1.1.................... moves to amend S.F. No. 191; H.F. No. 723, as follows:
1.2Delete everything after the enacting clause and insert:


1.6    Section 1. Minnesota Statutes 2008, section 3A.02, subdivision 3, is amended to read:
1.7    Subd. 3. Appropriation. The amounts required for payment of retirement
1.8allowances provided by this section are appropriated annually to the director from the
1.9participation of the legislators retirement plan in the Minnesota postretirement investment
1.10fund or from the general fund as provided in section 3A.115. The retirement allowance
1.11must be paid is payable monthly to the recipients entitled to those retirement allowances.

1.12    Sec. 2. Minnesota Statutes 2008, section 3A.02, is amended by adding a subdivision to
1.13read:
1.14    Subd. 6. Postretirement adjustment eligibility. A retirement allowance under this
1.15section is eligible for postretirement adjustments under section 356.415.

1.16    Sec. 3. Minnesota Statutes 2008, section 3A.03, is amended by adding a subdivision to
1.17read:
1.18    Subd. 3. Legislators retirement fund. (a) The legislators retirement fund, a special
1.19retirement fund, is created within the state treasury and must be credited with assets equal
1.20to the participation of the legislators retirement plan in the Minnesota postretirement
1.21investment fund as of June 30, 2009, and any investment proceeds on those assets.
1.22(b) The payment of annuities under section 3A.115, paragraph (b), is appropriated
1.23from the legislators retirement fund.

1.24    Sec. 4. Minnesota Statutes 2008, section 3A.04, is amended by adding a subdivision to
1.25read:
1.26    Subd. 2a. Postretirement adjustment eligibility. A survivor benefit under this
1.27section is eligible for postretirement adjustments under section 356.415.

1.28    Sec. 5. Minnesota Statutes 2008, section 3A.115, is amended to read:
1.293A.115 RETIREMENT ALLOWANCE APPROPRIATION;
1.30POSTRETIREMENT ADJUSTMENT.
2.1(a) The amount necessary to fund the retirement allowance granted under this
2.2chapter to a former legislator upon retirement retiring after June 30, 2003, is appropriated
2.3from the general fund to the director to pay pension obligations due to the retiree.
2.4(b) The amount necessary to fund the retirement allowance granted under this
2.5chapter to a former legislator retiring before July 1, 2003, must be paid from the legislators
2.6retirement fund created under section 3A.03, subdivision 3, until the assets of the fund
2.7are exhausted and at that time, the amount necessary to fund the retirement allowances
2.8under this paragraph is appropriated from the general fund to the director to pay pension
2.9obligations to the retiree.
2.10(c) Retirement allowances payable to retired legislators and their survivors under
2.11this chapter must be adjusted in the same manner, at the same times, and in the same
2.12amounts as are benefits payable from the Minnesota postretirement investment fund to
2.13retirees of a participating public pension fund as provided in sections 3A.02, subdivision
2.146, and 356.415.

2.15    Sec. 6. Minnesota Statutes 2008, section 11A.08, subdivision 1, is amended to read:
2.16    Subdivision 1. Membership. There is created an Investment Advisory Council
2.17consisting of 17 members. Ten of these members shall must be experienced in general
2.18investment matters. They shall be appointed by the state board The state board must
2.19appoint the ten members. The other seven members shall be are: the commissioner of
2.20finance; the executive director of the Minnesota State Retirement System; the executive
2.21director of the Public Employees Retirement Association; the executive director of
2.22the Teachers Retirement Association; a retiree currently receiving benefits from the
2.23postretirement investment fund a statewide retirement plan; and two public employees
2.24who are active members of funds whose assets are invested by the state board. The
2.25governor must appoint the retiree and the public employees shall be appointed by the
2.26governor for four-year terms.

2.27    Sec. 7. Minnesota Statutes 2008, section 11A.23, subdivision 1, is amended to read:
2.28    Subdivision 1. Certification of assets not needed for immediate use. Each
2.29executive director administering a retirement fund or plan enumerated in subdivision 4
2.30shall, from time to time, certify to the state board for investment those portions of the
2.31assets of the retirement fund or plan which in the judgment of the executive director are
2.32not required for immediate use. Assets of the fund or plan required for participation in
2.33the Minnesota postretirement adjustment fund, the combined investment fund, or the
2.34supplemental investment fund shall be transferred to those funds as provided by sections
2.3511A.01 to 11A.25.

3.1    Sec. 8. Minnesota Statutes 2008, section 11A.23, subdivision 2, is amended to read:
3.2    Subd. 2. Investment. Retirement fund assets certified to the state board pursuant to
3.3subdivision 1 shall must be invested by the state board subject to the provisions of section
3.411A.24 . Retirement fund assets transferred to the Minnesota postretirement investment
3.5fund, the combined investment fund or the supplemental investment fund shall must be
3.6invested by the state board as part of those funds.

3.7    Sec. 9. Minnesota Statutes 2008, section 352.021, is amended by adding a subdivision
3.8to read:
3.9    Subd. 5. Determining applicable law. An annuity under this chapter must be
3.10computed under the law in effect as of the last day for which the employee receives pay,
3.11or if on medical leave, the day that the leave terminates. However, if the employee has
3.12returned to covered employment following a termination, the employee must have earned
3.13at least six months of allowable service following their return in order to qualify for
3.14improved benefits resulting from any law change enacted subsequent to that termination.

3.15    Sec. 10. Minnesota Statutes 2008, section 352.04, subdivision 1, is amended to read:
3.16    Subdivision 1. Fund created. (a) There is created a special fund to be known as the
3.17general state employees retirement fund. In that fund, employee contributions, employer
3.18contributions, and other amounts authorized by law must be deposited.
3.19(b) The general state employees retirement plan of the Minnesota State Retirement
3.20System must participate in the Minnesota postretirement investment fund. The amounts
3.21provided in section 352.119 must be deposited in the Minnesota postretirement investment
3.22fund.

3.23    Sec. 11. Minnesota Statutes 2008, section 352.04, subdivision 12, is amended to read:
3.24    Subd. 12. Fund disbursement restricted. The general state employees retirement
3.25fund and the participation in the Minnesota postretirement investment fund must be
3.26disbursed only for the purposes provided by law. The expenses of the system and any
3.27benefits provided by law, other than benefits payable from the Minnesota postretirement
3.28investment fund, must be paid from the general state employees retirement fund. The
3.29retirement allowances, retirement annuities, and disability benefits, as well as refunds of
3.30any sum remaining to the credit of a deceased retired employee or a disabled employee
3.31must be paid only from the general state employees retirement fund after the needs
3.32have been certified and the amounts withdrawn from the participation in the Minnesota
3.33postretirement investment fund under section 11A.18. The amounts necessary to make the
3.34payments from the general state employees retirement fund and the participation in the
4.1Minnesota postretirement investment fund are annually appropriated from these funds
4.2that fund for those purposes.

4.3    Sec. 12. Minnesota Statutes 2008, section 352.061, is amended to read:
4.4352.061 INVESTMENT BOARD TO INVEST FUNDS.
4.5The director shall, from time to time, certify to the State Board of Investment any
4.6portions of the state employees retirement fund that in the judgment of the director are
4.7not required for immediate use. Assets from the state employees retirement fund must
4.8be transferred to the Minnesota postretirement investment fund as provided in section
4.911A.18. The State Board of Investment shall invest and reinvest sums so transferred, or
4.10certified, in securities that are duly authorized legal investments under section 11A.24.

4.11    Sec. 13. Minnesota Statutes 2008, section 352.113, is amended by adding a subdivision
4.12to read:
4.13    Subd. 13. Postretirement adjustment eligibility. A disability benefit under this
4.14section is eligible for postretirement adjustments under section 356.415.

4.15    Sec. 14. Minnesota Statutes 2008, section 352.115, is amended by adding a subdivision
4.16to read:
4.17    Subd. 14. Postretirement adjustment eligibility. A retirement annuity under
4.18this section and section 352.116 is eligible for postretirement adjustments under section
4.19356.415.

4.20    Sec. 15. Minnesota Statutes 2008, section 352.12, is amended by adding a subdivision
4.21to read:
4.22    Subd. 2c. Postretirement adjustment eligibility. A survivor benefit under
4.23subdivision 2, 2a, or 2b is eligible for postretirement adjustments under section 356.415.

4.24    Sec. 16. Minnesota Statutes 2008, section 352.75, subdivision 3, is amended to read:
4.25    Subd. 3. Existing retired members and benefit recipients. As of July 1, 1978,
4.26the liability for all retirement annuities, disability benefits, survivorship annuities, and
4.27survivor of deceased active employee benefits paid or payable by the former Metropolitan
4.28Transit Commission-Transit Operating Division employees retirement fund is transferred
4.29to the Minnesota State Retirement System, and is no longer the liability of the former
4.30Metropolitan Transit Commission-Transit Operating Division employees retirement
4.31fund. The required reserves for retirement annuities, disability benefits, and optional
4.32joint and survivor annuities in effect on June 30, 1978, and the required reserves for the
5.1increase in annuities and benefits provided under subdivision 6 must be determined using
5.2a five percent interest assumption and the applicable Minnesota State Retirement System
5.3mortality table and shall be transferred by the Minnesota State Retirement System to
5.4the Minnesota postretirement investment fund on July 1, 1978, but shall be considered
5.5transferred as of June 30, 1978. The annuity or benefit amount in effect on July 1, 1978,
5.6including the increase granted under subdivision 6, must be used for adjustments made
5.7under section 11A.18. For persons receiving benefits as survivors of deceased former
5.8retirement annuitants, the benefits must be considered as having commenced on the date
5.9on which the retirement annuitant began receiving the retirement annuity.

5.10    Sec. 17. Minnesota Statutes 2008, section 352.75, subdivision 4, is amended to read:
5.11    Subd. 4. Existing deferred retirees. Any former member of the former
5.12Metropolitan Transit Commission-Transit Operating Division employees retirement
5.13fund is entitled to a retirement annuity from the Minnesota State Retirement System if
5.14the employee:
5.15(1) is not an active employee of the Transit Operating Division of the former
5.16Metropolitan Transit Commission on July 1, 1978; (2) has at least ten years of active
5.17continuous service with the Transit Operating Division of the former Metropolitan
5.18Transit Commission as defined by the former Metropolitan Transit Commission-Transit
5.19Operating Division employees retirement plan document in effect on December 31, 1977;
5.20(3) has not received a refund of contributions; (4) has not retired or begun receiving an
5.21annuity or benefit from the former Metropolitan Transit Commission-Transit Operating
5.22Division employees retirement fund; (5) is at least 55 years old; and (6) submits a valid
5.23application for a retirement annuity to the executive director of the Minnesota State
5.24Retirement System.
5.25The person is entitled to a retirement annuity in an amount equal to the normal
5.26old age retirement allowance calculated under the former Metropolitan Transit
5.27Commission-Transit Operating Division employees retirement fund plan document in
5.28effect on December 31, 1977, subject to an early retirement reduction or adjustment in
5.29amount on account of retirement before the normal retirement age specified in that former
5.30Metropolitan Transit Commission-Transit Operating Division employees retirement fund
5.31plan document.
5.32The deferred retirement annuity of any person to whom this subdivision applies
5.33must be augmented. The required reserves applicable to the deferred retirement annuity,
5.34determined as of the date the allowance begins to accrue using an appropriate mortality
5.35table and an interest assumption of five percent, must be augmented by interest at the rate
6.1of five percent per year compounded annually from January 1, 1978, to January 1, 1981,
6.2and three percent per year compounded annually from January 1, 1981, to the first day
6.3of the month in which the annuity begins to accrue. Upon After the commencement of
6.4the retirement annuity, the required reserves for the annuity must be transferred to the
6.5Minnesota postretirement investment fund in accordance with subdivision 2 and section
6.6352.119 is entitled to postretirement adjustments under section 356.415. On applying for
6.7a retirement annuity under this subdivision, the person is entitled to elect a joint and
6.8survivor optional annuity under section 352.116, subdivision 3.

6.9    Sec. 18. Minnesota Statutes 2008, section 352.911, subdivision 3, is amended to read:
6.10    Subd. 3. Investment. The correctional employees retirement fund shall participate
6.11in the Minnesota postretirement investment fund and in that fund there shall be deposited
6.12the amounts provided in section 352.119. The balance of any assets of the fund shall
6.13must be deposited in the Minnesota combined investment funds as provided in section
6.1411A.14 , if applicable, or otherwise under section 11A.23.

6.15    Sec. 19. Minnesota Statutes 2008, section 352.911, subdivision 5, is amended to read:
6.16    Subd. 5. Fund disbursement restricted. The correctional employees retirement
6.17fund and its share of participation in the Minnesota postretirement investment fund shall
6.18must be disbursed only for the purposes provided for in the applicable provisions in this
6.19chapter. The proportional share of the expenses of the system and any benefits provided
6.20in sections section 352.90 to 352.951, other than benefits payable from the Minnesota
6.21postretirement investment fund, shall must be paid from the correctional employees
6.22retirement fund. The retirement allowances, retirement annuities, the disability benefits,
6.23the survivorship benefits, and any refunds of accumulated deductions shall must be paid
6.24only from the correctional employees retirement fund after those needs have been certified
6.25by the executive director and the amounts withdrawn from the share of participation in the
6.26Minnesota postretirement fund under section 11A.18. The amounts necessary to make the
6.27payments from the correctional employees retirement fund and the participation in the
6.28Minnesota postretirement investment fund are annually appropriated from those funds
6.29that fund for those purposes.

6.30    Sec. 20. Minnesota Statutes 2008, section 352.93, is amended by adding a subdivision
6.31to read:
6.32    Subd. 7. Postretirement adjustment eligibility. A retirement annuity under this
6.33section is eligible for postretirement adjustments under section 356.415.

7.1    Sec. 21. Minnesota Statutes 2008, section 352.931, is amended by adding a subdivision
7.2to read:
7.3    Subd. 6. Postretirement adjustment eligibility. A survivor benefit under this
7.4section is eligible for postretirement adjustments under section 356.415.

7.5    Sec. 22. Minnesota Statutes 2008, section 352.95, is amended by adding a subdivision
7.6to read:
7.7    Subd. 8. Postretirement adjustment eligibility. A disability benefit under this
7.8section is eligible for postretirement adjustments under section 356.415.

7.9    Sec. 23. Minnesota Statutes 2008, section 352B.02, subdivision 1d, is amended to read:
7.10    Subd. 1d. Fund revenue and expenses. The amounts provided for in this section
7.11must be credited to the State Patrol retirement fund. All money received must be deposited
7.12by the commissioner of finance in the State Patrol retirement fund. The fund must be used
7.13to pay the administrative expenses of the retirement fund, and the benefits and annuities
7.14provided in this chapter. Appropriate amounts shall be transferred to or withdrawn from
7.15the Minnesota postretirement investment fund as provided in section 352B.26.

7.16    Sec. 24. Minnesota Statutes 2008, section 352B.08, is amended by adding a
7.17subdivision to read:
7.18    Subd. 4. Postretirement adjustment eligibility. A retirement annuity under this
7.19section is eligible for postretirement adjustments under section 356.415.

7.20    Sec. 25. Minnesota Statutes 2008, section 352B.10, is amended by adding a
7.21subdivision to read:
7.22    Subd. 6. Postretirement adjustment eligibility. A disability benefit under this
7.23section is eligible for postretirement adjustments under section 356.415.

7.24    Sec. 26. Minnesota Statutes 2008, section 352B.11, is amended by adding a subdivision
7.25to read:
7.26    Subd. 2e. Postretirement adjustment eligibility. A survivor benefit under
7.27subdivision 2, 2b, or 2c is eligible for postretirement adjustments under section 356.415.

7.28    Sec. 27. Minnesota Statutes 2008, section 352C.10, is amended to read:
7.29352C.10 BENEFIT ADJUSTMENTS.
7.30    Retirement allowances payable to retired constitutional officers and surviving spouse
7.31benefits payable must be adjusted in the same manner, at the same times and in the same
8.1amounts as are benefits payable from the Minnesota postretirement investment fund to
8.2retirees of a participating public pension fund under section 356.415.

8.3    Sec. 28. Minnesota Statutes 2008, section 352D.06, subdivision 1, is amended to read:
8.4    Subdivision 1. Annuity; reserves. When a participant attains at least age 55,
8.5terminates from covered service, and applies for a retirement annuity, the cash value of the
8.6participant's shares shall must be transferred to the Minnesota postretirement investment
8.7general state employees retirement fund and must be used to provide an annuity for the
8.8retired employee based upon the participant's age when the benefit begins to accrue
8.9according to the reserve basis used by the general state employees retirement plan in
8.10determining pensions and reserves. The annuity under this subdivision is eligible for
8.11postretirement adjustments under section 356.415.

8.12    Sec. 29. Minnesota Statutes 2008, section 352D.065, is amended by adding a
8.13subdivision to read:
8.14    Subd. 3a. Postretirement adjustment eligibility. A disability benefit under this
8.15section is eligible for postretirement adjustments under section 356.415.

8.16    Sec. 30. Minnesota Statutes 2008, section 352D.075, is amended by adding a
8.17subdivision to read:
8.18    Subd. 2b. Postretirement adjustment eligibility. A survivor benefit under this
8.19section is eligible for postretirement adjustments under section 356.415.

8.20    Sec. 31. Minnesota Statutes 2008, section 353.06, is amended to read:
8.21353.06 STATE BOARD OF INVESTMENT TO INVEST FUNDS.
8.22The executive director shall from time to time certify to the State Board of
8.23Investment for investment such portions of the retirement fund as in its judgment may not
8.24be required for immediate use. Assets from the public employees retirement fund shall
8.25be transferred to the Minnesota postretirement investment fund as provided in section
8.2611A.18. The State Board of Investment shall thereupon invest and reinvest the sum so
8.27certified, or transferred, in such securities as are duly authorized as legal investments for
8.28state employees retirement fund and shall have authority to sell, convey, and exchange
8.29such securities and invest and reinvest the securities when it deems it desirable to do so
8.30and shall sell securities upon request of the board of trustees when such funds are needed
8.31for its purposes. All of the provisions regarding accounting procedures and restrictions
8.32and conditions for the purchase and sale of securities for the state employees retirement
9.1fund shall under chapter 11A must apply to the accounting, purchase and sale of securities
9.2for the public employees retirement fund.

9.3    Sec. 32. Minnesota Statutes 2008, section 353.27, subdivision 1, is amended to read:
9.4    Subdivision 1. Income; disbursements. There is a special fund known as the
9.5"public employees retirement fund," the "retirement fund," or the "fund," which shall
9.6must include all the assets of the association. This fund shall must be credited with all
9.7contributions, all interest and all other income authorized by law. From this fund there
9.8is appropriated the payments authorized by this chapter in the amounts and at such time
9.9provided herein, including the expenses of administering the fund, and including the
9.10proper share of the Minnesota postretirement investment fund.

9.11    Sec. 33. Minnesota Statutes 2008, section 353.29, is amended by adding a subdivision
9.12to read:
9.13    Subd. 9. Postretirement adjustment eligibility. An annuity under this section or
9.14section 353.30 is eligible for postretirement adjustments under section 356.415.

9.15    Sec. 34. Minnesota Statutes 2008, section 353.31, subdivision 1b, is amended to read:
9.16    Subd. 1b. Joint and survivor option. (a) Prior to payment of a surviving spouse
9.17benefit under subdivision 1, the surviving spouse may elect to receive the 100 percent
9.18joint and survivor optional annuity under section 353.32, subdivision 1a, rather than a
9.19surviving spouse benefit.
9.20(b) If there is a dependent child or children, and the 100 percent joint and survivor
9.21optional annuity for the surviving spouse, when added to the dependent children's benefit
9.22under subdivisions 1 and 1a, exceeds an amount equal to 70 percent of the member's
9.23specified average monthly salary, the 100 percent joint and survivor annuity under section
9.24353.32, subdivision 1a , must be reduced by the amount necessary so that the total family
9.25benefit does not exceed the 70 percent maximum family benefit amount under subdivision
9.261a.
9.27(c) The 100 percent joint and survivor optional annuity must be restored to the
9.28surviving spouse, plus applicable postretirement fund adjustments under Minnesota
9.29Statutes 2008, section 356.41, through January 1, 2009, and thereafter under section
9.30356.415, as the dependent child or children become no longer dependent under section
9.31353.01, subdivision 15 .

9.32    Sec. 35. Minnesota Statutes 2008, section 353.31, is amended by adding a subdivision
9.33to read:
10.1    Subd. 12. Postretirement adjustment eligibility. A survivor benefit under
10.2subdivision 1 or 1b or section 353.32, subdivision 1a, 1b, or 1c is eligible for
10.3postretirement adjustments under section 356.415.

10.4    Sec. 36. Minnesota Statutes 2008, section 353.33, subdivision 3b, is amended to read:
10.5    Subd. 3b. Optional annuity election. A disabled member may elect to receive the
10.6normal disability benefit or an optional annuity under section 353.30, subdivision 3. The
10.7election of an optional annuity must be made prior to the commencement of payment of
10.8the disability benefit. The optional annuity must begin to accrue on the same date as
10.9provided for the disability benefit.
10.10(1) If a person who is not the spouse of a member is named as beneficiary of the
10.11joint and survivor optional annuity, the person is eligible to receive the annuity only
10.12if the spouse, on the disability application form prescribed by the executive director,
10.13permanently waives the surviving spouse benefits under sections 353.31, subdivision 1,
10.14and 353.32, subdivision 1a. If the spouse of the member refuses to permanently waive
10.15the surviving spouse coverage, the selection of a person other than the spouse of the
10.16member as a joint annuitant is invalid.
10.17(2) If the spouse of the member permanently waives survivor coverage, the
10.18dependent children, if any, continue to be eligible for survivor benefits under section
10.19353.31, subdivision 1 , including the minimum benefit in section 353.31, subdivision 1a.
10.20The designated optional annuity beneficiary may draw the monthly benefit; however, the
10.21amount payable to the dependent child or children and joint annuitant must not exceed
10.22the 70 percent maximum family benefit under section 353.31, subdivision 1a. If the
10.23maximum is exceeded, the benefit of the joint annuitant must be reduced to the amount
10.24necessary so that the total family benefit does not exceed the 70 percent maximum family
10.25benefit amount.
10.26(3) If the spouse is named as the beneficiary of the joint and survivor optional
10.27annuity, the spouse may draw the monthly benefits; however, the amount payable to
10.28the dependent child or children and the joint annuitant must not exceed the 70 percent
10.29maximum family benefit under section 353.31, subdivision 1a. If the maximum is
10.30exceeded, each dependent child will receive ten percent of the member's specified
10.31average monthly salary, and the benefit to the joint annuitant must be reduced to the
10.32amount necessary so that the total family benefit does not exceed the 70 percent maximum
10.33family benefit amount. The joint and survivor optional annuity must be restored to the
10.34surviving spouse, plus applicable postretirement adjustments under Minnesota Statutes
11.12008, section 356.41 or section 356.415, as the dependent child or children become no
11.2longer dependent under section 353.01, subdivision 15.

11.3    Sec. 37. Minnesota Statutes 2008, section 353.33, subdivision 7, is amended to read:
11.4    Subd. 7. Partial reemployment. If, following a work or non-work-related injury
11.5or illness, a disabled person who remains totally and permanently disabled as defined
11.6in section 353.01, subdivision 19, has income from employment that is not substantial
11.7gainful activity and the rate of earnings from that employment are less than the salary
11.8rate at the date of disability or the salary rate currently paid for positions similar to the
11.9employment position held by the disabled person immediately before becoming disabled,
11.10whichever is greater, the executive director shall continue the disability benefit in an
11.11amount that, when added to the earnings and any workers' compensation benefit, does not
11.12exceed the salary rate at the date of disability or the salary currently paid for positions
11.13similar to the employment position held by the disabled person immediately before
11.14becoming disabled, whichever is higher. The disability benefit under this subdivision may
11.15not exceed the disability benefit originally allowed, plus any postretirement adjustments
11.16payable after December 31, 1988, in accordance with Minnesota Statutes 2008, section
11.1711A.18, subdivision 10 , or Minnesota Statutes 2008, section 356.41, through January 1,
11.182009, and thereafter as provided in section 356.415. No deductions for the retirement fund
11.19may be taken from the salary of a disabled person who is receiving a disability benefit
11.20as provided in this subdivision.

11.21    Sec. 38. Minnesota Statutes 2008, section 353.33, is amended by adding a subdivision
11.22to read:
11.23    Subd. 13. Postretirement adjustment eligibility. A disability benefit under this
11.24section is eligible for postretirement adjustments under section 356.415.

11.25    Sec. 39. Minnesota Statutes 2008, section 353.651, is amended by adding a subdivision
11.26to read:
11.27    Subd. 5. Postretirement adjustment eligibility. An annuity under this section is
11.28eligible for postretirement adjustments under section 356.415.

11.29    Sec. 40. Minnesota Statutes 2008, section 353.656, subdivision 5a, is amended to read:
11.30    Subd. 5a. Cessation of disability benefit. (a) The association shall cease the
11.31payment of any disability benefit the first of the month following the reinstatement of a
11.32member to full time or less than full-time service in a position covered by the police
11.33and fire fund.
12.1    (b) A disability benefit paid to a disabled member of the police and fire plan, that
12.2was granted under laws in effect after June 30, 2007, terminates at the end of the month in
12.3which the member:
12.4    (1) reaches normal retirement age;
12.5    (2) if the disability benefit is payable for a 60-month period as determined under
12.6subdivisions 1 and 3, as applicable, the first of the month following the expiration of
12.7the 60-month period; or
12.8    (3) if the disabled member so chooses, the end of the month in which the member
12.9has elected to convert to an early retirement annuity under section 353.651, subdivision 4.
12.10    (c) If the police and fire plan member continues to be disabled when the disability
12.11benefit terminates under this subdivision, the member is deemed to be retired. The
12.12individual is entitled to receive a normal retirement annuity or an early retirement annuity
12.13under section 353.651, whichever is applicable, as further specified in paragraph (d)
12.14or (e). If the individual did not previously elect an optional annuity under subdivision
12.151a, paragraph (a), the individual may elect an optional annuity under subdivision 1a,
12.16paragraph (b).
12.17    (d) A member of the police and fire plan who is receiving a disability benefit under
12.18this section may, upon application, elect to receive an early retirement annuity under
12.19section 353.651, subdivision 4, at any time after attaining age 50, but must convert to a
12.20retirement annuity no later than the end of the month in which the disabled member attains
12.21normal retirement age. An early retirement annuity elected under this subdivision must be
12.22calculated on the disabled member's accrued years of service and average salary as defined
12.23in section 353.01, subdivision 17a, and when elected, the member is deemed to be retired.
12.24    (e) When an individual's benefit is recalculated as a retirement annuity under this
12.25section, the annuity must be based on clause (1) or clause (2), whichever provides the
12.26greater amount:
12.27    (1) the benefit amount at the time of reclassification, including all prior adjustments
12.28provided under Minnesota Statutes 2008, section 11A.18, through January 1, 2009, and
12.29thereafter as provided in section 356.415; or
12.30    (2) a benefit amount computed on the member's actual years of accrued allowable
12.31service credit and the law in effect at the time the disability benefit first accrued, plus any
12.32increases that would have applied since that date under section Minnesota Statutes 2008,
12.3311A.18 , through January 1, 2009, and thereafter as provided in section 356.415.

12.34    Sec. 41. Minnesota Statutes 2008, section 353.656, is amended by adding a subdivision
12.35to read:
13.1    Subd. 14. Postretirement adjustment eligibility. A disability benefit under this
13.2section is eligible for postretirement adjustments under section 356.415.

13.3    Sec. 42. Minnesota Statutes 2008, section 353.657, subdivision 3a, is amended to read:
13.4    Subd. 3a. Maximum and minimum family benefits. (a) The maximum monthly
13.5benefit per family must not exceed the following percentages of the member's average
13.6monthly salary as specified in subdivision 3:
13.7    (1) 80 percent, if the member's death was a line of duty death; or
13.8    (2) 70 percent, if the member's death was not a line of duty death or occurred while
13.9the member was receiving a disability benefit that accrued before July 1, 2007.
13.10    (b) The minimum monthly benefit per family, including the joint and survivor
13.11optional annuity under subdivision 2a, and section 353.656, subdivision 1a, must not be
13.12less than the following percentage of the member's average monthly salary as specified in
13.13subdivision 3:
13.14    (1) 60 percent, if the death was a line of duty death; or
13.15    (2) 50 percent, if the death was not a line of duty death or occurred while the member
13.16was receiving a disability benefit that accrued before July 1, 2007.
13.17    (c) If the maximum under paragraph (a) is exceeded, the monthly benefit of the
13.18joint annuitant must be reduced to the amount necessary so that the total family benefit
13.19does not exceed the applicable maximum. The joint and survivor optional annuity must
13.20be restored, plus applicable postretirement adjustments under Minnesota Statutes 2008,
13.21section 356.41 or section 356.415, as the dependent child or children become no longer
13.22dependent under section 353.01, subdivision 15.

13.23    Sec. 43. Minnesota Statutes 2008, section 353.657, is amended by adding a subdivision
13.24to read:
13.25    Subd. 5. Postretirement adjustment eligibility. A survivor benefit under this
13.26section is eligible for postretirement adjustments under section 356.415.

13.27    Sec. 44. Minnesota Statutes 2008, section 353.665, subdivision 3, is amended to read:
13.28    Subd. 3. Transfer of assets. Unless the municipality has elected to retain the
13.29consolidation account under subdivision 1, paragraph (b), the assets of the former local
13.30police or fire consolidation account must be transferred and upon transfer, the actuarial
13.31value of the assets of a former local police or fire consolidation account less an amount
13.32equal to the residual assets as determined under subdivision 7, paragraph (f), are the
13.33assets of the public employees police and fire fund as of July 1, 1999. The participation
13.34of a consolidation account in the Minnesota postretirement investment fund becomes
14.1part of the participation of the public employees police and fire fund in the Minnesota
14.2postretirement investment fund. The remaining assets, excluding the amounts for
14.3distribution under subdivision 7, paragraph (f), become an asset of the public employees
14.4police and fire fund. The public employees police and fire fund also must be credited as an
14.5asset with the amount of receivable assets under subdivision 7, paragraph (e).

14.6    Sec. 45. Minnesota Statutes 2008, section 353A.02, subdivision 14, is amended to read:
14.7    Subd. 14. Ineligible investments. "Ineligible investments" means any investment
14.8security or other asset held by the relief association at or after the initiation of the
14.9consolidation procedure which does not comply with the applicable requirements or
14.10limitations of sections 11A.09, 11A.18, 11A.23, and 11A.24.

14.11    Sec. 46. Minnesota Statutes 2008, section 353A.02, subdivision 23, is amended to read:
14.12    Subd. 23. Postretirement adjustment. "Postretirement adjustment" means any
14.13periodic or regular procedure for modifying the amount of a retirement annuity, service
14.14pension, disability benefit, or survivor benefit after the start of that annuity, pension,
14.15or benefit, including but not limited to modifications of amounts from the Minnesota
14.16postretirement investment fund under section 11A.18, subdivision 9 356.415, or any
14.17benefit escalation or benefit amount modification based on changes in the salaries payable
14.18to active police officers or salaried firefighters or changes in a cost-of-living index as
14.19provided for in the existing relief association benefit plan.

14.20    Sec. 47. Minnesota Statutes 2008, section 353A.05, subdivision 1, is amended to read:
14.21    Subdivision 1. Commission actions. (a) Upon initiation of consolidation as
14.22provided in section 353A.04, the executive director of the commission shall direct the
14.23actuary retained under section 356.214 to undertake the preparation of the actuarial
14.24calculations necessary to complete the consolidation.
14.25(b) These actuarial calculations shall include for each active member, each deferred
14.26former member, each retired member, and each current beneficiary the computation of the
14.27present value of future benefits, the future normal costs, if any, and the actuarial accrued
14.28liability on the basis of the existing relief association benefit plan and on the basis of the
14.29public employees police and fire fund benefit plan. These actuarial calculations shall also
14.30include for the total active, deferred, retired, and benefit recipient membership the sum
14.31of the present value of future benefits, the future normal costs, if any, and the actuarial
14.32accrued liability on the basis of the existing relief association benefit plan, on the basis of
14.33the public employees police and fire fund benefit plan, and on the basis of the benefit plan
14.34which produced the largest present value of future benefits for each person. The actuarial
15.1calculations shall be prepared using the entry age actuarial cost method for all components
15.2of the benefit plan and using the actuarial assumptions applicable to the fund for the
15.3most recent actuarial valuation prepared under section 356.215, except that the actuarial
15.4calculations on the basis of the existing relief association benefit plan shall be prepared
15.5using an interest rate actuarial assumption during the postretirement period which is in
15.6the same amount as the interest rate actuarial assumption applicable to the preretirement
15.7period. The actuarial calculations shall include the computation of the present value of the
15.8initial postretirement adjustment anticipated by the executive director of the state board as
15.9payable after the effective date of the consolidation from the Minnesota postretirement
15.10investment fund under section 11A.18 356.415.
15.11(c) The chief administrative officer of the relief association shall, upon request,
15.12provide in a timely manner to the executive director of the commission and to the actuary
15.13retained under section 356.214 the most current available information or documents,
15.14whichever applies, regarding the demographics of the active, deferred, retired, and
15.15benefit recipient membership of the relief association, the financial condition of the relief
15.16association, and the existing benefit plan of the relief association.
15.17(d) Upon completion of the actuarial calculations required by this subdivision, the
15.18actuary retained under section 356.214 shall issue a report in the form of an appropriate
15.19summary of the actuarial calculations and shall provide a copy of that report to the
15.20executive director of the commission, the executive director of the Public Employees
15.21Retirement Association, the chief administrative officer of the relief association, the chief
15.22administrative officer of the municipality in which the relief association is located, and
15.23the state auditor.

15.24    Sec. 48. Minnesota Statutes 2008, section 353A.05, subdivision 2, is amended to read:
15.25    Subd. 2. State board actions. (a) Upon approval of consolidation by the
15.26membership as provided in section 353A.04, the executive director of the state board
15.27shall review the existing investment portfolio of the relief association for compliance
15.28with the requirements and limitations set forth in sections 11A.09, 11A.14, 11A.18,
15.2911A.23 , and 11A.24 and for appropriateness for retention in the light of the established
15.30investment objectives of the state board. The executive director of the state board, using
15.31any reporting service retained by the state board, shall determine the approximate market
15.32value of the existing assets of the relief association upon the effective date of consolidation
15.33and the transfer of assets from the relief association to the individual relief association
15.34consolidation accounts at market value.
16.1(b) The state board may require that the relief association liquidate any investment
16.2security or other item of value which is determined to be ineligible or inappropriate for
16.3retention by the state board. The liquidation shall occur before the effective date of
16.4consolidation and transfer of assets.
16.5(c) If requested to do so by the chief administrative officer of the relief association
16.6or of the municipality, the state board shall provide advice on the means and procedures
16.7available to liquidate investment securities and other assets determined to be ineligible or
16.8inappropriate.

16.9    Sec. 49. Minnesota Statutes 2008, section 353A.08, subdivision 1, is amended to read:
16.10    Subdivision 1. Election of coverage by current retirees. (a) A person who is
16.11receiving a service pension, disability benefit, or survivor benefit is eligible to elect benefit
16.12coverage provided under the relevant provisions of the public employees police and fire
16.13fund benefit plan or to retain benefit coverage provided under the relief association benefit
16.14plan in effect on the effective date of the consolidation. The relevant provisions of the
16.15public employees police and fire fund benefit plan for the person electing that benefit
16.16coverage are limited to participation in the Minnesota postretirement investment fund for
16.17any future postretirement adjustments under section 356.415 based on the amount of
16.18the benefit or pension payable on December 31, if December 31 is the effective date of
16.19consolidation, or on the December 1 following the effective date of the consolidation, if
16.20other than December 31. The survivor benefit payable on behalf of any service pension
16.21or disability benefit recipient who elects benefit coverage under the public employees
16.22police and fire fund benefit plan must be calculated under the relief association benefit
16.23plan and is subject to participation in the Minnesota postretirement investment fund for
16.24any future postretirement adjustments under section 356.415 based on the amount of the
16.25survivor benefit payable.
16.26(b) A survivor benefit calculated under the relief association benefit plan which is first
16.27payable after June 30, 1997, to the surviving spouse of a retired member of a consolidation
16.28account who, before July 1, 1997, chose to participate in the Minnesota postretirement
16.29investment fund adjustments as provided under this subdivision section 356.415 must be
16.30increased on the effective date of the survivor benefit on an actuarial equivalent basis to
16.31reflect the change in the postretirement interest rate actuarial assumption under section
16.32356.215, subdivision 8 , from five percent to six percent under a calculation procedure and
16.33tables adopted by the board and approved by the actuary retained under section 356.214.
16.34(c) By electing the public employees police and fire fund benefit plan, a current
16.35service pension or disability benefit recipient who, as of the first January 1 occurring after
17.1the effective date of consolidation, has been receiving the pension or benefit for at least
17.2seven months, or any survivor benefit recipient who, as of the first January 1 occurring
17.3after the effective date of consolidation, has been receiving the benefit on the person's own
17.4behalf or in combination with a prior applicable service pension or disability benefit for at
17.5least seven months is eligible to receive a partial adjustment payable from the Minnesota
17.6postretirement investment fund under section 11A.18, subdivision 9 356.415.
17.7(d) The election by any pension or benefit recipient must be made on or before
17.8the deadline established by the board of the Public Employees Retirement Association
17.9in a manner that recognizes the number of persons eligible to make the election and the
17.10anticipated time required to conduct any required benefit counseling.

17.11    Sec. 50. Minnesota Statutes 2008, section 353A.08, subdivision 3, is amended to read:
17.12    Subd. 3. Election of coverage by active members. (a) A person who is an active
17.13member of a police or fire relief association, other than a volunteer firefighter, has the
17.14option to elect benefit coverage under the relevant provisions of the public employees
17.15police and fire fund or to retain benefit coverage provided by the relief association benefit
17.16plan in effect on the effective date of consolidation. The relevant provisions of the public
17.17employee police and fire fund benefit plan for the person electing that benefit coverage
17.18are the relevant provisions of the public employee police and fire fund benefit plan
17.19applicable to retirement annuities, disability benefits, and survivor benefits, including
17.20participation in the Minnesota postretirement investment fund adjustments under section
17.21356.415, but excluding any provisions governing the purchase of credit for prior service
17.22or making payments in lieu of member contribution deductions applicable to any period
17.23which occurred before the effective date of consolidation.
17.24(b) An active member is eligible to make an election at one of the following times:
17.25(1) within six months of the effective date of consolidation;
17.26(2) between the date on which the active member attains the age of 49 years and six
17.27months and the date on which the active member attains the age of 50 years; or
17.28(3) on the date on which the active member terminates active employment for
17.29purposes of receiving a service pension or disability benefits, or within 90 days of the
17.30date the member terminates active employment and defers receipt of a service pension,
17.31whichever applies.

17.32    Sec. 51. Minnesota Statutes 2008, section 353A.081, subdivision 2, is amended to read:
17.33    Subd. 2. Election of coverage. (a) Individuals eligible under subdivision 1 may
17.34elect, on a form prescribed by the executive director of the Public Employees Retirement
17.35Association, to have survivor benefits calculated under the relevant provisions of the
18.1public employees police and fire fund benefit plan or to have survivor benefits calculated
18.2under the relief association benefit plan. The relevant provisions of the public employee
18.3police and fire fund benefit plan for the person electing that benefit coverage are the
18.4relevant provisions of the public employee police and fire fund benefit plan applicable
18.5to survivor benefits, including participation in the Minnesota postretirement investment
18.6fund adjustments under section 356.415.
18.7(b) If the election results in an increased benefit amount to the surviving spouse
18.8eligible under subdivision 1, or to eligible children if there is no surviving spouse, the
18.9increased benefit accrues as of the date on which the survivor benefits payable to the
18.10survivors from the consolidation account were first paid. The back payment of any
18.11increase in prior benefit amounts, plus any postretirement adjustments payable under
18.12section 356.41 356.415, or any increase payable under the local relief association bylaws
18.13is payable as soon as practicable after the effective date of the election.

18.14    Sec. 52. Minnesota Statutes 2008, section 353A.09, subdivision 1, is amended to read:
18.15    Subdivision 1. Establishment of consolidation accounts. (a) The board of trustees
18.16of the Public Employees Retirement Association shall establish a separate consolidation
18.17account for each local relief association of a municipality that consolidates with the Public
18.18Employees Retirement Association. The association shall credit to the consolidation
18.19account the assets of the individual consolidating local relief association upon transfer,
18.20member contributions received after consolidation under subdivision 4, municipal
18.21contributions received after consolidation under subdivision 5, and a proportionate share
18.22of any investment income earned after consolidation. From the consolidation account,
18.23the association shall pay for the transfer of any required reserves to the Minnesota
18.24postretirement investment fund on account of persons electing the type of benefit coverage
18.25provided by the public employees police and fire fund under subdivisions 2 and 3 and
18.26section 353.271, subdivision 2, the pension and benefit amounts on account of persons
18.27electing coverage by the relief association benefit plan under section 353A.08, the benefit
18.28amounts not payable from the Minnesota postretirement investment fund on account of
18.29persons electing the type of benefit coverage provided by the public employees police and
18.30fire fund under section 353A.08, and any direct administrative expenses related to the
18.31consolidation account, and the proportional share of the general administrative expenses
18.32of the association.
18.33(b) Except as otherwise provided for in this section, the liabilities and the assets
18.34of a consolidation account must be considered for all purposes to be separate from the
18.35balance of the public employees police and fire fund. The consolidation account must be
19.1subject to separate accounting, a separate actuarial valuation, and must be reported as a
19.2separate exhibit in any annual financial report or actuarial valuation report of the public
19.3employees police and fire consolidation fund, whichever applies. The executive director
19.4of the public employees retirement association shall maintain separate accounting records
19.5and balances for each consolidation account.

19.6    Sec. 53. Minnesota Statutes 2008, section 353A.10, subdivision 2, is amended to read:
19.7    Subd. 2. Collection of late contributions. In the event of a refusal by a
19.8municipality in which was located a local police or firefighters relief association which
19.9has consolidated with the fund to pay to the fund any amount or amounts due under
19.10section 353A.09, subdivisions 2 4 to 6, the executive director of the public employees
19.11retirement association may notify the Department of Revenue, the Department of Finance,
19.12and the state auditor of the refusal and commence the necessary procedure to collect the
19.13amount or amounts due from the amount of any state aid under sections 69.011 to 69.051,
19.14amortization state aid under section 423A.02, or supplemental amortization state aid under
19.15Laws 1984, chapter 564, section 48, as amended by Laws 1986, chapter 359, section 20,
19.16which is payable to the municipality or to certify the amount or amounts due to the county
19.17auditor for inclusion in the next tax levy of the municipality or for collection from other
19.18revenue available to the municipality, or both.

19.19    Sec. 54. Minnesota Statutes 2008, section 353A.10, subdivision 3, is amended to read:
19.20    Subd. 3. Levy and bonding authority. A municipality in which was located a local
19.21police or firefighters relief association that has consolidated with the fund may issue
19.22general obligation bonds of the municipality to defray all or a portion of the principal
19.23amounts specified in section 353A.09, subdivisions 2 4 to 6, or certify to the county
19.24auditor a levy in the amount necessary to defray all or a portion of the principal amount
19.25specified in section 353A.09, subdivisions 2 4 to 6, or the annual amount specified in
19.26section 353A.09, subdivisions 2 4 to 6. The municipality may pledge the full faith, credit,
19.27and taxing power of the municipality for the payment of the principal of and interest on the
19.28general obligation bonds. Any municipal bond may be issued without an election under
19.29section 475.58 and may not be included in the net debt of the municipality for purposes of
19.30any charter or statutory debt limitation, nor may any tax levy for the payment of bond
19.31principal or interest be subject to any limitation concerning rate or amount established
19.32by charter or law.

19.33    Sec. 55. Minnesota Statutes 2008, section 353E.01, subdivision 3, is amended to read:
20.1    Subd. 3. Investment. (a) The public employees local government correctional
20.2service retirement fund participates in the Minnesota postretirement investment fund.
20.3(b) The amounts provided in section 353.271 must be deposited in that fund.
20.4(c) The balance of any Assets of the public employees local government correctional
20.5service retirement fund must be deposited in the Minnesota combined investment fund as
20.6provided in section 11A.14, if applicable, or otherwise invested under section 11A.23.

20.7    Sec. 56. Minnesota Statutes 2008, section 353E.01, subdivision 5, is amended to read:
20.8    Subd. 5. Fund disbursement restricted. (a) The public employees local
20.9government correctional service retirement fund and its share of participation in the
20.10Minnesota postretirement investment fund may be disbursed only for the purposes
20.11provided for in this chapter.
20.12(b) The proportional share of the necessary and reasonable administrative expenses
20.13of the association and any benefits provided in this chapter, other than benefits payable
20.14from the Minnesota postretirement investment fund, must be paid from the public
20.15employees local government correctional service retirement fund. Retirement annuities,
20.16disability benefits, survivorship benefits, and any refunds of accumulated deductions may
20.17be paid only from the correctional service retirement fund after those needs have been
20.18certified by the executive director and any applicable amounts withdrawn from the share
20.19of participation in the Minnesota postretirement fund under section 11A.18.
20.20(c) The amounts necessary to make the payments from the public employees local
20.21government correctional service retirement fund and its participation in the Minnesota
20.22postretirement investment fund are annually appropriated from those funds for those
20.23purposes.

20.24    Sec. 57. Minnesota Statutes 2008, section 353E.04, is amended by adding a subdivision
20.25to read:
20.26    Subd. 7. Postretirement adjustment eligibility. An annuity under this section is
20.27eligible for postretirement adjustments under section 356.415.

20.28    Sec. 58. Minnesota Statutes 2008, section 353E.06, is amended by adding a subdivision
20.29to read:
20.30    Subd. 9. Postretirement adjustment eligibility. A disability benefit under this
20.31section is eligible for postretirement adjustments under section 356.415.

20.32    Sec. 59. Minnesota Statutes 2008, section 353E.07, is amended by adding a subdivision
20.33to read:
21.1    Subd. 8. Postretirement adjustment eligibility. A survivor benefit under this
21.2section is eligible for postretirement adjustments under section 356.415.

21.3    Sec. 60. Minnesota Statutes 2008, section 354.07, subdivision 4, is amended to read:
21.4    Subd. 4. Certification of funds to State Board of Investment. It shall be is
21.5the duty of the board from time to time to certify to the State Board of Investment for
21.6investment as much of the funds in its hands as shall not be needed for current purposes.
21.7Such funds that are certified as to investment in the postretirement investment fund shall
21.8include the amount as required for the total reserves needed for the purposes described
21.9in section 354.63. The State Board of Investment shall thereupon transfer such assets
21.10to the appropriate fund provided herein, in accordance with the procedure set forth in
21.11section 354.63, or invest and reinvest an amount equal to the sum so certified in such
21.12securities as are now or may hereafter be duly authorized legal investments for state
21.13employees retirement fund and all such securities so transferred or purchased shall must
21.14be deposited with the commissioner of finance. All interest from these investments shall
21.15must be credited to the appropriate funds teachers retirement fund and used for current
21.16purposes or investments, except as hereinafter provided. The State Board of Investment
21.17shall have has authority to sell, convey, and exchange such securities and invest and
21.18reinvest the funds when it deems it desirable to do so, and shall must sell securities upon
21.19request of the officers of the association when such officers determine funds are needed
21.20for its purposes. All of the provisions regarding accounting procedures and restrictions
21.21and conditions for the purchase and sale of securities for the state employees retirement
21.22fund shall under chapter 11A must apply to the accounting, purchase and sale of securities
21.23for the Teachers' Retirement Association.

21.24    Sec. 61. Minnesota Statutes 2008, section 354.33, subdivision 5, is amended to read:
21.25    Subd. 5. Retirees not eligible for federal benefits. When any person retires after
21.26July 1, 1973, who (1) has ten or more years of allowable service, and (2) does not have any
21.27retroactive Social Security coverage by reason of the person's position in the retirement
21.28system, and (3) does not qualify for federal old age and survivor primary benefits at the
21.29time of retirement, the annuity must be computed under section 354.44, subdivision 2, of
21.30the law in effect on June 30, 1969, except that accumulations after June 30, 1957, must be
21.31calculated using the same most recent mortality table approved under section 356.215,
21.32subdivision 18, and interest assumption as are used to transfer the required reserves to the
21.33Minnesota postretirement investment fund using the applicable postretirement interest rate
21.34assumption specified in section 356.215, subdivision 8.

22.1    Sec. 62. Minnesota Statutes 2008, section 354.35, is amended by adding a subdivision
22.2to read:
22.3    Subd. 3. Postretirement adjustment eligibility. An annuity under this section is
22.4eligible for postretirement adjustments under section 356.415.

22.5    Sec. 63. Minnesota Statutes 2008, section 354.42, subdivision 1a, is amended to read:
22.6    Subd. 1a. Teachers retirement fund. (a) Within the Teachers Retirement
22.7Association and the state treasury is created a special retirement fund, which must include
22.8all the assets of the Teachers Retirement Association and all revenue of the association.
22.9The fund is the continuation of the fund established under Laws 1931, chapter 406, section
22.102, notwithstanding the repeal of Minnesota Statutes 1973, section 354.42, subdivision 1,
22.11by Laws 1974, chapter 289, section 59.
22.12(b) The teachers retirement fund must be credited with all employee and employer
22.13contributions, all investment revenue and gains, and all other income authorized by law.
22.14(c) From the teachers retirement fund is appropriated the payments of annuities
22.15and benefits authorized by this chapter, the transfers to the Minnesota postretirement
22.16investment fund, and the reasonable and necessary expenses of administering the fund
22.17and the association.

22.18    Sec. 64. Minnesota Statutes 2008, section 354.44, is amended by adding a subdivision
22.19to read:
22.20    Subd. 7a. Postretirement adjustment eligibility. (a) A retirement annuity under
22.21subdivision 2 or 6 is eligible for postretirement adjustments under section 356.415.
22.22(b) Retirement annuities payable from the teachers retirement plan must not be in
22.23an amount less than the amount originally determined on the date of retirement and as
22.24adjusted on each succeeding January 1 under Minnesota Statutes 2008, section 11A.18,
22.25before January 1, 2010, and under section 356.415 after December 31, 2009.

22.26    Sec. 65. Minnesota Statutes 2008, section 354.46, is amended by adding a subdivision
22.27to read:
22.28    Subd. 7. Postretirement adjustment eligibility. A survivor benefit under
22.29subdivision 1, 2, 2a, or 2b, is eligible for postretirement adjustments under section 356.415.

22.30    Sec. 66. Minnesota Statutes 2008, section 354.48, is amended by adding a subdivision
22.31to read:
22.32    Subd. 11. Postretirement adjustment eligibility. A disability benefit under this
22.33section is eligible for postretirement adjustments under section 356.415.

23.1    Sec. 67. Minnesota Statutes 2008, section 354.55, subdivision 13, is amended to read:
23.2    Subd. 13. Pre-1969 law retirements. Any person who ceased teaching service
23.3prior to July 1, 1968, who has ten years or more of allowable service and left accumulated
23.4deductions in the fund for the purpose of receiving when eligible a retirement annuity,
23.5and retires shall must have the annuity computed in accordance with the law in effect on
23.6June 30, 1969, except that the portion of the annuity based on accumulations after June 30,
23.71957, under Minnesota Statutes 1967, section 354.44, subdivision 2, and accumulations
23.8under Minnesota Statutes 1967, section 354.33, subdivision 1, shall must be calculated
23.9using the mortality table established by the board under section 354.07, subdivision 1,
23.10and approved under section 356.215, subdivision 18, and the postretirement interest rate
23.11assumption specified in section 356.215, to transfer the required reserves to the Minnesota
23.12postretirement investment fund subdivision 8.

23.13    Sec. 68. Minnesota Statutes 2008, section 354.70, subdivision 5, is amended to read:
23.14    Subd. 5. Transfer of assets. (a) On or before June 30, 2006, the chief administrative
23.15officer of the Minneapolis Teachers Retirement Fund Association shall transfer to the
23.16Teachers Retirement Association the entire assets of the special retirement fund of the
23.17Minneapolis Teachers Retirement Fund Association. The transfer of the assets of the
23.18Minneapolis Teachers Retirement Fund Association special retirement fund must include
23.19any accounts receivable that are determined by the executive director of the State Board of
23.20Investment as reasonably capable of being collected. Legal title to account receivables that
23.21are determined by the executive director of the State Board of Investment as not reasonably
23.22capable of being collected transfers to Special School District No. 1, Minneapolis, as of
23.23the date of the determination of the executive director of the State Board of Investment.
23.24If the account receivables transferred to Special School District No. 1, Minneapolis,
23.25are subsequently recovered by the school district, the superintendent of Special School
23.26District No. 1, Minneapolis, shall transfer the recovered amount to the executive director
23.27of the Teachers Retirement Association, in cash, for deposit in the teachers retirement
23.28fund, less the reasonable expenses of the school district related to the recovery.
23.29(b) As of June 30, 2006, assets of the special retirement fund of the Minneapolis
23.30Teachers Retirement Fund Association are assets of the Teachers Retirement Association
23.31to be invested by the State Board of Investment pursuant to the provisions of section
23.32354.07 , subdivision 4. The Teachers Retirement Association is the successor in interest to
23.33all claims which the Minneapolis Teachers Retirement Fund Association may have or may
23.34assert against any person and is the successor in interest to all claims which could have
24.1been asserted against the former Minneapolis Teachers Retirement Fund Association,
24.2subject to the following exceptions and qualifications:
24.3(1) the Teachers Retirement Association is not liable for any claim against the
24.4Minneapolis Teachers Retirement Fund Association, its former board or board members,
24.5which is founded upon a claim of breach of fiduciary duty, where the act or acts
24.6constituting the claimed breach were not done in good faith;
24.7 (2) the Teachers Retirement Association may assert any applicable defense to any
24.8claim in any judicial or administrative proceeding that the former Minneapolis Teachers
24.9Retirement Fund Association or its board would otherwise have been entitled to assert;
24.10(3) the Teachers Retirement Association may assert any applicable defense that the
24.11Teachers Retirement Association may assert in its capacity as a statewide agency; and
24.12(4) the Teachers Retirement Association shall indemnify any former fiduciary of the
24.13Minneapolis Teachers Retirement Fund Association consistent with the provisions of the
24.14Public Pension Fiduciary Responsibility Act, in section 356A.11.
24.15(c) From the assets of the former Minneapolis Teachers Retirement Fund Association
24.16transferred to the Teachers Retirement Association, an amount equal to the percentage
24.17figure that represents the ratio between the market value of the Minnesota postretirement
24.18investment fund as of June 30, 2006, and the required reserves of the Minnesota
24.19postretirement investment fund as of June 30, 2006, applied to the present value of
24.20future benefits payable to annuitants of the former Minneapolis Teachers Retirement
24.21Fund Association as of June 30, 2006, including any postretirement adjustment from the
24.22Minnesota postretirement investment fund expected to be payable on January 1, 2007,
24.23must be transferred to the Minnesota postretirement investment fund. The executive
24.24director of the State Board of Investment shall estimate this ratio at the time of the
24.25transfer. By January 1, 2007, after all necessary financial information becomes available
24.26to determine the actual funded ratio of the Minnesota postretirement investment fund, the
24.27postretirement investment fund must refund to the Teachers Retirement Association any
24.28excess assets or the Teachers Retirement Association must contribute any deficiency to
24.29the Minnesota postretirement investment fund with interest under Minnesota Statutes
24.302008, section 11A.18, subdivision 6. The balance of the assets of the former Minneapolis
24.31Teachers Retirement Fund Association after the transfer to the Minnesota postretirement
24.32investment fund must be credited to the Teachers Retirement Association.
24.33(d) If the assets transferred by the Minneapolis Teachers Retirement Fund
24.34Association to the Teachers Retirement Association are insufficient to meet its obligation
24.35to the Minnesota postretirement investment fund, additional assets must be transferred by
24.36the executive director of the Teachers Retirement Association to meet the amount required.

25.1    Sec. 69. Minnesota Statutes 2008, section 354.70, subdivision 6, is amended to read:
25.2    Subd. 6. Benefit calculation. (a) For every deferred, inactive, disabled, and retired
25.3member of the Minneapolis Teachers Retirement Fund Association transferred under
25.4subdivision 1, and the survivors of these members, annuities or benefits earned before
25.5the date of the transfer, other than future postretirement adjustments, must be calculated
25.6and paid by the Teachers Retirement Association under the laws, articles of incorporation,
25.7and bylaws of the former Minneapolis Teachers Retirement Fund Association that were
25.8in effect relative to the person on the date of the person's termination of active service
25.9covered by the former Minneapolis Teachers Retirement Fund Association.
25.10(b) Former Minneapolis Teachers Retirement Fund Association members who
25.11retired before July 1, 2006, must receive postretirement adjustments after December 31,
25.122006, only as provided in Minnesota Statutes 2008, section 11A.18 or section 356.415. All
25.13other benefit recipients of the former Minneapolis Teachers Retirement Fund Association
25.14must receive postretirement adjustments after December 31, 2006, only as provided in
25.15section 356.41 356.415.
25.16(c) This consolidation does not impair or diminish benefits for an active, deferred,
25.17or retired member or a survivor of an active, deferred, or retired member under the
25.18former Minneapolis Teachers Retirement Fund Association in existence at the time of the
25.19consolidation, except that any future guaranteed or investment-related postretirement
25.20adjustments must be paid after July 1, 2006, in accordance with paragraph (b), and all
25.21benefits based on service on or after July 1, 2006, must be determined only by laws
25.22governing the Teachers Retirement Association.

