Engrossments
Introduction		Posted on 05/24/2017

A bill for an act
relating to labor standards; making changes to Minnesota statewide and major
local public employee retirement plans; increasing contribution rates; adjusting
benefits and contributions; requiring a study on postretirement adjustments;
modifying executive director credentials; modifying annual benefit limitations for
federal tax code compliance; authorizing use of IRS correction procedures;
modifying actuarial assumptions; authorizing the transfer of assets and members
from the voluntary statewide volunteer firefighter retirement plan to a volunteer
firefighter relief association; adopting recommendations of the Volunteer Firefighter
Relief Association Working Group; making changes to volunteer firefighter relief
pensions; establishing a fire state aid work group; modifying various Department
of Human Services and Department of Corrections employment classifications
eligible for correctional retirement coverage; modifying public safety officer death
benefits; authorizing certain service credit purchases, transfers, and elections;
increasing maximum employer contribution to a supplemental laborers pension
fund; authorizing certain additional sources of retirement plan funding; ratifying
certain collective bargaining agreements; providing uniformity for employment
mandates on private employers; making technical and conforming changes;
providing for wage theft prevention; appropriating money; amending Minnesota
Statutes 2016, sections 3A.02, subdivision 4; 3A.03, subdivisions 2, 3; 16A.14,
subdivision 2a; 181.03, subdivision 1; 352.01, subdivisions 2a, 13a; 352.017,
subdivision 2; 352.03, subdivisions 5, 6; 352.04, subdivisions 2, 3, 8, 9; 352.113,
subdivisions 2, 4, 14; 352.116, subdivision 1a; 352.22, subdivisions 2, 3, by adding
subdivisions; 352.23; 352.27; 352.91, subdivisions 3f, 3g, by adding a subdivision;
352.92, subdivisions 1, 2, by adding a subdivision; 352.955, subdivision 3;
352B.013, subdivision 2; 352B.02, subdivisions 1a, 1c; 352B.08, by adding a
subdivision; 352B.085; 352B.086; 352B.11, subdivision 4; 352D.02, subdivisions
1, 3; 352D.04, subdivision 2; 352D.05, subdivision 4; 352D.06, subdivision 1;
352D.085, subdivision 1; 352D.11, subdivision 2; 352D.12; 352F.04, subdivisions
1, 2, by adding a subdivision; 353.01, subdivisions 2b, 10, 16, 43, 47; 353.012;
353.0162; 353.03, subdivision 3; 353.27, subdivisions 3c, 7a, 12, 12a, 12b; 353.28,
subdivision 5; 353.29, subdivisions 4, 7; 353.30, subdivision 3c; 353.32,
subdivisions 1, 4; 353.34, subdivision 2; 353.35, subdivision 1; 353.37, subdivision
1; 353.64, subdivision 10; 353.65, subdivisions 2, 3, by adding a subdivision;
353F.02, subdivision 5a; 353F.025, subdivision 2; 353F.04, subdivision 2; 353F.05;
353F.057; 353F.06; 353F.07; 353G.01, subdivision 9, by adding a subdivision;
353G.02, subdivision 6; 353G.03, subdivision 3; 353G.08, subdivision 3; 353G.11,
subdivision 1; 354.05, subdivision 2, by adding a subdivision; 354.06, subdivisions
2, 2a; 354.095; 354.436, subdivision 3; 354.44, subdivisions 3, 9; 354.45, by adding
a subdivision; 354.46, subdivision 6; 354.48, subdivision 1; 354.50, subdivision
2; 354.51, subdivision 5; 354.512; 354.52, subdivisions 4, 4d; 354.53, subdivision
5; 354.55, subdivision 11; 354.66, subdivision 2; 354.72, subdivision 1; 354A.011,
subdivisions 3a, 29; 354A.093, subdivisions 4, 6; 354A.095; 354A.096; 354A.12,
subdivisions 1, 1a, 2a, 3a, 3c, 7; 354A.29, subdivision 7; 354A.31, subdivisions
3, 7; 354A.34; 354A.35, subdivision 2; 354A.37, subdivisions 2, 3; 354A.38;
356.195, subdivision 2; 356.215, subdivisions 8, 9, 11; 356.24, subdivision 1;
356.30, subdivision 1; 356.32, subdivision 2; 356.415, subdivisions 1, 1a, 1b, 1c,
1d, 1e, 1f, by adding a subdivision; 356.44; 356.47, subdivisions 1, 3; 356.50,
subdivision 2; 356.551, subdivision 2; 356.635, subdivision 10, by adding
subdivisions; 356.96, subdivisions 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13; 356A.06,
subdivision 7; 423A.02, subdivisions 3, 5; 424A.001, subdivisions 2, 3, 10, by
adding a subdivision; 424A.002, subdivision 1; 424A.01, subdivisions 1, 5, 6, by
adding subdivisions; 424A.015, subdivision 1, by adding a subdivision; 424A.016,
subdivision 2; 424A.02, subdivisions 1, 3, 3a, 7; 424A.04, subdivision 1; 424A.07;
424A.091, subdivision 3; 424A.094, subdivision 3; 424A.10, subdivision 1;
424B.20, subdivision 4; 490.121, subdivisions 4, 25, 26; 490.1211; 490.124,
subdivision 12; proposing coding for new law in Minnesota Statutes, chapters 181;
353F; 353G; 356; 424A; repealing Minnesota Statutes 2016, sections 3A.12;
352.04, subdivision 11; 352.045; 352.72; 352B.30; 353.0161; 353.27, subdivision
3b; 353.34, subdivision 6; 353.71, subdivision 1; 354.42, subdivisions 4a, 4b, 4c,
4d; 354.60; 354A.12, subdivision 2c; 354A.29, subdivisions 8, 9; 354A.39; 356.611,
subdivisions 3, 3a, 4, 5; 356.96, subdivisions 14, 15; 424A.02, subdivision 13.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

ARTICLE 1

MINNESOTA STATE RETIREMENT SYSTEM BENEFIT AND CONTRIBUTION
CHANGES

Section 1.

Minnesota Statutes 2016, section 3A.02, subdivision 4, is amended to read:

Subd. 4.

Deferred annuities augmentation.

deleted text begin (a)deleted text end The deferred retirement allowance of
any former legislator must be new text begin computed as provided in subdivision 1 on the basis of allowable
service and new text end augmented deleted text begin as provided herein.(b) The required reserves applicable to the deferred
retirement allowance, determined as of the date the benefit begins to accrue using an
appropriate mortality table and an interest assumption of six percent, must be augmenteddeleted text end
new text begin by interest compounded annually new text end from the first of the month following the termination of
active service, or July 1, 1973, whichever is later, to the deleted text begin first day of the month in which the
allowance begins to accruedeleted text end new text begin effective date of retirementnew text end , at the following deleted text begin annually
compoundeddeleted text end rate or rates:

(1) five percent until January 1, 1981;

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

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

(4) two percent deleted text begin after December 31, 2011.deleted text end new text begin from January 1, 2012, until December 31,
2017; and
new text end

new text begin (5) after December 31, 2017, the deferred annuity must not be augmented.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 2.

Minnesota Statutes 2016, section 352.116, subdivision 1a, is amended to read:

Subd. 1a.

Actuarial reduction for early retirement.

This subdivision applies to a
person who has become at least 55 years old and first became a covered employee after
June 30, 1989, and to any other covered employee who has become at least 55 years old
and whose annuity is higher when calculated under section 352.115, subdivision 3, paragraph
(b), in conjunction with this subdivision than when calculated under section 352.115,
subdivision 3, paragraph (a), in conjunction with subdivision 1. A covered employee who
retires before the normal retirement age shall be paid the normal retirement annuity provided
in section 352.115, subdivisions 2 and 3, paragraph (b), reduced deleted text begin so thatdeleted text end new text begin as described in
clause (1) or (2), as applicable.
new text end

new text begin (1) For covered employees who retire on or after July 1, 2018, new text end the reduced annuity is
the actuarial equivalent of the annuity that would be payable to the employee if the employee
deferred receipt of the annuity new text begin until normal retirement age new text end and the annuity amount were
augmented at deleted text begin andeleted text end new text begin the applicable new text end annual rate deleted text begin of three percentdeleted text end new text begin ,new text end compounded annuallynew text begin ,new text end from
the day the annuity begins to accrue until the normal retirement agenew text begin . The applicable annual
rate is the rate in effect on the employee's effective date of retirement and shall be considered
as fixed for the employee for the period until the employee reaches normal retirement age.
The applicable annual rates are the following:
new text end

new text begin (i) until June 30, 2018, three percent if the employee became an employee before July
1, 2006, and 2.5 percent if the employee became an employee after June 30, 2006;
new text end

new text begin (ii) a rate that changes each month, beginning July 1, 2018, through June 30, 2023, which
is determined by reducing the rate in item (i) to zero in equal monthly increments over the
five-year period; and
new text end

new text begin (iii) after June 30, 2023, zero percent.
new text end

new text begin After June 30, 2023, actuarial equivalent, for the purpose of determining the reduced annuity
commencing before normal retirement age under this clause, shall not take into account any
augmentation.
new text end

new text begin (2) For covered employees who retire before July 1, 2018, the reduced annuity is the
actuarial equivalent of the annuity that would be payable to the employee if the employee
deferred receipt of the annuity until normal retirement age and the annuity amount were
augmented at an annual rate of three percent, compounded annually, from the day the annuity
begins to accrue until normal retirement agenew text end if the employee became an employee before
July 1, 2006, and at an annual rate of 2.5 percentnew text begin ,new text end compounded annuallynew text begin ,new text end from the day the
annuity begins to accrue until deleted text begin thedeleted text end normal retirement age if the employee deleted text begin initially becomesdeleted text end
new text begin became new text end an employee after June 30, 2006.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 3.

Minnesota Statutes 2016, section 352.22, subdivision 2, is amended to read:

Subd. 2.

Amount of refund.

Except as provided in subdivision 3, the refund payable
to a person who ceased to be a state employee by reason of a termination of state service is
an amount equal to employee accumulated contributions plus interest new text begin until the date on which
the refund is paid, new text end at the deleted text begin rate ofdeleted text end new text begin following rates for the applicable period:
new text end

new text begin (a) new text end six percent per year compounded daily from the date that the contribution was made
until June 30, 2011deleted text begin , or until the date on which the refund is paid, whichever is earlier, and
at the rate ofdeleted text end new text begin ;
new text end

new text begin (b)new text end four percent per year compounded daily from the date that the contribution was made
or deleted text begin fromdeleted text end July 1, 2011, whichever is laterdeleted text begin , until the date on which the refund is paid.deleted text end new text begin until
June 30, 2017; and
new text end

new text begin (c) three percent per year compounded daily from the date that the contribution was
made or July 1, 2017, whichever is later.
new text end

Included with the refund is any interest paid as part of repayment of a past refund, plus
interest thereon from the date of repayment.

Sec. 4.

Minnesota Statutes 2016, section 352.22, is amended by adding a subdivision to
read:

new text begin Subd. 2b. new text end

new text begin Refund repayment. new text end

new text begin Any person who has received a refund from the state
employees retirement plan, and who is a member of any of the retirement plans specified
in section 356.311, paragraph (b), may repay the refund with interest to the state employees
retirement plan. If a refund is repaid to the plan and more than one refund has been received
from the plan, all refunds must be repaid. Repayment must be made as provided in section
352.23, and under terms and conditions consistent with that section as agreed upon with
the director.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 5.

Minnesota Statutes 2016, section 352.22, subdivision 3, is amended to read:

Subd. 3.

Deferred annuity.

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

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

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

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

(e) Deferred annuities must be augmented as provided in deleted text begin section 352.72, subdivision 2deleted text end new text begin
subdivision 3anew text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 6.

Minnesota Statutes 2016, section 352.22, is amended by adding a subdivision to
read:

new text begin Subd. 3a. new text end

new text begin Computation of deferred annuity. new text end

new text begin (a) The deferred annuity, if any, accruing
under subdivision 3, on the basis of allowable service before termination of state service
and augmented by interest compounded annually from the first day of the month following
the month in which the employee ceased to be a state employee, or July 1, 1971, whichever
is later, to the effective date of retirement.
new text end

new text begin (b) For a person who became a state employee before July 1, 2006, the annuity must be
augmented at the following rate or rates:
new text end

new text begin (1) five percent until January 1, 1981;
new text end

new text begin (2) three percent thereafter until January 1 of the year following the year in which the
former employee attains age 55 or until January 1, 2012, whichever is earlier;
new text end

new text begin (3) five percent from the January 1 next following the attainment of age 55 until
December 31, 2011;
new text end

new text begin (4) two percent from January 1, 2012 , until December 31, 2017; and
new text end

new text begin (5) after December 31, 2017, the deferred annuity must not be augmented.
new text end

new text begin (c) For a person who became a state employee after June 30, 2006, the annuity must be
augmented at the following rate or rates:
new text end

new text begin (1) 2.5 percent until December 31, 2011;
new text end

new text begin (2) two percent from January 1, 2012, until December 31, 2017; and
new text end

new text begin (3) after December 31, 2017, the deferred annuity must not be augmented.
new text end

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 7.

Minnesota Statutes 2016, section 352B.08, is amended by adding a subdivision to
read:

new text begin Subd. 2b. new text end

new text begin Computation of deferred annuity. new text end

new text begin (a) Deferred annuities must be computed
according to this chapter on the basis of allowable service before termination of service and
augmented by interest compounded annually from the first day of the month following the
month in which the member terminated service, or July 1, 1971, whichever is later, to the
effective date of retirement.
new text end

new text begin (b) For a person who became an employee before July 1, 2006, the annuity must be
augmented at the following rate or rates:
new text end

new text begin (1) five percent until January 1, 1981;
new text end

new text begin (2) three percent from January 1, 1981, until December 31, 2011;
new text end

new text begin (3) two percent from January 1, 2012, until December 31, 2017; and
new text end

new text begin (4) after December 31, 2017, the deferred annuity must not be augmented.
new text end

new text begin (c) For a person who became an employee after June 30, 2006, the annuity must be
augmented as follows:
new text end

new text begin (1) 2.5 percent until December 31, 2011;
new text end

new text begin (2) two percent from January 1, 2012, until December 31, 2017; and
new text end

new text begin (3) after December 31, 2017, the deferred annuity must not be augmented.
new text end

new text begin (d) The mortality table and interest assumption used to compute the annuity must be
those in effect when the member files application for annuity.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 8.

Minnesota Statutes 2016, section 352D.085, subdivision 1, is amended to read:

Subdivision 1.

Combined service.

Except as provided in section 356.30, 356.302, or
356.303, service under the unclassified program for which the employee has been credited
with employee shares may be used for the limited purpose of qualifying for benefits under
sections 352.115, deleted text begin 352.72, subdivision 1,deleted text end 352.113, 354.44, 354.45, 354.48, and deleted text begin 354.60deleted text end new text begin
356.311new text end . The service also may not be used to qualify for a disability benefit under section
352.113 or 354.48 if a participant was under the unclassified program at the time of the
disability. Also, the years of service and salary paid while the participant was in the
unclassified program may not be used in determining the amount of benefits.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 9.

Minnesota Statutes 2016, section 490.121, subdivision 25, is amended to read:

Subd. 25.

Tier I.

"Tier I" is the benefit program of the retirement plan with a membership
specified by section 490.1221, paragraph (b), and governed by sections 356.415, deleted text begin subdivisions
1 anddeleted text end new text begin subdivision new text end 1f; and 490.121 to 490.133, except as modified in sections 490.121,
subdivision 21f, paragraph (b); 490.1222; 490.123, subdivision 1a, paragraph (b); and
490.124, subdivision 1, paragraphs (c) and (d).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 10.

Minnesota Statutes 2016, section 490.121, subdivision 26, is amended to read:

Subd. 26.

Tier II.

