1.1OMNIBUS RETIREMENT BILL II
1.2.................... moves to amend S.F. No. 1191; H.F. No. 1152, as follows:
1.3Delete everything after the enacting clause and insert:


1.6    Section 1. Minnesota Statutes 2012, section 352B.011, subdivision 4, is amended to
1.7read:
1.8    Subd. 4. Average monthly salary. (a) Subject to the limitations of section 356.611,
1.9"average monthly salary" means the average of the highest monthly salaries for five years
1.10of service as a member upon which contributions were deducted from pay under section
1.11352B.02 , or upon which appropriate contributions or payments were made to the fund to
1.12receive allowable service and salary credit as specified under the applicable law. Average
1.13monthly salary must be based upon all allowable service if this service is less than five years.
1.14(b) The salary used for the calculation of "average monthly salary" means the salary
1.15of the member as defined in section 352.01, subdivision 13. "Average monthly salary"
1.16includes the salary of the member during the period of covered employment rendered after
1.17reaching the allowable service credit limit of section 352B.08, subdivision 2, paragraph
1.18(b). The salary used for the calculation of "average monthly salary" does not include any
1.19lump-sum annual leave payments and overtime payments made at the time of separation
1.20from state service, any amounts of severance pay, or any reduced salary paid during the
1.21period the person is entitled to workers' compensation benefit payments for temporary
1.22disability.
1.23EFFECTIVE DATE.This section is effective the day following final enactment.

1.24    Sec. 2. Minnesota Statutes 2012, section 352B.02, subdivision 1a, is amended to read:
1.25    Subd. 1a. Member contributions. (a) The member contribution is the following
1.26percentage of the member's salary:

1.27 1.28		(1) before the first day of the first pay period beginning after July 1, 2011 2014	10.40 12.4 percent
1.29 1.30		(2) on or after the first day of the first pay period beginning after July 1, 2011 2014, to June 30, 2016	12.40 13.4 percent
1.31		(3) after June 30, 2016	14.4 percent

1.32(b) These contributions must be made by deduction from salary as provided in
1.33section 352.04, subdivision 4.
1.34EFFECTIVE DATE.This section is effective July 1, 2013.

2.1    Sec. 3. Minnesota Statutes 2012, section 352B.02, subdivision 1c, is amended to read:
2.2    Subd. 1c. Employer contributions. (a) In addition to member contributions,
2.3department heads shall pay a sum equal to the specified percentage of the salary upon which
2.4deductions were made, which constitutes the employer contribution to the fund as follows:

2.5 2.6		(1) before the first day of the first pay period beginning after July 1, 2011 2014	15.60 18.6 percent
2.7 2.8		(2) on or after the first day of the first pay period beginning after July 1, 2011 2014, to June 30, 2016	18.60 20.1 percent
2.9		(3) after June 30, 2016	21.6 percent

2.10(b) Department contributions must be paid out of money appropriated to departments
2.11for this purpose.
2.12EFFECTIVE DATE.This section is effective July 1, 2013.

2.13    Sec. 4. Minnesota Statutes 2012, section 352B.08, subdivision 1, is amended to read:
2.14    Subdivision 1. Eligibility; when to apply; accrual. (a) Every member who is
2.15credited with three or more years of allowable service if first employed before July 1, 2010
2.16 2013, or with at least five ten years of allowable service if first employed after June 30,
2.172010 2013, is entitled to separate from state service and upon becoming 50 years old, is
2.18entitled to receive a life annuity, upon separation from state service.
2.19(b) Members must apply for an annuity in a form and manner prescribed by the
2.20executive director.
2.21(c) No application may be made more than 90 days before the date the member is
2.22eligible to retire by reason of both age and service requirements.
2.23(d) An annuity begins to accrue no earlier than 180 days before the date the
2.24application is filed with the executive director.
2.25EFFECTIVE DATE.This section is effective July 1, 2013.

2.26    Sec. 5. Minnesota Statutes 2012, section 352B.08, subdivision 2, is amended to read:
2.27    Subd. 2. Normal retirement annuity. (a) The annuity must be paid in monthly
2.28installments. The annuity shall be equal to the amount determined by multiplying
2.29the average monthly salary of the member by the percent specified in section 356.315,
2.30subdivision 6 , for each year of allowable service and pro rata prorated for additional
2.31completed months of allowable service, unless restricted under paragraph (b).
2.32(b) Allowable service in excess of 33 years must not be used in computing the
2.33annuity. This restriction does not apply to any member who has at least 28 years of
2.34allowable service before July 1, 2013.
3.1(c) When the annuity commences, any member contributions attributable to
3.2allowable service not used to compute the annuity due to the restrictions in paragraph (b)
3.3must be refunded using procedures specified in section 352B.11, subdivision 1.
3.4EFFECTIVE DATE.This section is effective July 1, 2013.

3.5    Sec. 6. Minnesota Statutes 2012, section 352B.08, subdivision 2a, is amended to read:
3.6    Subd. 2a. Early retirement. Any member who has become at least 50 years old
3.7and who has at least three years of allowable service if first employed before July 1,
3.82010 2013, or who has at least five ten years of allowable service if first employed after
3.9June 30, 2010 2013, is entitled upon application to a reduced retirement annuity equal
3.10to the annuity calculated under subdivision 2, reduced by one-tenth of one percent for
3.11each month that the member is under age 55 at the time of retirement, if first employed
3.12 the effective date of retirement is before July 1, 2010, or reduced by two-tenths of one
3.13percent 2015. If the effective date of retirement is after June 30, 2015, the reduction is
3.140.34 percent for each month that the member is under age 55 at the time of retirement if
3.15first employed after June 30, 2010.
3.16EFFECTIVE DATE.This section is effective July 1, 2013.

3.17    Sec. 7. Minnesota Statutes 2012, section 352B.10, subdivision 5, is amended to read:
3.18    Subd. 5. Optional annuity. A disabilitant may elect, in lieu of spousal survivorship
3.19coverage under section 352B.11, subdivisions subdivision 2b and 2c, the normal disability
3.20benefit or an optional annuity as provided in section 352B.08, subdivision 3. The choice
3.21of an optional annuity must be made in writing, on a form prescribed by the executive
3.22director, and must be made before the commencement of the payment of the disability
3.23benefit, or within 90 days before reaching age 55 or before reaching the five-year
3.24anniversary of the effective date of the disability benefit, whichever is later. The optional
3.25annuity is effective on the date on which the disability benefit begins to accrue, or the
3.26month following the attainment of age 55 or following the five-year anniversary of the
3.27effective date of the disability benefit, whichever is later.

3.28    Sec. 8. Minnesota Statutes 2012, section 352B.11, subdivision 1, is amended to read:
3.29    Subdivision 1. Refund of payments. (a) A member who has not received other
3.30benefits under this chapter is entitled to a refund of payments made by salary deduction,
3.31plus interest, if the member is separated, either voluntarily or involuntarily, from the state
3.32service that entitled the member to membership.
4.1(b) A refund under section 352B.08, subdivision 2, paragraph (c), does not result in
4.2a forfeiture of salary credit for the allowable service credit covered by the refund.
4.3(b) (c) In the event of the member's death, if there are no survivor benefits payable
4.4under this chapter, a refund plus interest is payable to the last designated beneficiary on
4.5a form filed with the director before death, or if no designation is filed, is payable to
4.6the member's estate. Interest under this subdivision must be calculated as provided in
4.7section 352.22, subdivision 2. To receive a refund, the application must be made on a
4.8form prescribed by the executive director.
4.9EFFECTIVE DATE.This section is effective the day following final enactment.

4.10    Sec. 9. Minnesota Statutes 2012, section 352B.11, subdivision 2b, is amended to read:
4.11    Subd. 2b. Surviving spouse benefit eligibility. (a) If an active member with
4.12three or more years of allowable service if first employed before July 1, 2010 2013, or
4.13with at least five years of allowable service if first employed after June 30, 2010 2013,
4.14dies before attaining age 55, the surviving spouse is entitled to the a benefit specified in
4.15subdivision 2c, paragraph (b) for life equal to 50 percent of the average monthly salary
4.16of the deceased member. On the first of the month next following the date on which the
4.17deceased member would have attained exact age 55, in lieu of continued receipt of the
4.18prior benefit, the surviving spouse is eligible to commence receipt of the second half of
4.19a 100 percent joint and survivor annuity if this provides a larger benefit. The joint and
4.20survivor annuity must be computed assuming the exact age 55 for the deceased member
4.21and the age of the surviving spouse on the date of death.
4.22(b) If an active member with less than three years of allowable service if first
4.23employed before July 1, 2010 2013, or with fewer than five years of allowable service if
4.24first employed after June 30, 2010 2013, dies at any age, the surviving spouse is entitled to
4.25receive the a benefit specified in subdivision 2c, paragraph (c) for life equal to 50 percent
4.26of the average monthly salary of the deceased member.
4.27(c) If an active member with three or more years of allowable service if first
4.28employed before July 1, 2010 2013, or with at least five years of allowable service if first
4.29employed after June 30, 2010 2013, dies on or after attaining exact age 55, the surviving
4.30spouse is entitled to receive the benefits specified in subdivision 2c, paragraph (d) a benefit
4.31for life equal to 50 percent of the average monthly salary of the deceased member, or the
4.32second half of a 100 percent joint and survivor annuity, whichever is larger. The joint and
4.33survivor annuity must be computed using the age of the deceased member on the date of
4.34death and the age of the surviving spouse on that same date.
5.1(d) If a disabilitant dies while receiving a disability benefit under section 352B.10
5.2or before the benefit under that section commenced, and an optional annuity was not
5.3elected under section 352B.10, subdivision 5, the surviving spouse is entitled to receive
5.4the a benefit specified in subdivision 2c, paragraph (b) for life equal to 50 percent of the
5.5average monthly salary of the deceased member. On the first of the month next following
5.6the date on which the deceased member would have attained exact age 55, in lieu of
5.7continued receipt of the prior benefit, the surviving spouse is eligible to commence receipt
5.8of the second half of a 100 percent joint and survivor annuity if this provides a larger
5.9benefit. The joint and survivor annuity must be computed assuming the exact age 55 for
5.10the deceased member and the age of the surviving spouse on the date of death.
5.11(e) If a former member with three or more years of allowable service if first employed
5.12before July 1, 2010 2013, or with at least five years of allowable service if first employed
5.13after June 30, 2010 2013, who terminated from service and has not received a refund or
5.14commenced receipt of any other benefit provided by this chapter, dies, the surviving
5.15spouse is entitled to receive the as a benefit specified in subdivision 2c, paragraph (e) the
5.16second half of a 100 percent joint and survivor annuity, commencing on the first of the
5.17month next following the deceased member's date of death, or the first of the month next
5.18following the date on which the deceased member would have attained age 55, whichever
5.19is later. The joint and survivor annuity must be computed using the age of the deceased
5.20member on the date of death and the age of the surviving spouse on that same date.
5.21(f) If a former member with less than three years of allowable service if first
5.22employed before July 1, 2010 2013, or with fewer than five years of allowable service if
5.23first employed after June 30, 2010 2013, who terminated from service and has not received
5.24a refund or commenced receipt of any other benefit, if applicable, provided by this chapter,
5.25dies, the surviving spouse is entitled to receive the refund specified in subdivision 2c,
5.26paragraph (f) or, if none, the children or, if none, the deceased member's estate is entitled to
5.27a refund of the employee contributions plus interest computed as specified in subdivision 1.
5.28EFFECTIVE DATE.This section is effective July 1, 2013.

5.29    Sec. 10. Minnesota Statutes 2012, section 356.415, subdivision 1e, is amended to read:
5.30    Subd. 1e. Annual postretirement adjustments; State Patrol retirement plan.
5.31(a) Retirement annuity, disability benefit, or survivor benefit recipients of the State Patrol
5.32retirement plan are entitled to a postretirement adjustment annually on January 1, as
5.33follows:
5.34(1) a postretirement increase of 1.5 one percent must be applied each year, effective
5.35on January 1, to the monthly annuity or benefit of each annuitant or benefit recipient
6.1who has been receiving an annuity or a benefit for at least 18 full months before the
6.2January 1 increase; and
6.3(2) for each annuitant or benefit recipient who has been receiving an annuity or a
6.4benefit for at least six full months, an annual postretirement increase of 1/12 of 1.5 one
6.5percent for each month that the person has been receiving an annuity or benefit must be
6.6applied, effective January 1, following the calendar year in which the person has been
6.7retired for at least six months, but has been retired for less than 18 months.
6.8(b) The increases provided by this subdivision commence on January 1, 2011
6.9 2014. Increases under this subdivision paragraph (a) for the State Patrol retirement plan
6.10terminate on December 31 of the calendar year in which the actuarial valuation prepared
6.11by the approved actuary under sections 356.214 and 356.215 and the standards for
6.12actuarial work promulgated by the Legislative Commission on Pensions and Retirement
6.13indicates that the market value of assets of the retirement plan equals or exceeds 90
6.14 85 percent of the actuarial accrued liability of the retirement plan and increases under
6.15subdivision 1 paragraph (c) recommence after that date.
6.16(c) Retirement annuity, disability benefit, or survivor benefit recipients of the State
6.17Patrol retirement plan are entitled to a postretirement adjustment annually on January
6.181, as follows:
6.19(1) a postretirement increase of 1.5 percent must be applied each year, effective on
6.20January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who
6.21has been receiving an annuity or a benefit for at least 18 full months before the January 1
6.22increase; and
6.23(2) for each annuitant or benefit recipient who has been receiving an annuity or a
6.24benefit for at least six full months, an annual postretirement increase of 1/12 of 1.5 percent
6.25for each month that the person has been receiving an annuity or benefit must be applied,
6.26effective January 1, following the calendar year in which the person has been retired for at
6.27least six months, but has been retired for less than 18 months.
6.28(d) Increases under paragraph (c) for the State Patrol retirement plan terminate on
6.29December 31 of the calendar year in which the actuarial valuation prepared by the approved
6.30actuary under sections 356.214 and 356.215 and the standards for actuarial work adopted by
6.31the Legislative Commission on Pensions and Retirement indicates that the market value of
6.32assets of the retirement plan equals or exceeds 90 percent of the actuarial accrued liability
6.33of the retirement plan and increases under subdivision 1 recommence after that date.
6.34(c) (e) An increase in annuity or benefit payments under this subdivision must be
6.35made automatically unless written notice is filed by the annuitant or benefit recipient
7.1with the executive director of the applicable covered retirement plan requesting that the
7.2increase not be made.
7.3EFFECTIVE DATE.This section is effective July 1, 2013.

7.4    Sec. 11. REPEALER.
7.5Minnesota Statutes 2012, section 352B.11, subdivision 2c, is repealed.
7.6EFFECTIVE DATE.This section is effective July 1, 2013.


