE.
135.6    (a) An eligible person described in paragraph (b) is entitled to purchase prior
135.7uncredited service rendered as a member of the board of education of Independent School
135.8District No. 625, St. Paul, from the defined contribution retirement plan of the Public
135.9Employees Retirement Association.
135.10    (b) An eligible person is a person who has one of the following combinations of
135.11date of birth, date of initial membership on the board of education of Independent School
135.12District No. 625, St. Paul, and first enrolled in the public employees defined contribution
135.13plan:

135.14 135.15 135.16 135.17	person	birth date	date of initial school board membership		date of enrollment in public employees defined contribution plan
135.18	A	January 10, 1955		January 1, 2000		August 28, 2007
135.19	B	May 15, 1957		January 1, 2006		January 20, 2007
135.20	C	May 7, 1960		January 1, 1992		February 17, 1998
135.21	D	July 16, 1969		January 1, 2004		April 13, 2007

135.22    (c) To make the purchase, eligible persons A, B, and D shall pay an amount equal to
135.23five percent of the salary of the eligible person between the date of the initial school board
135.24membership and the date of enrollment in the public employees defined contribution plan,
135.25plus compound interest on that amount from the midpoint of that period to the date of
135.26payment. To make the purchase, eligible person C shall make two payments, one before
135.27December 15, 2008, and the other after January 1, 2009, and before January 31, 2010,
135.28each in an amount equal to 2.5 percent of the salary of the eligible person between January
135.291, 1992, and February 17, 1998, plus compound interest on that amount at the rate of six
135.30percent from July 1, 1994, to the date of payment.
135.31    (d) If the eligible person makes the payment under paragraph (c), Independent
135.32School District No. 625, St. Paul, shall pay an amount equal to the payment amount or
135.33amounts under paragraph (c). The employer payment or payments must be made within
135.34ten days of the date of notification of the eligible person's payment by the executive
135.35director of the Public Employees Retirement Association.
136.1    (e) This authority expires on May 31, 2010, or on the first day of the month next
136.2following the conclusion of the eligible member's elected public service, whichever
136.3occurs earlier.
136.4EFFECTIVE DATE.This section is effective the day following final enactment.

136.5    Sec. 10. TEACHERS RETIREMENT ASSOCIATION; SERVICE CREDIT
136.6PURCHASE AUTHORIZATION.
136.7    (a) Notwithstanding any provision of Minnesota Statutes, chapter 354, to the
136.8contrary, unless the period to be purchased is credited as allowable service by another
136.9retirement plan covered by Minnesota Statutes, section 356.30, or is ineligible for credit as
136.10allowable or formula service under Minnesota Statutes, chapter 354, an eligible person
136.11described in paragraph (b) may purchase allowable and formula service credit under
136.12Minnesota Statutes, section 354.05, subdivisions 13 and 25, from the Teachers Retirement
136.13Association, for the period specified in paragraph (c), by making the payment required
136.14under paragraph (d).
136.15    (b) An eligible person is a person who:
136.16    (1) was born on December 8, 1974; and
136.17    (2) took a leave of absence from teaching in Wayzata, Independent School District,
136.18No. 284, from January, 2006, through March, 2006, during which the person did not
136.19receive allowable and formula service credit from the Teachers Retirement Association.
136.20    (c) The period of prior service credit available for purchase is 26.5 days.
136.21    (d) The purchase payment amount under this section is the amount calculated in
136.22Minnesota Statutes, section 356.551.
136.23    (e) The election to purchase prior service credit under this section must be made
136.24in writing and must be filed with the executive director of the Teachers Retirement
136.25Association. The executive director may require documentation of the applicability of this
136.26section and any other relevant information from the eligible person.
136.27EFFECTIVE DATE; EXPIRATION.(a) This section is effective the day
136.28following final enactment.
136.29    (b) This section expires on June 30, 2009.

136.30    Sec. 11. MSRS-UNCLASSIFIED PROGRAM; MARITAL PROPERTY
136.31DIVISION.
136.32    (a) An eligible state employee described in paragraph (b) may elect to have the
136.33person's account in the unclassified state employees retirement program of the Minnesota
136.34State Retirement System governed by Minnesota Statutes, chapter 352D, divided as
137.1provided in a martial property division decree as part of a marriage dissolution action prior
137.2to the date on which the person terminates state employment.