"Tier II" is the benefit program of the retirement plan with a
membership specified by section 490.1221, paragraph (c), and governed by sections 356.415,
deleted text begin subdivisions 1 anddeleted text end new text begin subdivision new text end 1f; 490.121 to 490.133, as modified in section 490.121,
subdivision 21f, paragraph (b); 490.1222; 490.123, subdivision 1a, paragraph (b); and
490.124, subdivision 1, paragraphs (c) and (d).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 11. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2016, sections 3A.12; 352.045; 352.72; and 352B.30, new text end new text begin are repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

ARTICLE 2

PUBLIC EMPLOYEES RETIREMENT ASSOCIATION CHANGES

Section 1. new text begin PERA BOARD OF TRUSTEES; REFORM PROPOSAL REQUIREMENT.
new text end

new text begin The board of trustees of the Public Employees Retirement Association shall present to
the Legislative Commission on Pensions and Retirement, no later than January 15, 2018, a
package of benefit and sustainability reforms for the general employees retirement plan
consisting of reforms that are similar to the changes made to the other statewide retirement
plans during the 2017 legislative session and any other related reforms that improve the
projected funded ratio of the plan. The package of reforms must be accompanied by the
opinion of the plan's approved actuary under Minnesota Statutes, section 356.215, subdivision
1, paragraph (c), that implementation of the reforms is projected to result in the general
employees retirement plan attaining a ratio of market value of assets to actuarial accrued
liabilities equal to or greater than 90 percent by the end of the amortization period under
Minnesota Statutes, section 356.215, subdivision 11, in effect as of July 1, 2017. For purposes
of determining the initial funding ratio, the beginning asset value as of July 1, 2017, shall
be the market value of assets expected to occur if the assumed investment return for fiscal
year 2017 is met. Subsequent funding ratios should be based on the actuarial accrued liability
determined as of July 1, 2017, and subsequent projected assets and liabilities based on
approved 2017 valuation assumptions. The package of reforms shall be presented for
consideration by the Legislative Commission on Pensions and Retirement and passage by
the legislature during the 2018 legislative session.
new text end

Sec. 2. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2016, sections 353.27, subdivision 3b; and 353.71, subdivision 1, new text end new text begin
are repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

ARTICLE 3

TEACHERS RETIREMENT ASSOCIATION

Section 1.

Minnesota Statutes 2016, section 354.436, subdivision 3, is amended to read:

Subd. 3.

Aid expiration.

The aid amounts specified in this section terminate and this
section expires on the October 1 next following deleted text begin the later of the following dates: (1) whendeleted text end
new text begin the date on which new text end the current assets of the Teachers Retirement Association fund equal or
exceed the actuarial accrued liabilities of the fund as determined in the most recent actuarial
valuation report for the Teachers Retirement Association fund by the actuary retained under
section 356.214deleted text begin ; or (2) when the member and employer contribution rates are first determined
to be eligible for a reduction under section 354.42, subdivisions 4a, 4b, 4c, and 4ddeleted text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 2. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2016, sections 354.42, subdivisions 4a, 4b, 4c, and 4d; and 354.60, new text end new text begin
are repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

ARTICLE 4

ST. PAUL TEACHERS RETIREMENT FUND ASSOCIATION BENEFIT AND
CONTRIBUTION CHANGES

Section 1.

Minnesota Statutes 2016, section 354A.011, subdivision 3a, is amended to read:

Subd. 3a.

Actuarial equivalent.

"Actuarial equivalent" means the condition of one
annuity or benefit having an equal actuarial present value as another annuity or benefit,
determined as of a given date with each actuarial present value based on the appropriate
mortality table adopted by the appropriate board of trustees based on the experience of that
retirement fund association as recommended by the actuary retained under section 356.214,
and approved under section 356.215, subdivision 18, and using the applicable deleted text begin preretirement
or postretirement interest ratedeleted text end new text begin investment return new text end assumption specified in section 356.215,
subdivision 8.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 2.

Minnesota Statutes 2016, section 354A.29, subdivision 7, is amended to read:

Subd. 7.

deleted text begin Eligibility for payment ofdeleted text end Postretirement adjustments.

deleted text begin (a) Annually, after
June 30, the board of trustees of the St. Paul Teachers Retirement Fund Association must
determine the amount of any postretirement adjustment using the procedures in this
subdivision and subdivision 8 or 9, whichever is applicable.
deleted text end

deleted text begin (b) On January 1deleted text end new text begin (a) Except as set forth in paragraph (c)new text end , each person who has been
receiving an annuity or benefit under the articles of incorporation, the bylaws, or this chapter,
whose effective date of benefit commencement occurred on or before July 1 of the calendar
year immediately before the adjustment, is eligible to receive deleted text begin adeleted text end new text begin an annual new text end postretirement
deleted text begin increase as specified in subdivision 8 or 9.deleted text end new text begin adjustment, effective as of each January 1, as
follows:
new text end

new text begin (1) there shall be no postretirement adjustment on January 1, 2018, and January 1, 2019;
and
new text end

new text begin (2) the postretirement adjustment shall be one percent on January 1, 2020, and each
January 1 thereafter.
new text end

new text begin (b) The amount determined under paragraph (a), clause (2), is the full postretirement
adjustment to be applied as a permanent increase to the regular payment of each eligible
member on January 1 of the next calendar year. For any eligible member whose effective
date of benefit commencement occurred after January 1 of the calendar year immediately
before the postretirement adjustment is applied, the amount determined under paragraph
(a), clause (2), must be reduced by 50 percent.
new text end

new text begin (c) Each person who retires on or after January 1, 2023, is entitled to an annual
postretirement adjustment, effective as of each January 1, beginning with the year following
the year in which the member attains normal retirement age.
new text end

new text begin (d) Paragraph (c) does not apply to members who retire under section 354A.31,
subdivision 6, paragraph (b).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3.

Minnesota Statutes 2016, section 354A.31, subdivision 7, is amended to read:

Subd. 7.

Reduction for early retirement.

(a) This subdivision applies to a person who
has become at least 55 years old and first becomes a coordinated member after June 30,
1989, and to any other coordinated member who has become at least 55 years old and whose
annuity is higher when calculated using the retirement annuity formula percentage in
subdivision 4, paragraph (d), or subdivision 4a, paragraph (d), as applicable, in conjunction
with this subdivision than when calculated under subdivision 4, paragraph (c), or subdivision
4a, paragraph (c), in conjunction with subdivision 6.new text begin An employee who retires under the
formula annuity before the normal retirement age shall be paid the normal annuity reduced
as described in paragraph (b) if the person retires on or after July 1, 2018, or in paragraph
(c) if the person retires before July 1, 2018, as applicable.
new text end

(b) A coordinated member who retires before the normal retirement age new text begin and on or after
July 1, 2018, new text end is entitled to receive a retirement annuity calculated using the retirement
annuity formula percentage in subdivision 4, paragraph (d), or subdivision 4a, paragraph
(d), whichever applies, new text begin reduced as described in clause (1) or (2), as applicable.
new text end

new text begin (1) If the member retires when the member is younger than age 62 or with fewer than
30 years of service, the annuity must be reduced by an early reduction factor for each year
that the member's age of retirement precedes normal retirement age. The early reduction
factors are four percent per year for ages 55 through 59 and seven percent per year for ages
60 through normal retirement age. The resulting annuity must be further adjusted to take
into account augmentation as if the employee had deferred receipt of the annuity until normal
retirement age and the annuity were augmented at the applicable annual rate, compounded
annually, from the day the annuity begins to accrue until normal retirement age. The
applicable annual rate is the rate in effect on the employee's effective date of retirement and
shall be considered as fixed for the employee. The applicable annual rates are the following:
new text end

new text begin (i) until June 30, 2018, 2.5 percent;
new text end

new text begin (iii) after June 30, 2023, zero percent.
new text end

new text begin After June 30, 2023, the reduced annuity commencing before normal retirement age
under this clause shall not take into account any augmentation.
new text end

new text begin (2) If the member retires when the member is at least age 62 or older and has at least 30
years of service, the member is entitled to receive a retirement annuity calculated using the
retirement annuity formula percentage in subdivision 4, paragraph (d), or subdivision 4a,
paragraph (c), whichever applies, multiplied by the applicable early retirement factor
specified for members "Age 62 or older with 30 years of service" in the table in paragraph
(c).
new text end

new text begin (c) A coordinated member who retires before the normal retirement age and before July
1, 2018, is entitled to receive a retirement annuity calculated using the retirement annuity
formula percentage in subdivision 4, paragraph (d), or subdivision 4a, paragraph (d),
whichever applies, new text end multiplied by the applicable early retirement factor specified below:

	Under age 62	Age 62 or older
	or less than 30 years of service	with 30 years of service

Normal retirement age:	65	66	65	66
Age at retirement
55	0.5376	0.4592
56	0.5745	0.4992
57	0.6092	0.5370
58	0.6419	0.5726
59	0.6726	0.6062
60	0.7354	0.6726
61	0.7947	0.7354
62	0.8507	0.7947	0.8831	0.8389
63	0.9035	0.8507	0.9246	0.8831
64	0.9533	0.9035	0.9635	0.9246
65	1.0000	0.9533	1.0000	0.9635
66		1.0000		1.0000

For normal retirement ages between ages 65 and 66, the early retirement factors must
be determined by linear interpolation between the early retirement factors applicable for
normal retirement ages 65 and 66.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 4.

Minnesota Statutes 2016, section 354A.37, subdivision 2, is amended to read:

Subd. 2.

Eligibility for deferred retirement annuity.

(a) Any coordinated member
who ceases to render teaching services for the school district in which the teachers retirement
fund association is located, with sufficient allowable service credit to meet the minimum
service requirements specified in section 354A.31, subdivision 1, shall be entitled to a
deferred retirement annuity in lieu of a refund under subdivision 1.

new text begin (b)new text end The deferred retirement annuity must be computed under section 354A.31 and shall
be augmented deleted text begin as provided in this subdivisiondeleted text end new text begin by the applicable interest rate compounded
annually from the first day of the month following the month during which the member
ceased to render teaching service to the effective date of retirement. There is no augmentation
if this period is less than three monthsnew text end .

new text begin (c)new text end The deferred annuity commences upon application after the person on deferred status
attains at least the minimum age specified in section 354A.31, subdivision 1.

deleted text begin (b) The monthly annuity amount that had accrued when the member ceased to render
teaching service must be augmented from the first day of the month following the month
during which the member ceased to render teaching service to the effective date of retirement.
There is no augmentation if this period is less than three months. The rate of augmentation
is
deleted text end

new text begin (d) For a person who became a covered employee before July 1, 2006, the annuity must
be augmented as follows:
new text end

new text begin (1) new text end three percent compounded annually until January 1 of the year following the year
in which the former member attains age 55deleted text begin ,deleted text end new text begin or until June 30, 2012, whichever is earlier;
new text end

new text begin (2) new text end five percent deleted text begin compounded annually after that date to July 1deleted text end new text begin from the January 1, next
following the attainment of age 55 or until June 30new text end , 2012deleted text begin , anddeleted text end new text begin ;
new text end

new text begin (3) new text end two percent deleted text begin compounded annually after that date to the effective date of retirement
if the employee became an employee before July 1, 2006, and atdeleted text end new text begin from July 1, 2012, until
June 30, 2018; and
new text end

new text begin (4) after June 30, 2018, the deferred annuity must not be augmented.
new text end

new text begin (e) For a person who became a covered employee after June 30, 2006, the annuity must
be augmented as follows:
new text end

new text begin (1) new text end 2.5 percent deleted text begin compounded annually to July 1, 2012, anddeleted text end new text begin until June 30, 2012;
new text end

new text begin (2) new text end two percent deleted text begin compounded annually after that date to the effective date of retirement
if the employee became an employee after June 30, 2006deleted text end new text begin from July 1, 2012, until June 30,
2018; and
new text end

deleted text begin . If a person has more than one period of uninterrupted service, a separate average salary
determined under section 354A.31 must be used for each period, and the monthly annuity
amount related to each period must be augmented as provided in this subdivision. The sum
of the augmented monthly annuity amounts determines the total deferred annuity payable.
If a person repays a refund, the service restored by the repayment must be considered as
continuous with the next period of service for which the person has credit with the fund. If
a person does not render teaching services in any one fiscal year or more consecutive fiscal
years and then resumes teaching service, the formula percentages used from the date of
resumption of teaching service are those applicable to new members. The mortality table
and interest assumption used to compute the annuity are the table established by the fund
to compute other annuities, and the interest assumption under section 356.215 in effect
when the member retires. A period of uninterrupted service for the purpose of this subdivision
means a period of covered teaching service during which the member has not been separated
from active service for more than one fiscal yeardeleted text end .

new text begin (3) after June 30, 2018, the deferred annuity must not be augmented.
new text end

deleted text begin (c)deleted text end new text begin (f) new text end The augmentation provided by this subdivision applies to the benefit provided in
section 354A.35, subdivision 2.

new text begin (g)new text end The augmentation provided by this subdivision does not apply to any period in which
a person is on an approved leave of absence from an employer unit.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 5.

Minnesota Statutes 2016, section 354A.37, subdivision 3, is amended to read:

Subd. 3.

Computation of refund amount.

A former coordinated member who qualifies
for a refund under subdivision 1 is entitled to receive a refund equal to the amount of the
former coordinated member's accumulated employee contributions with interest at the deleted text begin rate
ofdeleted text end new text begin following rates for the applicable period:
new text end

new text begin (a) new text end Six percent per annum compounded annually to July 1, 2011deleted text begin , if the person is a former
member of the St. Paul Teachers Retirement Fund Association, anddeleted text end new text begin ;
new text end

new text begin (b) new text end four percent per annum compounded annually new text begin to July 1, 2017; and
new text end

new text begin (c) three percent per annum compounded annually new text end thereafter.

Sec. 6. new text begin REPEALER.
new text end

new text begin (a) new text end new text begin Minnesota Statutes 2016, section 354A.29, subdivisions 8 and 9, new text end new text begin are repealed.
new text end

new text begin (b) new text end new text begin Minnesota Statutes 2016, section 354A.39, new text end new text begin is repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin Paragraph (a) is effective the day following final enactment.
Paragraph (b) is effective July 1, 2017.
new text end

ARTICLE 5

POSTRETIREMENT ADJUSTMENTS FOR STATEWIDE PLANS
AND GENERAL PROVISIONS

Section 1.

Minnesota Statutes 2016, section 356.215, subdivision 8, is amended to read:

Subd. 8.

deleted text begin Interest and salarydeleted text end new text begin Actuarial new text end assumptions.

(a) The actuarial valuation must
use the applicable following deleted text begin interestdeleted text end new text begin investment return new text end assumption:

(1) select and ultimate deleted text begin interest ratedeleted text end new text begin investment returnnew text end assumption

plan	ultimate deleted text begin interest ratedeleted text end new text begin investment return new text end assumption
teachers retirement plan	8.5%

The select preretirement interest rate assumption for the period through June 30, 2017,
is eight percent.

(2) single rate deleted text begin interest ratedeleted text end new text begin investment returnnew text end assumption

plan	deleted text begin interest ratedeleted text end new text begin investment return new text end assumption
general state employees retirement plan	deleted text begin 8deleted text end new text begin 7.5new text end %
correctional state employees retirement plan	deleted text begin 8 deleted text end new text begin 7.5 new text end
State Patrol retirement plan	deleted text begin 8 deleted text end new text begin 7.5 new text end
legislators retirement plan, and for the constitutional officers calculation of total plan liabilities	0
judges retirement plan	deleted text begin 8 deleted text end new text begin 7.5 new text end
general public employees retirement plan	deleted text begin 8 deleted text end new text begin 7.5 new text end
public employees police and fire retirement plan	deleted text begin 8 deleted text end new text begin 7.5 new text end
local government correctional service retirement plan	deleted text begin 8 deleted text end new text begin 7.5 new text end
St. Paul teachers retirement plan	deleted text begin 8 deleted text end new text begin 7.5 new text end
Bloomington Fire Department Relief Association	6
local monthly benefit volunteer firefighter relief associations	5
monthly benefit retirement plans in the statewide volunteer firefighter retirement plan	6

(b)deleted text begin (1) If funding stability has been attained,deleted text end The new text begin actuarial new text end valuation new text begin for each of the
covered retirement plans listed in section 356.415, subdivision 2, new text end must deleted text begin use adeleted text end new text begin take into account
the new text end postretirement adjustment rate deleted text begin actuarial assumption equal to the postretirement adjustment
ratedeleted text end new text begin or rates applicable to the plan as new text end specified in section deleted text begin 354A.27, subdivision 7;deleted text end 354A.29,
subdivision deleted text begin 9deleted text end new text begin 7new text end ; or 356.415deleted text begin , subdivision 1deleted text end , whichever applies.

deleted text begin (2) If funding stability has not been attained, the valuation must use a select postretirement
adjustment rate actuarial assumption equal to the postretirement adjustment rate specified
in section 354A.27, subdivision 6a; 354A.29, subdivision 8; or 356.415, subdivision 1a,
1b, 1c, 1d, 1e, or 1f, whichever applies, for a period ending when the approved actuary
estimates that the plan will attain the defined funding stability measure, and thereafter an
ultimate postretirement adjustment rate actuarial assumption equal to the postretirement
adjustment rate under section 354A.27, subdivision 7; 354A.29, subdivision 9; or 356.415,
subdivision 1, for the applicable period or periods beginning when funding stability is
projected to be attained.
deleted text end

(c) The actuarial valuation must use the applicable following single rate future salary
increase assumption, the applicable following modified single rate future salary increase
assumption, or the applicable following graded rate future salary increase assumption:

(1) single rate future salary increase assumption

plan	future salary increase assumption
legislators retirement plan		5%
judges retirement plan		2.75
Bloomington Fire Department Relief Association		4

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

plan	future salary increase assumption
local government correctional service retirement plan	assumption B
St. Paul teachers retirement plan	assumption A

For plans other than the St. Paul teachers
retirement plan and the local government
correctional service retirement plan, the select
calculation is: during the designated select
period, a designated percentage rate is
multiplied by the result of the designated
integer minus T, where T is the number of
completed years of service, and is added to
the applicable future salary increase
assumption. The designated select period is
ten years and the designated integer is ten for
the local government correctional service
retirement plan and 15 for the St. Paul
Teachers Retirement Fund Association. The
designated percentage rate is 0.2 percent for
the St. Paul Teachers Retirement Fund
Association.