7.9    Section 1. Minnesota Statutes 2012, section 353.01, subdivision 10, is amended to read:
7.10    Subd. 10. Salary. (a) Subject to the limitations of section 356.611, "salary" means:
7.11    (1) the wages or periodic compensation of payable to a public employee, by the
7.12employing governmental subdivision before:
7.13    (i) employee retirement deductions that are designated as picked-up contributions
7.14under section 356.62;
7.15    (ii) any employee-elected deductions for deferred compensation, supplemental
7.16retirement plans, or other voluntary salary reduction programs, and also means "wages"
7.17and includes net income from fees that would have otherwise been available as a cash
7.18payment to the employee; and
7.19(iii) employee deductions for contributions to a supplemental plan or to a
7.20governmental trust established under section 356.24, subdivision 1, clause (7), to save for
7.21postretirement health care expenses, unless otherwise excluded under paragraph (b);
7.22    (2) for a public employee who is covered by a supplemental retirement plan under
7.23section 356.24, subdivision 1, clause (8), (9), or (10), or (12) which require all plan
7.24contributions be made by the employer, the contribution contributions to the applicable
7.25supplemental retirement plan when an agreement between the parties establishes that the
7.26contribution contributions will either result in a mandatory reduction of employees' wages
7.27through payroll withholdings, or be made in lieu of an amount that would otherwise be
7.28paid as wages; and
7.29    (3) for a public employee who has prior service covered by a local police or
7.30firefighters relief association that has consolidated with the Public Employees Retirement
7.31Association or to which section 353.665 applies and who has elected coverage either
7.32under the public employees police and fire fund benefit plan under section 353A.08
7.33following the consolidation or under section 353.665, subdivision 4, the rate of salary
8.1upon which member contributions to the special fund of the relief association were made
8.2prior to the effective date of the consolidation as specified by law and by bylaw provisions
8.3governing the relief association on the date of the initiation of the consolidation procedure
8.4and the actual periodic compensation of the public employee after the effective date of
8.5consolidation.;
8.6(4) a payment from a public employer through a grievance proceeding, settlement,
8.7or court order that is attached to a specific earnings period in which the employee's regular
8.8salary was not earned or paid to the member due to a suspension or a period of involuntary
8.9termination that is not a wrongful discharge under section 356.50; provided the amount is
8.10not less than the equivalent of the average of the hourly base salary rate in effect during
8.11the last six months of allowable service prior to the suspension or period of involuntary
8.12termination, plus any applicable increases awarded during the period that would have been
8.13paid under a collective bargaining agreement or personnel policy but for the suspension
8.14or involuntary termination, multiplied by the average number of regular hours for which
8.15the employee was compensated during the six months of allowable service prior to the
8.16suspension or period of involuntary termination, but not to exceed the compensation that
8.17the public employee would have earned if regularly employed during the applicable period;
8.18(5) the amount paid to a member who is absent from employment by reason of
8.19personal, parental, or military leave of absence if equivalent to the hourly base salary
8.20rate in effect during the six months of allowable service, or portions thereof, prior to the
8.21leave, multiplied by the average number of regular hours for which the employee was
8.22compensated during the six months of allowable service prior to the applicable leave of
8.23absence;
8.24(6) the amount paid to a member who is absent from employment by reason of an
8.25authorized medical leave of absence if specified in advance to be at least one-half, but
8.26no more than equal to the earnings the member received, on which contributions were
8.27reported and allowable service credited during the six months immediately preceding
8.28the medical leave of absence; and
8.29    (7) for a public employee who receives in addition to regular salary or in lieu
8.30of regular salary increases performance or merit bonus payment under a written
8.31compensation plan, policy, or collective bargaining agreement, the compensation paid to
8.32the employee for attaining or exceeding performance goals, duties, or measures during a
8.33specified period of employment.
8.34    (b) Salary does not mean:
8.35    (1) the fees paid to district court reporters,;
9.1    (2) unused annual leave, vacation, or sick leave payments, in the form of lump-sum
9.2or periodic payments,;
9.3    (3) for the donor, payment to another person of the value of hours donated under a
9.4benevolent vacation, personal, or sick leave donation program;
9.5    (4) any form of severance payments, or retirement incentive payments;
9.6    (5) an allowance payment or per diem payments for or reimbursement of expenses,;
9.7    (6) lump-sum settlements not attached to a specific earnings period, or;
9.8    (7) workers' compensation payments or disability insurance payments, including
9.9payments from employer self-insurance arrangements;
9.10    (2) (8) employer-paid amounts used by an employee toward the cost of insurance
9.11coverage, employer-paid fringe benefits, flexible spending accounts, cafeteria plans, health
9.12care expense accounts, day care expenses, or any payments in lieu of any employer-paid
9.13group insurance coverage, including the difference between single and family rates that
9.14may be paid to a member with single coverage and certain amounts determined by the
9.15executive director to be ineligible;
9.16(9) employer-paid fringe benefits, including, but not limited to:
9.17(i) employer-paid premiums or supplemental contributions for employees for all
9.18types of insurance;
9.19(ii) membership dues or fees for the use of fitness or recreational facilities;
9.20(iii) incentive payments or cash awards relating to a wellness program;
9.21(iv) the value of any nonmonetary benefits;
9.22(v) any form of payment made in lieu of an employer-paid fringe benefit;
9.23(vi) an employer-paid amount made to a deferred compensation or tax-sheltered
9.24annuity program; and
9.25(vii) any amount paid by the employer as a supplement to salary, either as a
9.26lump-sum amount or a fixed or matching amount paid on a recurring basis, that is not
9.27available to the employee as cash;
9.28    (3) (10) the amount equal to that which the employing governmental subdivision
9.29would otherwise pay toward single or family insurance coverage for a covered employee
9.30when, through a contract or agreement with some but not all employees, the employer:
9.31    (i) discontinues, or for new hires does not provide, payment toward the cost of the
9.32employee's selected insurance coverages under a group plan offered by the employer;
9.33    (ii) makes the employee solely responsible for all contributions toward the cost of
9.34the employee's selected insurance coverages under a group plan offered by the employer,
9.35including any amount the employer makes toward other employees' selected insurance
9.36coverages under a group plan offered by the employer; and
10.1    (iii) provides increased salary rates for employees who do not have any
10.2employer-paid group insurance coverages;
10.3    (4) (11) except as provided in section 353.86 or 353.87, compensation of any
10.4kind paid to volunteer ambulance service personnel or volunteer firefighters, as defined
10.5in subdivision 35 or 36;
10.6    (5) (12) the amount of compensation that exceeds the limitation provided in section
10.7356.611 ; and
10.8    (6) (13) amounts paid by a federal or state grant for which the grant specifically
10.9prohibits grant proceeds from being used to make pension plan contributions, unless the
10.10contributions to the plan are made from sources other than the federal or state grant.; and
10.11(14) bonus pay that is not performance or merit pay under paragraph (a), clause (6).
10.12    (c) Amounts, other than those provided under paragraph (a), clause (4), provided to
10.13an employee by the employer through a grievance proceeding, a court order, or a legal
10.14settlement are salary only if the settlement or court order is reviewed by the executive
10.15director and the amounts are determined by the executive director to be consistent with
10.16paragraph (a) and prior determinations.
10.17EFFECTIVE DATE.This section is effective the day following final enactment.


10.21    Section 1. Minnesota Statutes 2012, section 353.01, subdivision 17a, is amended to read:
10.22    Subd. 17a. Average salary. (a) "Average salary," for purposes of calculating a
10.23retirement annuity under section 353.29, subdivision 3, means an amount equivalent to
10.24the average of the highest salary of the member, police officer, or firefighter, whichever
10.25applies, upon which employee contributions were paid for any five successive years of
10.26allowable service, based on dates of salary periods as listed on salary deduction reports.
10.27"Average salary" includes the salary of the employee during the period of covered
10.28employment rendered after reaching the allowable service credit limit of section 353.651,
10.29subdivision 3, paragraph (b). Average salary must be based upon all allowable service if
10.30this service is less than five years.
10.31(b) "Average salary" may not include any reduced salary paid during a period
10.32in which the employee is entitled to benefit payments from workers' compensation for
10.33temporary disability, unless the average salary is higher, including this period.
10.34EFFECTIVE DATE.This section is effective the day following final enactment.

11.1    Sec. 2. Minnesota Statutes 2012, section 353.01, subdivision 41, is amended to read:
11.2    Subd. 41. Duty disability. "Duty disability," physical or psychological, means a
11.3condition that is expected to prevent a member, for a period of not less than 12 months,
11.4from performing the normal duties of the position held by a person who is a member of the
11.5public employees police and fire retirement plan, and that is the direct result of an injury
11.6incurred during, or a disease arising out of, the performance of normal duties or the actual
11.7performance of less frequent inherently dangerous duties, either of which are specific to
11.8protecting the property and personal safety of others and that present inherent dangers that
11.9are specific to the positions covered by the public employees police and fire retirement plan.
11.10EFFECTIVE DATE.This section is effective the day following final enactment.

11.11    Sec. 3. Minnesota Statutes 2012, section 353.01, subdivision 47, is amended to read:
11.12    Subd. 47. Vesting. (a) "Vesting" means obtaining a nonforfeitable entitlement
11.13to an annuity or benefit from a retirement plan administered by the Public Employees
11.14Retirement Association by having credit for sufficient allowable service under paragraph
11.15(b) or, (c), or (d), whichever applies.
11.16(b) For purposes of qualifying for an annuity or benefit as a basic or coordinated plan
11.17member of the general employees retirement plan of the Public Employees Retirement
11.18Association:
11.19(1) a public employee who first became a member of the association before July
11.201, 2010, is 100 percent vested when the person has accrued credit for not less than three
11.21years of allowable service as defined under subdivision 16; and
11.22(2) a public employee who first becomes a member of the association after June 30,
11.232010, is 100 percent vested when the person has accrued credit for not less than five years
11.24of allowable service as defined under subdivision 16.
11.25(c) For purposes of qualifying for an annuity or benefit as a member of the police
11.26and fire plan or a member of the local government correctional employees retirement plan:
11.27(1) a public employee who first became a member of the association before July
11.281, 2010, is 100 percent vested when the person has accrued credit for not less than three
11.29years of allowable service as defined under subdivision 16; and
11.30(2) a public employee who first becomes a member of the association after June
11.3130, 2010, is vested at the following percentages when the person has accrued credited
11.32allowable service as defined under subdivision 16, as follows:
11.33(i) 50 percent after five years;
11.34(ii) 60 percent after six years;
11.35(iii) 70 percent after seven years;
12.1(iv) 80 percent after eight years;
12.2(v) 90 percent after nine years; and
12.3(vi) 100 percent after ten years.
12.4(d) For purposes of qualifying for an annuity or benefit as a member of the public
12.5employees police and fire retirement plan:
12.6(1) a public employee who first became a member of the association before July
12.71, 2010, is 100 percent vested when the person has accrued credit for not less than three
12.8years of allowable service as defined under subdivision 16;
12.9(2) a public employee who first becomes a member of the association after June 30,
12.102010, and before July 1, 2014, is vested at the following percentages when the person has
12.11accrued credited allowable service as defined under subdivision 16, as follows:
12.12(i) 50 percent after five years;
12.13(ii) 60 percent after six years;
12.14(iii) 70 percent after seven years;
12.15(iv) 80 percent after eight years;
12.16(v) 90 percent after nine years; and
12.17(vi) 100 percent after ten years; and
12.18(3) a public employee who first becomes a member of the association after June
12.1930, 2014, is vested at the following percentages when the person has accrued credited
12.20allowable service as defined under subdivision 16, as follows:
12.21(i) 50 percent after ten years;
12.22(ii) 55 percent after 11 years;
12.23(iii) 60 percent after 12 years;
12.24(iv) 65 percent after 13 years;
12.25(v) 70 percent after 14 years;
12.26(vi) 75 percent after 15 years;
12.27(vii) 80 percent after 16 years;
12.28(viii) 85 percent after 17 years;
12.29(ix) 90 percent after 18 years;
12.30(x) 95 percent after 19 years; and
12.31(xi) 100 percent after 20 or more years.

12.32    Sec. 4. Minnesota Statutes 2012, section 353.031, subdivision 4, is amended to read:
12.33    Subd. 4. Additional requirements; eligibility for police and fire or local
12.34government correctional service retirement plan disability benefits. (a) If an
12.35application for disability benefits is filed within two years of the date of the injury or the
13.1onset of the illness that gave rise to the disability application, the application must be
13.2supported by evidence that the applicant is unable to perform the duties of the position
13.3held by the applicant on the date of the injury or the onset of the illness causing the
13.4disability. The employer must provide evidence indicating whether the applicant is able or
13.5unable to perform the duties of the position held on the date of the injury or onset of the
13.6illness causing the disability and the specifications, a clear explanation of any duties that
13.7the individual can or cannot perform, and an explanation of why the employer may or may
13.8not authorize continued employment to the applicant in the current or some other position.
13.9    (b) If an application for disability benefits is filed more than two years after the
13.10date of injury or the onset of an illness causing the disability, the application must be
13.11supported by evidence that the applicant is unable to perform the most recent duties that
13.12are were expected to be performed by the applicant during the 90 days before preceding
13.13the filing of last day the application applicant performed services for the employer. The
13.14employer must provide evidence of the duties that are were expected to be performed by
13.15the applicant during the 90 days before preceding the filing of last day the application
13.16 applicant performed services, whether the applicant can or cannot perform those duties
13.17overall, and the specifications a clear explanation of any duties that the applicant can
13.18or cannot perform, and an explanation of why the employer may or may not authorize
13.19continued employment to the applicant in the current or some other position.
13.20    (c) Any report supporting a claim to disability benefits under section 353.656 or
13.21353E.06 must specifically relate the disability to its cause; and for any claim to duty
13.22disability from an injury or illness arising out of an act of duty, the report must state the
13.23specific act of duty giving rise to the claim, and relate the cause of disability to inherently
13.24dangerous duties specific tasks or functions required to be performed by the employee in
13.25fulfilling the employee's duty-related acts which must be specific to the inherent dangers of
13.26the positions eligible for membership in covered by the public employees police and fire
13.27fund plan and the local government correctional service retirement plan. Any report that
13.28does not relate the cause of disability to specific acts or functions inherently dangerous
13.29duties performed by the employee may not be relied upon as evidence to support eligibility
13.30for benefits and may be disregarded in the executive director's decision-making process.
13.31    (d) Any application for duty disability must be supported by a first report of injury as
13.32defined in section 176.231.
13.33    (e) If a member who has applied for and been approved for disability benefits before
13.34the termination of service does not terminate service or is not placed on an authorized
13.35leave of absence as certified by the governmental subdivision within 45 days following
13.36the date on which the application is approved, the application shall be canceled. If an
14.1approved application for disability benefits has been canceled, a subsequent application
14.2for disability benefits may not be filed on the basis of the same medical condition for a
14.3minimum of one year from the date on which the previous application was canceled.
14.4EFFECTIVE DATE.This section is effective the day following final enactment.

14.5    Sec. 5. Minnesota Statutes 2012, section 353.35, subdivision 1, is amended to read:
14.6    Subdivision 1. Refund rights. (a) Except as provided in paragraph (b), when any
14.7former member accepts a refund, all existing service credits and all rights and benefits to
14.8which the person was entitled prior to the acceptance of the refund must terminate.
14.9(b) A refund under section 353.651, subdivision 3, paragraph (c), does not result in a
14.10forfeiture of salary credit for the allowable service credit covered by the refund.
14.11(c) The rights and benefits of a former member must not be restored until the person
14.12returns to active service and acquires at least six months of allowable service credit
14.13after taking the last refund and repays the refund or refunds taken and interest received
14.14under section 353.34, subdivisions 1 and 2, plus interest at an annual rate of 8.5 percent
14.15compounded annually. If the person elects to restore service credit in a particular fund
14.16from which the person has taken more than one refund, the person must repay all refunds
14.17to that fund. All refunds must be repaid within six months of the last date of termination
14.18of public service.
14.19EFFECTIVE DATE.This section is effective the day following final enactment.