137.3    (b) An eligible state employee is a person who:
137.4    (1) was born on July 19, 1953;
137.5    (2) was employed by the State Lottery in October 1989; and
137.6    (3) filed a marital property division decree from a marriage dissolution action with
137.7the executive director of the Minnesota State Retirement System.
137.8    (c) The former spouse of an eligible state employee, following the division election
137.9under paragraph (a), may, upon filing a written application, withdraw the cash value of
137.10the shares to the credit of the former spouse or to leave those shares on deposit in the
137.11supplemental investment fund.
137.12    (d) If the eligible state employee described in paragraph (b) exercises a retirement
137.13coverage transfer option election under Minnesota Statutes, section 352D.02, subdivision
137.143, and if the eligible state employee had previously exercised the division election under
137.15paragraph (a), the redemption of shares by the eligible state employee under Minnesota
137.16Statutes, section 352D.02, subdivision 3, is limited to the employee's portion of the total
137.17account amount and the allowable service credit of the employee in the general state
137.18employees retirement plan obtained by the election must bear the same relationship
137.19to the total state employment of the employee that the employee's portion of the total
137.20account bears to the total account amount. An election by an eligible state employee
137.21under Minnesota Statutes, section 352D.02, subdivision 3, does not apply to the former
137.22spouse and does not prevent the former spouse from utilizing Minnesota Statutes, section
137.23352D.05, at any time after the division election under paragraph (a) is made or Minnesota
137.24Statutes, section 352D.06, when the former spouse attains at least age 55.
137.25    (e) A division election under paragraph (a) is irrevocable.
137.26EFFECTIVE DATE.This section is effective the day following final enactment."
137.27Delete the title and insert:
137.29relating to retirement; various retirement plans; adding two employment
137.30positions to the correctional state employees retirement plan; including certain
137.31departments of the Rice Memorial Hospital in Willmar and the Worthington
137.32Regional Hospital in privatized public employee retirement coverage; providing
137.33for the potential dissolution of the Minnesota Post Retirement Investment Fund;
137.34increasing teacher retirement plan reemployed annuitant earnings limitations;
137.35temporarily exempting Metropolitan Airports Commission police officers from
137.36reemployed annuitant earnings limits; mandating joint and survivor optional
137.37annuities rather than single life annuities as basic annuity form; making various
137.38changes in retirement plan administrative provisions; clarifying general state
137.39employee retirement plan alternative coverage elections by certain unclassified
137.40state employees retirement program participants; clarifying direct state aid
137.41for the teacher retirement associations; clarifying the handling of unclaimed
138.1retirement accounts in the individual retirement account plan; providing for
138.2a study of certain Minnesota State Colleges and Universities System tenure
138.3track faculty members; modifying the manner in which official actuarial work
138.4for public pension plans is performed; allowing pension plans greater latitude
138.5in setting salary and payroll assumptions; extending amortization target dates
138.6for various retirement plans; making the number and identity of tax-sheltered
138.7annuity vendors a mandatory bargaining item for school districts and their
138.8employees; allowing a certain firefighter relief association certain benefit
138.9increases; allowing security broker-dealers to directly hold local pension
138.10plan assets; increasing upmost flexible service pension maximum amounts
138.11for volunteer firefighters; creating a voluntary statewide volunteer firefighter
138.12retirement plan advisory board within the Public Employees Retirement
138.13Association; allowing various retirement plans to accept labor union retired
138.14member dues deduction authorizations; authorizing various prior service credit
138.15purchases; authorizing certain service credit and coverage transfers; authorizing