The ultimate future salary increase assumption is:

age	A	B
16	5.9%	8.75%
17	5.9	8.75
18	5.9	8.75
19	5.9	8.75
20	5.9	8.75
21	5.9	8.5
22	5.9	8.25
23	5.85	8
24	5.8	7.75
25	5.75	7.5
26	5.7	7.25
27	5.65	7
28	5.6	6.75
29	5.55	6.5
30	5.5	6.5
31	5.45	6.25
32	5.4	6.25
33	5.35	6.25
34	5.3	6
35	5.25	6
36	5.2	5.75
37	5.15	5.75
38	5.1	5.75
39	5.05	5.5
40	5	5.5
41	4.95	5.5
42	4.9	5.25
43	4.85	5
44	4.8	5
45	4.75	4.75
46	4.7	4.75
47	4.65	4.75
48	4.6	4.75
49	4.55	4.75
50	4.5	4.75
51	4.45	4.75
52	4.4	4.75
53	4.35	4.75
54	4.3	4.75
55	4.25	4.5
56	4.2	4.5
57	4.15	4.25
58	4.1	4
59	4.05	4
60	4	4
61	4	4
62	4	4
63	4	4
64	4	4
65	4	3.75
66	4	3.75
67	4	3.75
68	4	3.75
69	4	3.75
70	4	3.75

(3) service-related ultimate future salary increase assumption

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

service length	A	B	C	D	E	F
1	10.25%	11.78%	12%	12.75%	7.75%	5.75%
2	7.85	8.65	9	10.75	7.25	5.6
3	6.65	7.21	8	8.75	6.75	5.45
4	5.95	6.33	7.5	7.75	6.5	5.3
5	5.45	5.72	7.25	6.25	6.25	5.15
6	5.05	5.27	7	5.85	6	5
7	4.75	4.91	6.85	5.55	5.75	4.85
8	4.45	4.62	6.7	5.35	5.6	4.7
9	4.25	4.38	6.55	5.15	5.45	4.55
10	4.15	4.17	6.4	5.05	5.3	4.4
11	3.95	3.99	6.25	4.95	5.15	4.3
12	3.85	3.83	6	4.85	5	4.2
13	3.75	3.69	5.75	4.75	4.85	4.1
14	3.55	3.57	5.5	4.65	4.7	4
15	3.45	3.45	5.25	4.55	4.55	3.9
16	3.35	3.35	5	4.55	4.4	3.8
17	3.25	3.26	4.75	4.55	4.25	3.7
18	3.25	3.25	4.5	4.55	4.1	3.6
19	3.25	3.25	4.25	4.55	3.95	3.5
20	3.25	3.25	4	4.55	3.8	3.5
21	3.25	3.25	3.9	4.45	3.75	3.5
22	3.25	3.25	3.8	4.35	3.75	3.5
23	3.25	3.25	3.7	4.25	3.75	3.5
24	3.25	3.25	3.6	4.25	3.75	3.5
25	3.25	3.25	3.5	4.25	3.75	3.5
26	3.25	3.25	3.5	4.25	3.75	3.5
27	3.25	3.25	3.5	4.25	3.75	3.5
28	3.25	3.25	3.5	4.25	3.75	3.5
29	3.25	3.25	3.5	4.25	3.75	3.5
30 or more	3.25	3.25	3.5	4.25	3.75	3.5

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

plan	payroll growth assumption
general state employees retirement plan of the Minnesota State Retirement System	3.5%
correctional state employees retirement plan	3.5
State Patrol retirement plan	3.5
judges retirement plan	2.75
general employees retirement plan of the Public Employees Retirement Association	3.5
public employees police and fire retirement plan	3.5
local government correctional service retirement plan	3.5
teachers retirement plan	3.75
St. Paul teachers retirement plan	4

(e) The assumptions set forth in paragraphs (c) and (d) continue to apply, unless a
different salary assumption or a different payroll increase assumption:

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

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

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 2.

Minnesota Statutes 2016, section 356.215, subdivision 9, is amended to read:

Subd. 9.

Other assumptions.

deleted text begin Thedeleted text end new text begin (a) Each plan's new text end actuarial valuation must use
assumptions concerning new text begin base new text end mortalitynew text begin ratesnew text end , disability, retirement, withdrawal, retirement
age, and any other relevant demographic or economic factor. These assumptions must be
set at levels consistent with those determined in the most recent quadrennial experience
study completed under subdivision 16, if required, or deleted text begin representative of the best estimate of
future experiencedeleted text end new text begin as recommended by the plan's approved actuarynew text end , if a quadrennial experience
study is not required.

new text begin (b) The actuarial valuation may use an assumption concerning future mortality
improvement. This assumption may be set at levels consistent with those determined in the
most recent mortality improvement scale published by the Society of Actuaries or as
otherwise recommended by the plan's approved actuary.
new text end

new text begin (c)new text end The actuarial valuation must contain an exhibit indicating deleted text begin anydeleted text end new text begin the new text end actuarial
assumptions used in preparing the valuation report.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 3.

Minnesota Statutes 2016, section 356.215, subdivision 11, is amended to read:

Subd. 11.

Amortization contributions.

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

(b) For any retirement plan other than a retirement plan governed by paragraph (d), (e),
(f), (g), (h), (i), or (j), if there has not been a change in the actuarial assumptions used for
calculating the actuarial accrued liability of the fund, a change in the benefit plan governing
annuities and benefits payable from the fund, a change in the actuarial cost method used in
calculating the actuarial accrued liability of all or a portion of the fund, or a combination
of the three, which change or changes by itself or by themselves without inclusion of any
other items of increase or decrease produce a net increase in the unfunded actuarial accrued
liability of the fund, the established date for full funding is the first actuarial valuation date
occurring after June 1, 2020.

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

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

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

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

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

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

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

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

(d) For the general employees retirement plan of the Public Employees Retirement
Association, the established date for full funding is June 30, deleted text begin 2031deleted text end new text begin 2047new text end .

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

(f) For the correctional state employees retirement plan new text begin and the State Patrol retirement
plan new text end of the Minnesota State Retirement System, the established date for full funding is June
30, deleted text begin 2038deleted text end new text begin 2047new text end .

(g) For the judges retirement plan, the established date for full funding is June 30, deleted text begin 2038deleted text end new text begin
2047new text end .

(h) For the new text begin local government correctional service retirement plan and the new text end public employees
police and fire retirement plan, the established date for full funding is June 30, deleted text begin 2038deleted text end new text begin 2047new text end .

(i) For the St. Paul Teachers Retirement Fund Association, the established date for full
funding is June 30, deleted text begin 2042. In addition to other requirements of this chapter, the annual
actuarial valuation must contain an exhibit indicating the funded ratio and the deficiency
or sufficiency in annual contributions when comparing liabilities to the market value of the
assets of the fund as of the close of the most recent fiscal yeardeleted text end new text begin 2047new text end .

(j) For the general state employees retirement plan of the Minnesota State Retirement
System, the established date for full funding is June 30, deleted text begin 2040deleted text end new text begin 2047new text end .

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 4.

Minnesota Statutes 2016, section 356.30, subdivision 1, is amended to read:

Subdivision 1.

Eligibility; computation of annuity.

(a) Notwithstanding any provisions
of the laws governing the new text begin covered new text end retirement plans deleted text begin enumerateddeleted text end new text begin listed new text end in subdivision 3, a
person deleted text begin who has met the qualifications of paragraph (b)deleted text end may elect to receivenew text begin , upon retirement,new text end
a retirement annuity from each deleted text begin enumerateddeleted text end new text begin covered new text end retirement plandeleted text begin in which the person has
at least one-half year of allowable service, based on the allowable service in each plandeleted text end ,
subject to the provisions of paragraph deleted text begin (c)deleted text end new text begin (b), if the person has:
new text end

new text begin (1) allowable service in any two or more of the covered plans;
new text end

new text begin (2) at least one-half year of allowable service in each covered plan, based on the allowable
service in each plan;
new text end

new text begin (3) total allowable service that equals or exceeds the longest service credit vesting
requirement of the applicable retirement plan; and
new text end

new text begin (4) not begun to receive an annuity from any covered plan or has made application for
benefits from each applicable plan and the retirement annuity effective dates of each plan
are within a one-year periodnew text end .

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

deleted text begin (1) the person has allowable service in any two or more of the enumerated plans;
deleted text end

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

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

deleted text begin (c)deleted text end new text begin (b) If all requirements in paragraph (a) have been satisfied, new text end the retirement annuity
from each plan must be based upon the allowable service, accrual rates, and average salary
in the applicable plan except as further specified or modified in the following clauses:

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

(2) the deleted text begin "deleted text end average salarydeleted text begin " on which the annuity from each covered plan in which the
employee has credit in adeleted text end new text begin used to calculate the annuity for each new text end formula plan must be based
on the employee's highest five successive years of covered salary during the entire service
in covered plans;

(3) the accrual rates deleted text begin to be used bydeleted text end new text begin under new text end each plan must be deleted text begin thosedeleted text end new text begin the new text end percentages
prescribed by each plan's formula deleted text begin as continueddeleted text end new text begin in effect new text end for the respective years of allowable
service from one plan to the next, recognizing all previous allowable service with the other
covered plans;

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

(5) the annuity amount payable for any allowable service under a nonformula plan deleted text begin ofdeleted text end
new text begin that is new text end a covered plan must not be affected, but such service and covered salary must be
used in the above calculation.

new text begin (c) If a person eligible for an annuity under paragraph (a) from each covered plan, except
the Public Employees Retirement Association and the Teachers Retirement Association,
terminates all public service, the deferred annuity must be augmented from the date of
termination until the earlier of:
new text end

new text begin (1) the effective date of retirement; or
new text end

new text begin (2) December 31, 2017, for the Minnesota State Retirement System or June 30, 2018,
for the St. Paul Teachers Retirement Association.
new text end

new text begin A deferred annuity for all applicable plans, except the Public Employees Retirement
Association and the Teachers Retirement Association, must not be augmented after the
applicable dates under clause (2). The appropriate rate of augmentation is the rate in effect
on the date on which the person entered into public employment and subsequently adjusted
according to the laws governing each covered plan, as applicable. The Public Employees
Retirement Association and the Teachers Retirement Association must augment a deferred
annuity under section 353.74 or 354.55, subdivision 11, whichever applies.
new text end

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

(e) For the purpose of computing annuities under this sectiondeleted text begin , the accrual rates used by
any covered plan, except the public employees police and fire plan, the judges retirement
fund, and the State Patrol retirement plan, must not exceed 2.7 percent per year of service
for any year of service or fraction thereof. The formula percentage used bydeleted text end new text begin :
new text end

new text begin (1)new text end the judges retirement fund new text begin accrual rate new text end must not exceed 3.2 percent per year of service
for any year of service or fraction thereofdeleted text begin . The accrual rate used bydeleted text end new text begin ;
new text end

new text begin (2)new text end the public employees police and fire plan and the State Patrol retirement plan new text begin accrual
rate new text end must not exceed 3.0 percent per year of service for any year of service or fraction
thereofdeleted text begin . The accrual rate or rates used bydeleted text end new text begin ;
new text end

new text begin (3)new text end the legislators retirement plan new text begin accrual rate new text end must not exceed 2.5 percent, but this limit
does not apply to the adjustment provided under section 3A.02, subdivision 1, paragraph
(c)new text begin ; and
new text end

new text begin (4) any other covered plan's accrual rate must not exceed 2.7 percent per year of service
for any year of service or fraction thereofnew text end .

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

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

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 5.

new text begin [356.311] COVERAGE BY MORE THAN ONE PLAN.
new text end

new text begin (a) Any person who has been a member of two or more of the retirement plans listed in
paragraph (b) is entitled, when qualified, to an annuity from each fund if:
new text end

new text begin (1) the person's combined service in any two or more retirement plans equals or exceeds
the vesting requirement of the fund with the longest vesting requirement; and
new text end

new text begin (2) the person has not taken a refund from any of the retirement plans.
new text end

new text begin (b) This section applies to any defined benefit plan administered by the Minnesota State
Retirement System, including the State Patrol Retirement Plan; the Public Employees
Retirement Association, including the public employees police and fire plan; the Teachers
Retirement Association; and the St. Paul Teachers Retirement Fund Association, except as
noted in paragraph (c).
new text end

new text begin (c) This section does not apply to plans providing benefits for police officers or
firefighters under sections 424A.091 to 424A.096 or the Bloomington Fire Department
Relief Association.
new text end

new text begin (d) No portion of the service upon which the retirement annuity from one retirement
plan is based shall be again used in the computation of a retirement annuity from another
plan. The annuity from each plan must be determined under the laws applicable to that plan
except that the requirement that a person meet the vesting requirement in any particular
plan shall not apply, provided the combined service in any two or more plans equals or
exceeds the vesting requirement of the plan with the longest vesting requirement.
new text end

new text begin (e) Any deferred annuity payable under this section shall be subject to augmentation
under the laws applicable to the deferred annuity.
new text end

new text begin (f) Any person to whom an annuity is not payable under this section because the person
took a refund from one of the funds shall be entitled to repay the refund in accordance with
the laws governing the refund. Upon repayment, the person is entitled to annuities under
this section, if the person would otherwise be entitled.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 6.

Minnesota Statutes 2016, section 356.415, subdivision 1, is amended to read:

Subdivision 1.

Annual postretirement adjustments; deleted text begin generallydeleted text end new text begin Minnesota State
Retirement System general state employees retirement plan, legislators retirement
plan, and unclassified state employees retirement programnew text end .

(a) Except as deleted text begin otherwise
provided in subdivision 1a, 1b, 1c, 1d, 1e, or 1fdeleted text end new text begin set forth in paragraph (c)new text end , new text begin recipients of a
new text end retirement annuity, disability benefit, or survivor benefit deleted text begin recipients of a covereddeleted text end new text begin from the
general state employees new text end retirement plannew text begin , the legislators retirement plan, or the unclassified
state employees retirement program new text end are entitled to deleted text begin adeleted text end new text begin an annual new text end postretirement adjustment
deleted text begin annually ondeleted text end new text begin , effective as of eachnew text end January 1, as follows:

(1) new text begin effective January 1, 2018, through December 31, 2022, new text end a postretirement increase of
deleted text begin 2.5deleted text end new text begin one new text end percent must be applied each yeardeleted text begin , effective January 1,deleted text end to the monthly annuity or
benefit of each annuitant or benefit recipient who has been receiving an annuity or a benefit
for at least 12 full months as of the June 30 of the calendar year immediately before the
adjustment; deleted text begin and
deleted text end

(2) new text begin effective January 1, 2018, through December 31, 2022, new text end for each annuitant or benefit
recipient who has been receiving an annuity or a benefit amount for at least one full month,
but less than 12 full months as of the June 30 of the calendar year immediately before the
adjustment, an annual postretirement increase of 1/12 of deleted text begin 2.5deleted text end new text begin one new text end percent for each month
that the person has been receiving an annuity or benefit must be appliednew text begin to the monthly
annuity or benefit amount of the annuitant or benefit recipient;
new text end

new text begin (3) effective January 1, 2023, and thereafter, a postretirement increase of 1.5 percent
must be applied each year to the monthly annuity or benefit of each annuitant or benefit
recipient who has been receiving an annuity or a benefit for at least 12 full months as of the
June 30 of the calendar year immediately before the adjustment; and
new text end

new text begin (4) effective January 1, 2023, and thereafter, for each annuitant or benefit recipient who
has been receiving an annuity or a benefit amount for at least one full month, but less than
12 full months as of the June 30 of the calendar year immediately before the adjustment,
an annual postretirement increase of 1/12 of 1.5 percent for each month that the person has
been receiving an annuity or benefit must be applied to the monthly annuity or benefit
amount of the annuitant or benefit recipientnew text end .