25.23    Sec. 70. Minnesota Statutes 2008, section 356.215, subdivision 1, is amended to read:
25.24    Subdivision 1. Definitions. (a) For the purposes of sections 3.85 and 356.20 to
25.25356.23 , each of the terms in the following paragraphs has the meaning given.
25.26    (b) "Actuarial valuation" means a set of calculations prepared by an actuary retained
25.27under section 356.214 if so required under section 3.85, or otherwise, by an approved
25.28actuary, to determine the normal cost and the accrued actuarial liabilities of a benefit
25.29plan, according to the entry age actuarial cost method and based upon stated assumptions
25.30including, but not limited to rates of interest, mortality, salary increase, disability,
25.31withdrawal, and retirement and to determine the payment necessary to amortize over a
25.32stated period any unfunded accrued actuarial liability disclosed as a result of the actuarial
25.33valuation of the benefit plan.
25.34    (c) "Approved actuary" means a person who is regularly engaged in the business of
25.35providing actuarial services and who is a fellow in the Society of Actuaries.
26.1    (d) "Entry age actuarial cost method" means an actuarial cost method under which
26.2the actuarial present value of the projected benefits of each individual currently covered
26.3by the benefit plan and included in the actuarial valuation is allocated on a level basis over
26.4the service of the individual, if the benefit plan is governed by section 69.773, or over the
26.5earnings of the individual, if the benefit plan is governed by any other law, between the
26.6entry age and the assumed exit age, with the portion of the actuarial present value which is
26.7allocated to the valuation year to be the normal cost and the portion of the actuarial present
26.8value not provided for at the valuation date by the actuarial present value of future normal
26.9costs to be the actuarial accrued liability, with aggregation in the calculation process to be
26.10the sum of the calculated result for each covered individual and with recognition given to
26.11any different benefit formulas which may apply to various periods of service.
26.12    (e) "Experience study" means a report providing experience data and an actuarial
26.13analysis of the adequacy of the actuarial assumptions on which actuarial valuations are
26.14based.
26.15    (f) "Actuarial value of assets" means:
26.16(1) For the July 1, 2009, actuarial valuation, the market value of all assets as of
26.17the preceding June 30, 2009, reduced by:
26.18    (1) (i) 20 percent of the difference between the actual net change in the market value
26.19of assets other than the Minnesota postretirement investment fund between the June 30
26.20that occurred three years earlier, 2006, and the June 30 that occurred four years earlier,
26.212005, and the computed increase in the market value of assets other than the Minnesota
26.22postretirement investment fund over that fiscal year period if the assets had increased at
26.23the percentage preretirement interest rate assumption used in the actuarial valuation for
26.24the July 1 that occurred four years earlier earned a rate of return on assets equal to the
26.25annual percentage preretirement interest rate assumption used in the actuarial valuation
26.26for July 1, 2005;
26.27    (2) (ii) 40 percent of the difference between the actual net change in the market
26.28value of assets other than the Minnesota postretirement investment fund between the
26.29June 30 that occurred two years earlier, 2007, and the June 30 that occurred three years
26.30earlier, 2006, and the computed increase in the market value of assets other than the
26.31Minnesota postretirement investment fund over that fiscal year period if the assets had
26.32increased at the percentage preretirement interest rate assumption used in the actuarial
26.33valuation for the July 1 that occurred three years earlier earned a rate of return on assets
26.34equal to the annual percentage preretirement interest rate assumption used in the actuarial
26.35valuation for July 1, 2006;
27.1    (3) (iii) 60 percent of the difference between the actual net change in the market
27.2value of assets other than the Minnesota postretirement investment fund between the
27.3June 30 that occurred one year earlier, 2008, and the June 30 that occurred two years
27.4earlier, 2007, and the computed increase in the market value of assets other than the
27.5Minnesota postretirement investment fund over that fiscal year period if the assets had
27.6increased at the percentage preretirement interest rate assumption used in the actuarial
27.7valuation for the July 1 that occurred two years earlier earned a rate of return on assets
27.8equal to the annual percentage preretirement interest rate assumption used in the actuarial
27.9valuation for July 1, 2007; and
27.10    (4) (iv) 80 percent of the difference between the actual net change in the market
27.11value of assets other than the Minnesota postretirement investment fund between the
27.12immediately prior June 30, 2009, and the June 30 that occurred one year earlier, 2008,
27.13and the computed increase in the market value of assets other than the Minnesota
27.14postretirement investment fund over that fiscal year period if the assets had increased at
27.15the percentage preretirement interest rate assumption used in the actuarial valuation for
27.16the July 1 that occurred one year earlier. earned a rate of return on assets equal to the
27.17annual percentage preretirement interest rate assumption used in the actuarial valuation
27.18for July 1, 2008; and
27.19(v) if applicable, 80 percent of the difference between the actual net change in the
27.20market value of the Minnesota postretirement investment fund between June 30, 2009,
27.21and June 30, 2008, and the computed increase in the market value of assets over that fiscal
27.22year period if the assets had increased at 8.5 percent annually.
27.23(2) For the July 1, 2010, actuarial valuation, the market value of all assets as of
27.24June 30, 2010, reduced by:
27.25(i) 20 percent of the difference between the actual net change in the market value of
27.26assets other than the Minnesota postretirement investment fund between June 30, 2007,
27.27and June 30, 2006, and the computed increase in the market value of assets other than the
27.28Minnesota postretirement investment fund over that fiscal year period if the assets had
27.29earned a rate of return on assets equal to the annual percentage preretirement interest rate
27.30assumption used in the actuarial valuation for July 1, 2006;
27.31(ii) 40 percent of the difference between the actual net change in the market value of
27.32assets other than the Minnesota postretirement investment fund between June 30, 2008,
27.33and June 30, 2007, and the computed increase in the market value of assets other than the
27.34Minnesota postretirement investment fund over that fiscal year period if the assets had
27.35earned a rate of return on assets equal to the annual percentage preretirement interest rate
27.36assumption used in the actuarial valuation for July 1, 2007;
28.1(iii) 60 percent of the difference between the actual net change in the market value
28.2of assets other than the Minnesota postretirement investment fund between June 30, 2009,
28.3and June 30, 2008, and the computed increase in the market value of assets other than the
28.4Minnesota postretirement investment fund over that fiscal year period if the assets had
28.5earned a rate of return on assets equal to the annual percentage preretirement interest rate
28.6assumption used in the actuarial valuation for July 1, 2008;
28.7(iv) 80 percent of the difference between the actual net change in the market value of
28.8total assets between June 30, 2010, and June 30, 2009, and the computed increase in the
28.9market value of total assets over that fiscal year period if the assets had earned a rate of
28.10return on assets equal to the annual percentage preretirement interest rate assumption used
28.11in the actuarial valuation for July 1, 2009; and
28.12(v) if applicable, 60 percent of the difference between the actual net change in the
28.13market value of the Minnesota postretirement investment fund between June 30, 2009,
28.14and June 30, 2008, and the computed increase in the market value of assets over that fiscal
28.15year period if the assets had increased at 8.5 percent annually.
28.16(3) For the July 1, 2011, actuarial valuation, the market value of all assets as of
28.17June 30, 2011, reduced by:
28.18(i) 20 percent of the difference between the actual net change in the market value of
28.19assets other than the Minnesota postretirement investment fund between June 30, 2008,
28.20and June 30, 2007, and the computed increase in the market value of assets other than the
28.21Minnesota postretirement investment fund over that fiscal year period if the assets had
28.22earned a rate of return on assets equal to the annual percentage preretirement interest rate
28.23assumption used in the actuarial valuation for July 1, 2007;
28.24(ii) 40 percent of the difference between the actual net change in the market value of
28.25assets other than the Minnesota postretirement investment fund between June 30, 2009,
28.26and June 30, 2008, and the computed increase in the market value of assets other than the
28.27Minnesota postretirement investment fund over that fiscal year period if the assets had
28.28earned a rate of return on assets equal to the annual percentage preretirement interest rate
28.29assumption used in the actuarial valuation for July 1, 2008;
28.30(iii) 60 percent of the difference between the actual net change in the market value
28.31of the total assets between June 30, 2010, and June 30, 2009, and the computed increase in
28.32the market value of the total assets over that fiscal year period if the assets had earned
28.33a rate of return on assets equal to the annual percentage preretirement interest rate
28.34assumption used in the actuarial valuation for July 1, 2009;
28.35(iv) 80 percent of the difference between the actual net change in the market value of
28.36total assets between June 30, 2011, and June 30, 2010, and the computed increase in the
29.1market value of total assets over that fiscal year period if the assets had earned a rate of
29.2return on assets equal to the annual percentage preretirement interest rate assumption used
29.3in the actuarial valuation for July 1, 2010; and
29.4(v) if applicable, 40 percent of the difference between the actual net change in the
29.5market value of the Minnesota postretirement investment fund between June 30, 2009,
29.6and June 30, 2008, and the computed increase in the market value of assets over that fiscal
29.7year period if the assets had increased at 8.5 percent annually.
29.8(4) For the July 1, 2012, actuarial valuation, the market value of all assets as of
29.9June 30, 2012, reduced by:
29.10(i) 20 percent of the difference between the actual net change in the market value of
29.11assets other than the Minnesota postretirement investment fund between June 30, 2009,
29.12and June 30, 2008, and the computed increase in the market value of assets other than the
29.13Minnesota postretirement investment fund over that fiscal year period if the assets had
29.14earned a rate of return on assets equal to the annual percentage preretirement interest rate
29.15assumption used in the actuarial valuation for July 1, 2008;
29.16(ii) 40 percent of the difference between the actual net change in the market value of
29.17total assets between June 30, 2010, and June 30, 2009, and the computed increase in the
29.18market value of total assets over that fiscal year period if the assets had earned a rate of
29.19return on assets equal to the annual percentage preretirement interest rate assumption used
29.20in the actuarial valuation for July 1, 2009;
29.21(iii) 60 percent of the difference between the actual net change in the market value
29.22of total assets between June 30, 2011, and June 30, 2010, and the computed increase in the
29.23market value of total assets over that fiscal year period if the assets had earned a rate of
29.24return on assets equal to the annual percentage preretirement interest rate assumption used
29.25in the actuarial valuation for July 1, 2010;
29.26(iv) 80 percent of the difference between the actual net change in the market value of
29.27total assets between June 30, 2012, and June 30, 2011, and the computed increase in the
29.28market value of total assets over that fiscal year period if the assets had earned a rate of
29.29return on assets equal to the annual percentage preretirement interest rate assumption used
29.30in the actuarial valuation for July 1, 2011; and
29.31(v) if applicable, 20 percent of the difference between the actual net change in the
29.32market value of the Minnesota postretirement investment fund between June 30, 2009,
29.33and June 30, 2008, and the computed increase in the market value of assets over that fiscal
29.34year period if the assets had increased at 8.5 percent annually.
29.35(5) For the July 1, 2013, and following actuarial valuations, the market value of all
29.36assets as of the preceding June 30, reduced by:
30.1(i) 20 percent of the difference between the actual net change in the market value
30.2of total assets between the June 30 that occurred three years earlier and the June 30 that
30.3occurred four years earlier and the computed increase in the market value of total assets
30.4over that fiscal year period if the assets had earned a rate of return on assets equal to the
30.5annual percentage preretirement interest rate assumption used in the actuarial valuation
30.6for the July 1 that occurred four years earlier;
30.7(ii) 40 percent of the difference between the actual net change in the market value
30.8of total assets between the June 30 that occurred two years earlier and the June 30 that
30.9occurred three years earlier and the computed increase in the market value of total assets
30.10over that fiscal year period if the assets had earned a rate of return on assets equal to the
30.11annual percentage preretirement interest rate assumption used in the actuarial valuation
30.12for the July 1 that occurred three years earlier;
30.13(iii) 60 percent of the difference between the actual net change in the market value
30.14of total assets between the June 30 that occurred one year earlier and the June 30 that
30.15occurred two years earlier and the computed increase in the market value of total assets
30.16over that fiscal year period if the assets had earned a rate of return on assets equal to the
30.17annual percentage preretirement interest rate assumption used in the actuarial valuation
30.18for the July 1 that occurred two years earlier; and
30.19(iv) 80 percent of the difference between the actual net change in the market value
30.20of total assets between the most recent June 30 and the June 30 that occurred one year
30.21earlier and the computed increase in the market value of total assets over that fiscal year
30.22period if the assets had earned a rate of return on assets equal to the annual percentage
30.23preretirement interest rate assumption used in the actuarial valuation for the July 1 that
30.24occurred one year earlier.
30.25    (g) "Unfunded actuarial accrued liability" means the total current and expected
30.26future benefit obligations, reduced by the sum of the actuarial value of assets and the
30.27present value of future normal costs.
30.28    (h) "Pension benefit obligation" means the actuarial present value of credited
30.29projected benefits, determined as the actuarial present value of benefits estimated to be
30.30payable in the future as a result of employee service attributing an equal benefit amount,
30.31including the effect of projected salary increases and any step rate benefit accrual rate
30.32differences, to each year of credited and expected future employee service.

30.33    Sec. 71. Minnesota Statutes 2008, section 356.215, subdivision 11, is amended to read:
30.34    Subd. 11. Amortization contributions. (a) In addition to the exhibit indicating
30.35the level normal cost, the actuarial valuation of the retirement plan must contain an
31.1exhibit for financial reporting purposes indicating the additional annual contribution
31.2sufficient to amortize the unfunded actuarial accrued liability and must contain an exhibit
31.3for contribution determination purposes indicating the additional contribution sufficient
31.4to amortize the unfunded actuarial accrued liability. For the retirement plans listed in
31.5subdivision 8, paragraph (c), the additional contribution must be calculated on a level
31.6percentage of covered payroll basis by the established date for full funding in effect when
31.7the valuation is prepared, assuming annual payroll growth at the applicable percentage
31.8rate set forth in subdivision 8, paragraph (c). For all other retirement plans, the additional
31.9annual contribution must be calculated on a level annual dollar amount basis.
31.10    (b) For any retirement plan other than the Minneapolis Employees Retirement Fund,
31.11the general employees retirement plan of the Public Employees Retirement Association,
31.12and the St. Paul Teachers Retirement Fund Association, if there has not been a change in
31.13the actuarial assumptions used for calculating the actuarial accrued liability of the fund, a
31.14change in the benefit plan governing annuities and benefits payable from the fund, a
31.15change in the actuarial cost method used in calculating the actuarial accrued liability of all
31.16or a portion of the fund, or a combination of the three, which change or changes by itself
31.17or by themselves without inclusion of any other items of increase or decrease produce a
31.18net increase in the unfunded actuarial accrued liability of the fund, the established date for
31.19full funding is the first actuarial valuation date occurring after June 1, 2020.
31.20    (c) For any retirement plan other than the Minneapolis Employees Retirement
31.21Fund and the general employees retirement plan of the Public Employees Retirement
31.22Association, if there has been a change in any or all of the actuarial assumptions used
31.23for calculating the actuarial accrued liability of the fund, a change in the benefit plan
31.24governing annuities and benefits payable from the fund, a change in the actuarial cost
31.25method used in calculating the actuarial accrued liability of all or a portion of the fund,
31.26or a combination of the three, and the change or changes, by itself or by themselves and
31.27without inclusion of any other items of increase or decrease, produce a net increase in the
31.28unfunded actuarial accrued liability in the fund, the established date for full funding must
31.29be determined using the following procedure:
31.30    (i) the unfunded actuarial accrued liability of the fund must be determined in
31.31accordance with the plan provisions governing annuities and retirement benefits and the
31.32actuarial assumptions in effect before an applicable change;
31.33    (ii) the level annual dollar contribution or level percentage, whichever is applicable,
31.34needed to amortize the unfunded actuarial accrued liability amount determined under item
31.35(i) by the established date for full funding in effect before the change must be calculated
31.36using the interest assumption specified in subdivision 8 in effect before the change;
32.1    (iii) the unfunded actuarial accrued liability of the fund must be determined in
32.2accordance with any new plan provisions governing annuities and benefits payable from
32.3the fund and any new actuarial assumptions and the remaining plan provisions governing
32.4annuities and benefits payable from the fund and actuarial assumptions in effect before
32.5the change;
32.6    (iv) the level annual dollar contribution or level percentage, whichever is applicable,
32.7needed to amortize the difference between the unfunded actuarial accrued liability amount
32.8calculated under item (i) and the unfunded actuarial accrued liability amount calculated
32.9under item (iii) over a period of 30 years from the end of the plan year in which the
32.10applicable change is effective must be calculated using the applicable interest assumption
32.11specified in subdivision 8 in effect after any applicable change;
32.12    (v) the level annual dollar or level percentage amortization contribution under item
32.13(iv) must be added to the level annual dollar amortization contribution or level percentage
32.14calculated under item (ii);
32.15    (vi) the period in which the unfunded actuarial accrued liability amount determined
32.16in item (iii) is amortized by the total level annual dollar or level percentage amortization
32.17contribution computed under item (v) must be calculated using the interest assumption
32.18specified in subdivision 8 in effect after any applicable change, rounded to the nearest
32.19integral number of years, but not to exceed 30 years from the end of the plan year in
32.20which the determination of the established date for full funding using the procedure set
32.21forth in this clause is made and not to be less than the period of years beginning in the
32.22plan year in which the determination of the established date for full funding using the
32.23procedure set forth in this clause is made and ending by the date for full funding in effect
32.24before the change; and
32.25    (vii) the period determined under item (vi) must be added to the date as of which
32.26the actuarial valuation was prepared and the date obtained is the new established date
32.27for full funding.
32.28    (d) For the Minneapolis Employees Retirement Fund, the established date for full
32.29funding is June 30, 2020.
32.30    (e) For the general employees retirement plan of the Public Employees Retirement
32.31Association, the established date for full funding is June 30, 2031.
32.32    (f) For the Teachers Retirement Association, the established date for full funding is
32.33June 30, 2037.
32.34    (g) For the correctional state employees retirement plan of the Minnesota State
32.35Retirement System, the established date for full funding is June 30, 2038.
33.1    (h) For the judges retirement plan, the established date for full funding is June
33.230, 2038.
33.3    (i) For the public employees police and fire retirement plan, the established date
33.4for full funding is June 30, 2038.
33.5    (j) For the St. Paul Teachers Retirement Fund Association, the established date for
33.6full funding is June 30 of the 25th year from the valuation date. In addition to other
33.7requirements of this chapter, the annual actuarial valuation shall contain an exhibit
33.8indicating the funded ratio and the deficiency or sufficiency in annual contributions when
33.9comparing liabilities to the market value of the assets of the fund as of the close of the
33.10most recent fiscal year.
33.11    (k) For the retirement plans for which the annual actuarial valuation indicates an
33.12excess of valuation assets over the actuarial accrued liability, the valuation assets in
33.13excess of the actuarial accrued liability must be recognized as a reduction in the current
33.14contribution requirements by an amount equal to the amortization of the excess expressed
33.15as a level percentage of pay over a 30-year period beginning anew with each annual
33.16actuarial valuation of the plan.
33.17    (l) In addition to calculating the unfunded actuarial accrued liability of the retirement
33.18plan for financial reporting purposes under paragraphs (a) to (j), the actuarial valuation
33.19of the retirement plan must also include a calculation of the unfunded actuarial accrued
33.20liability of the retirement plan for purposes of determining the amortization contribution
33.21sufficient to amortize the unfunded actuarial liability of the Minnesota Post Retirement
33.22Investment Fund. For this exhibit, the calculation must be the unfunded actuarial accrued
33.23liability net of the postretirement adjustment liability funded from the investment
33.24performance of the Minnesota Post Retirement Investment Fund or the retirement benefit
33.25fund.

33.26    Sec. 72. Minnesota Statutes 2008, section 356.351, subdivision 2, is amended to read:
33.27    Subd. 2. Incentive. (a) For an employee eligible under subdivision 1, if approved
33.28under paragraph (b), the employer may provide an amount up to $17,000, to an employee
33.29who terminates service, to be used:
33.30    (1) unless the appointing authority has designated the use under clause (2) or the use
33.31under clause (3) for the initial retirement incentive applicable to that employing entity
33.32under Laws 2007, chapter 134, after May 26, 2007, for deposit in the employee's account
33.33in the health care savings plan established by section 352.98;
33.34    (2) notwithstanding section 352.01, subdivision 11, or 354.05, subdivision 13,
33.35whichever applies, if the appointing authority has designated the use under this clause
34.1for the initial retirement incentive applicable to that employing entity under Laws 2007,
34.2chapter 134, after May 26, 2007, for purchase of service credit for unperformed service
34.3sufficient to enable the employee to retire under section 352.116, subdivision 1, paragraph
34.4(b); 353.30; 354.44, subdivision 6, paragraph (b), or 354A.31, subdivision 6, paragraph
34.5(b), whichever applies; or
34.6    (3) if the appointing authority has designated the use under this clause for the initial
34.7retirement incentive applicable to the employing entity under Laws 2007, chapter 134,
34.8after May 26, 2007, for purchase of a lifetime annuity or an annuity for a specific number
34.9of years from the applicable retirement plan to provide additional benefits, as provided in
34.10paragraph (d).
34.11    (b) Approval to provide the incentive must be obtained from the commissioner
34.12of finance if the eligible employee is a state employee and must be obtained from the
34.13applicable governing board with respect to any other employing entity. An employee is
34.14eligible for the payment under paragraph (a), clause (2), if the employee uses money from
34.15a deferred compensation account that, combined with the payment under paragraph (a),
34.16clause (2), would be sufficient to purchase enough service credit to qualify for retirement
34.17under section 352.116, subdivision 1, paragraph (b); 353.30, subdivision 1a; 354.44,
34.18subdivision 6 , paragraph (b), or 354A.31, subdivision 6, paragraph (b), whichever applies.
34.19    (c) The cost to purchase service credit under paragraph (a), clause (2), must be
34.20made in accordance with section 356.551.
34.21    (d) The annuity purchase under paragraph (a), clause (3), must be made using
34.22annuity factors, as determined by the actuary retained under section 356.214, derived from
34.23the applicable factors used by the applicable retirement plan to transfer amounts to the
34.24Minnesota postretirement investment fund and to calculate optional annuity forms. The
34.25purchased annuity must be the actuarial equivalent of the incentive amount.

34.26    Sec. 73. [356.415] POSTRETIREMENT ADJUSTMENTS; STATEWIDE
34.27RETIREMENT PLANS.
34.28    Subdivision 1. Annual postretirement adjustments. (a) Retirement annuity,
34.29disability benefit, or survivor benefit recipients of a covered retirement plan are entitled to
34.30a postretirement adjustment annually on January 1, as follows:
34.31(1) a postretirement increase of 2.5 percent must be applied each year, effective
34.32January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who has
34.33been receiving an annuity or a benefit for at least 12 full months prior to the January 1
34.34increase; and
35.1(2) for each annuitant or benefit recipient who has been receiving an annuity or a
35.2benefit for at least one full month, an annual postretirement increase of 1/12 of 2.5 percent
35.3for each month the person has been receiving an annuity or benefit must be applied,
35.4effective January 1 following the year in which the person has been retired for less than
35.512 months.
35.6(b) The increases provided by this section commence on January 1, 2010.
35.7(c) An increase in annuity or benefit payments under this section must be made
35.8automatically unless written notice is filed by the annuitant or benefit recipient with the
35.9executive director of the covered retirement plan requesting that the increase not be made.
35.10(d) The retirement annuity payable to a person who retires before becoming eligible
35.11for Social Security benefits and who has elected the optional payment as provided in
35.12section 353.29, subdivision 6, or 354.35 must be treated as the sum of a period certain
35.13retirement annuity and a life retirement annuity for the purposes of any postretirement
35.14adjustment. The period certain retirement annuity plus the life retirement annuity must be
35.15the annuity amount payable until age 62 for section 353.29, subdivision 6, or age 62, 65,
35.16or normal retirement age, as selected by the member at retirement, for an annuity amount
35.17payable under section 354.35. A postretirement adjustment granted on the period certain
35.18retirement annuity must terminate when the period certain retirement annuity terminates.
35.19    Subd. 2. Covered retirement plans. The provisions of this section apply to the
35.20following retirement plans:
35.21(1) the legislators retirement plan established under chapter 3A;
35.22(2) the correctional state employees retirement plan of the Minnesota State
35.23Retirement System established under chapter 352;
35.24(3) the general state employees retirement plan of the Minnesota State Retirement
35.25System established under chapter 352;
35.26(4) the State Patrol retirement plan established under chapter 352B;
35.27(5) the elective state officers retirement plan established under chapter 352C;
35.28(6) the general employees retirement plan of the Public Employees Retirement
35.29Association established under chapter 353;
35.30(7) the public employees police and fire retirement plan of the Public Employees
35.31Retirement Association established under chapter 353;
35.32(8) the local government correctional employees retirement plan of the Public
35.33Employees Retirement Association established under chapter 353E;
35.34(9) the teachers retirement plan established under chapter 354; and
35.35(10) the judges retirement plan established under chapter 490.

36.1    Sec. 74. Minnesota Statutes 2008, section 490.123, subdivision 1, is amended to read:
36.2    Subdivision 1. Fund creation; revenue and authorized disbursements. (a) There
36.3is created a special fund to be known as the "judges' retirement fund."
36.4    (b) The judges' retirement fund must be credited with all contributions; all interest,
36.5dividends, and other investment proceeds; and all other income authorized by this chapter
36.6or other applicable law.
36.7    (c) From this fund there are appropriated the payments authorized by this chapter, in
36.8the amounts and at the times provided, including the necessary and reasonable expenses of
36.9the Minnesota State Retirement System in administering the fund and the transfers to the
36.10Minnesota postretirement investment fund.

36.11    Sec. 75. Minnesota Statutes 2008, section 490.123, subdivision 3, is amended to read:
36.12    Subd. 3. Investment. (a) The executive director of the Minnesota State Retirement
36.13System shall, from time to time, certify to the State Board of Investment such portions
36.14of the judges' retirement fund as in the director's judgment may not be required for
36.15immediate use.
36.16    (b) Assets from the judges' retirement fund must be transferred to the Minnesota
36.17postretirement investment fund for retirement and disability benefits as provided in
36.18sections 11A.18 and 352.119.
36.19    (c) (b) The State Board of Investment shall thereupon invest and reinvest sums so
36.20transferred, or certified, in such securities as are duly authorized legal investments for such
36.21purposes under section 11A.24 in compliance with sections 356A.04 and 356A.06.

36.22    Sec. 76. Minnesota Statutes 2008, section 490.124, is amended by adding a subdivision
36.23to read:
36.24    Subd. 14. Postretirement adjustment eligibility. A retirement annuity under
36.25subdivision 1, 3, or 5, a disability benefit under subdivision 4, and a survivor's annuity
36.26under subdivision 9 or 11 are eligible for postretirement adjustments under section
36.27356.415.

36.28    Sec. 77. REPEALER.
36.29Minnesota Statutes 2008, sections 11A.041; 11A.18; 11A.181; 352.119, subdivisions
36.302, 3, and 4; 352B.26, subdivisions 1 and 3; 353.271; 353A.02, subdivision 20; 353A.09,
36.31subdivisions 2 and 3; 354.05, subdivision 26; 354.55, subdivision 14; 354.63; 356.41;
36.32356.431, subdivision 2; 422A.01, subdivision 13; 422A.06, subdivision 4; and 490.123,
36.33subdivisions 1c and 1e, are repealed.

37.1    Sec. 78. EFFECTIVE DATE.
37.2Sections 1 to 77 are effective July 1, 2009.


37.5    Section 1. Minnesota Statutes 2008, section 43A.34, subdivision 4, is amended to read:
37.6    Subd. 4. Officers exempted. Notwithstanding any provision to the contrary, (a)
37.7conservation officers and crime bureau officers who were first employed on or after July
37.81, 1973, and who are members of the State Patrol retirement fund by reason of their
37.9employment, and members of the Minnesota State Patrol Division and Alcohol and
37.10Gambling Enforcement Division of the Department of Public Safety who are members
37.11of the State Patrol Retirement Association by reason of their employment, shall may not
37.12continue employment after attaining the age of 60 years, except for a fractional portion
37.13of one year that will enable the employee to complete the employee's next full year of
37.14allowable service as defined pursuant to section 352B.01 352B.011, subdivision 3; and (b)
37.15conservation officers and crime bureau officers who were first employed and are members
37.16of the State Patrol retirement fund by reason of their employment before July 1, 1973,
37.17shall may not continue employment after attaining the age of 70 years.
37.18EFFECTIVE DATE.This section is effective July 1, 2009.

37.19    Sec. 2. Minnesota Statutes 2008, section 299A.465, subdivision 1, is amended to read:
37.20    Subdivision 1. Officer or firefighter disabled in line of duty. (a) This subdivision
37.21applies to any peace officer or firefighter:
37.22    (1) who the Public Employees Retirement Association or the Minnesota State
37.23Retirement System determines is eligible to receive a duty disability benefit pursuant to
37.24section 353.656 or 352B.10, subdivision 1, respectively; or
37.25    (2) who (i) does not qualify to receive disability benefits by operation of the
37.26eligibility requirements set forth in section 353.656, subdivision 1, paragraph (b), (ii)
37.27retires pursuant to section 353.651, subdivision 4, or (iii) is a member of a local police or
37.28salaried firefighters relief association and qualifies for a duty disability benefit under the
37.29terms of plans of the relief associations, and the peace officer or firefighter described in
37.30item (i), (ii), or (iii) has discontinued public service as a peace officer or firefighter as a
37.31result of a disabling injury and has been determined, by the Public Employees Retirement
37.32Association, to have otherwise met the duty disability criteria set forth in section 353.01,
37.33subdivision 41.
38.1    (b) A determination made on behalf of a peace officer or firefighter described in
38.2paragraph (a), clause (2), must be at the request of the peace officer or firefighter made for
38.3the purposes of this section. Determinations made in accordance with paragraph (a) are
38.4binding on the peace officer or firefighter, employer, and state. The determination must
38.5be made by the executive director of the Public Employees Retirement Association or
38.6by the executive director of the Minnesota State Retirement System, whichever applies,
38.7and is not subject to section 356.96, subdivision 2. Upon making a determination, the
38.8executive director shall provide written notice to the peace officer or firefighter and the
38.9employer. This notice must include:
38.10    (1) a written statement of the reasons for the determination;
38.11    (2) a notice that the person may petition for a review of the determination by
38.12requesting that a contested case be initiated before the Office of Administrative Hearings,
38.13the cost of which must be borne by the peace officer or firefighter and the employer; and
38.14    (3) a statement that any person who does not petition for a review within 60 days
38.15is precluded from contesting issues determined by the executive director in any other
38.16administrative review or court procedure.
38.17If, prior to the contested case hearing, additional information is provided to support the
38.18claim for duty disability as defined in section 353.01, subdivision 41, or 352B.011,
38.19subdivision 7, whichever applies, the executive director may reverse the determination
38.20without the requested hearing. If a hearing is held before the Office of Administrative
38.21Hearings, the determination rendered by the judge conducting the fact-finding hearing
38.22is a final decision and order under section 14.62, subdivision 2a, and is binding on the
38.23applicable executive director, the peace officer or firefighter, employer, and state. Review
38.24of a final determination made by the Office of Administrative Hearings under this section
38.25may only be obtained by writ of certiorari to the Minnesota Court of Appeals under
38.26sections 14.63 to 14.68. Only the peace officer or firefighter, employer, and state have
38.27standing to participate in a judicial review of the decision of the Office of Administrative
38.28Hearings.
38.29    (c) The officer's or firefighter's employer shall continue to provide health coverage
38.30for:
38.31    (1) the officer or firefighter; and
38.32    (2) the officer's or firefighter's dependents if the officer or firefighter was receiving
38.33dependent coverage at the time of the injury under the employer's group health plan.
38.34    (d) The employer is responsible for the continued payment of the employer's
38.35contribution for coverage of the officer or firefighter and, if applicable, the officer's
38.36or firefighter's dependents. Coverage must continue for the officer or firefighter and, if
39.1applicable, the officer's or firefighter's dependents until the officer or firefighter reaches or,
39.2if deceased, would have reached the age of 65. However, coverage for dependents does
39.3not have to be continued after the person is no longer a dependent.
39.4EFFECTIVE DATE.This section is effective the day following final enactment
39.5and also applies to any member of the State Patrol retirement plan who was awarded a
39.6duty disability benefit on or after July 1, 2008.

39.7    Sec. 3. Minnesota Statutes 2008, section 352.01, subdivision 2b, is amended to read:
39.8    Subd. 2b. Excluded employees. "State employee" does not include:
39.9    (1) students employed by the University of Minnesota, or the state colleges and
39.10universities, unless approved for coverage by the Board of Regents of the University of
39.11Minnesota or the Board of Trustees of the Minnesota State Colleges and Universities,
39.12whichever is applicable;
39.13    (2) employees who are eligible for membership in the state Teachers Retirement
39.14Association, except employees of the Department of Education who have chosen or may
39.15choose to be covered by the general state employees retirement plan of the Minnesota
39.16State Retirement System instead of the Teachers Retirement Association;
39.17    (3) employees of the University of Minnesota who are excluded from coverage by
39.18action of the Board of Regents;
39.19    (4) officers and enlisted personnel in the National Guard and the naval militia who
39.20are assigned to permanent peacetime duty and who under federal law are or are required to
39.21be members of a federal retirement system;
39.22    (5) election officers;
39.23    (6) persons who are engaged in public work for the state but who are employed
39.24by contractors when the performance of the contract is authorized by the legislature or
39.25other competent authority;
39.26    (7) officers and employees of the senate, or of the house of representatives, or of a
39.27legislative committee or commission who are temporarily employed;
39.28    (8) receivers, jurors, notaries public, and court employees who are not in the judicial
39.29branch as defined in section 43A.02, subdivision 25, except referees and adjusters
39.30employed by the Department of Labor and Industry;
39.31    (9) patient and inmate help in state charitable, penal, and correctional institutions
39.32including the Minnesota Veterans Home;
39.33    (10) persons who are employed for professional services where the service is
39.34incidental to their regular professional duties and whose compensation is paid on a per
39.35diem basis;
40.1    (11) employees of the Sibley House Association;
40.2    (12) the members of any state board or commission who serve the state intermittently
40.3and are paid on a per diem basis; the secretary, secretary-treasurer, and treasurer of those
40.4boards if their compensation is $5,000 or less per year, or, if they are legally prohibited
40.5from serving more than three years; and the board of managers of the State Agricultural
40.6Society and its treasurer unless the treasurer is also its full-time secretary;
40.7    (13) state troopers and persons who are described in section 352B.01, subdivision 2
40.8352B.011, subdivision 10, clauses (2) to (6) (8);
40.9    (14) temporary employees of the Minnesota State Fair who are employed on or
40.10after July 1 for a period not to extend beyond October 15 of that year; and persons who
40.11are employed at any time by the state fair administration for special events held on the
40.12fairgrounds;
40.13    (15) emergency employees who are in the classified service; except that if an
40.14emergency employee, within the same pay period, becomes a provisional or probationary
40.15employee on other than a temporary basis, the employee shall must be considered a "state
40.16employee" retroactively to the beginning of the pay period;
40.17    (16) temporary employees in the classified service, and temporary employees in the
40.18unclassified service who are appointed for a definite period of not more than six months
40.19and who are employed less than six months in any one-year period;
40.20    (17) interns hired for six months or less and trainee employees, except those listed in
40.21subdivision 2a, clause (8);
40.22    (18) persons whose compensation is paid on a fee basis or as an independent
40.23contractor;
40.24    (19) state employees who are employed by the Board of Trustees of the Minnesota
40.25State Colleges and Universities in unclassified positions enumerated in section 43A.08,
40.26subdivision 1 , clause (9);
40.27    (20) state employees who in any year have credit for 12 months service as teachers
40.28in the public schools of the state and as teachers are members of the Teachers Retirement
40.29Association or a retirement system in St. Paul, Minneapolis, or Duluth, except for
40.30incidental employment as a state employee that is not covered by one of the teacher
40.31retirement associations or systems;
40.32    (21) employees of the adjutant general who are employed on an unlimited
40.33intermittent or temporary basis in the classified or unclassified service for the support of
40.34Army and Air National Guard training facilities;
40.35    (22) chaplains and nuns who are excluded from coverage under the federal Old
40.36Age, Survivors, Disability, and Health Insurance Program for the performance of service
41.1as specified in United States Code, title 42, section 410(a)(8)(A), as amended, if no
41.2irrevocable election of coverage has been made under section 3121(r) of the Internal
41.3Revenue Code of 1986, as amended through December 31, 1992;
41.4    (23) examination monitors who are employed by departments, agencies,
41.5commissions, and boards to conduct examinations required by law;
41.6    (24) persons who are appointed to serve as members of fact-finding commissions or
41.7adjustment panels, arbitrators, or labor referees under chapter 179;
41.8    (25) temporary employees who are employed for limited periods under any state or
41.9federal program for training or rehabilitation, including persons who are employed for
41.10limited periods from areas of economic distress, but not including skilled and supervisory
41.11personnel and persons having civil service status covered by the system;
41.12    (26) full-time students who are employed by the Minnesota Historical Society
41.13intermittently during part of the year and full-time during the summer months;
41.14    (27) temporary employees who are appointed for not more than six months, of
41.15the Metropolitan Council and of any of its statutory boards, if the board members are
41.16appointed by the Metropolitan Council;
41.17    (28) persons who are employed in positions designated by the Department of
41.18Finance as student workers;
41.19    (29) members of trades who are employed by the successor to the Metropolitan
41.20Waste Control Commission, who have trade union pension plan coverage under a
41.21collective bargaining agreement, and who are first employed after June 1, 1977;
41.22    (30) off-duty peace officers while employed by the Metropolitan Council;
41.23    (31) persons who are employed as full-time police officers by the Metropolitan
41.24Council and as police officers are members of the public employees police and fire fund;
41.25    (32) persons who are employed as full-time firefighters by the Department of Military
41.26Affairs and as firefighters are members of the public employees police and fire fund;
41.27    (33) foreign citizens with a work permit of less than three years, or an H-1b/JV visa
41.28valid for less than three years of employment, unless notice of extension is supplied which
41.29allows them to work for three or more years as of the date the extension is granted, in
41.30which case they are eligible for coverage from the date extended; and
41.31    (34) persons who are employed by the Board of Trustees of the Minnesota State
41.32Colleges and Universities and who elected to remain members of the Public Employees
41.33Retirement Association or the Minneapolis Employees Retirement Fund, whichever
41.34applies, under Minnesota Statutes 1994, section 136C.75.
41.35EFFECTIVE DATE.This section is effective July 1, 2009.

42.1    Sec. 4. Minnesota Statutes 2008, section 352.01, is amended by adding a subdivision
42.2to read:
42.3    Subd. 17a. Occupational disability. "Occupational disability," for purposes of
42.4determining eligibility for disability benefits for a correctional employee, means a
42.5disabling condition that is expected to prevent the correctional employee, for a period of
42.6not less than 12 months, from performing the normal duties of the position held by the
42.7correctional employee.
42.8EFFECTIVE DATE.This section is effective July 1, 2009.

42.9    Sec. 5. Minnesota Statutes 2008, section 352.01, is amended by adding a subdivision
42.10to read:
42.11    Subd. 17b. Duty disability, physical or psychological. "Duty disability, physical
42.12or psychological," for a correctional employee, means an occupational disability that is the
42.13direct result of an injury incurred during, or a disease arising out of, the performance of
42.14normal duties or the performance of less frequent duties either of which are specific to
42.15the correctional employee.
42.16EFFECTIVE DATE.This section is effective July 1, 2009.

42.17    Sec. 6. Minnesota Statutes 2008, section 352.01, is amended by adding a subdivision
42.18to read:
42.19    Subd. 17c. Regular disability, physical or psychological. "Regular disability,
42.20physical or psychological," for a correctional employee, means an occupational disability
42.21resulting from a disease or an injury that arises from any activities while not at work or
42.22from activities while at work performing normal or less frequent duties that do not present
42.23inherent dangers specific to covered correctional positions.
42.24EFFECTIVE DATE.This section is effective July 1, 2009.

42.25    Sec. 7. Minnesota Statutes 2008, section 352.01, is amended by adding a subdivision
42.26to read:
42.27    Subd. 17d. Normal duties. "Normal duties" means specific tasks designated in the
42.28applicant's job description and which the applicant performs on a day-to-day basis, but
42.29do not include less frequent duties which may be requested to be done by the employer
42.30from time to time.
42.31EFFECTIVE DATE.This section is effective July 1, 2009.

43.1    Sec. 8. Minnesota Statutes 2008, section 352.01, is amended by adding a subdivision
43.2to read:
43.3    Subd. 17e. Less frequent duties. "Less frequent duties" means tasks designated
43.4in the applicant's job description as either required from time to time or as assigned, but
43.5which are not carried out as part of the normal routine of the applicant's job.
43.6EFFECTIVE DATE.This section is effective July 1, 2009.

43.7    Sec. 9. Minnesota Statutes 2008, section 352.113, subdivision 4, is amended to read:
43.8    Subd. 4. Medical or psychological examinations; authorization for payment of
43.9benefit. (a) An applicant shall provide medical, chiropractic, or psychological evidence to
43.10support an application for total and permanent disability.
43.11(b) The director shall have the employee examined by at least one additional
43.12licensed chiropractor, physician, or psychologist designated by the medical adviser. The
43.13chiropractors, physicians, or psychologists shall make written reports to the director
43.14concerning the employee's disability including expert opinions as to whether the employee
43.15is permanently and totally disabled within the meaning of section 352.01, subdivision 17.
43.16(c) The director shall also obtain written certification from the employer stating
43.17whether the employment has ceased or whether the employee is on sick leave of
43.18absence because of a disability that will prevent further service to the employer and as a
43.19consequence the employee is not entitled to compensation from the employer.
43.20(d) The medical adviser shall consider the reports of the physicians, psychologists,
43.21and chiropractors and any other evidence supplied by the employee or other interested
43.22parties. If the medical adviser finds the employee totally and permanently disabled, the
43.23adviser shall make appropriate recommendation to the director in writing together with the
43.24date from which the employee has been totally disabled. The director shall then determine
43.25if the disability occurred within 180 days 18 months of filing the application, while still
43.26in the employment of the state, and the propriety of authorizing payment of a disability
43.27benefit as provided in this section.
43.28(e) A terminated employee may apply for a disability benefit within 180 days 18
43.29months of termination as long as the disability occurred while in the employment of the
43.30state. The fact that an employee is placed on leave of absence without compensation
43.31because of disability does not bar that employee from receiving a disability benefit.
43.32(f) Unless the payment of a disability benefit has terminated because the employee is
43.33no longer totally disabled, or because the employee has reached normal retirement age as
43.34provided in this section, the disability benefit must cease with the last payment received
43.35by the disabled employee or which had accrued during the lifetime of the employee unless
44.1there is a spouse surviving. In that event, the surviving spouse is entitled to the disability
44.2benefit for the calendar month in which the disabled employee died.
44.3EFFECTIVE DATE.This section is effective July 1, 2009, and applies to disability
44.4benefit applicants whose last day of public employment was after June 30, 2009.

44.5    Sec. 10. Minnesota Statutes 2008, section 352.95, subdivision 1, is amended to read:
44.6    Subdivision 1. Job-related disability Duty disability; computation of benefit.
44.7A covered correctional employee who becomes disabled and who is expected to be
44.8physically or mentally unfit to perform the duties of the position for at least one year as a
44.9direct result of an injury, sickness, or other disability that incurred in or arose out of any
44.10act of duty that makes the employee physically or mentally unable to perform the duties is
44.11determined to have a duty disability, physical or psychological, as defined under section
44.12352.01, subdivision 17b, is entitled to a duty disability benefit. The duty disability benefit
44.13may must be based on covered correctional service only. The duty disability benefit
44.14amount is 50 percent of the average salary defined in section 352.93, plus an additional
44.15percent equal to that specified in section 356.315, subdivision 5, for each year of covered
44.16correctional service in excess of 20 years, ten months, prorated for completed months.
44.17EFFECTIVE DATE.This section is effective July 1, 2009.

44.18    Sec. 11. Minnesota Statutes 2008, section 352.95, subdivision 2, is amended to read:
44.19    Subd. 2. Non-job-related Regular disability; computation of benefit. A covered
44.20correctional employee who was hired before July 1, 2009, after rendering at least one year
44.21of covered correctional service, or a covered correctional employee who was first hired
44.22after June 30, 2009, after rendering at least three years of covered correctional plan service,
44.23becomes disabled and who is expected to be physically or mentally unfit to perform the
44.24duties of the position for at least one year because of sickness or injury that occurred while
44.25not engaged in covered employment and who is determined to have a regular disability,
44.26physical or psychological, as defined under section 352.01, subdivision 17c, is entitled
44.27to a regular disability benefit. The regular disability benefit must be based on covered
44.28correctional service only. The regular disability benefit must be computed as provided
44.29in section 352.93, subdivisions 1 and 2, and. The regular disability benefit of a covered
44.30correctional employee who was first hired before July 1, 2009, and who is determined
44.31to have a regular disability, physical or psychological, under this subdivision must be
44.32computed as though the employee had at least 15 years of covered correctional service.
44.33EFFECTIVE DATE.This section is effective July 1, 2009.

45.1    Sec. 12. Minnesota Statutes 2008, section 352.95, subdivision 3, is amended to read:
45.2    Subd. 3. Applying for benefits; accrual. No application for disability benefits
45.3shall may be made until after the last day physically on the job. The disability benefit
45.4shall begin begins to accrue the day following the last day for which the employee is paid
45.5sick leave or annual leave, but not earlier than 180 days before the date the application
45.6is filed. A terminated employee must file a written application within the time frame
45.7specified under section 352.113, subdivision 4, paragraph (e).
45.8EFFECTIVE DATE.This section is effective July 1, 2009, and applies to disability
45.9benefit applicants whose last day of public employment was after June 30, 2009.

45.10    Sec. 13. Minnesota Statutes 2008, section 352.95, subdivision 4, is amended to read:
45.11    Subd. 4. Medical or psychological evidence. (a) An applicant shall provide
45.12medical, chiropractic, or psychological evidence to support an application for disability
45.13benefits. The director shall have the employee examined by at least one additional
45.14licensed physician, chiropractor, or psychologist who is designated by the medical adviser.
45.15The physicians, chiropractors, or psychologists with respect to a mental impairment,
45.16shall make written reports to the director concerning the question of the employee's
45.17disability, including their expert opinions as to whether the employee is disabled has an
45.18occupational disability within the meaning of this section 352.01, subdivision 17a, and
45.19whether the employee has a duty disability, physical or psychological, under section
45.20352.01, subdivision 17b, or has a regular disability, physical or psychological, under
45.21section 352.01, subdivision 17c. The director shall also obtain written certification from
45.22the employer stating whether or not the employee is on sick leave of absence because of a
45.23disability that will prevent further service to the employer performing normal duties as
45.24defined in section 352.01, subdivision 17d, or performing less frequent duties as defined in
45.25section 352.01, subdivision 17e, and as a consequence, the employee is not entitled to
45.26compensation from the employer.
45.27(b) If, on considering the reports by the physicians, chiropractors, or psychologists
45.28and any other evidence supplied by the employee or others, the medical adviser finds that
45.29the employee disabled has an occupational disability within the meaning of this section
45.30352.01, subdivision 17a, the advisor shall make the appropriate recommendation to the
45.31director, in writing, together with the date from which the employee has been disabled.
45.32The director shall then determine the propriety of authorizing payment of a duty disability
45.33benefit or a regular disability benefit as provided in this section.
45.34(c) Unless the payment of a disability benefit has terminated because the employee
45.35is no longer disabled has an occupational disability, or because the employee has reached
46.1either age 65 55 or the five-year anniversary of the effective date of the disability benefit,
46.2whichever is later, the disability benefit must cease with the last payment which was
46.3received by the disabled employee or which had accrued during the employee's lifetime.
46.4While disability benefits are paid, the director has the right, at reasonable times, to
46.5require the disabled employee to submit proof of the continuance of the an occupational
46.6disability claimed. If any examination indicates to the medical adviser that the employee
46.7is no longer disabled has an occupational disability, the disability payment must be
46.8discontinued upon the person's reinstatement to state service or within 60 days of the
46.9finding, whichever is sooner.
46.10EFFECTIVE DATE.This section is effective July 1, 2009, and applies to disability
46.11benefit applicants whose last day of public employment was after June 30, 2009.

46.12    Sec. 14. Minnesota Statutes 2008, section 352.95, subdivision 5, is amended to read:
46.13    Subd. 5. Retirement status at normal retirement age. The disability benefit paid
46.14to a disabled correctional employee under this section shall terminate terminates at the end
46.15of the month in which the employee reaches age 65 55, or the five-year anniversary of
46.16the effective date of the disability benefit, whichever is later. If the disabled correctional
46.17employee is still disabled when the employee reaches age 65 55, or the five-year
46.18anniversary of the effective date of the disability benefit, whichever is later, the employee
46.19shall must be deemed to be a retired employee. If the employee had elected an optional
46.20annuity under subdivision 1a, the employee shall receive an annuity in accordance with
46.21the terms of the optional annuity previously elected. If the employee had not elected an
46.22optional annuity under subdivision 1a, the employee may within 90 days of attaining age
46.2365 55 or reaching the five-year anniversary of the effective date of the disability benefit,
46.24whichever is later, either elect to receive a normal retirement annuity computed in the
46.25manner provided in section 352.93 or elect to receive an optional annuity as provided
46.26in section 352.116, subdivision 3, based on the same length of service as used in the
46.27calculation of the disability benefit. Election of an optional annuity must be made within
46.2890 days before attaining age 65 55 or reaching the five-year anniversary of the effective
46.29date of the disability benefit, whichever is later. If an optional annuity is elected, the
46.30optional annuity shall begin begins to accrue on the first of the month following the month
46.31in which the employee reaches age 65 55 or the five-year anniversary of the effective date
46.32of the disability benefit, whichever is later.
46.33EFFECTIVE DATE.This section is effective July 1, 2009, and applies to disability
46.34benefit applicants whose last day of public employment was after June 30, 2009.

47.1    Sec. 15. [352B.011] DEFINITIONS.
47.2    Subdivision 1. Scope. For the purposes of this chapter, the terms defined in this
47.3section have the meanings given them.
47.4    Subd. 2. Accumulated deductions. "Accumulated deductions" means the total
47.5sums deducted from the salary of a member and the total amount of assessments paid by
47.6a member in place of deductions and credited to the member's individual account as
47.7permitted by law without interest.
47.8    Subd. 3. Allowable service. (a) "Allowable service" means:
47.9(1) service in a month during which a member is paid a salary from which a member
47.10contribution is deducted, deposited, and credited in the State Patrol retirement fund;
47.11(2) for members defined in subdivision 10, clause (1), service in any month for
47.12which payments have been made to the State Patrol retirement fund under law; and
47.13(3) for members defined in subdivision 10, clauses (2) and (3), service for which
47.14payments have been made to the State Patrol retirement fund under law, service for which
47.15payments were made to the State Police officers retirement fund under law after June
47.1630, 1961, and all prior service which was credited to a member for service on or before
47.17June 30, 1961.
47.18(b) Allowable service also includes any period of absence from duty by a member
47.19who, by reason of injury incurred in the performance of duty, is temporarily disabled and
47.20for which disability the state is liable under the workers' compensation law, until the date
47.21authorized by the executive director for commencement of payment of a disability benefit
47.22or until the date of a return to employment.
47.23    Subd. 4. Average monthly salary. (a) Subject to the limitations of section 356.611,
47.24"average monthly salary" means the average of the highest monthly salaries for five
47.25years of service as a member upon which contributions were deducted from pay under
47.26section 352B.02, or upon which appropriate contributions or payments were made to
47.27the fund to receive allowable service and salary credit as specified under the applicable
47.28law. Average monthly salary must be based upon all allowable service if this service is
47.29less than five years.
47.30(b) The salary used for the calculation of "average monthly salary" means the
47.31salary of the member as defined in section 352.01, subdivision 13. The salary used for
47.32the calculation of "average monthly salary" does not include any lump-sum annual leave
47.33payments and overtime payments made at the time of separation from state service, any
47.34amounts of severance pay, or any reduced salary paid during the period the person is
47.35entitled to workers' compensation benefit payments for temporary disability.
48.1    Subd. 5. Department head. "Department head" means the head of any department,
48.2institution, or branch of the state service that directly pays salaries from state funds
48.3to a member who prepares, approves, and submits salary abstracts of employees to the
48.4commissioner of Minnesota Management and Budget.
48.5    Subd. 6. Dependent child. "Dependent child" means a natural or adopted unmarried
48.6child of a deceased member under the age of 18 years, including any child of the member
48.7conceived during the lifetime of the member and born after the death of the member.
48.8    Subd. 7. Duty disability. "Duty disability" means a physical or psychological
48.9condition that is expected to prevent a member, for a period of not less than 12 months,
48.10from performing the normal duties of the position held by the person as a member of the
48.11State Patrol retirement fund, and that is the direct result of any injury incurred during, or a
48.12disease arising out of, the performance of normal duties or the actual performance of less
48.13frequent duties, either of which are specific to protecting the property and personal safety
48.14of others and that present inherent dangers that are specific to the positions covered by
48.15the State Patrol retirement fund.
48.16    Subd. 8 Fund. "Fund" means the State Patrol retirement fund.
48.17    Subd. 9. Less frequent duties. "Less frequent duties" means tasks which are
48.18designated in the member's job description as either required from time to time or as
48.19assigned, but which are not carried out as part of the normal routine of the member's
48.20position.
48.21    Subd. 10. Member. "Member" means:
48.22(1) a State Patrol member currently employed under section 299D.03 by the state,
48.23who is a peace officer under section 626.84, and whose salary or compensation is paid
48.24out of state funds;
48.25(2) a conservation officer employed under section 97A.201, currently employed by
48.26the state, whose salary or compensation is paid out of state funds;
48.27(3) a crime bureau officer who was employed by the crime bureau and was a member
48.28of the Highway Patrolmen's retirement fund on July 1, 1978, whether or not that person
48.29has the power of arrest by warrant after that date, or who is employed as police personnel,
48.30with powers of arrest by warrant under section 299C.04, and who is currently employed
48.31by the state, and whose salary or compensation is paid out of state funds;
48.32(4) a person who is employed by the state in the Department of Public Safety in a
48.33data processing management position with salary or compensation paid from state funds,
48.34who was a crime bureau officer covered by the State Patrol retirement plan on August
48.3515, 1987, and who was initially hired in the data processing management position within
49.1the department during September 1987, or January 1988, with membership continuing
49.2for the duration of the person's employment in that position, whether or not the person
49.3has the power of arrest by warrant after August 15, 1987;
49.4(5) a public safety employee who is a peace officer under section 626.84, subdivision
49.51 , paragraph (c), and who is employed by the Division of Alcohol and Gambling
49.6Enforcement under section 299L.01;
49.7(6) a Fugitive Apprehension Unit officer after October 31, 2000, who is employed
49.8by the Office of Special Investigations of the Department of Corrections and who is a
49.9peace officer under section 626.84;
49.10(7) an employee of the Department of Commerce defined as a peace officer in section
49.11626.84, subdivision 1, paragraph (c), who is employed by the Division of Insurance Fraud
49.12Prevention under section 45.0135 after January 1, 2005, and who has not attained the
49.13mandatory retirement age specified in section 43A.34, subdivision 4; and
49.14(8) an employee of the Department of Public Safety, who is a licensed peace officer
49.15under section 626.84, subdivision 1, paragraph (c), and is employed as the statewide
49.16coordinator of the Gang and Drug Oversight Council.
49.17    Subd. 11. Normal duties. "Normal duties" means specific tasks which are
49.18designated in the member's job description and which the applicant performs on a
49.19day-to-day basis, but do not include less frequent duties which may be requested to be
49.20done by the employer from time to time.
49.21    Subd. 12. Regular disability. "Regular disability" means a physical or
49.22psychological condition that is expected to prevent a member, for a period of not less than
49.2312 months, from performing the normal duties of the position held by a person who is a
49.24member of the State Patrol retirement plan, and which results from a disease or an injury
49.25that arises from any activities while not at work, or while at work and performing those
49.26normal or less frequent duties that do not present inherent dangers that are specific to the
49.27occupations covered by the State Patrol retirement plan.
49.28    Subd. 13. Surviving spouse. "Surviving spouse" means a member's or former
49.29member's legally married spouse who resided with the member or former member at the
49.30time of death and was married to the member or former member, for a period of at least
49.31one year, during or before the time of membership.
49.32EFFECTIVE DATE.(a) Except as provided in paragraph (b), this section is
49.33effective July 1, 2009.
50.1(b) Subdivision 3, paragraph (a), clause (1), is effective retroactively from July
50.21, 1969, and allowable service on the records of the State Patrol retirement plan credit
50.3consistent with that provision is validated.

50.4    Sec. 16. Minnesota Statutes 2008, section 352B.02, subdivision 1, is amended to read:
50.5    Subdivision 1. Fund created; membership. A State Patrol retirement fund is
50.6established. Its membership consists of all persons defined in section 352B.01, subdivision
50.72 352B.011, subdivision 10.
50.8EFFECTIVE DATE.This section is effective July 1, 2009.

50.9    Sec. 17. [352B.085] SERVICE CREDIT FOR CERTAIN DISABILITY LEAVES
50.10OF ABSENCE.
50.11A member on leave of absence receiving temporary workers' compensation
50.12payments and a reduced salary or no salary from the employer who is entitled to allowable
50.13service credit for the period of absence under section 352B.011, subdivision 3, paragraph
50.14(b), may make payment to the fund for the difference between salary received, if any,
50.15and the salary that the member would normally receive if the member was not on leave
50.16of absence during the period. The member shall pay an amount equal to the member
50.17and employer contribution rate under section 352B.02, subdivisions 1b and 1c, on
50.18the differential salary amount for the period of the leave of absence. The employing
50.19department, at its option, may pay the employer amount on behalf of the member. Payment
50.20made under this subdivision must include interest at the rate of 8.5 percent per year, and
50.21must be completed within one year of the member's return from the leave of absence.
50.22EFFECTIVE DATE.This section is effective July 1, 2009.

50.23    Sec. 18. [352B.086] SERVICE CREDIT FOR UNIFORMED SERVICE.
50.24(a) A member who is absent from employment by reason of service in the uniformed
50.25services, as defined in United States Code, title 38, section 4303(13), and who returns to
50.26state employment in a position covered by the plan upon discharge from service in the
50.27uniformed services within the time frame required in United States Code, title 38, section
50.284312(e), may obtain service credit for the period of the uniformed service, provided that
50.29the member did not separate from uniformed service with a dishonorable or bad conduct
50.30discharge or under other than honorable conditions.
50.31(b) The member may obtain credit by paying into the fund an equivalent member
50.32contribution based on the member contribution rate or rates in effect at the time that
50.33the uniformed service was performed multiplied by the full and fractional years being
50.34purchased and applied to the annual salary rate. The annual salary rate is the average
51.1annual salary during the purchase period that the member would have received if the
51.2member had continued to provide employment services to the state rather than to provide
51.3uniformed service, or if the determination of that rate is not reasonably certain, the annual
51.4salary rate is the member's average salary rate during the 12-month period of covered
51.5employment rendered immediately preceding the purchase period.
51.6(c) The equivalent employer contribution and, if applicable, the equivalent employer
51.7additional contribution, must be paid by the employing unit, using the employer and
51.8employer additional contribution rate or rates in effect at the time that the uniformed
51.9service was performed, applied to the same annual salary rate or rates used to compute the
51.10equivalent member contribution.
51.11(d) If the member equivalent contributions provided for in this subdivision are not
51.12paid in full, the member's allowable service credit must be prorated by multiplying the
51.13full and fractional number of years of uniformed service eligible for purchase by the
51.14ratio obtained by dividing the total member contributions received by the total member
51.15contributions otherwise required under this subdivision.
51.16(e) To receive allowable service credit under this subdivision, the contributions
51.17specified in this section must be transmitted to the fund during the period which begins
51.18with the date on which the individual returns to state employment covered by the plan and
51.19which has a duration of three times the length of the uniformed service period, but not
51.20to exceed five years. If the determined payment period is calculated to be less than one
51.21year, the contributions required under this subdivision to receive service credit may be
51.22within one year from the discharge date.
51.23(f) The amount of allowable service credit obtainable under this section may not
51.24exceed five years, unless a longer purchase period is required under United States Code,
51.25title 38, section 4312.
51.26(g) The employing unit shall pay interest on all equivalent member and employer
51.27contribution amounts payable under this section. Interest must be computed at a rate of
51.288.5 percent compounded annually from the end of each fiscal year of the leave or break in
51.29service to the end of the month in which payment is received.
51.30EFFECTIVE DATE.This section is effective July 1, 2009.

51.31    Sec. 19. Minnesota Statutes 2008, section 352B.10, subdivision 1, is amended to read:
51.32    Subdivision 1. Injuries; payment amounts Duty disability. A member who
51.33becomes disabled and who is expected to be physically or mentally unfit to perform duties
51.34for at least one year as a direct result of an injury, sickness, or other disability that incurred
51.35in or arose out of any act of duty is determined to qualify for duty disability as defined in
52.1section 352B.011, subdivision 7, is entitled to receive a duty disability benefits benefit
52.2while disabled. The benefits must be paid in monthly installments. The duty disability
52.3benefit is an amount equal to the member's average monthly salary multiplied by 60
52.4percent, plus an additional percent equal to that specified in section 356.315, subdivision
52.56 , for each year and pro rata for completed months of service in excess of 20 years, if any.
52.6EFFECTIVE DATE.This section is effective July 1, 2009.

52.7    Sec. 20. Minnesota Statutes 2008, section 352B.10, subdivision 2, is amended to read:
52.8    Subd. 2. Disabled while not on duty Regular disability benefit. If A member with
52.9at least one year of service becomes disabled and is expected to be physically or mentally
52.10unfit to perform the duties of the position for at least one year because of sickness or injury
52.11that occurred while not engaged in covered employment, the individual who qualifies for
52.12a regular disability benefit as defined in section 352B.011, subdivision 12, is entitled to
52.13a regular disability benefits benefit. The regular disability benefit must be computed as if
52.14the individual were 55 years old at the date of disability and as if the annuity was payable
52.15under section 352B.08. If a regular disability under this subdivision occurs after one year
52.16of service but before 15 years of service, the regular disability benefit must be computed
52.17as though the individual had credit for 15 years of service.
52.18EFFECTIVE DATE.This section is effective July 1, 2009.

52.19    Sec. 21. Minnesota Statutes 2008, section 352B.10, is amended by adding a
52.20subdivision to read:
52.21    Subd. 2a. Applying for benefits; accrual. No application for disability benefits
52.22shall be made until after the last day physically on the job. The disability benefit begins to
52.23accrue the day following the last day for which the employee is paid sick leave or annual
52.24leave but not earlier than 180 days before the date the application is filed. A member
52.25who is terminated must file a written application within the time frame specified under
52.26section 352.113, subdivision 4, paragraph (e).
52.27EFFECTIVE DATE.This section is effective July 1, 2009, and applies to disability
52.28benefit applicants whose last day of public employment was after June 30, 2009.