138.16a disability benefit application to be rescinded; authorizing a retirement coverage
138.17termination; providing an additional benefit to certain injured Minneapolis
138.18bomb squad officers; allowing certain Independent School District No. 625
138.19school board members to make back defined contribution retirement plan
138.20contributions; revising post-2009 additional amortization state aid allocations;
138.21modifying PERA-P&F duty disability benefit amounts; authorizing a PERA
138.22prior military service credit purchase; revising the administrative duties of the
138.23board and the executive director of the Minnesota State Retirement System;
138.24appropriating money;amending Minnesota Statutes 2006, sections 6.67; 11A.18,
138.25subdivision 9, by adding subdivisions; 16A.055, subdivision 5; 43A.346,
138.26subdivisions 4, 5, 6, 7; 69.011, subdivision 1; 123B.02, subdivision 15; 352.03,
138.27subdivisions 4, 5; 352.12, subdivision 2; 352.22, subdivision 10; 352.931,
138.28subdivision 1; 352.97; 352.98, subdivisions 1, 2, 3, 4, 5; 352D.075, subdivision
138.292a; 353.01, subdivisions 10, 11a, by adding a subdivision; 353.27, by adding a
138.30subdivision; 353.30, subdivision 3; 353.33, subdivision 5; 353.656, subdivision
138.312; 353D.05, subdivision 2; 353D.12, subdivision 4; 353E.07, subdivision 7;
138.32354.05, subdivision 37; 354.33, subdivision 5; 354.44, subdivision 5; 354A.12,
138.33subdivision 3a; 354A.31, subdivision 3; 354B.20, by adding a subdivision;
138.34354B.25, subdivision 5, by adding a subdivision; 354C.12, subdivision 4;
138.35354C.165; 356.20, subdivisions 1, 2, 3, 4, 4a; 356.214, subdivisions 1, 3, by
138.36adding a subdivision; 356.215, subdivisions 1, 2, 3, 8, 11, 18; 356.24, subdivision
138.371; 356.41; 356.46, as amended; 356.47, subdivision 3; 356.551, subdivision 2;
138.38356.611, subdivision 2, by adding a subdivision; 356A.06, subdivisions 1, 7,
138.398b; 356B.10, subdivision 3; 363A.36, subdivision 1; 383B.914, subdivision 7;
138.40423A.02, subdivision 1b; 424A.001, subdivision 6, by adding a subdivision;
138.41424A.02, subdivisions 3, 7, 9; 424A.05, subdivision 3; 518.003, subdivision
138.428; Minnesota Statutes 2007 Supplement, sections 43A.346, subdivisions 1,
138.432; 352.01, subdivision 2a; 352.017, subdivision 2; 352.91, subdivision 3d;
138.44352.955, subdivisions 3, 5; 352D.02, subdivisions 1, 3; 353.01, subdivision
138.452b; 353.0161, subdivision 2; 353.27, subdivision 14; 353.32, subdivision
138.461a; 353.656, subdivision 1; 353.657, subdivision 2a; 353F.02, subdivision 4;
138.47354.096, subdivision 2; 354.72, subdivision 2; 354A.12, subdivision 3c; 356.96,
138.48subdivision 1; 422A.06, subdivision 8; Laws 2002, chapter 392, article 2, section
138.494; Laws 2006, chapter 271, article 5, section 5; proposing coding for new law
138.50in Minnesota Statutes, chapters 11A; 352; 353D; 353F; 354; 354C; 356; 423A;
138.51repealing Minnesota Statutes 2006, sections 352.96; 354.44, subdivision 6a;
138.52354.465; 354.51, subdivision 4; 354.55, subdivisions 2, 3, 6, 12, 15; 354A.091,
138.53subdivisions 1a, 1b; 354A.12, subdivision 3a; 355.629; 356.214, subdivision 2;
138.54356.215, subdivision 2a; Minnesota Statutes 2007 Supplement, section 354A.12,
138.55subdivisions 3b, 3c; Laws 1965, chapter 592, sections 3, as amended; 4, as
138.56amended; Laws 1967, chapter 575, sections 2, as amended; 3; 4; Laws 1969,
138.57chapter 352, section 1, subdivisions 3, 4, 5, 6; Laws 1969, chapter 526, sections
138.583; 4; 5, as amended; 7, as amended; Laws 1971, chapter 140, sections 2, as
139.1amended; 3, as amended; 4, as amended; 5, as amended; Laws 1971, chapter
139.2214, section 1, subdivisions 1, 2, 3, 4, 5; Laws 1973, chapter 304, section 1,
139.3subdivisions 3, 4, 5, 6, 7, 8, 9; Laws 1973, chapter 472, section 1, as amended;
139.4Laws 1975, chapter 185, section 1; Laws 1985, chapter 261, section 37, as
139.5amended; Laws 1991, chapter 125, section 1; Laws 2005, First Special Session
139.6chapter 8, article 1, section 23; Minnesota Rules, parts 7905.0100; 7905.0200;
139.77905.0300; 7905.0400; 7905.0500; 7905.0600; 7905.0700; 7905.0800;
139.87905.0900; 7905.1000; 7905.1100; 7905.1200; 7905.1300; 7905.1400;
139.97905.1500; 7905.1600; 7905.1700; 7905.1800; 7905.1900; 7905.2000;
139.107905.2100; 7905.2200; 7905.2300; 7905.2400; 7905.2450; 7905.2500;
139.117905.2560; 7905.2600; 7905.2700; 7905.2800; 7905.2900."