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

new text begin (c) Members who retire on or after January 1, 2023, under the general state employees
retirement plan, the legislators retirement plan, or the unclassified state employees retirement
program are entitled to an annual postretirement adjustment of the member's retirement
annuity, effective as of each January 1, beginning with the year following the year in which
the member attains normal retirement age, as follows:
new text end

new text begin (1) if a member has been receiving an annuity for at least 12 full months as of the June
30 of the calendar year immediately before the date of the adjustment, a postretirement
increase equal to the percentage specified in paragraph (a), clause (1) or (3), as applicable,
must be applied, effective on January 1, to the member's monthly annuity;
new text end

new text begin (2) if a member has been receiving an annuity for at least one full month, but less than
12 full months as of the June 30 of the calendar year immediately before the date of
adjustment, a postretirement increase of 1/12 of the percentage specified in clause (1) for
each month that the member has been receiving an annuity must be applied, effective on
January 1, to the member's monthly annuity; or
new text end

new text begin (3) if a member has been receiving an annuity for fewer than six months before the date
of adjustment, a postretirement increase shall not be applied until the next January 1 and
the amount of the adjustment shall be the amount determined under clause (2).
new text end

new text begin (d) Paragraph (c) does not apply to members who retire under section 352.116,
subdivision 1, paragraph (c).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 7.

Minnesota Statutes 2016, section 356.415, subdivision 1a, is amended to read:

Subd. 1a.

Annual postretirement adjustments; Minnesota State Retirement System
deleted text begin plans other than State Patroldeleted text end new text begin correctional state employees new text end retirement plan.

(a)
Retirement annuity, disability benefit, or survivor benefit recipients of the deleted text begin legislators
retirement plan, including constitutional officers as specified in chapter 3A, the general
state employees retirement plan, thedeleted text end correctional state employees retirement plandeleted text begin , and the
unclassified state employees retirement programdeleted text end are entitled to deleted text begin adeleted text end new text begin an annual new text end postretirement
adjustment deleted text begin annually ondeleted text end new text begin , effective as of eachnew text end January 1, as follows:

(1) deleted text begin for each successive January 1, if the definition of funding stability under paragraph
(b) has not been met as of the prior July 1 for or with respect to the applicable retirement
plan,deleted text end a postretirement increase of deleted text begin twodeleted text end new text begin 1.5 new text end percent must be applied each yeardeleted text begin , effective on
January 1,deleted text end to the monthly annuity or benefit of each annuitant or benefit recipient who has
been receiving an annuity or a benefit for at least 12 full months as of the June 30 of the
calendar year immediately before the adjustment; and

(2) deleted text begin for each successive January 1, if the definition of funding stability under paragraph
(b) has not been met as of the prior July 1 for or with respect to the applicable retirement
plan,deleted text end for each annuitant or benefit recipient who has been receiving an annuity or a benefit
for at least one full month, but less than 12 full months as of the June 30 of the calendar
year immediately before the adjustment, an annual postretirement increase of 1/12 of deleted text begin twodeleted text end
new text begin 1.5 new text end percent for each month that the person has been receiving an annuity or benefit must
be appliednew text begin to the monthly annuity or benefit amount of each annuitant or benefit recipientnew text end .

deleted text begin (b) Increases under this subdivision for the general state employees retirement plan or
the correctional state employees retirement plan terminate on December 31 of the calendar
year in which two prior consecutive actuarial valuations prepared by the approved actuary
under sections 356.214 and 356.215 and the standards for actuarial work promulgated by
the Legislative Commission on Pensions and Retirement indicate that the market value of
assets of the retirement plan equals or exceeds 90 percent of the actuarial accrued liability
of the retirement plan and increases under subdivision 1 recommence after that date. Increases
under this subdivision for the legislators retirement plan established under chapter 3A,
including the constitutional officers specified in that chapter, and for the unclassified state
employees retirement program, terminate on December 31 of the calendar year in which
two prior consecutive actuarial valuations prepared by the approved actuary under sections
356.214 and 356.215 and the standards for actuarial work promulgated by the Legislative
Commission on Pensions and Retirement indicate that the market value of assets of the
general state employees retirement plan equals or exceeds 90 percent of the actuarial accrued
liability of the retirement plan and increases under subdivision 1 recommence after that
date.
deleted text end

deleted text begin (c) After having met the definition of funding stability under paragraph (b), the increase
provided in paragraph (a), clauses (1) and (2), rather than an increase under subdivision 1,
for the general state employees retirement plan or the correctional state employees retirement
plan, is again to be applied in a subsequent year or years if the market value of assets of the
applicable plan equals or is less than:
deleted text end

deleted text begin (1) 85 percent of the actuarial accrued liabilities of the applicable plan for two consecutive
actuarial valuations; or
deleted text end

deleted text begin (2) 80 percent of the actuarial accrued liabilities of the applicable plan for the most recent
actuarial valuation.
deleted text end

deleted text begin (d) After having met the definition of funding stability under paragraph (b), the increase
provided in paragraph (a), clauses (1) and (2), rather than an increase under subdivision 1,
for the legislators retirement plan, including the constitutional officers, and for the
unclassified state employees retirement program, is again to be applied in a subsequent year
or years if the market value of assets of the general state employees retirement plan equals
or is less than:
deleted text end

deleted text begin (1) 85 percent of the actuarial accrued liabilities of the applicable plan for two consecutive
actuarial valuations; or
deleted text end

deleted text begin (2) 80 percent of the actuarial accrued liabilities of the applicable plan for the most recent
actuarial valuation.
deleted text end

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 8.

Minnesota Statutes 2016, section 356.415, subdivision 1b, is amended to read:

Subd. 1b.

Annual postretirement adjustments; PERA; general employees retirement
plan deleted text begin and local government correctional retirement plandeleted text end .

(a) Retirement annuity, disability
benefit, or survivor benefit recipients of the general employees retirement plan of the Public
Employees Retirement Association deleted text begin and the local government correctional service retirement
plandeleted text end are entitled to deleted text begin adeleted text end new text begin an annual new text end postretirement adjustment deleted text begin annually ondeleted text end new text begin , effective as of eachnew text end
January 1, as follows:

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

(2) deleted text begin for each successive January 1deleted text end until funding stability is restored for the applicable
retirement plan, for each annuitant or benefit recipient who has been receiving an annuity
or a benefit for at least one full month, but less than 12 full months as of the June 30 of the
calendar year immediately before the adjustment, an annual postretirement increase of 1/12
of one percent for each month the person has been receiving an annuity or benefit must be
appliednew text begin to the monthly annuity or benefit amount of each annuitant or benefit recipientnew text end ;

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

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

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

(c) After having met the definition of funding stability under paragraph (b), the increase
provided in paragraph (a), clauses (1) and (2), rather than an increase under deleted text begin subdivision 1,deleted text end
new text begin paragraph (a), clauses (3) and (4),new text end is again to be applied in a subsequent year or years if the
market value of assets of the applicable plan equals or is less than:

(1) 85 percent of the actuarial accrued liabilities of the applicable plan for two consecutive
actuarial valuations; or

(2) 80 percent of the actuarial accrued liabilities of the applicable plan for the most recent
actuarial valuation.

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 9.

Minnesota Statutes 2016, section 356.415, subdivision 1c, is amended to read:

Subd. 1c.

Annual postretirement adjustments; PERA-police and fire.

(a) Retirement
annuity, disability benefit, or survivor benefit recipients of the public employees police and
fire retirement plan are entitled to deleted text begin adeleted text end new text begin an annual new text end postretirement adjustment deleted text begin annually ondeleted text end new text begin ,
effective as of each new text end January 1, deleted text begin if the definition of funding stability under paragraph (c) has
not been met,deleted text end as follows:

deleted text begin (1) for each annuitant or benefit recipient whose annuity or benefit effective date is on
or before June 1, 2014, who has been receiving the annuity or benefit for at least 12 full
months as of the immediate preceding June 30, an amount equal to one percent in each year;
or
deleted text end

deleted text begin (2) for each annuitant or benefit recipient whose annuity or benefit effective date is on
or before June 1, 2014, who has been receiving the annuity or benefit for at least one full
month, but less than 12 months, as of the immediate preceding June 30, an amount equal
to 1/12 of one percent for each month of annuity or benefit receipt; and
deleted text end

deleted text begin (3)deleted text end new text begin (1) new text end for each annuitant or benefit recipient deleted text begin whose annuity or benefit effective date is
after June 1, 2014,deleted text end who will have been receiving an annuity or benefit for at least 36 full
months as of the immediate preceding June 30, deleted text begin an amount equal todeleted text end new text begin a postretirement increase
of new text end one percentnew text begin must be applied each year to the monthly annuity or benefit amount of the
annuitant or benefit recipientnew text end ; or

deleted text begin (4)deleted text end new text begin (2) new text end for each annuitant or benefit recipient deleted text begin whose annuity or benefit effective date is
after June 1, 2014,deleted text end who has been receiving the annuity or benefit for at least 25 full months,
but less than 36 months as of the immediate preceding June 30, deleted text begin an amount equal todeleted text end new text begin a
postretirement increase of new text end 1/12 of one percent for each full month deleted text begin ofdeleted text end new text begin that the person has
been receiving an new text end annuity or benefit deleted text begin receiptdeleted text end during the fiscal year in which the annuity or
benefit was effectivenew text begin must be applied each year to the monthly annuity or benefit amount
of the annuitant or benefit recipientnew text end .

deleted text begin (b) Retirement annuity, disability benefit, or survivor benefit recipients of the public
employees police and fire retirement plan are entitled to a postretirement adjustment annually
on each January 1 following the restoration of funding stability as defined under paragraph
(c) and during the continuation of funding stability as defined under paragraph (c), as follows:
deleted text end

deleted text begin (1) for each annuitant or benefit recipient who has been receiving the annuity or benefit
for at least 36 full months as of the immediate preceding June 30, an amount equal to 2.5
percent; and
deleted text end

deleted text begin (2) for each annuitant or benefit recipient who has been receiving the annuity or benefit
for at least 25 full months, but less than 36 full months, as of the immediate preceding June
30, an amount equal to 1/12 of 2.5 percent for each full month of annuity or benefit receipt
during the fiscal year in which the annuity or benefit was effective.
deleted text end

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

deleted text begin (d) After having met the definition of funding stability under paragraph (c), a full or
prorated increase, as provided in paragraph (a), clause (1), (2), (3), or (4), whichever applies,
rather than adjustments under paragraph (b), is again applied in a subsequent year or years
if the market value of assets of the public employees police and fire retirement plan equals
or is less than:
deleted text end

deleted text begin (1) 85 percent of the actuarial accrued liabilities of the applicable plan for two consecutive
actuarial valuations; or
deleted text end

deleted text begin (2) 80 percent of the actuarial accrued liabilities of the applicable plan for the most recent
actuarial valuation.
deleted text end

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 10.

Minnesota Statutes 2016, section 356.415, subdivision 1d, is amended to read:

Subd. 1d.

Teachers Retirement Association annual postretirement adjustments.

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

(1) for each January 1 until funding stability is restored, a postretirement increase of
two percent must be applied each year, effective on January 1, to the monthly annuity or
benefit amount of each annuitant or benefit recipient who has been receiving an annuity or
a benefit for at least 12 full months as of the June 30 of the calendar year immediately before
the adjustment;

(2) for each January 1 until funding stability is restored, for each annuitant or benefit
recipient who has been receiving an annuity or a benefit for at least one full month, but less
than 12 full months as of the June 30 of the calendar year immediately before the adjustment,
an annual postretirement increase of 1/12 of two percent for each month the person has been
receiving an annuity or benefit must be applied;

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

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

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

(c) After having met the definition of funding stability under paragraph (b), the increase
provided in paragraph (a), clauses (1) and (2), rather than an increase under deleted text begin subdivision 1,
or the increase underdeleted text end paragraph (a), clauses (3) and (4), is again to be applied in a subsequent
year or years if the market value of assets of the plan equals or is less than:

(1) 85 percent of the actuarial accrued liabilities of the plan for two consecutive actuarial
valuations; or

(2) 80 percent of the actuarial accrued liabilities of the plan for the most recent actuarial
valuation.

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

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 11.

Minnesota Statutes 2016, section 356.415, subdivision 1e, is amended to read:

Subd. 1e.

Annual postretirement adjustments; State Patrol retirement plan.

(a)
Retirement annuity, disability benefit, or survivor benefit recipients of the State Patrol
retirement plan are entitled to deleted text begin adeleted text end new text begin an annual new text end postretirement adjustment deleted text begin annually ondeleted text end new text begin , effective
as of eachnew text end January 1 deleted text begin if the definition of funding stability under paragraph (b) has not been
metdeleted text end , as follows:

(1) a postretirement increase of one percent must be applied each yeardeleted text begin , effective on
January 1,deleted text end to the monthly annuity or benefit of each annuitant or benefit recipient who has
been receiving an annuity or a benefit for at least 12 full months as of the June 30 of the
calendar year immediately before the adjustment; and

(2) for each annuitant or benefit recipient who has been receiving an annuity or a benefit
for at least one full month, but less than 12 full months as of the June 30 of the calendar
year immediately before the adjustment, an annual postretirement increase of 1/12 of one
percent for each month that the person has been receiving an annuity or benefit must be
appliednew text begin to the monthly annuity or benefit of each annuitant or benefit recipientnew text end .

deleted text begin (b) Increases under paragraph (a) for the State Patrol retirement plan terminate on
December 31 of the calendar year in which two prior consecutive actuarial valuations for
the plan prepared by the approved actuary under sections 356.214 and 356.215 and the
standards for actuarial work promulgated by the Legislative Commission on Pensions and
Retirement indicates that the market value of assets of the retirement plan equals or exceeds
85 percent of the actuarial accrued liability of the retirement plan. Thereafter, increases
under paragraph (a) become effective again on the December 31 of the calendar year in
which the actuarial valuation, or prior consecutive actuarial valuations for the plan prepared
by the approved actuary under sections 356.214 and 356.215 and the standards for actuarial
work promulgated by the Legislative Commission on Pensions and Retirement indicates
that the market value of the assets of the retirement plan equals or is less than 80 percent
of the actuarial accrued liability of the retirement plan for two years, or equals or is less
than 75 percent of the actuarial accrued liability of the retirement plan for one year and
increases under paragraph (c) commence after that date.
deleted text end

deleted text begin (c) Retirement annuity, disability benefit, or survivor benefit recipients of the State Patrol
retirement plan are entitled to a postretirement adjustment annually on January 1, as follows:
deleted text end

deleted text begin (1) a postretirement increase of 1.5 percent must be applied each year, effective on
January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who has
been receiving an annuity or a benefit for at least 12 full months as of the June 30 of the
calendar year immediately before the adjustment; and
deleted text end

deleted text begin (2) for each annuitant or benefit recipient who has been receiving an annuity or a benefit
for at least one full month, but less than 12 full months as of the June 30 of the calendar
year immediately before the adjustment, an annual postretirement increase of 1/12 of 1.5
percent for each month that the person has been receiving an annuity or benefit must be
applied.
deleted text end

deleted text begin (d) Increases under paragraph (c) for the State Patrol retirement plan terminate on
December 31 of the calendar year in which two prior consecutive actuarial valuations
prepared by the approved actuary under sections 356.214 and 356.215 and the standards
for actuarial work adopted by the Legislative Commission on Pensions and Retirement
indicates that the market value of assets of the retirement plan equals or exceeds 90 percent
of the actuarial accrued liability of the retirement plan and increases under subdivision 1
recommence after that date.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 12.