14.20    Sec. 6. Minnesota Statutes 2012, section 353.65, subdivision 2, is amended to read:
14.21    Subd. 2. Employee contribution. (a) For members other than members who were
14.22active members of the former Minneapolis Firefighters Relief Association on December
14.2329, 2011, or for members other than members who were active members of the former
14.24Minneapolis Police Relief Association on December 29, 2011, the employee contribution
14.25is 9.4 percent an amount equal to the following percentage of the total salary of the each
14.26member in calendar year 2010 and is, as follows: 9.6 percent of the salary of the member
14.27in each before calendar year after 2010 2014; 10.2 percent in calendar year 2014; and 10.8
14.28percent in calendar year 2015 and thereafter.
14.29(b) For members who were active members of the former Minneapolis Firefighters
14.30Relief Association on December 29, 2011, the employee contribution is an amount
14.31equal to eight percent of the monthly unit value under section 353.01, subdivision 10a,
14.32multiplied by 80 and expressed as a biweekly amount for each member. The employee
14.33contribution made by a member with at least 25 years of service credit as an active
15.1member of the former Minneapolis Firefighters Relief Association must be deposited in
15.2the postretirement health care savings account established under section 352.98.
15.3(c) For members who were active members of the former Minneapolis Police Relief
15.4Association on December 29, 2011, the employee contribution is an amount equal to eight
15.5percent of the monthly unit value under section 353.01, subdivision 10b, multiplied by 80
15.6and expressed as a biweekly amount for each member. The employee contribution made
15.7by a member with at least 25 years of service credit as an active member of the former
15.8Minneapolis Police Relief Association must be deposited in the postretirement health care
15.9savings account established under section 352.98.
15.10(d) Contributions under this section must be made by deduction from salary in
15.11the manner provided in subdivision 4. Where any portion of a member's salary is paid
15.12from other than public funds, the member's employee contribution is based on the total
15.13salary received from all sources.
15.14EFFECTIVE DATE.This section is effective the day following final enactment.

15.15    Sec. 7. Minnesota Statutes 2012, section 353.65, subdivision 3, is amended to read:
15.16    Subd. 3. Employer contribution. (a) With respect to members other than members
15.17who were active members of the former Minneapolis Firefighters Relief Association on
15.18December 29, 2011, or for members other than members who were active members of
15.19the former Minneapolis Police Relief Association on December 29, 2011, the employer
15.20contribution is 14.1 percent an amount equal to the following percentage of the total salary
15.21of the each member in calendar year 2010 and is, as follows: 14.4 percent of the salary of
15.22the member in each before calendar year after 2010 2014; 15.3 percent in calendar year
15.232014; and 16.2 percent in calendar year 2015 and thereafter.
15.24(b) With respect to members who were active members of the former Minneapolis
15.25Firefighters Relief Association on December 29, 2011, the employer contribution is an
15.26amount equal to the amount of the member contributions under subdivision 2, paragraph
15.27(b).
15.28(c) With respect to members who were active members of the former Minneapolis
15.29Police Relief Association on December 29, 2011, the employer contribution is an amount
15.30equal to the amount of the member contributions under subdivision 2, paragraph (c).
15.31(d) Contributions under this subdivision must be made from funds available to the
15.32employing subdivision by the means and in the manner provided in section 353.28.
15.33EFFECTIVE DATE.This section is effective the day following final enactment.

16.1    Sec. 8. Minnesota Statutes 2012, section 353.651, subdivision 3, is amended to read:
16.2    Subd. 3. Retirement annuity formula. (a) The average salary as defined in
16.3section 353.01, subdivision 17a, multiplied by the percent specified in section 356.315,
16.4subdivision 6 , per year multiplied by years of allowable service, multiplied by the
16.5applicable vesting percentage indicated in section 353.01, subdivision 47, determines the
16.6amount of the normal retirement annuity. If the member has earned allowable service
16.7for performing services other than those of a police officer or firefighter, the annuity
16.8representing that service must be computed under sections 353.29 and 353.30.
16.9(b) For a member first enrolled in the public employees police and fire retirement
16.10plan after June 30, 2014, the average salary as defined in section 353.01, subdivision 17a,
16.11paragraph (a), includes salary for all years for which contributions have been reported to
16.12the public employees police and fire retirement plan, but allowable service included in
16.13the calculation is limited to 33 years and the normal retirement annuity must not exceed
16.1499 percent of the average salary.
16.15(c) When the annuity begins for members of the public employees police and fire
16.16retirement plan enrolled after June 30, 2014, a prorated share of the contributions for
16.17allowable service exceeding 33 years must be refunded to the member. The prorated
16.18share of the contributions to be refunded is determined by multiplying the accumulated
16.19deductions paid by the member to the public employees police and fire retirement plan by
16.20a percentage determined using the number of months of service in excess of 396 as the
16.21numerator and the total number of months of allowable service on which contributions
16.22were reported as the denominator. Interest as defined in section 353.34, subdivision 2,
16.23is to be applied to the prorated share of contributions from the first of the 397th month
16.24of allowable service reported to the public employees police and fire retirement plan to
16.25the first of the month the annuity begins.
16.26EFFECTIVE DATE.This section is effective the day following final enactment.

16.27    Sec. 9. Minnesota Statutes 2012, section 353.651, subdivision 4, is amended to read:
16.28    Subd. 4. Early retirement. (a) A person who becomes a public employees police
16.29and fire retirement plan member after June 30, 2007, or a former member who is reinstated
16.30as a member of the plan after that date, who is at least 50 years of age and who is at least
16.31partially vested under section 353.01, subdivision 47, upon the termination of public
16.32service before July 1, 2014, if the person is other than a county sheriff or after January 4,
16.332015, if the person is a county sheriff is entitled upon application to a retirement annuity
16.34equal to the normal annuity calculated under subdivision 3, reduced by two-tenths of one
16.35percent for each month that the member is under age 55 at the time of retirement.
17.1    (b) Upon the termination of public service before July 1, 2014, if the person is
17.2other than a county sheriff or upon the termination of public service before January 5,
17.32015, if the person is a county sheriff, any public employees police and fire retirement
17.4plan member who first became a member of the plan before July 1, 2007, and who is
17.5not specified in paragraph (a), upon attaining at least 50 years of age with at least three
17.6years of allowable service is entitled upon application to a retirement annuity equal to the
17.7normal annuity calculated under subdivision 3, reduced by one-tenth of one percent for
17.8each month that the member is under age 55 at the time of retirement.
17.9(c) A person other than a county sheriff who is a member of the public employees
17.10police and fire retirement plan on or after July 1, 2014, or a county sheriff who is a
17.11member of the public employees police and fire retirement plan on or after January 5,
17.122015, and who is at least 50 years old and is at least partially vested under section 353.01,
17.13subdivision 47, and whose benefit effective date is after July 1, 2014, if other than a
17.14county sheriff or after January 4, 2015, if a county sheriff and on or before July 1, 2019, is
17.15entitled upon application to a retirement annuity equal to the normal annuity calculated
17.16under subdivision 3, reduced for each month the member is under age 55 at the time of
17.17retirement by applying a blended monthly rate that is equivalent to the sum of:
17.18(1) one-sixtieth of the annual rate of five percent, prorated for each month the
17.19person's benefit effective date is after July 1, 2014, or after December 31, 2014, whichever
17.20applies; and
17.21(2) one-sixtieth of the annual rate provided under paragraph (a) or (b), whichever
17.22applies, for each month the person's benefit effective date is before July 1, 2019.
17.23(d) A person other than a county sheriff who is a member of the public employees
17.24police and fire retirement plan on or after July 1, 2014, or a county sheriff who is a member
17.25of the public employees police and fire retirement plan on or after January 5, 2015, and
17.26who is at least 50 years old and is at least partially vested under section 353.01, subdivision
17.2747, whose benefit effective date is after July 1, 2019, is entitled, upon application, to a
17.28retirement annuity equal to the normal annuity calculated under subdivision 3, reduced by
17.29five percent annually, prorated for each month that the member is under age 55.
17.30EFFECTIVE DATE.This section is effective the day following final enactment.

17.31    Sec. 10. Minnesota Statutes 2012, section 353.657, subdivision 2a, is amended to read:
17.32    Subd. 2a. Death while eligible survivor benefit. (a) If a member or former member
17.33who has attained the age of at least 50 years and either who is vested under section
17.34353.01, subdivision 47 , or who has credit for at least 30 years of allowable service,
17.35regardless of age attained, dies before the annuity or disability benefit becomes payable,
18.1notwithstanding any designation of beneficiary to the contrary, the surviving spouse may
18.2elect to receive a death while eligible survivor benefit.
18.3    (b) Notwithstanding the definition of surviving spouse in section 353.01, subdivision
18.420 , a former spouse of the member, if any, is entitled to a portion of the death while
18.5eligible survivor benefit if stipulated under the terms of a marriage dissolution decree
18.6filed with the association. If there is no surviving spouse or child or children, a former
18.7spouse may be entitled to a lump-sum refund payment under section 353.32, subdivision
18.81 , if provided for in a marriage dissolution decree but not a death while eligible survivor
18.9benefit despite the terms of a marriage dissolution decree filed with the association.
18.10    (c) The benefit may be elected instead of a refund with interest under section 353.32,
18.11subdivision 1 , or surviving spouse benefits otherwise payable under subdivisions 1 and
18.122. The benefit must be an annuity equal to the 100 percent joint and survivor annuity
18.13which the member could have qualified for on the date of death, computed as provided in
18.14sections 353.651, subdivisions 2 and subdivision 3, and 353.30, subdivision 3.
18.15    (d) The surviving spouse may apply for the annuity at any time after the date
18.16on which the deceased employee would have attained the required age for retirement
18.17based on the employee's allowable service. Sections 353.34, subdivision 3, and 353.71,
18.18subdivision 2 , apply to a deferred annuity payable under this subdivision.
18.19    (e) No payment accrues beyond the end of the month in which entitlement to
18.20such annuity has terminated. An amount equal to the excess, if any, of the accumulated
18.21contributions which were credited to the account of the deceased employee over and
18.22above the total of the annuities paid and payable to the surviving spouse must be paid to
18.23the deceased member's last designated beneficiary or, if none, to the legal representative of
18.24the estate of such deceased member.
18.25    (f) Any member may request in writing, with the signed consent of the spouse, that
18.26this subdivision not apply and that payment be made only to the designated beneficiary, as
18.27otherwise provided by this chapter.
18.28    (g) For a member who is employed as a full-time firefighter by the Department of
18.29Military Affairs of the state of Minnesota, allowable service as a full-time state Military
18.30Affairs Department firefighter credited by the Minnesota State Retirement System may be
18.31used in meeting the minimum allowable service requirement of this subdivision.
18.32EFFECTIVE DATE.This section is effective the day following final enactment.

18.33    Sec. 11. Minnesota Statutes 2012, section 353.657, subdivision 3a, is amended to read:
19.1    Subd. 3a. Maximum and minimum family benefits. (a) The maximum monthly
19.2benefit per family must not exceed the following percentages of the member's average
19.3monthly salary as specified in subdivision 3:
19.4    (1) 80 percent, if the member's death was a line of duty death; or
19.5    (2) 70 percent, if the member's death was not a line of duty death or occurred while
19.6the member was receiving a disability benefit that accrued before July 1, 2007.
19.7    (b) The minimum monthly benefit per family, including the joint and survivor
19.8optional annuity under subdivision 2a, and section 353.656, subdivision 1a, must not be
19.9less than the following percentage of the member's average monthly salary as specified in
19.10subdivision 3:
19.11    (1) 60 percent, if the death was a line of duty death; or
19.12    (2) 50 percent, if the death was not a line of duty death or occurred while the member
19.13was receiving a disability benefit that accrued before July 1, 2007.
19.14    (c) If the maximum under paragraph (a) is exceeded, the monthly benefit of the
19.15joint annuitant, surviving spouse, and dependent children, as applicable, must each be
19.16reduced to the amount necessary proportionately so that the total family benefit does
19.17not exceed the applicable maximum. The joint and survivor optional annuity, surviving
19.18spouse, or dependent children benefit, as applicable, must be restored, plus applicable
19.19postretirement adjustments under Minnesota Statutes 2008, section 356.41 or section
19.20356.415 , as the dependent child or children become no longer dependent under section
19.21353.01, subdivision 15 , or in the event of the death of the joint and survivor annuity
19.22recipient or the surviving spouse.
19.23EFFECTIVE DATE.This section is effective the day following final enactment.

19.24    Sec. 12. Minnesota Statutes 2012, section 353E.001, subdivision 1, is amended to read:
19.25    Subdivision 1. Duty disability. "Duty disability," physical or psychological, means
19.26a condition that is expected to prevent a member, for a period of not less than 12 months,
19.27from performing the normal duties of a local government correctional service employee as
19.28defined under section 353E.02 and that is the direct result of an injury incurred during, or
19.29a disease arising out of, the performance of normal duties or the actual performance of
19.30less frequent inherently dangerous duties, either of which are specific to protecting the
19.31property and personal safety of others and that present inherent dangers that are specific to
19.32the positions covered by the local government correctional service retirement plan.
19.33EFFECTIVE DATE.This section is effective the day following final enactment.