52.29    Sec. 22. Minnesota Statutes 2008, section 352B.10, subdivision 5, is amended to read:
52.30    Subd. 5. Optional annuity. A disabilitant may elect, in lieu of spousal survivorship
52.31coverage under section 352B.11, subdivisions 2b and 2c, the normal disability benefit or
52.32an optional annuity as provided in section 352B.08, subdivision 3. The choice of an
52.33optional annuity must be made in writing, on a form prescribed by the executive director,
53.1and must be made before the commencement of the payment of the disability benefit, or
53.2within 90 days before reaching age 65 55 or before reaching the five-year anniversary
53.3of the effective date of the disability benefit, whichever is later. The optional annuity
53.4is effective on the date on which the disability benefit begins to accrue, or the month
53.5following the attainment of age 65 55 or following the five-year anniversary of the
53.6effective date of the disability benefit, whichever is later.
53.7EFFECTIVE DATE.This section is effective July 1, 2009, and applies to disability
53.8benefit applicants whose last day of public employment was after June 30, 2009.

53.9    Sec. 23. Minnesota Statutes 2008, section 352B.11, subdivision 2, is amended to read:
53.10    Subd. 2. Death; payment to dependent children; family maximums. (a) Each
53.11dependent child, as defined in section 352B.01, subdivision 10 352B.011, subdivision 6, is
53.12entitled to receive a monthly annuity equal to ten percent of the average monthly salary
53.13of the deceased member.
53.14(b) A dependent child over 18 and under 23 years of age also may receive the
53.15monthly benefit provided in this section if the child is continuously attending an accredited
53.16school as a full-time student during the normal school year as determined by the director.
53.17If the child does not continuously attend school, but separates from full-time attendance
53.18during any part of a school year, the annuity must cease at the end of the month of
53.19separation.
53.20(c) In addition, a payment of $20 per month must be prorated equally to the
53.21surviving dependent children when the former member is survived by more than one
53.22dependent child.
53.23(d) Payments for the benefit of any dependent child must be made to the surviving
53.24spouse, or if there is none, to the legal guardian of the child.
53.25(e) The monthly benefit for any one family, including a surviving spouse benefit, if
53.26applicable, must not be less than 50 percent nor exceed 70 percent of the average monthly
53.27salary of the deceased member.
53.28EFFECTIVE DATE.This section is effective July 1, 2009.

53.29    Sec. 24. REPEALER.
53.30Minnesota Statutes 2008, section 352B.01, subdivisions 1, 2, 3, 3b, 4, 6, 7, 9, 10,
53.31and 11, are repealed.
53.32EFFECTIVE DATE.This section is effective July 1, 2009.


54.4    Section 1. Minnesota Statutes 2008, section 352.91, subdivision 3d, is amended to read:
54.5    Subd. 3d. Other correctional personnel. (a) "Covered correctional service" means
54.6service by a state employee in one of the employment positions at a correctional facility or
54.7at the Minnesota Security Hospital specified in paragraph (b) if at least 75 percent of the
54.8employee's working time is spent in direct contact with inmates or patients and the fact of
54.9this direct contact is certified to the executive director by the appropriate commissioner.
54.10    (b) The employment positions are:
54.11    (1) automotive mechanic;
54.12(2) baker;
54.13    (2) (3) central services administrative specialist, intermediate;
54.14    (3) (4) central services administrative specialist, principal;
54.15    (4) (5) chaplain;
54.16    (5) (6) chief cook;
54.17    (6) (7) cook;
54.18    (7) (8) cook coordinator;
54.19    (8) (9) corrections program therapist 1;
54.20    (9) (10) corrections program therapist 2;
54.21    (10) (11) corrections program therapist 3;
54.22    (11) (12) corrections program therapist 4;
54.23    (12) (13) corrections inmate program coordinator;
54.24    (13) (14) corrections transitions program coordinator;
54.25    (14) (15) corrections security caseworker;
54.26    (15) (16) corrections security caseworker career;
54.27    (16) (17) corrections teaching assistant;
54.28    (17) (18) delivery van driver;
54.29    (18) (19) dentist;
54.30    (19) (20) electrician supervisor;
54.31    (20) (21) general maintenance worker lead;
54.32    (21) (22) general repair worker;
54.33    (22) (23) library/information research services specialist;
54.34    (23) (24) library/information research services specialist senior;
54.35    (24) (25) library technician;
54.36    (25) (26) painter lead;
55.1    (26) (27) plant maintenance engineer lead;
55.2    (27) (28) plumber supervisor;
55.3    (28) (29) psychologist 1;
55.4    (29) (30) psychologist 3;
55.5    (30) (31) recreation therapist;
55.6    (31) (32) recreation therapist coordinator;
55.7    (32) (33) recreation program assistant;
55.8    (33) (34) recreation therapist senior;
55.9    (34) (35) sports medicine specialist;
55.10    (35) (36) work therapy assistant;
55.11    (36) (37) work therapy program coordinator; and
55.12    (37) (38) work therapy technician.
55.13EFFECTIVE DATE.This section is effective retroactively from May 29, 2007.

55.14    Sec. 2. MSRS-CORRECTIONAL; ELIMINATION OF CERTAIN POSITION
55.15FROM COVERAGE.
55.16Notwithstanding any provision of Minnesota Statutes, section 352.91, to the contrary,
55.17including Minnesota Statutes, section 352.91, subdivision 2, "covered correctional service"
55.18does not mean service rendered by a state employee as an automotive mechanic lead.
55.19EFFECTIVE DATE.This section is effective the day following final enactment.


55.22    Section 1. Minnesota Statutes 2008, section 43A.346, subdivision 2, is amended to
55.23read:
55.24    Subd. 2. Eligibility. (a) This section applies to a terminated state employee who:
55.25    (1) for at least the five years immediately preceding separation under clause (2),
55.26was regularly scheduled to work 1,044 or more hours per year in a position covered by
55.27a pension plan administered by the Minnesota State Retirement System or the Public
55.28Employees Retirement Association;
55.29    (2) terminated state or Metropolitan Council employment;
55.30    (3) at the time of termination under clause (2), met the age and service requirements
55.31necessary to receive an unreduced retirement annuity from the plan and satisfied
55.32requirements for the commencement of the retirement annuity or, for a terminated
55.33employee under the unclassified employees retirement plan, met the age and service
55.34requirements necessary to receive an unreduced retirement annuity from the plan and
56.1satisfied requirements for the commencement of the retirement annuity or elected a
56.2lump-sum payment; and
56.3    (4) agrees to accept a postretirement option position with the same or a different
56.4appointing authority, working a reduced schedule that is both (i) a reduction of at least 25
56.5percent from the employee's number of previously regularly scheduled work hours; and
56.6(ii) 1,044 hours or less in state or Metropolitan Council service.
56.7    (b) For purposes of this section, an unreduced retirement annuity includes a
56.8retirement annuity computed under a provision of law which permits retirement, without
56.9application of an earlier retirement reduction factor, whenever age plus years of allowable
56.10service total at least 90.
56.11    (c) For purposes of this section, as it applies to staff state employees who are
56.12members of the Public Employees Retirement Association who are at least age 62, the
56.13length of separation requirement and termination of service requirement prohibiting return
56.14to work agreements under section 353.01, subdivisions 11a and 28, are not applicable.
56.15EFFECTIVE DATE.This section is effective the day following final enactment.

56.16    Sec. 2. Minnesota Statutes 2008, section 43A.346, subdivision 6, is amended to read:
56.17    Subd. 6. Duration. Postretirement option employment shall be is for an initial
56.18period not to exceed one year. During that period, the appointing authority may not
56.19modify the conditions specified in the written offer without the person's consent, except as
56.20required by law or by the collective bargaining agreement or compensation plan applicable
56.21to the person. At the end of the initial period, the appointing authority has sole discretion
56.22to determine if the offer of a postretirement option position will be renewed, renewed
56.23with modifications, or terminated. If the person is under age 62, an offer of renewal
56.24and any related verbal offer or agreement must not be made until at least 30 days after
56.25termination of the person's previous postretirement option employment. Postretirement
56.26option employment may be renewed for periods of up to one year, not to exceed a total
56.27duration of five years. No person shall may be employed in one or a combination of
56.28postretirement option positions under this section for a total of more than five years.
56.29EFFECTIVE DATE.This section is effective the day following final enactment.

56.30    Sec. 3. Minnesota Statutes 2008, section 352B.02, subdivision 1a, is amended to read:
56.31    Subd. 1a. Member contributions. (a) Each The member shall pay a sum equal to
56.32the following contribution is 10.40 percent of the member's salary, which constitutes the
56.33member contribution to the fund:.

57.1		before July 1, 2007	8.40
57.2		from July 1, 2007, to June 30, 2008	9.10
57.3		from July 1, 2008, to June 30, 2009	9.80
57.4		from July 1, 2009, and thereafter	10.40.

57.5(b) These contributions must be made by deduction from salary as provided in
57.6section 352.04, subdivision 4.
57.7EFFECTIVE DATE.This section is effective July 1, 2009.

57.8    Sec. 4. Minnesota Statutes 2008, section 352B.02, subdivision 1c, is amended to read:
57.9    Subd. 1c. Employer contributions. (a) In addition to member contributions,
57.10department heads shall pay a sum equal to the following 15.60 percent of the salary upon
57.11which deductions were made, which shall constitute constitutes the employer contribution
57.12to the fund:.

57.13		before July 1, 2007	12.60
57.14		from July 1, 2007, to June 30, 2008	13.60
57.15		from July 1, 2008, to June 30, 2009	14.60
57.16		from July 1, 2009, and thereafter	15.60.

57.17(b) Department contributions must be paid out of money appropriated to departments
57.18for this purpose.
57.19EFFECTIVE DATE.This section is effective July 1, 2009.

57.20    Sec. 5. Minnesota Statutes 2008, section 353.01, subdivision 16, is amended to read:
57.21    Subd. 16. Allowable service; limits and computation. (a) "Allowable service"
57.22means:
57.23    (1) service during years of actual membership in the course of which employee
57.24deductions were withheld from salary and contributions were made, at the applicable rates
57.25under section 353.27, 353.65, or 353E.03;
57.26(2) periods of service covered by payments in lieu of salary deductions under section
57.27sections 353.27, subdivision 12, and 353.35;
57.28    (2) (3) service in years during which the public employee was not a member but for
57.29which the member later elected, while a member, to obtain credit by making payments to
57.30the fund as permitted by any law then in effect;
57.31    (3) (4) a period of authorized leave of absence with pay from which deductions for
57.32employee contributions are made, deposited, and credited to the fund;
57.33    (4) (5) a period of authorized personal, parental, or medical leave of absence without
57.34pay, including a leave of absence covered under the federal Family Medical Leave Act,
58.1that does not exceed one year, and for which a member obtained service credit for each
58.2month in the leave period by payment under section 353.0161 to the fund made in place of
58.3salary deductions. An employee must return to public service and render a minimum of
58.4three months of allowable service in order to be eligible to make payment under section
58.5353.0161 for a subsequent authorized leave of absence without pay. Upon payment, the
58.6employee must be granted allowable service credit for the purchased period;
58.7    (5) (6) a periodic, repetitive leave that is offered to all employees of a governmental
58.8subdivision. The leave program may not exceed 208 hours per annual normal work
58.9cycle as certified to the association by the employer. A participating member obtains
58.10service credit by making employee contributions in an amount or amounts based on the
58.11member's average salary that would have been paid if the leave had not been taken. The
58.12employer shall pay the employer and additional employer contributions on behalf of the
58.13participating member. The employee and the employer are responsible to pay interest on
58.14their respective shares at the rate of 8.5 percent a year, compounded annually, from the
58.15end of the normal cycle until full payment is made. An employer shall also make the
58.16employer and additional employer contributions, plus 8.5 percent interest, compounded
58.17annually, on behalf of an employee who makes employee contributions but terminates
58.18public service. The employee contributions must be made within one year after the end of
58.19the annual normal working cycle or within 20 30 days after termination of public service,
58.20whichever is sooner. The executive director shall prescribe the manner and forms to be
58.21used by a governmental subdivision in administering a periodic, repetitive leave. Upon
58.22payment, the member must be granted allowable service credit for the purchased period;
58.23    (6) (7) an authorized temporary or seasonal layoff under subdivision 12, limited
58.24to three months allowable service per authorized temporary or seasonal layoff in one
58.25calendar year. An employee who has received the maximum service credit allowed for an
58.26authorized temporary or seasonal layoff must return to public service and must obtain a
58.27minimum of three months of allowable service subsequent to the layoff in order to receive
58.28allowable service for a subsequent authorized temporary or seasonal layoff; or
58.29    (7) (8) a period during which a member is absent from employment by a
58.30governmental subdivision by reason of service in the uniformed services, as defined in
58.31United States Code, title 38, section 4303(13), if the member returns to public service with
58.32the same governmental subdivision upon discharge from service in the uniformed service
58.33within the time frames required under United States Code, title 38, section 4312(e),
58.34provided that the member did not separate from uniformed service with a dishonorable or
58.35bad conduct discharge or under other than honorable conditions. The service is credited
58.36if the member pays into the fund equivalent employee contributions based upon the
59.1contribution rate or rates in effect at the time that the uniformed service was performed
59.2multiplied by the full and fractional years being purchased and applied to the annual salary
59.3rate. The annual salary rate is the average annual salary during the purchase period that
59.4the member would have received if the member had continued to be employed in covered
59.5employment rather than to provide uniformed service, or, if the determination of that
59.6rate is not reasonably certain, the annual salary rate is the member's average salary rate
59.7during the 12-month period of covered employment rendered immediately preceding the
59.8period of the uniformed service. Payment of the member equivalent contributions must
59.9be made during a period that begins with the date on which the individual returns to
59.10public employment and that is three times the length of the military leave period, or
59.11within five years of the date of discharge from the military service, whichever is less. If
59.12the determined payment period is less than one year, the contributions required under
59.13this clause to receive service credit may be made within one year of the discharge date.
59.14Payment may not be accepted following 20 30 days after termination of public service
59.15under subdivision 11a. If the member equivalent contributions provided for in this clause
59.16are not paid in full, the member's allowable service credit must be prorated by multiplying
59.17the full and fractional number of years of uniformed service eligible for purchase by the
59.18ratio obtained by dividing the total member contributions received by the total member
59.19contributions otherwise required under this clause. The equivalent employer contribution,
59.20and, if applicable, the equivalent additional employer contribution must be paid by the
59.21governmental subdivision employing the member if the member makes the equivalent
59.22employee contributions. The employer payments must be made from funds available to
59.23the employing unit, using the employer and additional employer contribution rate or
59.24rates in effect at the time that the uniformed service was performed, applied to the same
59.25annual salary rate or rates used to compute the equivalent member contribution. The
59.26governmental subdivision involved may appropriate money for those payments. The
59.27amount of service credit obtainable under this section may not exceed five years unless a
59.28longer purchase period is required under United States Code, title 38, section 4312. The
59.29employing unit shall pay interest on all equivalent member and employer contribution
59.30amounts payable under this clause. Interest must be computed at a rate of 8.5 percent
59.31compounded annually from the end of each fiscal year of the leave or the break in service
59.32to the end of the month in which the payment is received. Upon payment, the employee
59.33must be granted allowable service credit for the purchased period.; or
59.34(9) a period specified under subdivision 40.
59.35    (b) For calculating benefits under sections 353.30, 353.31, 353.32, and 353.33 for
59.36state officers and employees displaced by the Community Corrections Act, chapter 401,
60.1and transferred into county service under section 401.04, "allowable service" means the
60.2combined years of allowable service as defined in paragraph (a), clauses (1) to (6), and
60.3section 352.01, subdivision 11.
60.4    (c) For a public employee who has prior service covered by a local police or
60.5firefighters relief association that has consolidated with the Public Employees Retirement
60.6Association or to which section 353.665 applies, and who has elected the type of benefit
60.7coverage provided by the public employees police and fire fund either under section
60.8353A.08 following the consolidation or under section 353.665, subdivision 4, "applicable
60.9service" is a period of service credited by the local police or firefighters relief association
60.10as of the effective date of the consolidation based on law and on bylaw provisions
60.11governing the relief association on the date of the initiation of the consolidation procedure.
60.12    (d) No member may receive more than 12 months of allowable service credit in a
60.13year either for vesting purposes or for benefit calculation purposes.
60.14    (e) MS 2002 [Expired]
60.15EFFECTIVE DATE.This section is effective the day following final enactment.

60.16    Sec. 6. Minnesota Statutes 2008, section 353.01, subdivision 16b, is amended to read:
60.17    Subd. 16b. Uncredited military service credit purchase. (a) A public employee
60.18who has at least three years of allowable service with the Public Employees Retirement
60.19Association or the public employees police and fire plan and who performed service in the
60.20United States armed forces before becoming a public employee, or who failed to obtain
60.21service credit for a military leave of absence under subdivision 16, paragraph (h) (a),
60.22clause 7, is entitled to purchase allowable service credit for the initial period of enlistment,
60.23induction, or call to active duty without any voluntary extension by making payment under
60.24section 356.551. This authority is voided if the public employee has not purchased service
60.25credit from any other Minnesota defined benefit public employee pension plan, other than
60.26a volunteer fire plan, for the same period of service, or if the separation from the United
60.27States armed forces was under less than honorable conditions.
60.28    (b) A public employee who desires to purchase service credit under paragraph
60.29(a) must apply with the executive director to make the purchase. The application must
60.30include all necessary documentation of the public employee's qualifications to make the
60.31purchase, signed written permission to allow the executive director to request and receive
60.32necessary verification of applicable facts and eligibility requirements, and any other
60.33relevant information that the executive director may require.
60.34    (c) Allowable service credit for the purchase period must be granted by the
60.35Public Employees Retirement Association or the public employees police and fire plan,
61.1whichever applies, to the purchasing public employee upon receipt of the purchase
61.2payment amount. Payment must be made before the effective date of retirement of the
61.3public employee employee's termination of public service or termination of membership,
61.4whichever is earlier.
61.5    (d) This subdivision is repealed July 1, 2013.
61.6EFFECTIVE DATE.This section is effective the day after final enactment.

61.7    Sec. 7. Minnesota Statutes 2008, section 353.0161, subdivision 1, is amended to read:
61.8    Subdivision 1. Application. This section applies to employees covered by any plan
61.9specified in this chapter or chapter 353E for any period of authorized leave of absence
61.10specified in section 353.01, subdivision 16, paragraph (a), clause (4) (5), for which the
61.11employee obtains credit for allowable service by making payment as specified in this
61.12section to the applicable fund.
61.13EFFECTIVE DATE.This section is effective the day following final enactment.

61.14    Sec. 8. Minnesota Statutes 2008, section 353.03, subdivision 3a, is amended to read:
61.15    Subd. 3a. Executive director. (a) Appointment. The board shall appoint an
61.16executive director on the basis of education, experience in the retirement field, and
61.17leadership ability. The executive director must have had at least five years' experience in
61.18an executive level management position, which has included responsibility for pensions,
61.19deferred compensation, or employee benefits. The executive director serves at the pleasure
61.20of the board. The salary of the executive director is as provided by section 15A.0815.
61.21    (b) Duties. The management of the association is vested in the executive director
61.22who shall be the executive and administrative head of the association. The executive
61.23director shall act as adviser to the board on all matters pertaining to the association and
61.24shall also act as the secretary of the board. The executive director shall:
61.25    (1) attend all meetings of the board;
61.26    (2) prepare and recommend to the board appropriate rules to carry out the provisions
61.27of this chapter;
61.28    (3) establish and maintain an adequate system of records and accounts following
61.29recognized accounting principles and controls;
61.30    (4) designate, with the approval of the board, up to two persons who may serve in
61.31the unclassified service and whose salaries are set in accordance with section 43A.18,
61.32subdivision 3 , appoint a confidential secretary in the unclassified service, and appoint
61.33employees to carry out this chapter, who are subject to chapters 43A and 179A in the same
61.34manner as are executive branch employees;
62.1    (5) organize the work of the association as the director deems necessary to fulfill
62.2the functions of the association, and define the duties of its employees and delegate to
62.3them any powers or duties, subject to the control of, and under such conditions as, the
62.4executive director may prescribe;
62.5    (6) with the approval of the board, contract for the services of an approved actuary,
62.6professional management services, and any other consulting services as necessary to fulfill
62.7the purposes of this chapter. All contracts are subject to chapter 16C. The commissioner
62.8of administration shall not approve, and the association shall not enter into, any contract
62.9to provide lobbying services or legislative advocacy of any kind. Any approved actuary
62.10retained by the executive director shall function as the actuarial advisor of the board and
62.11the executive director and may perform actuarial valuations and experience studies to
62.12supplement those performed by the actuary retained . In addition to filing requirements
62.13under section 356.214., any supplemental actuarial valuations or experience studies shall
62.14be filed with the executive director of the Legislative Commission on Pensions and
62.15Retirement. Copies of professional management survey reports shall be transmitted to the
62.16secretary of the senate, the chief clerk of the house of representatives, and the Legislative
62.17Reference Library as provided by section 3.195, and to the executive director of the
62.18commission at the same time as reports are furnished to the board. Only management
62.19firms experienced in conducting management surveys of federal, state, or local public
62.20retirement systems shall be qualified to contract with the director hereunder;
62.21    (7) with the approval of the board provide in-service training for the employees
62.22of the association;
62.23    (8) make refunds of accumulated contributions to former members and to the
62.24designated beneficiary, surviving spouse, legal representative or next of kin of deceased
62.25members or deceased former members, as provided in this chapter;
62.26    (9) determine the amount of the annuities and disability benefits of members covered
62.27by the association and authorize payment of the annuities and benefits beginning as of
62.28the dates on which the annuities and benefits begin to accrue, in accordance with the
62.29provisions of this chapter;
62.30    (10) pay annuities, refunds, survivor benefits, salaries, and necessary operating
62.31expenses of the association;
62.32    (11) prepare and submit to the board and the legislature an annual financial report
62.33covering the operation of the association, as required by section 356.20;
62.34    (12) prepare and submit biennial and annual budgets to the board for its approval
62.35and submit the approved budgets to the Department of Finance for approval by the
62.36commissioner;
63.1    (13) reduce all or part of the accrued interest payable under section 353.27,
63.2subdivisions 12, 12a, and 12b , or 353.28, subdivision 5, upon receipt of proof by the
63.3association of an unreasonable processing delay or other extenuating circumstances of
63.4the employing unit; and notwithstanding section 353.27, subdivision 7, may authorize
63.5that accrued interest of $10 or less is not payable to the member when a credit has been
63.6taken by the employer to correct an employee deduction taken in error. The executive
63.7director shall prescribe and submit for approval by the board the conditions under which
63.8such interest may be reduced; and
63.9    (14) with the approval of the board, perform such other duties as may be required for
63.10the administration of the association and the other provisions of this chapter and for the
63.11transaction of its business.
63.12EFFECTIVE DATE.This section is effective the day after final enactment.

63.13    Sec. 9. Minnesota Statutes 2008, section 353.27, subdivision 2, is amended to read:
63.14    Subd. 2. Employee contribution. (a) For a basic member, the employee
63.15contribution is the following applicable percentage of the total 9.10 percent of salary
63.16amount for a "basic member" and. For a "coordinated member": coordinated member,
63.17the employee contribution is six percent of salary plus any contribution rate adjustment
63.18under subdivision 3b.

63.19			Basic Program		Coordinated Program
63.20	Effective before January 1, 2006		9.10		5.10
63.21	Effective January 1, 2006		9.10		5.50
63.22	Effective January 1, 2007		9.10		5.75
63.23 63.24 63.25	Effective January 1, 2008		9.10		6.00 plus any contribution rate adjustment under subdivision 3b

63.26(b) These contributions must be made by deduction from salary as defined in section
63.27353.01, subdivision 10 , in the manner provided in subdivision 4. If any portion of a
63.28member's salary is paid from other than public funds, the member's employee contribution
63.29must be based on the total salary received by the member from all sources.
63.30EFFECTIVE DATE.This section is effective the day following final enactment.

63.31    Sec. 10. Minnesota Statutes 2008, section 353.27, subdivision 3, is amended to read:
63.32    Subd. 3. Employer contribution. (a) For a basic member, the employer
63.33contribution is the following applicable percentage of the total 9.10 percent of salary
63.34amount for "basic members" and. For "coordinated members": a coordinated member,
64.1the employer contribution is six percent of salary plus any contribution rate adjustment
64.2under subdivision 3b.

64.3			Basic Program		Coordinated Program
64.4	Effective before January 1, 2006		9.10		5.10
64.5	Effective January 1, 2006		9.10		5.50
64.6	Effective January 1, 2007		9.10		5.75
64.7 64.8 64.9	Effective January 1, 2008		9.10		6.00 plus any contribution rate adjustment under subdivision 3b

64.10(b) This contribution must be made from funds available to the employing
64.11subdivision by the means and in the manner provided in section 353.28.
64.12EFFECTIVE DATE.This section is effective the day following final enactment.

64.13    Sec. 11. Minnesota Statutes 2008, section 353.27, subdivision 7, is amended to read:
64.14    Subd. 7. Adjustment for erroneous receipts or disbursements. (a) Except
64.15as provided in paragraph (b), erroneous employee deductions and erroneous employer
64.16contributions and additional employer contributions for a person, who otherwise does not
64.17qualify for membership under this chapter, are considered:
64.18(1) valid if the initial erroneous deduction began before January 1, 1990. Upon
64.19determination of the error by the association, the person may continue membership in the
64.20association while employed in the same position for which erroneous deductions were
64.21taken, or file a written election to terminate membership and apply for a refund upon
64.22termination of public service or defer an annuity under section 353.34; or
64.23(2) invalid, if the initial erroneous employee deduction began on or after January 1,
64.241990. Upon determination of the error, the association shall refund all erroneous employee
64.25deductions and all erroneous employer contributions as specified in paragraph (d) (e). No
64.26person may claim a right to continued or past membership in the association based on
64.27erroneous deductions which began on or after January 1, 1990.
64.28(b) Erroneous deductions taken from the salary of a person who did not qualify
64.29for membership in the association by virtue of concurrent employment before July 1,
64.301978, which required contributions to another retirement fund or relief association
64.31established for the benefit of officers and employees of a governmental subdivision, are
64.32invalid. Upon discovery of the error, the association shall remove all invalid service and,
64.33upon termination of public service, the association shall refund all erroneous employee
64.34deductions to the person, with interest as determined under section 353.34, subdivision 2,
64.35and all erroneous employer contributions without interest to the employer. This paragraph
64.36has both retroactive and prospective application.
65.1(c) Adjustments to correct employer contributions and employee deductions taken in
65.2error from amounts which are not salary under section 353.01, subdivision 10, are invalid
65.3upon discovery by the association and must be refunded made as specified in paragraph
65.4(d) (e). The period of adjustment must be limited to the fiscal year in which the error is
65.5discovered by the association and the immediate two preceding fiscal years.
65.6(d) If there is evidence of fraud or other misconduct on the part of the employee or
65.7the employer, the board of trustees may authorize adjustments to the account of a member
65.8or former member to correct erroneous employee deductions and employer contributions
65.9on invalid salary and the recovery of any overpayments for a period longer than provided
65.10for under paragraph (c).
65.11(d) (e) Upon discovery of the receipt of erroneous employee deductions and
65.12employer contributions under paragraph (a), clause (2), or paragraph (c), the association
65.13must require the employer to discontinue the erroneous employee deductions and
65.14erroneous employer contributions reported on behalf of a member. Upon discontinuation,
65.15the association either must refund :
65.16(1) for a member, provide a refund or credit to the employer in the amount of the
65.17invalid employee deductions to the person without interest and with interest on the invalid
65.18employee deductions at the rate specified under section 353.34, subdivision 2, from the
65.19received date of each invalid salary transaction through the date the credit or refund is
65.20made; and the employer must pay the refunded employee deductions plus interest to the
65.21member;
65.22(2) for a former member who:
65.23(i) is not receiving a retirement annuity or benefit, return the erroneous employee
65.24deductions to the former member through a refund with interest at the rate specified under
65.25section 353.34, subdivision 2, from the received date of each invalid salary transaction
65.26through the date the credit or refund is made; or
65.27(ii) is receiving a retirement annuity or disability benefit, or a person who is
65.28receiving an optional annuity or survivor benefit, for whom it has been determined an
65.29overpayment must be recovered, adjust the payment amount and recover the overpayments
65.30as provided under this section; and
65.31(3) return the invalid employer contributions reported on behalf of a member
65.32or former member to the employer or provide by providing a credit against future
65.33contributions payable by the employer for the amount of all erroneous deductions and
65.34contributions. If the employing unit receives a credit under this paragraph, the employing
65.35unit is responsible for refunding to the applicable employee any amount that had been
65.36erroneously deducted from the person's salary. In the event that a retirement annuity or
66.1disability benefit has been computed using invalid service or salary, the association must
66.2adjust the annuity or benefit and recover any overpayment under subdivision 7b.
66.3(e) (f) In the event that a salary warrant or check from which a deduction for the
66.4retirement fund was taken has been canceled or the amount of the warrant or check
66.5returned to the funds of the department making the payment, a refund of the sum
66.6deducted, or any portion of it that is required to adjust the deductions, must be made
66.7to the department or institution.
66.8(f) Any refund to a member under this subdivision that is reasonably determined
66.9to cause the plan to fail to be a qualified plan under section 401(a) of the federal
66.10Internal Revenue Code, as amended, may not be refunded and instead must be credited
66.11against future contributions payable by the employer. The employer receiving the
66.12credit is responsible for refunding to the applicable employee any amount that had been
66.13erroneously deducted from the person's salary.
66.14(g) If the accrual date of any retirement annuity, survivor benefit, or disability benefit
66.15is within the limitation period specified in paragraph (c), and an overpayment has resulted
66.16by using invalid service or salary, or due to any erroneous calculation procedure, the
66.17association must recalculate the annuity or benefit payable and recover any overpayment
66.18as provided under subdivision 7b.
66.19(h) Notwithstanding the provisions of this subdivision, the association may apply
66.20the Revenue Procedures defined in the federal Internal Revenue Service Employee Plans
66.21Compliance Resolution System and not issue a refund of erroneous employee deductions
66.22and employer contributions or not recover a small overpayment of benefits if the cost to
66.23correct the error would exceed the amount of the member refund or overpayment.
66.24(i) Any fees or penalties assessed by the federal Internal Revenue Service for any
66.25failure by an employer to follow the statutory requirements for reporting eligible members
66.26and salary must be paid by the employer.
66.27EFFECTIVE DATE.(a) This section is effective the day following enactment.
66.28(b) The interest required on deductions in error as provided in paragraph (e) must
66.29be applied to any refunds paid on or after June 1, 2009.

66.30    Sec. 12. Minnesota Statutes 2008, section 353.27, subdivision 7b, is amended to read:
66.31    Subd. 7b. Recovery of overpayments to members. (a) In the event of an
66.32overpayment to a member, retiree, beneficiary, or other person, the executive director shall
66.33recover the overpayment by suspending or reducing the payment of a retirement annuity,
66.34refund, disability benefit, survivor benefit, or optional annuity payable to the applicable
66.35person or the person's estate, whichever applies, under this chapter until all outstanding
67.1money has been recovered determines that an overpaid annuity or benefit that is the result
67.2of invalid salary included in the average salary used to calculate the payment amount must
67.3be recovered, the association must determine the amount of the employee deductions
67.4taken in error on the invalid salary, with interest determined in the manner provided for a
67.5former member under subdivision 7, paragraph (e), clause (2), item (i), and must subtract
67.6that amount from the total annuity or benefit overpayment, and the remaining balance of
67.7the overpaid annuity or benefit, if any, must be recovered.
67.8(b) If the invalid employee deductions plus interest exceed the amount of the
67.9overpaid benefits, the balance must be refunded to the person to whom the benefit or
67.10annuity is being paid.
67.11(c) Any invalid employer contributions reported on the invalid salary must be
67.12credited to the employer as provided in subdivision 7, paragraph (e).
67.13(d) If a member or former member, who is receiving a retirement annuity or
67.14disability benefit for which an overpayment is being recovered, dies before recovery of
67.15the overpayment is completed and a joint and survivor optional annuity is payable, the
67.16remaining balance of the overpaid annuity or benefit must continue to be recovered from
67.17the payment to the optional annuity beneficiary.
67.18(e) If the association finds that a refund has been overpaid to a former member,
67.19beneficiary or other person, the amount of the overpayment must be recovered.
67.20(f) The board of trustees shall adopt policies directing the period of time and manner
67.21for the collection of any overpaid retirement or optional annuity, and survivor or disability
67.22benefit, or a refund that the executive director determines must be recovered as provided
67.23under this section.
67.24EFFECTIVE DATE.This section is effective the day following final enactment.

67.25    Sec. 13. Minnesota Statutes 2008, section 353.33, subdivision 1, is amended to read:
67.26    Subdivision 1. Age, service, and salary requirements. A coordinated or basic
67.27member who has at least three years of allowable service and becomes totally and
67.28permanently disabled before normal retirement age, and a basic member who has at least
67.29three years of allowable service and who becomes totally and permanently disabled, upon
67.30application as defined under section 353.031, is entitled to a disability benefit in an amount
67.31determined under subdivision 3. If the disabled person's public service has terminated
67.32at any time, at least two of the required three years of allowable service must have been
67.33rendered after last becoming an active member.
67.34EFFECTIVE DATE.This section is effective the day following final enactment.

68.1    Sec. 14. Minnesota Statutes 2008, section 353.33, is amended by adding a subdivision
68.2to read:
68.3    Subd. 1a. Benefit restriction. No person is entitled to receive disability benefits
68.4and a retirement annuity at the same time.
68.5EFFECTIVE DATE.This section is effective the day following final enactment.

68.6    Sec. 15. Minnesota Statutes 2008, section 353.33, subdivision 11, is amended to read:
68.7    Subd. 11. Coordinated member disabilitant transfer to retirement status. No
68.8person is entitled to receive disability benefits and a retirement annuity at the same time.
68.9The disability benefits paid to a coordinated member must terminate when the person
68.10reaches normal retirement age. If the coordinated member is still totally and permanently
68.11disabled upon attaining normal retirement age, the coordinated member is deemed to be on
68.12retirement status. If an optional annuity is elected under subdivision 3a, the coordinated
68.13member shall receive an annuity under the terms of the optional annuity previously
68.14elected, or, if an optional annuity is not elected under subdivision 3a, the coordinated
68.15member may elect to receive a normal retirement annuity under section 353.29 or an
68.16annuity equal to the disability benefit paid before the coordinated member reaches normal
68.17retirement age, whichever amount is greater, or elect to receive an optional annuity
68.18under section 353.30, subdivision 3. The annuity of a disabled coordinated member who
68.19attains normal retirement age must be computed under the law in effect upon attainment
68.20of normal retirement age. Election of an optional annuity must be made before the
68.21coordinated member attains normal retirement age. If an optional annuity is elected, the
68.22election is effective on the date on which the person attains normal retirement age and
68.23the optional annuity begins to accrue on the first day of the month next following the
68.24month in which the person attains that age.
68.25EFFECTIVE DATE.This section is effective the day following final enactment.

68.26    Sec. 16. Minnesota Statutes 2008, section 353.33, subdivision 12, is amended to read:
68.27    Subd. 12. Basic disability disabilitant transfer to retirement status; survivor
68.28benefits. (a) If a basic member who is receiving a disability benefit under subdivision 3:
68.29(1) dies before attaining age 65 or within five years of the effective date of the
68.30disability, whichever is later, the surviving spouse is entitled to receive a survivor
68.31benefit under section 353.31, unless and any dependent child or children are entitled to
68.32dependent child benefits under section 353.31, subdivision 1b, paragraph (b). If there are
68.33no dependent children, in lieu of the survivor benefit specified under section 353.31, the
68.34surviving spouse elected may elect to receive a refund under section 353.32, subdivision 1;.
69.1(2) (b) If a basic member who is receiving a disability benefit under subdivision 3 is
69.2living at age 65 or five years after the effective date of the disability, whichever is later, the
69.3basic member may continue to receive a normal retirement annuity equal to the disability
69.4benefit previously received, adjusted for the amount no longer payable under subdivision
69.53, paragraph (b), or the person may elect a joint and survivor optional annuity under
69.6section 353.31, subdivision 1b. The election of the joint and survivor optional annuity
69.7must occur within 90 days of attaining age 65 or of reaching the five-year anniversary
69.8of the effective date of the disability benefit, whichever is later. The optional annuity
69.9takes effect on the first day of the month following the month in which the person attains
69.10age 65 or reaches the five-year anniversary of the effective date of the disability benefit,
69.11whichever is later; or.
69.12(3) if there is a dependent child or children under clause (1) or (2), the dependent
69.13child is entitled to a dependent child benefit under section 353.31, subdivision 1b,
69.14paragraph (b).
69.15EFFECTIVE DATE.This section is effective the day following final enactment.

69.16    Sec. 17. Minnesota Statutes 2008, section 353.65, subdivision 2, is amended to read:
69.17    Subd. 2. Employee contribution rate. (a) The employee contribution is an amount
69.18equal to the 9.4 percent of the total salary of the member specified in paragraph (b). This
69.19contribution must be made by deduction from salary in the manner provided in subdivision
69.204. Where any portion of a member's salary is paid from other than public funds, the
69.21member's employee contribution is based on the total salary received from all sources.
69.22(b) For calendar year 2006, the employee contribution rate is 7.0 percent. For
69.23calendar year 2007, the employee contribution rate is 7.8 percent. For calendar year 2008,
69.24the employee contribution rate is 8.6 percent. For calendar year 2009 and thereafter, the
69.25employee contribution rate is 9.4 percent.
69.26EFFECTIVE DATE.This section is effective the day following final enactment.

69.27    Sec. 18. Minnesota Statutes 2008, section 353.65, subdivision 3, is amended to read:
69.28    Subd. 3. Employer contribution rate. (a) The employer contribution shall be an
69.29amount equal to the is 14.1 percent of the total salary of every the member as specified in
69.30paragraph (b). This contribution shall must be made from funds available to the employing
69.31subdivision by the means and in the manner provided in section 353.28.
69.32(b) For calendar year 2006, the employer contribution rate is 10.5 percent. For
69.33calendar year 2007, the employer contribution rate is 11.7 percent. For calendar year 2008,
70.1the employer contribution rate is 12.9 percent. For calendar year 2009 and thereafter, the
70.2employer contribution rate is 14.1 percent.
70.3EFFECTIVE DATE.This section is effective the day following final enactment.

70.4    Sec. 19. Minnesota Statutes 2008, section 353A.08, subdivision 6a, is amended to read:
70.5    Subd. 6a. Military service contribution and refund. A person who was an active
70.6member of a local police or firefighters relief association upon its consolidation with the
70.7public employees retirement association, and who was otherwise eligible for automatic
70.8service credit for military service under Minnesota Statutes 2000, section 423.57, and
70.9who has not elected the type of benefit coverage provided by the public employees
70.10police and fire fund at the time of consolidation, must make employee contributions
70.11under section 353.01, subdivision 16, paragraph (h) (a), clause (8), to receive allowable
70.12service credit from the association for a military service leave after the effective date of the
70.13consolidation. A person who later elects, under subdivision 3, to retain benefit coverage
70.14under the bylaws of the local relief association is eligible for a refund from the association
70.15at the time of retirement. The association shall refund the employee contributions
70.16plus interest at the rate of six percent, compounded quarterly, from the date on which
70.17contributions were made until the first day of the month in which the refund is paid. The
70.18employer shall receive a refund of the employer contributions. The association shall not
70.19pay a refund to a person who later elects, under subdivision 3, the type of benefit coverage
70.20provided by the public employees police and fire fund or to the person's employer.
70.21EFFECTIVE DATE.This section is effective the day following final enactment.

70.22    Sec. 20. Minnesota Statutes 2008, section 353F.02, subdivision 4, is amended to read:
70.23    Subd. 4. Medical facility. "Medical facility" means:
70.24    (1) Bridges Medical Services;
70.25    (2) the City of Cannon Falls Hospital;
70.26    (3) Clearwater County Memorial Hospital doing business as Clearwater Health
70.27Services in Bagley;
70.28    (4) the Dassel Lakeside Community Home;
70.29    (5) the Fair Oaks Lodge, Wadena;
70.30    (6) the Glencoe Area Health Center;
70.31    (7) Hutchinson Area Health Care;
70.32    (8) the Lakefield Nursing Home;
70.33    (9) the Lakeview Nursing Home in Gaylord;
70.34    (10) the Luverne Public Hospital;
71.1    (11) the Oakland Park Nursing Home;
71.2    (12) the RenVilla Nursing Home;
71.3    (13) the Rice Memorial Hospital in Willmar, with respect to the Department of
71.4Radiology and the Department of Radiation/Oncology;
71.5(14) the St. Peter Community Health Care Center;
71.6    (15) the Waconia-Ridgeview Medical Center; and
71.7(16) the Weiner Memorial Medical Center, Inc.; and
71.8(17) the Worthington Regional Hospital.
71.9EFFECTIVE DATE.This section is effective upon compliance with Minnesota
71.10Statutes, section 353F.02, subdivision 3.

71.11    Sec. 21. Minnesota Statutes 2008, section 354.05, is amended by adding a subdivision
71.12to read:
71.13    Subd. 42. Fiscal year. The fiscal year of the association begins on July 1 of each
71.14calendar year and ends on June 30 of the following calendar year.
71.15EFFECTIVE DATE.This section is effective the day following final enactment.

71.16    Sec. 22. Minnesota Statutes 2008, section 354.42, subdivision 2, is amended to read:
71.17    Subd. 2. Employee contribution. (a) For a basic member, the employee
71.18contribution to the fund is an amount equal to the following percentage 9.0 percent of the
71.19member's salary of a member:. For a coordinated member, the employee contribution is
71.205.5 percent of the member's salary.
71.21(1) after July 1, 2006, for a teacher employed by Special School District No. 1,
71.22Minneapolis, 5.5 percent if the teacher is a coordinated member, and 9.0 percent if the
71.23teacher is a basic member;
71.24(2) for every other teacher, after July 1, 2006, 5.5 percent if the teacher is a
71.25coordinated member and 9.0 percent if the teacher is a basic member.
71.26(b) This contribution must be made by deduction from salary. Where any portion
71.27of a member's salary is paid from other than public funds, the member's employee
71.28contribution must be based on the entire salary received.
71.29EFFECTIVE DATE.This section is effective the day following final enactment.

71.30    Sec. 23. Minnesota Statutes 2008, section 354.44, subdivision 4, is amended to read:
71.31    Subd. 4. Retirement annuity accrual date. (a) An annuity payment begins to
71.32accrue, provided that the age and service requirements under subdivision 1 are satisfied,
72.1after the termination of teaching service, or after the application for retirement has been
72.2filed with the board, whichever is later executive director, as follows:
72.3(1) on the 16th day of after the month of termination or filing if the termination or
72.4filing occurs on or before the 15th day of the month of teaching service;
72.5(2) on the first day of the month following the month of termination or filing if
72.6the termination or filing occurs on or after the 16th day of the month day of receipt of
72.7application if the application is filed with the executive director after the six-month period
72.8that occurs immediately following the termination of teaching service;
72.9(3) on July 1 for all school principals and other administrators who receive a full
72.10annual contract salary during the fiscal year for performance of a full year's contract
72.11duties; or
72.12(4) a later date to be either the first or the 16th day of a month occurring within the
72.13six-month period immediately following the termination of teaching service as specified
72.14under paragraph (b) by the member.
72.15(b) (4) if an application for retirement is filed with the board executive director
72.16during the six-month period that occurs immediately following the termination of teaching
72.17service, the annuity may begin to accrue as if the application for retirement had been filed
72.18with the board on the date teaching service terminated or a later date under paragraph
72.19(a), clause (4).
72.20(b) A member, or a person authorized to act on behalf of the member, may specify a
72.21different date of retirement from that determined in paragraph (a), as follows:
72.22(1) if the application is filed on or before the date of termination of teaching service,
72.23the accrual date may be a date no earlier than the day after the termination of teaching
72.24service and no later than six months after the termination date; or
72.25(2) if the application is filed during the six-month period that occurs immediately
72.26following the termination of teaching service, the accrual date may begin to accrue
72.27retroactively, but no earlier than the day after teaching service terminated and no later
72.28than six months after the termination date.
72.29EFFECTIVE DATE.This section is effective January 1, 2010.

72.30    Sec. 24. Minnesota Statutes 2008, section 354.44, subdivision 5, is amended to read:
72.31    Subd. 5. Resumption of teaching service after retirement. (a) Any person who
72.32retired under the provisions of this chapter and has thereafter resumed teaching in any
72.33employer unit to which this chapter applies is eligible to continue to receive payments in
72.34accordance with the annuity except that all or a portion of the annuity payments must be
72.35deferred during the calendar year immediately following any calendar the fiscal year in
73.1which the person's salary from the teaching service is in an amount greater than $46,000.
73.2The amount of the annuity deferral is one-half of the salary amount in excess of $46,000
73.3and must be deducted from the annuity payable for the calendar year immediately
73.4following the calendar fiscal year in which the excess amount was earned.
73.5    (b) If the person is retired for only a fractional part of the calendar fiscal year during
73.6the initial year of retirement, the maximum reemployment salary exempt from triggering a
73.7deferral as specified in this subdivision must be prorated for that calendar fiscal year.
73.8    (c) After a person has reached the Social Security normal retirement age, no deferral
73.9requirement is applicable regardless of the amount of salary.
73.10    (d) The amount of the retirement annuity deferral must be handled or disposed
73.11of as provided in section 356.47.
73.12    (e) For the purpose of this subdivision, salary from teaching service includes, but is
73.13not limited to:
73.14    (1) all income for services performed as a consultant or an independent contractor
73.15for an employer unit covered by the provisions of this chapter; and
73.16    (2) the greater of either the income received or an amount based on the rate paid
73.17with respect to an administrative position, consultant, or independent contractor in an
73.18employer unit with approximately the same number of pupils and at the same level as the
73.19position occupied by the person who resumes teaching service.
73.20EFFECTIVE DATE.This section is effective January 1, 2010.

73.21    Sec. 25. Minnesota Statutes 2008, section 354.47, subdivision 1, is amended to read:
73.22    Subdivision 1. Death before retirement. (a) If a member dies before retirement
73.23and is covered under section 354.44, subdivision 2, and neither an optional annuity, nor a
73.24reversionary annuity, nor a benefit under section 354.46, subdivision 1, is payable to the
73.25survivors if the member was a basic member, then the surviving spouse, or if there is no
73.26surviving spouse, the designated beneficiary is entitled to an amount equal to the member's
73.27accumulated deductions with interest credited to the account of the member to the date of
73.28death of the member. If the designated beneficiary is a minor, interest must be credited to
73.29the date the beneficiary reaches legal age, or the date of receipt, whichever is earlier.
73.30(b) If a member dies before retirement and is covered under section 354.44,
73.31subdivision 6 , and neither an optional annuity, nor reversionary annuity, nor the benefit
73.32described in section 354.46, subdivision 1, is payable to the survivors if the member
73.33was a basic member, then the surviving spouse, or if there is no surviving spouse,
73.34the designated beneficiary is entitled to an amount equal to the member's accumulated
73.35deductions credited to the account of the member as of June 30, 1957, and from July 1,
74.11957, to the date of death of the member, the member's accumulated deductions plus
74.2six percent interest compounded annually.
74.3(c) If the designated beneficiary under paragraph (b) is a minor, any interest credited
74.4under that paragraph must be credited to the date the beneficiary reaches legal age, or
74.5the date of receipt, whichever is earlier.
74.6(d) The amount of any refund payable under this subdivision must be reduced by
74.7any permanent disability payment under section 354.48 received by the member.
74.8EFFECTIVE DATE.This section is effective the day following final enactment.

74.9    Sec. 26. Minnesota Statutes 2008, section 354.48, subdivision 4, is amended to read:
74.10    Subd. 4. Determination by executive director. (a) The executive director shall
74.11have the member examined by at least two licensed physicians, licensed chiropractors,
74.12or licensed psychologists selected by the medical adviser.
74.13(b) These physicians, chiropractors, or psychologists with respect to a mental
74.14impairment, shall make written reports to the executive director concerning the member's
74.15disability, including expert opinions as to whether or not the member is permanently and
74.16totally disabled within the meaning of section 354.05, subdivision 14.
74.17(c) The executive director shall also obtain written certification from the last
74.18employer stating whether or not the member was separated from service because of
74.19a disability which would reasonably prevent further service to the employer and as a
74.20consequence the member is not entitled to compensation from the employer.
74.21(d) If, upon the consideration of the reports of the physicians, chiropractors, or
74.22psychologists and any other evidence presented by the member or by others interested
74.23therein, the executive director finds that the member is totally and permanently disabled,
74.24the executive director shall grant the member a disability benefit.
74.25(e) An employee who is placed on leave of absence without compensation because
74.26of disability is not barred from receiving a disability benefit.
74.27EFFECTIVE DATE.This section is effective the day following final enactment.

74.28    Sec. 27. Minnesota Statutes 2008, section 354.48, subdivision 6, is amended to read:
74.29    Subd. 6. Regular physical examinations. At least once each year during the first
74.30five years following the allowance of a disability benefit to any member, and at least once
74.31in every three-year period thereafter, the executive director shall may require the disability
74.32beneficiary recipient to undergo an expert examination by a physician or physicians,
74.33by a chiropractor or chiropractors, or by one or more psychologists with respect to a
74.34mental impairment, engaged by the executive director. If an examination indicates that the
75.1member is no longer permanently and totally disabled or that the member is engaged or is
75.2able to engage in a substantial gainful occupation, payments of the disability benefit by
75.3the association must be discontinued. The payments must be discontinued as soon as the
75.4member is reinstated to the payroll following sick leave, but payment may not be made for
75.5more than 60 days after the physicians, the chiropractors, or the psychologists engaged by
75.6the executive director find that the person is no longer permanently and totally disabled.
75.7EFFECTIVE DATE.This section is effective the day following final enactment.

75.8    Sec. 28. Minnesota Statutes 2008, section 354.49, subdivision 2, is amended to read:
75.9    Subd. 2. Calculation. (a) Except as provided in section 354.44, subdivision 1, any
75.10person who ceases to be a member by reason of termination of teaching service, shall is
75.11entitled to receive a refund in an amount equal to the accumulated deductions credited to
75.12the account as of June 30, 1957, and after July 1, 1957, the accumulated deductions with
75.13interest at the rate of six percent per annum compounded annually. For the purpose of this
75.14subdivision, interest shall must be computed on fiscal year end balances to the first day of
75.15the month in which the refund is issued.
75.16(b) If the person has received permanent disability payments under section 354.48,
75.17the refund amount must be reduced by the amount of those payments.
75.18EFFECTIVE DATE.This section is effective the day following final enactment.

75.19    Sec. 29. Minnesota Statutes 2008, section 354.52, subdivision 2a, is amended to read:
75.20    Subd. 2a. Annual Postretirement income reports reporting. On or before each
75.21February 15, a representative authorized by an Each employing unit must report to the
75.22executive director the amount of income earned during the previous calendar fiscal year
75.23by each retiree for teaching service performed after retirement. This annual report must be
75.24shall be done through the payroll reporting system and is based on reemployment income
75.25as defined in section 354.44, subdivision 5, and it must be made on a form provided by the
75.26executive director. Signing Submitting the report salary data through payroll reporting
75.27has the force and effect of an oath as to the correctness of the amount of postretirement
75.28reemployment income earned.
75.29EFFECTIVE DATE.This section is effective January 1, 2010.

75.30    Sec. 30. Minnesota Statutes 2008, section 354.52, subdivision 4b, is amended to read:
75.31    Subd. 4b. Payroll cycle reporting requirements. An employing unit shall provide
75.32the following data to the association for payroll warrants on an ongoing basis within 14
76.1calendar days after the date of the payroll warrant in a format prescribed by the executive
76.2director:
76.3(1) association member number;
76.4(2) employer-assigned employee number;
76.5(3) Social Security number;
76.6(4) amount of each salary deduction;
76.7(5) amount of salary as defined in section 354.05, subdivision 35, from which each
76.8deduction was made;
76.9(6) reason for payment;
76.10(7) service credit;
76.11(8) the beginning and ending dates of the payroll period covered and the date
76.12of actual payment;
76.13(9) fiscal year of salary earnings;
76.14(10) total remittance amount including employee, employer, and additional employer
76.15contributions; and
76.16(11) reemployed annuitant salary under section 354.44, subdivision 5; and
76.17(11) (12) other information as may be required by the executive director.
76.18EFFECTIVE DATE.This section is effective January 1, 2010.

76.19    Sec. 31. [354.543] PRIOR OR UNCREDITED MILITARY SERVICE CREDIT
76.20PURCHASE.
76.21    Subdivision 1. Service credit purchase authorized. (a) If paragraph (b) does not
76.22apply, a teacher who has at least three years of allowable service credit with the Teachers
76.23Retirement Association and who performed service in the United States armed forces
76.24before becoming a teacher as defined in section 354.05, subdivision 2, or who failed
76.25to obtain service credit for a military leave of absence under the provisions of section
76.26354.53, is entitled to purchase allowable and formula service credit for the initial period of
76.27enlistment, induction, or call to active duty without any voluntary extension by making
76.28payment under section 356.551.
76.29(b) A service credit purchase is prohibited if:
76.30(1) the teacher separated from service with the United States armed forces with a
76.31dishonorable or bad conduct discharge or under other than honorable conditions; or
76.32(2) the teacher has purchased or otherwise received service credit from any
76.33Minnesota defined benefit public employee pension plan, other than a volunteer fire plan,
76.34for the same period of service.
77.1    Subd. 2. Application and documentation. A teacher who desires to purchase
77.2service credit under subdivision 1 must apply with the executive director to make the
77.3purchase. The application must include all necessary documentation of the teacher's
77.4qualifications to make the purchase, signed written permission to allow the executive
77.5director to request and receive necessary verification of applicable facts and eligibility
77.6requirements, and any other relevant information that the executive director may require.
77.7    Subd. 3. Service credit grant. Allowable and formula service credit for the
77.8purchase period must be granted by the Teachers Retirement Association to the purchasing
77.9teacher upon receipt of the purchase payment amount. Payment must be made before the
77.10teacher's termination of teaching service.
77.11EFFECTIVE DATE.This section is effective the day following final enactment.

77.12    Sec. 32. Minnesota Statutes 2008, section 354.55, subdivision 11, is amended to read:
77.13    Subd. 11. Deferred annuity; augmentation. (a) Any person covered under section
77.14354.44, subdivision 6 , who ceases to render teaching service, may leave the person's
77.15accumulated deductions in the fund for the purpose of receiving a deferred annuity at
77.16retirement. Eligibility for an annuity under this subdivision is governed pursuant to
77.17section 354.44, subdivision 1, or 354.60.
77.18(b) The amount of the deferred retirement annuity is determined by section 354.44,
77.19subdivision 6 , and augmented as provided in this subdivision. The required reserves
77.20related to that portion of for the annuity which had accrued when the member ceased to
77.21render teaching service must be augmented, as further specified in this subdivision, by
77.22interest compounded annually from the first day of the month following the month during
77.23which the member ceased to render teaching service to the effective date of retirement.
77.24(c) There shall be No augmentation is not creditable if this the deferral period is less
77.25than three months or if this period commences prior to deferral commenced before July 1,
77.261971. The rates of interest used for this purpose must be five percent compounded annually
77.27commencing July 1, 1971, until January 1, 1981, and three percent compounded annually
77.28thereafter until January 1 of the year following the year in which the former member
77.29attains age 55 and from that date to the effective date of retirement, the rate is five percent
77.30compounded annually if the employee became an employee before July 1, 2006, and at 2.5
77.31percent compounded annually if the employee becomes an employee after June 30, 2006.
77.32(d) For persons who became covered employees before July 1, 2006, with a deferral
77.33period commencing after June 30, 1971, the annuity must be augmented using five
77.34percent interest compounded annually until January 1, 1981, and three percent interest
77.35compounded annually thereafter until January 1 of the year following the year in which
78.1the deferred annuitant attains age 55. From that date to the effective date of retirement, the
78.2rate is five percent compounded annually.
78.3(e) For persons who become covered employees after June 30, 2006, the interest rate
78.4used to augment the deferred annuity is 2.5 percent interest compounded annually.
78.5(f) If a person has more than one period of uninterrupted service, a separate average
78.6salary determined under section 354.44, subdivision 6, must be used for each period and
78.7the required reserves related to each period must be augmented by interest pursuant to as
78.8specified in this subdivision. The sum of the augmented required reserves so determined
78.9shall be the basis for purchasing is the present value of the deferred annuity. For the
78.10purposes of this subdivision, "period of uninterrupted service" means a period of covered
78.11teaching service during which the member has not been separated from active service for
78.12more than one fiscal year.
78.13(g) If a person repays a refund, the service restored by the repayment must be
78.14considered as continuous with the next period of service for which the person has
78.15allowable service credit with this fund in the Teachers Retirement Association.
78.16(h) If a person does not render teaching service in any one fiscal year or more
78.17consecutive fiscal years and then resumes teaching service, the formula percentages used
78.18from the date of the resumption of teaching service must be those applicable to new
78.19members.
78.20(i) The mortality table and interest assumption used to compute the annuity must be
78.21the applicable mortality table established by the board under section 354.07, subdivision
78.221 , and the interest rate assumption under section 356.215 in effect when the member
78.23retires. A period of uninterrupted service for the purposes of this subdivision means a
78.24period of covered teaching service during which the member has not been separated from
78.25active service for more than one fiscal year.
78.26(c) (j) In no case shall may the annuity payable under this subdivision be less than
78.27the amount of annuity payable pursuant to under section 354.44, subdivision 6.
78.28(d) (k) The requirements and provisions for retirement before normal retirement
78.29age contained in section 354.44, subdivision 6, clause (3) or (5), shall also apply to an
78.30employee fulfilling the requirements with a combination of service as provided in section
78.31354.60 .
78.32(e) (l) The augmentation provided by this subdivision applies to the benefit provided
78.33in section 354.46, subdivision 2.
78.34(f) (m) The augmentation provided by this subdivision shall does not apply to any
78.35period in which a person is on an approved leave of absence from an employer unit
78.36covered by the provisions of this chapter.
79.1(g) (n) The retirement annuity or disability benefit of, or the survivor benefit payable
79.2on behalf of, a former teacher who terminated service before July 1, 1997, which is not
79.3first payable until after June 30, 1997, must be increased on an actuarial equivalent basis
79.4to reflect the change in the postretirement interest rate actuarial assumption under section
79.5356.215, subdivision 8 , from five percent to six percent under a calculation procedure and
79.6tables adopted by the board as recommended by an approved actuary and approved by the
79.7actuary retained under section 356.214.
79.8EFFECTIVE DATE.This section is effective the day following final enactment.

79.9    Sec. 33. Minnesota Statutes 2008, section 354A.096, is amended to read:
79.10354A.096 MEDICAL LEAVE.
79.11Any teacher in the coordinated program of the St. Paul Teachers Retirement Fund
79.12Association or the new law coordinated program of the Duluth Teachers Retirement Fund
79.13Association who is on an authorized medical leave of absence and subsequently returns
79.14to teaching service is entitled to receive allowable service credit, not to exceed one year,
79.15for the period of leave, upon making the prescribed payment to the fund. This payment
79.16must include the required employee and employer contributions at the rates specified in
79.17section 354A.12, subdivisions 1 and 2 2a, as applied to the member's average full-time
79.18monthly salary rate on the date the leave of absence commenced plus annual interest at
79.19the rate of 8.5 percent per year from the end of the fiscal year during which the leave
79.20terminates to the end of the month during which payment is made. The member must pay
79.21the total amount required unless the employing unit, at its option, pays the employer
79.22contributions. The total amount required must be paid by the end of the fiscal year
79.23following the fiscal year in which the leave of absence terminated or before the member
79.24retires, whichever is earlier. Payment must be accompanied by a copy of the resolution or
79.25action of the employing authority granting the leave and the employing authority, upon
79.26granting the leave, must certify the leave to the association in a manner specified by the
79.27executive director. A member may not receive more than one year of allowable service
79.28credit during any fiscal year by making payment under this section. A member may not
79.29receive disability benefits under section 354A.36 and receive allowable service credit
79.30under this section for the same period of time.
79.31EFFECTIVE DATE.This section is effective the day following final enactment.