Minnesota Statutes 2016, section 356.415, subdivision 1f, is amended to read:

Subd. 1f.

Annual postretirement adjustments; Minnesota State Retirement System
judges retirement plan.

deleted text begin (a) The increases provided under this subdivision are in lieu of
increases under subdivision 1 or 1a for retirement annuity, disability benefit, or survivor
benefit recipients of the judges retirement plan.
deleted text end

deleted text begin (b)deleted text end new text begin (a) new text end Retirement annuity, disability benefit, or survivor benefit recipients of the judges
retirement plan are entitled to deleted text begin adeleted text end new text begin an annual new text end postretirement adjustment deleted text begin annually ondeleted text end new text begin , effective
as of eachnew text end January 1deleted text begin ,deleted text end new text begin if the definition of funding stability under paragraph (b) has not been
met, new text end as follows:

(1) a postretirement increase of 1.75 percent must be applied each yeardeleted text begin , effective on
January 1,deleted text end to the monthly annuity or benefit of each annuitant or benefit recipient who has
been receiving an annuity or a benefit for at least 12 full months as of the June 30 of the
calendar year immediately before the adjustment; and

(2) for each annuitant or benefit recipient who has been receiving an annuity or a benefit
for at least one full month, but less than 12 full months as of the June 30 of the calendar
year immediately before the adjustment, an annual postretirement increase of 1/12 of 1.75
percent for each month that the person has been receiving an annuity or benefit must be
appliednew text begin to the monthly annuity or benefit of each annuitant or benefit recipientnew text end .

deleted text begin (c)deleted text end new text begin (b) new text end Increases under deleted text begin this subdivisiondeleted text end new text begin paragraph (a) new text end terminate on December 31 of the
calendar year in which two prior consecutive actuarial valuations prepared by the approved
actuary under sections 356.214 and 356.215 and the standards for actuarial work promulgated
by the Legislative Commission on Pensions and Retirement indicates that the market value
of assets of the judges retirement plan equals or exceeds 70 percent of the actuarial accrued
liability of the retirement plandeleted text begin .deleted text end new text begin and new text end increases under deleted text begin subdivision 1 or 1a, whichever is
applicable,deleted text end new text begin paragraph (c) new text end begin deleted text begin on the January 1 next followingdeleted text end new text begin after new text end that date.

new text begin (c) Retirement annuity, disability benefit, or survivor benefit recipients of the judges
retirement plan are entitled to a postretirement adjustment annually, effective as of each
January 1 if the definition of funding stability under paragraph (d) has not been met, as
follows:
new text end

new text begin (1) a postretirement increase of two percent must be applied each year to the monthly
annuity or benefit of each annuitant or benefit recipient who has been receiving an annuity
or a benefit for at least 12 full months as of the June 30 of the calendar year immediately
before the adjustment; and
new text end

new text begin (2) for each annuitant or benefit recipient who has been receiving an annuity or a benefit
for at least one full month, but less than 12 full months as of the June 30 of the calendar
year immediately before the adjustment, an annual postretirement increase of 1/12 of two
percent for each month that the person has been receiving an annuity or benefit must be
applied to the monthly annuity or benefit amount of the annuitant or benefit recipient.
new text end

new text begin (d) Increases under paragraph (c) terminate on December 31 of the calendar year in
which two prior consecutive actuarial valuations prepared by the approved actuary under
section 356.214 and the standards for actuarial work promulgated by the Legislative
Commission on Pensions and Retirement indicate that the market value of assets of the
judges retirement plan equals or exceeds 90 percent of the actuarial accrued liability of the
retirement plan and increases under paragraph (e) begin after that date.
new text end

new text begin (e) Retirement annuity, disability benefit, or survivor benefit recipients of the judges
retirement plan are entitled to a postretirement adjustment annually, effective as of each
January 1, as follows:
new text end

new text begin (1) a postretirement increase of 2.5 percent must be applied each year to the monthly
annuity or benefit of each annuitant or benefit recipient who has been receiving an annuity
or a benefit for at least 12 full months as of the June 30 of the calendar year immediately
before the adjustment; and
new text end

new text begin (2) for each annuitant or benefit recipient who has been receiving an annuity or a benefit
for at least one full month, but less than 12 full months as of the June 30 of the calendar
year immediately before the adjustment, an annual postretirement increase of 1/12 of 2.5
percent for each month that the person has been receiving an annuity or benefit must be
applied to the monthly annuity or benefit amount of the annuitant or benefit recipient.
new text end

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 13.

Minnesota Statutes 2016, section 356.415, is amended by adding a subdivision
to read:

new text begin Subd. 1g. new text end

new text begin Annual postretirement adjustments; PERA local government correctional
retirement plan. new text end

new text begin (a) Retirement annuity, disability benefit, or survivor benefit recipients
of the public employees local government correctional service retirement plan are entitled
to an annual postretirement adjustment, effective as of each January 1 as follows:
new text end

new text begin (1) a postretirement increase of 1.5 percent must be applied each year to the monthly
annuity or benefit of each annuitant or benefit recipient who has been receiving an annuity
or a benefit for at least 12 full months as of the June 30 of the calendar year immediately
before the adjustment; and
new text end

new text begin (2) for each annuitant or benefit recipient who has been receiving an annuity or a benefit
for at least one full month, but less than 12 full months as of the June 30 of the calendar
year immediately before the adjustment, a postretirement increase of 1/12 of 1.5 percent
for each month that the person has been receiving an annuity or benefit must be applied to
the monthly annuity or benefit amount of the annuitant or benefit recipient.
new text end

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 14. new text begin STUDY.
new text end

new text begin Before December 31, 2020, the Legislative Commission on Pensions and Retirement
must conduct a study of the rates of the postretirement adjustments for the covered plans
as defined in Minnesota Statutes, section 356.415, subdivision 2, and the St. Paul Teachers
Retirement Fund Association, and make recommendations regarding whether they should
be modified and whether a new methodology for determining postretirement adjustment
should be adopted. The Legislative Commission on Pensions and Retirement shall make a
determination based on the study during the 2021 legislative session.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

ARTICLE 6

INTEREST RATE CONFORMING CHANGES

Section 1.

Minnesota Statutes 2016, section 3A.03, subdivision 2, is amended to read:

Subd. 2.

Refund.

(a) A former member who has made contributions under subdivision
1 and who is no longer a member of the legislature is entitled to receive, upon written
application to the executive director on a form prescribed by the executive director, a refund
from the general fund of all contributions credited to the member's account with interest
computed as provided in section 352.22, subdivision 2.

(b) The refund of contributions as provided in paragraph (a) terminates all rights of a
former member of the legislature and the survivors of the former member under this chapter.

(c) If the former member of the legislature again becomes a member of the legislature
after having taken a refund as provided in paragraph (a), the member is a member of the
unclassified employees retirement program of the Minnesota State Retirement System.

(d) However, the member may reinstate the rights and credit for service previously
forfeited under this chapter if the member repays all refunds taken, plus interest at the deleted text begin rate
of 8.5 percent until June 30, 2015, and eight percent thereafterdeleted text end new text begin applicable annual rate or
rates specified in section 356.59, subdivision 2, new text end compounded annuallynew text begin ,new text end from the date on
which the refund was taken to the date on which the refund is repaid.

new text begin (e) A member of the legislature who has received a refund from any of the retirement
plans specified in section 356.311, paragraph (b), may repay the refund to the respective
plan under such terms and conditions consistent with the law governing the retirement plan
if the law governing the plan permits the repayment of refunds. If the total amount to be
repaid, including principal and interest exceeds $2,000, repayment may be made in three
equal installments over a period of 18 months, with the interest accrued during the period
of the repayment added to the final installment.
new text end

deleted text begin (e)deleted text end new text begin (f) new text end No person may be required to apply for or to accept a refund.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 2.

Minnesota Statutes 2016, section 352.01, subdivision 13a, is amended to read:

Subd. 13a.

Reduced salary during period of workers' compensation.

An employee
on leave of absence receiving temporary workers' compensation payments and a reduced
salary or no salary from the employer who is entitled to allowable service credit for the
period of absence, may make payment to the fund for the difference between salary received,
if any, and the salary the employee would normally receive if not on leave of absence during
the period. The employee shall pay an amount equal to the employee and employer
contribution rate under section 352.04, subdivisions 2 and 3, on the differential salary amount
for the period of the leave of absence.

The employing department, at its option, may pay the employer amount on behalf of its
employees. Payment made under this subdivision must include interest at the deleted text begin rate of 8.5
percent until June 30, 2015, and eight percent thereafter per yeardeleted text end new text begin applicable annual rate or
rates specified in section 356.59, subdivision 2new text end , and must be completed within one year of
the return from leave of absence.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 3.

Minnesota Statutes 2016, section 352.017, subdivision 2, is amended to read:

Subd. 2.

Purchase procedure.

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

(b) If payment is received by the executive director within one year from the date the
employee returned to work following the authorized leave, the payment amount is equal to
the employee and employer contribution rates specified in law for the applicable plan at the
end of the leave period multiplied by the employee's hourly rate of salary on the date of
return from the leave of absence and by the days and months of the leave of absence for
which the employee is eligible for allowable service credit. The payment must include
compound interest at the deleted text begin monthly rate of 0.71 percent until June 30, 2015, and 0.667 percent
per month thereafterdeleted text end new text begin applicable monthly rate or rates specified in section 356.59, subdivision
2, new text end from the last day of the leave period until the last day of the month in which payment is
received. If payment is received by the executive director after one year, the payment amount
is the amount determined under section 356.551. Payment under this paragraph must be
made before the date of termination from public employment covered under this chapter.

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 4.

Minnesota Statutes 2016, section 352.04, subdivision 8, is amended to read:

Subd. 8.

Department required to pay omitted salary deductions.

(a) If a department
fails to take deductions past due for a period of 60 days or less from an employee's salary
as provided in this section, those deductions must be taken on later payroll abstracts.

(b) If a department fails to take deductions past due for a period in excess of 60 days
from an employee's salary as provided in this section, the department, and not the employee,
must pay on later payroll abstracts the employee and employer contributions and deleted text begin an amount
equivalent to 8.5 percent until June 30, 2015, and eight percent thereafter of the total amount
due in lieu of interest, or if the delay in payment exceeds one year, 8.5 percent until June
30, 2015, and eight percent thereafter compound annualdeleted text end interestnew text begin at the applicable annual
rate or rates specified in section 356.59, subdivision 2, compounded annually, from the date
the employee and employer contributions should have been deducted to the date payment
of the total amount due is paid by the departmentnew text end .

(c) If a department fails to take deductions past due for a period of 60 days or less and
the employee is no longer in state service so that the required deductions cannot be taken
from the salary of the employee, the department must nevertheless pay the required employer
contributions. If any department fails to take deductions past due for a period in excess of
60 days and the employee is no longer in state service, the omitted contributions must be
recovered under paragraph (b).

(d) If an employee from whose salary required deductions were past due for a period of
60 days or less leaves state service before the payment of the omitted deductions and
subsequently returns to state service, the unpaid amount is considered the equivalent of a
refund. The employee accrues no right by reason of the unpaid amount, except that the
employee may pay the amount of omitted deductions as provided in section 352.23.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 5.

Minnesota Statutes 2016, section 352.04, subdivision 9, is amended to read:

Subd. 9.

Erroneous deductions, canceled warrants.

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

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

(c) If erroneous employee deductions and employer contributions are caused by an error
in plan coverage involving the plan and any other plans specified in section 356.99, that
section applies. If the employee should have been covered by the plan governed by chapter
352D, 353D, 354B, or 354D, the employee deductions and employer contributions taken
in error must be directly transferred to the applicable employee's account in the correct
retirement plan, with interest at the deleted text begin rate of 0.71 percent per month until June 30, 2015, and
0.667 percent per month thereafterdeleted text end new text begin applicable monthly rate or rates specified in section
356.59, subdivision 2new text end , compounded annually, from the first day of the month following the
month in which coverage should have commenced in the correct defined contribution plan
until the end of the month in which the transfer occurs.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 6.

Minnesota Statutes 2016, section 352.23, is amended to read:

352.23 TERMINATION OF RIGHTS; REPAYMENT OF REFUND.

(a) When any employee accepts a refund as provided in section 352.22, all existing
allowable service credits and all rights and benefits to which the employee was entitled
before accepting the refund terminate.

(c) Repayment of refunds entitles the employee only to credit for service covered by (1)
salary deductions; (2) payments previously made in lieu of salary deductions as permitted
under law in effect when the payment in lieu of deductions was made; (3) payments made
to obtain credit for service as permitted by laws in effect when payment was made; and (4)
allowable service previously credited while receiving temporary workers' compensation as
provided in section 352.01, subdivision 11, paragraph (a), clause (3).

(d) Payments under this section for repayment of refunds are to be paid with interest at
the deleted text begin rate of 8.5 percent until June 30, 2015, and eight percent thereafterdeleted text end new text begin applicable annual
rate or rates specified in section 356.59, subdivision 2, new text end compounded annuallynew text begin ,new text end from the date
the refund was taken until the date the refund is repaid. They may be paid in a lump sum
or by payroll deduction in the manner provided in section 352.04. Payment may be made
in a lump sum up to six months after termination from service.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 7.

Minnesota Statutes 2016, section 352.27, is amended to read:

352.27 CREDIT FOR BREAK IN SERVICE TO PROVIDE UNIFORMED
SERVICE.

(a) An employee who is absent from employment by reason of service in the uniformed
services, as defined in United States Code, title 38, section 4303(13), and who returns to
state service upon discharge from service in the uniformed service within the time frames
required in United States Code, title 38, section 4312(e), may obtain service credit for the
period of the uniformed service as further specified in this section, provided that the employee
did not separate from uniformed service with a dishonorable or bad conduct discharge or
under other than honorable conditions.

(b) The employee may obtain credit by paying into the fund an equivalent employee
contribution based upon the contribution rate or rates in effect at the time that the uniformed
service was performed multiplied by the full and fractional years being purchased and
applied to the annual salary rate. The annual salary rate is the average annual salary during
the purchase period that the employee would have received if the employee had continued
to be employed in covered employment rather than to provide uniformed service, or, if the
determination of that rate is not reasonably certain, the annual salary rate is the employee's
average salary rate during the 12-month period of covered employment rendered immediately
preceding the period of the uniformed service.

(c) The equivalent employer contribution and, if applicable, the equivalent additional
employer contribution provided in this chapter must be paid by the department employing
the employee from funds available to the department at the time and in the manner provided
in this chapter, using the employer and additional employer contribution rate or rates in
effect at the time that the uniformed service was performed, applied to the same annual
salary rate or rates used to compute the equivalent employee contribution.

(d) If the employee equivalent contributions provided in this section are not paid in full,
the employee's allowable service credit must be prorated by multiplying the full and fractional
number of years of uniformed service eligible for purchase by the ratio obtained by dividing
the total employee contribution received by the total employee contribution otherwise
required under this section.

(e) To receive service credit under this section, the contributions specified in this section
must be transmitted to the Minnesota State Retirement System during the period which
begins with the date on which the individual returns to state service and which has a duration
of three times the length of the uniformed service period, but not to exceed five years. If
the determined payment period is less than one year, the contributions required under this
section to receive service credit may be made within one year of the discharge date.

(f) The amount of service credit obtainable under this section may not exceed five years
unless a longer purchase period is required under United States Code, title 38, section 4312.

(g) The employing unit shall pay interest on all equivalent employee and employer
contribution amounts payable under this section. Interest must be deleted text begin computed at the rate of
8.5 percent until June 30, 2015, and eight percent thereafterdeleted text end new text begin at the applicable annual rate or
rates specified in section 356.59, subdivision 2, new text end compounded annuallynew text begin ,new text end from the end of each
fiscal year of the leave or the break in service to the end of the month in which the payment
is received.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 8.

Minnesota Statutes 2016, section 352.955, subdivision 3, is amended to read:

Subd. 3.

Payment of additional equivalent contributions.

(a) An eligible employee
who is transferred to plan coverage and who elects to transfer past service credit under this
section must pay an additional member contribution for that prior service period. The
additional member contribution is the amount computed under paragraph (b), plus the greater
of the amount computed under paragraph (c), or 40 percent of the unfunded actuarial accrued
liability attributable to the past service credit transfer.