20.1    Sec. 13. Minnesota Statutes 2012, section 356.415, subdivision 1b, is amended to read:
20.2    Subd. 1b. Annual postretirement adjustments; PERA; general employees
20.3retirement plan and local government correctional retirement plan. (a) Retirement
20.4annuity, disability benefit, or survivor benefit recipients of the general employees
20.5retirement plan of the Public Employees Retirement Association and the local government
20.6correctional service retirement plan are entitled to a postretirement adjustment annually
20.7on January 1, as follows:
20.8(1) for January 1, 2011, and each successive January 1 until funding stability is
20.9restored for the applicable retirement plan, a postretirement increase of one percent must
20.10be applied each year, effective on January 1, to the monthly annuity or benefit amount of
20.11each annuitant or benefit recipient who has been receiving an annuity or benefit for at least
20.1212 full months as of the current June 30;
20.13(2) for January 1, 2011, and each successive January 1 until funding stability is
20.14restored for the applicable retirement plan, for each annuitant or benefit recipient who has
20.15been receiving an annuity or a benefit for at least one full month, but less than 12 full
20.16months as of the current June 30, an annual postretirement increase of 1/12 of one percent
20.17for each month the person has been receiving an annuity or benefit must be applied;
20.18(3) for each January 1 following the restoration of funding stability for the applicable
20.19retirement plan, a postretirement increase of 2.5 percent must be applied each year,
20.20effective January 1, to the monthly annuity or benefit amount of each annuitant or benefit
20.21recipient who has been receiving an annuity or benefit for at least 12 full months as of
20.22the current June 30; and
20.23(4) for each January 1 following restoration of funding stability for the applicable
20.24retirement plan, for each annuity or benefit recipient who has been receiving an annuity or
20.25a benefit for at least one full month, but less than 12 full months as of the current June
20.2630, an annual postretirement increase of 1/12 of 2.5 percent for each month the person
20.27has been receiving an annuity or benefit must be applied.
20.28(b) Funding stability is restored when the market value of assets of the applicable
20.29retirement plan equals or exceeds 90 percent of the actuarial accrued liabilities of the
20.30applicable plan in the two most recent prior consecutive actuarial valuation valuations
20.31prepared under section 356.215 and the standards for actuarial work by the approved
20.32actuary retained by the Public Employees Retirement Association under section 356.214.
20.33(c) If, after applying the increase as provided for in paragraph (a), clauses (3)
20.34and (4), the market value of the applicable retirement plan is determined in the next
20.35subsequent actuarial valuation prepared under section 356.215 to be less than 90 percent
20.36of the actuarial accrued liability of any of the applicable Public Employees Retirement
21.1Association plans, After having met the definition of funding stability under paragraph
21.2(b), the increase provided in paragraph (a), clauses (1) and (2), are rather than an increase
21.3under subdivision 1, is again to be applied as of the next successive January until funding
21.4stability is again restored. in a subsequent year or years if the market value of assets of
21.5the applicable plan equals or is less than:
21.6(1) 85 percent of the actuarial accrued liabilities of the applicable plan for two
21.7consecutive actuarial valuations; or
21.8(2) 80 percent of the actuarial accrued liabilities of the applicable plan for the most
21.9recent actuarial valuation.
21.10(d) An increase in annuity or benefit payments under this section must be made
21.11automatically unless written notice is filed by the annuitant or benefit recipient with the
21.12executive director of the Public Employees Retirement Association requesting that the
21.13increase not be made.
21.14(e) The retirement annuity payable to a person who retires before becoming eligible
21.15for Social Security benefits and who has elected the optional payment, as provided in
21.16section 353.29, subdivision 6, must be treated as the sum of a period-certain retirement
21.17annuity and a life retirement annuity for the purposes of any postretirement adjustment.
21.18The period-certain retirement annuity plus the life retirement annuity must be the
21.19annuity amount payable until age 62 for section 353.29, subdivision 6. A postretirement
21.20adjustment granted on the period-certain retirement annuity must terminate when the
21.21period-certain retirement annuity terminates.
21.22EFFECTIVE DATE.This section is effective the day following final enactment.

21.23    Sec. 14. Minnesota Statutes 2012, section 356.415, subdivision 1c, is amended to read:
21.24    Subd. 1c. Annual postretirement adjustments; PERA-police and fire. (a)
21.25Retirement annuity, disability benefit, or survivor benefit recipients of the public
21.26employees police and fire retirement plan are entitled to a postretirement adjustment
21.27annually on January 1, until funding stability is restored, as follows:
21.28(1) for January 1, 2011, and for January 1, 2012, for each annuitant or benefit
21.29recipient whose annuity or benefit effective date is on or before June 1, 2014, who has
21.30been receiving the annuity or benefit for at least 12 full months as of the immediate
21.31preceding June 30, an amount equal to one percent in each year; or
21.32(2) for January 1, 2011, and for January 1, 2012, for each annuitant or benefit
21.33recipient whose annuity or benefit effective date is on or before June 1, 2014, who has
21.34been receiving the annuity or benefit for at least one full month, but not less than 11
22.1months, as of the immediate preceding June 30, an amount equal to 1/12 of one percent in
22.2each year for each month of annuity or benefit receipt; and
22.3(3) for January 1, 2013, and each successive January 1 that follows the loss of
22.4funding stability as defined under paragraph (b) until funding stability as defined under
22.5paragraph (b) is again restored, for each annuitant or benefit recipient whose annuity
22.6or benefit effective date is after June 1, 2014, who has will have been receiving the an
22.7annuity or benefit for at least 12 36 full months as of the immediate preceding June 30,
22.8an amount equal to the percentage increase in the Consumer Price Index for urban wage
22.9earners and clerical workers all items index published by the Bureau of Labor Statistics of
22.10the United States Department of Labor between the immediate preceding June 30 and the
22.11June 30 occurring 12 months previous, but not to exceed 1.5 one percent; or
22.12(4) for January 1, 2013, and each successive January 1 that follows the loss of funding
22.13stability as defined under paragraph (b) until funding stability as defined under paragraph
22.14(b) is again restored, for each annuitant or benefit recipient whose annuity or benefit
22.15effective date is after June 1, 2014, who has been receiving the annuity or benefit for at
22.16least one 25 full month months, but less than 36 months as of the immediate preceding June
22.1730, an amount equal to 1/12 of the percentage increase in the Consumer Price Index for
22.18urban wage earners and clerical workers all items index published by the Bureau of Labor
22.19Statistics of the United States Department of Labor between the immediate preceding June
22.2030 and the June 30 occurring 12 months previous for each full month of annuity or benefit
22.21receipt, but not to exceed 1/12 of 1.5 one percent for each full month of annuity or benefit
22.22receipt during the fiscal year in which the annuity or benefit was effective;.
22.23(5) for (b) Retirement annuity, disability benefit, or survivor benefit recipients of
22.24the public employees police and fire retirement plan are entitled to a postretirement
22.25adjustment annually on each January 1 following the restoration of funding stability as
22.26defined under paragraph (b) (c) and during the continuation of funding stability as defined
22.27under paragraph (b) (c), as follows:
22.28(1) for each annuitant or benefit recipient who has been receiving the annuity or
22.29benefit for at least 12 36 full months as of the immediate preceding June 30, an amount
22.30equal to the percentage increase in the Consumer Price Index for urban wage earners and
22.31clerical workers all items index published by the Bureau of Labor Statistics of the United
22.32States Department of Labor between the immediate preceding June 30 and the June 30
22.33occurring 12 months previous, but not to exceed 2.5 percent; and
22.34(6) for each January 1 following the restoration of funding stability as defined under
22.35paragraph (b) and during the continuation of funding stability as defined under paragraph
22.36(b), (2) for each annuitant or benefit recipient who has been receiving the annuity or benefit
23.1for at least one 25 full month months, but less than 36 full months, as of the immediate
23.2preceding June 30, an amount equal to 1/12 of the percentage increase in the Consumer
23.3Price Index for urban wage earners and clerical workers all items index published by
23.4the Bureau of Labor Statistics of the United States Department of Labor between the
23.5immediate preceding June 30 and the June 30 occurring 12 months previous for each full
23.6month of annuity or benefit receipt during the fiscal year in which the annuity or benefit
23.7was effective, but not to exceed 1/12 of 2.5 percent for each full month of annuity or
23.8benefit receipt during the fiscal year in which the annuity or benefit was effective.
23.9(b) (c) Funding stability is restored when the market value of assets of the public
23.10employees police and fire retirement plan equals or exceeds 90 percent of the actuarial
23.11accrued liabilities of the applicable plan in the two most recent prior consecutive actuarial
23.12valuation valuations prepared under section 356.215 and under the standards for actuarial
23.13work of the Legislative Commission on Pensions and Retirement by the approved actuary
23.14retained by the Public Employees Retirement Association under section 356.214.
23.15(d) After having met the definition of funding stability under paragraph (c), a full
23.16or prorated increase, as provided in paragraph (a), clauses (1), (2), (3), or (4), whichever
23.17applies, rather than adjustments under paragraph (b), is again applied in a subsequent year
23.18or years if the market value of assets of the public employees police and fire retirement
23.19plan equals or is less than:
23.20(1) 85 percent of the actuarial accrued liabilities of the applicable plan for two
23.21consecutive actuarial valuations; or
23.22(2) 80 percent of the actuarial accrued liabilities of the applicable plan for the most
23.23recent actuarial valuation.
23.24(c) (e) An increase in annuity or benefit payments under this section must be made
23.25automatically unless written notice is filed by the annuitant or benefit recipient with the
23.26executive director of the Public Employees Retirement Association requesting that the
23.27increase not be made.
23.28EFFECTIVE DATE.This section is effective the day following final enactment.


23.32    Section 1. Minnesota Statutes 2012, section 354.44, subdivision 6, is amended to read:
23.33    Subd. 6. Computation of formula program retirement annuity. (a) The formula
23.34retirement annuity must be computed in accordance with the applicable provisions of the
24.1formulas stated in paragraph (b) or (d) on the basis of each member's average salary under
24.2section 354.05, subdivision 13a, for the period of the member's formula service credit.
24.3    (b) This paragraph, in conjunction with paragraph (c), applies to a person who first
24.4became a member of the association or a member of a pension fund listed in section
24.5356.30, subdivision 3 , before July 1, 1989, unless paragraph (d), in conjunction with
24.6paragraph (e), produces a higher annuity amount, in which case paragraph (d) applies. The
24.7average salary as defined in section 354.05, subdivision 13a, multiplied by the following
24.8percentages per year of formula service credit shall determine the amount of the annuity to
24.9which the member qualifying therefor is entitled for service rendered before July 1, 2006:

24.10				Coordinated Member		Basic Member
24.11 24.12 24.13		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
24.14 24.15 24.16		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

24.17    For service rendered on or after July 1, 2006, the average salary as defined in section
24.18354.05 , subdivision 13a, multiplied by the following percentages per year of service credit,
24.19determines the amount the annuity to which the member qualifying therefor is entitled:

24.20				Coordinated Member		Basic Member
24.21 24.22 24.23		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
24.24 24.25 24.26		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

24.27    (c)(i) This paragraph applies only to a person who first became a member of the
24.28association or a member of a pension fund listed in section 356.30, subdivision 3, before
24.29July 1, 1989, and whose annuity is higher when calculated under paragraph (b), in
24.30conjunction with this paragraph than when calculated under paragraph (d), in conjunction
24.31with paragraph (e).
24.32    (ii) Where any member retires prior to normal retirement age under a formula
24.33annuity, the member shall be paid a retirement annuity in an amount equal to the normal
24.34annuity provided in paragraph (b) reduced by one-quarter of one percent for each month
24.35that the member is under normal retirement age at the time of retirement except that for
24.36any member who has 30 or more years of allowable service credit, the reduction shall be
24.37applied only for each month that the member is under age 62.
25.1    (iii) Any member whose attained age plus credited allowable service totals 90 years
25.2is entitled, upon application, to a retirement annuity in an amount equal to the normal
25.3annuity provided in paragraph (b), without any reduction by reason of early retirement.
25.4    (d) This paragraph applies to a member who has become at least 55 years old and
25.5first became a member of the association after June 30, 1989, and to any other member
25.6who has become at least 55 years old and whose annuity amount when calculated under
25.7this paragraph and in conjunction with paragraph (e), is higher than it is when calculated
25.8under paragraph (b), in conjunction with paragraph (c). For a basic member, the average
25.9salary, as defined in section 354.05, subdivision 13a, multiplied by the percent specified
25.10by section 356.315, subdivision 4, for each year of service for a basic member shall
25.11determine the amount of the retirement annuity to which the basic member is entitled.
25.12The annuity of a basic member who was a member of the former Minneapolis Teachers
25.13Retirement Fund Association as of June 30, 2006, must be determined according to the
25.14annuity formula under the articles of incorporation of the former Minneapolis Teachers
25.15Retirement Fund Association in effect as of that date. For a coordinated member, the
25.16average salary, as defined in section 354.05, subdivision 13a, multiplied by the percent
25.17specified in section 356.315, subdivision 2, for each year of service rendered before July
25.181, 2006, and by the percent specified in section 356.315, subdivision 2b, for each year of
25.19service rendered on or after July 1, 2006, determines the amount of the retirement annuity
25.20to which the coordinated member is entitled.
25.21    (e) This paragraph applies to a person who has become at least 55 years old and first
25.22becomes a member of the association after June 30, 1989, and to any other member who
25.23has become at least 55 years old and whose annuity is higher when calculated under
25.24paragraph (d) in conjunction with this paragraph than when calculated under paragraph
25.25(b), in conjunction with paragraph (c). An employee who retires under the formula annuity
25.26before the normal retirement age shall be paid the normal annuity provided in paragraph
25.27(d) reduced so that the reduced annuity is the actuarial equivalent of the annuity that
25.28would be payable to the employee if the employee deferred receipt of the annuity and the
25.29annuity amount were augmented at an annual rate of three percent compounded annually
25.30from the day the annuity begins to accrue until the normal retirement age if the employee
25.31became an employee before July 1, 2006, and at 2.5 percent compounded annually if the
25.32employee becomes an employee after June 30, 2006. Except in regards to section 354.46,
25.33this paragraph remains in effect until June 30, 2015.
25.34(f) After June 30, 2020, this paragraph applies to a person who has become at least
25.3555 years old and first becomes a member of the association after June 30, 1989, and to any
25.36other member who has become at least 55 years old and whose annuity is higher when
26.1calculated under paragraph (d) in conjunction with this paragraph than when calculated
26.2under paragraph (b), in conjunction with paragraph (c). An employee who retires under
26.3the formula annuity before the normal retirement age is entitled to receive the normal
26.4annuity provided in paragraph (d). For a person who is at least age 62 or older and has at
26.5least 30 years of service, the annuity must be reduced by an early reduction factor of six
26.6percent per year of the annuity that would be payable to the employee if the employee
26.7deferred receipt of the annuity and the annuity amount were augmented at an annual rate
26.8of three percent compounded annually from the day the annuity begins to accrue until the
26.9normal retirement age if the employee became an employee before July 1, 2006, and at 2.5
26.10percent compounded annually if the employee became an employee after June 30, 2006.
26.11For a person who is not at least age 62 or older and does not have at least 30 years of
26.12service, the annuity would be reduced by an early reduction factor of four percent per year
26.13for ages 55 through 59 and seven percent per year of the annuity that would be payable
26.14to the employee if the employee deferred receipt of the annuity and the annuity amount
26.15were augmented at an annual rate of three percent compounded annually from the day
26.16the annuity begins to accrue until the normal retirement age if the employee became an
26.17employee before July 1, 2006, and at 2.5 percent compounded annually if the employee
26.18became an employee after June 30, 2006.
26.19(g) After June 30, 2015, and before July 1, 2020, for a person who would have
26.20a reduced retirement annuity under either paragraph (e) or (f) if they were applicable,
26.21the employee is entitled to receive a reduced annuity which must be calculated using
26.22a blended reduction factor augmented monthly by 1/60 of the difference between the
26.23reduction required under paragraph (e) and the reduction required under paragraph (f).
26.24    (f) (h) No retirement annuity is payable to a former employee with a salary that
26.25exceeds 95 percent of the governor's salary unless and until the salary figures used in
26.26computing the highest five successive years average salary under paragraph (a) have been
26.27audited by the Teachers Retirement Association and determined by the executive director
26.28to comply with the requirements and limitations of section 354.05, subdivisions 35 and 35a.
26.29EFFECTIVE DATE.This section is effective July 1, 2013.