79.32    Sec. 34. Minnesota Statutes 2008, section 354A.12, subdivision 2a, is amended to read:
80.1    Subd. 2a. Employer regular and additional contribution rates contributions.
80.2(a) The employing units shall make the following employer contributions to teachers
80.3retirement fund associations:
80.4(1) for any coordinated member of a teachers retirement fund association in a city of
80.5the first class, the employing unit shall pay the employer Social Security taxes;
80.6(2) for any coordinated member of one of the following teachers retirement fund
80.7associations in a city of the first class, the employing unit shall make a regular employer
80.8contribution to the respective retirement fund association in an amount equal to the
80.9designated percentage of the salary of the coordinated member as provided below:

80.10 80.11		Duluth Teachers Retirement Fund Association		4.50 percent
80.12 80.13		St. Paul Teachers Retirement Fund Association		4.50 percent

80.14(3) (2) for any basic member of the St. Paul Teachers Retirement Fund Association,
80.15the employing unit shall make a regular employer contribution to the respective retirement
80.16fund in an amount equal to 8.00 percent of the salary of the basic member;
80.17(4) (3) for a basic member of the St. Paul Teachers Retirement Fund Association, the
80.18employing unit shall make an additional employer contribution to the respective fund in
80.19an amount equal to 3.64 percent of the salary of the basic member;
80.20(5) (4) for a coordinated member of a teachers retirement fund association in a city
80.21of the first class, the employing unit shall make an additional employer contribution to
80.22the respective fund in an amount equal to the applicable percentage of the coordinated
80.23member's salary, as provided below:

80.24 80.25		Duluth Teachers Retirement Fund Association		1.29 percent
80.26 80.27		St. Paul Teachers Retirement Fund Association		3.84 percent
80.28		July 1, 1993 - June 30, 1994		0.50 percent
80.29		July 1, 1994 - June 30, 1995		1.50 percent
80.30		July 1, 1997, and thereafter		3.84 percent

80.31(b) The regular and additional employer contributions must be remitted directly to
80.32the respective teachers retirement fund association at least once each month. Delinquent
80.33amounts are payable with interest under the procedure in subdivision 1a.
80.34(c) Payments of regular and additional employer contributions for school district
80.35or technical college employees who are paid from normal operating funds must be made
80.36from the appropriate fund of the district or technical college.
80.37EFFECTIVE DATE.This section is effective the day following final enactment.

81.1    Sec. 35. Minnesota Statutes 2008, section 354A.12, is amended by adding a
81.2subdivision to read:
81.3    Subd. 6. Adjustment for erroneous receipts. (a) Adjustments to correct employer
81.4contributions and employee deductions taken in error from amounts which are not salary
81.5under section 354A.011, subdivision 24, must be made as specified in this section.
81.6(b) Upon discovery of the receipt of erroneous employee deductions and employer
81.7contributions under paragraph (a), the executive director must require the employer to
81.8discontinue the erroneous employee deductions and erroneous employer contributions
81.9reported on behalf of an active member. Upon discontinuation, the executive director
81.10must provide for a refund or credit to the employer in the amount of the invalid employee
81.11deductions with interest on the employee deductions at the rate specified in section
81.12354A.37, subdivision 3, from the received date of each invalid salary transaction to the
81.13first day of the month in which the credit or refund is made. The employer must pay the
81.14refunded employee deductions plus interest to the active member.
81.15(c) If the individual is a former member who is not receiving a retirement annuity or
81.16benefit and has not received a refund under section 354A.37, subdivision 3, related to the
81.17applicable service, the executive director must return the erroneous employee deductions
81.18to the former member through a refund within interest at the rate specified in section
81.19354A.37, subdivision 3, from the received date of each invalid salary transaction to the
81.20first day of the month in which the credit or refund is made.
81.21(d) The executive director must return the invalid employer contributions reported
81.22on behalf of a member or former member to the employer by providing a credit against
81.23future contributions payable by the employer.
81.24EFFECTIVE DATE.This section is effective the day after final enactment.

81.25    Sec. 36. Minnesota Statutes 2008, section 354A.12, is amended by adding a
81.26subdivision to read:
81.27    Subd. 7. Recovery of benefit overpayments. (a) If the executive director discovers,
81.28within the time period specified in subdivision 8 following the payment of a refund or
81.29the accrual date of any retirement annuity, survivor benefit, or disability benefit, that
81.30benefit overpayment has occurred due to using invalid service or salary, or due to any
81.31erroneous calculation procedure, the executive director must recalculate the annuity or
81.32benefit payable and recover any overpayment. The executive director shall recover the
81.33overpayment by requiring direct repayment or by suspending or reducing the payment of a
81.34retirement annuity or other benefit payable under this chapter to the applicable person or
81.35the person's estate, whichever applies, until all outstanding amounts have been recovered.
82.1(b) In the event the executive director determines that an overpaid annuity or benefit
82.2that is the result of invalid salary included in the average salary used to calculate the
82.3payment amount must be recovered, the executive director must determine the amount of
82.4the employee deductions taken in error on the invalid salary, with interest as determined
82.5under 354A.37, subdivision 3, and must subtract that amount from the total annuity or
82.6benefit overpayment, and the remaining balance of the overpaid annuity or benefit, if
82.7any, must be recovered.
82.8(c) If the invalid employee deductions plus interest exceed the amount of the
82.9overpaid benefits, the balance must be refunded to the person to whom the benefit or
82.10annuity is being paid.
82.11(d) Any invalid employer contributions reported on the invalid salary must be
82.12credited against future contributions payable by the employer.
82.13(e) If a member or former member, who is receiving a retirement annuity or
82.14disability benefit for which an overpayment is being recovered, dies before recovery of the
82.15overpayment is completed and an optional annuity or refund is payable, the remaining
82.16balance of the overpaid annuity or benefit must continue to be recovered from the payment
82.17to the optional annuity beneficiary or refund recipient.
82.18(f) The board of trustees shall adopt policies directing the period of time and manner
82.19for the collection of any overpaid retirement or optional annuity, and survivor or disability
82.20benefit, or a refund that the executive director determines must be recovered as provided
82.21under this section.
82.22EFFECTIVE DATE.This section is effective the day after final enactment.

82.23    Sec. 37. Minnesota Statutes 2008, section 354A.12, is amended by adding a
82.24subdivision to read:
82.25    Subd. 8. Additional procedures. (a) If paragraph (b) does not apply, the period of
82.26adjustment under subdivisions 6 and 7 is limited to the fiscal year in which the error is
82.27discovered by the executive director and the immediate two preceding fiscal years.
82.28(b) If there is evidence of fraud or other misconduct on the part of the employee or
82.29the employer, the board of trustees may authorize adjustments to the account of a member
82.30or former member to correct erroneous employee deductions and employer contributions
82.31on invalid salary and the recovery of any overpayments for a period longer than specified
82.32under paragraph (a).
82.33(c) Notwithstanding other provisions of this section, the executive director may
82.34apply the Revenue Procedures defined in the Internal Revenue Service Employee Plans
82.35Compliance Resolution System and not issue a refund of erroneous employee deductions
83.1and employer contributions or not recover a small overpayment of benefits if the cost to
83.2correct the error would exceed the amount of the refund or overpayment.
83.3(d) Notwithstanding other provisions of this section, interest of $10 or less shall not
83.4be payable to a member or former member.
83.5EFFECTIVE DATE.This section is effective the day after final enactment.

83.6    Sec. 38. Minnesota Statutes 2008, section 354A.12, is amended by adding a
83.7subdivision to read:
83.8    Subd. 9. Employer responsibility for fees, penalties. Any fees or penalties
83.9assessed by the Internal Revenue Service for any failure by an employer to follow the
83.10statutory requirements for reporting eligible members and salary must be paid by the
83.11employer.
83.12EFFECTIVE DATE.This section is effective the day after final enactment.

83.13    Sec. 39. Minnesota Statutes 2008, section 354A.36, subdivision 6, is amended to read:
83.14    Subd. 6. Requirement for regular physical examinations. At least once each year
83.15during the first five years following the granting of a disability benefit to a coordinated
83.16member by the board and at least once in every three year period thereafter, the board shall
83.17may require the disability benefit recipient to undergo an expert examination as a condition
83.18for continued entitlement of the benefit recipient to receive a disability benefit. If the board
83.19requires an examination, the expert examination must be made at the place of residence of
83.20the disability benefit recipient or at any other place mutually agreeable to the disability
83.21benefit recipient and the board. The expert examination must be made by a physician or
83.22physicians, by a chiropractor or chiropractors, or by one or more psychologists engaged
83.23by the board. The physician or physicians, the chiropractor or chiropractors, or the
83.24psychologist or psychologists with respect to a mental impairment, conducting the expert
83.25examination shall make a written report to the board concerning the disability benefit
83.26recipient and the recipient's disability, including a statement of the expert opinion of
83.27the physician, chiropractor, or psychologist as to whether or not the member remains
83.28permanently and totally disabled within the meaning of section 354A.011, subdivision
83.2914 . If the board determines from consideration of the written expert examination report
83.30of the physician, of the chiropractor, or of the psychologist, with respect to a mental
83.31impairment, that the disability benefit recipient is no longer permanently and totally
83.32disabled or if the board determines that the benefit recipient is engaged or is able to
83.33engage in a gainful occupation, unless the disability benefit recipient is partially employed
83.34under subdivision 7, then further disability benefit payments from the fund must be
84.1discontinued. The discontinuation of disability benefits must occur immediately if the
84.2disability recipient is reinstated to the district payroll following sick leave and within 60
84.3days of the determination by the board following the expert examination and report of the
84.4physician or physicians, chiropractor or chiropractors, or psychologist or psychologists
84.5engaged by the board that the disability benefit recipient is no longer permanently and
84.6totally disabled within the meaning of section 354A.011, subdivision 14.
84.7EFFECTIVE DATE.This section is effective the day following final enactment.

84.8    Sec. 40. Minnesota Statutes 2008, section 356.401, subdivision 2, is amended to read:
84.9    Subd. 2. Automatic deposits. (a) The chief administrative officer of a covered
84.10retirement plan may remit, through an automatic deposit system, annuity, benefit, or
84.11refund payments only to a financial institution associated with the National Automated
84.12Clearinghouse Association or a comparable successor organization that is trustee for a
84.13person who is eligible to receive the annuity, benefit, or refund.
84.14(b) Upon the request of a retiree, disabilitant, survivor, or former member, the chief
84.15administrative officer of a covered retirement plan may remit the annuity, benefit, or
84.16refund check payment to the applicable financial institution for deposit in the person's
84.17individual account or the person's joint account. If an overpayment of benefits is paid
84.18after the death of the annuitant or benefit recipient, the chief administrative officer of
84.19the pension plan is authorized to issue an administrative subpoena consistent with the
84.20requirements of section 13A.02, requiring the applicable financial institution to disclose
84.21the names of all joint and co-owners of the account and a description of all deposits to,
84.22and withdrawals from, the account which take place on or after the death of the annuitant
84.23or benefit recipient. An overpayment to a joint account after the death of the annuitant or
84.24benefit recipient must be repaid to the fund of the applicable covered retirement plan by
84.25the joint tenant if the overpayment is not repaid to that fund by the financial institution
84.26associated with the National Automated Clearinghouse Association or its successor. The
84.27governing board of the covered retirement plan may prescribe the conditions under which
84.28these payments may be made.
84.29EFFECTIVE DATE.This section is effective the day following final enactment.

84.30    Sec. 41. Minnesota Statutes 2008, section 356.465, subdivision 1, is amended to read:
84.31    Subdivision 1. Inclusion as recipient. Notwithstanding any provision to the
84.32contrary of the laws, articles of incorporation, or bylaws governing a covered retirement
84.33plan specified in subdivision 3, A retiring member may designate a qualified supplemental
84.34needs trust under subdivision 2 as the remainder recipient on an optional retirement
85.1annuity form for a period not to exceed the lifetime of the beneficiary of the supplemental
85.2needs trust.
85.3EFFECTIVE DATE.This section is effective the day following final enactment.

85.4    Sec. 42. Minnesota Statutes 2008, section 356.465, is amended by adding a subdivision
85.5to read:
85.6    Subd. 4. Expanded eligibility. (a) Notwithstanding subdivision 1, for a retirement
85.7plan specified in paragraph (b), a designation under subdivision 1 may be made by an
85.8active, disabled, deferred, or retiring member.
85.9(b) The applicable plan is the Teachers Retirement Association established under
85.10chapter 354.
85.11EFFECTIVE DATE.This section is effective the day following final enactment.

85.12    Sec. 43. Minnesota Statutes 2008, section 356.611, subdivision 3, is amended to read:
85.13    Subd. 3. Maximum benefit limitations. A member's annual benefit, if necessary,
85.14must be reduced to the extent required by section 415(b) of the federal Internal Revenue
85.15Code, as adjusted by the United States secretary of the treasury under section 415(d) of the
85.16Internal Revenue Code for any applicable increases in the cost of living after the member's
85.17termination of employment. For purposes of section 415 of the federal Internal Revenue
85.18Code, the limitation year of a pension plan covered by this section must be the fiscal year
85.19or calendar year of that plan, whichever is applicable. The accrued benefit limitation
85.20described in section 415(e) of the Internal Revenue Code must cease to be effective for
85.21limitation years beginning after December 31, 1999.
85.22EFFECTIVE DATE.This section is effective July 1, 2009.

85.23    Sec. 44. Minnesota Statutes 2008, section 356.611, subdivision 4, is amended to read:
85.24    Subd. 4. Compensation. (a) For purposes of this section, compensation means
85.25a member's compensation actually paid or made available for any limitation year
85.26determined as provided by including items described in federal treasury regulation section
85.271.415-2(d)(10) 1.415(c)-2(b) and excluding items described in federal treasury regulation
85.28section 1.415(c)-2(c).
85.29(b) Compensation for any period includes:
85.30(1) any elective deferral as defined in section 402(g)(3) of the federal Internal
85.31Revenue Code;
85.32(2) any elective amounts that are not includable in a member's gross income by
85.33reason of sections 125 or 457 of the federal Internal Revenue Code; and
86.1(3) any elective amounts that are not includable in a member's gross income by
86.2reason of section 132(f)(4) of the federal Internal Revenue Code.
86.3EFFECTIVE DATE.This section is effective July 1, 2009.

86.4    Sec. 45. Minnesota Statutes 2008, section 356.635, subdivision 6, is amended to read:
86.5    Subd. 6. Eligible retirement plan. (a) An "eligible retirement plan" is:
86.6(1) an individual retirement account under section 408(a) of the federal Internal
86.7Revenue Code;
86.8(2) an individual retirement annuity plan under section 408(b) of the federal Internal
86.9Revenue Code;
86.10(3) an annuity plan under section 403(a) of the federal Internal Revenue Code;
86.11(4) a qualified trust plan under section 401(a) of the federal Internal Revenue Code
86.12that accepts the distributee's eligible rollover distribution;
86.13(5) an annuity contract under section 403(b) of the federal Internal Revenue Code; or
86.14(6) an eligible deferred compensation plan under section 457(b) of the federal
86.15Internal Revenue Code, which is maintained by a state or local government and which
86.16agrees to separately account for the amounts transferred into the plan; or
86.17(7) in the case of an eligible rollover distribution to a nonspousal beneficiary, an
86.18individual account or annuity treated as an inherited individual retirement account under
86.19section 402(c)(11) of the federal Internal Revenue Code.
86.20(b) For distributions of after-tax contributions which are not includable in gross
86.21income, the after-tax portion may be transferred only to an individual retirement account
86.22or annuity described in section 408(a) or (b) of the federal Internal Revenue Code, or
86.23to a qualified defined contribution plan described in either section 401(a) or 403(a) of
86.24the federal Internal Revenue Code, that agrees to separately account for the amounts
86.25transferred, including separately accounting for the portion of the distribution which is
86.26includable in gross income and the portion of the distribution which is not includable.
86.27EFFECTIVE DATE.This section is effective July 1, 2009.

86.28    Sec. 46. Minnesota Statutes 2008, section 356.635, subdivision 7, is amended to read:
86.29    Subd. 7. Distributee. A "distributee" is:
86.30(1) an employee or a former employee;
86.31(2) the surviving spouse of an employee or former employee; or
86.32(3) the former spouse of the employee or former employee who is the alternate
86.33payee under a qualified domestic relations order as defined in section 414(p) of the federal
87.1Internal Revenue Code, or who is a recipient of a court-ordered equitable distribution of
87.2marital property, as provided in section 518.58.; or
87.3(4) a nonspousal beneficiary of an employee or former employee who qualifies
87.4for a distribution under the plan and is a designated beneficiary as defined in section
87.5401(a)(9)(E) of the federal Internal Revenue Code.
87.6EFFECTIVE DATE.This section is effective July 1, 2009.

87.7    Sec. 47. Minnesota Statutes 2008, section 356.96, subdivision 5, is amended to read:
87.8    Subd. 5. Petition for review. (a) A person who claims a right under subdivision 2
87.9may petition for a review of that decision by the governing board of the covered pension
87.10plan.
87.11    (b) A petition under this section must be sent to the chief administrative officer
87.12by mail and must be postmarked no later than 60 days after the person received the
87.13notice required by subdivision 3. The petition must include the person's statement of
87.14the reason or reasons that the person believes the decision of the chief administrative
87.15officer should be reversed or modified. The petition may include all documentation and
87.16written materials that the petitioner deems to be relevant. In developing a record for
87.17review by the board when a decision is appealed, the executive director may direct that the
87.18applicant participate in a fact-finding session conducted by an administrative law judge
87.19assigned by the Office of Administrative Hearings and, as applicable, participate in a
87.20vocational assessment conducted by a qualified rehabilitation counselor on contract with
87.21the applicable retirement system.
87.22EFFECTIVE DATE.This section is effective the day following final enactment.

87.23    Sec. 48. Laws 2006, chapter 271, article 5, section 5, as amended by Laws 2008,
87.24chapter 349, article 5, section 36, is amended to read:
87.25    Sec. 5. EFFECTIVE DATE.
87.26    (a) Sections 1, 3, and 4 are effective the day following final enactment and section 3
87.27has effect retroactively from July 25, 2005.
87.28    (b) Section 2 with respect to the Cannon Falls Hospital District is effective upon the
87.29latter of:
87.30    (1) the day after the governing body of the Cannon Falls Hospital District and its
87.31chief clerical officer meet the requirements under Minnesota Statutes, section 645.021,
87.32subdivisions 2 and 3; and
87.33    (2) the first day of the month following certification to the Cannon Falls Hospital
87.34District by the executive director of the Public Employees Retirement Association that the
88.1actuarial accrued liability of the special benefit coverage proposed for extension to the
88.2privatized City of Cannon Falls Hospital employees under section 1 does not exceed the
88.3actuarial gain otherwise to be accrued by the Public Employees Retirement Association, as
88.4calculated by the consulting actuary retained under Minnesota Statutes, section 356.214.
88.5The cost of the actuarial calculations must be borne by the current employer or by the
88.6entity which is the employer following the privatization.
88.7    (c) Section 2, with respect to Clearwater County Memorial Hospital, is effective
88.8upon the latter of:
88.9    (1) the day after the governing body of Clearwater County and its chief clerical
88.10officer meet the requirements under Minnesota Statutes, section 645.021, subdivisions 2
88.11and 3, except that the certificate of approval must be filed before January 1, 2009 2010; and
88.12    (2) the first day of the month following certification to Clearwater County by the
88.13executive director of the Public Employees Retirement Association that the actuarial
88.14accrued liability of the special benefit coverage proposed for extension to the privatized
88.15Clearwater Health Services employees under section 2 does not exceed the actuarial gain
88.16otherwise to be accrued by the Public Employees Retirement Association, as calculated by
88.17the consulting actuary retained under Minnesota Statutes, section 356.214. The cost of
88.18the actuarial calculations must be borne by the current employer or by the entity which is
88.19the employer following the privatization.
88.20    (d) Section 2 with respect to the Dassel Lakeside Community Home is effective
88.21upon the latter of:
88.22    (1) the day after the governing body of the city of Dassel and its chief clerical officer
88.23timely complete compliance with Minnesota Statutes, section 645.021, subdivisions 2
88.24and 3; and
88.25    (2) the first day of the month next following certification to the Dassel City
88.26Council by the executive director of the Public Employees Retirement Association that
88.27the actuarial accrued liability of the special benefit coverage proposed for extension to
88.28the privatized Dassel Lakeside Community Home employees under section 2 does not
88.29exceed the actuarial gain otherwise to be accrued by the Public Employees Retirement
88.30Association, as calculated by the consulting actuary retained under Minnesota Statutes,
88.31section 356.214. The cost of the actuarial calculations must be borne by the city of Dassel
88.32or by the entity which is the employer following the privatization.
88.33EFFECTIVE DATE.This section is effective the day following final enactment.

89.1    Sec. 49. CITY OF DULUTH AND DULUTH AIRPORT AUTHORITY;
89.2CORRECTING ERRONEOUS EMPLOYEE DEDUCTIONS, EMPLOYER
89.3CONTRIBUTIONS AND ADJUSTING OVERPAID BENEFITS.
89.4    Subdivision 1. Application. Notwithstanding any provisions of sections 10 and 11,
89.5or Minnesota Statutes 2008, chapters 353 and 356, to the contrary, this section establishes
89.6the procedures by which the executive director of the Public Employees Retirement
89.7Association shall adjust erroneous employee deductions and employer contributions
89.8paid on behalf of active employees and former members by the city of Duluth and by
89.9the Duluth Airport Authority on amounts determined by the executive director to be
89.10invalid salary under Minnesota Statutes, section 353.01, subdivision 10, reported between
89.11January 1, 1997, and October 23, 2008, and for adjusting benefits that were paid to former
89.12members and their beneficiaries based upon invalid salary amounts.
89.13    Subd. 2. Refunds of employee deductions. (a) The executive director shall refund
89.14to active employees or former members who are not receiving retirement annuities or
89.15benefits all erroneous employee deductions identified by the city of Duluth or by the
89.16Duluth Airport Authority as deductions taken from amounts determined to be invalid
89.17salary. The refunds must include interest at the rate specified in Minnesota Statutes,
89.18section 353.34, subdivision 2, from the date each invalid employee deduction was received
89.19through the date each refund is paid.
89.20(b) The refund payment for active employees must be sent to the applicable
89.21governmental subdivision which must pay the refunded employee deductions plus interest
89.22to the active members who are employees of the city of Duluth or who are employees of
89.23the Duluth Airport Authority, as applicable.
89.24(c) Refunds to former members must be mailed by the executive director of the
89.25Public Employees Retirement Association to the former member's last known address.
89.26    Subd. 3. Benefit adjustments. (a) For a former member who is receiving a
89.27retirement annuity or disability benefit, or for a person receiving an optional annuity or
89.28survivor benefit, the executive director must:
89.29(1) adjust the annuity or benefit payment to the correct monthly benefit amount
89.30payable by reducing the average salary under Minnesota Statutes, section 353.01,
89.31subdivision 17a, by the invalid salary amounts;
89.32(2) determine the amount of the overpaid benefits paid from the effective date of
89.33the annuity or benefit payment to the first of the month in which the monthly benefit
89.34amount is corrected;
89.35(3) calculate the amount of employee deductions taken in error on invalid salary,
89.36including interest at the rate specified in Minnesota Statutes, section 353.34, subdivision 2,
90.1from the date each invalid employee deduction was received through the date the annuity
90.2or benefit is adjusted as provided under clause (1); and
90.3(4) determine the net amount of overpaid benefits by reducing the amount of the
90.4overpaid annuity or benefit as determined in clause (2) by the amount of the erroneous
90.5employee deductions with interest determined in clause (3).
90.6(b) If a former member's erroneous employee deductions plus interest determined
90.7under this section exceeds the amount of the person's overpaid benefits, the balance must
90.8be refunded to the person to whom the annuity or benefit is being paid.
90.9(c) The executive director shall recover the net amount of all overpaid annuities or
90.10benefits as provided under subdivision 4.
90.11    Subd. 4. Employer credits and obligations. (a) The executive director shall
90.12provide a credit without interest to the city of Duluth and to the Duluth Airport Authority
90.13for the amount of that governmental subdivision's erroneous employer contributions. The
90.14credit must first be used to offset the net amount of the overpaid retirement annuities and
90.15the disability and survivor benefits that remains after applying the amount of erroneous
90.16employee deductions with interest as provided under subdivision 3, clause (4). The
90.17remaining erroneous employer contributions, if any, must be credited against future
90.18employer contributions required to be paid by the applicable governmental subdivision. If
90.19the overpaid benefits exceed the employer contribution credit, the balance of the overpaid
90.20benefits is the obligation of the city of Duluth or the Duluth Airport Authority, whichever
90.21is applicable.
90.22(b) The Public Employees Retirement Association board of trustees shall determine
90.23the period of time and manner for the collection of overpaid retirement annuities and
90.24benefits, if any, from the city of Duluth and the Duluth Airport Authority.
90.25EFFECTIVE DATE.(a) This section is effective for the city of Duluth the day after
90.26the Duluth city council and the chief clerical officer of the city of Duluth timely complete
90.27their compliance with Minnesota Statutes, section 645.021, subdivisions 2 and 3, for
90.28members who are, and former members who were, employees of the city of Duluth.
90.29(b) This section is effective for the Duluth Airport Authority the day after the Duluth
90.30Airport Authority and the chief clerical officer of the Duluth Airport Authority timely
90.31complete their compliance with Minnesota Statutes, section 645.021, subdivisions 2
90.32and 3, for members who are, and former members who were, employees of the Duluth
90.33Airport Authority.

91.1    Sec. 50. APPLICATION OF PUBLIC EMPLOYEES RETIREMENT
91.2ASSOCIATION ERRONEOUS RECEIPTS AND DISBURSEMENTS PROVISION;
91.3ELECTION.
91.4(a) If adjustments under section 10 due to invalid salary amounts are in process as of
91.5the effective date of this section for employees or former employees of a governmental
91.6subdivision, the governing body of the governmental subdivision may elect to have the
91.7statute of limitations under section 10, paragraphs (c) and (g), apply to adjustments
91.8or corrections in process as of the effective date of section 10, by a resolution of the
91.9governing body transmitted to the Public Employees Retirement Association executive
91.10director within 90 days after the effective date of this section.
91.11(b) If the governing body of the governmental subdivision declines the treatment
91.12permitted under paragraph (a) or fails to submit a resolution in a timely manner, the statute
91.13of limitations does not apply to adjustments or corrections in process as of the effective
91.14date.
91.15EFFECTIVE DATE.This section is effective the day after final enactment.

91.16    Sec. 51. REPEALER.
91.17Minnesota Statutes 2008, sections 354.06, subdivision 6; and 354.55, subdivision
91.1814, are repealed.
91.19EFFECTIVE DATE.This section is effective the day following final enactment.


91.22    Section 1. Minnesota Statutes 2008, section 353.01, subdivision 11b, is amended to
91.23read:
91.24    Subd. 11b. Termination of membership. (a) "Termination of membership" means
91.25the conclusion of membership in the association for a person who has not terminated
91.26public service under subdivision 11a and occurs:
91.27(1) when a person files a written election with the association to discontinue
91.28employee deductions under section 353.27, subdivision 7, paragraph (a), clause (1);
91.29(2) when a city manager files a written election with the association to discontinue
91.30employee deductions under section 353.028, subdivision 2; or
91.31(3) when a member transfers to a temporary position and becomes excluded from
91.32membership under subdivision 2b, clause (4).; or
91.33(4) when a member is approved to participate in the postretirement option authorized
91.34under section 353.371.
92.1(b) The termination of membership under clause clauses (3) and (4) must be reported
92.2to the association by the governmental subdivision.
92.3EFFECTIVE DATE.This section is effective the day following final enactment.

92.4    Sec. 2. [353.371] POSTRETIREMENT OPTION.
92.5    Subdivision 1. Eligibility. (a) This section applies to a basic or coordinated member
92.6of the general employees retirement plan of the Public Employees Retirement Association
92.7who:
92.8(1) for at least the five years immediately preceding separation under clause (2), was
92.9regularly scheduled to work 1,044 or more hours per year in a position covered by the
92.10general employees retirement plan of the Public Employees Retirement Association;
92.11(2) terminates membership as defined under section 353.01, subdivision 11b;
92.12(3) at the time of termination under clause (2), was at least age 62 and met the age
92.13and service requirements necessary to receive a retirement annuity from the plan and
92.14satisfied requirements for the commencement of the retirement annuity;
92.15(4) agrees to accept a postretirement option position with the same or a different
92.16governmental subdivision, working a reduced schedule that is both:
92.17(i) a reduction of at least 25 percent from the employee's number of previously
92.18regularly scheduled work hours; and
92.19(ii) 1,044 hours or less in public; and
92.20(5) is not eligible for participation in the state employee postretirement option
92.21program under section 43A.346.
92.22(b) For purposes of this section, the length of separation requirement and termination
92.23of service requirement prohibiting return to work agreements under section 353.01,
92.24subdivisions 11a and 28, are not applicable.
92.25    Subd. 2. Annuity reduction not applicable. Notwithstanding any law to the
92.26contrary, the provisions of section 353.37 governing annuities of reemployed annuitants
92.27do not apply for the duration of a terminated member's employment in a postretirement
92.28option position.
92.29    Subd. 3. Governing body discretion. The governing body of the governmental
92.30subdivision has sole discretion to determine if and the extent to which a postretirement
92.31option position under this section is available to a terminated member. Any offer of such
92.32a position must be made in writing to the person by the governing body's designee in a
92.33manner prescribed by the executive director.
92.34    Subd. 4. Duration. Postretirement option employment shall be for an initial period
92.35not to exceed one year. At the end of the initial period, the governing body has sole
93.1discretion to determine if the offer of a postretirement option position will be renewed,
93.2renewed with modifications, or terminated. Postretirement option employment may be
93.3renewed annually, but may not be renewed after the individual attains retirement age as
93.4defined in United States Code, title 42, section 416(l).
93.5    Subd. 5. Copy to fund. The appointing authority shall provide the Public
93.6Employees Retirement Association with documentation, as prescribed by the executive
93.7director, of the terms of any agreement entered into with a member who accepts continuing
93.8employment with the appointing authority under the terms of this section, and any
93.9subsequent renewal agreement.
93.10    Subd. 6. No service credit. Notwithstanding any law to the contrary, a person
93.11may not earn service credit in the general employees retirement plan of the Public
93.12Employees Retirement Association for employment covered under this section, and
93.13employer contributions and payroll deductions for the retirement fund must not be made
93.14based on earnings of a person working under an agreement covered by this section. No
93.15change may be made to a monthly annuity or retirement allowance based on employment
93.16under this section.
93.17    Subd. 7. Subsequent employment. If a person has been in a postretirement option
93.18position and accepts any other position in public service beyond the period of time for
93.19which the person participated in the postretirement option provided under this section, the
93.20person may not earn service credit in the general employees retirement plan of the Public
93.21Employees Retirement Association, no employer contributions or payroll deductions for
93.22the retirement fund may be made, and the provisions of section 353.37 apply.
93.23EFFECTIVE DATE.This section is effective the day following final enactment
93.24and expires on June 30, 2011. Individuals must not be appointed to a postretirement option
93.25position after that date.


93.28    Section 1. Minnesota Statutes 2008, section 127A.50, subdivision 1, is amended to
93.29read:
93.30    Subdivision 1. Aid adjustment. Beginning in fiscal year 1998 and each year
93.31thereafter, the commissioner of education shall adjust state aid payments to school
93.32operating funds for Independent School District No. 625 and Independent School District
93.33No. 709 by the net amount of clauses (1) and, (2), and (5), for Special School District
93.34No. 1 by the net amount of clauses (1), (2), and (4), and (5), and for all other districts,
94.1including charter schools, but excluding any education organizations that are prohibited
94.2from receiving direct state aids under section 123A.26 or 125A.75, subdivision 7, by the
94.3net amount of clauses (1), (2), (3), and (4), and (5):
94.4(1) a decrease equal to each district's share of the fiscal year 1997 adjustment
94.5effected under Minnesota Statutes 1996, section 124.2139;
94.6(2) an increase equal to one percent of the salaries paid to members of the general
94.7plan of the Public Employees Retirement Association in fiscal year 1997, multiplied by
94.80.35 for fiscal year 1998 and 0.70 each year thereafter;
94.9(3) a decrease equal to 2.34 percent of the salaries paid to members of the Teachers
94.10Retirement Association in fiscal year 1997; and
94.11(4) an increase equal to 0.5 percent of the salaries paid to members of the Teachers
94.12Retirement Association in fiscal year 2007.; and
94.13(5) an increase equal to the specified percentage of the salaries paid to members of
94.14the Teachers Retirement Association, the St. Paul Teachers Retirement Fund Association,
94.15and the Duluth Teachers Retirement Fund Association in fiscal year 2012 as follows:

94.16	fiscal year 2012	0.5 percent
94.17	fiscal year 2013	0.5 percent
94.18	fiscal year 2014	0.5 percent
94.19	fiscal year 2015	0.5 percent

94.20EFFECTIVE DATE.This section is effective July 1, 2011.

94.21    Sec. 2. Minnesota Statutes 2008, section 354.05, subdivision 38, is amended to read:
94.22    Subd. 38. Normal retirement age. "Normal retirement age" means age 65 for a
94.23person who first became a member of the association or a member of a pension fund listed
94.24in section 356.30, subdivision 3, before July 1, 1989. For a person who first becomes a
94.25member of the association after June 30, 1989, normal retirement age means the higher
94.26of age 65 or "retirement age," as defined in United States Code, title 42, section 416(l),
94.27as amended, but not to exceed age 66. For a person with 30 years of service, normal
94.28retirement age means age 62.
94.29EFFECTIVE DATE.This section is effective July 1, 2011.

94.30    Sec. 3. Minnesota Statutes 2008, section 354.42, subdivision 2, is amended to read:
94.31    Subd. 2. Employee. (a) The employee contribution to the fund is an amount equal
94.32to the following percentage of the salary of a member:
95.1(1) after July 1, 2006, for a teacher employed by Special School District No. 1,
95.2Minneapolis, 5.5 percent if the teacher is a coordinated member, and 9.0 percent if the
95.3teacher is a basic member;
95.4(2) for every other teacher, after July 1, 2006, 5.5 percent if the teacher is a
95.5coordinated member and 9.0 percent if the teacher is a basic member.

95.6	Period	Coordinated Member	Basic Member
95.7	(1) before July 1, 2011	5.5 percent	9 percent
95.8 95.9	(2) after June 30, 2011, and before July 1, 2012	6 percent	9 percent
95.10 95.11	(3) after June 30, 2012, and before July 1, 2013	6.5 percent	9 percent
95.12 95.13	(4) unless paragraph (c) applies, after June 30, 2013, and before July 1, 2014	7 percent	9 percent
95.14 95.15	(5) unless paragraph (c) applies, after June 30, 2014	7.5 percent	9 percent

95.16(b) When an employee contribution rate changes for a fiscal year, the new
95.17contribution rate is effective for the entire salary paid for each employer unit with the
95.18first payroll cycle reported.
95.19(c) After July 1, 2012, a scheduled contribution increase under paragraph (a),
95.20clause (4) or (5), is suspended if the most recent actuarial valuation prepared under
95.21section 356.215 indicates that there is no contribution deficiency when the total employee
95.22contributions, employer contributions under subdivision 3, and direct state aid under
95.23section 354A.12 and chapter 422A are compared to the actuarial required contributions of
95.24the retirement plan.
95.25(b) (d) This contribution must be made by deduction from salary. Where any
95.26portion of a member's salary is paid from other than public funds, the member's employee
95.27contribution must be based on the entire salary received.
95.28EFFECTIVE DATE.This section is effective July 1, 2011.

95.29    Sec. 4. Minnesota Statutes 2008, section 354.42, subdivision 3, is amended to read:
95.30    Subd. 3. Employer. (a) The regular employer contribution to the fund by Special
95.31School District No. 1, Minneapolis, after July 1, 2006, and before July 1, 2007, is an
95.32amount equal to 5.0 percent of the salary of each of its teachers who is a coordinated
95.33member and 9.0 percent of the salary of each of its teachers who is a basic member. After
95.34July 1, 2007, and before July 1, 2011, the regular employer contribution to the fund by
95.35Special School District No. 1, Minneapolis, is an amount equal to 5.5 percent of salary of
95.36each coordinated member and 9.5 percent of salary of each basic member. The additional
95.37employer contribution to the fund by Special School District No. 1, Minneapolis, after
96.1July 1, 2006, is an amount equal to 3.64 percent of the salary of each teacher who is a
96.2coordinated member or is a basic member. The regular employer contribution to the
96.3fund by Special School District No. 1, Minneapolis, is an amount equal to the following
96.4percentage of the salary of each teacher:

96.5	Period	Coordinated Member	Basic Member
96.6	(1) before July 1, 2011	5.5 percent	9.5 percent
96.7 96.8	(2) after June 30, 2011, and before July 1, 2012	6 percent	9.5 percent
96.9 96.10	(3) after June 30, 2012, and before July 1, 2013	6.5 percent	9.5 percent
96.11 96.12	(4) unless paragraph (d) applies, after June 30, 2013, and before July 1, 2014	7 percent	9.5 percent
96.13 96.14	(5) unless paragraph (d) applies, after June 30, 2014	7.5 percent	9.5 percent

96.15(b) When an employer contribution rate changes for a fiscal year, the new
96.16contribution rate is effective for the entire salary paid for each employer unit with the
96.17first payroll cycle reported.
96.18(b) (c) The employer contribution to the fund for every other employer is an amount
96.19equal to 5.0 percent of the salary of each coordinated member and 9.0 percent of the salary
96.20of each basic member before July 1, 2007, and 5.5 percent of the salary of each coordinated
96.21member and 9.5 percent of the salary of each basic member after June 30, 2007., and
96.22before July 1, 2011. The regular employer contribution to the fund by every other
96.23employer is an amount equal to the following percentage of the salary of each teacher:

96.24	Period	Coordinated Member	Basic Member
96.25 96.26	(1) after June 30, 2011, and before July 1, 2012	6 percent	9.5 percent
96.27 96.28	(2) after June 30, 2012, and before July 1, 2013	6.5 percent	9.5 percent
96.29 96.30	(3) unless paragraph (d) applies, after June 30, 2013, and before July 1, 2014	7 percent	9.5 percent
96.31 96.32	(4) unless paragraph (d) applies, after June 30, 2014	7.5 percent	9.5 percent

96.33(d) After July 1, 2012, a scheduled contribution increase under paragraph (a), clause
96.34(4) or (5), and paragraph (c), clause (3) or (4), is suspended if the most recent actuarial
96.35valuation prepared under section 356.215 indicates that there is no contribution deficiency
96.36when the total employee contributions, employer contributions under subdivision 3, and
96.37direct state aid under section 354A.12 and chapter 422A are compared to the actuarial
96.38required contributions of the retirement plan.
96.39EFFECTIVE DATE.This section is effective July 1, 2011.

97.1    Sec. 5. Minnesota Statutes 2008, section 354.42, is amended by adding a subdivision
97.2to read:
97.3    Subd. 4b. Determination. (a) For purposes of this section, a contribution
97.4sufficiency exists if, for purposes of the applicable plan, the total of the employee
97.5contributions, the employer contributions, and any additional employer contributions, if
97.6applicable, exceeds the total of the normal cost, the administrative expenses, and the
97.7amortization contribution of the retirement plan as reported in the most recent actuarial
97.8valuation of the retirement plan prepared by the actuary retained under section 356.214
97.9and prepared under section 356.215 and the standards for actuarial work of the Legislative
97.10Commission on Pensions and Retirement.
97.11(b) For purposes of this section, a contribution deficiency exists if, for the applicable
97.12plan, the total employee contributions, the employer contributions, and any additional
97.13employer contributions are less than the total of the normal cost, the administrative
97.14expenses, and the amortization contribution of the retirement plan as reported in the most
97.15recent actuarial valuation of the retirement plan prepared by the actuary retained under
97.16section 356.214 and prepared under section 356.215 and the standards for actuarial work
97.17of the Legislative Commission on Pensions and Retirement.

97.18    Sec. 6. Minnesota Statutes 2008, section 354.42, is amended by adding a subdivision
97.19to read:
97.20    Subd. 4c. Contribution rate revision. Notwithstanding the contribution rate
97.21provisions stated in plan law, the employee and employer contribution rates must be
97.22adjusted:
97.23(1) if after July 1, 2014, the regular actuarial valuations of the applicable plan under
97.24section 356.215 indicate that there is a contribution sufficiency under subdivision 2 equal
97.25to or greater than 0.5 percent of covered payroll for two consecutive years, the employee
97.26and employer contribution rates for the applicable plan must be decreased as determined
97.27under subdivision 4 to a level such that the sufficiency equals no more than 0.25 percent of
97.28covered payroll based on the most recent actuarial valuation; or
97.29(2) if after July 1, 2014, the regular actuarial valuations of the applicable plan under
97.30section 356.215 indicate that there is a deficiency equal to or greater than 0.5 percent of
97.31covered payroll for two consecutive years, the employee and employer contribution rates
97.32for the applicable plan must be increased as determined under subdivision 4 to a level such
97.33that no deficiency exists based on the most recent actuarial valuation.

97.34    Sec. 7. Minnesota Statutes 2008, section 354.42, is amended by adding a subdivision
97.35to read:
98.1    Subd. 4d. Reporting, commission review. (a) The contribution rate increase
98.2or decrease must be determined by the executive director of the Teachers Retirement
98.3Association, must be reported to the chair and the executive director of the Legislative
98.4Commission on Pensions and Retirement on or before the next February 1, and, if the
98.5Legislative Commission on Pensions and Retirement does not recommend against the
98.6rate change or does not recommend a modification in the rate change, is effective on the
98.7next July 1 following the determination by the executive director that a contribution
98.8deficiency or sufficiency has existed for two consecutive fiscal years based on the most
98.9recent actuarial valuations under section 356.215. If the actuarially required contribution
98.10exceeds or is less than the total support provided by the combined employee and employer
98.11contribution rates for the applicable plan by more than 0.5 percent of covered payroll, the
98.12applicable plan employee and employer contribution rates must be adjusted incrementally
98.13over one or more years to a level such that there remains a contribution sufficiency of no
98.14more than 0.25 percent of covered payroll.
98.15(b) No incremental adjustment may exceed 0.25 percent of payroll for either the
98.16employee or employer contribution rates per year in which any adjustment is implemented.
98.17For an applicable plan, a contribution rate adjustment under this section must not be
98.18made until at least two years have passed since fully implementing a previous adjustment
98.19under this section.
98.20EFFECTIVE DATE.This section is effective July 1, 2011.

98.21    Sec. 8. Minnesota Statutes 2008, section 354.44, subdivision 6, is amended to read:
98.22    Subd. 6. Computation of formula program retirement annuity. (a) The formula
98.23retirement annuity must be computed in accordance with the applicable provisions of the
98.24formulas stated in paragraph (b) or (d) on the basis of each member's average salary under
98.25section 354.05, subdivision 13a, for the period of the member's formula service credit.
98.26    (b) This paragraph, in conjunction with paragraph (c), applies to a person who first
98.27became a member of the association or a member of a pension fund listed in section
98.28356.30, subdivision 3 , before July 1, 1989, unless paragraph (d), in conjunction with
98.29paragraph (e), produces a higher annuity amount, in which case paragraph (d) applies. The
98.30average salary as defined in section 354.05, subdivision 13a, multiplied by the following
98.31percentages per year of formula service credit shall determine determines the amount
98.32of the annuity to which the member qualifying therefor is entitled for service rendered
98.33before July 1, 2006:

99.1				Coordinated Member		Basic Member
99.2 99.3 99.4		Each year of service during first ten		the percent specified in section 356.315, subdivision 1, per year		the percent specified in section 356.315, subdivision 3, per year
99.5 99.6 99.7		Each year of service thereafter		the percent specified in section 356.315, subdivision 2, per year		the percent specified in section 356.315, subdivision 4, per year

99.8    For service rendered on or after July 1, 2006, the average salary as defined in section
99.9354.05 , subdivision 13a, multiplied by the following percentages per year of service credit,
99.10determines the amount the annuity to which the member qualifying therefor is entitled:

99.11				Coordinated Member		Basic Member
99.12 99.13 99.14		Each year of service during first ten		the percent specified in section 356.315, subdivision 1a, per year		the percent specified in section 356.315, subdivision 3, per year
99.15 99.16 99.17		Each year of service after ten years of service		the percent specified in section 356.315, subdivision 2b, per year		the percent specified in section 356.315, subdivision 4, per year

99.18    (c)(i) This paragraph applies only to a person who first became a member of the
99.19association or a member of a pension fund listed in section 356.30, subdivision 3, before
99.20July 1, 1989, and whose annuity is higher when calculated under paragraph (b), in
99.21conjunction with this paragraph than when calculated under paragraph (d), in conjunction
99.22with paragraph (e).
99.23    (ii) Where any member retires prior to normal retirement age under a formula
99.24annuity, the member shall must be paid a retirement annuity in an amount equal to the
99.25normal annuity provided in paragraph (b) reduced by one-quarter of one percent for each
99.26month that the member is under normal retirement age at the time of retirement except
99.27that for any member who has 30 or more years of allowable service credit, the reduction
99.28shall must be applied only for each month that the member is under age 62.
99.29    (iii) Any member whose attained age plus credited allowable service totals 90 years
99.30is entitled, upon application, to a retirement annuity in an amount equal to the normal
99.31annuity provided in paragraph (b), without any reduction by reason of early retirement.
99.32    (d) This paragraph applies to a member who has become at least 55 years old and
99.33first became a member of the association after June 30, 1989, and to any other member
99.34who has become at least 55 years old and whose annuity amount when calculated under
99.35this paragraph and in conjunction with paragraph (e), is higher than it is when calculated
99.36under paragraph (b), in conjunction with paragraph (c). For a basic member, the average
99.37salary, as defined in section 354.05, subdivision 13a, multiplied by the percent specified
99.38by section 356.315, subdivision 4, for each year of service for a basic member shall
99.39determine determines the amount of the retirement annuity to which the basic member is
100.1entitled. The annuity of a basic member who was a member of the former Minneapolis
100.2Teachers Retirement Fund Association as of June 30, 2006, must be determined according
100.3to the annuity formula under the articles of incorporation of the former Minneapolis
100.4Teachers Retirement Fund Association in effect as of that date. For a coordinated member,
100.5the average salary, as defined in section 354.05, subdivision 13a, multiplied by the percent
100.6specified in section 356.315, subdivision 2, for each year of service rendered before July
100.71, 2006, and by the percent specified in section 356.315, subdivision 2b, for each year
100.8of service rendered on or after July 1, 2006, and before July 1, 2011, and by the percent
100.9specified in section 356.315, subdivision 2c, for each year of service rendered after June
100.1030, 2011, determines the amount of the retirement annuity to which the coordinated
100.11member is entitled. For a member who has 30 or more years of allowable service credit,
100.12the person's normal retirement age is age 62 and the age 55 minimum early reduced benefit
100.13retirement age does not apply to the person.
100.14    (e) This paragraph applies to a person who has become at least 55 years old and first
100.15becomes a member of the association after June 30, 1989, and to any other member who
100.16has become at least 55 years old and whose annuity is higher when calculated under
100.17paragraph (d) in conjunction with this paragraph than when calculated under paragraph
100.18(b), in conjunction with paragraph (c). An employee who retires under the formula annuity
100.19before the normal retirement age as defined by section 354.05, subdivision 38, shall must
100.20be paid the normal annuity provided in paragraph (d) reduced so that the reduced annuity
100.21is the actuarial equivalent of the annuity that would be payable to the employee if the
100.22employee deferred receipt of the annuity and the annuity amount were augmented at an
100.23annual rate of three percent compounded annually from the day the annuity begins to
100.24accrue until the normal retirement age if the employee became an employee before July 1,
100.252006, and at 2.5 percent compounded annually if the employee becomes an employee after
100.26June 30, 2006. For a member who has 30 or more years of allowable service credit, the
100.27person's normal retirement age is age 62 and the age 55 minimum early reduced benefit
100.28retirement age does not apply to the person.
100.29    (f) No retirement annuity is payable to a former employee with a salary that exceeds
100.3095 percent of the governor's salary unless and until the salary figures used in computing
100.31the highest five successive years average salary under paragraph (a) have been audited by
100.32the Teachers Retirement Association and determined by the executive director to comply
100.33with the requirements and limitations of section 354.05, subdivisions 35 and 35a.
100.34EFFECTIVE DATE.This section is effective July 1, 2011.

101.1    Sec. 9. Minnesota Statutes 2008, section 354A.011, subdivision 15a, is amended to
101.2read:
101.3    Subd. 15a. Normal retirement age. "Normal retirement age" means age 65 for a
101.4person who first became a member of the coordinated program of the St. Paul Teachers
101.5Retirement Fund Association or the new law coordinated program of the Duluth Teachers
101.6Retirement Fund Association or a member of a pension fund listed in section 356.30,
101.7subdivision 3 , before July 1, 1989. For a person who first became a member of the
101.8coordinated program of the St. Paul Teachers Retirement Fund Association or the new law
101.9coordinated program of the Duluth Teachers Retirement Fund Association after June 30,
101.101989, normal retirement age means the higher of age 65 or retirement age, as defined in
101.11United States Code, title 42, section 416(l), as amended, but not to exceed age 66. For a
101.12person with 30 years of service, normal retirement age means age 62. For a person who is
101.13a member of the basic program of the St. Paul Teachers Retirement Fund Association or
101.14the old law coordinated program of the Duluth Teachers Retirement Fund Association,
101.15normal retirement age means the age at which a teacher becomes eligible for a normal
101.16retirement annuity computed upon meeting the age and service requirements specified
101.17in the applicable provisions of the articles of incorporation or bylaws of the respective
101.18teachers retirement fund association.
101.19EFFECTIVE DATE.This section is effective July 1, 2011.

101.20    Sec. 10. Minnesota Statutes 2008, section 354A.12, subdivision 1, is amended to read:
101.21    Subdivision 1. Employee contributions. (a) The contribution required to be paid
101.22by each member of a teachers retirement fund association shall must not be less than the
101.23percentage of total salary specified below for the applicable association and program:

101.24		Association and Program	Percentage of Total Salary
101.25	Duluth Teachers Retirement Fund Association
101.26		old law and new law
101.27		coordinated programs	5.5 percent
101.28		(1) before July 1, 2011	5.5 percent
101.29		(2) after June 30, 2011, and before July 1, 2012	6 percent
101.30		(3) after June 30, 2012, and before July 1, 2013	6.5 percent
101.31 101.32		(4) unless paragraph (b) applies, after June 30, 2013, and before July 1, 2014	7 percent
101.33 101.34		(5) unless paragraph (b) applies, after June 30, 2014	7.5 percent
101.35	St. Paul Teachers Retirement Fund Association
101.36		basic program	8 percent
101.37		coordinated program	5.5 percent
101.38		(6) before July 1, 2011	5.5 percent
102.1		(7) after June 30, 2011, and before July 1, 2012	6 percent
102.2		(8) after June 30, 2012, and before July 1, 2013	6.5 percent
102.3 102.4		(9) unless paragraph (b) applies, after June 30, 2013, and before July 1, 2014	7 percent
102.5 102.6		(10) unless paragraph (b) applies, after June 30, 2014	7.5 percent

102.7(b) When an employee contribution rate changes for a fiscal year, the new
102.8contribution rate is effective for the entire salary paid for each employer unit with the
102.9first payroll cycle reported.
102.10(c) After July 1, 2012, a scheduled contribution increase under paragraph (a),
102.11clause (4), (5), (9), or (10), is suspended if the most recent actuarial valuation prepared
102.12under section 356.215 indicates that there is no contribution deficiency when the total
102.13employee contributions, employer contributions under subdivision 3, and direct state aid
102.14are compared to the actuarial required contributions of the retirement plan.
102.15(d) Contributions shall must be made by deduction from salary and must be remitted
102.16directly to the respective teachers retirement fund association at least once each month.
102.17EFFECTIVE DATE.This section is effective July 1, 2011.

102.18    Sec. 11. Minnesota Statutes 2008, section 354A.12, subdivision 2a, is amended to read:
102.19    Subd. 2a. Employer regular and additional contribution rates. (a) The
102.20employing units shall make the following employer contributions to teachers retirement
102.21fund associations:
102.22(1) for any coordinated member of a teachers retirement fund association in a city of
102.23the first class, the employing unit shall pay the employer Social Security taxes;
102.24(2) for any coordinated member of one of the following teachers retirement fund
102.25associations in a city of the first class, the employing unit shall make a regular employer
102.26contribution to the respective retirement fund association in an amount equal to the
102.27designated percentage of the salary of the coordinated member as provided below:

102.28 102.29		Duluth Teachers Retirement Fund Association		4.50 percent
102.30		(A) before July 1, 2011		4.5 percent
102.31 102.32		(B) after June 30, 2011, and before July 1, 2012		5 percent
102.33 102.34		(C) after June 30, 2012, and before July 1, 2013		5.5 percent
102.35 102.36 102.37		(D) unless clause (3) applies, after June 30, 2013, and before July 1, 2014		6 percent
102.38 102.39		(E) unless clause (3) applies, after June 30, 2014		6.5 percent
103.1 103.2		St. Paul Teachers Retirement Fund Association		4.50 percent
103.3		(F) before July 1, 2011		4.5 percent
103.4 103.5		(G) after June 30, 2011, and before July 1, 2012		5 percent
103.6 103.7		(H) after June 30, 2012, and before July 1, 2013		5.5 percent
103.8 103.9 103.10		(I) unless clause (3) applies, after June 30, 2013, and before July 1, 2014		6 percent
103.11 103.12		(J) unless clause (3) applies, after June 30, 2014		6.5 percent

103.13(3) After July 1, 2012, a scheduled contribution increase under paragraph (a), clause
103.14(2), item (D), (E), (I), or (J), is suspended if the most recent actuarial valuation prepared
103.15under section 356.215 indicates that there is no contribution deficiency when the total
103.16employee contributions, employer contributions under subdivision 3, and direct state aid
103.17are compared to the actuarial required contributions of the retirement plan;
103.18(4) for any basic member of the St. Paul Teachers Retirement Fund Association, the
103.19employing unit shall make a regular employer contribution to the respective retirement
103.20fund in an amount equal to 8.00 percent of the salary of the basic member;
103.21(4) (5) for a basic member of the St. Paul Teachers Retirement Fund Association, the
103.22employing unit shall make an additional employer contribution to the respective fund in
103.23an amount equal to 3.64 percent of the salary of the basic member;
103.24(5) (6) for a coordinated member of a teachers retirement fund association in a city
103.25of the first class, the employing unit shall make an additional employer contribution to
103.26the respective fund in an amount equal to the applicable percentage of the coordinated
103.27member's salary, as provided below:

103.28 103.29		Duluth Teachers Retirement Fund Association		1.29 percent
103.30 103.31		St. Paul Teachers Retirement Fund Association
103.32		July 1, 1993 - June 30, 1994		0.50 percent
103.33		July 1, 1994 - June 30, 1995		1.50 percent
103.34		July 1, 1997, and thereafter		3.84 percent

103.35(b) When an employer contribution rate changes for a fiscal year, the new
103.36contribution rate is effective for the entire salary paid for each employer unit with the
103.37first payroll cycle reported.
103.38(c) The regular and additional employer contributions must be remitted directly to
103.39the respective teachers retirement fund association at least once each month. Delinquent
103.40amounts are payable with interest under the procedure in subdivision 1a.
104.1(c) (d) Payments of regular and additional employer contributions for school district
104.2or technical college employees who are paid from normal operating funds must be made
104.3from the appropriate fund of the district or technical college.
104.4EFFECTIVE DATE.This section is effective July 1, 2011.

104.5    Sec. 12. Minnesota Statutes 2008, section 354A.12, is amended by adding a
104.6subdivision to read:
104.7    Subd. 4a. Determination. (a) For purposes of this section, a contribution sufficiency
104.8exists if, for purposes of the applicable plan, the total of the employee contributions,
104.9the employer contributions, and any additional employer contributions, if applicable,
104.10exceeds the total of the normal cost, the administrative expenses, and the amortization
104.11contribution of the retirement plan as reported in the most recent actuarial valuation of the
104.12retirement plan prepared by the actuary retained under section 356.214 and prepared under
104.13section 356.215 and the standards for actuarial work of the Legislative Commission on
104.14Pensions and Retirement.
104.15(b) For purposes of this section, a contribution deficiency exists if, for the applicable
104.16plan, the total employee contributions, employer contributions, and any additional
104.17employer contributions are less than the total of the normal cost, the administrative
104.18expenses, and the amortization contribution of the retirement plan as reported in the most
104.19recent actuarial valuation of the retirement plan prepared by the actuary retained under
104.20section 356.214 and prepared under section 356.215 and the standards for actuarial work
104.21of the Legislative Commission on Pensions and Retirement.

104.22    Sec. 13. Minnesota Statutes 2008, section 354A.12, is amended by adding a
104.23subdivision to read:
104.24    Subd. 4b. Contribution rate revision. Notwithstanding the contribution rate
104.25provisions stated in plan law, the employee and employer contribution rates must be
104.26adjusted:
104.27(1) if after July 1, 2014, the regular actuarial valuations of the applicable plan under
104.28section 356.215 indicate that there is a contribution sufficiency under subdivision 2 equal
104.29to or greater than 0.5 percent of covered payroll for two consecutive years, the employee
104.30and employer contribution rates for the applicable plan must be decreased as determined
104.31under subdivision 4 to a level such that the sufficiency equals no more than 0.25 percent of
104.32covered payroll based on the most recent actuarial valuation; or
104.33(2) if after July 1, 2014, the regular actuarial valuations of the applicable plan under
104.34section 356.215 indicate that there is a deficiency equal to or greater than 0.5 percent of
105.1covered payroll for two consecutive years, the employee and employer contribution rates
105.2for the applicable plan must be increased as determined under subdivision 4 to a level such
105.3that no deficiency exists based on the most recent actuarial valuation.

105.4    Sec. 14. Minnesota Statutes 2008, section 354A.12, is amended by adding a
105.5subdivision to read:
105.6    Subd. 4c. Reporting, commission review. (a) The contribution rate increase or
105.7decrease must be determined by the executive director of the Duluth Teachers Retirement
105.8Fund Association or the St. Paul Teachers Retirement Fund Association, and must be
105.9reported to the chair and the executive director of the Legislative Commission on Pensions
105.10and Retirement on or before the next February 1, and, if the Legislative Commission
105.11on Pensions and Retirement does not recommend against the rate change or does not
105.12recommend a modification in the rate change, is effective on the next July 1 following
105.13the determination by the executive director that a contribution deficiency or sufficiency
105.14has existed for two consecutive fiscal years based on the most recent actuarial valuations
105.15under section 356.215. If the actuarially required contribution exceeds or is less than
105.16the total support provided by the combined employee and employer contribution rates
105.17for the applicable plan by more than 0.5 percent of covered payroll, the applicable plan
105.18employee and employer contribution rates must be adjusted incrementally over one or
105.19more years to a level such that there remains a contribution sufficiency of no more than
105.200.25 percent of covered payroll.
105.21(b) No incremental adjustment may exceed 0.25 percent of payroll for either the
105.22employee or employer contribution rates per year in which any adjustment is implemented.
105.23For an applicable plan, a contribution rate adjustment under this section must not be
105.24made until at least two years have passed since fully implementing a previous adjustment
105.25under this section.
105.26EFFECTIVE DATE.This section is effective July 1, 2011.

105.27    Sec. 15. Minnesota Statutes 2008, section 354A.31, subdivision 4, is amended to read:
105.28    Subd. 4. Computation of normal coordinated retirement annuity; St. Paul
105.29fund. (a) This subdivision applies to the coordinated program of the St. Paul Teachers
105.30Retirement Fund Association.
105.31(b) The normal coordinated retirement annuity is an amount equal to a retiring
105.32coordinated member's average salary under section 354A.011, subdivision 7a, multiplied
105.33by the retirement annuity formula percentage.
106.1(c) This paragraph, in conjunction with subdivision 6, applies to a person who first
106.2became a member or a member in a pension fund listed in section 356.30, subdivision 3,
106.3before July 1, 1989, unless paragraph (d), in conjunction with subdivision 7, produces a
106.4higher annuity amount, in which case paragraph (d) will apply. The retirement annuity
106.5formula percentage for purposes of this paragraph is the percent specified in section
106.6356.315, subdivision 1, per year for each year of coordinated service for the first ten years
106.7and the percent specified in section 356.315, subdivision 2, for each year of coordinated
106.8service thereafter. The average salary multiplied by the following retirement annuity
106.9formula percentage per year of allowable service determines the amount of the annuity to
106.10which the member qualifying therefor is entitled for service rendered before July 1, 2011:

106.11 106.12	Each year of service during first ten years	the percent specified in section 356.315, subdivision 1, per year
106.13 106.14	Each year of service thereafter	the percent specified in section 356.315, subdivision 2, per year

106.15For service rendered on or after July 1, 2011, the average salary multiplied by the
106.16following retirement annuity formula percentage per year of allowable service determines
106.17the amount of the annuity to which the member qualifying therefor is entitled:

106.18 106.19	Each year of service during first ten years	the percent specified in section 356.315, subdivision 1a, per year
106.20 106.21	Each year of service thereafter	the percent specified in section 356.315, subdivision 2b, per year

106.22(d) This paragraph applies to a person who has become at least 55 years old and who
106.23first becomes a member after June 30, 1989, and to any other member who has become
106.24at least 55 years old and whose annuity amount, when calculated under this paragraph
106.25and in conjunction with subdivision 7 is higher than it is when calculated under paragraph
106.26(c), in conjunction with the provisions of subdivision 6. The retirement annuity formula
106.27percentage for purposes of this paragraph is the percent specified in section 356.315,
106.28subdivision 2 , for each year of coordinated service before July 1, 2011, and by the percent
106.29specified in section 356.315, subdivision 2c, for each year of service rendered after June
106.3030, 2011. For a member who has 30 or more years of allowable service credit, the person's
106.31normal retirement age is age 62 and the age 55 minimum early reduced benefit retirement
106.32age does not apply to the person.
106.33EFFECTIVE DATE.This section is effective July 1, 2011.