(b) The executive director shall compute, for the most recent 12 months of service credit
eligible for transfer, or for the entire period eligible for transfer if less than 12 months, the
difference between the employee contribution rate or rates for the general state employees
retirement plan and the employee contribution rate or rates for the correctional state
employees retirement plan applied to the eligible employee's salary during that transfer
period, plus compound interest at the new text begin applicable new text end monthly rate deleted text begin of 0.71 percent until June 30,
2015, and 0.667 percent per month thereafterdeleted text end new text begin or rates specified in section 356.59, subdivision
2new text end .

(c) The executive director shall compute, for any service credit being transferred on
behalf of the eligible employee and not included under paragraph (b), the difference between
the employee contribution rate or rates for the general state employees retirement plan and
the employee contribution rate or rates for the correctional state employees retirement plan
applied to the eligible employee's salary during that transfer period, plus compound interest
at the deleted text begin monthly rate of 0.71 percent until June 30, 2015, and 0.667 percent per month thereafterdeleted text end new text begin
applicable monthly rate or rates specified in section 356.59, subdivision 2new text end .

(d) The executive director shall compute an amount using the process specified in
paragraph (b), but based on differences in employer contribution rates between the general
state employees retirement plan and the correctional state employees retirement plan rather
than employee contribution rates.

(e) The executive director shall compute an amount using the process specified in
paragraph (c), but based on differences in employer contribution rates between the general
state employees retirement plan and the correctional state employees retirement plan rather
than employee contribution rates.

(f) The additional equivalent member contribution under this subdivision must be paid
in a lump sum. Payment must accompany the election to transfer the prior service credit.
No transfer election or additional equivalent member contribution payment may be made
by a person or accepted by the executive director after the one year anniversary date of the
effective date of the retirement coverage transfer, or the date on which the eligible employee
terminates state employment, whichever is earlier.

(g) If an eligible employee elects to transfer past service credit under this section and
pays the additional equivalent member contribution amount under paragraph (a), the
applicable department shall pay an additional equivalent employer contribution amount.
The additional employer contribution is the amount computed under paragraph (d), plus the
greater of the amount computed under paragraph (e), or 60 percent of the unfunded actuarial
accrued liability attributable to the past service credit transfer.

(h) The unfunded actuarial accrued liability attributable to the past service credit transfer
is the present value of the benefit obtained by the transfer of the service credit to the
correctional state employees retirement plan reduced by the amount of the asset transfer
under subdivision 4, by the amount of the member contribution equivalent payment computed
under paragraph (b), and by the amount of the employer contribution equivalent payment
computed under paragraph (d).

(i) The additional equivalent employer contribution under this subdivision must be paid
in a lump sum and must be paid within 30 days of the date on which the executive director
of the Minnesota State Retirement System certifies to the applicable department that the
employee paid the additional equivalent member contribution.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 9.

Minnesota Statutes 2016, section 352B.013, subdivision 2, is amended to read:

Subd. 2.

Purchase procedure.

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

(b) If payment is received by the executive director within one year from the date the
employee returned to work following the authorized leave, the payment amount is equal to
the employee and employer contribution rates specified in section 352B.02 at the end of
the leave period multiplied by the employee's hourly rate of salary on the date of return
from the leave of absence and by the days and months of the leave of absence for which
the employee is eligible for allowable service credit. The payment must include compound
interest at the deleted text begin monthly rate of 0.71 percent until June 30, 2015, and 0.667 percent per month
thereafterdeleted text end new text begin applicable monthly rate or rates specified in section 356.59, subdivision 2, new text end from
the last day of the leave period until the last day of the month in which payment is received.
If payment is received by the executive director after one year from the date the employee
returned to work following the authorized leave, the payment amount is the amount
determined under section 356.551. Payment under this paragraph must be made before the
date of termination from public employment covered under this chapter.

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 10.

Minnesota Statutes 2016, section 352B.085, is amended to read:

352B.085 SERVICE CREDIT FOR CERTAIN DISABILITY LEAVES OF
ABSENCE.

A member on leave of absence receiving temporary workers' compensation payments
and a reduced salary or no salary from the employer who is entitled to allowable service
credit for the period of absence under section 352B.011, subdivision 3, paragraph (b), may
make payment to the fund for the difference between salary received, if any, and the salary
that the member would normally receive if the member was not on leave of absence during
the period. The member shall pay an amount equal to the member and employer contribution
rate under section 352B.02, subdivisions 1b and 1c, on the differential salary amount for
the period of the leave of absence. The employing department, at its option, may pay the
employer amount on behalf of the member. Payment made under this subdivision must
include interest at the deleted text begin rate of 8.5 percent until June 30, 2015, and eight percent thereafter
per yeardeleted text end new text begin applicable annual rate or rates specified in section 356.59, subdivision 2new text end , and must
be completed within one year of the member's return from the leave of absence.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 11.

Minnesota Statutes 2016, section 352B.086, is amended to read:

352B.086 SERVICE CREDIT FOR UNIFORMED SERVICE.

(a) A member who is absent from employment by reason of service in the uniformed
services, as defined in United States Code, title 38, section 4303(13), and who returns to
state employment in a position covered by the plan upon discharge from service in the
uniformed services within the time frame required in United States Code, title 38, section
4312(e), may obtain service credit for the period of the uniformed service, provided that
the member did not separate from uniformed service with a dishonorable or bad conduct
discharge or under other than honorable conditions.

(b) The member may obtain credit by paying into the fund an equivalent member
contribution based on the member contribution rate or rates in effect at the time that the
uniformed service was performed multiplied by the full and fractional years being purchased
and applied to the annual salary rate. The annual salary rate is the average annual salary
during the purchase period that the member would have received if the member had continued
to provide employment services to the state rather than to provide uniformed service, or if
the determination of that rate is not reasonably certain, the annual salary rate is the member's
average salary rate during the 12-month period of covered employment rendered immediately
preceding the purchase period.

(c) The equivalent employer contribution and, if applicable, the equivalent employer
additional contribution, must be paid by the employing unit, using the employer and employer
additional contribution rate or rates in effect at the time that the uniformed service was
performed, applied to the same annual salary rate or rates used to compute the equivalent
member contribution.

(d) If the member equivalent contributions provided for in this section are not paid in
full, the member's allowable service credit must be prorated by multiplying the full and
fractional number of years of uniformed service eligible for purchase by the ratio obtained
by dividing the total member contributions received by the total member contributions
otherwise required under this section.

(e) To receive allowable service credit under this section, the contributions specified in
this section must be transmitted to the fund during the period which begins with the date
on which the individual returns to state employment covered by the plan and which has a
duration of three times the length of the uniformed service period, but not to exceed five
years. If the determined payment period is calculated to be less than one year, the
contributions required under this section to receive service credit must be transmitted to the
fund within one year from the discharge date.

(f) The amount of allowable service credit obtainable under this section may not exceed
five years, unless a longer purchase period is required under United States Code, title 38,
section 4312.

(g) The employing unit shall pay interest on all equivalent member and employer
contribution amounts payable under this section. Interest must be computed at the deleted text begin rate of
8.5 percent until June 30, 2015, and eight percent thereafterdeleted text end new text begin applicable annual rate or rates
specified in section 356.59, subdivision 2, new text end compounded annuallynew text begin ,new text end from the end of each
fiscal year of the leave or break in service to the end of the month in which payment is
received.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 12.

Minnesota Statutes 2016, section 352B.11, subdivision 4, is amended to read:

Subd. 4.

Reentry into state servicenew text begin ; refund repaymentnew text end .

new text begin (a) new text end When a former member,
who has become separated from state service that entitled the member to membership and
has received a refund of retirement payments, reenters the state service in a position that
entitles the member to membership, that member shall receive credit for the period of prior
allowable state service if the member repays into the fund the amount of the refund, plus
interest deleted text begin on it at the rate of 8.5 percent until June 30, 2015, and eight percent thereafterdeleted text end new text begin at
the applicable annual rate or rates specified in section 356.59, subdivision 2, new text end compounded
annually, at any time before subsequent retirement. Repayment may be made in installments
or in a lump sum.

new text begin (b) A person who has received a refund from the State Patrol retirement fund who is a
member of a public retirement system included in section 356.311 may repay the refund
with interest to the State Patrol retirement fund as provided in paragraph (a).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 13.

Minnesota Statutes 2016, section 352D.05, subdivision 4, is amended to read:

Subd. 4.

Repayment of refund.

(a) A participant in the unclassified program may repay
regular refunds taken under section 352.22, as provided in section 352.23.

(b) A participant in the unclassified program or an employee covered by the general
employees retirement plan who has withdrawn the value of the total shares may repay the
refund taken and thereupon restore the service credit, rights and benefits forfeited by paying
into the fund the amount refunded plus interest at the deleted text begin rate of 8.5 percent until June 30, 2015,
and eight percent thereafterdeleted text end new text begin applicable annual rate or rates specified in section 356.59,
subdivision 2, new text end compounded annuallynew text begin ,new text end from the date that the refund was taken until the date
that the refund is repaid. If the participant had withdrawn only the employee shares as
permitted under prior laws, repayment must be pro rata.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 14.

Minnesota Statutes 2016, section 352D.11, subdivision 2, is amended to read:

Subd. 2.

Payments by employee.

An employee entitled to purchase service credit may
make the purchase by paying to the state retirement system an amount equal to the current
employee contribution rate in effect for the state retirement system applied to the current
or final salary rate multiplied by the months and days of prior temporary, intermittent, or
contract legislative service. Payment shall be made in one lump sum unless the executive
director of the state retirement system agrees to accept payment in installments over a period
of not more than three years from the date of the agreement. Installment payments shall be
charged interest at the deleted text begin rate of 8.5 percent until June 30, 2015, and eight percent thereafterdeleted text end
new text begin applicable annual rate or rates specified in section 356.59, subdivision 2, new text end compounded
annually.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 15.

Minnesota Statutes 2016, section 352D.12, is amended to read:

352D.12 TRANSFER OF PRIOR SERVICE CONTRIBUTIONS.

(a) An employee who is a participant in the unclassified program and who has prior
service credit in a covered plan under chapter 352, 353, 354, 354A, or 422A may, within
the time limits specified in this section, elect to transfer to the unclassified program prior
service contributions to one or more of those plans.

(b) For participants with prior service credit in a plan governed by chapter 352, 353,
354, 354A, or 422A, "prior service contributions" means the accumulated employee and
equal employer contributions with interest at the deleted text begin rate of 8.5 percent until June 30, 2015,
and eight percent thereafterdeleted text end new text begin applicable annual rate or rates specified in section 356.59,
subdivision 2, new text end compounded annually, based on fiscal year balances.

(c) If a participant has taken a refund from a retirement plan listed in this section, the
participant may repay the refund to that plan, notwithstanding any restrictions on repayment
to that plan, deleted text begin plus 8.5 percent interest until June 30, 2015, and eight percent interest thereafterdeleted text end
new text begin with interest at the applicable annual rate or rates specified in section 356.59, subdivision
2, new text end compounded annuallynew text begin ,new text end and have the accumulated employee and equal employer
contributions transferred to the unclassified program with interest at the rate of 8.5 percent
until June 30, 2015, and eight percent thereafter compounded annually based on fiscal year
balances. If a person repays a refund and subsequently elects to have the money transferred
to the unclassified program, the repayment amount, including interest, is added to the fiscal
year balance in the year which the repayment was made.

(d) A participant electing to transfer prior service contributions credited to a retirement
plan governed by chapter 352, 353, 354, 354A, or 422A as provided under this section must
complete a written application for the transfer and repay any refund within one year of the
commencement of the employee's participation in the unclassified program.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 16.

Minnesota Statutes 2016, section 353.01, subdivision 16, is amended to read:

Subd. 16.

Allowable service; limits and computation.

(a) "Allowable service" means:

(1) service during years of actual membership in the course of which employee deductions
were withheld from salary and contributions were made at the applicable rates under section
353.27, 353.65, or 353E.03;

(2) periods of service covered by payments in lieu of salary deductions under sections
353.27, subdivisions 12 and 12a, and 353.35;

(3) service in years during which the public employee was not a member but for which
the member later elected, while a member, to obtain credit by making payments to the fund
as permitted by any law then in effect;

(4) a period of authorized leave of absence during which the employee receives pay as
specified in subdivision 10, paragraph (a), clause (4) or (5), from which deductions for
employee contributions are made, deposited, and credited to the fund;

(5) a period of authorized leave of absence without pay, or with pay that is not included
in the definition of salary under subdivision 10, paragraph (a), clause (4) or (5), for which
salary deductions are not authorized, and for which a member obtained service credit for
up to 12 months of the authorized leave period by payment under section 353.0161 or
353.0162, to the fund made in place of salary deductions;

(6) a periodic, repetitive leave that is offered to all employees of a governmental
subdivision. The leave program may not exceed 208 hours per annual normal work cycle
as certified to the association by the employer. A participating member obtains service credit
by making employee contributions in an amount or amounts based on the member's average
salary, excluding overtime pay, that would have been paid if the leave had not been taken.
The employer shall pay the employer and additional employer contributions on behalf of
the participating member. The employee and the employer are responsible to pay interest
on their respective shares at the deleted text begin rate of 8.5 percent until June 30, 2015, and eight percent
thereafterdeleted text end new text begin applicable rate or rates specified in section 356.59, subdivision 3new text end , compounded
annually, from the end of the normal cycle until full payment is made. An employer shall
also make the employer and additional employer contributions, plus deleted text begin 8.5 percentdeleted text end interest
deleted text begin until June 30, 2015, and eight percent interest thereafterdeleted text end new text begin at the applicable rate or rates
specified in section 356.59, subdivision 3new text end , compounded annually, on behalf of an employee
who makes employee contributions but terminates public service. The employee contributions
must be made within one year after the end of the annual normal working cycle or within
30 days after termination of public service, whichever is sooner. The executive director
shall prescribe the manner and forms to be used by a governmental subdivision in
administering a periodic, repetitive leave. Upon payment, the member must be granted
allowable service credit for the purchased period;

(7) an authorized temporary or seasonal layoff under subdivision 12, limited to three
months allowable service per authorized temporary or seasonal layoff in one calendar year.
An employee who has received the maximum service credit allowed for an authorized
temporary or seasonal layoff must return to public service and must obtain a minimum of
three months of allowable service subsequent to the layoff in order to receive allowable
service for a subsequent authorized temporary or seasonal layoff;

(8) a period during which a member is absent from employment by a governmental
subdivision by reason of service in the uniformed services, as defined in United States Code,
title 38, section 4303(13), if the member returns to public service with the same governmental
subdivision upon discharge from service in the uniformed service within the time frames
required under United States Code, title 38, section 4312(e), provided that the member did
not separate from uniformed service with a dishonorable or bad conduct discharge or under
other than honorable conditions. The service must be credited if the member pays into the
fund equivalent employee contributions based upon the contribution rate or rates in effect
at the time that the uniformed service was performed multiplied by the full and fractional
years being purchased and applied to the annual salary rate. The annual salary rate is the
average annual salary during the purchase period that the member would have received if
the member had continued to be employed in covered employment rather than to provide
uniformed service, or, if the determination of that rate is not reasonably certain, the annual
salary rate is the member's average salary rate during the 12-month period of covered
employment rendered immediately preceding the period of the uniformed service. Payment
of the member equivalent contributions must be made during a period that begins with the
date on which the individual returns to public employment and that is three times the length
of the military leave period, or within five years of the date of discharge from the military
service, whichever is less. If the determined payment period is less than one year, the
contributions required under this clause to receive service credit may be made within one
year of the discharge date. Payment may not be accepted following 30 days after termination
of public service under subdivision 11a. If the member equivalent contributions provided
for in this clause are not paid in full, the member's allowable service credit must be prorated
by multiplying the full and fractional number of years of uniformed service eligible for
purchase by the ratio obtained by dividing the total member contributions received by the
total member contributions otherwise required under this clause. The equivalent employer
contribution, and, if applicable, the equivalent additional employer contribution must be
paid by the governmental subdivision employing the member if the member makes the
equivalent employee contributions. The employer payments must be made from funds
available to the employing unit, using the employer and additional employer contribution
rate or rates in effect at the time that the uniformed service was performed, applied to the
same annual salary rate or rates used to compute the equivalent member contribution. The
governmental subdivision involved may appropriate money for those payments. The amount
of service credit obtainable under this section may not exceed five years unless a longer
purchase period is required under United States Code, title 38, section 4312. The employing
unit shall pay interest on all equivalent member and employer contribution amounts payable
under this clause. Interest must be computed at the deleted text begin rate of 8.5 percent until June 30, 2015,
and eight percent thereafterdeleted text end new text begin applicable rate or rates specified in section 356.59, subdivision
3new text end , compounded annually, from the end of each fiscal year of the leave or the break in service
to the end of the month in which the payment is received. Upon payment, the employee
must be granted allowable service credit for the purchased period; or

(9) a period specified under section 353.0162.