26.33    Section 1. [354.436] DIRECT STATE AID ON BEHALF OF THE FORMER
26.34MINNEAPOLIS TEACHERS RETIREMENT FUND ASSOCIATION.
27.1    Subdivision 1. Aid authorization. The state shall pay $12,954,000 to the Teachers
27.2Retirement Association on behalf of the former Minneapolis Teachers Retirement Fund
27.3Association.
27.4    Subd. 2. Aid appropriation. The commissioner of management and budget shall
27.5pay the aid annually on October 1. The amount required is appropriated annually from the
27.6general fund to the commissioner of management and budget.
27.7    Subd. 3. Aid expiration. The aid specified in this section terminates and this
27.8section expires when the current assets of the Teachers Retirement Association fund equal
27.9or exceed the actuarial accrued liabilities of the fund as determined in the most recent
27.10actuarial valuation report for the Teachers Retirement Association fund by the actuary
27.11retained under section 356.214, or on the established date for full funding under section
27.12356.215, subdivision 11, whichever occurs earlier.
27.13EFFECTIVE DATE.This section is effective the day following final enactment.

27.14    Sec. 2. Minnesota Statutes 2012, section 354A.011, subdivision 21, is amended to read:
27.15    Subd. 21. Retirement. (a) "Retirement" means the time after the date of cessation
27.16of active teaching service by a teacher who is thereafter then entitled to an accrued
27.17retirement annuity commencing beginning as designated by the board of trustees and
27.18payable pursuant to an upon filing a valid application for an annuity filed with the board.
27.19The applicable provisions of law, articles of incorporation and bylaws in effect on the date
27.20of cessation of active teaching service thereafter determine the rights of the person.
27.21(b) For members of the St. Paul Teachers Retirement Fund Association, a right to
27.22a retirement annuity requires a complete and continuous separation for 90 days from
27.23employment in any form with Independent School District No. 625, including service
27.24provided to the school district as an independent contractor or as an employee of an
27.25independent contractor.
27.26EFFECTIVE DATE.This section is effective the day following final enactment.

27.27    Sec. 3. Minnesota Statutes 2012, section 354A.12, subdivision 1, is amended to read:
27.28    Subdivision 1. Employee contributions. (a) The contribution required to be paid
27.29by each member of a teachers retirement fund association is the percentage of total salary
27.30specified below for the applicable association and program:

27.31		Association and Program	Percentage of Total Salary
27.32	Duluth Teachers Retirement Fund Association
27.33		old law and new law
28.1		coordinated programs
28.2		before July 1, 2011 2013	5.5 6.5 percent
28.3		effective July 1, 2011 2013	6.0 7.0 percent
28.4		effective July 1, 2012 2014	6.5 7.5 percent
28.5	St. Paul Teachers Retirement Fund Association
28.6		basic program before July 1, 2011	8 percent
28.7		basic program after June 30, 2011	8.25 percent
28.8		basic program after June 30, 2012	8.5 percent
28.9		basic program after June 30, 2013	8.75 percent
28.10		basic program after June 30, 2014	9.0 percent
28.11		basic program after June 30, 2015	9.5 percent
28.12		basic program after June 30, 2016	10.0 percent
28.13		coordinated program before July 1, 2011	5.5 percent
28.14		coordinated program after June 30, 2011	5.75 percent
28.15		coordinated program after June 30, 2012	6.0 percent
28.16		coordinated program after June 30, 2013	6.25 percent
28.17		coordinated program after June 30, 2014	6.50 percent
28.18		coordinated program after June 30, 2015	7.0 percent
28.19		coordinated program after June 30, 2016	7.50 percent

28.20(b) Contributions shall be made by deduction from salary and must be remitted
28.21directly to the respective teachers retirement fund association at least once each month.
28.22(c) When an employee contribution rate changes for a fiscal year, the new
28.23contribution rate is effective for the entire salary paid by the employer with the first
28.24payroll cycle reported.
28.25EFFECTIVE DATE.This section is effective with respect to the Duluth Teachers
28.26Retirement Fund Association on July 1, 2013, and is effective with respect to the St. Paul
28.27Teachers Retirement Fund Association on the day following final enactment.

28.28    Sec. 4. Minnesota Statutes 2012, section 354A.12, subdivision 2a, is amended to read:
28.29    Subd. 2a. Employer regular and additional contributions. (a) The employing
28.30units shall make the following employer contributions to teachers retirement fund
28.31associations:
28.32(1) for any coordinated member of one of the following teachers retirement fund
28.33associations in a city of the first class, the employing unit shall make a regular employer
28.34contribution to the respective retirement fund association in an amount equal to the
28.35designated percentage of the salary of the coordinated member as provided below:

28.36	Duluth Teachers Retirement Fund Association
28.37		before July 1, 2011 2013	5.79 6.79 percent
28.38		effective July 1, 2011 2013	6.29 7.29 percent
29.1		effective July 1, 2012 2014	6.79 7.50 percent
29.2	St. Paul Teachers Retirement Fund Association
29.3		before July 1, 2011	4.50 percent
29.4		after June 30, 2011	4.75 percent
29.5		after June 30, 2012	5.0 percent
29.6		after June 30, 2013	5.25 percent
29.7		after June 30, 2014	5.5 percent
29.8		after June 30, 2015	6.0 percent
29.9		after June 30, 2016	6.25 percent
29.10		after June 30, 2017	6.5 percent

29.11(2) for any basic member of the St. Paul Teachers Retirement Fund Association, the
29.12employing unit shall make a regular employer contribution to the respective retirement
29.13fund in an amount according to the schedule below:

29.14		before July 1, 2011	8.0 percent of salary
29.15		after June 30, 2011	8.25 percent of salary
29.16		after June 30, 2012	8.5 percent of salary
29.17		after June 30, 2013	8.75 percent of salary
29.18		after June 30, 2014	9.0 percent of salary
29.19		after June 30, 2015	9.5 percent of salary
29.20		after June 30, 2016	9.75 percent of salary
29.21		after June 30, 2017	10.0 percent of salary

29.22(3) for a basic member of the St. Paul Teachers Retirement Fund Association, the
29.23employing unit shall make an additional employer contribution to the respective fund in
29.24an amount equal to 3.64 percent of the salary of the basic member;
29.25(4) for a coordinated member of the St. Paul Teachers Retirement Fund Association,
29.26the employing unit shall make an additional employer contribution to the respective fund
29.27in an amount equal to the applicable percentage of the coordinated member's salary,
29.28as provided below:

29.29

St. Paul Teachers Retirement Fund Association

3.84 percent

29.30(b) The regular and additional employer contributions must be remitted directly to
29.31the respective teachers retirement fund association at least once each month. Delinquent
29.32amounts are payable with interest under the procedure in subdivision 1a.
29.33(c) Payments of regular and additional employer contributions for school district
29.34or technical college employees who are paid from normal operating funds must be made
29.35from the appropriate fund of the district or technical college.
29.36(d) When an employer contribution rate changes for a fiscal year, the new
29.37contribution rate is effective for the entire salary paid by the employer with the first
29.38payroll cycle reported.
30.1EFFECTIVE DATE.This section is effective with respect to the Duluth Teachers
30.2Retirement Fund Association on July 1, 2013, and is effective with respect to the St. Paul
30.3Teachers Retirement Fund Association on the day following final enactment.

30.4    Sec. 5. Minnesota Statutes 2012, section 354A.12, is amended by adding a subdivision
30.5to read:
30.6    Subd. 2c. Duluth Teachers Retirement Fund Association; employer
30.7contributions for reemployed annuitants. The school district shall make the regular
30.8employer contributions and additional employer contributions specified in subdivision 2a
30.9on behalf of any retired member of the Duluth Teachers Retirement Fund Association who
30.10is reemployed by Independent School District No. 709, including providing service to the
30.11school district as an independent contractor or as an employee of an independent contractor.
30.12EFFECTIVE DATE.This section is effective July 1, 2013.

30.13    Sec. 6. Minnesota Statutes 2012, section 354A.12, is amended by adding a subdivision
30.14to read:
30.15    Subd. 2d. St. Paul Teachers Retirement Fund Association; employer
30.16contributions for reemployed annuitants. Independent School District No. 625 shall
30.17make the regular employer contribution and additional employer contribution specified in
30.18subdivision 2a, plus a supplemental contribution equal to 2.5 percent of salary, on behalf
30.19of any retired member of the St. Paul Teachers Retirement Fund Association who is
30.20reemployed by Independent School District No. 625, including providing service to the
30.21school district as an independent contractor or as an employee of an independent contractor.
30.22EFFECTIVE DATE.This section is effective the day following final enactment.

30.23    Sec. 7. Minnesota Statutes 2012, section 354A.12, subdivision 3a, is amended to read:
30.24    Subd. 3a. Special direct state aid to first class city teachers retirement fund
30.25associations. (a) The state shall pay $346,000 $6,346,000 as special direct state aid to
30.26the Duluth Teachers Retirement Fund Association, and $2,827,000 $9,827,000 to the St.
30.27Paul Teachers Retirement Fund Association and, for the former Minneapolis Teachers
30.28Retirement Fund Association, $12,954,000 to the Teachers Retirement Association.
30.29    (b) The direct state aids under this subdivision are payable October 1 annually. The
30.30commissioner of management and budget shall pay the direct state aid aids specified in
30.31this subdivision. The amount amounts required under this subdivision is are appropriated
30.32annually from the general fund to the commissioner of management and budget.
31.1EFFECTIVE DATE.This section is effective the day following final enactment.

31.2    Sec. 8. Minnesota Statutes 2012, section 354A.12, subdivision 3c, is amended to read:
31.3    Subd. 3c. Termination of supplemental contributions and direct matching
31.4and state aid. (a) The supplemental contributions payable to the St. Paul Teachers
31.5Retirement Fund Association by Independent School District No. 625 under section
31.6423A.02, subdivision 3 , or the direct and all forms of state aid under subdivision 3a to the
31.7St. Paul Teachers Retirement Fund Association must continue until the current assets of
31.8the fund equal or exceed the actuarial accrued liability of the fund as determined in the
31.9most recent actuarial report for the fund by the actuary retained under section 356.214 or
31.10until June 30, 2037, whichever occurs earlier.
31.11(b) The aid to the Duluth Teachers Retirement Fund Association under section
31.12423A.02, subdivision 3, and all forms of state aid under subdivision 3a to the Duluth
31.13Teachers Retirement Fund Association must continue until the current assets of the fund
31.14equal or exceed the actuarial accrued liability of the fund as determined in the most
31.15recent actuarial report for the fund by the actuary retained under section 356.214 or until
31.16the established date for full funding under section 356.215, subdivision 11, whichever
31.17occurs earlier.
31.18EFFECTIVE DATE.This section is effective the day following final enactment.

31.19    Sec. 9. Minnesota Statutes 2012, section 354A.12, subdivision 7, is amended to read:
31.20    Subd. 7. Recovery of benefit overpayments. (a) If the executive director discovers,
31.21within the time period specified in subdivision 8 following the payment of a refund or
31.22the accrual date of any retirement annuity, survivor benefit, or disability benefit, that
31.23benefit overpayment has occurred due to using invalid service or salary, or due to any
31.24erroneous calculation procedure, the executive director must recalculate the annuity or
31.25benefit payable and recover any overpayment. The executive director shall recover the
31.26overpayment by requiring direct repayment or by suspending or reducing the payment of a
31.27retirement annuity or other benefit payable under this chapter to the applicable person or
31.28the person's estate, whichever applies, until all outstanding amounts have been recovered.
31.29 If a benefit overpayment or improper payment of benefits occurred caused by a failure
31.30of the person to satisfy length of separation requirements for retirement under section
31.31354A.011, subdivision 21, the executive director shall recover the improper payments by
31.32requiring direct repayment. The repayment must include interest at the rate of 0.71 percent
31.33per month from the first of the month in which a monthly benefit amount was paid to the
31.34first of the month in which the amount is repaid, with annual compounding.
32.1(b) In the event the executive director determines that an overpaid annuity or benefit
32.2that is the result of invalid salary included in the average salary used to calculate the
32.3payment amount must be recovered, the executive director must determine the amount of
32.4the employee deductions taken in error on the invalid salary, with interest as determined
32.5under 354A.37, subdivision 3, and must subtract that amount from the total annuity or
32.6benefit overpayment, and the remaining balance of the overpaid annuity or benefit, if
32.7any, must be recovered.
32.8(c) If the invalid employee deductions plus interest exceed the amount of the
32.9overpaid benefits, the balance must be refunded to the person to whom the benefit or
32.10annuity is being paid.
32.11(d) Any invalid employer contributions reported on the invalid salary must be
32.12credited against future contributions payable by the employer.
32.13(e) If a member or former member, who is receiving a retirement annuity or
32.14disability benefit for which an overpayment is being recovered, dies before recovery of the
32.15overpayment is completed and an optional annuity or refund is payable, the remaining
32.16balance of the overpaid annuity or benefit must continue to be recovered from the payment
32.17to the optional annuity beneficiary or refund recipient.
32.18(f) The board of trustees shall adopt policies directing the period of time and manner
32.19for the collection of any overpaid retirement or optional annuity, and survivor or disability
32.20benefit, or a refund that the executive director determines must be recovered as provided
32.21under this section.
32.22EFFECTIVE DATE.This section is effective the day following final enactment.

32.23    Sec. 10. Minnesota Statutes 2012, section 354A.27, is amended by adding a
32.24subdivision to read:
32.25    Subd. 6a. Postretirement adjustment transition. (a) If the funded ratio of the
32.26retirement plan based on the actuarial value of assets is at least 90 percent as reported
32.27in the most recent actuarial valuation prepared under sections 356.214 and 356.215,
32.28this subdivision expires and subsequent postretirement adjustments are governed by
32.29subdivision 7.
32.30(b) Each annuity or benefit recipient of the retirement plan who has been receiving
32.31that annuity or benefit for at least 12 months as of the applicable January 1 is eligible to
32.32receive a postretirement adjustment of one percent, payable on January 1.
32.33EFFECTIVE DATE.This section is effective July 1, 2013, and applies to the
32.34January 1, 2014, postretirement increase.

33.1    Sec. 11. Minnesota Statutes 2012, section 354A.27, subdivision 7, is amended to read:
33.2    Subd. 7. Calculation of postretirement adjustments. (a) This subdivision applies
33.3if subdivision 6 6a has expired.
33.4(b) A percentage adjustment must be computed and paid under this subdivision to
33.5eligible persons under subdivision 5. This adjustment is determined by reference to the
33.6Consumer Price Index for urban wage earners and clerical workers all items index as
33.7reported by the Bureau of Labor Statistics within the United States Department of Labor
33.8each year as part of the determination of annual cost-of-living adjustments to recipients
33.9of federal old-age, survivors, and disability insurance. For calculations of cost-of-living
33.10adjustments under paragraph (c), the term "average third quarter Consumer Price Index
33.11value" means the sum of the monthly index values as initially reported by the Bureau of
33.12Labor Statistics for the months of July, August, and September, divided by 3.
33.13(c) Before January 1 of each year, the executive director must calculate the amount
33.14of the cost-of-living adjustment by dividing the most recent average third quarter index
33.15value by the same average third quarter index value from the previous year, subtract one
33.16from the resulting quotient, and express the result as a percentage amount, which must be
33.17rounded to the nearest one-tenth of one percent.
33.18(d) The amount calculated under paragraph (c) is the full cost-of-living adjustment
33.19to be applied as a permanent increase to the regular payment of each eligible member
33.20on January 1 of the next calendar year. For any eligible member whose effective date
33.21of benefit commencement occurred during the calendar year before the cost-of-living
33.22adjustment is applied, the full increase amount must be prorated on the basis of whole
33.23calendar quarters in benefit payment status in the calendar year prior to the January 1 on
33.24which the cost-of-living adjustment is applied, calculated to the third decimal place.
33.25(e) The adjustment must not be less than zero nor greater than five percent.
33.26(f) If the funding ratio of the plan as determined in the most recent actuarial
33.27valuation using the actuarial value of assets is less than 80 percent there will be no
33.28postretirement adjustment the following January 1.
33.29EFFECTIVE DATE.This section is effective July 1, 2013.