106.34    Sec. 16. Minnesota Statutes 2008, section 354A.31, subdivision 4a, is amended to read:
107.1    Subd. 4a. Computation of normal coordinated retirement annuity; Duluth
107.2fund. (a) This subdivision applies to the new law coordinated program of the Duluth
107.3Teachers Retirement Fund Association.
107.4(b) The normal coordinated retirement annuity is an amount equal to a retiring
107.5coordinated member's average salary under section 354A.011, subdivision 7a, multiplied
107.6by the retirement annuity formula percentage.
107.7(c) This paragraph, in conjunction with subdivision 6, applies to a person who first
107.8became a member or a member in a pension fund listed in section 356.30, subdivision 3,
107.9before July 1, 1989, unless paragraph (d), in conjunction with subdivision 7, produces a
107.10higher annuity amount, in which case paragraph (d) applies. The retirement annuity
107.11formula percentage for purposes of this paragraph is the percent specified in section
107.12356.315, subdivision 1, per year for each year of coordinated service for the first ten years
107.13and the percent specified in section 356.315, subdivision 2, for each subsequent year of
107.14coordinated service. The average salary multiplied by the following retirement annuity
107.15formula percentage per year of allowable service determines the amount of the annuity to
107.16which the member qualifying therefor is entitled for service rendered before July 1, 2011:

107.17 107.18	Each year of service during first ten years	the percent specified in section 356.315, subdivision 1, per year
107.19 107.20	Each year of service thereafter	the percent specified in section 356.315, subdivision 2, per year

107.21For service rendered on or after July 1, 2011, the average salary multiplied by the
107.22following retirement annuity formula percentage per year of allowable service determines
107.23the amount of the annuity to which the member qualifying therefor is entitled:

107.24 107.25	Each year of service during first ten years	the percent specified in section 356.315, subdivision 1a, per year
107.26 107.27	Each year of service thereafter	the percent specified in section 356.315, subdivision 2b, per year

107.28(d) This paragraph applies to a person who is at least 55 years old and who first
107.29becomes a member after June 30, 1989, and to any other member who is at least 55 years
107.30old and whose annuity amount, when calculated under this paragraph and in conjunction
107.31with subdivision 7, is higher than it is when calculated under paragraph (c) in conjunction
107.32with subdivision 6. The retirement annuity formula percentage for purposes of this
107.33paragraph is the percent specified in section 356.315, subdivision 2, for each year of
107.34coordinated service before July 1, 2011, and by the percent specified in section 356.315,
107.35subdivision 2c, for each year of service rendered after June 30, 2011. For a member who
107.36has 30 or more years of allowable service credit, the person's normal retirement age is
107.37age 62 and the age 55 minimum early reduced benefit retirement age does not apply
107.38to the person.
108.1EFFECTIVE DATE.This section is effective July 1, 2011.

108.2    Sec. 17. Minnesota Statutes 2008, section 354A.31, subdivision 7, is amended to read:
108.3    Subd. 7. Actuarial reduction for early retirement. This subdivision applies to
108.4a person who has become at least 55 years old and first becomes a coordinated member
108.5after June 30, 1989, and to any other coordinated member who has become at least 55
108.6years old and whose annuity is higher when calculated using the retirement annuity
108.7formula percentage in subdivision 4, paragraph (d), and subdivision 4a, paragraph (d), in
108.8conjunction with this subdivision than when calculated under subdivision 4, paragraph
108.9(c), or subdivision 4a, paragraph (c), in conjunction with subdivision 6. A coordinated
108.10member who retires before the full benefit age shall as defined by section 354A.011,
108.11subdivision 15a, must be paid the retirement annuity calculated using the retirement
108.12annuity formula percentage in subdivision 4, paragraph (d), or subdivision 4a, paragraph
108.13(d), reduced so that the reduced annuity is the actuarial equivalent of the annuity that
108.14would be payable to the member if the member deferred receipt of the annuity and the
108.15annuity amount were augmented at an annual rate of three percent compounded annually
108.16from the day the annuity begins to accrue until the normal retirement age if the employee
108.17became an employee before July 1, 2006, and at 2.5 percent compounded annually
108.18from the day the annuity begins to accrue until the normal retirement age if the person
108.19initially becomes a teacher after June 30, 2006. For a member who has 30 or more years
108.20of allowable service credit, the person's normal retirement age is age 62 and the age 55
108.21minimum early reduced benefit retirement age does not apply to the person.
108.22EFFECTIVE DATE.This section is effective July 1, 2011.

108.23    Sec. 18. Minnesota Statutes 2008, section 356.315, is amended by adding a subdivision
108.24to read:
108.25    Subd. 2c. Certain coordinated members. The applicable benefit accrual rate
108.26is 2.1 percent.
108.27EFFECTIVE DATE.This section is effective July 1, 2011.


108.30    Section 1. [136F.481] EARLY SEPARATION INCENTIVE PROGRAM.
108.31(a) Notwithstanding any provision of law to the contrary, the Board of Trustees
108.32of the Minnesota State Colleges and Universities may offer a targeted early separation
108.33incentive program for its employees.
109.1(b) The early separation incentive program may include one or both of the following:
109.2(1) cash incentives, not to exceed one year of base salary; or
109.3(2) employer contributions to the postretirement healthcare savings plan established
109.4under section 352.98.
109.5(c) To be eligible to receive an incentive, an employee must be at least age 55
109.6and must have at least five years of employment by the Minnesota State Colleges and
109.7Universities System. The board of trustees shall establish the eligibility requirements
109.8for system employees to receive an incentive. The board of trustees shall file a copy
109.9of its proposed eligibility requirements with the chairs and ranking members of the
109.10Senate Committee on Higher Education and the Higher Education Budget and Policy
109.11Division of the Senate Committee on Finance and with the chair and ranking members of
109.12the Higher Education and Workforce Development Finance and Policy Division of the
109.13Finance Committee of the House of Representatives at least 30 days before their final
109.14adoption by the board of trustees, shall post the same document on the system website at
109.15the same time, and shall hold a public hearing on the proposed eligibility requirements.
109.16The type and any additional amount of the incentive to be offered may vary by employee
109.17classification, as specified by the board.
109.18(d) The president of a college or university, consistent with paragraphs (b) and
109.19(c), may designate:
109.20(1) specific departments or programs at the college or university whose employees
109.21are eligible to be offered the incentive program; or
109.22(2) positions at the college or university eligible to be offered the incentive program.
109.23(e) The chancellor, consistent with paragraphs (b) and (c), may designate:
109.24(1) system office divisions whose employees are eligible to be offered the incentive
109.25program; or
109.26(2) positions at the system office eligible to be offered the incentive program.
109.27(f) Acceptance of the offered incentive must be voluntary on the part of the employee
109.28and must be in writing. The incentive may only be offered at the sole discretion of the
109.29president of the applicable college or university.
109.30(g) A decision by the president of a college or university or by the chancellor not to
109.31offer an incentive may not be challenged.
109.32(h) The cost of the incentive is payable by the college or university on whose behalf
109.33the president offered the incentive or from the system office budget if the chancellor
109.34offered the incentive. If a college or university is merged, the remaining cost of any
109.35early separation incentive must be borne by the successor institution. If a college or
110.1university is closed, the remaining cost of any early separation incentive must be borne
110.2by the board of trustees.
110.3(i) Annually, the chancellor and the president of each college or university must
110.4report on the number and types of early separation incentives which were offered and
110.5utilized under this section. The report must be filed annually with the board of trustees and
110.6with the Legislative Reference Library on or before September 1.
110.7EFFECTIVE DATE; SUNSET.This section is effective the day following final
110.8enactment and expires June 30, 2014.

110.9    Sec. 2. [136F.482] APPLICATION OF OTHER LAWS.
110.10Unilateral implementation of section 136F.481 by the Board of Trustees of the
110.11Minnesota State Colleges and Universities, by the chancellor, or by a president of a college
110.12or university is not an unfair labor practice under chapter 179A.
110.13EFFECTIVE DATE; SUNSET.This section is effective the day following final
110.14enactment and expires June 30, 2014.

110.15    Sec. 3. Minnesota Statutes 2008, section 354B.21, subdivision 2, is amended to read:
110.16    Subd. 2. Coverage; election. (a) For Eligible persons who were employed by
110.17the former state university system or the former community college system before May
110.181, 1995, the person has the retirement coverage that the person had for employment
110.19immediately before May 1, 1995.
110.20(b) For all other eligible persons (a) Eligible persons who were employed by
110.21the Minnesota State Colleges and Universities System on or after June 30, 2009,
110.22unless otherwise specified in this section, the eligible person is are authorized to elect
110.23prospective Teachers Retirement Association plan coverage rather than coverage by
110.24the plan established by this chapter. The election of prospective Teachers Retirement
110.25Association plan coverage shall must be made within one year of commencing eligible
110.26Minnesota State Colleges and Universities system employment. If an election is not made
110.27within the specified election period due to a termination of Minnesota State Colleges and
110.28Universities system employment, an election may be made within 90 days of returning to
110.29eligible Minnesota State Colleges and Universities system employment. All elections are
110.30irrevocable. Prior to Before making an election, the eligible person shall be is covered by
110.31the plan indicated as default coverage under subdivision 3.
110.32(b) Except as provided in paragraph (c), a purchase of service credit in the Teachers
110.33Retirement Association plan for any period or periods of Minnesota State Colleges and
111.1Universities system employment occurring prior to before the election under paragraph
111.2(b) (a) is prohibited.
111.3(c) Notwithstanding paragraphs (a) and (b), a faculty member who is a member of
111.4the individual retirement account plan who first achieves tenure or its equivalent at a
111.5Minnesota state college or university after June 30, 2009, may elect to transfer retirement
111.6coverage under the teachers retirement plan within one year of the faculty member
111.7achieving tenure or its equivalent at a Minnesota state college or university. The faculty
111.8member electing Teachers Retirement Association coverage under this paragraph must
111.9purchase service credit in the Teachers Retirement Association for the entire period of
111.10time covered under the individual retirement account plan and the purchase payment
111.11amount must be determined under section 356.551. The Teachers Retirement Association
111.12may charge a faculty member transferring coverage a reasonable fee to cover the costs
111.13associated with computing the actuarial cost of purchasing service credit and making the
111.14transfer. A faculty member transferring from the individual retirement account plan to the
111.15Teachers Retirement Association may use any balances to the credit of the faculty member
111.16in the individual retirement account plan, any balances to the credit of the faculty member
111.17in the higher education supplemental retirement plan established under chapter 354C, or
111.18any source specified in section 356.441, subdivision 1, to purchase the service credit in the
111.19Teachers Retirement Association. If the total amount of payments under this paragraph are
111.20less than the total purchase payment amount under section 356.551, the payment amounts
111.21must be refunded to the applicable source. The retirement coverage transfer and service
111.22credit purchase authority under this paragraph expires with respect to any Minnesota State
111.23Colleges and Universities System faculty initially hired after June 30, 2014.
111.24EFFECTIVE DATE.This section is effective July 1, 2009.


111.28    Section 1. Minnesota Statutes 2008, section 354A.29, subdivision 3, is amended to
111.29read:
111.30    Subd. 3. Postretirement adjustment. (a) The postretirement adjustment described
111.31in the articles and bylaws of the St. Paul Teachers Retirement Fund Association this
111.32section must be determined by the executive director of the St. Paul Teachers Retirement
111.33Fund Association and approved by the board annually after June 30 using the procedures
111.34under this section.
112.1(b) On January 1,each eligible person who has been receiving an annuity or benefit
112.2under the articles of incorporation, the bylaws, or this chapter for at least 12 three calendar
112.3months as of the end of the fiscal last day of the previous calendar year is eligible to
112.4receive a postretirement adjustment of 2.0 percent that is payable each January 1 increase
112.5as further specified in this subdivision.
112.6(c) A percentage adjustment must be computed and paid under this subdivision to
112.7eligible persons under paragraph (b). This adjustment is determined by reference to the
112.8Consumer Price Index for urban wage earners and clerical workers all items index as
112.9reported by the Bureau of Labor Statistics within the United States Department of Labor
112.10each year as part of the determination of annual cost-of-living adjustments to recipients of
112.11federal old-age, survivors, and disability insurance. For calculations of the cost-of-living
112.12adjustment under paragraph (d), the term "average third quarter Consumer Price Index
112.13value" means the sum of the monthly index values as initially reported by the Bureau of
112.14Labor Statistics for the months of July, August, and September, divided by 3.
112.15(d) Before January 1 of each year, the executive director must calculate the amount
112.16of the cost-of-living adjustment by dividing the most recent average third quarter index
112.17value by the same average third quarter index value from the previous year, subtract one
112.18from the resulting quotient, and express the result as a percentage amount, which must be
112.19rounded to the nearest one-tenth of one percent.
112.20(e) The amount calculated under paragraph (d) is the full cost-of-living adjustment
112.21to be applied as a permanent increase to the regular payment of each eligible member
112.22on January 1 of the next calendar year. For any eligible member whose effective date
112.23of benefit commencement occurred during the calendar year before the cost-of-living
112.24adjustment is applied, the full increase amount must be prorated on the basis of whole
112.25calendar quarters in benefit payment status in the calendar year prior to the January 1 on
112.26which the cost-of-living adjustment is applied, calculated to the third decimal place.
112.27(f) The adjustment may not be less than zero, nor greater than five percent.

112.28    Sec. 2. BYLAW REVISION AUTHORIZATION.
112.29Consistent with Minnesota Statutes, section 354A.12, subdivision 4, the board of
112.30the St. Paul Teachers Retirement Fund Association shall revise the bylaws or articles of
112.31incorporation of the teachers retirement fund association to conform with section 1.

112.32    Sec. 3. REPEALER.
112.33Minnesota Statutes 2008, section 354A.29, subdivisions 2, 4, and 5, are repealed.

112.34    Sec. 4. EFFECTIVE DATE.
113.1Sections 1 to 3 are effective January 1, 2010, and expire June 30, 2011.


113.5    Section 1. Minnesota Statutes 2008, section 69.77, subdivision 4, is amended to read:
113.6    Subd. 4. Relief association financial requirements; minimum municipal
113.7obligation. (a) The officers of the relief association shall determine the financial
113.8requirements of the relief association and minimum obligation of the municipality for
113.9the following calendar year in accordance with the requirements of this subdivision.
113.10The financial requirements of the relief association and the minimum obligation of the
113.11municipality must be determined on or before the submission date established by the
113.12municipality under subdivision 5.
113.13(b) The financial requirements of the relief association for the following calendar
113.14year must be based on the most recent actuarial valuation or survey of the special fund of
113.15the association if more than one fund is maintained by the association, or of the association,
113.16if only one fund is maintained, prepared in accordance with sections 356.215, subdivisions
113.174 to 15 , and 356.216, as required under subdivision 10. If an actuarial estimate is prepared
113.18by the actuary of the relief association as part of obtaining a modification of the benefit
113.19plan of the relief association and the modification is implemented, the actuarial estimate
113.20must be used in calculating the subsequent financial requirements of the relief association.
113.21(c) If the relief association has an unfunded actuarial accrued liability as reported in
113.22the most recent actuarial valuation or survey, the total of the amounts calculated under
113.23clauses (1), (2), and (3), constitute the financial requirements of the relief association for
113.24the following year. If the relief association does not have an unfunded actuarial accrued
113.25liability as reported in the most recent actuarial valuation or survey, the amount calculated
113.26under clauses (1) and (2) constitute the financial requirements of the relief association for
113.27the following year. The financial requirement elements are:
113.28(1) the normal level cost requirement for the following year, expressed as a dollar
113.29amount, which must be determined by applying the normal level cost of the relief
113.30association as reported in the actuarial valuation or survey and expressed as a percentage
113.31of covered payroll to the estimated covered payroll of the active membership of the relief
113.32association, including any projected change in the active membership, for the following
113.33year;
113.34(2) for the Bloomington Fire Department Relief Association, the Fairmont Police
113.35Relief Association, and the Virginia Fire Department Relief Association, to the dollar
113.36amount of normal cost determined under clause (1) must be added an amount equal to the
114.1dollar amount of the administrative expenses of the special fund of the association if more
114.2than one fund is maintained by the association, or of the association if only one fund is
114.3maintained, for the most recent year, multiplied by the factor of 1.035. The administrative
114.4expenses are those authorized under section 69.80. No amount of administrative expenses
114.5under this clause are to be included in the financial requirements of the Minneapolis
114.6Firefighters Relief Association or the Minneapolis Police Relief Association; and
114.7(3) to the dollar amount of normal cost and expenses determined under clauses
114.8(1) and (2) must be added an amount equal to the level annual dollar amount which is
114.9sufficient to amortize the unfunded actuarial accrued liability by December 31, 2010, the
114.10Fairmont Police Relief Association, the Minneapolis Firefighters Relief Association,
114.11and the Virginia Fire Department Relief Association, by the date determined under
114.12section 356.216, paragraph (a), clause (2), for the Bloomington Fire Department Relief
114.13Association, and by December 31, 2020, for the Minneapolis Police Relief Association, as
114.14determined from the actuarial valuation or survey of the fund, using an interest assumption
114.15set at the applicable rate specified in section 356.215, subdivision 8. The, by that
114.16fund's amortization date as specified in this clause applies to all local police or salaried
114.17firefighters' relief associations and that date supersedes any amortization date specified in
114.18any applicable special law paragraph (d).
114.19(d) The Minneapolis Firefighters Relief Association special fund amortization date
114.20is determined under section 423C.15, subdivisions 3 and 4. The Virginia Fire Department
114.21Relief Association special fund amortization date is December 31, 2010. The Minneapolis
114.22Police Relief Association special fund and the Fairmont Police Relief Association
114.23special fund amortization date is December 31, 2020. The Bloomington Fire Department
114.24Relief Association special fund amortization date is determined under section 356.216,
114.25paragraph (a), clause (2). The amortization date specified in this paragraph supersedes any
114.26amortization date specified in any applicable special law.
114.27(d) (e) The minimum obligation of the municipality is an amount equal to the
114.28financial requirements of the relief association reduced by the estimated amount of
114.29member contributions from covered salary anticipated for the following calendar year and
114.30the estimated amounts anticipated for the following calendar year from the applicable
114.31state aid program established under sections 69.011 to 69.051 receivable by the relief
114.32association after any allocation made under section 69.031, subdivision 5, paragraph (b),
114.33clause (2), or 423A.01, subdivision 2, paragraph (a), clause (6), from the local police
114.34and salaried firefighters' relief association amortization aid program established under
114.35section 423A.02, subdivision 1, from the supplementary amortization state-aid program
115.1established under section 423A.02, subdivision 1a, and from the additional amortization
115.2state aid under section 423A.02, subdivision 1b.
115.3EFFECTIVE DATE; LOCAL APPROVAL.This section is effective the day after
115.4the Fairmont City Council and the chief clerical officer of the city of Fairmont timely
115.5complete their compliance with Minnesota Statutes, section 645.021, subdivisions 2 and 3.

115.6    Sec. 2. Minnesota Statutes 2008, section 423C.03, subdivision 1, is amended to read:
115.7    Subdivision 1. Board composition and elections. The board shall consist of
115.8two persons appointed by the city and ten the number of other members specified in
115.9the association bylaws, but not to exceed ten, who must be selected by the members.
115.10Elections for active and retired positions on the board shall be conducted pursuant to
115.11the association's bylaws.
115.12EFFECTIVE DATE.This section is effective the day following final enactment.


115.16    Section 1. Minnesota Statutes 2008, section 11A.17, subdivision 1, is amended to read:
115.17    Subdivision 1. Purpose; accounts; continuation. (a) The purpose of the
115.18supplemental investment fund is to provide an investment vehicle for the assets of various
115.19public retirement plans and funds.
115.20(b) The fund consists of seven eight investment accounts: an income share account,
115.21a growth share account, an international share account, a money market account, a fixed
115.22interest account, a bond market account, and a common stock index account, and a
115.23volunteer firefighter account.
115.24(c) The supplemental investment fund is a continuation of the supplemental
115.25retirement fund in existence on January 1, 1980.

115.26    Sec. 2. Minnesota Statutes 2008, section 11A.17, subdivision 2, is amended to read:
115.27    Subd. 2. Assets. (a) The assets of the supplemental investment fund shall consist
115.28of the money certified and transmitted to the state board from the participating public
115.29retirement plans and funds or from the board of the Minnesota State Colleges and
115.30Universities under section 136F.45 and from the voluntary statewide lump-sum volunteer
115.31firefighter retirement plan under section 353G.08.
115.32(b) With the exception of the assets of the voluntary statewide lump-sum volunteer
115.33firefighter retirement fund, the assets must be used to purchase investment shares in
116.1the investment accounts as specified by the plan or fund. The assets of the voluntary
116.2statewide lump-sum volunteer firefighter retirement fund must be invested in the volunteer
116.3firefighter account.
116.4(c) These accounts must be valued at least on a monthly basis but may be valued
116.5more frequently as determined by the State Board of Investment.

116.6    Sec. 3. Minnesota Statutes 2008, section 69.011, subdivision 1, is amended to read:
116.7    Subdivision 1. Definitions. Unless the language or context clearly indicates that a
116.8different meaning is intended, the following words and terms shall, for the purposes of this
116.9chapter and chapters 423, 423A, 424 and 424A, have the meanings ascribed to them:
116.10    (a) "Commissioner" means the commissioner of revenue.
116.11    (b) "Municipality" means:
116.12    (1) a home rule charter or statutory city;
116.13    (2) an organized town;
116.14    (3) a park district subject to chapter 398;
116.15    (4) the University of Minnesota;
116.16    (5) for purposes of the fire state aid program only, an American Indian tribal
116.17government entity located within a federally recognized American Indian reservation;
116.18    (6) for purposes of the police state aid program only, an American Indian tribal
116.19government with a tribal police department which exercises state arrest powers under
116.20section 626.90, 626.91, 626.92, or 626.93;
116.21    (7) for purposes of the police state aid program only, the Metropolitan Airports
116.22Commission with respect to peace officers covered under chapter 422A; and
116.23    (8) for purposes of the police state aid program only, the Department of Natural
116.24Resources and the Department of Public Safety with respect to peace officers covered
116.25under chapter 352B.
116.26    (c) "Minnesota Firetown Premium Report" means a form prescribed by the
116.27commissioner containing space for reporting by insurers of fire, lightning, sprinkler
116.28leakage and extended coverage premiums received upon risks located or to be performed
116.29in this state less return premiums and dividends.
116.30    (d) "Firetown" means the area serviced by any municipality having a qualified fire
116.31department or a qualified incorporated fire department having a subsidiary volunteer
116.32firefighters' relief association.
116.33    (e) "Market value" means latest available market value of all property in a taxing
116.34jurisdiction, whether the property is subject to taxation, or exempt from ad valorem
117.1taxation obtained from information which appears on abstracts filed with the commissioner
117.2of revenue or equalized by the State Board of Equalization.
117.3    (f) "Minnesota Aid to Police Premium Report" means a form prescribed by the
117.4commissioner for reporting by each fire and casualty insurer of all premiums received
117.5upon direct business received by it in this state, or by its agents for it, in cash or otherwise,
117.6during the preceding calendar year, with reference to insurance written for insuring against
117.7the perils contained in auto insurance coverages as reported in the Minnesota business
117.8schedule of the annual financial statement which each insurer is required to file with
117.9the commissioner in accordance with the governing laws or rules less return premiums
117.10and dividends.
117.11    (g) "Peace officer" means any person:
117.12    (1) whose primary source of income derived from wages is from direct employment
117.13by a municipality or county as a law enforcement officer on a full-time basis of not less
117.14than 30 hours per week;
117.15    (2) who has been employed for a minimum of six months prior to December 31
117.16preceding the date of the current year's certification under subdivision 2, clause (b);
117.17    (3) who is sworn to enforce the general criminal laws of the state and local
117.18ordinances;
117.19    (4) who is licensed by the Peace Officers Standards and Training Board and is
117.20authorized to arrest with a warrant; and
117.21    (5) who is a member of a local police relief association to which section 69.77
117.22applies, the State Patrol retirement plan, the public employees police and fire fund, or the
117.23Minneapolis Employees Retirement Fund.
117.24    (h) "Full-time equivalent number of peace officers providing contract service" means
117.25the integral or fractional number of peace officers which would be necessary to provide
117.26the contract service if all peace officers providing service were employed on a full-time
117.27basis as defined by the employing unit and the municipality receiving the contract service.
117.28    (i) "Retirement benefits other than a service pension" means any disbursement
117.29authorized under section 424A.05, subdivision 3, clauses (2) and (3).
117.30    (j) "Municipal clerk, municipal clerk-treasurer, or county auditor" means the person
117.31who was elected or appointed to the specified position or, in the absence of the person,
117.32another person who is designated by the applicable governing body. In a park district,
117.33the clerk is the secretary of the board of park district commissioners. In the case of the
117.34University of Minnesota, the clerk is that official designated by the Board of Regents.
117.35For the Metropolitan Airports Commission, the clerk is the person designated by the
117.36commission. For the Department of Natural Resources or the Department of Public Safety,
118.1the clerk is the respective commissioner. For a tribal police department which exercises
118.2state arrest powers under section 626.90, 626.91, 626.92, or 626.93, the clerk is the person
118.3designated by the applicable American Indian tribal government.
118.4(k) "Voluntary statewide lump-sum volunteer firefighter retirement plan" means the
118.5retirement plan established by chapter 353G.

118.6    Sec. 4. Minnesota Statutes 2008, section 69.011, subdivision 2, is amended to read:
118.7    Subd. 2. Qualification for fire or police state aid. (a) Unless retirement coverage
118.8is provided by the voluntary statewide lump-sum volunteer firefighter retirement plan, in
118.9order to qualify to receive fire state aid, on or before March 15 annually, in conjunction
118.10with the financial report required pursuant to section 69.051, the clerk of each municipality
118.11having a duly organized fire department as provided in subdivision 4, or the secretary of
118.12each independent nonprofit firefighting corporation having a subsidiary incorporated
118.13firefighters' relief association whichever is applicable, and the fire chief, shall jointly
118.14certify the existence of the municipal fire department or of the independent nonprofit
118.15firefighting corporation, whichever is applicable, which meets the minimum qualification
118.16requirements set forth in this subdivision, and the fire personnel and equipment of the
118.17municipal fire department or the independent nonprofit firefighting corporation as of the
118.18preceding December 31.
118.19(b) Where retirement coverage is provided by the voluntary statewide lump-sum
118.20volunteer firefighter retirement plan, the executive director of the Public Employees
118.21Retirement Association shall certify the existence of that coverage for each municipality
118.22and the municipal clerk or independent nonprofit firefighting corporation secretary,
118.23whichever applies, and the applicable fire chief shall certify the fire personnel and fire
118.24department equipment as of the preceding December 31.
118.25(c) Certification shall must be made to the commissioner on a form prescribed
118.26by the commissioner and shall include any other facts the commissioner may require.
118.27The certification shall must be made to the commissioner in duplicate. Each copy of the
118.28certificate shall must be duly executed and is deemed to be an original. The commissioner
118.29shall forward one copy to the auditor of the county wherein the fire department is located
118.30and shall retain one copy.
118.31(b) (d) On or before March 15 annually the clerk of each municipality having a duly
118.32organized police department and having a duly incorporated relief association shall certify
118.33that fact to the county auditor of the county where the police department is located and to
118.34the commissioner on a form prescribed by the commissioner together with the other facts
118.35the commissioner or auditor may require.
119.1(e) Except as provided in subdivision 2b, on or before March 15 annually, the clerk
119.2of each municipality and the auditor of each county employing one or more peace officers
119.3as defined in subdivision 1, clause (g), shall certify the number of such peace officers to
119.4the commissioner on forms prescribed by the commissioner. Credit for officers employed
119.5less than a full year shall must be apportioned. Each full month of employment of a
119.6qualifying officer during the calendar year shall entitle entitles the employing municipality
119.7or county to credit for 1/12 of the payment for employment of a peace officer for the entire
119.8year. For purposes of sections 69.011 to 69.051, employment of a peace officer shall
119.9commence commences when the peace officer is entered on the payroll of the respective
119.10municipal police department or county sheriff's department. No peace officer shall may be
119.11included in the certification of the number of peace officers by more than one municipality
119.12or county for the same month.

119.13    Sec. 5. Minnesota Statutes 2008, section 69.011, subdivision 4, is amended to read:
119.14    Subd. 4. Qualification for state aid. Any municipality in this state having for more
119.15than one year an organized fire department and officially established by the governing
119.16body of the municipality or an independent nonprofit fire fighting corporation created
119.17under the nonprofit corporation act of this state and operating exclusively for fire fighting
119.18purposes and providing retirement and relief benefits to its members or, having a separate
119.19subsidiary incorporated firefighter's relief and pension association providing retirement and
119.20relief benefits, or participating in the voluntary statewide lump-sum volunteer firefighter
119.21retirement plan, may qualify to receive state aid if it meets the following minimum
119.22requirements or equivalent as determined by the state fire marshal by July 1, 1972:
119.23(a) ten paid or volunteer firefighters including a fire chief and assistant fire chief, and
119.24(b) regular scheduled meetings and frequent drills including instructions in fire
119.25fighting tactics and in the use, care, and operation of all fire apparatus and equipment, and
119.26(c) a motorized fire truck equipped with a motorized pump, 250 gallon or larger
119.27water tank, 300 feet of one inch or larger fire hose in two lines with combination spray
119.28and straight stream nozzles, five-gallon hand pumps--tank extinguisher or equivalent, dry
119.29chemical extinguisher or equivalent, ladders, extension ladders, pike poles, crow bars,
119.30axes, lanterns, fire coats, helmets, boots, and
119.31(d) apparatus suitably housed in a building of good construction with facilities for
119.32care of hose and equipment, and
119.33(e) a reliable and adequate method of receiving fire alarms by telephone or with
119.34electric siren and suitable means of sounding an alarm, and
120.1(f) if response is to be provided outside the corporate limits of the municipality
120.2wherein the fire department is located, the municipality has another piece of motorized
120.3apparatus to make the response, and
120.4(g) other requirements the commissioner establishes by rule.

120.5    Sec. 6. Minnesota Statutes 2008, section 69.021, subdivision 7, is amended to read:
120.6    Subd. 7. Apportionment of fire state aid to municipalities and relief associations.
120.7(a) The commissioner shall apportion the fire state aid relative to the premiums reported
120.8on the Minnesota Firetown Premium Reports filed under this chapter to each municipality
120.9and/or firefighters relief association.
120.10(b) The commissioner shall calculate an initial fire state aid allocation amount for
120.11each municipality or fire department under paragraph (c) and a minimum fire state aid
120.12allocation amount for each municipality or fire department under paragraph (d). The
120.13municipality or fire department must receive the larger fire state aid amount.
120.14(c) The initial fire state aid allocation amount is the amount available for
120.15apportionment as fire state aid under subdivision 5, without inclusion of any additional
120.16funding amount to support a minimum fire state aid amount under section 423A.02,
120.17subdivision 3 , allocated one-half in proportion to the population as shown in the last
120.18official statewide federal census for each fire town and one-half in proportion to the market
120.19value of each fire town, including (1) the market value of tax exempt property and (2) the
120.20market value of natural resources lands receiving in lieu payments under sections 477A.11
120.21to 477A.14, but excluding the market value of minerals. In the case of incorporated or
120.22municipal fire departments furnishing fire protection to other cities, towns, or townships
120.23as evidenced by valid fire service contracts filed with the commissioner, the distribution
120.24must be adjusted proportionately to take into consideration the crossover fire protection
120.25service. Necessary adjustments shall must be made to subsequent apportionments. In
120.26the case of municipalities or independent fire departments qualifying for the aid, the
120.27commissioner shall calculate the state aid for the municipality or relief association on the
120.28basis of the population and the market value of the area furnished fire protection service
120.29by the fire department as evidenced by duly executed and valid fire service agreements
120.30filed with the commissioner. If one or more fire departments are furnishing contracted
120.31fire service to a city, town, or township, only the population and market value of the
120.32area served by each fire department may be considered in calculating the state aid and
120.33the fire departments furnishing service shall enter into an agreement apportioning among
120.34themselves the percent of the population and the market value of each service area. The
120.35agreement must be in writing and must be filed with the commissioner.
121.1(d) The minimum fire state aid allocation amount is the amount in addition to the
121.2initial fire state allocation amount that is derived from any additional funding amount
121.3to support a minimum fire state aid amount under section 423A.02, subdivision 3, and
121.4allocated to municipalities with volunteer firefighters relief associations or covered by the
121.5voluntary statewide lump-sum volunteer firefighter retirement plan based on the number
121.6of active volunteer firefighters who are members of the relief association as reported
121.7in the annual financial reporting for the calendar year 1993 to the Office of the State
121.8Auditor, but not to exceed 30 active volunteer firefighters, so that all municipalities or
121.9fire departments with volunteer firefighters relief associations receive in total at least a
121.10minimum fire state aid amount per 1993 active volunteer firefighter to a maximum of
121.1130 firefighters. If a relief association is established after calendar year 1993 and before
121.12calendar year 2000, the number of active volunteer firefighters who are members of the
121.13relief association as reported in the annual financial reporting for calendar year 1998
121.14to the Office of the State Auditor, but not to exceed 30 active volunteer firefighters,
121.15shall be used in this determination. If a relief association is established after calendar
121.16year 1999, the number of active volunteer firefighters who are members of the relief
121.17association as reported in the first annual financial reporting submitted to the Office of
121.18the State Auditor, but not to exceed 20 active volunteer firefighters, must be used in this
121.19determination. If a relief association is terminated as a result of providing retirement
121.20coverage for volunteer firefighters by the voluntary statewide lump-sum volunteer
121.21firefighter retirement plan under chapter 353G, the number of active volunteer firefighters
121.22of the municipality covered by the statewide plan as certified by the executive director of
121.23the Public Employees Retirement Association to the commissioner and the state auditor,
121.24but not to exceed 30 active firefighters, must be used in this determination.
121.25(e) Unless the firefighters of the applicable fire department are members of the
121.26voluntary statewide lump-sum volunteer firefighter retirement plan, the fire state aid must
121.27be paid to the treasurer of the municipality where the fire department is located and the
121.28treasurer of the municipality shall, within 30 days of receipt of the fire state aid, transmit
121.29the aid to the relief association if the relief association has filed a financial report with the
121.30treasurer of the municipality and has met all other statutory provisions pertaining to the
121.31aid apportionment. If the firefighters of the applicable fire department are members of
121.32the voluntary statewide lump-sum volunteer firefighter retirement plan, the fire state aid
121.33must be paid to the executive director of the Public Employees Retirement Association
121.34and deposited in the voluntary statewide lump-sum volunteer firefighter retirement fund.
121.35(f) The commissioner may make rules to permit the administration of the provisions
121.36of this section.
122.1(g) Any adjustments needed to correct prior misallocations must be made to
122.2subsequent apportionments.

122.3    Sec. 7. Minnesota Statutes 2008, section 69.021, subdivision 9, is amended to read:
122.4    Subd. 9. Appeal. In the event that any a municipality, a county, a fire relief
122.5association, or a police relief association, or the voluntary statewide lump-sum volunteer
122.6firefighter retirement plan, feels itself to be aggrieved, it may request the commissioner to
122.7review and adjust the apportionment of funds within the county in the case of police state
122.8aid, or within the state in the case of fire state aid. The decision of the commissioner is
122.9subject to appeal, review, and adjustment by the district court in the county in which the
122.10applicable municipality, fire department, or police department is located.

122.11    Sec. 8. Minnesota Statutes 2008, section 69.031, subdivision 1, is amended to read:
122.12    Subdivision 1. Commissioner of finance's warrant. (a) The commissioner of
122.13finance shall issue to the Public Employees Retirement Association on behalf of a
122.14municipality or independent nonprofit firefighting corporation that is a member of the
122.15voluntary statewide lump-sum volunteer firefighter retirement plan under chapter 353G or
122.16to the county, municipality, or independent nonprofit firefighting corporation certified to
122.17the commissioner of finance by the commissioner a warrant for an amount equal to the
122.18amount of fire state aid or police state aid, whichever applies, certified for the applicable
122.19state aid recipient by the commissioner under section 69.021.
122.20(b) The amount of state aid due and not paid by October 1 accrues interest at the rate
122.21of one percent for each month or part of a month the amount remains unpaid, beginning
122.22the preceding July 1.

122.23    Sec. 9. Minnesota Statutes 2008, section 69.031, subdivision 5, is amended to read:
122.24    Subd. 5. Deposit of state aid. (a) If the municipality or the independent nonprofit
122.25firefighting corporation is covered by the voluntary statewide lump-sum volunteer
122.26firefighter retirement plan under chapter 353G, the executive director shall credit the
122.27fire state aid against future municipal contribution requirements under section 353G.08
122.28and shall notify the municipality or independent nonprofit firefighting corporation of
122.29the fire state aid so credited at least annually. If the municipality or the independent
122.30nonprofit firefighting corporation is not covered by the voluntary statewide lump-sum
122.31volunteer firefighter retirement plan, the municipal treasurer shall, within 30 days after
122.32receipt, transmit the fire state aid to the treasurer of the duly incorporated firefighters'
122.33relief association if there is one organized and the association has filed a financial report
122.34with the municipality. If the relief association has not filed a financial report with the
123.1municipality, the municipal treasurer shall delay transmission of the fire state aid to
123.2the relief association until the complete financial report is filed. If the municipality or
123.3independent nonprofit firefighting corporation is not covered by the voluntary statewide
123.4lump-sum volunteer firefighter retirement plan, if there is no relief association organized,
123.5or if the association has dissolved, or has been removed as trustees of state aid, then the
123.6treasurer of the municipality shall deposit the money in the municipal treasury as provided
123.7for in section 424A.08 and the money may be disbursed only for the purposes and in the
123.8manner set forth in that section.
123.9(b) The municipal treasurer, upon receipt of the police state aid, shall disburse the
123.10police state aid in the following manner:
123.11(1) For a municipality in which a local police relief association exists and all peace
123.12officers are members of the association, the total state aid must be transmitted to the
123.13treasurer of the relief association within 30 days of the date of receipt, and the treasurer
123.14of the relief association shall immediately deposit the total state aid in the special fund
123.15of the relief association;
123.16(2) For a municipality in which police retirement coverage is provided by the public
123.17employees police and fire fund and all peace officers are members of the fund, including
123.18municipalities covered by section 353.665, the total state aid must be applied toward the
123.19municipality's employer contribution to the public employees police and fire fund under
123.20sections 353.65, subdivision 3, and 353.665, subdivision 8, paragraph (b), if applicable; or
123.21(3) For a municipality other than a city of the first class with a population of more
123.22than 300,000 in which both a police relief association exists and police retirement
123.23coverage is provided in part by the public employees police and fire fund, the municipality
123.24may elect at its option to transmit the total state aid to the treasurer of the relief association
123.25as provided in clause (1), to use the total state aid to apply toward the municipality's
123.26employer contribution to the public employees police and fire fund subject to all the
123.27provisions set forth in clause (2), or to allot the total state aid proportionately to be
123.28transmitted to the police relief association as provided in this subdivision and to apply
123.29toward the municipality's employer contribution to the public employees police and fire
123.30fund subject to the provisions of clause (2) on the basis of the respective number of active
123.31full-time peace officers, as defined in section 69.011, subdivision 1, clause (g).
123.32For a city of the first class with a population of more than 300,000, in addition, the
123.33city may elect to allot the appropriate portion of the total police state aid to apply toward
123.34the employer contribution of the city to the public employees police and fire fund based
123.35on the covered salary of police officers covered by the fund each payroll period and to
123.36transmit the balance to the police relief association; or
124.1(4) For a municipality in which police retirement coverage is provided in part by
124.2the public employees police and fire fund and in part by a local police consolidation
124.3account governed by chapter 353A and established before March 2, 1999, for which the
124.4municipality declined merger under section 353.665, subdivision 1, or established after
124.5March 1, 1999, the total police state aid must be applied towards the municipality's total
124.6employer contribution to the public employees police and fire fund and to the local police
124.7consolidation account under sections 353.65, subdivision 3, and 353A.09, subdivision 5.
124.8(c) The county treasurer, upon receipt of the police state aid for the county, shall
124.9apply the total state aid toward the county's employer contribution to the public employees
124.10police and fire fund under section 353.65, subdivision 3.
124.11(d) The designated Metropolitan Airports Commission official, upon receipt of the
124.12police state aid for the Metropolitan Airports Commission, shall apply the total police
124.13state aid first toward the commission's employer contribution for police officers to the
124.14Minneapolis Employees Retirement Fund under section 422A.101, subdivision 2a, and, if
124.15there is any amount of police state aid remaining, shall apply that remainder toward the
124.16commission's employer contribution for police officers to the public employees police and
124.17fire plan under section 353.65, subdivision 3.
124.18(e) The police state aid apportioned to the Departments of Public Safety and Natural
124.19Resources under section 69.021, subdivision 7a, is appropriated to the commissioner of
124.20finance for transfer to the funds and accounts from which the salaries of peace officers
124.21certified under section 69.011, subdivision 2a, are paid. The commissioner of revenue
124.22shall certify to the commissioners of public safety, natural resources, and finance the
124.23amounts to be transferred from the appropriation for police state aid. The commissioners
124.24of public safety and natural resources shall certify to the commissioner of finance the
124.25amounts to be credited to each of the funds and accounts from which the peace officers
124.26employed by their respective departments are paid. Each commissioner must shall allocate
124.27the police state aid first for employer contributions for employees funded from the general
124.28fund and then for employer contributions for employees funded from other funds. For
124.29peace officers whose salaries are paid from the general fund, the amounts transferred from
124.30the appropriation for police state aid must be canceled to the general fund.

124.31    Sec. 10. [353G.01] DEFINITIONS.
124.32    Subdivision 1. Scope. For the purposes of this chapter, the words or terms defined
124.33in this section have the meanings given to them unless the context of the word or term
124.34clearly indicates otherwise.
125.1    Subd. 2. Advisory board. "Advisory board" means the board established by section
125.2353G.03.
125.3    Subd. 3. Board. "Board" means the board of trustees of the Public Employees
125.4Retirement Association operating under section 353.03.
125.5    Subd. 4. Commissioner of finance. "Commissioner of finance" means the state
125.6official appointed and qualified under section 16A.01.
125.7    Subd. 5. Executive director; director. "Executive director" or "director" means
125.8the person appointed under section 353.03, subdivision 3a.
125.9    Subd. 6. Fund. "Fund" means the voluntary statewide lump-sum volunteer
125.10firefighter retirement fund established under section 353G.02, subdivision 3.
125.11    Subd. 7. Good time service credit. "Good time service credit" means the length of
125.12service credit for an active firefighter that is reported by the applicable fire chief based
125.13on the minimum firefighter activity standards of the fire department. The credit may be
125.14recognized on an annual or monthly basis.
125.15    Subd. 8. Member. "Member" means a volunteer firefighter who provides active
125.16service to a municipal fire department or an independent nonprofit firefighting corporation
125.17where the applicable municipality or corporation has elected coverage by the retirement
125.18plan under section 353G.05, and which service is covered by the retirement plan.
125.19    Subd. 9. Municipality. "Municipality" means a governmental entity specified in
125.20section 69.011, subdivision 1, paragraph (b), clauses (1), (2), and (5).
125.21    Subd. 10. Plan. "Plan" means the retirement plan established by this chapter.
125.22    Subd. 11. Retirement fund. "Retirement fund" means the voluntary statewide
125.23lump-sum volunteer firefighter retirement fund established under section 353G.02,
125.24subdivision 3.
125.25    Subd. 12. Retirement plan. "Retirement plan" means the retirement plan
125.26established by this chapter.
125.27    Subd. 13. Standards for actuarial work. "Standards for actuarial work" means
125.28the standards adopted by the Legislative Commission on Pensions and Retirement under
125.29section 3.85, subdivision 10.
125.30    Subd. 14. State Board of Investment. "State Board of Investment" means the
125.31board created by article XI, section 8, of the Minnesota Constitution and governed by
125.32chapter 11A.
125.33    Subd. 15. Volunteer firefighter. "Volunteer firefighter" means a person who is
125.34an active member of a municipal fire department or independent nonprofit firefighting
126.1corporation and who, in that capacity, engages in fire suppression activities, provides
126.2emergency response services, or delivers fire education or prevention services on an
126.3on-call basis.

126.4    Sec. 11. [353G.02] PLAN AND FUND CREATION.
126.5    Subdivision 1. Retirement plan. The voluntary statewide lump-sum volunteer
126.6firefighter retirement plan is created.
126.7    Subd. 2. Administration. The policy-making, management, and administrative
126.8functions related to the voluntary statewide lump-sum volunteer firefighter retirement
126.9plan and fund are vested in the board of trustees and the executive director of the Public
126.10Employees Retirement Association. Their duties, authority, and responsibilities are as
126.11provided in section 353.03. Fiduciary activities of the plan and fund must be undertaken
126.12in a manner consistent with chapter 356A.
126.13    Subd. 3. Retirement fund. (a) The voluntary statewide lump-sum volunteer
126.14firefighter retirement fund is created. The fund contains the assets attributable to the
126.15voluntary statewide lump-sum volunteer firefighter retirement plan.
126.16(b) The State Board of Investment shall invest those portions of the retirement
126.17fund not required for immediate purposes in the voluntary statewide lump-sum volunteer
126.18firefighter retirement plan in the statewide lump-sum volunteer firefighter account of the
126.19Minnesota supplemental investment fund under section 11A.17.
126.20(c) The commissioner of finance is the ex officio treasurer of the voluntary statewide
126.21lump-sum volunteer firefighter retirement fund. The commissioner of finance's general
126.22bond to the state covers all liability for actions taken as the treasurer of the retirement fund.
126.23(d) The revenues of the retirement plan beyond investment returns are governed by
126.24section 353G.08 and must be deposited in the retirement fund. The disbursements of the
126.25retirement plan are governed by section 353G.08. The commissioner of finance shall
126.26transmit a detailed statement showing all credits to and disbursements from the retirement
126.27fund to the executive director monthly.
126.28    Subd. 4. Audit; actuarial valuation. (a) The legislative auditor shall periodically
126.29audit the voluntary statewide lump-sum volunteer firefighter retirement fund.
126.30(b) An actuarial valuation of the voluntary statewide lump-sum volunteer firefighter
126.31retirement plan may be performed periodically as determined to be appropriate or useful
126.32by the board. An actuarial valuation must be performed by the approved actuary retained
126.33under section 356.214 and must conform with section 356.215 and the standards for
126.34actuarial work. An actuarial valuation must contain sufficient detail for each participating
127.1employing entity to ascertain the actuarial condition of its account in the fund and the
127.2contribution requirement towards its account.
127.3    Subd. 5. Legal advisor; attorney general. (a) The legal advisor of the board
127.4and the executive director with respect to the voluntary statewide lump-sum volunteer
127.5firefighter retirement plan is the attorney general.
127.6(b) The board may sue, petition, be sued, or be petitioned under this chapter with
127.7respect to the plan or the fund in the name of the board.
127.8(c) The attorney general shall represent the board in all actions by the board or
127.9against the board with respect to the plan or the fund.
127.10(d) Venue of all actions related to the plan or fund is in the court for the first judicial
127.11district unless the action is an appeal to the Court of Appeals under section 356.96.

127.12    Sec. 12. [353G.03] VOLUNTARY STATEWIDE LUMP-SUM VOLUNTEER
127.13FIREFIGHTER RETIREMENT PLAN ADVISORY BOARD.
127.14    Subdivision 1. Establishment. A Voluntary Statewide Lump-Sum Volunteer
127.15Firefighter Retirement Plan Advisory Board is created.
127.16    Subd. 2. Function; purpose. The advisory board shall provide advice to the board
127.17of trustees of the Public Employees Retirement Association about the retirement coverage
127.18needs of volunteer firefighters who are members of the plan and about the legislative and
127.19administrative changes that would assist the retirement plan in accommodating volunteer
127.20firefighters who are not members of the plan.
127.21    Subd. 3. Composition. (a) The advisory board consists of seven members.
127.22(b) The advisory board members are:
127.23(1) one representative of Minnesota townships, appointed by the Minnesota
127.24Association of Townships;
127.25(2) two representatives of Minnesota cities, appointed by the League of Minnesota
127.26Cities;
127.27(3) one representative of Minnesota fire chiefs, who is a fire chief, appointed by the
127.28Minnesota State Fire Chiefs Association;
127.29(4) two representatives of Minnesota volunteer firefighters, who are active volunteer
127.30firefighters, appointed by the Minnesota State Fire Departments Association; and
127.31(5) one representative of the Office of the State Auditor, designated by the state
127.32auditor.
127.33    Subd. 4. Term. (a) The initial terms on the advisory board for the Minnesota
127.34townships representative and the Minnesota fire chiefs representative are one year. The
127.35initial terms on the advisory board for one of the Minnesota cities representatives and one
128.1of the Minnesota active volunteer firefighter representatives are two years. The initial
128.2terms on the advisory board for the other Minnesota cities representative and the other
128.3Minnesota active volunteer firefighter representative are three years. The term for the
128.4Office of the State Auditor representative is determined by the state auditor.
128.5(b) Subsequent terms on the advisory board other than the Office of the State
128.6Auditor representative are three years.
128.7    Subd. 5. Compensation of advisory board. The compensation of members of the
128.8advisory board other than the Office of the State Auditor representative is governed by
128.9section 15.0575, subdivision 3.

128.10    Sec. 13. [353G.04] INFORMATION FROM MUNICIPALITIES AND FIRE
128.11DEPARTMENTS.
128.12The chief executive officers of municipalities and fire departments with volunteer
128.13firefighters covered by the voluntary lump-sum volunteer firefighter retirement plan shall
128.14provide all relevant information and records requested by the board, the executive director,
128.15and the State Board of Investment as required to perform their duties.

128.16    Sec. 14. [353G.05] PLAN COVERAGE ELECTION.
128.17    Subdivision 1. Coverage. Any municipality or independent nonprofit firefighting
128.18corporation may elect to have its volunteer firefighters covered by the retirement plan.
128.19    Subd. 2. Election of coverage. (a) The process for electing coverage of volunteer
128.20firefighters by the retirement plan is initiated by a request to the executive director for a
128.21cost analysis of the prospective retirement coverage.
128.22(b) If the volunteer firefighters are currently covered by a volunteer firefighters' relief
128.23association governed by chapter 424A, the cost analysis of the prospective retirement
128.24coverage must be requested jointly by the secretary of the volunteer firefighters' relief
128.25association, following approval of the request by the board of the volunteer firefighters'
128.26relief association, and the chief administrative officer of the entity associated with the
128.27relief association, following approval of the request by the governing body of the entity
128.28associated with the relief association. If the relief association is associated with more than
128.29one entity, the chief administrative officer of each associated entity must execute the
128.30request. If the volunteer firefighters are not currently covered by a volunteer firefighters'
128.31relief association, the cost analysis of the prospective retirement coverage must be
128.32requested by the chief administrative officer of the entity operating the fire department.
128.33The request must be made in writing and must be made on a form prescribed by the
128.34executive director.
129.1(c) The cost analysis of the prospective retirement coverage by the statewide
129.2retirement plan must be based on the service pension amount under section 353G.11
129.3closest to the service pension amount provided by the volunteer firefighters' relief
129.4association, if there is one, or to the lowest service pension amount under section 353G.11
129.5if there is no volunteer firefighters' relief association, rounded up, and any other service
129.6pension amount designated by the requester or requesters. The cost analysis must be
129.7prepared using a mathematical procedure certified as accurate by an approved actuary
129.8retained by the Public Employees Retirement Association.
129.9(d) If a cost analysis is requested and a volunteer firefighters' relief association exists
129.10that has filed the information required under section 69.051 in a timely fashion, upon
129.11request by the executive director, the state auditor shall provide the most recent data
129.12available on the financial condition of the volunteer firefighters' relief association, the most
129.13recent firefighter demographic data available, and a copy of the current relief association
129.14bylaws. If a cost analysis is requested, but no volunteer firefighters' relief association
129.15exists, the chief administrative officer of the entity operating the fire department shall
129.16provide the demographic information on the volunteer firefighters serving as members
129.17of the fire department requested by the executive director.
129.18(e) If a cost analysis is requested, the executive director of the State Board of
129.19Investment shall review the investment portfolio of the relief association, if applicable,
129.20for compliance with the applicable provisions of chapter 11A and for appropriateness
129.21for retention under the established investment objectives and investment policies of the
129.22State Board of Investment. If the prospective retirement coverage change is approved
129.23under paragraph (f), the State Board of Investment may require that the relief association
129.24liquidate any investment security or other asset which the executive director of the State
129.25Board of Investment has determined to be an ineligible or inappropriate investment for
129.26retention by the State Board of Investment. The security or asset liquidation must occur
129.27before the effective date of the transfer of retirement plan coverage. If requested to do
129.28so by the chief administrative officer of the relief association, the executive director of
129.29the State Board of Investment shall provide advice about the best means to conduct the
129.30liquidation.
129.31(f) Upon receipt of the cost analysis, the governing body of the municipality or
129.32independent nonprofit firefighting corporation associated with the fire department shall
129.33approve or disapprove the retirement coverage change within 90 days. If the retirement
129.34coverage change is not acted upon within 90 days, it is deemed to be disapproved. If the
129.35retirement coverage change is approved by the applicable governing body, coverage by
130.1the voluntary statewide lump-sum volunteer firefighter retirement plan is effective on the
130.2next following January 1.

130.3    Sec. 15. [353G.06] DISESTABLISHMENT OF PRIOR VOLUNTEER
130.4FIREFIGHTERS' RELIEF ASSOCIATION SPECIAL FUND UPON
130.5RETIREMENT COVERAGE CHANGE.
130.6    Subdivision 1. Special fund disestablishment. (a) On the date immediately prior
130.7to the effective date of the coverage change, the special fund of the applicable volunteer
130.8firefighters' relief association, if one exists, ceases to exist as a pension fund of the
130.9association and legal title to the assets of the special fund transfers to the State Board of
130.10Investment, with the beneficial title to the assets of the special fund remaining in the
130.11applicable volunteer firefighters.
130.12(b) If the market value of the special fund of the volunteer firefighters' relief
130.13association for which retirement coverage changed under this chapter declines in the
130.14interval between the date of the most recent financial report or statement, and the special
130.15fund disestablishment date, the applicable municipality shall transfer an additional amount
130.16to the State Board of Investment equal to that decline. If more than one municipality is
130.17responsible for the direct management of the fire department, the municipalities shall
130.18allocate the additional transfer amount among the various applicable municipalities
130.19one-half in proportion to the population of each municipality and one-half in proportion
130.20to the market value of each municipality.
130.21    Subd. 2. Other relief association changes. In addition to the transfer and
130.22disestablishment of the special fund under subdivision 1, notwithstanding any provisions
130.23of chapter 424A or 424B to the contrary, upon the effective date of the change in volunteer
130.24firefighter retirement coverage, if the relief association membership elects to retain the
130.25relief association after the benefit coverage election, the following changes must be
130.26implemented with respect to the applicable volunteer firefighters' relief association:
130.27(1) the relief association board of trustees membership is reduced to five, comprised
130.28of the fire chief of the fire department and four trustees elected by and from the relief
130.29association membership;
130.30(2) the relief association may only maintain a general fund, which continues to
130.31be governed by section 424A.06;
130.32(3) the relief association is not authorized to receive the proceeds of any state aid or
130.33to receive any municipal funds; and
131.1(4) the relief association may not pay any service pension or benefit that was not
131.2authorized as a general fund disbursement under the articles of incorporation or bylaws of
131.3the relief association in effect prior to the plan coverage election process.
131.4    Subd. 3. Successor in interest. Upon the disestablishment of the special fund of
131.5the volunteer firefighters' relief association under this section, the voluntary statewide
131.6lump-sum volunteer firefighter retirement plan is the successor in interest of the special
131.7fund of the volunteer firefighters' relief association for all claims against the special fund
131.8other than a claim against the special fund, the volunteer firefighters' relief association,
131.9the municipality, the fire department, or any person connected with the volunteer
131.10firefighters' relief association in a fiduciary capacity under chapter 356A or common law
131.11that was based on any act or acts which were not performed in good faith and which
131.12constituted a breach of a fiduciary obligation. As the successor in interest of the special
131.13fund of the volunteer firefighters' relief association, the voluntary statewide lump-sum
131.14volunteer firefighter retirement plan may assert any applicable defense in any judicial
131.15proceeding which the board of trustees of the volunteer firefighters' relief association or
131.16the municipality would have been entitled to assert.

131.17    Sec. 16. [353G.07] CERTIFICATION OF GOOD TIME SERVICE CREDIT.
131.18(a) Annually, by March 31, the fire chief of the fire department with firefighters who
131.19are active members of the retirement plan shall certify to the executive director the good
131.20time service credit for the previous calendar year of each firefighter rendering active
131.21service with the fire department.
131.22(b) The fire chief shall provide to each firefighter rendering active service with
131.23the fire department notification of the amount of good time service credit rendered by
131.24the firefighter for the calendar year. The good time service credit notification must be
131.25provided to the firefighter 60 days before its certification to the executive director of the
131.26Public Employees Retirement Association, along with an indication of the process for the
131.27firefighter to challenge the fire chief's determination of good time service credit. If the
131.28good time service credit amount is challenged in a timely fashion, the fire chief shall hold
131.29a hearing on the challenge, accept and consider any additional pertinent information,
131.30and make a final determination of good time service credit. The final determination of
131.31good time service credit by the fire chief is not reviewable by the executive director of
131.32the Public Employees Retirement Association or by the board of trustees of the Public
131.33Employees Retirement Association.
132.1(c) The good time service credit certification is an official public document. If a
132.2false good time service credit certification is filed or if false information regarding good
132.3time service credits is provided, section 353.19 applies.
132.4(d) The good time service credit certification must be expressed as a percentage of a
132.5full year of service during which an active firefighter rendered at least the minimum level
132.6and quantity of fire suppression, emergency response, fire prevention, or fire education
132.7duties required by the fire department under the rules and regulations applicable to the
132.8fire department. No more than one year of good time service credit may be certified
132.9for a calendar year.
132.10(e) If a firefighter covered by the retirement plan leaves active firefighting service
132.11to render active military service that is required to be covered by the federal Uniformed
132.12Services Employment and Reemployment Rights Act, as amended, the person must be
132.13certified as providing a full year of good time service credit in each year of the military
132.14service, up to the applicable limit of the federal Uniformed Services Employment and
132.15Reemployment Rights Act. If the firefighter does not return from the military service in
132.16compliance with the federal Uniformed Services Employment and Reemployment Rights
132.17Act, the good time service credits applicable to that military service credit period are
132.18forfeited and cancel at the end of the calendar year in which the federal law time limit
132.19occurs.