(b) No member may receive more than 12 months of allowable service credit in a year
either for vesting purposes or for benefit calculation purposes.

(c) For an active member who was an active member of the former Minneapolis
Firefighters Relief Association on December 29, 2011, "allowable service" is the period of
service credited by the Minneapolis Firefighters Relief Association as reflected in the
transferred records of the association up to December 30, 2011, and the period of service
credited under paragraph (a), clause (1), after December 30, 2011. For an active member
who was an active member of the former Minneapolis Police Relief Association on December
29, 2011, "allowable service" is the period of service credited by the Minneapolis Police
Relief Association as reflected in the transferred records of the association up to December
30, 2011, and the period of service credited under paragraph (a), clause (1), after December
30, 2011.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 17.

Minnesota Statutes 2016, section 353.0162, is amended to read:

353.0162 REDUCED SALARY PERIODS SALARY CREDIT PURCHASE.

(a) A member may purchase additional salary credit for a period specified in this section.

(b) The applicable period is a period during which the member is receiving a reduced
salary from the employer while the member is:

(1) receiving temporary workers' compensation payments related to the member's service
to the public employer;

(2) on an authorized leave of absence; or

(3) on an authorized partial paid leave of absence as a result of a budgetary or salary
savings program offered or mandated by a governmental subdivision.

(c) The differential salary amount is the difference between the average monthly salary
received by the member during the period of reduced salary under this section and the
average monthly salary of the member, excluding overtime, on which contributions to the
applicable plan were made during the period of the last six months of covered employment
occurring immediately before the period of reduced salary, applied to the member's normal
employment period, measured in hours or otherwise, as applicable.

(d) To receive eligible salary credit, the member shall pay an amount equal to:

(1) the applicable employee contribution rate under section 353.27, subdivision 2; 353.65,
subdivision 2; or 353E.03, subdivision 1, as applicable, multiplied by the differential salary
amount;

(2) plus an employer equivalent payment equal to the applicable employer contribution
rate in section 353.27, subdivision 3; 353.65, subdivision 3; or 353E.03, subdivision 2, as
applicable, multiplied by the differential salary amount;

(3) plus, if applicable, an equivalent employer additional amount equal to the additional
employer contribution rate in section 353.27, subdivision 3a, multiplied by the differential
salary amount.

(e) The employer, by appropriate action of its governing body and documented in its
official records, may pay the employer equivalent contributions and, as applicable, the
equivalent employer additional contributions on behalf of the member.

(f) Payment under this section must include interest on the contribution amount or
amounts, whichever applies, at deleted text begin an 8.5 percent annual rate until June 30, 2015, and at an
eight percent annual rate thereafterdeleted text end new text begin the applicable rate or rates specified in section 356.59,
subdivision 3, compounded annuallynew text end , prorated for deleted text begin applicabledeleted text end new text begin the number of new text end monthsnew text begin , if less
than 12 months,new text end from the date on which the period of reduced salary specified under this
section terminates to the date on which the payment or payments are received by the
executive director. Payment under this section must be completed within the earlier of 30
days from termination of public service by the employee under section 353.01, subdivision
11a, or one year after the termination of the period specified in paragraph (b), as further
restricted under this section.

(g) The period for which additional allowable salary credit may be purchased is limited
to the period during which the person receives temporary workers' compensation payments
or for those business years in which the governmental subdivision offers or mandates a
budget or salary savings program, as certified to the executive director by a resolution of
the governing body of the governmental subdivision. For an authorized leave of absence,
the period for which allowable salary credit may be purchased may not exceed 12 months
of authorized leave.

(h) To purchase salary credit for a subsequent period of temporary workers' compensation
benefits or subsequent authorized medical leave of absence, the member must return to
public service and render a minimum of three months of allowable service.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 18.

Minnesota Statutes 2016, section 353.27, subdivision 3c, is amended to read:

Subd. 3c.

Former MERF members; member and employer contributions.

(a) For
the period July 1, 2015, through December 31, 2031, the member contributions for former
members of the Minneapolis Employees Retirement Fund and by the former Minneapolis
Employees Retirement Fund-covered employing units are governed by this subdivision.

(b) The member contribution for a public employee who was a member of the former
Minneapolis Employees Retirement Fund on June 29, 2010, is 9.75 percent of the salary of
the employee.

(c) The employer regular contribution with respect to a public employee who was a
member of the former Minneapolis Employees Retirement Fund on June 29, 2010, is 9.75
percent of the salary of the employee.

(d) For calendar years 2015 and 2016, the employer supplemental contribution is the
employing unit's share of $31,000,000. For calendar years 2017 through 2031, the employer
supplemental contribution is the employing unit's share of $21,000,000.

(e) Each employing unit's share under paragraph (d) is the amount determined from an
allocation between each employing unit in the portion equal to the unit's employer
supplemental contribution paid or payable under Minnesota Statutes 2012, section 353.50,
during calendar year 2014.

(f) The employer supplemental contribution amount under paragraph (d) for calendar
year 2015 must be invoiced by the executive director of the Public Employees Retirement
Association by July 1, 2015. The calendar year 2015 payment is payable in a single amount
on or before September 30, 2015. For subsequent calendar years, the employer supplemental
contribution under paragraph (d) must be invoiced on January 31 of each year and is payable
in two parts, with the first half payable on or before July 31 and with the second half payable
on or before December 15. Late payments are payable with deleted text begin compounddeleted text end interestnew text begin , compounded
annually,new text end at the deleted text begin rate of 0.71 percentdeleted text end new text begin applicable rate or rates specified in section 356.59,
subdivision 3, new text end per month for each month or portion of a month that has elapsed after the
due date.

(g) The employer supplemental contribution under paragraph (d) terminates on December
31, 2031.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 19.

Minnesota Statutes 2016, section 353.27, subdivision 7a, is amended to read:

Subd. 7a.

Deductions or contributions transmitted by error.

(a) If employee deductions
and employer contributions under this section, section 353.50, 353.65, or 353E.03 were
erroneously transmitted to the association, but should have been transmitted to a plan covered
by chapter 352D, 353D, 354B, or 354D, the executive director shall transfer the erroneous
employee deductions and employer contributions to the appropriate retirement fund or
individual account, as applicable. The time limitations specified in subdivisions 7 and 12
do not apply. The transfer to the applicable defined contribution plan account must include
interest at the deleted text begin rate of 0.71 percent per month until June 30, 2015, and 0.667 percentdeleted text end new text begin applicable
rate or rates specified in section 356.59, subdivision 3, new text end per month deleted text begin thereafterdeleted text end , compounded
annually, from the first day of the month following the month in which coverage should
have commenced in the defined contribution plan until the end of the month in which the
transfer occurs.

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

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 20.

Minnesota Statutes 2016, section 353.27, subdivision 12, is amended to read:

Subd. 12.

Omitted salary deductions; obligations.

(a) In the case of omission of
required deductions for the general employees retirement plan, the public employees police
and fire retirement plan, or the local government correctional employees retirement plan
from the salary of an employee, the department head or designee shall immediately, upon
discovery, report the employee for membership and deduct the employee deductions under
subdivision 4 during the current pay period or during the pay period immediately following
the discovery of the omission. Payment for the omitted obligations may only be made in
accordance with reporting procedures and methods established by the executive director.

(b) When the entire omission period of an employee does not exceed 60 days, the
governmental subdivision may report and submit payment of the omitted employee
deductions and the omitted employer contributions through the reporting processes under
subdivision 4.

(c) When the omission period of an employee exceeds 60 days, the governmental
subdivision shall furnish to the association sufficient data and documentation upon which
the obligation for omitted employee and employer contributions can be calculated. The
omitted employee deductions must be deducted from the employee's subsequent salary
payment or payments and remitted to the association for deposit in the applicable retirement
fund. The employee shall pay omitted employee deductions due for the 60 days prior to the
end of the last pay period in the omission period during which salary was earned. The
employer shall pay any remaining omitted employee deductions and any omitted employer
contributions, plus cumulative interest at the annual rate of 8.5 percent until June 30, 2015,
and eight percent thereafter compounded annually, from the date or dates each omitted
employee contribution was first payable.

(d) An employer shall not hold an employee liable for omitted employee deductions
beyond the pay period dates under paragraph (c), nor attempt to recover from the employee
those employee deductions paid by the employer on behalf of the employee. Omitted
deductions due under paragraph (c) which are not paid by the employee constitute a liability
of the employer that failed to deduct the omitted deductions from the employee's salary.
The employer shall make payment with interest at the deleted text begin annual rate of 8.5 percent until June
30, 2015, and eight percent thereafterdeleted text end new text begin applicable rate or rates specified in section 356.59,
subdivision 3, new text end compounded annually. Omitted employee deductions are no longer due if an
employee terminates public service before making payment of omitted employee deductions
to the association, but the employer remains liable to pay omitted employer contributions
plus interest at the deleted text begin annual rate of 8.5 percent until June 30, 2015, and eight percent thereafterdeleted text end
new text begin applicable rate or rates specified in section 356.59, subdivision 3, new text end compounded annuallynew text begin ,new text end
from the date the contributions were first payable.

(e) The association may not commence action for the recovery of omitted employee
deductions and employer contributions after the expiration of three calendar years after the
calendar year in which the contributions and deductions were omitted. Except as provided
under paragraph (b), no payment may be made or accepted unless the association has already
commenced action for recovery of omitted deductions. An action for recovery commences
on the date of the mailing of any written correspondence from the association requesting
information from the governmental subdivision upon which to determine whether or not
omitted deductions occurred.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 21.

Minnesota Statutes 2016, section 353.27, subdivision 12a, is amended to read:

Subd. 12a.

Terminated employees: omitted deductions.

A terminated employee who
was a member of the general employees retirement plan of the Public Employees Retirement
Association, the public employees police and fire retirement plan, or the local government
correctional employees retirement plan and who has a period of employment in which
previously omitted employer contributions were made under subdivision 12 but for whom
no, or only partial, omitted employee contributions have been made, or a member who had
prior coverage in the association for which previously omitted employer contributions were
made under subdivision 12 but who terminated service before required omitted employee
deductions could be withheld from salary, may pay the omitted employee deductions for
the period on which omitted employer contributions were previously paid plus interest at
the deleted text begin annual rate of 8.5 percent until June 30, 2015, and eight percent thereafterdeleted text end new text begin applicable
rate or rates specified in section 356.59, subdivision 3, new text end compounded annually. A terminated
employee may pay the omitted employee deductions plus interest within six months of an
initial notification from the association of eligibility to pay those omitted deductions. If a
terminated employee is reemployed in a position covered under a public pension fund under
section 356.30, subdivision 3, and elects to pay omitted employee deductions, payment
must be made no later than six months after a subsequent termination of public service.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 22.

Minnesota Statutes 2016, section 353.27, subdivision 12b, is amended to read:

Subd. 12b.

Terminated employees: immediate eligibility.

If deductions were omitted
from salary adjustments or final salary of a terminated employee who was a member of the
general employees retirement plan, the public employees police and fire retirement plan,
or the local government correctional employees retirement plan and who is immediately
eligible to draw a monthly benefit, the employer shall pay the omitted employer and employer
additional contributions plus interest on both the employer and employee amounts due at
deleted text begin an annual rate of 8.5 percentdeleted text end new text begin the applicable rate or rates specified in section 356.59,
subdivision 3, new text end compounded annually. The employee shall pay the employee deductions
within six months of an initial notification from the association of eligibility to pay omitted
deductions or the employee forfeits the right to make the payment.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 23.

Minnesota Statutes 2016, section 353.28, subdivision 5, is amended to read:

Subd. 5.

Interest chargeable on amounts due.

Any amount due under this section or
section 353.27, subdivision 4, is payable with interest at the deleted text begin annual compound rate of 8.5
percent until June 30, 2015, and eight percent thereafterdeleted text end new text begin applicable rate or rates specified
in section 356.59, subdivision 3, compounded annually, new text end from the date due until the date
payment is received by the association, with a minimum interest charge of $10.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 24.

Minnesota Statutes 2016, section 353.35, subdivision 1, is amended to read:

Subdivision 1.

Refund rights.

(a) Except as provided in paragraph (b), when any former
member accepts a refund, all existing service credits and all rights and benefits to which
the person was entitled prior to the acceptance of the refund must terminate.

(b) A refund under section 353.651, subdivision 3, paragraph (c), does not result in a
forfeiture of salary credit for the allowable service credit covered by the refund.

(c) The rights and benefits of a former member must not be restored until the person
returns to active service and acquires at least six months of allowable service credit after
taking the last refund and repays the refund or refunds taken and interest received under
section 353.34, subdivisions 1 and 2, plus interest at the deleted text begin annual rate of 8.5 percent until June
30, 2015, and eight percent thereafterdeleted text end new text begin applicable rate or rates specified in section 356.59,
subdivision 3, new text end compounded annually. If the person elects to restore service credit in a
particular fund from which the person has taken more than one refund, the person must
repay all refunds to that fund. All refunds must be repaid within six months of the last date
of termination of public service.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 25.

Minnesota Statutes 2016, section 354.50, subdivision 2, is amended to read:

Subd. 2.

Interest charge.

If a member desires to repay the refunds, payment shall include
interest at deleted text begin an annual rate of 8.5 percentdeleted text end new text begin the applicable annual rate or rates specified in section
356.59, subdivision 4, new text end compounded annuallynew text begin ,new text end from date of withdrawal to the date payment
is made and shall be credited to the fund.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 26.

Minnesota Statutes 2016, section 354.51, subdivision 5, is amended to read:

Subd. 5.

Payment of shortages.

(a) Except as provided in paragraph (b), in the event
that full required member contributions are not deducted from the salary of a teacher,
payment of shortages in member deductions on salary earned are the sole obligation of the
employing unit and are payable by the employing unit upon notification by the executive
director of the shortagenew text begin . The amount of the shortage shall be paidnew text end with interest at deleted text begin an annual
rate of 8.5 percentdeleted text end new text begin the applicable annual rate or rates specified in section 356.59, subdivision
4, new text end compounded annuallynew text begin ,new text end from the end of the fiscal year in which the shortage occurred to
the end of the month in which payment is made and the interest must be credited to the
fund. The employing unit shall also pay the employer contributions as specified in section
354.42, subdivisions 3 and 5 for the shortages. If the shortage payment is not paid by the
employing unit within 60 days of notification, and if the executive director does not use the
recovery procedure in section 354.512, the executive director shall certify the amount of
the shortage to the applicable county auditor, who shall spread a levy in the amount of the
shortage payment over the taxable property of the taxing district of the employing unit if
the employing unit is supported by property taxes. Payment may not be made for shortages
in member deductions on salary paid or payable under paragraph (b) or for shortages in
member deductions for persons employed by the Minnesota State Colleges and Universities
system in a faculty position or in an eligible unclassified administrative position and whose
employment was less than 25 percent of a full academic year, exclusive of the summer
session, for the applicable institution that exceeds the most recent 36 months.

(b) For a person who is employed by the Minnesota State Colleges and Universities
system in a faculty position or in an eligible unclassified administrative position and whose
employment was less than 25 percent of a full academic year, exclusive of the summer
session, for the applicable institution, upon the person's election under section 354B.21 of
retirement coverage under this chapter, the shortage in member deductions on the salary
for employment by the Minnesota State Colleges and Universities system institution of less
than 25 percent of a full academic year, exclusive of the summer session, for the applicable
institution for the most recent 36 months and the associated employer contributions must
be paid by the Minnesota State Colleges and Universities system institution, plus deleted text begin annual
compounddeleted text end interest at the deleted text begin rate of 8.5 percentdeleted text end new text begin applicable annual rate or rates specified in
section 356.59, subdivision 4, compounded annually, new text end from the end of the fiscal year in
which the shortage occurred to the end of the month in which the Teachers Retirement
Association coverage election is made. An individual electing coverage under this paragraph
shall repay the amount of the shortage in member deductions, plus interest, through deduction
from salary or compensation payments within the first year of employment after the election
under section 354B.21, subject to the limitations in section 16D.16. The Minnesota State
Colleges and Universities system may use any means available to recover amounts which
were not recovered through deductions from salary or compensation payments. No payment
of the shortage in member deductions under this paragraph may be made for a period longer
than the most recent 36 months.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 27.