33.30    Sec. 12. Minnesota Statutes 2012, section 354A.31, subdivision 3, is amended to read:
33.31    Subd. 3. Resumption of teaching after commencement of a retirement annuity.
33.32    (a) Any person who retired and is receiving a coordinated program retirement annuity
33.33under the provisions of sections 354A.31 to 354A.41 or any person receiving a basic
33.34program retirement annuity under the governing sections in the articles of incorporation
33.35or bylaws and who has resumed teaching service for the school district in which the
34.1teachers retirement fund association exists is entitled to continue to receive retirement
34.2annuity payments, except that all or a portion of the annuity payments must be deferred
34.3during the calendar year immediately following the calendar year in which the person's
34.4salary from the teaching service is in an amount greater than $46,000. The amount of the
34.5annuity deferral is one-third the salary amount in excess of $46,000 and must be deducted
34.6from the annuity payable for the calendar year immediately following the calendar year
34.7in which the excess amount was earned.
34.8    (b) If the person is retired for only a fractional part of the calendar year during the
34.9initial year of retirement, the maximum reemployment salary exempt from triggering a
34.10deferral as specified in this subdivision must be prorated for that calendar year.
34.11    (c) After a person has reached the Social Security normal retirement age, no deferral
34.12requirement is applicable regardless of the amount of any compensation received for
34.13teaching service for the school district in which the teachers retirement fund association
34.14exists.
34.15    (d) The amount of the retirement annuity deferral must be handled or disposed
34.16of as provided in section 356.47.
34.17(e) Notwithstanding other paragraphs of this subdivision, for any retired Duluth
34.18Teachers Retirement Fund Association member whose effective date of retirement is after
34.19June 30, 2013, amounts specified as deferred under this subdivision must instead be
34.20forfeited to the Duluth Teachers Retirement Fund Association fund.
34.21(f) Notwithstanding other paragraphs of this subdivision, for any retired St. Paul
34.22Teachers Retirement Fund Association basic or coordinated program member whose
34.23effective date of retirement is after June 30, 2013, amounts specified as deferred under
34.24this subdivision must instead be forfeited to the St. Paul Teachers Retirement Fund
34.25Association fund.
34.26    (e) (g) For the purpose of this subdivision, salary from teaching service includes: (i)
34.27all income for services performed as a consultant or independent contractor; or income
34.28resulting from working with the school district in any capacity; and (ii) the greater of either
34.29the income received or an amount based on the rate paid with respect to an administrative
34.30position, consultant, or independent contractor in the school district in which the teachers
34.31retirement fund association exists and at the same level as the position occupied by the
34.32person who resumes teaching service.
34.33    (f) (h) On or before February 15 of each year, each applicable employing unit
34.34shall report to the teachers retirement fund association the amount of postretirement
34.35salary as defined in this subdivision, earned as a teacher, consultant, or independent
34.36contractor during the previous calendar year by each retiree of the teachers retirement
35.1fund association for teaching service performed after retirement. The report must be in
35.2a format approved by the executive secretary or director.
35.3EFFECTIVE DATE.This section is effective with respect to the Duluth Teachers
35.4Retirement Fund Association on July 1, 2013, and is effective with respect to the St. Paul
35.5Teachers Retirement Fund Association on the day following final enactment.

35.6    Sec. 13. Minnesota Statutes 2012, section 354A.31, subdivision 4, is amended to read:
35.7    Subd. 4. Computation of normal coordinated retirement annuity; St. Paul
35.8fund. (a) This subdivision applies to the coordinated program of the St. Paul Teachers
35.9Retirement Fund Association.
35.10(b) The normal coordinated retirement annuity is an amount equal to a retiring
35.11coordinated member's average salary under section 354A.011, subdivision 7a, multiplied
35.12by the retirement annuity formula percentage.
35.13(c) This paragraph, in conjunction with subdivision 6, applies to a person who first
35.14became a member or a member in a pension fund listed in section 356.30, subdivision 3,
35.15before July 1, 1989, unless paragraph (d), in conjunction with subdivision 7, produces
35.16a higher annuity amount, in which case paragraph (d) will apply. For service rendered
35.17before July 1, 2015, the retirement annuity formula percentage for purposes of this
35.18paragraph is the percent specified in section 356.315, subdivision 1, per year for each year
35.19of coordinated service for the first ten years and the percent specified in section 356.315,
35.20subdivision 2 , for each year of coordinated service thereafter. For service rendered after
35.21June 30, 2015, the retirement annuity formula percentage for purposes of this paragraph
35.22is the percent specified in section 356.315, subdivision 1a, per year for each year of
35.23coordinated service for the first ten years and the percent specified in section 356.315,
35.24subdivision 2b , for each year of coordinated service thereafter.
35.25(d) This paragraph applies to a person who has become at least 55 years old and who
35.26first becomes a member after June 30, 1989, and to any other member who has become
35.27at least 55 years old and whose annuity amount, when calculated under this paragraph
35.28and in conjunction with subdivision 7 is higher than it is when calculated under paragraph
35.29(c), in conjunction with the provisions of subdivision 6. The retirement annuity formula
35.30percentage for purposes of this paragraph is the percent specified in section 356.315,
35.31subdivision 2 , for each year of coordinated service rendered before July 1, 2015, and
35.32the percent specified in section 356.215, subdivision 2b, for each year of coordinated
35.33service thereafter.
35.34EFFECTIVE DATE.This section is effective July 1, 2014.

36.1    Sec. 14. Minnesota Statutes 2012, section 354A.31, subdivision 4a, is amended to read:
36.2    Subd. 4a. Computation of normal coordinated retirement annuity; Duluth
36.3fund. (a) This subdivision applies to the new law coordinated program of the Duluth
36.4Teachers Retirement Fund Association.
36.5(b) The normal coordinated retirement annuity is an amount equal to a retiring
36.6coordinated member's average salary under section 354A.011, subdivision 7a, multiplied
36.7by the retirement annuity formula percentage.
36.8(c) This paragraph, in conjunction with subdivision 6, applies to a person who first
36.9became a member or a member in a pension fund listed in section 356.30, subdivision 3,
36.10before July 1, 1989, unless paragraph (d), in conjunction with subdivision 7, produces a
36.11higher annuity amount, in which case paragraph (d) applies. The retirement annuity
36.12formula percentage for purposes of this paragraph is the percent specified in section
36.13356.315, subdivision 1 , per year for each year of coordinated program service for the first
36.14ten years rendered through June 30, 2013, and the percent specified in section 356.315,
36.15subdivision 1a, per year for each year of coordinated program service rendered after June
36.1630, 2013, and the percent specified in section 356.315, subdivision 2, for each subsequent
36.17year of coordinated program service through June 30, 2013, and the percent specified in
36.18section 356.315, subdivision 2b, per year for each year of coordinated program service
36.19rendered after June 30, 2013.
36.20(d) This paragraph applies to a person who is at least 55 years old and who first
36.21becomes a member after June 30, 1989, and to any other member who is at least 55 years
36.22old and whose annuity amount, when calculated under this paragraph and in conjunction
36.23with subdivision 7, is higher than it is when calculated under paragraph (c) in conjunction
36.24with subdivision 6. The retirement annuity formula percentage for purposes of this
36.25paragraph is the percent specified in section 356.315, subdivision 2, for each year of
36.26coordinated program service through June 30, 2013, and the percent specified in section
36.27356.315, subdivision 2b, per year for each year of coordinated program service rendered
36.28after June 30, 2013.
36.29EFFECTIVE DATE.This section is effective July 1, 2013.

36.30    Sec. 15. Minnesota Statutes 2012, section 354A.31, subdivision 7, is amended to read:
36.31    Subd. 7. Actuarial reduction for early retirement. (a) This subdivision applies to
36.32a person who has become at least 55 years old and first becomes a coordinated member
36.33after June 30, 1989, and to any other coordinated member who has become at least 55
36.34years old and whose annuity is higher when calculated using the retirement annuity
36.35formula percentage in subdivision 4, paragraph (d), and or subdivision 4a, paragraph (d),
37.1as applicable, in conjunction with this subdivision than when calculated under subdivision
37.24, paragraph (c), or subdivision 4a, paragraph (c), in conjunction with subdivision 6.
37.3(b) A coordinated member who retires before the full benefit normal retirement
37.4age shall be paid the retirement annuity calculated using the retirement annuity formula
37.5percentage in subdivision 4, paragraph (d), or subdivision 4a, paragraph (d), reduced so
37.6that the reduced annuity is the actuarial equivalent of the annuity that would be payable
37.7to the member if the member deferred receipt of the annuity and the annuity amount
37.8were augmented at an annual rate of three percent compounded annually from the day
37.9the annuity begins to accrue until the normal retirement age if the employee became an
37.10employee before July 1, 2006, and at 2.5 percent compounded annually from the day the
37.11annuity begins to accrue until the normal retirement age if the person initially becomes a
37.12teacher after June 30, 2006. whichever is applicable, multiplied by the applicable early
37.13retirement factor specified below:

37.14				Under age 62		Age 62 or older
37.15				or less than 30 years of service		with 30 years of service
37.16	Normal retirement age:			65	66	65	66
37.17		Age at retirement
37.18			55	0.5376	0.4592
37.19			56	0.5745	0.4992
37.20			57	0.6092	0.5370
37.21			58	0.6419	0.5726
37.22			59	0.6726	0.6062
37.23			60	0.7354	0.6726
37.24			61	0.7947	0.7354
37.25			62	0.8507	0.7947	0.8831	0.8389
37.26			63	0.9035	0.8507	0.9246	0.8831
37.27			64	0.9533	0.9035	0.9635	0.9246
37.28			65	1.0000	0.9533	1.0000	0.9635
37.29			66		1.0000		1.0000

37.30For normal retirement ages between ages 65 and 66, the early retirement factors will
37.31be determined by linear interpolation between the early retirement factors applicable for
37.32normal retirement ages 65 and 66.
37.33EFFECTIVE DATE.This section is effective July 1, 2013.

37.34    Sec. 16. Minnesota Statutes 2012, section 354A.35, subdivision 2, is amended to read:
37.35    Subd. 2. Death while eligible to retire; surviving spouse optional annuity. (a)
37.36The surviving spouse of a vested coordinated member who dies prior to retirement may
37.37elect to receive, instead of a refund with interest under subdivision 1, an annuity equal
38.1to the 100 percent joint and survivor annuity the member could have qualified for had
38.2the member terminated service on the date of death. The surviving spouse eligible for
38.3a surviving spouse benefit under this paragraph may apply for the annuity at any time
38.4after the date on which the deceased employee would have attained the required age for
38.5retirement based on the employee's allowable service. A surviving spouse eligible for
38.6surviving spouse benefits under paragraph (b) or (c) may apply for an annuity at any time
38.7after the member's death. The member's surviving spouse shall be paid a joint and survivor
38.8annuity under section 354A.32 and computed under section 354A.31.
38.9(b) If the member was under age 55 and has credit for at least 30 years of allowable
38.10service on the date of death, the surviving spouse may elect to receive a 100 percent joint
38.11and survivor annuity based on the age of the member and surviving spouse on the date
38.12of death. The annuity is payable using the full early retirement reduction under section
38.13354A.31, subdivision 6 , paragraph (a), to age 55 and one-half of the early retirement
38.14reduction from age 55 to the age payment begins.
38.15(c) If a vested member of the Duluth Teachers Retirement Fund Association was
38.16under age 55 on the date of death but did not yet qualify for retirement, the surviving
38.17spouse may elect to receive the 100 percent joint and survivor annuity based on the age
38.18of the member and the survivor at the time of death. The annuity is payable using the
38.19full early retirement reduction under section 354A.31, subdivision 6 or 7, to age 55 and
38.20one-half of the early retirement reduction from age 55 to the date payment begins.
38.21(d) If a vested member of the St. Paul Teachers Retirement Fund Association was
38.22under age 55 on the date of death but did not yet qualify for retirement, the surviving
38.23spouse may elect to receive the 100 percent joint and survivor annuity based on the age
38.24of the member and the survivor at the time of death. The annuity is payable using the
38.25full early retirement reduction under section 354A.31, subdivision 6 or 7, to age 55 and
38.26one-half of the actuarial equivalent reduction from age 55 to the date payment begins.
38.27The actuarial equivalent reduction is calculated so that the reduced annuity is the actuarial
38.28equivalent of the annuity that would be payable to the member if the member deferred
38.29receipt of the annuity and the annuity amount were augmented at an annual rate of 2.5
38.30percent compounded annually from the day the annuity begins to accrue until the normal
38.31retirement age.
38.32(d) (e) Sections 354A.37, subdivision 2, and 354A.39 apply to a deferred annuity
38.33or surviving spouse benefit payable under this section. The benefits are payable for the
38.34life of the surviving spouse, or upon expiration of the term certain benefit payment under
38.35subdivision 2b.
38.36EFFECTIVE DATE.This section is effective the day following final enactment.