132.20    Sec. 17. [353G.08] RETIREMENT PLAN FUNDING; DISBURSEMENTS.
132.21(a) Annually, the executive director shall determine the funding requirements of
132.22each account in the voluntary statewide lump-sum volunteer firefighter retirement plan
132.23on or before August 1. The funding requirements as directed under this section, must be
132.24determined using a mathematical procedure developed and certified as accurate by an
132.25approved actuary retained by the Public Employees Retirement Association and based on
132.26present value factors using a six percent interest rate, without any decrement assumptions.
132.27The funding requirements must be certified to the entity or entities associated with the fire
132.28department whose active firefighters are covered by the retirement plan.
132.29(b) The overall funding balance of each account for the current calendar year must
132.30be determined in the following manner:
132.31(1) The total accrued liability for all active and deferred members of the account as
132.32of December 31 of the current year must be calculated based on the good time service
132.33credit of active and deferred members as of that date.
132.34(2) The total present assets of the account projected to December 31 of the current
132.35year, including receipts by and disbursements from the account anticipated to occur on or
133.1before December 31, must be calculated. To the extent possible, the market value of assets
133.2must be utilized in making this calculation.
133.3(3) The amount of the total present assets calculated under clause (2) must be
133.4subtracted from the amount of the total accrued liability calculated under clause (1). If the
133.5amount of total present assets exceeds the amount of the total accrued liability, then the
133.6account is considered to have a surplus over full funding. If the amount of the total present
133.7assets is less than the amount of the total accrued liability, then the account is considered
133.8to have a deficit from full funding. If the amount of total present assets is equal to the
133.9amount of the total accrued liability, then the special fund is considered to be fully funded.
133.10(c) The financial requirements of each account for the following calendar year must
133.11be determined in the following manner:
133.12(1) The total accrued liability for all active and deferred members of the account
133.13as of December 31 of the calendar year next following the current calendar year must be
133.14calculated based on the good time service used in the calculation under paragraph (b),
133.15clause (1), increased by one year.
133.16(2) The increase in the total accrued liability of the account for the following calendar
133.17year over the total accrued liability of the account for the current year must be calculated.
133.18(3) The amount of anticipated future administrative expenses of the account must be
133.19calculated by multiplying the dollar amount of the administrative expenses for the most
133.20recent prior calendar year by the factor of 1.035.
133.21(4) If the account is fully funded, the financial requirement of the account for the
133.22following calendar year is the total of the amounts calculated under clauses (2) and (3).
133.23(5) If the account has a deficit from full funding, the financial requirement of the
133.24account for the following calendar year is the total of the amounts calculated under clauses
133.25(2) and (3) plus an amount equal to one-tenth of the amount of the deficit from full
133.26funding of the account.
133.27(6) If the account has a surplus over full funding, the financial requirement of
133.28the account for the following calendar year is the financial requirement of the account
133.29calculated as though the account was fully funded under clause (4) and, if the account has
133.30also had a surplus over full funding during the prior two years, additionally reduced by an
133.31amount equal to one-tenth of the amount of the surplus over full funding of the account.
133.32(d) The required contribution of the entity or entities associated with the fire
133.33department whose active firefighters are covered by the retirement plan is the annual
133.34financial requirements of the account of the retirement plan under paragraph (c) reduced
133.35by the amount of any fire state aid payable under sections 69.011 to 69.051 reasonably
133.36anticipated to be received by the retirement plan attributable to the entity or entities during
134.1the following calendar year, and an amount of interest on the assets projected to be
134.2received during the following calendar year calculated at the rate of six percent per annum.
134.3The required contribution must be allocated between the entities if more than one entity
134.4is involved. A reasonable amount of anticipated fire state aid is an amount that does not
134.5exceed the fire state aid actually received in the prior year multiplied by the factor 1.035.
134.6(e) The required contribution calculated in paragraph (d) must be paid to the
134.7retirement plan on or before December 31 of the year for which it was calculated. If
134.8the contribution is not received by the retirement plan by December 31, it is payable
134.9with interest at an annual compound rate of six percent from the date due until the date
134.10payment is received by the retirement plan. If the entity does not pay the full amount of
134.11the required contribution, the executive director shall collect the unpaid amount under
134.12section 353.28, subdivision 6.
134.13(f) The assets of the retirement fund may only be disbursed for:
134.14(1) the administrative expenses of the retirement plan;
134.15(2) the investment expenses of the retirement fund;
134.16(3) the service pensions payable under section 353G.10, 353G.11, 353G.14, or
134.17353G.15; and
134.18(4) the survivor benefits payable under section 353G.12.

134.19    Sec. 18. [353G.09] RETIREMENT BENEFIT ELIGIBILITY.
134.20    Subdivision 1. Entitlement. Except as provided in subdivision 3, an active member
134.21of the retirement plan is entitled to a lump-sum service pension from the retirement plan
134.22if the person:
134.23(1) has separated from active service with the fire department for at least 30 days;
134.24(2) has attained the age of at least 50 years;
134.25(3) has completed at least five years of good time service credit as a member of
134.26the retirement plan; and
134.27(4) applies in a manner prescribed by the executive director for the service pension.
134.28    Subd. 2. Vesting schedule; nonforfeitable portion of service pension. If an
134.29active member has completed less than 20 years of good time service credit, the person's
134.30entitlement is to the nonforfeitable percentage of the applicable service pension amount,
134.31as follows:

134.32 134.33		Completed years of good time service credit		Nonforfeitable percentage of the service pension
134.34			5		40 percent
134.35			6		44 percent
134.36			7		48 percent
135.1			8		52 percent
135.2			9		56 percent
135.3			10		60 percent
135.4			11		64 percent
135.5			12		68 percent
135.6			13		72 percent
135.7			14		76 percent
135.8			15		80 percent
135.9			16		84 percent
135.10			17		88 percent
135.11			18		92 percent
135.12			19		96 percent
135.13			20 and thereafter		100 percent

135.14    Subd. 3. Alternative pension eligibility and computation. (a) An active member
135.15of the retirement plan is entitled to an alternative lump-sum service pension from the
135.16retirement plan if the person:
135.17(1) has separated from active service with the fire department for at least 30 days;
135.18(2) has attained the age of at least 50 years or the age for receipt of a service pension
135.19under the benefit plan of the applicable former volunteer firefighters' relief association
135.20as of the date immediately prior to the election of the retirement coverage change,
135.21whichever is later;
135.22(3) has completed at least five years of active service with the fire department and at
135.23least five years in total as a member of the applicable former volunteer firefighters' relief
135.24association or of the retirement plan, but has not rendered at least five years of good time
135.25service credit as a member of the retirement plan; and
135.26(4) applies in a manner prescribed by the executive director for the service pension.
135.27(b) The alternative lump-sum service pension is the service pension amount specified
135.28in the bylaws of the applicable former volunteer firefighters' relief association either
135.29as of the date immediately prior to the election of the retirement coverage change or
135.30as of the date immediately before the termination of firefighting services, whichever is
135.31earlier, multiplied by the total number of years of service as a member of that volunteer
135.32firefighters' relief association and as a member of the retirement plan.

135.33    Sec. 19. [353G.10] DEFERRED SERVICE PENSION AMOUNT.
135.34A person who was an active member of a fire department covered by the retirement
135.35plan who has separated from active firefighting service for at least 30 days and who has
135.36completed at least five years of good time service credit, but has not attained the age of
135.3750 years, is entitled to a deferred service pension on or after attaining the age of 50 years
136.1and applying in a manner specified by the executive director for the service pension. The
136.2service pension payable is the nonforfeitable percentage of the service pension under
136.3section 353G.09, subdivision 2, and is payable without any interest over the period of
136.4deferral.

136.5    Sec. 20. [353G.11] SERVICE PENSION LEVELS.
136.6    Subdivision 1. Levels. The retirement plan provides the following levels of service
136.7pension amounts to be selected at the election of coverage, or, if fully funded, thereafter:

136.8		Level A	$500 per year of good time service credit
136.9		Level B	$750 per year of good time service credit
136.10		Level C	$1,000 per year of good time service credit
136.11		Level D	$1,500 per year of good time service credit
136.12		Level E	$2,000 per year of good time service credit
136.13		Level F	$2,500 per year of good time service credit
136.14		Level G	$3,000 per year of good time service credit
136.15		Level H	$3,500 per year of good time service credit
136.16		Level I	$4,000 per year of good time service credit
136.17		Level J	$4,500 per year of good time service credit
136.18		Level K	$5,000 per year of good time service credit
136.19		Level L	$5,500 per year of good time service credit
136.20		Level M	$6,000 per year of good time service credit
136.21		Level N	$6,500 per year of good time service credit
136.22		Level O	$7,000 per year of good time service credit
136.23		Level P	$7,500 per year of good time service credit

136.24    Subd. 2. Level selection. At the time of the election to transfer retirement coverage,
136.25or on April 30 thereafter, the governing body or bodies of the entity or entities operating
136.26the fire department whose firefighters are covered by the retirement plan may request
136.27a cost estimate from the executive director of an increase in the service pension level
136.28applicable to the active firefighters of the fire department. Within 90 days of the receipt of
136.29the cost estimate prepared by the executive director using a procedure certified as accurate
136.30by the approved actuary retained by the Public Employees Retirement Association, the
136.31governing body or bodies may approve the service pension level change, effective for the
136.32following calendar year. If not approved in a timely fashion, the service pension level
136.33change is considered to have been disapproved.
136.34    Subd. 3. Supplemental benefit. The retirement plan also shall pay a supplemental
136.35benefit as provided for in section 424A.10.
136.36    Subd. 4. Ancillary benefits. No disability, death, funeral, or other ancillary benefit
136.37beyond a service pension or a survivor benefit is payable from the retirement plan.

137.1    Sec. 21. [353G.12] SURVIVOR BENEFIT.
137.2    Subdivision 1. Entitlement. (a) A survivor of a deceased active member of the
137.3retirement plan or a deceased deferred member of the retirement plan, upon application as
137.4prescribed by the executive director, is entitled to receive a survivor benefit.
137.5(b) A survivor is the spouse of the member, or if none, the minor child or children of
137.6the member, or if none, the estate of the member.
137.7    Subd. 2. Survivor benefit amount. The amount of the survivor benefit is the
137.8amount of the service pension that would have been payable to the member of the
137.9retirement plan on the date of death if the member had been age 50 or older on that date.

137.10    Sec. 22. [353G.13] PORTABILITY.
137.11    Subdivision 1. Eligibility. An active firefighter who is a member of the retirement
137.12plan who also renders firefighting service and has good time service credit in the retirement
137.13plan from another fire department, if the good time service credit in the plan from a
137.14combination of periods totals at least five years, is eligible, upon complying with the other
137.15requirements of section 353G.09, to receive a service pension upon filing an application in
137.16the manner prescribed by the executive director, computed as provided in subdivision 2.
137.17    Subd. 2. Combined service pension computation. The service pension payable to
137.18a firefighter who qualifies under subdivision 1 is the per year of good time service credit
137.19service pension amount in effect for each account in which the firefighter has good time
137.20service credit as of the date on which the firefighter terminated active service with the fire
137.21department associated with the applicable account, multiplied by the number of years of
137.22good time service credit that the firefighter has in the applicable account.
137.23    Subd. 3. Payment. A service pension under this section must be paid in a single
137.24payment, with the applicable portion of the total service pension payment amount
137.25deducted from each account.

137.26    Sec. 23. [353G.14] PURCHASE OF ANNUITY CONTRACTS.
137.27The executive director may purchase an annuity contract on behalf of a retiring
137.28firefighter with a total premium payment in an amount equal to the lump-sum service
137.29pension payable under section 353G.09 if the purchase was requested by the retiring
137.30firefighter in a manner prescribed by the executive director. The annuity contract must
137.31be purchased from an insurance carrier that is licensed to do business in this state. If
137.32purchased, the annuity contract is in lieu of any service pension or other benefit from the
137.33retirement plan. The annuity contract may be purchased at any time after the volunteer
138.1firefighter discontinues active service, but the annuity contract must stipulate that no
138.2annuity amounts are payable before the former volunteer firefighter attains the age of 50.

138.3    Sec. 24. [353G.15] INDIVIDUAL RETIREMENT ACCOUNT TRANSFER.
138.4Upon receipt of a determination that the retirement plan is a qualified pension plan
138.5under section 401(a) of the Internal Revenue Code, as amended, the executive director,
138.6upon request, shall transfer the service pension amount under sections 353G.08 and
138.7353G.11 of a former volunteer firefighter who has terminated active firefighting services
138.8covered by the plan and who has attained the age of at least 50 years to the person's
138.9individual retirement account under section 408(a) of the federal Internal Revenue Code,
138.10as amended. The transfer request must be in a manner prescribed by the executive director
138.11and must be filed by the former volunteer firefighter who has sufficient service credit to be
138.12entitled to a service pension or, following the death of a participating active firefighter,
138.13must be filed by the deceased firefighter's surviving spouse.

138.14    Sec. 25. [353G.16] EXEMPTION FROM PROCESS.
138.15The provisions of section 356.401 apply to the retirement plan.

138.16    Sec. 26. Minnesota Statutes 2008, section 356.20, subdivision 2, is amended to read:
138.17    Subd. 2. Covered public pension plans and funds. This section applies to the
138.18following public pension plans:
138.19    (1) the general state employees retirement plan of the Minnesota State Retirement
138.20System;
138.21    (2) the general employees retirement plan of the Public Employees Retirement
138.22Association;
138.23    (3) the Teachers Retirement Association;
138.24    (4) the State Patrol retirement plan;
138.25    (5) the St. Paul Teachers Retirement Fund Association;
138.26    (6) the Duluth Teachers Retirement Fund Association;
138.27    (7) the Minneapolis Employees Retirement Fund;
138.28    (8) the University of Minnesota faculty retirement plan;
138.29    (9) the University of Minnesota faculty supplemental retirement plan;
138.30    (10) the judges retirement fund;
138.31    (11) a police or firefighter's relief association specified or described in section 69.77,
138.32subdivision 1a ;
138.33    (12) a volunteer firefighter relief association governed by section 69.771, subdivision
138.341 ;
139.1    (13) the public employees police and fire plan of the Public Employees Retirement
139.2Association;
139.3    (14) the correctional state employees retirement plan of the Minnesota State
139.4Retirement System; and
139.5    (15) the local government correctional service retirement plan of the Public
139.6Employees Retirement Association; and
139.7(16) the voluntary statewide lump-sum volunteer firefighter retirement plan.

139.8    Sec. 27. Minnesota Statutes 2008, section 356.401, subdivision 3, is amended to read:
139.9    Subd. 3. Covered retirement plans. The provisions of this section apply to the
139.10following retirement plans:
139.11(1) the legislators retirement plan, established by chapter 3A;
139.12(2) the general state employees retirement plan of the Minnesota State Retirement
139.13System, established by chapter 352;
139.14(3) the correctional state employees retirement plan of the Minnesota State
139.15Retirement System, established by chapter 352;
139.16(4) the State Patrol retirement plan, established by chapter 352B;
139.17(5) the elective state officers retirement plan, established by chapter 352C;
139.18(6) the unclassified state employees retirement program, established by chapter
139.19352D;
139.20(7) the general employees retirement plan of the Public Employees Retirement
139.21Association, established by chapter 353;
139.22(8) the public employees police and fire plan of the Public Employees Retirement
139.23Association, established by chapter 353;
139.24(9) the public employees defined contribution plan, established by chapter 353D;
139.25(10) the local government correctional service retirement plan of the Public
139.26Employees Retirement Association, established by chapter 353E;
139.27(11) the voluntary statewide lump-sum volunteer firefighter retirement plan,
139.28established by chapter 353G;
139.29(12) the Teachers Retirement Association, established by chapter 354;
139.30(12) (13) the Duluth Teachers Retirement Fund Association, established by chapter
139.31354A;
139.32(13) the Minneapolis Teachers Retirement Fund Association, established by chapter
139.33354A;
139.34(14) the St. Paul Teachers Retirement Fund Association, established by chapter
139.35354A;
140.1(15) the individual retirement account plan, established by chapter 354B;
140.2(16) the higher education supplemental retirement plan, established by chapter 354C;
140.3(17) the Minneapolis Employees Retirement Fund, established by chapter 422A;
140.4(18) the Minneapolis Police Relief Association, established by chapter 423B;
140.5(19) the Minneapolis Firefighters Relief Association, established by chapter 423C;
140.6and
140.7(20) the judges retirement fund, established by chapter 490.

140.8    Sec. 28. Minnesota Statutes 2008, section 356.96, subdivision 1, is amended to read:
140.9    Subdivision 1. Definitions. (a) Unless the language or context clearly indicates that
140.10a different meaning is intended, for the purpose of this section, the terms in paragraphs
140.11(b) to (e) have the meanings given them.
140.12    (b) "Chief administrative officer" means the executive director of a covered pension
140.13plan or the executive director's designee or representative.
140.14    (c) "Covered pension plan" means a plan enumerated in section 356.20,
140.15subdivision 2, clauses (1) to (4), (10), and (13) to (15) (16), but does not mean the
140.16deferred compensation plan administered under sections 352.965 and 352.97 or to the
140.17postretirement health care savings plan administered under section 352.98.
140.18    (d) "Governing board" means the Board of Trustees of the Public Employees
140.19Retirement Association, the Board of Trustees of the Teachers Retirement Association, or
140.20the Board of Directors of the Minnesota State Retirement System.
140.21    (e) "Person" includes an active, retired, deferred, or nonvested inactive participant in
140.22a covered pension plan or a beneficiary of a participant, or an individual who has applied
140.23to be a participant or who is or may be a survivor of a participant, or a state agency or
140.24other governmental unit that employs active participants in a covered pension plan.

140.25    Sec. 29. Minnesota Statutes 2008, section 424A.10, subdivision 1, is amended to read:
140.26    Subdivision 1. Definitions. For purposes of this section:
140.27    (1) "qualified recipient" means an individual who receives a lump-sum distribution
140.28of pension or retirement benefits from a firefighters' relief association or from the
140.29voluntary statewide lump-sum volunteer firefighter retirement plan for service that the
140.30individual has performed as a volunteer firefighter;
140.31    (2) "survivor of a deceased active or deferred volunteer firefighter" means the legally
140.32married spouse of a deceased volunteer firefighter, or, if none, the surviving minor child or
140.33minor children of a deceased volunteer firefighter;
140.34    (3) "active volunteer firefighter" means a person who regularly renders fire
140.35suppression service for a municipal fire department or an independent nonprofit firefighting
141.1corporation, who has met the statutory and other requirements for relief association
141.2membership, and who has been a fully qualified member of the relief association or from
141.3the voluntary statewide lump-sum volunteer firefighter retirement plan for at least one
141.4month; and
141.5    (4) "deferred volunteer firefighter" means a former active volunteer firefighter who
141.6terminated active firefighting service, has sufficient service credit from the applicable
141.7relief association or from the voluntary statewide lump-sum volunteer firefighter
141.8retirement plan to be entitled to a service pension, but has not applied for or has not
141.9received the service pension.

141.10    Sec. 30. Minnesota Statutes 2008, section 424A.10, subdivision 2, is amended to read:
141.11    Subd. 2. Payment of supplemental benefit. (a) Upon the payment by a
141.12firefighters' relief association or by the voluntary statewide lump-sum volunteer firefighter
141.13retirement plan of a lump-sum distribution to a qualified recipient, the association must
141.14pay a supplemental benefit to the qualified recipient. Notwithstanding any law to the
141.15contrary, the relief association must pay the supplemental benefit out of its special fund
141.16and the voluntary statewide lump-sum volunteer firefighter retirement plan must pay
141.17the supplemental benefit out of the voluntary statewide lump-sum volunteer firefighter
141.18retirement plan. The amount of this benefit equals ten percent of the regular lump-sum
141.19distribution that is paid on the basis of the recipient's service as a volunteer firefighter.
141.20In no case may the amount of the supplemental benefit exceed $1,000. A supplemental
141.21benefit under this paragraph may not be paid to a survivor of a deceased active or deferred
141.22volunteer firefighter in that capacity.
141.23    (b) Upon the payment by a relief association or the retirement plan of a lump-sum
141.24survivor benefit or funeral benefit to a survivor of a deceased active volunteer firefighter
141.25or of a deceased deferred volunteer firefighter, the association may pay a supplemental
141.26survivor benefit to the survivor of the deceased active or deferred volunteer firefighter
141.27from the special fund of the relief association if its articles of incorporation or bylaws so
141.28provide and the retirement plan may pay a supplemental survivor benefit to the survivor of
141.29the deceased active or deferred volunteer firefighter from the retirement fund if chapter
141.30353G so provides. The amount of the supplemental survivor benefit is 20 percent of the
141.31survivor benefit or funeral benefit, but not to exceed $2,000.
141.32    (c) An individual may receive a supplemental benefit under paragraph (a) or under
141.33paragraph (b), but not under both paragraphs with respect to one lump-sum volunteer
141.34firefighter benefit.

141.35    Sec. 31. Minnesota Statutes 2008, section 424A.10, subdivision 3, is amended to read:
142.1    Subd. 3. State reimbursement. (a) Each year, to be eligible for state reimbursement
142.2of the amount of supplemental benefits paid under subdivision 2 during the preceding
142.3calendar year, the relief association mustor the voluntary statewide lump-sum volunteer
142.4firefighter retirement plan shall apply to the commissioner of revenue by February 15.
142.5By March 15, the commissioner shall reimburse the relief association for the amount of
142.6the supplemental benefits paid to qualified recipients and to survivors of deceased active
142.7or deferred volunteer firefighters.
142.8    (b) The commissioner of revenue shall prescribe the form of and supporting
142.9information that must be supplied as part of the application for state reimbursement.
142.10The commissioner of revenue shall reimburse the relief association by paying the
142.11reimbursement amount to the treasurer of the municipality where the association is
142.12located and shall reimburse the retirement plan by paying the reimbursement amount to
142.13the executive director of the Public Employees Retirement Association. Within 30 days
142.14after receipt, the municipal treasurer shall transmit the state reimbursement to the treasurer
142.15of the association if the association has filed a financial report with the municipality. If
142.16the relief association has not filed a financial report with the municipality, the municipal
142.17treasurer shall delay transmission of the reimbursement payment to the association until
142.18the complete financial report is filed. If the association has dissolved or has been removed
142.19as a trustee of state aid, the treasurer shall deposit the money in a special account in the
142.20municipal treasury, and the money may be disbursed only for the purposes and in the
142.21manner provided in section 424A.08. When paid to the association, the reimbursement
142.22payment must be deposited in the special fund of the relief association and when paid to
142.23the retirement plan, the reimbursement payment must be deposited in the retirement
142.24fund of the plan.
142.25    (c) A sum sufficient to make the payments is appropriated from the general fund
142.26to the commissioner of revenue.

142.27    Sec. 32. EFFECTIVE DATE.
142.28Sections 1 to 31 are effective August 1, 2009.


142.31    Section 1. Minnesota Statutes 2008, section 69.031, subdivision 5, is amended to read:
142.32    Subd. 5. Deposit of state aid. (a) The municipal treasurer shall, within 30 days
142.33after receipt, transmit the fire state aid to the treasurer of the duly incorporated firefighters'
142.34relief association if there is one organized and the association has filed a financial report
142.35with the municipality. If the relief association has not filed a financial report with the
143.1municipality, the municipal treasurer shall delay transmission of the fire state aid to the
143.2relief association until the complete financial report is filed. If there is no relief association
143.3organized, or if the association has dissolved, or has been removed as trustees of state aid,
143.4then the treasurer of the municipality shall deposit the money in the municipal treasury
143.5as provided for in section 424A.08 and the money may be disbursed only for the purposes
143.6and in the manner set forth in that section 424A.08 or for the payment of the employer
143.7contribution requirement with respect to firefighters covered by the public employees
143.8police and fire retirement plan under section 353.65, subdivision 3.
143.9(b) The municipal treasurer, upon receipt of the police state aid, shall disburse the
143.10police state aid in the following manner:
143.11(1) For a municipality in which a local police relief association exists and all peace
143.12officers are members of the association, the total state aid must be transmitted to the
143.13treasurer of the relief association within 30 days of the date of receipt, and the treasurer
143.14of the relief association shall immediately deposit the total state aid in the special fund
143.15of the relief association;
143.16(2) For a municipality in which police retirement coverage is provided by the public
143.17employees police and fire fund and all peace officers are members of the fund, including
143.18municipalities covered by section 353.665, the total state aid must be applied toward the
143.19municipality's employer contribution to the public employees police and fire fund under
143.20sections 353.65, subdivision 3, and 353.665, subdivision 8, paragraph (b), if applicable; or
143.21(3) For a municipality other than a city of the first class with a population of more
143.22than 300,000 in which both a police relief association exists and police retirement
143.23coverage is provided in part by the public employees police and fire fund, the municipality
143.24may elect at its option to transmit the total state aid to the treasurer of the relief association
143.25as provided in clause (1), to use the total state aid to apply toward the municipality's
143.26employer contribution to the public employees police and fire fund subject to all the
143.27provisions set forth in clause (2), or to allot the total state aid proportionately to be
143.28transmitted to the police relief association as provided in this subdivision and to apply
143.29toward the municipality's employer contribution to the public employees police and fire
143.30fund subject to the provisions of clause (2) on the basis of the respective number of active
143.31full-time peace officers, as defined in section 69.011, subdivision 1, clause (g).
143.32For a city of the first class with a population of more than 300,000, in addition, the
143.33city may elect to allot the appropriate portion of the total police state aid to apply toward
143.34the employer contribution of the city to the public employees police and fire fund based
143.35on the covered salary of police officers covered by the fund each payroll period and to
143.36transmit the balance to the police relief association; or
144.1(4) For a municipality in which police retirement coverage is provided in part by
144.2the public employees police and fire fund and in part by a local police consolidation
144.3account governed by chapter 353A and established before March 2, 1999, for which the
144.4municipality declined merger under section 353.665, subdivision 1, or established after
144.5March 1, 1999, the total police state aid must be applied towards the municipality's total
144.6employer contribution to the public employees police and fire fund and to the local police
144.7consolidation account under sections 353.65, subdivision 3, and 353A.09, subdivision 5.
144.8(c) The county treasurer, upon receipt of the police state aid for the county, shall
144.9apply the total state aid toward the county's employer contribution to the public employees
144.10police and fire fund under section 353.65, subdivision 3.
144.11(d) The designated Metropolitan Airports Commission official, upon receipt of the
144.12police state aid for the Metropolitan Airports Commission, shall apply the total police
144.13state aid first toward the commission's employer contribution for police officers to the
144.14Minneapolis Employees Retirement Fund under section 422A.101, subdivision 2a, and, if
144.15there is any amount of police state aid remaining, shall apply that remainder toward the
144.16commission's employer contribution for police officers to the public employees police and
144.17fire plan under section 353.65, subdivision 3.
144.18(e) The police state aid apportioned to the Departments of Public Safety and Natural
144.19Resources under section 69.021, subdivision 7a, is appropriated to the commissioner of
144.20finance for transfer to the funds and accounts from which the salaries of peace officers
144.21certified under section 69.011, subdivision 2a, are paid. The commissioner of revenue
144.22shall certify to the commissioners of public safety, natural resources, and finance the
144.23amounts to be transferred from the appropriation for police state aid. The commissioners
144.24of public safety and natural resources shall certify to the commissioner of finance the
144.25amounts to be credited to each of the funds and accounts from which the peace officers
144.26employed by their respective departments are paid. Each commissioner must shall allocate
144.27the police state aid first for employer contributions for employees funded from the general
144.28fund and then for employer contributions for employees funded from other funds. For
144.29peace officers whose salaries are paid from the general fund, the amounts transferred from
144.30the appropriation for police state aid must be canceled to the general fund.
144.31EFFECTIVE DATE.This section is effective July 1, 2009.

144.32    Sec. 2. Minnesota Statutes 2008, section 69.771, subdivision 3, is amended to read:
144.33    Subd. 3. Remedy for noncompliance; determination. (a) A municipality in which
144.34there exists a firefighters' relief association as specified in subdivision 1 which does not
144.35comply with the applicable provisions of sections 69.771 to 69.776 or the provisions of
145.1any applicable special law relating to the funding or financing of the association does
145.2not qualify initially to receive, and is not entitled subsequently to retain, fire state aid
145.3under sections 69.011 to 69.051 until the reason for the disqualification specified by the
145.4state auditor is remedied, whereupon the municipality or relief association, if otherwise
145.5qualified, is entitled to again receive fire state aid for the year occurring immediately
145.6subsequent to the year in which the disqualification is remedied.
145.7(b) The state auditor shall determine if a municipality to which a firefighters' relief
145.8association is directly associated or a firefighters' relief association fails to comply with
145.9the provisions of sections 69.771 to 69.776 or the funding or financing provisions of any
145.10applicable special law based upon the information contained in the annual financial report
145.11of the firefighters' relief association required under section 69.051, the actuarial valuation
145.12of the relief association, if applicable, the relief association officers' financial requirements
145.13of the relief association and minimum municipal obligation determination documentation
145.14under section 69.772, subdivisions 3 and 4; 69.773, subdivisions 4 and 5; or 69.774,
145.15subdivision 2 , if requested to be filed by the state auditor, the applicable municipal or
145.16nonprofit firefighting corporation budget, if requested to be filed by the state auditor, and
145.17any other relevant documents or reports obtained by the state auditor.
145.18(c) The municipality or nonprofit firefighting corporation and the associated relief
145.19association are not eligible to receive or to retain fire state aid if:
145.20(1) the relief association fails to prepare or to file the financial report or financial
145.21statement under section 69.051;
145.22(2) the relief association treasurer is not bonded in the manner and in the amount
145.23required by section 69.051, subdivision 2;
145.24(3) the relief association officers fail to determine or improperly determine the
145.25accrued liability and the annual accruing liability of the relief association under section
145.2669.772, subdivisions 2, 2a, and 3 , paragraph (c), clause (2), if applicable;
145.27(4) if applicable, the relief association officers fail to obtain and file a required
145.28actuarial valuation or the officers file an actuarial valuation that does not contain the
145.29special fund actuarial liability calculated under the entry age normal actuarial cost
145.30method, the special fund current assets, the special fund unfunded actuarial accrued
145.31liability, the special fund normal cost under the entry age normal actuarial cost method,
145.32the amortization requirement for the special fund unfunded actuarial accrued liability
145.33by the applicable target date, a summary of the applicable benefit plan, a summary of
145.34the membership of the relief association, a summary of the actuarial assumptions used
145.35in preparing the valuation, and a signed statement by the actuary attesting to its results
146.1and certifying to the qualifications of the actuary as an approved actuary under section
146.2356.215, subdivision 1 , paragraph (c);
146.3(5) the municipality failed to provide a municipal contribution, or the nonprofit
146.4firefighting corporation failed to provide a corporate contribution, in the amount equal
146.5to the minimum municipal obligation if the relief association is governed under section
146.669.772 , or the amount necessary, when added to the fire state aid actually received
146.7in the plan year in question, to at least equal in total the calculated annual financial
146.8requirements of the special fund of the relief association if the relief association is
146.9governed under section 69.773, and, if the municipal or corporate contribution is deficient,
146.10the municipality failed to include the minimum municipal obligation certified under
146.11section 69.772, subdivision 3, or 69.773, subdivision 5, in its budget and tax levy or the
146.12nonprofit firefighting corporation failed to include the minimum corporate obligation
146.13certified under section 69.774, subdivision 2, in the corporate budget;
146.14(6) the defined benefit relief association did not receive municipal ratification for
146.15the most recent plan amendment when municipal ratification was required under section
146.1669.772, subdivision 6 ; 69.773, subdivision 6; or 424A.02, subdivision 10;
146.17(7) the relief association invested special fund assets in an investment security
146.18that is not authorized under section 69.775;
146.19(8) the relief association had an administrative expense that is not authorized under
146.20section 69.80 or 424A.05, subdivision 3, or the municipality had an expenditure that
146.21is not authorized under section 424A.08;
146.22(9) the relief association officers fail to provide a complete and accurate public
146.23pension plan investment portfolio and performance disclosure under section 356.219;
146.24(10) the relief association fails to obtain the acknowledgment from a broker of the
146.25statement of investment restrictions under section 356A.06, subdivision 8b;
146.26(11) the relief association officers permitted to occur a prohibited transaction under
146.27section 356A.06, subdivision 9, or 424A.001 424A.04, subdivision 7 2a, or failed to
146.28undertake correction of a prohibited transaction that did occur; or
146.29(12) the relief association pays a defined benefit service pension in an amount
146.30that is in excess of the applicable service pension maximum under section 424A.02,
146.31subdivision 3 .
146.32EFFECTIVE DATE.This section is effective July 1, 2009.

146.33    Sec. 3. Minnesota Statutes 2008, section 69.772, subdivision 4, is amended to read:
146.34    Subd. 4. Certification of financial requirements and minimum municipal
146.35obligation; levy. (a) The officers of the relief association shall certify the financial
147.1requirements of the special fund of the relief association and the minimum obligation of
147.2the municipality with respect to the special fund of the relief association as determined
147.3under subdivision 3 to the governing body of the municipality on or before August 1 of
147.4each year. The financial requirements of the relief association and the minimum municipal
147.5obligation must be included in the financial report or financial statement under section
147.669.051 . The schedule forms related to the determination of the financial requirements
147.7must be filed with the state auditor by March 31, annually, if the relief association is
147.8required to file a financial statement under section 69.051, subdivision 1a, or by June 30,
147.9annually, if the relief association is required to file a financial report and audit under
147.10section 69.051, subdivision 1.
147.11(b) The municipality shall provide for at least the minimum obligation of the
147.12municipality with respect to the special fund of the relief association by tax levy or from
147.13any other source of public revenue.
147.14(c) The municipality may levy taxes for the payment of the minimum municipal
147.15obligation without any limitation as to rate or amount and irrespective of any limitations
147.16imposed by other provisions of law upon the rate or amount of taxation until the balance
147.17of the special fund or any fund of the relief association has attained a specified level. In
147.18addition, any taxes levied under this section must not cause the amount or rate of any other
147.19taxes levied in that year or to be levied in a subsequent year by the municipality which are
147.20subject to a limitation as to rate or amount to be reduced.
147.21(d) If the municipality does not include the full amount of the minimum municipal
147.22obligations in its levy for any year, the officers of the relief association shall certify that
147.23amount to the county auditor, who shall spread a levy in the amount of the certified
147.24minimum municipal obligation on the taxable property of the municipality.
147.25(e) If the state auditor determines that a municipal contribution actually made in a
147.26plan year was insufficient under section 69.771, subdivision 3, paragraph (c), clause (5),
147.27the state auditor may request a copy of the certifications under this subdivision from the
147.28relief association or from the city. The relief association or the city, whichever applies,
147.29must provide the certifications within 14 days of the date of the request from the state
147.30auditor.
147.31EFFECTIVE DATE.This section is effective July 1, 2009.

147.32    Sec. 4. Minnesota Statutes 2008, section 69.772, subdivision 6, is amended to read:
147.33    Subd. 6. Municipal ratification for plan amendments. If the special fund of the
147.34relief association does not have a surplus over full funding pursuant to subdivision 3,
147.35clause (2), subclause (e), or if the municipality is required to provide financial support
148.1to the special fund of the relief association pursuant to this section, the adoption of or
148.2any amendment to the articles of incorporation or bylaws of a relief association which
148.3increases or otherwise affects the retirement coverage provided by or the service pensions
148.4or retirement benefits payable from the special fund of any relief association to which this
148.5section applies shall is not be effective until it is ratified by the governing body of the
148.6municipality in which the relief association is located and the officers of a relief association
148.7shall not seek municipal ratification prior to preparing and certifying an estimate of
148.8the expected increase in the accrued liability and annual accruing liability of the relief
148.9association attributable to the amendment. If the special fund of the relief association has
148.10a surplus over full funding pursuant to subdivision 3, clause (2), subclause (e), and if the
148.11municipality is not required to provide financial support to the special fund of the relief
148.12association pursuant to this section, the relief association may adopt or amend its articles
148.13of incorporation or bylaws which increase or otherwise affect the retirement coverage
148.14provided by or the service pensions or retirement benefits payable from the special fund
148.15of the relief association which shall be are effective without municipal ratification so
148.16long as this does not cause the amount of the resulting increase in the accrued liability
148.17of the special fund of the relief association to exceed 90 percent of the amount of the
148.18prior surplus over full funding reported in the prior year and this does not result in the
148.19financial requirements of the special fund of the relief association exceeding the expected
148.20amount of the future fire state aid to be received by the relief association as determined
148.21by the board of trustees following the preparation of an estimate of the expected increase
148.22in the accrued liability and annual accruing liability of the relief association attributable
148.23to the change. If a relief association adopts or amends its articles of incorporation or
148.24bylaws without municipal ratification pursuant to this subdivision, and, subsequent to
148.25the amendment or adoption, the financial requirements of the special fund of the relief
148.26association pursuant to this section are such so as to require financial support from the
148.27municipality, the provision which was implemented without municipal ratification shall
148.28is no longer be effective without municipal ratification and any service pensions or
148.29retirement benefits payable after that date shall may be paid only in accordance with the
148.30articles of incorporation or bylaws as amended or adopted with municipal ratification.
148.31EFFECTIVE DATE.This section is effective July 1, 2009.

148.32    Sec. 5. Minnesota Statutes 2008, section 69.773, subdivision 6, is amended to read:
148.33    Subd. 6. Municipal ratification for plan amendments. If the special fund of the
148.34relief association does not have a surplus over full funding pursuant to subdivision 4, or if
148.35the municipality is required to provide financial support to the special fund of the relief
149.1association pursuant to this section, the adoption of or any amendment to the articles of
149.2incorporation or bylaws of a relief association which increases or otherwise affects the
149.3retirement coverage provided by or the service pensions or retirement benefits payable
149.4from the special fund of any relief association to which this section applies shall is not
149.5be effective until it is ratified by the governing body of the municipality in which the
149.6relief association is located. If the special fund of the relief association has a surplus over
149.7full funding pursuant to subdivision 4, and if the municipality is not required to provide
149.8financial support to the special fund of the relief association pursuant to this section,
149.9the relief association may adopt or amend its articles of incorporation or bylaws which
149.10increase or otherwise affect the retirement coverage provided by or the service pensions or
149.11retirement benefits payable from the special fund of the relief association which shall be
149.12are effective without municipal ratification so long as this does not cause the amount of
149.13the resulting increase in the accrued liability of the special fund of the relief association to
149.14exceed 90 percent of the amount of the prior surplus over full funding reported in the prior
149.15year and this does not result in the financial requirements of the special fund of the relief
149.16association exceeding the expected amount of the future fire state aid to be received by the
149.17relief association as determined by the board of trustees following the preparation of an
149.18updated actuarial valuation including the proposed change or an estimate of the expected
149.19actuarial impact of the proposed change prepared by the actuary of the relief association.
149.20If a relief association adopts or amends its articles of incorporation or bylaws without
149.21municipal ratification pursuant to this subdivision, and, subsequent to the amendment or
149.22adoption, the financial requirements of the special fund of the relief association pursuant to
149.23this section are such so as to require financial support from the municipality, the provision
149.24which was implemented without municipal ratification shall is no longer be effective
149.25without municipal ratification and any service pensions or retirement benefits payable
149.26after that date shall be may paid only in accordance with the articles of incorporation or
149.27bylaws as amended or adopted with municipal ratification.
149.28EFFECTIVE DATE.This section is effective July 1, 2009.

149.29    Sec. 6. Minnesota Statutes 2008, section 356.219, subdivision 3, is amended to read:
149.30    Subd. 3. Content of reports. (a) The report required by subdivision 1 must include
149.31a written statement of the investment policy. Following that initial report, subsequent
149.32reports must include investment policy changes and the effective date of each policy
149.33change rather than a complete statement of investment policy, unless the state auditor
149.34requests submission of a complete current statement. The report must also include the
149.35information required by the following paragraphs, as applicable.
150.1(b) If, after four years of reporting under this paragraph, the total portfolio time
150.2weighted rate of return, net of all investment related costs and fees, provided by the public
150.3pension plan differs by no more than 0.1 percent from the comparable return for the plan
150.4calculated by the Office of the State Auditor, and if a public pension plan has a total
150.5market value of $25,000,000 or more as of the beginning of the calendar year, and if the
150.6public pension plan's annual audit is performed by the state auditor or by the legislative
150.7auditor, the report required by subdivision 1 must include the market value of the total
150.8portfolio and the market value of each asset class included in the pension fund as of the
150.9beginning of the calendar year and as of the end of the calendar year. At the discretion of
150.10the state auditor, the public pension plan may be required to submit the market value of the
150.11total portfolio and the market value of each investment account, investment portfolio, or
150.12asset class included in the pension fund for each month, and the amount and date of each
150.13injection and withdrawal to the total portfolio and to each investment account, investment
150.14portfolio, or asset class. If the market value of a public pension plan's fund drops below
150.15$25,000,000 in a subsequent year, it must continue reporting under this paragraph for any
150.16subsequent year in which the public pension plan is not fully invested as specified in
150.17subdivision 1, paragraph (b), except that if the public pension plan's annual audit is not
150.18performed by the state auditor or legislative auditor, paragraph (c) applies.
150.19(c) If paragraph (b) would apply if the annual audit were provided by the state
150.20auditor or legislative auditor, the report required by subdivision 1 must include the market
150.21value of the total portfolio and the market value of each asset class included in the pension
150.22fund as of the beginning of the calendar year and for each month, and the amount and date
150.23of each injection and withdrawal to the total portfolio and to each investment account,
150.24investment portfolio, or asset class.
150.25(d) For public pension plans to which paragraph (b) or (c) applies, the report required
150.26by subdivision 1 must also include a calculation of the total time-weighted rate of return
150.27available from index-matching investments assuming the asset class performance targets
150.28and target asset mix indicated in the written statement of investment policy. The provided
150.29information must include a description of indices used in the analyses and an explanation
150.30of why those indices are appropriate. This paragraph does not apply to any fully invested
150.31plan, as defined by subdivision 1, paragraph (b). Reporting by the State Board of
150.32Investment under this paragraph is limited to information on the Minnesota public pension
150.33plans required to be invested by the State Board of Investment under section 11A.23.
150.34(e) If a public pension plan has a total market value of less than $25,000,000 as of
150.35the beginning of the calendar year and was never required to file under paragraph (b) or
150.36(c), the report required by subdivision 1 must include the amount and date of each total
151.1portfolio injection and withdrawal. In addition, the report must include the market value
151.2of the total portfolio as of the beginning of the calendar year and for each quarter.
151.3(f) Any public pension plan reporting under paragraph (b) or (c) must include
151.4computed time-weighted rates of return with the report, in addition to all other required
151.5information, as applicable. The chief administrative officer of the public pension plan
151.6submitting the returns must certify, on a form prescribed by the state auditor, that the
151.7returns have been computed by the pension plan's investment performance consultant or
151.8custodial bank. The chief administrative officer of the public pension plan submitting the
151.9returns also must certify that the returns are net of all costs and fees, including investment
151.10management fees, and that the procedures used to compute the returns are consistent
151.11with Bank Administration Institute studies of investment performance measurement
151.12and presentation standards set by the Certified Financial Analyst CFA Institute. If the
151.13certifications required under this paragraph are not provided, the reporting requirements of
151.14paragraph (c) apply.
151.15(g) For public pension plans reporting under paragraph (e), the public pension plan
151.16must retain supporting information specifying the date and amount of each injection and
151.17withdrawal to each investment account and investment portfolio. The public pension plan
151.18must also retain the market value of each investment account and investment portfolio at
151.19the beginning of the calendar year and for each quarter. Information that is required to be
151.20collected and retained for any given year or years under this paragraph must be submitted
151.21to the Office of the State Auditor if the Office of the State Auditor requests in writing that
151.22the information be submitted by a public pension plan or plans, or be submitted by the
151.23State Board of Investment for any plan or plans for which the State Board of Investment is
151.24the investment authority under this section. If the state auditor requests information under
151.25this subdivision, and the public plan fails to comply, the pension plan is subject to penalties
151.26under subdivision 5, unless penalties are waived by the state auditor under that subdivision.
151.27EFFECTIVE DATE.This section is effective July 1, 2009.

151.28    Sec. 7. [420.20] PROHIBITION OF SERVICE BY MINORS AS VOLUNTEER
151.29FIREFIGHTERS.
151.30It is unlawful for any municipality or independent nonprofit firefighting corporation
151.31to employ a minor to serve as a firefighter or to permit a minor to serve in any capacity
151.32performing any firefighting duties with a fire department, except for members of a youth,
151.33civic, or educational organization or program who participate with uninterrupted adult
151.34supervision, as allowed by federal law and by section 181A.04. Such organizations or
152.1programs include, but are not limited to, Boy Scout Explorer programs or firefighting
152.2degree programs.
152.3EFFECTIVE DATE.This section is effective July 1, 2009.

152.4    Sec. 8. Minnesota Statutes 2008, section 424A.001, subdivision 1, is amended to read:
152.5    Subdivision 1. Terms defined. Unless the context clearly indicates otherwise, as
152.6used in this chapter, the terms defined in this section have the meanings given.
152.7EFFECTIVE DATE.This section is effective July 1, 2009.

152.8    Sec. 9. Minnesota Statutes 2008, section 424A.001, subdivision 1a, is amended to read:
152.9    Subd. 1a. Ancillary benefit. "Ancillary benefit" means a benefit payable from the
152.10special fund of the relief association other than a service pension that is permitted by law
152.11and that is provided for in the relief association bylaws.
152.12EFFECTIVE DATE.This section is effective July 1, 2009.

152.13    Sec. 10. Minnesota Statutes 2008, section 424A.001, is amended by adding a
152.14subdivision to read:
152.15    Subd. 1b. Defined benefit relief association. "Defined benefit relief association"
152.16means a volunteer firefighters' relief association that provides a lump-sum service pension,
152.17provides a monthly benefit service pension, or provides a lump-sum service pension as an
152.18alternative to the monthly benefit service pension.
152.19EFFECTIVE DATE.This section is effective July 1, 2009.

152.20    Sec. 11. Minnesota Statutes 2008, section 424A.001, is amended by adding a
152.21subdivision to read:
152.22    Subd. 1c. Defined contribution relief association. "Defined contribution relief
152.23association" means a volunteer firefighters' relief association that provides a service
152.24pension based solely on an individual account balance rather than a specified annual
152.25lump-sum or monthly benefit service pension amount.
152.26EFFECTIVE DATE.This section is effective July 1, 2009.

152.27    Sec. 12. Minnesota Statutes 2008, section 424A.001, subdivision 2, is amended to read:
152.28    Subd. 2. Fire department. "Fire department" includes a municipal fire department
152.29and or an independent nonprofit firefighting corporation.
152.30EFFECTIVE DATE.This section is effective July 1, 2009.

153.1    Sec. 13. Minnesota Statutes 2008, section 424A.001, subdivision 3, is amended to read:
153.2    Subd. 3. Municipality. "Municipality" means a municipality which has
153.3established a fire department with which the relief association is directly associated, or
153.4the municipalities which have entered into a contract with the independent nonprofit
153.5firefighting corporation of which the relief association is a subsidiary.
153.6EFFECTIVE DATE.This section is effective July 1, 2009.

153.7    Sec. 14. Minnesota Statutes 2008, section 424A.001, subdivision 4, is amended to read:
153.8    Subd. 4. Relief association. "Relief association" means (a)
153.9(1) a volunteer firefighters' relief association or a volunteer firefighters' division or
153.10account of a partially salaried and partially volunteer firefighters' relief association that is
153.11organized and incorporated under chapter 317A and any laws of the state, is governed by
153.12this chapter and chapter 69, and is directly associated with a fire department established by
153.13municipal ordinance; or
153.14(b) (2) any separate separately incorporated volunteer firefighters' relief association
153.15that is subsidiary to and providing that provides service pension and retirement benefit
153.16coverage for members of an independent nonprofit firefighting corporation that is
153.17organized under the provisions of chapter 317A, is governed by this chapter, and operating
153.18operates exclusively for firefighting purposes. A relief association is a governmental entity
153.19that receives and manages public money to provide retirement benefits for individuals
153.20providing the governmental services of firefighting and emergency first response.
153.21EFFECTIVE DATE.This section is effective July 1, 2009.

153.22    Sec. 15. Minnesota Statutes 2008, section 424A.001, subdivision 5, is amended to read:
153.23    Subd. 5. Special fund. "Special fund" means the special fund of a volunteer
153.24firefighters' relief association or the account for volunteer firefighters within the special
153.25fund of a partially salaried and partially volunteer firefighters' relief association.
153.26EFFECTIVE DATE.This section is effective July 1, 2009.

153.27    Sec. 16. Minnesota Statutes 2008, section 424A.001, subdivision 6, is amended to read:
153.28    Subd. 6. Surviving spouse. For purposes of this chapter, and the governing bylaws
153.29of any governing a relief association to which this chapter applies, the term "surviving
153.30spouse" means the spouse of a deceased member who was legally married to the member
153.31at the time of the member's death.
153.32EFFECTIVE DATE.This section is effective July 1, 2009.

154.1    Sec. 17. Minnesota Statutes 2008, section 424A.001, subdivision 8, is amended to read:
154.2    Subd. 8. Firefighting service. "Firefighting service," if the applicable municipality
154.3approves for a fire department that is a municipal department, or if the applicable
154.4contracting municipality or municipalities approve for a fire department that is an
154.5independent nonprofit firefighting corporation, includes fire department service rendered
154.6by fire prevention personnel.
154.7EFFECTIVE DATE.This section is effective July 1, 2009.

154.8    Sec. 18. Minnesota Statutes 2008, section 424A.001, subdivision 9, is amended to read:
154.9    Subd. 9. Separate from active service. "Separate from active service" means
154.10to that a firefighter permanently cease ceases to perform fire suppression duties with
154.11a particular volunteer fire department, to permanently cease ceases to perform fire
154.12prevention duties, to permanently cease ceases to supervise fire suppression duties, and to
154.13permanently cease ceases to supervise fire prevention duties.
154.14EFFECTIVE DATE.This section is effective July 1, 2009.

154.15    Sec. 19. Minnesota Statutes 2008, section 424A.001, subdivision 10, is amended to
154.16read:
154.17    Subd. 10. Volunteer firefighter. "Volunteer firefighter" means a person who either:
154.18(1) was a member of the applicable fire department or the independent nonprofit
154.19firefighting corporation and a member of the relief association on July 1, 2006; or
154.20(2) became a member of the applicable fire department or the independent nonprofit
154.21firefighting corporation and is eligible for membership in the applicable relief association
154.22after June 30, 2006, and
154.23(i) is engaged in providing emergency response services or delivering fire education
154.24or prevention services as a member of a municipal fire department, a joint powers entity
154.25fire department, or an independent nonprofit firefighting corporation;
154.26(ii) is trained in or is qualified to provide fire suppression duties or to provide fire
154.27prevention duties under subdivision 8; and
154.28(iii) meets any other minimum firefighter and service standards established by the
154.29fire department or the independent nonprofit firefighting corporation or specified in the
154.30articles of incorporation or bylaws of the relief association.
154.31EFFECTIVE DATE.This section is effective July 1, 2009.

154.32    Sec. 20. [424A.002] AUTHORIZATION OF NEW OR CONTINUING
154.33VOLUNTEER FIREFIGHTERS' RELIEF ASSOCIATIONS.
155.1    Subdivision 1. Authorization. A municipal fire department or an independent
155.2nonprofit firefighting corporation, with approval by the applicable municipality or
155.3municipalities, may establish a new volunteer firefighters' relief association or may retain
155.4an existing volunteer firefighters' relief association.
155.5    Subd. 2. Defined benefit or defined contribution relief association. The articles
155.6of incorporation or the bylaws of the volunteer firefighters' relief association must specify
155.7that the relief association is either a defined benefit relief association subject to sections
155.869.771 to 69.774, 424A.015, and 424A.02 or is a defined contribution relief association
155.9subject to sections 424A.015 and 424A.016.
155.10EFFECTIVE DATE.This section is effective July 1, 2009.

155.11    Sec. 21. Minnesota Statutes 2008, section 424A.01, is amended to read:
155.12424A.01 MEMBERSHIP IN A VOLUNTEER FIREFIGHTERS' RELIEF
155.13ASSOCIATION.
155.14    Subdivision 1. Minors. It is unlawful for any (a) No volunteer firefighters' relief
155.15association associated with a municipality or an independent nonprofit firefighting
155.16corporation to employ may include as a relief association member a minor serving as
155.17a volunteer firefighter or to permit a minor to serve in any capacity performing any
155.18firefighting duties with a volunteer fire department, except for members of a youth,
155.19civic, or educational organization or program who participate with uninterrupted adult
155.20supervision, as allowed by federal law and by section 181A.04. Such organizations or
155.21programs include, but are not limited to, Boy Scout Explorer programs or firefighting
155.22degree programs.
155.23(b) No volunteer firefighters' relief association associated with a municipality or an
155.24independent nonprofit firefighting corporation may include as a relief association member
155.25a minor serving as a volunteer firefighter.
155.26    Subd. 2. Status of substitute volunteer firefighters. No person who is serving as a
155.27substitute volunteer firefighter shall be deemed may be considered to be a firefighter for
155.28purposes of chapter 69 or this chapter nor shall be and no substitute volunteer firefighter is
155.29authorized to be a member of any volunteer firefighters' relief association governed by
155.30chapter 69 or this chapter.
155.31    Subd. 3. Status of nonmember volunteer firefighters. No person who is serving
155.32as a firefighter in a fire department but who is not a member of the applicable firefighters'
155.33relief association shall be is entitled to any service pension or ancillary benefits from
155.34the relief association.
156.1    Subd. 4. Exclusion of persons constituting an unwarranted health risk. The
156.2board of trustees of every relief association may exclude from membership in the relief
156.3association all applicants who, due to some medically determinable physical or mental
156.4impairment or condition, would is determined to constitute a predictable and unwarranted
156.5risk of imposing liability for an ancillary benefit at any age earlier than the minimum
156.6age specified for receipt of a service pension. Notwithstanding any provision of section
156.7363A.25 , it shall be is a good and valid defense to a complaint or action brought under
156.8chapter 363A that the board of trustees of the relief association made a good faith
156.9determination that the applicant suffers from an impairment or condition constituting a
156.10predictable and unwarranted risk for the relief association if the determination was made
156.11following consideration of: (a) (1) the person's medical history; and (b) (2) the report of
156.12the physician completing a physical examination of the applicant completed undertaken at
156.13the expense of the relief association.
156.14    Subd. 5. Fire prevention personnel. (a) If the fire department is a municipal
156.15department and the applicable municipality approves, or if the fire department is an
156.16independent nonprofit firefighting corporation and the contracting municipality or
156.17municipalities approve, the fire department may employ or otherwise utilize the services
156.18of persons as volunteer firefighters to perform fire prevention duties and to supervise
156.19fire prevention activities.
156.20(b) Personnel serving in fire prevention positions are eligible to be members of
156.21the applicable volunteer firefighter relief association and to qualify for service pension
156.22or other benefit coverage of the relief association on the same basis as fire department
156.23personnel who perform fire suppression duties.
156.24(c) Personnel serving in fire prevention positions also are eligible to receive any
156.25other benefits under the applicable law or practice for services on the same basis as
156.26personnel who are employed to perform fire suppression duties.
156.27    Subd. 6. Return to active firefighting after break in service. (a) If a former active
156.28firefighter who has ceased to perform or supervise fire suppression and fire prevention
156.29duties for at least 60 days resumes performing active firefighting with the fire department
156.30associated with the relief association, if the bylaws of the relief association so permit, the
156.31person may again become an active member of the relief association.
156.32(b) A firefighter who returns to active relief association membership under paragraph
156.33(a) may qualify for the receipt of a service pension from the relief association for the
156.34resumption service period if the firefighter meets a minimum period of resumption service
156.35specified in the relief association bylaws.
157.1(c) A firefighter who returns to active lump-sum relief association membership and
157.2who qualifies for a service pension under paragraph (b) must have, upon a subsequent
157.3cessation of duties, any service pension for the resumption service period calculated as
157.4a separate benefit. If a lump-sum service pension had been paid to the firefighter upon
157.5the firefighter's previous cessation of duties, a second lump-sum service pension for the
157.6resumption service period must be calculated to apply the service pension amount in effect
157.7on the date of the firefighter's termination of the resumption service for all years of the
157.8resumption service. No firefighter may be paid a service pension twice for the same period
157.9of service. If a lump-sum service pension had not been paid to the firefighter upon the
157.10firefighter's previous cessation of duties and the firefighter meets the minimum service
157.11requirement of section 424A.02, subdivision 2, a service pension must be calculated to
157.12apply the service pension amount in effect on the date of the firefighter's termination of the
157.13resumption service for all years of service credit.
157.14(d) A firefighter who had not been paid a lump-sum service pension returns to active
157.15relief association membership under paragraph (a), who does not qualify for a service
157.16pension under paragraph (b), but who does meet the minimum service requirement of
157.17section 424A.02, subdivision 2, based on the firefighter's previous years of active service,
157.18must have, upon a subsequent cessation of duties, a service pension calculated for the
157.19previous years of service based on the service pension amount in effect on the date of the
157.20firefighter's termination of the resumption service, or, if the bylaws so provide, based on the
157.21service pension amount in effect on the date of the firefighter's previous cessation of duties.
157.22(e) If a firefighter receiving a monthly benefit service pension returns to active
157.23monthly benefit relief association membership under paragraph (a), any monthly benefit
157.24service pension payable to the firefighter is suspended as of the first day of the month next
157.25following the date on which the firefighter returns to active membership. If the firefighter
157.26was receiving a monthly benefit service pension, and qualifies for a service pension under
157.27paragraph (b), the firefighter is entitled to an additional monthly benefit service pension
157.28upon a subsequent cessation of duties calculated based on the resumption service credit
157.29and the service pension accrual amount in effect on the date of the termination of the
157.30resumption service. The suspended initial service pension resumes as of the first of
157.31the month next following the termination of the resumption service. If the firefighter
157.32was not receiving a monthly benefit service pension and meets the minimum service
157.33requirement of section 424A.02, subdivision 2, a service pension must be calculated to
157.34apply the service pension amount in effect on the date of the firefighter's termination of the
157.35resumption service for all years of service credit.
158.1(f) A firefighter who was not receiving a monthly benefit service pension returns
158.2to active relief association membership under paragraph (a), who does not qualify for a
158.3service pension under paragraph (b), but who does meet the minimum service requirement
158.4of section 424A.02, subdivision 2, based on the firefighter's previous years of active
158.5service, must have, upon a subsequent cessation of duties, a service pension calculated for
158.6the previous years of service based on the service pension amount in effect on the date
158.7of the firefighter's termination of the resumption service, or, if the bylaws so provide,
158.8based on the service pension amount in effect on the date of the firefighter's previous
158.9cessation of duties.
158.10EFFECTIVE DATE.This section is effective July 1, 2009.

158.11    Sec. 22. [424A.015] GENERALLY APPLICABLE VOLUNTEER
158.12FIREFIGHTERS' RELIEF ASSOCIATION PENSION PLAN REGULATION.
158.13    Subdivision 1. Separation from active service; exception. (a) No service pension
158.14is payable to a person while the person remains an active member of the respective fire
158.15department, and a person who is receiving a service pension is not entitled to receive any
158.16other benefits from the special fund of the relief association.
158.17(b) No relief association as defined in section 424A.001, subdivision 4, may pay a
158.18service pension or disability benefit to a former member of the relief association if that
158.19person has not separated from active service with the fire department to which the relief
158.20association is directly associated, unless:
158.21(1) the person is employed subsequent to retirement by the municipality or the
158.22independent nonprofit firefighting corporation, whichever applies, to perform duties within
158.23the municipal fire department or corporation on a full-time basis;
158.24(2) the governing body of the municipality or of the corporation has filed its
158.25determination with the board of trustees of the relief association that the person's
158.26experience with and service to the fire department in that person's full-time capacity
158.27would be difficult to replace; and
158.28(3) the bylaws of the relief association were amended to provide for the payment of
158.29a service pension or disability benefit for such full-time employees.
158.30    Subd. 2. No assignment or garnishment. A service pension or ancillary benefits
158.31paid or payable from the special fund of a relief association to any person receiving or
158.32entitled to receive a service pension or ancillary benefits is not subject to garnishment,
158.33judgment, execution, or other legal process, except as provided in section 518.58, 518.581,
158.34or 518A.53. No person entitled to a service pension or ancillary benefits from the special
158.35fund of a relief association may assign any service pension or ancillary benefit payments,
159.1and the association does not have the authority to recognize any assignment or pay over
159.2any sum which has been assigned.
159.3    Subd. 3. Purchase of annuity contract. A relief association that provides a service
159.4pension in a single payment, if the governing articles of incorporation or bylaws so
159.5provide, may purchase an annuity contract on behalf of a retiring member in an amount
159.6equal to the service pension otherwise payable at the request of the person and in place of
159.7a direct payment to the person. The annuity contract must be purchased from an insurance
159.8carrier licensed to do business in this state.
159.9    Subd. 4. Transfer to individual retirement account. A relief association that is a
159.10qualified pension plan under section 401(a) of the Internal Revenue Code, as amended,
159.11and that provides a single payment service pension, at the written request of the applicable
159.12retiring member or, following the death of the active member, at the written request of the
159.13deceased member's surviving spouse, may directly transfer on an institution-to-institution
159.14basis the eligible member's lump-sum pension or the death or survivor benefit attributable
159.15to the member, whichever applies, to the requesting person's individual retirement account
159.16under section 408(a) of the Internal Revenue Code, as amended.
159.17EFFECTIVE DATE.This section is effective July 1, 2009.