39.1    Sec. 17. Minnesota Statutes 2012, section 356.215, subdivision 8, is amended to read:
39.2    Subd. 8. Interest and salary assumptions. (a) The actuarial valuation must use
39.3the applicable following preretirement interest assumption and the applicable following
39.4postretirement interest assumption:
39.5(1) select and ultimate interest rate assumption

39.6 39.7 39.8 39.9	plan	ultimate preretirement interest rate assumption	ultimate postretirement interest rate assumption
39.10	general state employees retirement plan	8.5%	6.0%
39.11	correctional state employees retirement plan	8.5	6.0
39.12	State Patrol retirement plan	8.5	6.0
39.13 39.14 39.15	legislators retirement plan	0.0	-2.0 until June 30, 2040, and -2.5 after June 30, 2040
39.16 39.17 39.18	elective state officers retirement plan	0.0	-2.0 until June 30, 2040, and -2.5 after June 30, 2040
39.19	judges retirement plan	8.5	6.0
39.20	general public employees retirement plan	8.5	6.0
39.21	public employees police and fire retirement plan	8.5	6.0
39.22 39.23	local government correctional service retirement plan	8.5	6.0
39.24	teachers retirement plan	8.5	6.0
39.25	Duluth teachers retirement plan	8.5	8.5
39.26	St. Paul teachers retirement plan	8.5	8.5

39.27Except for the legislators retirement plan and the elective state officers retirement
39.28plan, the select preretirement interest rate assumption for the period after June 30, 2012,
39.29through June 30, 2017, is 8.0 percent. Except for the legislators retirement plan and the
39.30elective state officers retirement plan, the select postretirement interest rate assumption for
39.31the period after June 30, 2012, through June 30, 2017, is 5.5 percent, except for the Duluth
39.32teachers retirement plan and the St. Paul teachers retirement plan, each with a select
39.33postretirement interest rate assumption for the period after June 30, 2012, through June
39.3430, 2017, of 8.0 percent.
39.35(2) single rate preretirement and postretirement interest rate assumption

39.36 39.37	plan	interest rate assumption
39.38	Bloomington Fire Department Relief Association	6.0
39.39 39.40	local monthly benefit volunteer firefighters relief associations	5.0

40.1    (b) The actuarial valuation must use the applicable following single rate future salary
40.2increase assumption, the applicable following modified single rate future salary increase
40.3assumption, or the applicable following graded rate future salary increase assumption:
40.4    (1) single rate future salary increase assumption

40.5	plan	future salary increase assumption
40.6	legislators retirement plan		5.0%
40.7	judges retirement plan		3.0
40.8 40.9	Bloomington Fire Department Relief Association		4.0

40.10    (2) age-related future salary increase age-related select and ultimate future salary
40.11increase assumption or graded rate future salary increase assumption

40.12	plan	future salary increase assumption
40.13	local government correctional service retirement plan	assumption C
40.14	Duluth teachers retirement plan	assumption A
40.15	St. Paul teachers retirement plan	assumption B

40.16For plans other than the Duluth teachers
40.17retirement plan, the select calculation
40.18is: during the designated select period, a
40.19designated percentage rate is multiplied by
40.20the result of the designated integer minus T,
40.21where T is the number of completed years
40.22of service, and is added to the applicable
40.23future salary increase assumption. The
40.24designated select period is ten years and the
40.25designated integer is ten for all retirement
40.26plans covered by this clause the Duluth
40.27Teachers Retirement Fund Association
40.28and for the local government correctional
40.29service retirement plan and 15 for the St.
40.30Paul Teachers Retirement Fund Association.
40.31The designated percentage rate is 0.3 0.2
40.32percent for the St. Paul Teachers Retirement
40.33Fund Association. The select calculation
40.34for the Duluth Teachers Retirement Fund
40.35Association is 8.00 percent per year for
40.36service years one through seven, 7.25 percent
40.37per year for service years seven and eight,
41.1and 6.50 percent per year for service years
41.2eight and nine.
41.3    The ultimate future salary increase assumption is:

41.4	age	A	B	C
41.5	16	8.00%6.00%	6.90%5.90%	9.00%
41.6	17	8.006.00	6.905.90	9.00
41.7	18	8.006.00	6.905.90	9.00
41.8	19	8.006.00	6.905.90	9.00
41.9	20	6.906.00	6.905.90	9.00
41.10	21	6.906.00	6.905.90	8.75
41.11	22	6.906.00	6.905.90	8.50
41.12	23	6.856.00	6.855.85	8.25
41.13	24	6.806.00	6.805.80	8.00
41.14	25	6.756.00	6.755.75	7.75
41.15	26	6.706.00	6.705.70	7.50
41.16	27	6.656.00	6.655.65	7.25
41.17	28	6.606.00	6.605.60	7.00
41.18	29	6.556.00	6.555.55	6.75
41.19	30	6.506.00	6.505.50	6.75
41.20	31	6.456.00	6.455.45	6.50
41.21	32	6.406.00	6.405.40	6.50
41.22	33	6.356.00	6.355.35	6.50
41.23	34	6.306.00	6.305.30	6.25
41.24	35	6.256.00	6.255.25	6.25
41.25	36	6.205.86	6.205.20	6.00
41.26	37	6.155.73	6.155.15	6.00
41.27	38	6.105.59	6.105.10	6.00
41.28	39	6.055.45	6.055.05	5.75
41.29	40	6.005.31	6.005.00	5.75
41.30	41	5.905.18	5.954.95	5.75
41.31	42	5.805.04	5.904.90	5.50
41.32	43	5.704.90	5.854.85	5.25
41.33	44	5.604.76	5.804.80	5.25
41.34	45	5.504.63	5.754.75	5.00
41.35	46	5.404.49	5.704.70	5.00
41.36	47	5.304.35	5.654.65	5.00
41.37	48	5.204.21	5.604.60	5.00
41.38	49	5.104.08	5.554.55	5.00
41.39	50	5.003.94	5.504.50	5.00
41.40	51	4.903.80	5.454.45	5.00
41.41	52	4.803.66	5.404.40	5.00
41.42	53	4.703.53	5.354.35	5.00
41.43	54	4.603.39	5.304.30	5.00
42.1	55	4.503.25	5.254.25	4.75
42.2	56	4.403.25	5.204.20	4.75
42.3	57	4.303.25	5.154.15	4.50
42.4	58	4.203.25	5.104.10	4.25
42.5	59	4.103.25	5.054.05	4.25
42.6	60	4.003.25	5.004.00	4.25
42.7	61	3.903.25	5.004.00	4.25
42.8	62	3.803.25	5.004.00	4.25
42.9	63	3.703.25	5.004.00	4.25
42.10	64	3.603.25	5.004.00	4.25
42.11	65	3.503.25	5.004.00	4.00
42.12	66	3.503.25	5.004.00	4.00
42.13	67	3.503.25	5.004.00	4.00
42.14	68	3.503.25	5.004.00	4.00
42.15	69	3.503.25	5.004.00	4.00
42.16	70	3.503.25	5.004.00	4.00

42.17(3) service-related ultimate future salary increase assumption

42.18 42.19	general state employees retirement plan of the Minnesota State Retirement System	assumption A
42.20 42.21	general employees retirement plan of the Public Employees Retirement Association	assumption B
42.22	Teachers Retirement Association	assumption C
42.23	public employees police and fire retirement plan	assumption D
42.24	State Patrol retirement plan	assumption E
42.25 42.26	correctional state employees retirement plan of the Minnesota State Retirement System	assumption F

42.27 42.28	service length	A	B	C	D	E	F
42.29	1	10.50%	12.03%	12.00%	13.00%	8.00%	6.00%
42.30	2	8.10	8.90	9.00	11.00	7.50	5.85
42.31	3	6.90	7.46	8.00	9.00	7.00	5.70
42.32	4	6.20	6.58	7.50	8.00	6.75	5.55
42.33	5	5.70	5.97	7.25	6.50	6.50	5.40
42.34	6	5.30	5.52	7.00	6.10	6.25	5.25
42.35	7	5.00	5.16	6.85	5.80	6.00	5.10
42.36	8	4.70	4.87	6.70	5.60	5.85	4.95
42.37	9	4.50	4.63	6.55	5.40	5.70	4.80
42.38	10	4.40	4.42	6.40	5.30	5.55	4.65
42.39	11	4.20	4.24	6.25	5.20	5.40	4.55
42.40	12	4.10	4.08	6.00	5.10	5.25	4.45
42.41	13	4.00	3.94	5.75	5.00	5.10	4.35
42.42	14	3.80	3.82	5.50	4.90	4.95	4.25
42.43	15	3.70	3.70	5.25	4.80	4.80	4.15
43.1	16	3.60	3.60	5.00	4.80	4.65	4.05
43.2	17	3.50	3.51	4.75	4.80	4.50	3.95
43.3	18	3.50	3.50	4.50	4.80	4.35	3.85
43.4	19	3.50	3.50	4.25	4.80	4.20	3.75
43.5	20	3.50	3.50	4.00	4.80	4.05	3.75
43.6	21	3.50	3.50	3.90	4.70	4.00	3.75
43.7	22	3.50	3.50	3.80	4.60	4.00	3.75
43.8	23	3.50	3.50	3.70	4.50	4.00	3.75
43.9	24	3.50	3.50	3.60	4.50	4.00	3.75
43.10	25	3.50	3.50	3.50	4.50	4.00	3.75
43.11	26	3.50	3.50	3.50	4.50	4.00	3.75
43.12	27	3.50	3.50	3.50	4.50	4.00	3.75
43.13	28	3.50	3.50	3.50	4.50	4.00	3.75
43.14	29	3.50	3.50	3.50	4.50	4.00	3.75
43.15 43.16	30 or more	3.50	3.50	3.50	4.50	4.00	3.75

43.17    (c) The actuarial valuation must use the applicable following payroll growth
43.18assumption for calculating the amortization requirement for the unfunded actuarial
43.19accrued liability where the amortization retirement is calculated as a level percentage
43.20of an increasing payroll:

43.21	plan	payroll growth assumption
43.22 43.23	general state employees retirement plan of the Minnesota State Retirement System	3.75%
43.24	correctional state employees retirement plan	3.75
43.25	State Patrol retirement plan	3.75
43.26	judges retirement plan	3.00
43.27 43.28	general employees retirement plan of the Public Employees Retirement Association	3.75
43.29	public employees police and fire retirement plan	3.75
43.30	local government correctional service retirement plan	3.75
43.31	teachers retirement plan	3.75
43.32	Duluth teachers retirement plan	4.503.50
43.33	St. Paul teachers retirement plan	5.004.00

43.34    (d) The assumptions set forth in paragraphs (b) and (c) continue to apply, unless a
43.35different salary assumption or a different payroll increase assumption:
43.36    (1) has been proposed by the governing board of the applicable retirement plan;
43.37    (2) is accompanied by the concurring recommendation of the actuary retained under
43.38section 356.214, subdivision 1, if applicable, or by the approved actuary preparing the
43.39most recent actuarial valuation report if section 356.214 does not apply; and
43.40    (3) has been approved or deemed approved under subdivision 18.
44.1EFFECTIVE DATE.This section is effective the day following final enactment.

44.2    Sec. 18. Minnesota Statutes 2012, section 356.47, subdivision 1, is amended to read:
44.3    Subdivision 1. Application. (a) This section applies to the balance of annual
44.4retirement annuities on the amount of retirement annuity reductions after reemployed
44.5annuitant earnings limitations for retirement plans governed by section 352.115,
44.6subdivision 10 ; 353.37; 354.44, subdivision 5; or 354A.31, subdivision 3.
44.7(b) This section also applies to the balance of annual retirement annuities on
44.8the amount of retirement annuity reductions under section 354A.31, subdivision 3, for
44.9members of the Duluth Teachers Retirement Fund Association whose effective date of
44.10retirement is before July 1, 2013.
44.11(c) This section also applies to the balance of annual retirement annuities on
44.12the amount of retirement annuity reductions under section 354A.31, subdivision 3, for
44.13members of the St. Paul Teachers Retirement Fund Association whose effective date of
44.14retirement is before July 1, 2013.
44.15EFFECTIVE DATE.This section is effective with respect to the Duluth Teachers
44.16Retirement Fund Association on July 1, 2013, and is effective with respect to the St. Paul
44.17Teachers Retirement Fund Association on the day following final enactment.

44.18    Sec. 19. Minnesota Statutes 2012, section 423A.02, subdivision 5, is amended to read:
44.19    Subd. 5. Termination of state aid programs. The amortization state aid,
44.20supplemental amortization state aid, and additional amortization state aid programs
44.21terminate as of the December 31, next following the date of the actuarial valuation when
44.22the assets of the St. Paul Teachers Retirement Fund Association equal the actuarial accrued
44.23liability of that plan or December 31, 2009 June 30, 2037, whichever is later earlier.
44.24EFFECTIVE DATE.This section is effective the day following final enactment.

44.25    Sec. 20. DULUTH TEACHERS RETIREMENT FUND ASSOCIATION BYLAW
44.26AMENDMENT AUTHORIZATION.
44.27Consistent with Minnesota Statutes, section 354A.12, subdivision 4, the Duluth
44.28Teachers Retirement Fund Association is authorized to amend its articles of incorporation
44.29or its bylaws to specify the revised contribution rates under sections 3 and 4, required
44.30employee contributions on behalf of reemployed annuitants as specified under section 5,
44.31and revised treatment of reemployed annuitant holding accounts under sections 12 and 18.
44.32EFFECTIVE DATE.This section is effective July 1, 2013.

45.1    Sec. 21. ST. PAUL TEACHERS RETIREMENT FUND ASSOCIATION BYLAW
45.2AMENDMENT AUTHORIZATION.
45.3Consistent with Minnesota Statutes, section 354A.12, subdivision 4, the St. Paul
45.4Teachers Retirement Fund Association is authorized to amend its articles of incorporation
45.5or its bylaws to apply the reduction factors stated in section 15 rather than the actuarial
45.6reduction factors previously authorized.
45.7EFFECTIVE DATE.This section is effective the day following final enactment.

45.8    Sec. 22. REPEALER.
45.9Minnesota Statutes 2012, section 354A.27, subdivision 6, is repealed.


45.12    Section 1. Minnesota Statutes 2012, section 356.315, is amended by adding a
45.13subdivision to read:
45.14    Subd. 8a. Judges plan. The applicable benefit accrual rate is 2.5 percent.
45.15EFFECTIVE DATE.This section is effective July 1, 2013.

45.16    Sec. 2. Minnesota Statutes 2012, section 356.415, subdivision 1, is amended to read:
45.17    Subdivision 1. Annual postretirement adjustments; generally. (a) Except as
45.18otherwise provided in subdivision 1a, 1b, 1c, 1d, or 1e, or 1f, retirement annuity, disability
45.19benefit, or survivor benefit recipients of a covered retirement plan are entitled to a
45.20postretirement adjustment annually on January 1, as follows:
45.21(1) a postretirement increase of 2.5 percent must be applied each year, effective
45.22January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who has
45.23been receiving an annuity or a benefit for at least 12 full months prior to the January 1
45.24increase; and
45.25(2) for each annuitant or benefit recipient who has been receiving an annuity or a
45.26benefit amount for at least one full month, an annual postretirement increase of 1/12 of 2.5
45.27percent for each month that the person has been receiving an annuity or benefit must be
45.28applied, effective on January 1 following the calendar year in which the person has been
45.29retired for less than 12 months.
45.30(b) The increases provided by this subdivision commence on January 1, 2010.
46.1(c) An increase in annuity or benefit payments under this section must be made
46.2automatically unless written notice is filed by the annuitant or benefit recipient with the
46.3executive director of the covered retirement plan requesting that the increase not be made.
46.4(d) The retirement annuity payable to a person who retires before becoming eligible
46.5for Social Security benefits and who has elected the optional payment as provided in
46.6section 353.29, subdivision 6, must be treated as the sum of a period certain retirement
46.7annuity and a life retirement annuity for the purposes of any postretirement adjustment.
46.8The period certain retirement annuity plus the life retirement annuity must be the
46.9annuity amount payable until age 62 for section 353.29, subdivision 6. A postretirement
46.10adjustment granted on the period certain retirement annuity must terminate when the
46.11period certain retirement annuity terminates.
46.12EFFECTIVE DATE.This section is effective July 1, 2013.

46.13    Sec. 3. Minnesota Statutes 2012, section 356.415, is amended by adding a subdivision
46.14to read:
46.15    Subd. 1f. Annual postretirement adjustments; Minnesota State Retirement
46.16System judges retirement plan. (a) The increases provided under this subdivision begin
46.17on January 1, 2014, and are in lieu of increases under subdivision 1 or 1a for retirement
46.18annuity, disability benefit, or survivor benefit recipients of the judges retirement plan.
46.19(b) Retirement annuity, disability benefit, or survivor benefit recipients of the
46.20judges retirement plan are entitled to a postretirement adjustment annually on January
46.211, as follows:
46.22(1) a postretirement increase of 1.75 percent must be applied each year, effective
46.23on January 1, to the monthly annuity or benefit of each annuitant or benefit recipient
46.24who has been receiving an annuity or a benefit for at least 18 full months before the
46.25January 1 increase; and
46.26(2) for each annuitant or benefit recipient who has been receiving an annuity or a
46.27benefit for at least six full months, an annual postretirement increase of 1/12 of 1.75
46.28percent for each month that the person has been receiving an annuity or benefit must be
46.29applied, effective January 1, following the calendar year in which the person has been
46.30retired for at least six months, but has been retired for less than 18 months.
46.31(c) Increases under this subdivision terminate on December 31 of the calendar
46.32year in which the actuarial valuation prepared by the approved actuary under sections
46.33356.214 and 356.215 and the standards for actuarial work promulgated by the Legislative
46.34Commission on Pensions and Retirement indicates that the market value of assets of the
46.35judges retirement plan equals or exceeds 70 percent of the actuarial accrued liability of
47.1the retirement plan. Increases under subdivision 1 or 1a, whichever is applicable, begin
47.2on the January 1 next following that date.
47.3(d) An increase in annuity or benefit payments under this subdivision must be made
47.4automatically unless written notice is filed by the annuitant or benefit recipient with the
47.5executive director of the applicable covered retirement plan requesting that the increase
47.6not be made.
47.7EFFECTIVE DATE.This section is effective July 1, 2013.

47.8    Sec. 4. Minnesota Statutes 2012, section 490.121, subdivision 21f, is amended to read:
47.9    Subd. 21f. Normal retirement date. (a) For a judge in the tier I program, "normal
47.10retirement date" means the date a the judge attains the age of 65.
47.11(b) For a judge in the tier II program, "normal retirement date" means the date
47.12the judge attains age 66.
47.13EFFECTIVE DATE.This section is effective July 1, 2013.

47.14    Sec. 5. Minnesota Statutes 2012, section 490.121, subdivision 22, is amended to read:
47.15    Subd. 22. Service credit limit. "Service credit limit" means, for a judge covered
47.16by tier I, the greater of: (1) 24 years of allowable service under this chapter; or (2), for
47.17judges a judge with allowable service rendered before July 1, 1980, the number of years of
47.18allowable service under chapter 490, which, when multiplied by the percentage listed in
47.19section 356.315, subdivision 7 or 8, whichever is applicable to each year of service, equals
47.2076.8. For a judge covered by tier II, there is no service credit limit.
47.21EFFECTIVE DATE.This section is effective July 1, 2013.

47.22    Sec. 6. Minnesota Statutes 2012, section 490.121, is amended by adding a subdivision
47.23to read:
47.24    Subd. 25. Tier I. "Tier I" is the benefit program of the retirement plan with a
47.25membership specified by section 490.1221, paragraph (b), and governed by sections
47.26356.315, subdivisions 7 and 8; 356.415, subdivisions 1 and 1f; and 490.121 to 490.133,
47.27except as modified in sections 356.315, subdivision 8a; 490.121, subdivision 21f,
47.28paragraph (b); 490.1222; 490.123, subdivision 1a, paragraph (b); and 490.124, subdivision
47.291, paragraphs (c) and (d).
47.30EFFECTIVE DATE.This section is effective July 1, 2013.

48.1    Sec. 7. Minnesota Statutes 2012, section 490.121, is amended by adding a subdivision
48.2to read:
48.3    Subd. 26. Tier II. "Tier II" is the benefit program of the retirement plan with a
48.4membership specified by section 490.1221, paragraph (c), and governed by sections
48.5356.315, subdivision 8a; 356.415, subdivisions 1 and 1f; 490.121 to 490.133, as modified
48.6in section 490.121, subdivision 21f, paragraph (b); 490.1222; 490.123, subdivision 1a,
48.7paragraph (b); and 490.124, subdivision 1, paragraphs (c) and (d).
48.8EFFECTIVE DATE.This section is effective July 1, 2013.

48.9    Sec. 8. [490.1221] JUDGES PLAN PROGRAMS.
48.10(a) Members of the judges retirement plan are members of either the tier I or tier II
48.11program.
48.12(b) A tier I program judge is a person who was first appointed or elected as a judge
48.13before July 1, 2013, who was not eligible for the tier II program because the judge had
48.14five or more years of allowable service on or before December 30, 2013, or did not elect
48.15that program.
48.16(c) A tier II program judge is a person who:
48.17(1) was first appointed or elected as a judge after June 30, 2013; or
48.18(2) was first appointed or elected as a judge before July 1, 2013, had less than five
48.19years of allowable service on or before December 30, 2013, and made an election under
48.20section 14 to be in the tier II program.
48.21EFFECTIVE DATE.This section is effective July 1, 2013.

48.22    Sec. 9. [490.1222] APPLICATION OF SERVICE CREDIT LIMIT.
48.23The service credit limit specified in section 490.121, subdivision 22, does not apply
48.24to a judge in the tier II program.
48.25EFFECTIVE DATE.This section is effective July 1, 2013.

48.26    Sec. 10. Minnesota Statutes 2012, section 490.123, subdivision 1a, is amended to read:
48.27    Subd. 1a. Member contribution rates. (a) A judge who is covered by the federal
48.28Old Age, Survivors, Disability, and Health Insurance Program and in the tier I program
48.29whose service does not exceed the service credit limit in section 490.121, subdivision 22,
48.30shall contribute to the fund from each salary payment a sum equal to 8.00 9.00 percent
48.31of salary.
49.1(b) A judge in the tier II program shall contribute to the fund from each salary
49.2payment a sum equal to 7.00 percent of salary.
49.3    (b) The contribution (c) Contributions under this subdivision is are payable by salary
49.4deduction. The deduction must be made by the state court administrator under section
49.5352.04 , subdivisions 4, 5, and 8.
49.6EFFECTIVE DATE.This section is effective beginning on the first day of the first
49.7full payroll period following an increase in judicial salaries of at least one percent due to
49.8action by the legislature during calendar year 2013 or later.

49.9    Sec. 11. Minnesota Statutes 2012, section 490.123, subdivision 1b, is amended to read:
49.10    Subd. 1b. Employer contribution rate. (a) The employer contribution rate to the
49.11fund on behalf of a judge is 20.5 22.5 percent of salary. The employer obligation continues
49.12after a judge exceeds the service credit limit in section 490.121, subdivision 22.
49.13    (b) The employer contribution must be paid by the state court administrator. The
49.14employer contribution is payable at the same time as member contributions are made
49.15under subdivision 1a or as employee contributions are made to the unclassified program
49.16governed by chapter 352D for judges whose service exceeds the limit in section 490.121,
49.17subdivision 22, are remitted.
49.18EFFECTIVE DATE.This section is effective the first day of the first full payroll
49.19period after June 30, 2013.

49.20    Sec. 12. Minnesota Statutes 2012, section 490.124, subdivision 1, is amended to read:
49.21    Subdivision 1. Basic Retirement annuity. (a) Except as qualified hereinafter from
49.22and after the mandatory retirement date, the normal retirement date, the early retirement
49.23date, or one year from the disability retirement date, as the case may be, a retiring judge is
49.24eligible to receive a retirement annuity from the judges' retirement fund.
49.25    (b) For a tier I program judge, the retirement annuity is an amount equal to:
49.26    (1) the percent specified in section 356.315, subdivision 7, multiplied by the judge's
49.27final average compensation with that result then multiplied by the number of years and
49.28fractions of years of allowable service rendered before July 1, 1980; plus
49.29    (2) the percent specified in section 356.315, subdivision 8, multiplied by the judge's
49.30final average compensation with that result then multiplied by the number of years and
49.31fractions of years of allowable service rendered after June 30, 1980.
49.32(c) For a tier II program judge who was first appointed or elected as a judge before
49.33July 1, 2013, the retirement annuity is an amount equal to:
50.1(1) the percent specified in section 356.315, subdivision 8, multiplied by the judge's
50.2final average compensation with that result then multiplied by the number of years and
50.3fractions of years of allowable service rendered before January 1, 2014; plus
50.4(2) the percentage specified in section 356.315, subdivision 8a, multiplied by the
50.5judge's final average compensation with that result then multiplied by the number of years
50.6and fractions of years of allowable service rendered after December 31, 2013.
50.7(d) For a tier II program judge who was first appointed or elected as a judge after
50.8June 30, 2013, the retirement annuity is an amount equal to the percent specified in section
50.9356.315, subdivision 8a, multiplied by the judge's final average compensation with that
50.10result then multiplied by the number of years and fractions of years of allowable service.
50.11    (c) (e) For a judge in the tier I program, service that exceeds the service credit limit in
50.12section 490.121, subdivision 22, must be excluded in calculating the retirement annuity, but
50.13the compensation earned by the judge during this period of judicial service must be used in
50.14determining a judge's final average compensation and calculating the retirement annuity.
50.15EFFECTIVE DATE.This section is effective July 1, 2013.

50.16    Sec. 13. MEMBER CONTRIBUTION INCREASE CONDITION.
50.17Any increase in judicial salaries enacted by the legislature during calendar year 2013
50.18or later is not applicable to a judge in the tier I program if the member contribution rate
50.19applicable to that judge in the tier I program under section 10 is not deducted from the
50.20salary of the judge.
50.21EFFECTIVE DATE.This section is effective the day following final enactment.

50.22    Sec. 14. TIER II PROGRAM ELECTION; PRE-JULY 1, 2013, JUDGES.
50.23    Subdivision 1. Authority. A person who was first appointed or elected as a judge
50.24covered by the Minnesota State Retirement System judges retirement plan before July 1,
50.252013, is eligible to elect treatment as a tier II program judge if the judge has less than five
50.26years of allowable service on the date the judge makes a valid election under subdivision 2.
50.27    Subd. 2. Election procedure. An eligible judge under subdivision 1 may elect
50.28to be subject to provisions of Minnesota Statutes, chapter 490, applicable to a tier II
50.29program judge rather than the tier I program by electing that treatment in writing before
50.30January 1, 2014, on a form provided by the executive director of the Minnesota State
50.31Retirement System.
50.32    Subd. 3. Effect of election. (a) The election is irrevocable.
51.1(b) An eligible judge who fails to make an election remains in the tier I program.
51.2(c) If the tier II program is elected by an eligible judge, member contributions based on
51.3revised member contribution rates under Minnesota Statutes, section 490.123, subdivision
51.41a, begin on the first day of the first full pay period occurring after January 1, 2014.
51.5EFFECTIVE DATE.This section is effective July 1, 2013.


51.8    Section 1. Minnesota Statutes 2012, section 356.91, is amended to read:
51.9356.91 VOLUNTARY MEMBERSHIP DUES DEDUCTION.
51.10    (a) Upon written authorization of a person receiving an annuity from a public
51.11pension fund administered by the Minnesota State Retirement System or the Public
51.12Employees Retirement Association, the executive director of the public pension fund may
51.13 shall deduct from the retirement annuity an amount requested by the annuitant to be paid
51.14as membership dues or other payments to any labor organization that is an exclusive
51.15bargaining agent representing public employees or an organization representing retired
51.16public employees of which the annuitant is a member and shall, on a monthly basis, pay
51.17the amount to the organization so designated by the annuitant.
51.18    (b) A pension fund and the plan fiduciaries which authorize or administer deductions
51.19of dues payments under paragraph (a) are not liable for failure to properly deduct or transmit
51.20the dues amounts, provided that the fund and the fiduciaries have acted in good faith.
51.21    (c) The deductions under paragraph (a) may occur no more frequently than two times
51.22per year and may not be used for political purposes. Any labor organization that is an
51.23exclusive bargaining agent representing public employees or an organization representing
51.24retired public employees may conduct blind mailings to the annuitants of a retirement
51.25system specified in paragraph (a) by requesting that the retirement system mail voluntary
51.26membership information and dues deduction cards to annuitants. Such mailings shall not
51.27be for the purpose of supporting or opposing any candidate, political party, or ballot
51.28measure. The organization requesting the blind mailing shall pay all costs associated
51.29with these mailings, including but not limited to copying, labeling, mailing, postage, and
51.30record keeping. In lieu of administering a blind mailing in-house, a retirement system
51.31may transmit annuitant data necessary for conducting a blind mailing to a mail center
51.32pursuant to a secure data share agreement with the mail center which provides that neither
51.33the organization nor any other entity shall have direct access to the data transmitted by
51.34the retirement system. The retirement system shall have no obligation to approve or
52.1disapprove, or otherwise be responsible for, the content of the mailings. No organization
52.2shall conduct more than two blind mailings per calendar year.
52.3    (d) Any labor organization specified in paragraph (a) shall reimburse the public
52.4pension fund for the administrative expense of withholding premium amounts."
52.5Delete the title and insert:
52.7relating to retirement, various retirement plans; redefining salary for benefit
52.8and contribution purposes; increasing member and employer contributions;
52.9increasing vesting to ten years for new hires; capping allowable service for
52.10computing annuities; modifying the trigger for increasing or lowering annual
52.11postretirement adjustments for all plans; modifying duty disability definitions
52.12and clarifying disability application requirements for the public employees
52.13police and fire and local government correctional plan; increasing the reduction
52.14for early retirement; clarifying survivor benefit provisions; delaying the first
52.15annual postretirement adjustment for the public employees police and fire
52.16retirement plan; increase the normal retirement age for new judge; permitting
52.17existing judges to elect to be treated as a new judge for benefit and contribution
52.18purposes; mandating certain dues and other payment deductions by MSRS and
52.19PERA; modifying the Teachers Retirement Association level benefit tier early
52.20retirement reduction factors; increasing member and employer contributions to
52.21the Duluth Teachers Retirement Fund Association and the St. Paul Teachers
52.22Retirement Fund Association; increasing direct state aid to the DTRFA and to
52.23the SPTRFA; increasing the DTRFA and SPTRFA benefit accrual rates for
52.24prospective allowable service; revising the DTRFA postretirement adjustment
52.25provision; modifying certain salary increase and payroll growth actuarial
52.26assumptions;amending Minnesota Statutes 2012, sections 352B.011, subdivision
52.274; 352B.02, subdivisions 1a, 1c; 352B.08, subdivisions 1, 2, 2a; 352B.10,
52.28subdivision 5; 352B.11, subdivisions 1, 2b; 353.01, subdivisions 10, 17a, 41,
52.2947; 353.031, subdivision 4; 353.35, subdivision 1; 353.65, subdivisions 2, 3;
52.30353.651, subdivisions 3, 4; 353.657, subdivisions 2a, 3a; 353E.001, subdivision
52.311; 354.44, subdivision 6; 354A.011, subdivision 21; 354A.12, subdivisions 1,
52.322a, 3a, 3c, 7, by adding subdivisions; 354A.27, subdivision 7, by adding a
52.33subdivision; 354A.31, subdivisions 3, 4, 4a, 7; 354A.35, subdivision 2; 356.215,
52.34subdivision 8; 356.315, by adding a subdivision; 356.415, subdivisions 1,
52.351b, 1c, 1e, by adding a subdivision; 356.47, subdivision 1; 356.91; 423A.02,
52.36subdivision 5; 490.121, subdivisions 21f, 22, by adding subdivisions; 490.123,
52.37subdivisions 1a, 1b; 490.124, subdivision 1; proposing coding for new law in
52.38Minnesota Statutes, chapters 354; 490; repealing Minnesota Statutes 2012,
52.39sections 352B.11, subdivision 2c; 354A.27, subdivision 6."