159.18    Sec. 23. [424A.016] DEFINED CONTRIBUTION VOLUNTEER
159.19FIREFIGHTERS' RELIEF ASSOCIATION SPECIFIC REGULATION.
159.20    Subdivision 1. Defined contribution relief association authorization. If the
159.21articles of incorporation or the bylaws governing the volunteer firefighters' relief
159.22association so provide exclusively, the relief association may pay a defined contribution
159.23lump-sum service pension instead of a defined benefit service pension governed by section
159.24424A.02.
159.25    Subd. 2. Defined contribution service pension eligibility. (a) A relief association,
159.26when its articles of incorporation or bylaws so provide, may pay out of the assets of its
159.27special fund a defined contribution service pension to each of its members who:
159.28(1) separates from active service with the fire department;
159.29(2) reaches age 50;
159.30(3) completes at least five years of active service as an active member of the
159.31municipal fire department to which the relief association is associated;
159.32(4) completes at least five years of active membership with the relief association
159.33before separation from active service; and
159.34(5) complies with any additional conditions as to age, service, and membership that
159.35are prescribed by the bylaws of the relief association.
160.1(b) In the case of a member who has completed at least five years of active service as
160.2an active member of the fire department to which the relief association is associated on
160.3the date that the relief association is established and incorporated, the requirement that
160.4the member complete at least five years of active membership with the relief association
160.5before separation from active service may be waived by the board of trustees of the relief
160.6association if the member completes at least five years of inactive membership with the
160.7relief association before the date of the payment of the service pension. During the period
160.8of inactive membership, the member is not entitled to receive any disability benefit
160.9coverage, is not entitled to receive additional individual account allocation of fire state
160.10aid or municipal contribution towards a service pension, and is considered to have the
160.11status of a person entitled to a deferred service pension.
160.12(c) The service pension earned by a volunteer under this chapter and the articles
160.13of incorporation and bylaws of the relief association may be paid whether or not the
160.14municipality or nonprofit firefighting corporation to which the relief association is
160.15associated qualifies for the receipt of fire state aid under chapter 69.
160.16    Subd. 3. Reduced vesting schedule. If the articles of incorporation or bylaws of a
160.17defined contribution relief association so provide, a relief association may pay a reduced
160.18service pension not to exceed the nonforfeitable percentage of the account balance to a
160.19retiring member who has completed fewer than 20 years of service. The reduced service
160.20pension may be paid when the retiring member meets the minimum age and service
160.21requirements of subdivision 2. The nonforfeitable percentage of pension amounts are
160.22as follows:

160.23 160.24		Completed Years of Service		Nonforfeitable Percentage of Pension Amount
160.25		5		40 percent
160.26		6		52 percent
160.27		7		64 percent
160.28		8		76 percent
160.29		9		88 percent
160.30		10	and thereafter	100 percent

160.31    Subd. 4. Individual accounts. (a) An individual account must be established for
160.32each firefighter who is a member of the relief association.
160.33(b) To each individual active member account must be credited an equal share of:
160.34(1) any amounts of fire state aid received by the relief association;
160.35(2) any amounts of municipal contributions to the relief association raised from
160.36levies on real estate or from other available municipal revenue sources exclusive of fire
160.37state aid; and
161.1(3) any amounts equal to the share of the assets of the special fund to the credit of:
161.2(i) any former member who terminated active service with the fire department to
161.3which the relief association is associated before meeting the minimum service requirement
161.4provided for in subdivision 2, paragraph (b), and has not returned to active service with
161.5the fire department for a period no shorter than five years; or
161.6(ii) any retired member who retired before obtaining a full nonforfeitable interest in
161.7the amounts credited to the individual member account under subdivision 2, paragraph
161.8(b), and any applicable provision of the bylaws of the relief association. In addition, any
161.9investment return on the assets of the special fund must be credited in proportion to the
161.10share of the assets of the special fund to the credit of each individual active member
161.11account. Administrative expenses of the relief association payable from the special
161.12fund may be deducted from individual accounts in a manner specified in the bylaws of
161.13the relief association.
161.14(c) Amounts to be credited to individual accounts must be allocated uniformly for all
161.15years of active service and allocations must be made for all years of service, except for
161.16caps on service credit if so provided in the bylaws of the relief association. The allocation
161.17method may utilize monthly proration for fractional years of service, as the bylaws or
161.18articles of incorporation of the relief association so provide. The bylaws or articles of
161.19incorporation may define a "month," but the definition must require a calendar month to
161.20have at least 16 days of active service. If the bylaws or articles of incorporation do not
161.21define a "month," a "month" is a completed calendar month of active service measured
161.22from the member's date of entry to the same date in the subsequent month.
161.23(d) At the time of retirement under subdivision 2 and any applicable provision of the
161.24bylaws of the relief association, a retiring member is entitled to that portion of the assets
161.25of the special fund to the credit of the member in the individual member account which is
161.26nonforfeitable under subdivision 3 and any applicable provision of the bylaws of the relief
161.27association based on the number of years of service to the credit of the retiring member.
161.28(e) Annually, the secretary of the relief association shall certify the individual
161.29account allocations to the state auditor at the same time that the annual financial statement
161.30or financial report and audit of the relief association, whichever applies, is due under
161.31section 69.051.
161.32    Subd. 5. Service pension installment payments. A defined contribution relief
161.33association, if the governing bylaws so provide, may pay, at the option of the retiring
161.34member and in lieu of a single payment of a service pension, the service pension in
161.35installments. The election of installment payments is irrevocable and must be made by the
161.36retiring member in writing and filed with the secretary of the relief association no later
162.1than 30 days before the commencement of payment of the service pension. The amount of
162.2the installment payments must be the fractional portion of the remaining account balance
162.3equal to one divided by the number of remaining annual installment payments.
162.4    Subd. 6. Deferred service pensions. (a) A member of a relief association is entitled
162.5to a deferred service pension if the member:
162.6    (1) has completed the lesser of the minimum period of active service with the fire
162.7department specified in the bylaws or 20 years of active service with the fire department;
162.8    (2) has completed at least five years of active membership in the relief association;
162.9and
162.10    (3) separates from active service and membership before reaching age 50 or the
162.11minimum age for retirement and commencement of a service pension specified in the
162.12bylaws governing the relief association if that age is greater than age 50.
162.13    (b) The deferred service pension is payable when the former member reaches age
162.1450, or the minimum age specified in the bylaws governing the relief association if that age
162.15is greater than age 50, and when the former member makes a valid written application.
162.16    (c) A defined contribution relief association may, if its governing bylaws so provide,
162.17credit interest or additional investment performance on the deferred lump-sum service
162.18pension during the period of deferral. If provided for in the bylaws, the interest must be
162.19paid:
162.20(1) at the investment performance rate actually earned on that portion of the assets
162.21if the deferred benefit amount is invested by the relief association in a separate account
162.22established and maintained by the relief association or if the deferred benefit amount is
162.23invested in a separate investment vehicle held by the relief association; or
162.24(2) the investment return on the assets of the special fund of the defined contribution
162.25volunteer firefighter relief association in proportion to the share of the assets of the special
162.26fund to the credit of each individual deferred member account through the date on which
162.27the investment return is recognized by and credited to the special fund.
162.28    (d) The deferred service pension is governed by and must be calculated under
162.29the general statute, special law, relief association articles of incorporation, and relief
162.30association bylaw provisions applicable on the date on which the member separated from
162.31active service with the fire department and active membership in the relief association.
162.32    Subd. 7. Limitation on ancillary benefits. (a) A defined contribution relief
162.33association may only pay an ancillary benefit which would constitute an authorized
162.34disbursement as specified in section 424A.05. The ancillary benefit for active members
162.35must equal the vested or nonvested amount of the individual account of the member.
163.1(b) For deferred members, the ancillary benefit must equal the vested amount of
163.2the individual account of the member. For the recipient of installment payments of a
163.3service pension, the ancillary benefit must equal the remaining balance in the individual
163.4account of the recipient.
163.5    Subd. 8. Filing of bylaw amendments. Each relief association to which this section
163.6applies must file a revised copy of its governing bylaws with the state auditor upon the
163.7adoption of any amendment to its governing bylaws by the relief association. Failure of
163.8the relief association to file a copy of the bylaws or any bylaw amendments with the state
163.9auditor disqualifies the municipality from the distribution of any future fire state aid until
163.10this filing requirement has been completed.
163.11EFFECTIVE DATE.This section is effective July 1, 2009.

163.12    Sec. 24. Minnesota Statutes 2008, section 424A.02, subdivision 1, is amended to read:
163.13    Subdivision 1. Authorization. (a) A defined benefit relief association, when its
163.14articles of incorporation or bylaws so provide, may pay out of the assets of its special fund
163.15a defined benefit service pension to each of its members who: (1) separates from active
163.16service with the fire department; (2) reaches age 50; (3) completes at least five years of
163.17active service as an active member of the municipal fire department to which the relief
163.18association is associated; (4) completes at least five years of active membership with
163.19the relief association before separation from active service; and (5) complies with any
163.20additional conditions as to age, service, and membership that are prescribed by the bylaws
163.21of the relief association. A service pension computed under this section may be prorated
163.22monthly for fractional years of service, if as the bylaws or articles of incorporation of
163.23the relief association so provide. The bylaws or articles of incorporation may define
163.24a "month," but the definition must require a calendar month to have at least 16 days of
163.25active service. If the bylaws or articles of incorporation do not define a "month," a
163.26"month" is a completed calendar month of active service measured from the member's
163.27date of entry to the same date in the subsequent month. The service pension earned by a
163.28volunteer firefighter under this chapter and the articles of incorporation and bylaws of the
163.29volunteer firefighters' relief association may be paid whether or not the municipality or
163.30nonprofit firefighting corporation to which the relief association is associated qualifies for
163.31the receipt of fire state aid under chapter 69.
163.32(b) In the case of a member who has completed at least five years of active service as
163.33an active member of the fire department to which the relief association is associated on
163.34the date that the relief association is established and incorporated, the requirement that
163.35the member complete at least five years of active membership with the relief association
164.1before separation from active service may be waived by the board of trustees of the relief
164.2association if the member completes at least five years of inactive membership with the
164.3relief association before the date of the payment of the service pension. During the
164.4period of inactive membership, the member is not entitled to receive disability benefit
164.5coverage, is not entitled to receive additional service credit towards computation of a
164.6service pension, and is considered to have the status of a person entitled to a deferred
164.7service pension under subdivision 7.
164.8(c) No municipality or nonprofit firefighting corporation may delegate the power to
164.9take final action in setting a service pension or ancillary benefit amount or level to the
164.10board of trustees of the relief association or to approve in advance a service pension or
164.11ancillary benefit amount or level equal to the maximum amount or level that this chapter
164.12would allow rather than a specific dollar amount or level.
164.13(d) No relief association as defined in section 424A.001, subdivision 4, may pay a
164.14defined benefit service pension or disability benefit to a former member of the relief
164.15association if that person has not separated from active service with the fire department to
164.16which the relief association is directly associated, unless:
164.17(1) the person is employed subsequent to retirement by the municipality or the
164.18independent nonprofit firefighting corporation, whichever applies, to perform duties within
164.19the municipal fire department or corporation on a full-time basis;
164.20(2) the governing body of the municipality or of the corporation has filed its
164.21determination with the board of trustees of the relief association that the person's
164.22experience with and service to the fire department in that person's full-time capacity
164.23would be difficult to replace; and
164.24(3) the bylaws of the relief association were amended to provide for the payment of
164.25a service pension or disability benefit for such full-time employees.
164.26EFFECTIVE DATE.This section is effective July 1, 2009.

164.27    Sec. 25. Minnesota Statutes 2008, section 424A.02, subdivision 2, is amended to read:
164.28    Subd. 2. Nonforfeitable portion of service pension. (a) If the articles of
164.29incorporation or bylaws of a defined benefit relief association so provide, a the relief
164.30association may pay a reduced service pension to a retiring member who has completed
164.31fewer than 20 years of service. The reduced service pension may be paid when the retiring
164.32member meets the minimum age and service requirements of subdivision 1.
164.33(b) The amount of the reduced service pension may not exceed the amount calculated
164.34by multiplying the service pension appropriate for the completed years of service as
165.1specified in the bylaws times multiplied by the applicable nonforfeitable percentage of
165.2pension.
165.3(c) For a defined benefit volunteer firefighter relief association that pays a lump-sum
165.4service pension, a monthly benefit service pension, or a lump-sum service pension or a
165.5monthly benefit service pension as alternative benefit forms, the nonforfeitable percentage
165.6of pension amounts are as follows:

165.7 165.8		Completed Years of Service		Nonforfeitable Percentage of Pension Amount
165.9		5		40 percent
165.10		6		44 percent
165.11		7		48 percent
165.12		8		52 percent
165.13		9		56 percent
165.14		10		60 percent
165.15		11		64 percent
165.16		12		68 percent
165.17		13		72 percent
165.18		14		76 percent
165.19		15		80 percent
165.20		16		84 percent
165.21		17		88 percent
165.22		18		92 percent
165.23		19		96 percent
165.24		20	and thereafter	100 percent

165.25(d) For a volunteer firefighter relief association that pays a defined contribution
165.26service pension, the nonforfeitable percentage of pension amounts are as follows:

165.27 165.28		Completed Years of Service		Nonforfeitable Percentage of Pension Amount
165.29		5		40 percent
165.30		6		52 percent
165.31		7		64 percent
165.32		8		76 percent
165.33		9		88 percent
165.34		10	and thereafter	100 percent

165.35EFFECTIVE DATE.This section is effective July 1, 2009.

165.36    Sec. 26. Minnesota Statutes 2008, section 424A.02, subdivision 3, is amended to read:
165.37    Subd. 3. Flexible service pension maximums. (a) Annually on or before August 1
165.38as part of the certification of the financial requirements and minimum municipal obligation
165.39determined under section 69.772, subdivision 4, or 69.773, subdivision 5, as applicable,
166.1the secretary or some other official of the relief association designated in the bylaws of
166.2each defined benefit relief association shall calculate and certify to the governing body
166.3of the applicable qualified municipality the average amount of available financing per
166.4active covered firefighter for the most recent three-year period. The amount of available
166.5financing shall include includes any amounts of fire state aid received or receivable by the
166.6relief association, any amounts of municipal contributions to the relief association raised
166.7from levies on real estate or from other available revenue sources exclusive of fire state
166.8aid, and one-tenth of the amount of assets in excess of the accrued liabilities of the relief
166.9association calculated under section 69.772, subdivision 2; 69.773, subdivisions 2 and 4;
166.10or 69.774, subdivision 2, if any.
166.11    (b) The maximum service pension which the defined benefit relief association has
166.12authority to provide for in its bylaws for payment to a member retiring after the calculation
166.13date when the minimum age and service requirements specified in subdivision 1 are met
166.14must be determined using the table in paragraph (c) or (d), whichever applies.
166.15    (c) For a defined benefit relief association where the governing bylaws provide for
166.16a monthly service pension to a retiring member, the maximum monthly service pension
166.17amount per month for each year of service credited that may be provided for in the bylaws
166.18is the greater of the service pension amount provided for in the bylaws on the date of the
166.19calculation of the average amount of the available financing per active covered firefighter
166.20or the maximum service pension figure corresponding to the average amount of available
166.21financing per active covered firefighter:

166.22 166.23 166.24	Minimum Average Amount of Available Financing per Firefighter		Maximum Service Pension Amount Payable per Month for Each Year of Service
166.25	$ ...		$ .25
166.26	41		.50
166.27	81		1.00
166.28	122		1.50
166.29	162		2.00
166.30	203		2.50
166.31	243		3.00
166.32	284		3.50
166.33	324		4.00
166.34	365		4.50
166.35	405		5.00
166.36	486		6.00
166.37	567		7.00
166.38	648		8.00
166.39	729		9.00
166.40	810		10.00
167.1	891		11.00
167.2	972		12.00
167.3	1053		13.00
167.4	1134		14.00
167.5	1215		15.00
167.6	1296		16.00
167.7	1377		17.00
167.8	1458		18.00
167.9	1539		19.00
167.10	1620		20.00
167.11	1701		21.00
167.12	1782		22.00
167.13	1823		22.50
167.14	1863		23.00
167.15	1944		24.00
167.16	2025		25.00
167.17	2106		26.00
167.18	2187		27.00
167.19	2268		28.00
167.20	2349		29.00
167.21	2430		30.00
167.22	2511		31.00
167.23	2592		32.00
167.24	2673		33.00
167.25	2754		34.00
167.26	2834		35.00
167.27	2916		36.00
167.28	2997		37.00
167.29	3078		38.00
167.30	3159		39.00
167.31	3240		40.00
167.32	3321		41.00
167.33	3402		42.00
167.34	3483		43.00
167.35	3564		44.00
167.36	3645		45.00
167.37	3726		46.00
167.38	3807		47.00
167.39	3888		48.00
167.40	3969		49.00
167.41	4050		50.00
167.42	4131		51.00
167.43	4212		52.00
168.1	4293		53.00
168.2	4374		54.00
168.3	4455		55.00
168.4	4536		56.00
168.5	Effective beginning December 31, 2008
168.6	4617		57.00
168.7	4698		58.00
168.8	4779		59.00
168.9	4860		60.00
168.10	4941		61.00
168.11	5022		62.00
168.12	5103		63.00
168.13	5184		64.00
168.14	5265		65.00
168.15	Effective beginning December 31, 2009
168.16	5346		66.00
168.17	5427		67.00
168.18	5508		68.00
168.19	5589		69.00
168.20	5670		70.00
168.21	5751		71.00
168.22	5832		72.00
168.23	5913		73.00
168.24	5994		74.00
168.25	Effective beginning December 31, 2010
168.26	6075		75.00
168.27	6156		76.00
168.28	6237		77.00
168.29	6318		78.00
168.30	6399		79.00
168.31	6480		80.00
168.32	6561		81.00
168.33	6642		82.00
168.34	6723		83.00
168.35	Effective beginning December 31, 2011
168.36	6804		84.00
168.37	6885		85.00
168.38	6966		86.00
168.39	7047		87.00
168.40	7128		88.00
168.41	7209		89.00
168.42	7290		90.00
168.43	7371		91.00
169.1	7452		92.00
169.2	Effective beginning December 31, 2012
169.3	7533		93.00
169.4	7614		94.00
169.5	7695		95.00
169.6	7776		96.00
169.7	7857		97.00
169.8	7938		98.00
169.9	8019		99.00
169.10	8100		100.00
169.11	any amount in excess of
169.12	8100		100.00

169.13    (d) For a defined benefit relief association in which the governing bylaws provide
169.14for a lump-sum service pension to a retiring member, the maximum lump-sum service
169.15pension amount for each year of service credited that may be provided for in the bylaws is
169.16the greater of the service pension amount provided for in the bylaws on the date of the
169.17calculation of the average amount of the available financing per active covered firefighter
169.18or the maximum service pension figure corresponding to the average amount of available
169.19financing per active covered firefighter for the applicable specified period:

169.20 169.21 169.22	Minimum Average Amount of Available Financing per Firefighter		Maximum Lump-Sum Service Pension Amount Payable for Each Year of Service
169.23	$ ...		$ 10
169.24	11		20
169.25	16		30
169.26	23		40
169.27	27		50
169.28	32		60
169.29	43		80
169.30	54		100
169.31	65		120
169.32	77		140
169.33	86		160
169.34	97		180
169.35	108		200
169.36	131		240
169.37	151		280
169.38	173		320
169.39	194		360
169.40	216		400
169.41	239		440
169.42	259		480
170.1	281		520
170.2	302		560
170.3	324		600
170.4	347		640
170.5	367		680
170.6	389		720
170.7	410		760
170.8	432		800
170.9	486		900
170.10	540		1000
170.11	594		1100
170.12	648		1200
170.13	702		1300
170.14	756		1400
170.15	810		1500
170.16	864		1600
170.17	918		1700
170.18	972		1800
170.19	1026		1900
170.20	1080		2000
170.21	1134		2100
170.22	1188		2200
170.23	1242		2300
170.24	1296		2400
170.25	1350		2500
170.26	1404		2600
170.27	1458		2700
170.28	1512		2800
170.29	1566		2900
170.30	1620		3000
170.31	1672		3100
170.32	1726		3200
170.33	1753		3250
170.34	1780		3300
170.35	1820		3375
170.36	1834		3400
170.37	1888		3500
170.38	1942		3600
170.39	1996		3700
170.40	2023		3750
170.41	2050		3800
170.42	2104		3900
170.43	2158		4000
171.1	2212		4100
171.2	2265		4200
171.3	2319		4300
171.4	2373		4400
171.5	2427		4500
171.6	2481		4600
171.7	2535		4700
171.8	2589		4800
171.9	2643		4900
171.10	2697		5000
171.11	2751		5100
171.12	2805		5200
171.13	2859		5300
171.14	2913		5400
171.15	2967		5500
171.16	3021		5600
171.17	3075		5700
171.18	3129		5800
171.19	3183		5900
171.20	3237		6000
171.21	3291		6100
171.22	3345		6200
171.23	3399		6300
171.24	3453		6400
171.25	3507		6500
171.26	3561		6600
171.27	3615		6700
171.28	3669		6800
171.29	3723		6900
171.30	3777		7000
171.31	3831		7100
171.32	3885		7200
171.33	3939		7300
171.34	3993		7400
171.35	4047		7500
171.36	Effective beginning December 31, 2008
171.37	4101		7600
171.38	4155		7700
171.39	4209		7800
171.40	4263		7900
171.41	4317		8000
171.42	4371		8100
171.43	4425		8200
172.1	4479		8300
172.2	Effective beginning December 31, 2009
172.3	4533		8400
172.4	4587		8500
172.5	4641		8600
172.6	4695		8700
172.7	4749		8800
172.8	4803		8900
172.9	4857		9000
172.10	4911		9100
172.11	Effective beginning December 31, 2010
172.12	4965		9200
172.13	5019		9300
172.14	5073		9400
172.15	5127		9500
172.16	5181		9600
172.17	5235		9700
172.18	5289		9800
172.19	5343		9900
172.20	5397		10,000
172.21	any amount in excess of
172.22	5397		10,000

172.23    (e) For a defined benefit relief association in which the governing bylaws provide
172.24for a monthly benefit service pension as an alternative form of service pension payment
172.25to a lump-sum service pension, the maximum service pension amount for each pension
172.26payment type must be determined using the applicable table contained in this subdivision.
172.27    (f) If a defined benefit relief association establishes a service pension in compliance
172.28with the applicable maximum contained in paragraph (c) or (d) and the minimum average
172.29amount of available financing per active covered firefighter is subsequently reduced
172.30because of a reduction in fire state aid or because of an increase in the number of active
172.31firefighters, the relief association may continue to provide the prior service pension
172.32amount specified in its bylaws, but may not increase the service pension amount until
172.33the minimum average amount of available financing per firefighter under the table in
172.34paragraph (c) or (d), whichever applies, permits.
172.35    (g) No defined benefit relief association is authorized to provide a service pension in
172.36an amount greater than the largest applicable flexible service pension maximum amount
172.37even if the amount of available financing per firefighter is greater than the financing
172.38amount associated with the largest applicable flexible service pension maximum.
173.1(h) The method of calculating service pensions must be applied uniformly for all
173.2years of active service. Credit must be given for all years of active service except for caps
173.3on service credit if so provided in the bylaws of the relief association.
173.4EFFECTIVE DATE.This section is effective July 1, 2009.

173.5    Sec. 27. Minnesota Statutes 2008, section 424A.02, subdivision 3a, is amended to read:
173.6    Subd. 3a. Penalty for paying pension greater than applicable maximum. (a)
173.7If a defined benefit relief association pays a service pension greater than the maximum
173.8service pension associated with the applicable average amount of available financing per
173.9active covered firefighter under the table in subdivision 3, paragraph (c) or (d), whichever
173.10applies, the maximum service pension under subdivision 3, paragraph (f), or the applicable
173.11maximum service pension amount specified in subdivision 3, paragraph (g), whichever is
173.12less, the state auditor shall:
173.13(1) disqualify the municipality or the nonprofit firefighting corporation associated
173.14with the relief association from receiving fire state aid by making the appropriate
173.15notification to the municipality and the commissioner of revenue, with the disqualification
173.16applicable for the next apportionment and payment of fire state aid; and
173.17(2) order the treasurer of the applicable relief association to recover the amount of
173.18the overpaid service pension or pensions from any retired firefighter who received an
173.19overpayment.
173.20(b) Fire state aid amounts from disqualified municipalities for the period of
173.21disqualifications under paragraph (a), clause (1), must be credited to the amount of
173.22fire insurance premium tax proceeds available for the next subsequent fire state aid
173.23apportionment.
173.24(c) The amount of any overpaid service pension recovered under paragraph (a),
173.25clause (2), must be credited to the amount of fire insurance premium tax proceeds
173.26available for the next subsequent fire state aid apportionment.
173.27(d) The determination of the state auditor that a relief association has paid a service
173.28pension greater than the applicable maximum must be made on the basis of the information
173.29filed by the relief association and the municipality with the state auditor under sections
173.3069.011, subdivision 2 , and 69.051, subdivision 1 or 1a, whichever applies, and any other
173.31relevant information that comes to the attention of the state auditor. The determination
173.32of the state auditor is final. An aggrieved municipality, relief association, or person may
173.33appeal the determination under section 480A.06.
173.34EFFECTIVE DATE.This section is effective July 1, 2009.

174.1    Sec. 28. Minnesota Statutes 2008, section 424A.02, subdivision 7, is amended to read:
174.2    Subd. 7. Deferred service pensions. (a) A member of a defined benefit relief
174.3association is entitled to a deferred service pension if the member:
174.4    (1) has completed the lesser of either the minimum period of active service with
174.5the fire department specified in the bylaws or 20 years of active service with the fire
174.6department;
174.7    (2) has completed at least five years of active membership in the relief association;
174.8and
174.9    (3) separates from active service and membership before reaching age 50 or the
174.10minimum age for retirement and commencement of a service pension specified in the
174.11bylaws governing the relief association if that age is greater than age 50.
174.12    (b) The deferred service pension is payable when the former member reaches age
174.1350, or the minimum age specified in the bylaws governing the relief association if that age
174.14is greater than age 50, and when the former member makes a valid written application.
174.15    (c) A defined benefit relief association that provides a lump-sum service pension
174.16governed by subdivision 3 may, when its governing bylaws so provide, pay interest on the
174.17deferred lump-sum service pension during the period of deferral. If provided for in the
174.18bylaws, interest must be paid in one of the following manners:
174.19    (1) at the investment performance rate actually earned on that portion of the assets
174.20if the deferred benefit amount is invested by the relief association in a separate account
174.21established and maintained by the relief association or if the deferred benefit amount is
174.22invested in a separate investment vehicle held by the relief association; or
174.23    (2) at an interest rate of up to five percent, compounded annually, as set by the board
174.24of directors and approved as provided in subdivision 10.
174.25    (d) Interest under paragraph (c), clause (2), is payable following the date on which
174.26the municipality has approved the deferred service pension interest rate established by
174.27the board of trustees.
174.28    (e) A relief association that provides a defined contribution service pension may,
174.29if its governing bylaws so provide, credit interest or additional investment performance
174.30on the deferred lump-sum service pension during the period of deferral. If provided for
174.31in the bylaws, the interest must be paid in one of the manners specified in paragraph
174.32(c) or alternatively the relief association may credit any investment return on the assets
174.33of the special fund of the defined contribution volunteer firefighter relief association in
174.34proportion to the share of the assets of the special fund to the credit of each individual
174.35deferred member account through the date on which the investment return is recognized
174.36by and credited to the special fund.
175.1    (f) (e) For a deferred service pension that is transferred to a separate account
175.2established and maintained by the relief association or separate investment vehicle held
175.3by the relief association, the deferred member bears the full investment risk subsequent
175.4to transfer and in calculating the accrued liability of the volunteer firefighters relief
175.5association that pays a lump-sum service pension, the accrued liability for deferred service
175.6pensions is equal to the separate relief association account balance or the fair market value
175.7of the separate investment vehicle held by the relief association.
175.8    (g) (f) The deferred service pension is governed by and must be calculated under
175.9the general statute, special law, relief association articles of incorporation, and relief
175.10association bylaw provisions applicable on the date on which the member separated from
175.11active service with the fire department and active membership in the relief association.
175.12EFFECTIVE DATE.This section is effective July 1, 2009.

175.13    Sec. 29. Minnesota Statutes 2008, section 424A.02, subdivision 8, is amended to read:
175.14    Subd. 8. Lump-sum service pensions; installment payments. (a) Any A defined
175.15benefit relief association, if the governing bylaws so provide, may pay, at the option of the
175.16retiring member intended recipient and in lieu of a single payment of a lump-sum service
175.17pension or survivor benefit, a lump-sum service pension or survivor benefit in installments.
175.18(b) The election of installment payments shall be is irrevocable and shall must be
175.19made by the retiring member intended recipient in writing and filed with the secretary of
175.20the relief association no later than 30 days prior to before the commencement of payment
175.21of the service pension or survivor benefit. The amount of the installment payments shall
175.22must be determined so that the present value of the aggregate installment payments
175.23computed at an interest rate of five percent, compounded annually, is equal to the amount
175.24of the single lump-sum payment which would have been made had the installment
175.25payments option not been elected. The payment of each installment shall include interest
175.26at the rate of five percent, compounded annually on the reserve supporting the remaining
175.27installment payments as of the date on which the previous installment payment was paid
175.28and computed from the date on which the previous installment payment was paid to the
175.29date of payment for the current installment payment in any reasonable manner provided
175.30for in the governing bylaws, but the total amount of installment payments may not exceed
175.31the single payment service pension amount plus interest at an annual rate of five percent
175.32on the amount of delayed payments for the period during which payment was delayed.
175.33(c) To the extent that the commissioner of commerce deems it to be necessary or
175.34practical, the commissioner may specify and issue procedures, forms or mathematical
175.35tables for use in performing the calculations required pursuant to this subdivision.
176.1EFFECTIVE DATE.This section is effective July 1, 2009.

176.2    Sec. 30. Minnesota Statutes 2008, section 424A.02, subdivision 9, is amended to read:
176.3    Subd. 9. Limitation on ancillary benefits. Any A defined benefit relief association,
176.4including any volunteer firefighters relief association governed by section 69.77 or any
176.5volunteer firefighters division of a relief association governed by chapter 424, may only
176.6pay ancillary benefits which would constitute an authorized disbursement as specified in
176.7section 424A.05 subject to the following requirements or limitations:
176.8    (1) with respect to a defined benefit relief association in which governing bylaws
176.9provide for a lump-sum service pension to a retiring member, no ancillary benefit may
176.10be paid to any former member or paid to any person on behalf of any former member
176.11after the former member (i) terminates active service with the fire department and active
176.12membership in the relief association; and (ii) commences receipt of a service pension as
176.13authorized under this section; and
176.14    (2) with respect to any defined benefit relief association, no ancillary benefit paid or
176.15payable to any member, to any former member, or to any person on behalf of any member
176.16or former member, may exceed in amount the total earned service pension of the member
176.17or former member. The total earned service pension must be calculated by multiplying
176.18the service pension amount specified in the bylaws of the relief association at the time of
176.19death or disability, whichever applies, by the years of service credited to the member or
176.20former member. The years of service must be determined as of (i) the date the member or
176.21former member became entitled to the ancillary benefit; or (ii) the date the member or
176.22former member died entitling a survivor or the estate of the member or former member to
176.23an ancillary benefit. The ancillary benefit must be calculated without regard to whether the
176.24member had attained the minimum amount of service and membership credit specified in
176.25the governing bylaws. For active members, the amount of a permanent disability benefit
176.26or a survivor benefit must be equal to the member's total earned service pension except
176.27that the bylaws of any a defined benefit relief association may provide for the payment of
176.28a survivor benefit in an amount not to exceed five times the yearly service pension amount
176.29specified in the bylaws on behalf of any member who dies before having performed five
176.30years of active service in the fire department with which the relief association is affiliated.
176.31EFFECTIVE DATE.This section is effective July 1, 2009.

176.32    Sec. 31. Minnesota Statutes 2008, section 424A.02, subdivision 9a, is amended to read:
176.33    Subd. 9a. Postretirement increases. Notwithstanding any provision of general or
176.34special law to the contrary, a defined benefit relief association paying a monthly service
177.1pension may provide a postretirement increase to retired members and ancillary benefit
177.2recipients of the relief association if (1) the relief association adopts an appropriate bylaw
177.3amendment; and (2) the bylaw amendment is approved by the municipality pursuant to
177.4subdivision 10 and section 69.773, subdivision 6. The postretirement increase shall be
177.5is applicable only to retired members and ancillary benefit recipients receiving a service
177.6pension or ancillary benefit as of the effective date of the bylaw amendment. The authority
177.7to provide a postretirement increase to retired members and ancillary benefit recipients
177.8of a relief association contained in this subdivision shall supersede supersedes any prior
177.9special law authorization relating to the provision of postretirement increases.
177.10EFFECTIVE DATE.This section is effective July 1, 2009.

177.11    Sec. 32. Minnesota Statutes 2008, section 424A.02, subdivision 9b, is amended to read:
177.12    Subd. 9b. Repayment of service pension in certain instances. If a retired
177.13volunteer firefighter does not permanently separate from active firefighting service as
177.14required by subdivision 1 and section 424A.001, subdivision 9, by resuming active service
177.15as a firefighter in the same volunteer fire department or as a person in charge of firefighters
177.16in the same volunteer fire department, no additional service pension amount is payable
177.17to the person, no additional service is creditable to the person, and the person shall must
177.18repay to the defined benefit relief association any previously received service pension.
177.19EFFECTIVE DATE.This section is effective July 1, 2009.

177.20    Sec. 33. Minnesota Statutes 2008, section 424A.02, subdivision 10, is amended to read:
177.21    Subd. 10. Local approval of bylaw amendments; filing requirements. (a) Each
177.22defined benefit relief association to which this section applies shall must file a revised
177.23copy of its governing bylaws with the state auditor upon the adoption of any amendment
177.24to its governing bylaws by the relief association or upon the approval of any amendment
177.25to its governing bylaws granted by the governing body of each municipality served by the
177.26fire department to which the relief association is directly associated. Failure of the relief
177.27association to file a copy of the bylaws or any bylaw amendments with the state auditor
177.28shall disqualify disqualifies the municipality from the distribution of any future fire state
177.29aid until this filing requirement has been completed.
177.30(b) If the special fund of the relief association does not have a surplus over full
177.31funding pursuant to under section 69.772, subdivision 3, clause (2), subclause (e), or
177.3269.773, subdivision 4 , and if the municipality is required to provide financial support to
177.33the special fund of the relief association pursuant to under section 69.772 or 69.773, no
177.34bylaw amendment which would affect the amount of, the manner of payment of, or the
178.1conditions for qualification for service pensions or ancillary benefits or disbursements
178.2other than administrative expenses authorized pursuant to under section 69.80 payable
178.3from the special fund of the relief association shall be is effective until it has been ratified
178.4by the governing body or bodies of the appropriate municipalities. If the municipality is
178.5not required to provide financial support to the special fund pursuant to under this section,
178.6the relief association may adopt or amend without municipal ratification its articles
178.7of incorporation or bylaws which increase or otherwise affect the service pensions or
178.8ancillary benefits payable from the special fund so long as the changes do not cause the
178.9amount of the resulting increase in the accrued liability of the special fund to exceed 90
178.10percent of the amount of the prior surplus over full funding reported in the prior year and
178.11the changes do not result in the financial requirements of the special fund exceeding the
178.12expected amount of the future subsequent calendar year's fire state aid to be received
178.13by the relief association.
178.14(c) If the relief association pays only a lump-sum pension, the financial requirements
178.15are to be determined by the board of trustees following the preparation of an estimate
178.16of the expected increase in the accrued liability and annual accruing liability of the
178.17relief association attributable to the change. If the relief association pays a monthly
178.18benefit service pension, the financial requirements are to be determined by the board of
178.19trustees following either an updated actuarial valuation including the proposed change
178.20or an estimate of the expected actuarial impact of the proposed change prepared by the
178.21actuary of the relief association. If a relief association adopts or amends its articles of
178.22incorporation or bylaws without municipal ratification pursuant to under this subdivision,
178.23and, subsequent to the amendment or adoption, the financial requirements of the special
178.24fund pursuant to under this section are such so as to require financial support from the
178.25municipality, the provision which was implemented without municipal ratification shall is
178.26no longer be effective without municipal ratification, and any service pensions or ancillary
178.27benefits payable after that date shall must be paid only in accordance with the articles of
178.28incorporation or bylaws as amended or adopted with municipal ratification.
178.29EFFECTIVE DATE.This section is effective July 1, 2009.

178.30    Sec. 34. Minnesota Statutes 2008, section 424A.02, subdivision 12, is amended to read:
178.31    Subd. 12. Transfer of service credit to new district. Notwithstanding the
178.32requirements of subdivision 1 or any other law, a member of a fire department which is
178.33disbanded upon formation of a fire district to serve substantially the same geographic
178.34area, who serves as an active firefighter with the new district fire department, and is a
178.35member of the district firefighters' defined benefit relief association shall be is entitled
179.1to a nonforfeitable service pension from the new relief association upon completion of
179.2a combined total of 20 years active service in the disbanded and the new departments.
179.3The amount of the service pension shall be is based upon years of service in the new
179.4department only, and shall must be in an amount equal to the accrued liability for the
179.5appropriate years of service calculated in accordance with section 69.772, subdivision 2.

179.6    Sec. 35. Minnesota Statutes 2008, section 424A.02, subdivision 13, is amended to read:
179.7    Subd. 13. Combined service pensions. (a) If the articles of incorporation or bylaws
179.8of the defined benefit relief associations so provide, a volunteer firefighter with credit for
179.9service as an active firefighter in more than one defined benefit volunteer firefighters relief
179.10association is entitled, when the applicable requirements of paragraph (b) are met and
179.11when otherwise qualified, to a prorated service credit from each relief association.
179.12(b) A volunteer firefighter receiving a prorated service pension under this subdivision
179.13must have a total amount of service credit of ten years or more, if the bylaws of every
179.14affected relief association does do not require specify only a five-year service vesting
179.15requirement, or five years or more, if the bylaws of every affected relief association
179.16requires require only a five-year service vesting requirement, as a member of two or more
179.17relief associations otherwise qualified. The member must have one year or more of service
179.18credit in each relief association. The prorated service pension must be based on the service
179.19pension amount in effect for the relief association on the date on which active volunteer
179.20firefighting services covered by that relief association terminate. To receive a service
179.21pension under this subdivision, the firefighter must become a member of the second or
179.22succeeding association and must give notice of membership to the prior association within
179.23two years of the date of termination of active service with the prior association. The notice
179.24must be attested to by the second or subsequent relief association secretary.
179.25EFFECTIVE DATE.This section is effective July 1, 2009.

179.26    Sec. 36. Minnesota Statutes 2008, section 424A.021, is amended to read:
179.27424A.021 CREDIT FOR BREAK IN SERVICE TO PROVIDE UNIFORMED
179.28SERVICE.
179.29    Subdivision 1. Authorization. Subject to restrictions stated in this section, a
179.30volunteer firefighter who is absent from firefighting service due to service in the uniformed
179.31services, as defined in United States Code, title 38, section 4303(13), may obtain service
179.32credit if the relief association is a defined benefit plan or an allocation of any fire state
179.33aid, any municipal contributions, and any investment return received by the relief
179.34association as though the person was an active member if the relief association is a defined
180.1contribution plan for the period of the uniformed service, not to exceed five years, unless a
180.2longer period is required under United States Code, title 38, section 4312.
180.3    Subd. 2. Limitations. (a) To be eligible for service credit or an investment return
180.4allocation as though an active member under this section, the volunteer firefighter must
180.5return to firefighting service with coverage by the same relief association or by the
180.6successor to that relief association upon discharge from service in the uniformed service
180.7within the time frame required in United States Code, title 38, section 4312(e).
180.8(b) Service credit or an investment return allocation as though an active member is
180.9not authorized if the firefighter separates from uniformed service with a dishonorable or
180.10bad conduct discharge or under other than honorable conditions.
180.11(c) Service credit or an investment return allocation as though an active member
180.12is not authorized if the firefighter fails to provide notice to the fire department that the
180.13individual is leaving to provide service in the uniformed service, unless it is not feasible to
180.14provide that notice due to the emergency nature of the situation.
180.15EFFECTIVE DATE.This section is effective July 1, 2009.

180.16    Sec. 37. Minnesota Statutes 2008, section 424A.03, is amended to read:
180.17424A.03 UNIFORMITY OF VOLUNTEER FIREFIGHTER SERVICE
180.18PENSION AND RETIREMENT BENEFITS.
180.19    Subdivision 1. Limitation on nonuniformity of pensions. Every partially salaried
180.20and partially volunteer firefighters' relief association shall must provide service pensions
180.21to volunteer firefighter members based on the years of service of the members not on
180.22the compensation paid to the members for firefighting services. Each relief association
180.23shall must provide service pensions to salaried members as set forth in chapter 424 and
180.24applicable special laws.
180.25    Subd. 2. Penalties for violations. Any A municipality which has a fire department
180.26to which associated with a relief association which violates the provisions of subdivision
180.271 is directly associated or which contracts with an independent nonprofit firefighting
180.28corporation of which associated with a relief association which violates the provisions
180.29of subdivision 1 is a subsidiary shall may not be included in the apportionment of fire
180.30state aid by the commissioner of commerce to the applicable county auditor pursuant to
180.31under section 69.021, subdivision 6, and shall may not be included in the apportionment
180.32of fire state aid by the county auditor to the various municipalities pursuant to under
180.33section 69.021, subdivision 7.
181.1    Subd. 3. Exception to application of limitation and penalty. The limitation
181.2provided for in subdivision 1 shall does not apply to any relief association which prior to
181.3before January 1, 1957, had established a definite service pension formula for members
181.4of the partially salaried and partially volunteer firefighters' relief association who are
181.5regularly employed firefighters.
181.6EFFECTIVE DATE.This section is effective July 1, 2009.

181.7    Sec. 38. Minnesota Statutes 2008, section 424A.04, is amended to read:
181.8424A.04 VOLUNTEER RELIEF ASSOCIATIONS; BOARD OF TRUSTEES.
181.9    Subdivision 1. Membership. (a) A relief association that is directly associated with
181.10a municipal fire department must be managed by a board of trustees consisting of nine
181.11members. Six trustees must be elected from the membership of the relief association and
181.12three trustees must be drawn from the officials of the municipalities served by the fire
181.13department to which the relief association is directly associated. The bylaws of a relief
181.14association which provides a monthly benefit service pension may provide that one of
181.15the six trustees elected from the relief association membership may be a retired member
181.16receiving a monthly pension who is elected by the membership of the relief association.
181.17The three municipal trustees must be one elected municipal official and one elected or
181.18appointed municipal official who are designated as municipal representatives by the
181.19municipal governing board annually and the chief of the municipal fire department.
181.20(b) A relief association that is a subsidiary of an independent nonprofit firefighting
181.21corporation must be managed by a board of trustees consisting of nine members. Six
181.22trustees must be elected from the membership of the relief association, two trustees must
181.23be drawn from the officials of the municipalities served by the fire department to which
181.24the relief association is directly associated, and one trustee shall must be the fire chief
181.25serving with the independent nonprofit firefighting corporation. The bylaws of a relief
181.26association may provide that one of the six trustees elected from the relief association
181.27membership may be a retired member receiving a monthly pension who is elected by the
181.28membership of the relief association. The two municipal trustees must be elected or
181.29appointed municipal officials, selected as follows:
181.30(1) if only one municipality contracts with the independent nonprofit firefighting
181.31corporation, the municipal trustees must be two officials of the contracting municipality
181.32who are designated annually by the governing body of the municipality; or
181.33(2) if two or more municipalities contract with the independent nonprofit corporation,
181.34the municipal trustees must be one official from each of the two largest municipalities
182.1in population who are designated annually by the governing bodies of the applicable
182.2municipalities.
182.3(c) The municipal trustees for a relief association that is directly associated with a
182.4fire department operated as or by a joint powers entity must be the fire chief of the fire
182.5department and two trustees designated annually by the joint powers board. The municipal
182.6trustees for a relief association that is directly associated with a fire department service
182.7area township must be the fire chief of the fire department and two trustees designated by
182.8the township board.
182.9(d) If a relief association lacks the municipal board members provided for in
182.10paragraph (a), (b), or (c) because the fire department is not located in or associated with an
182.11organized municipality, joint powers entity, or township, the municipal board members
182.12must be the fire chief of the fire department and two board members appointed from the
182.13fire department service area by the board of commissioners of the applicable county.
182.14(e) The term of these the appointed municipal board members is one year or until the
182.15person's successor is qualified, whichever is later.
182.16(f) A municipal trustee under paragraph (a), (b), (c), or (d) has all the rights
182.17and duties accorded to any other trustee, except the right to be an officer of the relief
182.18association board of trustees.
182.19(g) A board must have at least three officers, who are a president, a secretary and a
182.20treasurer. These officers must be elected from among the elected trustees by either the full
182.21board of trustees or by the relief association membership, as specified in the bylaws. In
182.22no event may any trustee hold more than one officer position at any one time. The terms
182.23of the elected trustees and of the officers of the board must be specified in the bylaws of
182.24the relief association, but may not exceed three years. If the term of the elected trustees
182.25exceeds one year, the election of the various trustees elected from the membership must be
182.26staggered on as equal a basis as is practicable.
182.27    Subd. 2. Fiduciary duty. The board of trustees of a relief association shall
182.28undertake their activities consistent with chapter 356A.
182.29    Subd. 2a. Fiduciary responsibility. In the discharge of their respective duties, the
182.30officers and trustees shall be held to the standard of care specified in section 11A.09. In
182.31addition, the trustees shall act in accordance with chapter 356A. Each member of the
182.32board is a fiduciary and shall undertake all fiduciary activities in accordance with the
182.33standard of care of section 11A.09, and in a manner consistent with chapter 356A. No
182.34fiduciary of a relief association shall cause a relief association to engage in a transaction if
182.35the fiduciary knows or should know that the transaction constitutes one of the following
182.36direct or indirect transactions:
183.1(1) sale or exchange or leasing of any real property between the relief association
183.2and a board member;
183.3(2) lending of money or other extension of credit between the relief association and
183.4a board member or member of the relief association;
183.5(3) furnishing of goods, services, or facilities between the relief association and a
183.6board member; or
183.7(4) transfer to a board member, or use by or for the benefit of a board member, of any
183.8assets of the relief association. A transfer of assets does not mean the payment of relief
183.9association benefits or administrative expenses permitted by law.
183.10    Subd. 3. Conditions on relief association consultants. (a) If a volunteer firefighter
183.11relief association hires employs or contracts with a consultant to provide legal or financial
183.12advice, the secretary of the relief association shall obtain and the consultant shall provide
183.13to the secretary of the relief association a copy of the consultant's certificate of insurance.
183.14(b) A consultant is any person who is employed under contract to provide legal or
183.15financial advice and who is or who represents to the volunteer firefighter relief association
183.16that the person is:
183.17(1) an actuary;
183.18(2) a licensed public accountant or a certified public accountant;
183.19(3) an attorney;
183.20(4) an investment advisor or manager, or an investment counselor;
183.21(5) an investment advisor or manager selection consultant;
183.22(6) a pension benefit design advisor or consultant; or
183.23(7) any other financial consultant.
183.24EFFECTIVE DATE.This section is effective July 1, 2009.

183.25    Sec. 39. Minnesota Statutes 2008, section 424A.05, subdivision 1, is amended to read:
183.26    Subdivision 1. Establishment of special fund. Every volunteer firefighters' relief
183.27association shall establish and maintain a special fund within the relief association.
183.28EFFECTIVE DATE.This section is effective July 1, 2009.

183.29    Sec. 40. Minnesota Statutes 2008, section 424A.05, subdivision 2, is amended to read:
183.30    Subd. 2. Special fund assets and revenues. The special fund shall must be credited
183.31with all fire state aid moneys received pursuant to under sections 69.011 to 69.051,
183.32all taxes levied by or other revenues received from the municipality pursuant to under
183.33sections 69.771 to 69.776 or any applicable special law requiring municipal support for
183.34the relief association, any moneys or property donated, given, granted or devised by any
184.1person which is specified for use for the support of the special fund and any interest or
184.2investment return earned upon the assets of the special fund. The treasurer of the relief
184.3association shall be is the custodian of the assets of the special fund and shall must be the
184.4recipient on behalf of the special fund of all revenues payable to the special fund. The
184.5treasurer shall maintain adequate records documenting any transaction involving the assets
184.6or the revenues of the special fund. These records and the bylaws of the relief association
184.7shall be are public and shall must be open for inspection by any member of the relief
184.8association, any officer or employee of the state or of the municipality, or any member of
184.9the public, at reasonable times and places.
184.10EFFECTIVE DATE.This section is effective July 1, 2009.

184.11    Sec. 41. Minnesota Statutes 2008, section 424A.05, subdivision 3, is amended to read:
184.12    Subd. 3. Authorized disbursements from the special fund. (a) Disbursements
184.13from the special fund are may not permitted to be made for any purpose other than one of
184.14the following:
184.15    (1) for the payment of service pensions to retired members of the relief association if
184.16authorized and paid under law and the bylaws governing the relief association;
184.17    (2) for the payment of temporary or permanent disability benefits to disabled
184.18members of the relief association if authorized and paid pursuant to under law and
184.19specified in amount in the bylaws governing the relief association;
184.20    (3) for the payment of survivor benefits to surviving spouses and surviving children,
184.21or if none, to designated beneficiaries, of deceased members of the relief association, and
184.22if no survivors and if no designated beneficiary, for the payment of a death benefit to the
184.23estate of the deceased active or deferred firefighter, if authorized by and paid pursuant to
184.24under law and specified in amount in the bylaws governing the relief association;
184.25    (4) for the payment of the fees, dues and assessments to the Minnesota State Fire
184.26Department Association, and to the Minnesota Area Relief Association Coalition, and to
184.27the state Volunteer Firefighters Benefit Association in order to entitle relief association
184.28members to membership in and the benefits of these associations or organizations; and
184.29(5) for the payment of insurance premiums to the state Volunteer Firefighters Benefit
184.30Association, or an insurance company licensed by the state of Minnesota offering casualty
184.31insurance, in order to entitle relief association members to membership in and the benefits
184.32of the association or organization; and
184.33    (5) (6) for the payment of administrative expenses of the relief association as
184.34authorized under section 69.80.
185.1    (b) For purposes of this chapter, for a monthly benefit volunteer fire relief association
185.2or for a combination lump-sum and monthly benefit volunteer fire relief association where
185.3a monthly benefit service pension has been elected by or a monthly benefit is payable with
185.4respect to a firefighter, a designated beneficiary must be a natural person. For purposes of
185.5this chapter, for a defined contribution volunteer fire relief association, for a lump-sum
185.6volunteer fire relief association, or for a combination lump-sum and monthly benefit
185.7volunteer fire relief association where a lump-sum service pension has been elected by
185.8or a lump-sum benefit is payable with respect to a firefighter, a designated beneficiary
185.9may be a trust created under chapter 501B.
185.10EFFECTIVE DATE.This section is effective July 1, 2009.

185.11    Sec. 42. Minnesota Statutes 2008, section 424A.05, subdivision 4, is amended to read:
185.12    Subd. 4. Investments of assets of the special fund. The assets of the special fund
185.13shall must be invested only in securities authorized by section 69.775.
185.14EFFECTIVE DATE.This section is effective July 1, 2009.

185.15    Sec. 43. Minnesota Statutes 2008, section 424A.06, is amended to read:
185.16424A.06 RELIEF ASSOCIATION GENERAL FUND.
185.17    Subdivision 1. Establishment of general fund. Any A volunteer firefighters' relief
185.18association may establish and maintain a general fund within the relief association.
185.19    Subd. 2. General fund assets and revenues. To the general fund, if established,
185.20shall must be credited all moneys received from dues, fines, initiation fees, entertainment
185.21revenues and any moneys or property donated, given, granted or devised by any person,
185.22for unspecified uses. The treasurer of the relief association shall be is the custodian of the
185.23assets of the general fund and shall must be the recipient on behalf of the general fund of
185.24all revenues payable to the general fund. The treasurer shall maintain adequate records
185.25documenting any transaction involving the assets or the revenues of the general fund.
185.26These records shall must be open for inspection by any member of the relief association
185.27at reasonable times and places.
185.28    Subd. 3. Authorized disbursements from the general fund. Disbursements from
185.29the general fund may be made for any purpose that is authorized by either the articles of
185.30incorporation or bylaws of the relief association.
185.31    Subd. 4. Investment of assets of the general fund. The assets of the general
185.32fund may be invested in any securities that are authorized by the bylaws of the relief
185.33association and may be certified for investment by the State Board of Investment in fixed
186.1income pools or in a separately managed account at the discretion of the State Board of
186.2Investment as provided in section 11A.14.
186.3EFFECTIVE DATE.This section is effective July 1, 2009.

186.4    Sec. 44. Minnesota Statutes 2008, section 424A.07, is amended to read:
186.5424A.07 NONPROFIT FIREFIGHTING CORPORATIONS;
186.6ESTABLISHMENT OF RELIEF ASSOCIATIONS.
186.7Prior to Before paying any service pensions or retirement benefits pursuant to
186.8under section 424A.02 or before becoming entitled to receive any amounts of fire state
186.9aid upon transmittal from a contracting municipality pursuant to under section 69.031,
186.10subdivision 5 , a nonprofit firefighting corporation shall establish a volunteer firefighters'
186.11relief association governed by this chapter.

186.12    Sec. 45. Minnesota Statutes 2008, section 424A.08, is amended to read:
186.13424A.08 MUNICIPALITY WITHOUT RELIEF ASSOCIATION;
186.14AUTHORIZED DISBURSEMENTS.
186.15(a) Any qualified municipality which is entitled to receive fire state aid but which
186.16has no volunteer firefighters' relief association directly associated with its fire department
186.17and which has no full-time firefighters with retirement coverage by the public employees
186.18police and fire retirement plan shall deposit the fire state aid in a special account
186.19established for that purpose in the municipal treasury. Disbursement from the special
186.20account shall may not be made for any purpose except:
186.21(1) payment of the fees, dues and assessments to the Minnesota State Fire
186.22Department Association and to the state Volunteer Firefighters' Benefit Association in
186.23order to entitle its firefighters to membership in and the benefits of these state associations;
186.24(2) payment of the cost of purchasing and maintaining needed equipment for the
186.25fire department; and
186.26(3) payment of the cost for of construction, acquisition, repair and, or maintenance
186.27of buildings or other premises to house the equipment of the fire department.
186.28(b) A qualified municipality which is entitled to receive fire state aid, which has no
186.29volunteer firefighters' relief association directly associated with its fire department and
186.30which has full-time firefighters with retirement coverage by the public employees police
186.31and fire retirement plan may disburse the fire state aid as provided in paragraph (a), for the
186.32payment of the employer contribution requirement with respect to firefighters covered by
186.33the public employees police and fire retirement plan under section 353.65, subdivision 3,
186.34or for a combination of the two types of disbursements.
187.1EFFECTIVE DATE.This section is effective July 1, 2009.

187.2    Sec. 46. Minnesota Statutes 2008, section 424A.10, subdivision 1, is amended to read:
187.3    Subdivision 1. Definitions. For purposes of this section:
187.4    (1) "qualified recipient" means an individual who receives a lump-sum distribution
187.5of pension or retirement benefits from a volunteer firefighters' relief association for service
187.6that the individual has performed as a volunteer firefighter;
187.7    (2) "survivor of a deceased active or deferred volunteer firefighter" means the legally
187.8married surviving spouse of a deceased active or deferred volunteer firefighter under
187.9section 424A.001, subdivision 6, or, if none, the surviving minor child or minor children
187.10of a deceased active or deferred volunteer firefighter;
187.11    (3) "active volunteer firefighter" means a person who regularly renders fire
187.12suppression service for a municipal fire department or an independent nonprofit firefighting
187.13corporation, who has met the statutory and other requirements for relief association
187.14membership, and who has been is deemed by the relief association under law and its
187.15bylaws to be a fully qualified member of the relief association for at least one month; and
187.16    (4) "deferred volunteer firefighter" means a former active volunteer firefighter who
187.17terminated active firefighting service, has sufficient service credit from the applicable relief
187.18association to be entitled to a service pension under the bylaws of the relief association,
187.19but has not applied for or has not received the service pension.
187.20EFFECTIVE DATE.This section is effective July 1, 2009.

187.21    Sec. 47. Minnesota Statutes 2008, section 424A.10, subdivision 2, is amended to read:
187.22    Subd. 2. Payment of supplemental benefit. (a) Upon the payment by a volunteer
187.23firefighters' relief association of a lump-sum distribution to a qualified recipient, the
187.24association must pay a supplemental benefit to the qualified recipient. Notwithstanding
187.25any law to the contrary, the relief association must pay the supplemental benefit out of
187.26its special fund. The amount of This benefit equals is an amount equal to ten percent of
187.27the regular lump-sum distribution that is paid on the basis of the recipient's service as
187.28a volunteer firefighter. In no case may the amount of the supplemental benefit exceed
187.29$1,000. A supplemental benefit under this paragraph may not be paid to a survivor of a
187.30deceased active or deferred volunteer firefighter in that capacity.
187.31    (b) Upon the payment by a relief association of a lump-sum survivor benefit or
187.32funeral benefit to a survivor of a deceased active volunteer firefighter or of a deceased
187.33deferred volunteer firefighter, the association may pay a supplemental survivor benefit
187.34to the survivor of the deceased active or deferred volunteer firefighter from the special
188.1fund of the relief association if its articles of incorporation or bylaws so provide. The
188.2amount of the supplemental survivor benefit is 20 percent of the survivor benefit or funeral
188.3benefit, but not to exceed $2,000.
188.4    (c) An individual may receive a supplemental benefit under paragraph (a) or under
188.5paragraph (b), but not under both paragraphs with respect to one lump-sum volunteer
188.6firefighter benefit.
188.7EFFECTIVE DATE.This section is effective July 1, 2009.

188.8    Sec. 48. Minnesota Statutes 2008, section 424A.10, subdivision 3, is amended to read:
188.9    Subd. 3. State reimbursement. (a) Each year, to be eligible for state reimbursement
188.10of the amount of supplemental benefits paid under subdivision 2 during the preceding
188.11calendar year, the volunteer firefighters' relief association must shall apply to the
188.12commissioner of revenue by February 15. By March 15, the commissioner shall
188.13reimburse the relief association for the amount of the supplemental benefits paid by the
188.14relief association to qualified recipients and to survivors of deceased active or deferred
188.15volunteer firefighters.
188.16    (b) The commissioner of revenue shall prescribe the form of and supporting
188.17information that must be supplied as part of the application for state reimbursement.
188.18The commissioner of revenue shall reimburse the relief association by paying the
188.19reimbursement amount to the treasurer of the municipality where the association is located.
188.20Within 30 days after receipt, the municipal treasurer shall transmit the state reimbursement
188.21to the treasurer of the association if the association has filed a financial report with the
188.22municipality. If the relief association has not filed a financial report with the municipality,
188.23the municipal treasurer shall delay transmission of the reimbursement payment to the
188.24association until the complete financial report is filed. If the association has dissolved or
188.25has been removed as a trustee of state aid, the treasurer shall deposit the money in a
188.26special account in the municipal treasury, and the money may be disbursed only for the
188.27purposes and in the manner provided in section 424A.08. When paid to the association,
188.28the reimbursement payment must be deposited in the special fund of the relief association.
188.29    (c) A sum sufficient to make the payments is appropriated from the general fund
188.30to the commissioner of revenue.
188.31EFFECTIVE DATE.This section is effective July 1, 2009.

188.32    Sec. 49. Minnesota Statutes 2008, section 424A.10, subdivision 4, is amended to read:
189.1    Subd. 4. In lieu of income tax exclusion. (a) The supplemental benefit provided
189.2by this section is in lieu of the state income tax exclusion for lump-sum distributions of
189.3retirement benefits paid to volunteer firefighters.
189.4(b) If the law is modified to exclude or exempt volunteer firefighters' lump-sum
189.5distributions from state income taxation, the supplemental benefits under this section
189.6may are no longer be paid payable, beginning with the first calendar year in which the
189.7exclusion or exemption is effective. This subdivision does not apply to exemption of all or
189.8part of a lump-sum distribution under section 290.032 or 290.0802.
189.9EFFECTIVE DATE.This section is effective July 1, 2009.

189.10    Sec. 50. Minnesota Statutes 2008, section 424A.10, subdivision 5, is amended to read:
189.11    Subd. 5. Retroactive reimbursement in certain instances. A supplemental
189.12survivor or funeral benefit may be paid by a relief association for the death of an active
189.13volunteer firefighter or of a deferred volunteer firefighter that occurred on or after August
189.141, 2005, if the relief association articles of incorporation or bylaws so provide for a
189.15supplemental survivor benefit and provide for retroactivity.
189.16EFFECTIVE DATE.This section is effective July 1, 2009.

189.17    Sec. 51. Minnesota Statutes 2008, section 424B.10, is amended by adding a
189.18subdivision to read:
189.19    Subd. 1a. Applicability. This section applies when all of the volunteer firefighters'
189.20relief associations involved in the consolidation are defined benefit relief associations as
189.21defined in section 424A.001, subdivision 1b.
189.22EFFECTIVE DATE.This section is effective July 1, 2009.

189.23    Sec. 52. Minnesota Statutes 2008, section 424B.10, is amended by adding a
189.24subdivision to read:
189.25    Subd. 1b. Benefits. (a) The successor relief association following the consolidation
189.26of two or more defined benefit relief associations must be a defined benefit relief
189.27association.
189.28(b) Notwithstanding any provision of section 424A.02, subdivision 3, to the contrary,
189.29the initial service pension amount of the subsequent defined benefit relief association as
189.30of the effective date of consolidation is either the service pension amount specified in
189.31clause (1) or the service pension amounts specified in clause (2), as provided for in the
189.32consolidated relief association's articles of incorporation or bylaws:
190.1(1) the highest dollar amount service pension amount of any prior volunteer
190.2firefighters relief association in effect immediately before the consolidation initiation if the
190.3pension amount was implemented consistent with section 424A.02; or
190.4(2) for service rendered by each individual volunteer firefighter before consolidation,
190.5the service pension amount under the consolidating volunteer firefighters relief association
190.6that the firefighter belonged to immediately before the consolidation if the pension amount
190.7was implemented consistent with section 424A.02 and for service rendered after the
190.8effective date of the consolidation, the highest dollar amount service pension of any of the
190.9consolidating volunteer firefighters relief associations in effect immediately before the
190.10consolidation if the pension amount was implemented consistent with section 424A.02.
190.11(c) Any increase in the service pension amount beyond the amount implemented
190.12under paragraph (a) must conform with the requirements and limitations of sections
190.1369.771 to 69.775 and section 424A.02.
190.14EFFECTIVE DATE.This section is effective July 1, 2009.

190.15    Sec. 53. Minnesota Statutes 2008, section 424B.10, subdivision 2, is amended to read:
190.16    Subd. 2. Funding. (a) Unless the applicable municipalities agree in writing to
190.17allocate the minimum municipal obligation in a different manner, the minimum municipal
190.18obligation under section 69.772 or 69.773, whichever applies, must be allocated between
190.19the applicable municipalities in proportion to their fire state aid.
190.20(b) If any applicable municipality fails to meet its portion of the minimum municipal
190.21obligation to the subsequent relief association, all other applicable municipalities are
190.22jointly obligated to provide the required funding upon certification by the relief association
190.23secretary. An applicable municipality that pays the minimum municipal obligation
190.24amount for another applicable municipality, the municipality may collect the that payment
190.25amount, plus a 25 percent surcharge, from the responsible applicable municipality by any
190.26available means, including a deduction from any state aid or payment amount payable
190.27to the responsible municipality upon certification of the necessary information to the
190.28commissioner of finance.
190.29EFFECTIVE DATE.This section is effective July 1, 2009.

190.30    Sec. 54. [424B.11] CONSOLIDATING DEFINED CONTRIBUTION RELIEF
190.31ASSOCIATIONS; INDIVIDUAL ACCOUNTS; FUNDING.
190.32    Subdivision 1. Applicability. This section applies when all of the volunteer
190.33firefighters' relief associations involved in the consolidation are defined contribution relief
190.34associations as defined in section 424A.001, subdivision 1c.
191.1    Subd. 2. Individual accounts. The successor relief association following the
191.2consolidation of two or more defined contribution relief associations must be a defined
191.3contribution relief association and the successor relief association board shall establish
191.4individual accounts for every active member, inactive member, deferred member, or
191.5retired member receiving installment payments with that status as of the consolidation
191.6date. To each individual account the successor relief association must credit the amount to
191.7the credit of each person by a predecessor relief association as of the date of consolidation
191.8plus a proportional share, based on account value, of any subsequent net revenue during
191.9the consolidation process.
191.10    Subd. 3. Funding. Unless the articles of incorporation or bylaws of the successor
191.11relief association specify that municipal contributions are wholly voluntary or unless the
191.12municipalities associated with the consolidating defined contribution relief associations
191.13agree in writing to a different municipal support arrangement, each municipality must
191.14continue to provide the same amount of municipal support to the successor relief
191.15association as the municipality provided to the applicable predecessor relief association in
191.16the calendar year immediately prior to the calendar year in which the consolidation occurs.
191.17EFFECTIVE DATE.This section is effective July 1, 2009.

191.18    Sec. 55. [424B.12] MIXED CONSOLIDATING RELIEF ASSOCIATIONS;
191.19BENEFIT PLAN; FUNDING.
191.20    Subdivision 1. Applicability. This section applies where one or more of the
191.21volunteer firefighters' relief associations involved in the consolidation are defined benefit
191.22relief associations as defined in section 424A.001, subdivision 1b, and one or more of
191.23the volunteer firefighters' relief associations involved in the consolidation are defined
191.24contribution relief associations as defined in section 424A.001, subdivision 1c.
191.25    Subd. 2. Benefit plan. The articles of incorporation or bylaws of the successor
191.26relief association must specify whether the relief association is a defined benefit relief
191.27association or whether the relief association is a defined contribution relief association. If
191.28the successor relief association is a defined benefit relief association, the relief association
191.29benefits must comply with sections 424A.02 and 424B.11, subdivision 1a. If the successor
191.30relief association is a defined contribution relief association, the relief association must
191.31comply with sections 424A.016 and 424B.12, subdivision 2.
191.32    Subd. 3. Funding. If the successor relief association is a defined benefit relief
191.33association, the relief association funding is governed by section 424B.11, subdivision 2.
191.34If the successor relief association is a defined contribution relief association, the relief
191.35association funding is governed by section 424B.12, subdivision 3.
192.1EFFECTIVE DATE.This section is effective July 1, 2009.

192.2    Sec. 56. Minnesota Statutes 2008, section 424B.21, is amended to read:
192.3424B.21 ANNUITY PURCHASES UPON DISSOLUTION.
192.4The board of trustees of a volunteer firefighters relief association that is scheduled
192.5for dissolution may purchase annuity contracts under section 424A.02 424A.015,
192.6subdivision 8a 3 , instead of transferring special fund assets to a municipal trust fund
192.7under section 424B.20, subdivision 4. Payment of an annuity for which a contract is
192.8purchased may not commence before the retirement age specified in the relief association
192.9bylaws and in compliance with section 424A.016, subdivision 2, or 424A.02, subdivision
192.101 . Legal title to the annuity contract transfers to the municipal trust fund under section
192.11424B.20, subdivision 4 .
192.12EFFECTIVE DATE.This section is effective July 1, 2009, if article 1 is also
192.13enacted.

192.14    Sec. 57. BRIMSON FIREFIGHTERS RELIEF ASSOCIATION; BOARD OF
192.15TRUSTEES MEMBERSHIP.
192.16Notwithstanding any provisions of Minnesota Statutes, section 424A.04, or other
192.17law to the contrary, the Brimson Firefighters Relief Association must be managed by a
192.18board of trustees consisting of ten members, with six trustees elected from the membership
192.19of the relief association, one trustee drawn from the officials of each municipality served
192.20by the fire department to which the relief association is directly associated, and one trustee
192.21who is the fire chief serving with the independent nonprofit firefighting corporation.
192.22EFFECTIVE DATE.This section is effective the day after the governing body
192.23of the Fairbanks Township and its chief clerical officer timely comply with Minnesota
192.24Statutes, section 645.021, subdivisions 2 and 3.

192.25    Sec. 58. REPEALER.
192.26    Subdivision 1. Repealed for recodification. Minnesota Statutes 2008, sections
192.27424A.001, subdivision 7; 424A.02, subdivisions 4, 6, 8a, and 8b; and 424B.10, subdivision
192.281, are repealed.
192.29    Subd. 2. Repealed as obsolete. Minnesota Statutes 2008, section 424A.09, is
192.30repealed.
192.31    Subd. 3. Substantive repeal. Minnesota Statutes 2008, section 424A.02,
192.32subdivision 9b, is repealed.


193.3    Section 1. Minnesota Statutes 2008, section 354.66, subdivision 6, is amended to read:
193.4    Subd. 6. Insurance. A board of an employing district entering into an agreement
193.5authorized by this section shall take all steps necessary to assure continuance of any
193.6insurance programs furnished or authorized a full-time teacher on an identical basis and
193.7with identical sharing of costs for a part-time teacher pursuant to this section, provided,
193.8however, that the requirements of this sentence may be modified by a collective bargaining
193.9agreement between a board and an exclusive representative pursuant to chapter 179 179A.
193.10Teachers as defined in section 136F.43 employed on a less than 75 percent time basis
193.11pursuant to this section shall be eligible for state paid insurance benefits as if the teachers
193.12were employed full time.
193.13EFFECTIVE DATE.This section is effective the day following final enactment.

193.14    Sec. 2. Minnesota Statutes 2008, section 356.32, subdivision 2, is amended to read:
193.15    Subd. 2. Covered retirement plans. The provisions of this section apply to the
193.16following retirement plans:
193.17(1) the general state employees retirement plan of the Minnesota State Retirement
193.18System, established under chapter 352;
193.19(2) the correctional state employees retirement plan of the Minnesota State
193.20Retirement System, established under chapter 352;
193.21(3) the State Patrol retirement plan, established under chapter 352B;
193.22(4) the general employees retirement plan of the Public Employees Retirement
193.23Association, established under chapter 353;
193.24(5) the public employees police and fire plan of the Public Employees Retirement
193.25Association, established under chapter 353;
193.26(6) the Teachers Retirement Association, established under chapter 354;
193.27(7) the Minneapolis Employees Retirement Fund, established under chapter 422A;
193.28(8) the Duluth Teachers Retirement Fund Association, established under chapter
193.29354A; and
193.30(9) the Minneapolis Teachers Retirement Fund Association, established under
193.31chapter 354A; and
193.32(10) (9) the St. Paul Teachers Retirement Fund Association, established under
193.33chapter 354A.
193.34EFFECTIVE DATE.This section is effective the day following final enactment.

194.1    Sec. 3. Minnesota Statutes 2008, section 422A.06, subdivision 8, is amended to read:
194.2    Subd. 8. Retirement benefit fund. (a) The retirement benefit fund consists of
194.3amounts held for payment of retirement allowances for members retired under this chapter,
194.4including any transfer amount payable under subdivision 3, paragraph (c).
194.5    (b) Unless subdivision 3, paragraph (c), applies, assets equal to the required
194.6reserves for retirement allowances under this chapter determined in accordance with the
194.7appropriate mortality table adopted by the board of trustees based on the experience of the
194.8fund as recommended by the actuary retained under section 356.214 must be transferred
194.9from the deposit accumulation fund to the retirement benefit fund as of the last business
194.10day of the month in which the retirement allowance begins. The income from investments
194.11of these assets must be allocated to this fund and any interest charge under subdivision
194.123, paragraph (c), must be credited to the fund. There must be paid from this fund the
194.13retirement annuities authorized by law. A required reserve calculation for the retirement
194.14benefit fund must be made by the actuary retained under section 356.214 and must be
194.15certified to the retirement board by the actuary retained under section 356.214.
194.16    (c) There is established a deferred yield adjustment account which must be increased
194.17by the sale or disposition of any debt securities at less than book value and must be
194.18decreased by the sale or disposition of debt securities at more than book value. At the
194.19end of each fiscal year, a portion of the balance of this account must be offset against the
194.20investment income for that year. The annual portion of the balance to be offset must be
194.21proportional to the reciprocal of the average remaining life of the bonds sold, unless the
194.22amounts are offset by gains on the future sales of these securities. The amount of this
194.23account must be included in the recognized value of assets other than corporate stocks
194.24and all other equity investments. In any fiscal year in which the gains on the sales of debt
194.25securities exceed the discounts realized on the sales of such securities, the excess must
194.26be used to reduce the balance of the account. If the realized capital gains are sufficient
194.27to reduce the balance of the account to zero, any excess gains must be available for the
194.28calculation of postretirement adjustments.
194.29    (d)(1) Annually, following June 30, the board shall use the procedures in clauses (2),
194.30(3), and (4), to determine whether a postretirement adjustment is payable and to determine
194.31the amount of any postretirement adjustment.
194.32    (2) If the Consumer Price Index for urban wage earners and clerical workers all
194.33items index published by the Bureau of Labor Statistics of the United States Department
194.34of Labor increases from June 30 of the preceding year to June 30 of the current year, the
194.35board shall certify the percentage increase. The amount certified must not exceed the
195.1lesser of the difference between the preretirement interest assumption and postretirement
195.2interest assumption in section 356.215, subdivision 8, paragraph (a), or 3.5 percent.
195.3    (3) In addition to any percentage increase certified under paragraph (b), the board
195.4shall use the following procedures to determine if a postretirement adjustment is payable
195.5under this paragraph:
195.6    (i) the board shall determine the market value of the fund on June 30 of that year;
195.7    (ii) the amount of reserves required as of the current June 30 for the annuity or
195.8benefit payable to an annuitant and benefit recipient must be determined by the actuary
195.9retained under section 356.214. An annuitant or benefit recipient who has been receiving
195.10an annuity or benefit for at least 12 full months as of the current June 30 is eligible to
195.11receive a full postretirement adjustment. An annuitant or benefit recipient who has been
195.12receiving an annuity or benefit for at least one full month, but less than 12 full months as of
195.13the current June 30, is eligible to receive a partial postretirement adjustment. The amount
195.14of the reserves for those annuitants and benefit recipients who are eligible to receive a
195.15full postretirement benefit adjustment is known as "eligible reserves." The amount of
195.16the reserves for those annuitants and benefit recipients who are not eligible to receive a
195.17postretirement adjustment is known as "noneligible reserves." For an annuitant or benefit
195.18recipient who is eligible to receive a partial postretirement adjustment, additional "eligible
195.19reserves" is an amount that bears the same ratio to the total reserves required for the
195.20annuitant or benefit recipient as the number of full months of annuity or benefit receipt as
195.21of the current June 30 bears to 12 full months. The remainder of the annuitant's or benefit
195.22recipient's reserves are "noneligible reserves";
195.23    (iii) the board shall determine the percentage increase certified under clause (2)
195.24multiplied by the eligible required reserves, as adjusted for mortality gains and losses,
195.25determined under item (ii);
195.26    (iv) the board shall add the amount of reserves required for the annuities or benefits
195.27payable to annuitants and benefit recipients of the participating public pension plans or
195.28funds as of the current June 30 to the amount determined under item (iii);
195.29    (v) the board shall subtract the amount determined under item (iv) from the market
195.30value of the fund determined under item (i);
195.31    (vi) the board shall adjust the amount determined under item (v) by the cumulative
195.32current balance determined under item (viii) and any negative balance carried forward
195.33under item (ix);
195.34    (vii) a positive amount resulting from the calculations in items (i) to (vi) is the excess
195.35market value. A negative amount is the negative balance;
196.1    (viii) the board shall allocate one-fifth of the excess market value or one-fifth of the
196.2negative balance to each of five consecutive years, beginning with the fiscal year ending
196.3the current June 30; and
196.4    (ix) to calculate the postretirement adjustment under this paragraph based on
196.5investment performance for a fiscal year, the board shall add together all excess market
196.6value allocated to that year and subtract from the sum all negative balances allocated to
196.7that year. If this calculation results in a negative number, the entire negative balance must
196.8be carried forward and allocated to the next year. If the resulting amount is positive, a
196.9postretirement adjustment is payable under this paragraph. The board shall express a
196.10positive amount as a percentage of the total eligible required reserves certified to the
196.11board under item (ii).
196.12    (4) The board shall determine the amount of any postretirement adjustment which
196.13is payable using the following procedure:
196.14    (i) the total "eligible" required reserves as of the first of January next following the
196.15end of the fiscal year for the annuitants and benefit recipients eligible to receive a full or
196.16partial postretirement adjustment as determined by item (ii) must be certified to the board
196.17by the actuary retained under section 356.214. The total "eligible" required reserves
196.18must be determined by the actuary retained under section 356.214 on the assumption that
196.19all annuitants and benefit recipients eligible to receive a full or partial postretirement
196.20adjustment will be alive on the January 1 in question; and
196.21    (ii) the board shall add the percentage certified under clause (2) to any positive
196.22percentage calculated under clause (3). The board shall not subtract from the percentage
196.23certified under paragraph (b) any negative amount calculated under clause (3). The sum
196.24of these percentages must be carried to five decimal places and must be certified as the
196.25full postretirement adjustment percentage.
196.26    (e) The board shall determine the amount of the postretirement adjustment payable
196.27to each eligible annuitant and benefit recipient. The dollar amount of the postretirement
196.28adjustment must be calculated by applying the certified postretirement adjustment
196.29percentage to the amount of the monthly annuity or benefit payable to each eligible
196.30annuitant or benefit recipient eligible for a full adjustment.
196.31    The dollar amount of the partial postretirement adjustment payable to each annuitant
196.32or benefit recipient eligible for a partial adjustment must be calculated by first determining
196.33a partial percentage amount that bears the same ratio to the certified full adjustment
196.34percentage amount as the number of full months of annuity or benefit receipt as of the
196.35current June 30 bears to 12 full months. The partial percentage amount determined
196.36must then be applied to the amount of the monthly annuity or benefit payable to each
197.1annuitant or benefit recipient eligible to receive a partial postretirement adjustment. The
197.2postretirement adjustments are payable on January 1 following the calculations required
197.3under this section and must thereafter be included in the monthly annuity or benefit paid to
197.4the recipient. Any adjustments under this section must be paid automatically unless the
197.5intended recipient files a written notice with the applicable participating public pension
197.6fund or plan requesting that the adjustment not be paid.
197.7    (f) As of June 30 annually, the actuary retained under section 356.214 shall calculate
197.8the amount of required reserves representing any mortality gains and any mortality losses
197.9incurred during the fiscal year and report the results of those calculations to the plan.
197.10The actuary shall report separately the amount of the reserves for annuitants and benefit
197.11recipients who are eligible for a postretirement benefit adjustment and the amount of
197.12reserves for annuitants and benefit recipients who are not eligible for a postretirement
197.13benefit adjustment. If the net amount of required reserves represents a mortality gain,
197.14the board shall sell sufficient securities or transfer sufficient available cash to equal the
197.15amount. If the amount of required reserves represents a mortality loss, the plan shall
197.16transfer an amount equal to the amount of the net mortality loss. The amount of the
197.17transfers must be determined before any postretirement benefit adjustments have been
197.18made. All transfers resulting from mortality adjustments must be completed annually
197.19by December 31 for the preceding June 30. Interest is payable on any transfers after
197.20December 31 based upon the preretirement interest assumption for the participating plan
197.21or fund as specified in section 356.215, subdivision 8, stated as a monthly rate. Book
197.22values of the assets of the fund must be determined only after all adjustments for mortality
197.23gains and losses for the fiscal year have been made.
197.24    (g) All money necessary to meet the requirements of the certification of withdrawals
197.25and all money necessary to pay postretirement adjustments under this section are hereby
197.26and from time to time appropriated from the postretirement investment fund to the board.
197.27    (h) Annually, following the calculation of any postretirement adjustment payable
197.28from the retirement benefit fund, the board of trustees shall submit a report to the
197.29executive director of the Legislative Commission on Pensions and Retirement and to the
197.30commissioner of finance indicating the amount of any postretirement adjustment and
197.31the underlying calculations on which that postretirement adjustment amount is based,
197.32including the amount of dividends, the amount of interest, and the amount of net realized
197.33capital gains or losses utilized in the calculations.
197.34    (i) With respect to a former contributing member who began receiving a retirement
197.35annuity or disability benefit under section 422A.151, paragraph (a), clause (2), after June
197.3630, 1997, or with respect to a survivor of a former contributing member who began
198.1receiving a survivor benefit under section 422A.151, paragraph (a), clause (2), after June
198.230, 1997, the reserves attributable to the one percent lower amount of the cost-of-living
198.3adjustment payable to those annuity or benefit recipients annually must be transferred back
198.4to the deposit accumulation fund to the credit of the Metropolitan Airports Commission.
198.5The calculation of this annual reduced cost-of-living adjustment reserve transfer must be
198.6reviewed by the actuary retained under section 356.214.
198.7EFFECTIVE DATE.This section is effective retroactively from June 30, 2008.

198.8    Sec. 4. Minnesota Statutes 2008, section 422A.08, subdivision 5, is amended to read:
198.9    Subd. 5. Service credit purchase. Any contributor who prior to entering the service
198.10of the city was an employee of a public corporation, is authorized, using the procedure in
198.11subdivision 5a section 356.551, to purchase allowable service credit in the retirement fund
198.12for employment by the public corporation in the same manner as though the service had
198.13been rendered to the city, providing that the individual has not received service credit and
198.14is not eligible to receive service credit for this period under any other plan or fund listed
198.15in section 356.30, subdivision 3. Before receiving credit for service rendered to a public
198.16corporation as herein set forth, the contributing employee shall make application therefor
198.17in writing to the retirement board, and shall contribute to the retirement fund the amount
198.18specified in subdivision 5a section 356.551.
198.19EFFECTIVE DATE.This section is effective the day following final enactment.

198.20    Sec. 5. Laws 1989, chapter 319, article 11, section 13, is amended to read:
198.21    Sec. 13. REPEALER.
198.22    Laws 1967, chapter 815; Laws 1978, chapter 683; and Laws 1981, chapter 224,
198.23sections 2 and 5 section 245, are repealed.
198.24EFFECTIVE DATE.This section is effective the day following final enactment
198.25and applies retroactively from June 2, 1989.

198.26    Sec. 6. Laws 2008, chapter 349, article 14, section 13, is amended to read:
198.27    Sec. 13. REPEALER OF PRIOR INCONSISTENT SPECIAL VOLUNTEER
198.28FIRE RELIEF ASSOCIATION ANCILLARY BENEFIT LEGISLATION.
198.29    Subdivision 1. Anoka. Laws 1969, chapter 352 252, section 1, subdivisions 3,
198.304, 5, and 6, are repealed.
198.31    Subd. 2. Butterfield. Laws 1975, chapter 185, section 1, is repealed.
198.32    Subd. 3. Coon Rapids. Laws 1973, chapter 304, section 1, subdivisions 3, 4, 5, 6,
198.337, 8, and 9, are repealed.
199.1    Subd. 4. Edina. (1) Laws 1965, chapter 592, section 3, as amended added by Laws
199.21969, chapter 644, section 2, and amended by Laws 1975, chapter 229, section 2; (2) Laws
199.31965, chapter 592, section 4, as amended added by Laws 1969, chapter 644, section 2, and
199.4amended by Laws 1975, chapter 229, section 3, Laws 1985, chapter 261, section 37, and
199.5Laws 1991, chapter 125, section 1; (3) Laws 1985, chapter 261, section 37, as amended by
199.6Laws 1991, chapter 125, section 1; and (4) Laws 1991, chapter 125, section 1, are repealed.
199.7    Subd. 5. Fairmont. Laws 1967, chapter 575, sections 2, as amended by Laws 1979,
199.8chapter 201, section 23; 3; and 4, are repealed.
199.9    Subd. 6. Falcon Heights. Laws 1969, chapter 526, sections 3; 4; 5, as amended
199.10by Laws 1974, chapter 208, section 2; and 7, as amended by Laws 1974, chapter 208,
199.11section 3, are repealed.
199.12    Subd. 7. Golden Valley. Laws 1971, chapter 140, sections 2, as amended by Laws
199.131973, chapter 30, section 2; 3, as amended by Laws 1973, chapter 30, section 3; 4, as
199.14amended by Laws 1973, chapter 30, section 4; and 5, as amended by Laws 1973, chapter
199.1530, section 5; and Laws 1993, chapter 244, article 4, section 1, are repealed.
199.16    Subd. 8. Wayzata. Laws 1973, chapter 472, section 1, as amended by Laws 1976,
199.17chapter 272, section 1, and Laws 1979, chapter 201, section 33, is repealed.
199.18    Subd. 9. White Bear Lake. Laws 1971, chapter 214, section 1, subdivisions
199.19sections 1, 2, 3, 4, and 5, are repealed.
199.20EFFECTIVE DATE; LOCAL APPROVAL.(a) Subdivision 1 is effective the day
199.21after the governing body of Anoka and its chief clerical officer timely complete their
199.22compliance with Minnesota Statutes, section 645.021, subdivisions 2 and 3, after June
199.2330, 2009.
199.24    (b) Subdivision 2 is effective the day after the governing body of Butterfield and its
199.25chief clerical officer timely complete their compliance with Minnesota Statutes, section
199.26645.021, subdivisions 2 and 3, after June 30, 2009.
199.27    (c) Subdivision 3 is effective the day after the governing body of Coon Rapids and
199.28its chief clerical officer timely complete their compliance with Minnesota Statutes, section
199.29645.021, subdivisions 2 and 3, after June 30, 2009.
199.30    (d) Subdivision 4 is effective the day after the governing body of Edina and its
199.31chief clerical officer timely complete their compliance with Minnesota Statutes, section
199.32645.021, subdivisions 2 and 3, after June 30, 2009.
199.33    (e) Subdivision 5 is effective the day after the governing body of Fairmont and its
199.34chief clerical officer timely complete their compliance with Minnesota Statutes, section
199.35645.021, subdivisions 2 and 3, after June 30, 2009.
200.1    (f) Subdivision 6 is effective the day after the governing body of Falcon Heights
200.2and its chief clerical officer timely complete their compliance with Minnesota Statutes,
200.3section 645.021, subdivisions 2 and 3, after June 30, 2009.
200.4    (g) Subdivision 7 is effective the day after the governing body of Golden Valley and
200.5its chief clerical officer timely complete their compliance with Minnesota Statutes, section
200.6645.021, subdivisions 2 and 3, after June 30, 2009.
200.7    (h) Subdivision 8 is effective the day after the governing body of Wayzata and its
200.8chief clerical officer timely complete their compliance with Minnesota Statutes, section
200.9645.021, subdivisions 2 and 3, after June 30, 2009.
200.10    (i) Subdivision 9 is effective the day after the governing body of White Bear Lake
200.11and its chief clerical officer timely complete their compliance with Minnesota Statutes,
200.12section 645.021, subdivisions 2 and 3, after June 30, 2009.
200.13EFFECTIVE DATE.This section is effective the day following final enactment.

200.14    Sec. 7. REPEALER.
200.15Minnesota Statutes 2008, sections 356.2165; and 422A.08, subdivision 5a, are
200.16repealed.
200.17EFFECTIVE DATE.This section is effective the day following final enactment.


200.20    Section 1. Minnesota Statutes 2008, section 352.86, subdivision 1, is amended to read:
200.21    Subdivision 1. Eligibility; retirement annuity. A person who is employed by
200.22This section applies to any employee of the Department of Transportation in the civil
200.23service employment classification of aircraft pilot or chief pilot, who is covered for
200.24that employment by the general employee retirement plan of the system under section
200.25352.01, subdivision 23, and who elects this elected before June 1, 2008, special retirement
200.26coverage under subdivision 3, who is prohibited from performing the duties of aircraft
200.27pilot or chief pilot after reaching age 65 by a policy adopted by the commissioner of
200.28transportation, and this section by an irrevocable election on forms provided by the
200.29executive director.
200.30    Subd. 2. Retirement annuity. An eligible person under subdivision 1 who
200.31terminates employment as a state employee on or after age 62 but prior to normal
200.32retirement age is entitled, upon application, to a retirement annuity computed under
200.33section 352.115, subdivisions 2 and 3, without any reduction for early retirement under
200.34section 352.116, subdivision 1.
201.1EFFECTIVE DATE.This section is effective the day following final enactment.

201.2    Sec. 2. Minnesota Statutes 2008, section 352.86, subdivision 1a, is amended to read:
201.3    Subd. 1a 3. Disability benefits. An employee described in subdivision 1, who is
201.4less than 62 years of age and who becomes disabled and physically or mentally unfit
201.5to perform occupational duties due to injury, sickness, or other disability, and who is
201.6found disqualified for retention as chief pilot or pilot as a result of a physical examination
201.7required by applicable federal laws or regulations, is entitled upon application to disability
201.8benefits for a maximum of five years in the amount of may submit an application for
201.9disability benefits calculated under section 352.113, subdivision 3. In considering the
201.10disability benefit application, the executive director must use the disability standard
201.11specified in this subdivision rather than the total and permanent standard specified in
201.12section 352.113, subdivision 1. If disability benefits commence under section 352.113,
201.13subdivision 3, the appointing authority shall also provide payments from the state airports
201.14fund, totaling 75 percent of current monthly salary, to be paid by the appointing authority
201.15less the amount payable under section 352.113, subdivision 3. Payments from the state
201.16airports fund must be made for five years or until normal retirement age, whichever is
201.17earlier. Disability benefits must not continue after the employee reaches age 62. These
201.18benefits are in lieu of all other state benefits for the disability, including, but not limited to,
201.19workers' compensation benefits.
201.20EFFECTIVE DATE.This section is effective the day following final enactment.

201.21    Sec. 3. Minnesota Statutes 2008, section 352.86, subdivision 2, is amended to read:
201.22    Subd. 2 4. Additional contributions. The special retirement annuity authorized
201.23by subdivision 1 shall be financed by An employee covered by this section must pay an
201.24additional employee contribution from the covered aircraft pilot or chief pilot of 1.6
201.25percent and an employer contribution from of salary. The Department of Transportation
201.26must pay an additional employer contribution of of 1.6 percent of salary. These
201.27contributions are in addition to the contributions required by section 352.04, subdivisions
201.282 and 3 . They must be made in the manner provided for in section 352.04, subdivisions 4,
201.295, and 6 .
201.30EFFECTIVE DATE.This section is effective the day following final enactment.

201.31    Sec. 4. Minnesota Statutes 2008, section 353.01, subdivision 2, is amended to read:
201.32    Subd. 2. Public employee. "Public employee" means a governmental employee
201.33performing personal services for a governmental subdivision defined in subdivision 6,
202.1whose salary is paid, in whole or in part, from revenue derived from taxation, fees,
202.2assessments, or from other sources. The term includes the classes of persons described or
202.3listed in subdivision 2a. The term also includes persons who elect association membership
202.4under subdivision 2d, paragraph (a), and persons for whom the applicable governmental
202.5subdivision had elected association membership under subdivision 2d, paragraph (b). The
202.6term also includes full-time employees of the Dakota County Agricultural Society. The
202.7term excludes the classes of persons listed in subdivision 2b for purposes of membership
202.8in the association.
202.9EFFECTIVE DATE.This section is effective the first day of the first full payroll
202.10period commencing after final enactment.

202.11    Sec. 5. Minnesota Statutes 2008, section 353.01, subdivision 2a, is amended to read:
202.12    Subd. 2a. Included employees. (a) Public employees whose salary from
202.13employment in one or more positions within one governmental subdivision exceeds $425
202.14in any month shall participate as members of the association. If the salary is less than
202.15$425 in a subsequent month, the employee retains membership eligibility. Eligible public
202.16employees shall participate as members of the association with retirement coverage by
202.17the public employees retirement plan or the public employees police and fire retirement
202.18plan under this chapter, or the local government correctional employees retirement plan
202.19under chapter 353E, whichever applies, as a condition of their employment on the first
202.20day of employment unless they:
202.21    (1) are specifically excluded under subdivision 2b;
202.22    (2) do not exercise their option to elect retirement coverage in the association as
202.23provided in subdivision 2d, paragraph (a); or
202.24    (3) are employees of the governmental subdivisions listed in subdivision 2d,
202.25paragraph (b), where the governmental subdivision has not elected to participate as a
202.26governmental subdivision covered by the association.
202.27    (b) A public employee who was a member of the association on June 30, 2002,
202.28based on employment that qualified for membership coverage by the public employees
202.29retirement plan or the public employees police and fire plan under this chapter, or the
202.30local government correctional employees retirement plan under chapter 353E as of June
202.3130, 2002, retains that membership for the duration of the person's employment in that
202.32position or incumbency in elected office. Except as provided in subdivision 28, the person
202.33shall participate as a member until the employee or elected official terminates public
202.34employment under subdivision 11a or terminates membership under subdivision 11b.
202.35    (c) Public employees under paragraph (a) include:
203.1(1) physicians under section 353D.01, subdivision 2, who do not elect public
203.2employees defined contribution plan coverage under section 353D.02, subdivision 2.;
203.3(2) full-time employees of the Dakota County Agricultural Society; and
203.4(3) employees of the Minneapolis Firefighters Relief Association or Minneapolis
203.5Police Relief Association who are not excluded employees under subdivision 2b due to
203.6coverage by the relief association pension plan and who elect Public Employee Retirement
203.7Association general plan coverage under section 5.
203.8EFFECTIVE DATE.This section is effective the first day of the first full payroll
203.9period commencing after final enactment.

203.10    Sec. 6. Minnesota Statutes 2008, section 353.01, subdivision 6, is amended to read:
203.11    Subd. 6. Governmental subdivision. (a) "Governmental subdivision" means a
203.12county, city, town, school district within this state, or a department, unit or instrumentality
203.13of state or local government, or any public body established under state or local
203.14authority that has a governmental purpose, is under public control, is responsible for the
203.15employment and payment of the salaries of employees of the entity, and receives a major
203.16portion of its revenues from taxation, fees, assessments or from other public sources.
203.17    (b) Governmental subdivision also means the Public Employees Retirement
203.18Association, the League of Minnesota Cities, the Association of Metropolitan
203.19Municipalities, charter schools formed under section 124D.10, service cooperatives
203.20exercising retirement plan participation under section 123A.21, subdivision 5, joint powers
203.21boards organized under section 471.59, subdivision 11, paragraph (a), family service
203.22collaboratives and children's mental health collaboratives organized under section 471.59,
203.23subdivision 11, paragraph (b) or (c), provided that the entities creating the collaboratives
203.24are governmental units that otherwise qualify for retirement plan membership, public
203.25hospitals owned or operated by, or an integral part of, a governmental subdivision or
203.26governmental subdivisions, the Association of Minnesota Counties, the Minnesota
203.27Inter-county Association, the Minnesota Municipal Utilities Association, the Metropolitan
203.28Airports Commission, the University of Minnesota with respect to police officers covered
203.29by the public employees police and fire retirement plan, the Minneapolis Employees
203.30Retirement Fund for employment initially commenced after June 30, 1979, the Range
203.31Association of Municipalities and Schools, soil and water conservation districts, economic
203.32development authorities created or operating under sections 469.090 to 469.108, the Port
203.33Authority of the city of St. Paul, the Spring Lake Park Fire Department, incorporated,
203.34the Lake Johanna Volunteer Fire Department, incorporated, the Red Wing Environmental
203.35Learning Center, the Dakota County Agricultural Society, and Hennepin Healthcare
204.1System, Inc., and the Minneapolis Firefighters Relief Association and Minneapolis Police
204.2Relief Association with respect to staff covered by the Public Employees Retirement
204.3Association general plan.
204.4    (c) Governmental subdivision does not mean any municipal housing and
204.5redevelopment authority organized under the provisions of sections 469.001 to 469.047;
204.6or any port authority organized under sections 469.048 to 469.089 other than the Port
204.7Authority of the city of St. Paul; or any hospital district organized or reorganized prior
204.8to July 1, 1975, under sections 447.31 to 447.37 or the successor of the district; or the
204.9board of a family service collaborative or children's mental health collaborative organized
204.10under sections 124D.23, 245.491 to 245.495, or 471.59, if that board is not controlled
204.11by representatives of governmental units.
204.12    (d) A nonprofit corporation governed by chapter 317A or organized under Internal
204.13Revenue Code, section 501(c)(3), which is not covered by paragraph (a) or (b), is not a
204.14governmental subdivision unless the entity has obtained a written advisory opinion from
204.15the United States Department of Labor or a ruling from the Internal Revenue Service
204.16declaring the entity to be an instrumentality of the state so as to provide that any future
204.17contributions by the entity on behalf of its employees are contributions to a governmental
204.18plan within the meaning of Internal Revenue Code, section 414(d).
204.19    (e) A public body created by state or local authority may request membership on
204.20behalf of its employees by providing sufficient evidence that it meets the requirements in
204.21paragraph (a).
204.22    (f) An entity determined to be a governmental subdivision is subject to the reporting
204.23requirements of this chapter upon receipt of a written notice of eligibility from the
204.24association.
204.25EFFECTIVE DATE.This section is effective the first day of the first full payroll
204.26period commencing after final enactment.

204.27    Sec. 7. PRIOR PENSION PLAN TERMINATION.
204.28As of the effective date of this section, contributions to the defined contribution or
204.29defined benefit pension plan or plans which previously provided primary pension coverage
204.30for any individual who elects coverage by the general employees retirement plan of the
204.31Public Employee Retirement Association under section 5 must terminate and must not be
204.32resumed.
204.33EFFECTIVE DATE.This section is effective the first day of the first full payroll
204.34period commencing after final enactment.

205.1    Sec. 8. PUBLIC EMPLOYEES RETIREMENT ASSOCIATION; SERVICE
205.2CREDIT PURCHASE AUTHORIZATION.
205.3(a) Notwithstanding any provision of Minnesota Statutes, chapter 353, to the
205.4contrary, unless the period to be purchased is credited as allowable service by another
205.5retirement plan covered by Minnesota Statutes, section 356.30, or would be ineligible
205.6for credit as allowable service under Minnesota Statutes, section 353.01, subdivision
205.716, if the service had been performed after the effective date of this section, an eligible
205.8person described in paragraph (b) may purchase allowable service credit under Minnesota
205.9Statutes, section 353.01, subdivision 16, from the general employees retirement plan of
205.10the Public Employees Retirement Association for the period specified in paragraph (c), by
205.11making the payment required under paragraph (d).
205.12(b) An eligible person is a person who began employment as staff to the Minneapolis
205.13Firefighters Relief Association or the Minneapolis Police Relief Association prior to
205.14the effective date of this section, and due to that employment became a member of the
205.15general employees retirement plan of the Public Employees Retirement Association on
205.16the effective date of this section.
205.17(c) The period of prior service credit available for purchase is the period of
205.18employment with the Minneapolis Firefighters Relief Association or the Minneapolis
205.19Police Relief Association, whichever is applicable, which would be includable service
205.20under the Public Employees Retirement Association general plan if that service had been
205.21performed after the effective date rather than before.
205.22(d) Except as otherwise stated under this section, Minnesota Statutes, section
205.23356.551, applies to this purchase.
205.24(e) An eligible person may purchase allowable service credit for a portion of the
205.25eligible period, resulting in prorated service credit.
205.26(f) The election to purchase prior service credit under this section must be made in
205.27writing and must be filed with the executive director of the Public Employees Retirement
205.28Association.
205.29(g) This section expires one year after the effective date of this section.
205.30EFFECTIVE DATE.This section is effective the first day of the first full payroll
205.31period commencing after final enactment.

205.32    Sec. 9. ELECTION OF COVERAGE.
205.33(a) An individual who is an employee of the Minneapolis Firefighters Relief
205.34Association or the Minneapolis Police Relief Association on the effective date of this
205.35section, and who is not excluded under section 353.01, subdivision 2b, due to coverage
206.1by the relief association pension plan, may elect prospective coverage by the general
206.2employees retirement plan of the Public Employees Retirement Association under an
206.3election as specified in this section.
206.4(b) An eligible individual under paragraph (a) may elect coverage by the general
206.5employees retirement plan of the Public Employees Retirement Association by making an
206.6election on a form provided by the Public Employees Retirement Association executive
206.7director. For an election to be valid, it must be made within 90 days of the effective date
206.8of this section and is irrevocable.
206.9(c) The Public Employees Retirement Association must provide eligible individuals
206.10with information and counseling regarding the general employees retirement plan of the
206.11Public Employees Retirement Association and the implications of electing that coverage.
206.12(d) If an eligible individual elects not to be covered by the general employees
206.13retirement plan of the Public Employees Retirement Association, or if no election is made,
206.14the prior coverage, if any, remains unchanged.
206.15EFFECTIVE DATE.This section is effective the first day of the first full payroll
206.16period commencing after final enactment.

206.17    Sec. 10. PERA-GENERAL; PURCHASE OF CREDIT FOR OMITTED
206.18CONTRIBUTION PERIOD.
206.19(a) An eligible person described in paragraph (b) is entitled, upon written application
206.20filed with the executive director of the Public Employees Retirement Association, to
206.21purchase service credit for the period of omitted contributions specified in paragraph (c)
206.22by paying the amount determined under paragraph (d). The employer of the eligible
206.23person shall pay the amount determined under paragraph (e) within 30 days of being
206.24notified by the Public Employees Retirement Association executive director that the
206.25eligible person made the person's payment.
206.26(b) An eligible person is a person who:
206.27(1) was born on December 16, 1946;
206.28(2) was first employed by the city of Elizabeth, Minnesota, municipal liquor store on
206.29July 23, 2004;
206.30(3) was first eligible for coverage by the general employees retirement plan of the
206.31Public Employees Retirement Association in September 2004;
206.32(4) was not reported as a general employees retirement plan member by the city of
206.33Elizabeth, Minnesota, to the Public Employees Retirement Association until January
206.342005; and
207.1(5) did not receive service credit under Minnesota Statutes, section 353.27,
207.2subdivision 12, paragraph (e), in a timely fashion.
207.3(c) The period of purchasable service credit is that portion of the period September
207.41, 2004, until January 1, 2005, during which the eligible person was an included employee
207.5under Minnesota Statutes, section 353.01, subdivision 2a, and during which the required
207.6deductions from the compensation of the eligible employee were not made under
207.7Minnesota Statutes, section 353.27, subdivision 2.
207.8(d) The member purchase amount is the amount of the omitted member contributions
207.9during the period of purchasable service credit, plus compound annual interest at the rate
207.10of 8.5 percent from October 15, 2004, to the date on which payment is made.
207.11(e) The employer purchase amount is either the balance of the full actuarial value
207.12purchase payment amount determined under Minnesota Statutes, section 356.551,
207.13remaining after subtracting the amount under paragraph (d) or the amount of the employer
207.14and employer additional contributions under Minnesota Statutes, section 353.27,
207.15subdivisions 3 and 3a, plus compound annual interest at the rate of 8.5 percent from
207.16October 15, 2004, to the date on which payment is made, whichever is larger. If the
207.17employer fails to pay the employer purchase amount in a timely fashion, the executive
207.18director of the Public Employees Retirement Association shall certify the unpaid
207.19amount, plus monthly compound interest at the rate of 0.71 percent for the period, to the
207.20commissioners of finance and revenue, who shall deduct the unpaid amount from any state
207.21aid or state transfers that the employing unit is eligible to receive and shall transmit the
207.22amount to the Public Employees Retirement Association.
207.23(f) Purchase authority under this section expires on July 1, 2010.
207.24EFFECTIVE DATE.This section is effective the day following final enactment.

207.25    Sec. 11. PERA-GENERAL AND TRA; ANNUITY APPLICATION
207.26REVOCATION.
207.27(a) An eligible person specified in paragraph (b) may elect to revoke retirement
207.28annuity applications as provided in paragraph (c). The election must be made in writing
207.29and must be filed with the executive director of the applicable retirement plan.
207.30(b) An eligible person is a person who:
207.31(1) was born in 1943;
207.32(2) was employed as publications editor for St. Cloud State University for twenty
207.33years, ending in 1998, and was covered by virtue of that employment by the general state
207.34employees retirement plan of the Minnesota State Retirement System;
208.1(3) retired from the general state employees retirement plan of the Minnesota State
208.2Retirement System in 2007;
208.3(4) was employed by the Underwood, Minnesota, municipal liquor store in early
208.42008, terminated that employment on April 18, 2008, applied for a retirement annuity from
208.5the general employee retirement plan of the Public Employees Retirement Association
208.6and from the Teachers Retirement Association under Minnesota Statutes, section 356.30,
208.7in April or May 2008, and was subsequently reemployed by the municipal liquor store
208.8on or about May 20, 2008; and
208.9(5) was informed by the Public Employees Retirement Association of a retirement
208.10annuity overpayment of $349.65 on July 22, 2008.
208.11(c) If elected, the eligible person may revoke the person's application for a retirement
208.12annuity from the general employee retirement plan of the Public Employees Retirement
208.13Association, or revoke the person's application for a retirement annuity from the Teachers
208.14Retirement Association, or revoke the person's application for a retirement annuity from
208.15both retirement plans. If a retirement application is revoked, the person's retirement
208.16annuity ends, the entitlement of the person to a future retirement annuity is restored, and
208.17that future retirement annuity amount must be adjusted by subtracting the total value of
208.18the retirement annuity amounts received from that retirement plan from the actuarial
208.19present value of the eligible person's future annuity without adjustment, calculated based
208.20on the mortality table for retired lives of the applicable retirement plan and 8.5 percent
208.21interest rate assumption, and determining the adjusted annuity amount from the remaining
208.22actuarial present value amount using the same interest and mortality assumption.
208.23EFFECTIVE DATE.This section is effective the day following final enactment.

208.24    Sec. 12. MSRS-GENERAL AND PERA-GENERAL; PLAN MEMBERSHIP
208.25EXCLUSION AND DEFERRED ANNUITY AUGMENTATION.
208.26(a) A qualified person described in paragraph (b) may, upon written application
208.27filed with the executive director of the Public Employees Retirement Association, elect
208.28retroactive exclusion from coverage by the general employees retirement plan of the
208.29Public Employees Retirement Association for any period of teacher assistant service for
208.30Independent School District No. 623, Roseville, and qualification for deferred annuities
208.31augmentation for the retroactively excluded period.
208.32(b) A qualified person is a person who:
208.33(1) was born on January 17, 1951;
208.34(2) was employed by Ramsey County from January 20, 1975, to June 22, 1999;
208.35(3) was employed by the state of Minnesota from June 22, 1999, to April 4, 2006; and
209.1(4) was employed by Independent School District No. 623, Roseville, as a teacher
209.2assistant following terminating state employment from December 13, 2007, to June 6,
209.32008.
209.4(c) If the retroactive exclusion is elected, all member and employer contributions to
209.5the general employees retirement plan of the Public Employees Retirement Association
209.6made with respect to Independent School District No. 623, Roseville, teacher assistant
209.7employment must be refunded with interest under Minnesota Statutes, section 353.27,
209.8subdivision 7, and the qualified person is entitled, if otherwise eligible, for deferred
209.9annuities augmentation from the general employees retirement plan of the Public
209.10Employees Retirement Association and from the general state employees retirement plan
209.11of the Minnesota State Retirement System for the period of retroactive exclusion.
209.12(d) Authority to make the election under this section expires September 1, 2009.
209.13EFFECTIVE DATE.This section is effective the day following final enactment.

209.14    Sec. 13. MSRS-GENERAL; EXCEPTION TO DISABILITY BENEFIT
209.15APPLICATION DEADLINE.
209.16(a) Notwithstanding any provision of Minnesota Statutes, section 352.113,
209.17subdivision 4, paragraph (e), to the contrary, an eligible person described in paragraph
209.18(b) is entitled to file a disability benefit application with the general state employees
209.19retirement plan of the Minnesota State Retirement System and, if otherwise qualified under
209.20Minnesota Statutes, section 352.113, receive a disability benefit from the retirement plan.
209.21(b) An eligible person is a person who:
209.22(1) was born on March 8, 1966;
209.23(2) was an employee of the Minnesota Veterans Home at Silver Bay, Minnesota;
209.24(3) terminated state employment on July 25, 2007;
209.25(4) attempted to apply for a disability benefit in February 2008;
209.26(5) had a request to apply for a disability benefit denied by the executive director of
209.27the Minnesota State Retirement System on April 3, 2008;
209.28(6) appealed the executive director's decision to the Minnesota State Retirement
209.29System board of directors on April 24, 2008; and
209.30(7) had the appeal to the Minnesota State Retirement System board of directors
209.31denied on August 4, 2008.
209.32(c) This section expires on June 1, 2010.
209.33EFFECTIVE DATE.This section is effective the day following final enactment.

210.1    Sec. 14. MSRS-GENERAL; ALLOWABLE SERVICE CREDIT REVISION FOR
210.2JOB-SHARE EMPLOYEES.
210.3(a) An eligible person as described in paragraph (b) is entitled to have any partial
210.4month allowable service credit in the general state employees retirement plan of the
210.5Minnesota State Retirement System for part-time employment as a job-share employee
210.6revised to be identical to allowable service credit for part-time state employment under
210.7Minnesota Statutes, section 352.01, subdivision 11, that was not rendered as a job-share
210.8employee.
210.9(b) An eligible person:
210.10(1) is an active member of the general state employees retirement plan or a retired
210.11member of the general state employees retirement plan;
210.12(2) was employed in the demonstration job-sharing project under Laws 1980,
210.13chapter 572, or in the job-sharing program under Minnesota Statutes 1998, sections
210.1443A.41 to 43A.46;
210.15(3) was employed in the demonstration job-sharing project or in the job-sharing
210.16program for one-half of full time; and
210.17(4) received partial month allowable service credit under Minnesota Statutes, section
210.18352.01, subdivision 11.
210.19(c) To have allowable service credit revised under this section, an eligible person
210.20shall provide the executive director of the Minnesota State Retirement System any
210.21relevant documentation that the executive director requests.
210.22(d) If the eligible person is a retired member of the general state employees
210.23retirement plan, the person's retirement annuity must be recomputed based on the revised
210.24service credit under this section and the recomputed retirement annuity is payable on the
210.25first day of the month next following the effective date of this section.
210.26(e) Nothing in this section may be interpreted to authorize the crediting of more than
210.27one year of allowable service during any 12-month period or to authorize the payment of
210.28any retroactive recomputed retirement annuity amounts.
210.29EFFECTIVE DATE.This section is effective the day following final enactment.

210.30    Sec. 15. HENNEPIN COUNTY EMPLOYEE WAIVER OF SERVICE
210.31REQUIREMENT TO APPLY FOR DISABILITY.
210.32(a) Notwithstanding Minnesota Statutes, section 353.33, subdivision 1, an eligible
210.33person specified in paragraph (b) is authorized to submit an application for disability
210.34benefits from the general employees retirement plan of the Public Employees Retirement
210.35Association.
211.1(b) An eligible person is a person who:
211.2(1) was born May 6, 1972;
211.3(2) was employed by Independent School District No. 11, Anoka-Hennepin, from
211.4September 11, 1995, to August 6, 1996;
211.5(3) was employed by Hennepin County from July 31, 2000, to December 30, 2004;
211.6(4) was again employed by Hennepin County starting April 2, 2007, with the most
211.7recent employment position being a principal child support officer;
211.8(5) has service credit with the Public Employees Retirement Association due to the
211.9employment under clauses (2), (3), and (4); and
211.10(6) has had several leaves from Hennepin County employment of a medical-related
211.11nature.
211.12(c) If an eligible person under paragraph (b) files a valid application, the executive
211.13director of the Public Employees Retirement Association shall determine whether that
211.14eligible person qualifies to receive a disability benefit under the laws and procedures
211.15applicable to the general employees retirement plan of the Public Employees Retirement
211.16Association.
211.17(d) This section expires one year after the effective date of this section.
211.18EFFECTIVE DATE.This section is effective the day following final enactment.

211.19    Sec. 16. REPEALER.
211.20Minnesota Statutes 2008, section 352.86, subdivision 3, is repealed."
211.21Delete the title and insert:
211.23relating to retirement; various retirement plans; making various statutory changes
211.24needed to accommodate the dissolution of the Minnesota Post Retirement
211.25Investment Fund; redefining the value of pension plan assets for actuarial
211.26reporting purposes; revising various disability benefit provisions of the general
211.27state employees retirement plan, the correctional state employees retirement
211.28plan, and the State Patrol retirement plan; making various administrative
211.29provision changes; establishing a voluntary statewide lump-sum volunteer
211.30firefighter retirement plan administered by the Public Employees Retirement
211.31Association; revising various volunteer firefighters' relief association provisions;
211.32correcting 2008 drafting errors related to the Minneapolis Employees Retirement
211.33Fund and other drafting errors; granting special retirement benefit authority
211.34in certain cases; revising the special transportation pilots retirement plan of
211.35the Minnesota State Retirement System; expanding the membership of the
211.36state correctional employees retirement plan; extending the amortization target
211.37date for the Fairmont Police Relief Association; modifying the number of
211.38board of trustees members of the Minneapolis Firefighters Relief Association;
211.39increasing state education aid to offset teacher retirement plan employer
211.40contribution increases; increasing teacher retirement plan member and employer
211.41contributions; revising the normal retirement age and providing prospective
211.42benefit accrual rate increases for teacher retirement plans; permitting the Brimson
211.43Volunteer Firefighters' Relief Association to implement a different board of
211.44trustees composition; permitting employees of the Minneapolis Firefighters
212.1Relief Association and the Minneapolis Police Relief Association to become
212.2members of the general employee retirement plan of the Public Employees
212.3Retirement Association; creating a two-year demonstration postretirement
212.4adjustment mechanism for the St. Paul Teachers Retirement Fund Association;
212.5creating a temporary postretirement option program for employees covered
212.6by the general employee retirement plan of the Public Employees Retirement
212.7Association; setting a statute of limitations for erroneous receipts of the general
212.8employee retirement plan of the Public Employees Retirement Association;
212.9permitting the Minnesota State Colleges and Universities System board to
212.10create an early separation incentive program; permitting certain Minnesota
212.11State Colleges and Universities System faculty members to make a second
212.12chance retirement coverage election upon achieving tenure; including the Weiner
212.13Memorial Medical Center, Inc., in the Public Employees Retirement Association
212.14privatization law; extending the approval deadline date for the inclusion of the
212.15Clearwater County Hospital in the Public Employees Retirement Association
212.16privatization law; appropriating money; amending Minnesota Statutes 2008,
212.17sections 3A.02, subdivision 3, by adding a subdivision; 3A.03, by adding a
212.18subdivision; 3A.04, by adding a subdivision; 3A.115; 11A.08, subdivision 1;
212.1911A.17, subdivisions 1, 2; 11A.23, subdivisions 1, 2; 43A.34, subdivision 4;
212.2043A.346, subdivisions 2, 6; 69.011, subdivisions 1, 2, 4; 69.021, subdivisions 7,
212.219; 69.031, subdivisions 1, 5; 69.77, subdivision 4; 69.771, subdivision 3; 69.772,
212.22subdivisions 4, 6; 69.773, subdivision 6; 127A.50, subdivision 1; 299A.465,
212.23subdivision 1; 352.01, subdivision 2b, by adding subdivisions; 352.021, by
212.24adding a subdivision; 352.04, subdivisions 1, 12; 352.061; 352.113, subdivision
212.254, by adding a subdivision; 352.115, by adding a subdivision; 352.12, by adding
212.26a subdivision; 352.75, subdivisions 3, 4; 352.86, subdivisions 1, 1a, 2; 352.91,
212.27subdivision 3d; 352.911, subdivisions 3, 5; 352.93, by adding a subdivision;
212.28352.931, by adding a subdivision; 352.95, subdivisions 1, 2, 3, 4, 5, by adding
212.29a subdivision; 352B.02, subdivisions 1, 1a, 1c, 1d; 352B.08, by adding a
212.30subdivision; 352B.10, subdivisions 1, 2, 5, by adding subdivisions; 352B.11,
212.31subdivision 2, by adding a subdivision; 352C.10; 352D.06, subdivision 1;
212.32352D.065, by adding a subdivision; 352D.075, by adding a subdivision; 353.01,
212.33subdivisions 2, 2a, 6, 11b, 16, 16b; 353.0161, subdivision 1; 353.03, subdivision
212.343a; 353.06; 353.27, subdivisions 1, 2, 3, 7, 7b; 353.29, by adding a subdivision;
212.35353.31, subdivision 1b, by adding a subdivision; 353.33, subdivisions 1, 3b, 7,
212.3611, 12, by adding subdivisions; 353.65, subdivisions 2, 3; 353.651, by adding
212.37a subdivision; 353.656, subdivision 5a, by adding a subdivision; 353.657,
212.38subdivision 3a, by adding a subdivision; 353.665, subdivision 3; 353A.02,
212.39subdivisions 14, 23; 353A.05, subdivisions 1, 2; 353A.08, subdivisions 1, 3, 6a;
212.40353A.081, subdivision 2; 353A.09, subdivision 1; 353A.10, subdivisions 2,
212.413; 353E.01, subdivisions 3, 5; 353E.04, by adding a subdivision; 353E.06, by
212.42adding a subdivision; 353E.07, by adding a subdivision; 353F.02, subdivision 4;
212.43354.05, subdivision 38, by adding a subdivision; 354.07, subdivision 4; 354.33,
212.44subdivision 5; 354.35, by adding a subdivision; 354.42, subdivisions 1a, 2, 3,
212.45by adding subdivisions; 354.44, subdivisions 4, 5, 6, by adding a subdivision;
212.46354.46, by adding a subdivision; 354.47, subdivision 1; 354.48, subdivisions
212.474, 6, by adding a subdivision; 354.49, subdivision 2; 354.52, subdivisions 2a,
212.484b; 354.55, subdivisions 11, 13; 354.66, subdivision 6; 354.70, subdivisions
212.495, 6; 354A.011, subdivision 15a; 354A.096; 354A.12, subdivisions 1, 2a, by
212.50adding subdivisions; 354A.29, subdivision 3; 354A.31, subdivisions 4, 4a, 7;
212.51354A.36, subdivision 6; 354B.21, subdivision 2; 356.20, subdivision 2; 356.215,
212.52subdivisions 1, 11; 356.219, subdivision 3; 356.315, by adding a subdivision;
212.53356.32, subdivision 2; 356.351, subdivision 2; 356.401, subdivisions 2, 3;
212.54356.465, subdivision 1, by adding a subdivision; 356.611, subdivisions 3, 4;
212.55356.635, subdivisions 6, 7; 356.96, subdivisions 1, 5; 422A.06, subdivision 8;
212.56422A.08, subdivision 5; 423C.03, subdivision 1; 424A.001, subdivisions 1, 1a,
212.572, 3, 4, 5, 6, 8, 9, 10, by adding subdivisions; 424A.01; 424A.02, subdivisions
212.581, 2, 3, 3a, 7, 8, 9, 9a, 9b, 10, 12, 13; 424A.021; 424A.03; 424A.04; 424A.05,
213.1subdivisions 1, 2, 3, 4; 424A.06; 424A.07; 424A.08; 424A.10, subdivisions 1,
213.22, 3, 4, 5; 424B.10, subdivision 2, by adding subdivisions; 424B.21; 490.123,
213.3subdivisions 1, 3; 490.124, by adding a subdivision; Laws 1989, chapter 319,
213.4article 11, section 13; Laws 2006, chapter 271, article 5, section 5, as amended;
213.5Laws 2008, chapter 349, article 14, section 13; proposing coding for new law
213.6in Minnesota Statutes, chapters 136F; 352B; 353; 354; 356; 420; 424A; 424B;
213.7proposing coding for new law as Minnesota Statutes, chapter 353G; repealing
213.8Minnesota Statutes 2008, sections 11A.041; 11A.18; 11A.181; 352.119,
213.9subdivisions 2, 3, 4; 352.86, subdivision 3; 352B.01, subdivisions 1, 2, 3, 3b,
213.104, 6, 7, 9, 10, 11; 352B.26, subdivisions 1, 3; 353.271; 353A.02, subdivision
213.1120; 353A.09, subdivisions 2, 3; 354.05, subdivision 26; 354.06, subdivision
213.126; 354.55, subdivision 14; 354.63; 354A.29, subdivisions 2, 4, 5; 356.2165;
213.13356.41; 356.431, subdivision 2; 422A.01, subdivision 13; 422A.06, subdivision
213.144; 422A.08, subdivision 5a; 424A.001, subdivision 7; 424A.02, subdivisions 4,
213.156, 8a, 8b, 9b; 424A.09; 424B.10, subdivision 1; 490.123, subdivisions 1c, 1e."