Minnesota Statutes 2016, section 354.52, subdivision 4, is amended to read:

Subd. 4.

Reporting and remittance requirements.

An employer shall remit all amounts
due to the association and furnish a statement indicating the amount due and transmitted
with any other information required by the executive director. If an amount due is not
received by the association within 14 calendar days of the payroll warrant, the deleted text begin amount
accrues interest at an annual rate of 8.5 percentdeleted text end new text begin employer shall pay interest on the amount
due at the applicable annual rate or rates specified in section 356.59, subdivision 4,
new text end compounded annuallynew text begin ,new text end from the due date until the amount is received by the association.
All amounts due and other employer obligations not remitted within 60 days of notification
by the association must be certified to the commissioner of management and budget who
shall deduct the amount from any state aid or appropriation amount applicable to the
employing unit.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 28.

Minnesota Statutes 2016, section 354.53, subdivision 5, is amended to read:

Subd. 5.

Interest requirements.

The employer shall pay interest on all equivalent
employee and employer contribution amounts payable under this sectiondeleted text begin . Interest must be
computed at a rate of 8.5 percentdeleted text end new text begin at the applicable annual rate or rates specified in section
356.59, subdivision 4, new text end compounded annuallynew text begin ,new text end from the end of each fiscal year of the leave
or the break in service to the end of the month in which the payment is received.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 29.

Minnesota Statutes 2016, section 354A.093, subdivision 6, is amended to read:

Subd. 6.

Interest requirements.

The employer shall pay interest on all equivalent
employee and employer contribution amounts payable under this section. Interest must be
computed at the deleted text begin rate of 8.5 percent until June 30, 2015, and eight percent thereafterdeleted text end new text begin applicable
annual rate or rates specified in section 356.59, subdivision 5, new text end compounded annuallynew text begin ,new text end from
the end of each fiscal year of the leave or break in service to the end of the month in which
payment is received.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 30.

Minnesota Statutes 2016, section 354A.096, is amended to read:

354A.096 MEDICAL LEAVE.

Any teacher in the coordinated program of the St. Paul Teachers Retirement Fund
Association who is on an authorized medical leave of absence and subsequently returns to
teaching service is entitled to receive allowable service credit, not to exceed one year, for
the period of leave, upon making the prescribed payment to the fund. This payment must
include the required employee and employer contributions at the rates specified in section
354A.12, subdivisions 1 and 2a, as applied to the member's average full-time monthly salary
rate on the date the leave of absence commenced plus deleted text begin annualdeleted text end interest at the deleted text begin rate of 8.5
percent until June 30, 2015, and eight percent thereafter per yeardeleted text end new text begin applicable annual rate or
rates specified in section 356.59, subdivision 5, compounded annually, new text end from the end of the
fiscal year during which the leave terminates to the end of the month during which payment
is made. The member must pay the total amount required unless the employing unit, at its
option, pays the employer contributions. The total amount required must be paid by the end
of the fiscal year following the fiscal year in which the leave of absence terminated or before
the member retires, whichever is earlier. Payment must be accompanied by a copy of the
resolution or action of the employing authority granting the leave and the employing
authority, upon granting the leave, must certify the leave to the association in a manner
specified by the executive director. A member may not receive more than one year of
allowable service credit during any fiscal year by making payment under this section. A
member may not receive disability benefits under section 354A.36 and receive allowable
service credit under this section for the same period of time.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 31.

Minnesota Statutes 2016, section 354A.12, subdivision 1a, is amended to read:

Subd. 1a.

Obligation for omitted salary deductions.

If the full required contributions
are not deducted from the salary of a teacher, payment of the shortage in such deductions
is the sole obligation of the employing unit during the three-year period following the end
of the fiscal year in which the shortage occurred. The shortage is payable by the employing
unit upon notification of the shortage by the executive director of the applicable retirement
fund association. The employing unit shall also pay any employer contributions related to
the shortage. The amount of the shortage in employee contributions and associated employer
contributions is payable with interest at the deleted text begin preretirement interest assumption for the
retirement fund as specified in section 356.215, subdivision 8, stated as a monthly ratedeleted text end
new text begin applicable annual rate or rates specified in section 356.59, subdivision 5, new text end from the date due
until the date payment is received in the office of the association, new text begin compounded annually,
new text end with a minimum interest charge of $10. If the shortage payment and interest is not paid by
the employing unit within 60 days of notification, the executive director shall certify the
amount of the shortage payment and interest to the commissioner of management and budget,
who shall deduct the amount from any state aid or appropriation amount applicable to the
employing unit.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 32.

Minnesota Statutes 2016, section 354A.12, subdivision 7, is amended to read:

Subd. 7.

Recovery of benefit overpayments.

(a) If the executive director discovers,
within the time period specified in subdivision 8 following the payment of a refund or the
accrual date of any retirement annuity, survivor benefit, or disability benefit, that benefit
overpayment has occurred due to using invalid service or salary, or due to any erroneous
calculation procedure, the executive director must recalculate the annuity or benefit payable
and recover any overpayment. The executive director shall recover the overpayment by
requiring direct repayment or by suspending or reducing the payment of a retirement annuity
or other benefit payable under this chapter to the applicable person or the person's estate,
whichever applies, until all outstanding amounts have been recovered. If a benefit
overpayment or improper payment of benefits occurred caused by a failure of the person
to satisfy length of separation requirements for retirement under section 354A.011,
subdivision 21, the executive director shall recover the improper payments by requiring
direct repayment. The repayment must include interest at the deleted text begin rate of 0.71 percent per monthdeleted text end
new text begin applicable annual rate or rates specified in section 356.59, subdivision 5, new text end from the first of
the month in which a monthly benefit amount was paid to the first of the month in which
the amount is repaid, with annual compounding.

(b) In the event the executive director determines that an overpaid annuity or benefit
that is the result of invalid salary included in the average salary used to calculate the payment
amount must be recovered, the executive director must determine the amount of the employee
deductions taken in error on the invalid salary, with interest as determined under 354A.37,
subdivision 3, and must subtract that amount from the total annuity or benefit overpayment,
and the remaining balance of the overpaid annuity or benefit, if any, must be recovered.

(c) If the invalid employee deductions plus interest exceed the amount of the overpaid
benefits, the balance must be refunded to the person to whom the benefit or annuity is being
paid.

(d) Any invalid employer contributions reported on the invalid salary must be credited
against future contributions payable by the employer.

(e) If a member or former member, who is receiving a retirement annuity or disability
benefit for which an overpayment is being recovered, dies before recovery of the overpayment
is completed and an optional annuity or refund is payable, the remaining balance of the
overpaid annuity or benefit must continue to be recovered from the payment to the optional
annuity beneficiary or refund recipient.

(f) The board of trustees shall adopt policies directing the period of time and manner
for the collection of any overpaid retirement or optional annuity, and survivor or disability
benefit, or a refund that the executive director determines must be recovered as provided
under this section.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 33.

Minnesota Statutes 2016, section 354A.34, is amended to read:

354A.34 DISPOSITION OF UNPAID PERIOD CERTAIN FOR LIFE OR
GUARANTEED REFUND OPTIONAL ANNUITIES.

If a retiree from a coordinated program who has elected a period certain and for life
thereafter or a guaranteed refund optional annuity form dies without having a designated
beneficiary who has survived the retiree, any remaining unpaid guaranteed annuity payments
shall be computed at the rate of interest specified in section 356.215, subdivision 8, and
paid in one lump sum to the estate of the retiree. If a retiree from a coordinated program
who has elected a period certain and for life or a guaranteed refund optional annuity form
dies with a designated beneficiary who has survived the retiree but the designated beneficiary
dies without there existing another designated beneficiary, any remaining unpaid guaranteed
annuity payments shall be computed deleted text begin at the rate ofdeleted text end new text begin with new text end interest new text begin at the applicable annual rate
or rates new text end specified in section deleted text begin 356.215, subdivision 8deleted text end new text begin 356.59, subdivision 5new text end , and paid in one
lump sum to the estate of the designated beneficiary.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 34.

Minnesota Statutes 2016, section 356.195, subdivision 2, is amended to read:

Subd. 2.

Purchase procedure for strike periods.

(a) An employee covered by a plan
specified in subdivision 1 may purchase allowable service credit in the applicable plan for
any period of time during which the employee was on a public employee strike without
pay, not to exceed a period of one year, if the employee makes a payment in lieu of salary
deductions as specified in paragraph (b) or (c), whichever applies. The employing unit, at
its option, may pay the employer portion of the amount specified in paragraph (b) on behalf
of its employees.

(b) If payment is received by the applicable pension plan executive director within one
year from the end of the strike, the payment amount is equal to the applicable employee
and employer contribution rates specified in law for the applicable plan during the strike
period, applied to the employee's rate of salary in effect at the conclusion of the strike for
the period of the strike without pay, plus compound interest at the deleted text begin monthly rate of 0.71
percent for any period for the Teachers Retirement Association and at the monthly rate of
0.71 percent until June 30, 2015, and 0.667 percent thereafter for any other retirement plan
listed in section 356.30, subdivision 3deleted text end new text begin applicable monthly rate or rates specified in section
356.59, subdivision 2, 3, 4, or 5, whichever appliesnew text end , from the last day of the strike period
until the date payment is received.

(c) If payment is received by the applicable pension fund director after one year and
before five years from the end of the strike, the payment amount is the amount determined
under section 356.551.

(d) Payments may not be made more than five years after the end of the strike.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 35.

Minnesota Statutes 2016, section 356.44, is amended to read:

356.44 PARTIAL PAYMENT OF PENSION PLAN REFUND.

(a) Notwithstanding any provision of law to the contrary, a member of a pension plan
listed in section 356.30, subdivision 3, with at least two years of forfeited service taken
from a single pension plan, may repay a portion of all refunds. A partial refund repayment
must comply with this section.

(b) The minimum portion of a refund repayment is one-third of the total service credit
period of all refunds taken from a single plan.

(c) The cost of the partial refund repayment is the product of the cost of the total
repayment multiplied by the ratio of the restored service credit to the total forfeited service
credit. The total repayment amount includes interest at the deleted text begin annual rate of 8.5 percent for
any period for the Teachers Retirement Association and is 8.5 percent until June 30, 2015,
and eight percent thereafter for any other retirement plan listed in section 356.30, subdivision
3deleted text end new text begin at the applicable annual rate or rates specified in section 356.59, subdivision 2, 3, 4, or 5,
whichever appliesnew text end , compounded annually, from the refund date to the date repayment is
received.

(d) The restored service credit must be allocated based on the relationship the restored
service bears to the total service credit period for all refunds taken from a single pension
plan.

(e) This section does not authorize a public pension plan member to repay a refund if
the law governing the plan does not authorize the repayment of a refund of member
contributions.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 36.

Minnesota Statutes 2016, section 356.50, subdivision 2, is amended to read:

Subd. 2.

Service credit procedure.

(a) To obtain the public pension plan allowable
service credit, the eligible person under subdivision 1 shall pay the required member
contribution amount. The required member contribution amount is the member contribution
rate or rates in effect for the pension plan during the period of service covered by the back
pay award, applied to the unpaid gross salary amounts of the back pay award including
unemployment insurance, workers' compensation, or wages from other sources which
reduced the back award. No contributions may be made under this clause for compensation
covered by a public pension plan listed in section 356.30, subdivision 3, for employment
during the removal period. The person shall pay the required member contribution amount
within 60 days of the date of receipt of the back pay award or within 60 days of a billing
from the retirement fund, whichever is later.

(b) The public employer who wrongfully discharged the public employee must pay an
employer contribution on the back pay award. The employer contribution must be based
on the employer contribution rate or rates in effect for the pension plan during the period
of service covered by the back pay award, applied to the salary amount on which the member
contribution amount was determined under paragraph (a). deleted text begin Interest on both the required
member and employer contribution amount must be paid by the employer at the annual
compound rate of 8.5 percent for any period for the Teachers Retirement Association and
8.5 percent until June 30, 2015, and eight percent thereafter, for any other retirement plan
listed in section 356.30, subdivision 3, per year, expressed monthlydeleted text end new text begin The employer must pay
compound interest on both the required member and employer contribution amounts at the
applicable monthly rate or rates specified in section 356.59, subdivision 2, 3, 4, or 5,
whichever appliesnew text end , between the date the contribution amount would have been paid to the
date of actual payment. The employer payment must be made within 30 days of the payment
under paragraph (a).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 37.

Minnesota Statutes 2016, section 356.551, subdivision 2, is amended to read:

Subd. 2.

Determination.

(a) Unless the minimum purchase amount set forth in paragraph
(c) applies, the prior service credit purchase amount is an amount equal to the actuarial
present value, on the date of payment, as calculated by the chief administrative officer of
the pension plan and reviewed by the actuary retained under section 356.214, of the amount
of the additional retirement annuity obtained by the acquisition of the additional service
credit in this section.

(b) Calculation of this amount must be made using the preretirement interest rate
applicable to the public pension plan specified in section 356.215, subdivision 8, and the
mortality table adopted for the public pension plan. The calculation must assume continuous
future service in the public pension plan until, and retirement at, the age at which the
minimum requirements of the fund for normal retirement or retirement with an annuity
unreduced for retirement at an early age, including section 356.30, are met with the additional
service credit purchased. The calculation must also assume a full-time equivalent salary, or
actual salary, whichever is greater, and a future salary history that includes annual salary
increases at the applicable salary increase rate for the plan specified in section 356.215,
subdivision deleted text begin 4ddeleted text end new text begin 8new text end .

(c) The prior service credit purchase amount may not be less than the amount determined
by applying, for each year or fraction of a year being purchased, the sum of the employee
contribution rate, the employer contribution rate, and the additional employer contribution
rate, if any, applicable during that period, to the person's annual salary during that period,
or fractional portion of a year's salary, if applicable, plus interest at the deleted text begin annual rate of 8.5
percent until June 30, 2015, and eight percent thereafterdeleted text end new text begin applicable annual rate or rates
specified in section 356.59, subdivision 2, 3, 4, or 5, whichever applies, new text end compounded
annuallynew text begin ,new text end from the end of the year in which contributions would otherwise have been made
to the date on which the payment is received.

(d) Unless otherwise provided by statutes governing a specific plan, payment must be
made in one lump sum within one year of the prior service credit authorization or prior to
the member's effective date of retirement, whichever is earlier. Payment of the amount
calculated under this section must be made by the applicable eligible person.

(e) However, the current employer or the prior employer may, at its discretion, pay all
or any portion of the payment amount that exceeds an amount equal to the employee
contribution rates in effect during the period or periods of prior service applied to the actual
salary rates in effect during the period or periods of prior service, plus interest at the
new text begin applicable annual new text end rate deleted text begin of 8.5 percent a yeardeleted text end new text begin or rates specified in section 356.59, subdivision
2, 3, 4, or 5, whichever applies,new text end compounded annuallynew text begin ,new text end from the date on which the
contributions would otherwise have been made to the date on which the payment is made.
If the employer agrees to payments under this subdivision, the purchaser must make the
employee payments required under this subdivision within 90 days of the prior service credit
authorization. If that employee payment is made, the employer payment under this
subdivision must be remitted to the chief administrative officer of the public pension plan
within 60 days of receipt by the chief administrative officer of the employee payments
specified under this subdivision.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 38.

new text begin [356.59] INTEREST RATES.
new text end

new text begin Subdivision 1. new text end

new text begin Applicable interest rates. new text end

new text begin Whenever the payment of interest is required
with respect to any payment, including refunds, remittances, shortages, contributions, or
repayments, the rate of interest is the rate or rates specified in subdivisions 2 to 5 for each
public retirement plan.
new text end

new text begin Subd. 2. new text end

new text begin Minnesota State Retirement System. new text end

new text begin The interest rates for all retirement plans
administered by the Minnesota State Retirement System are as follows:
new text end

		new text begin Annual new text end		new text begin Monthly new text end
new text begin before July 1, 2015 new text end	new text begin 8.5 percent new text end		new text begin 0.71 percent new text end
new text begin from July 1, 2015, to June 30, 2017 new text end	new text begin 8.0 percent new text end		new text begin 0.667 percent new text end
new text begin after June 30, 2017 new text end	new text begin 7.5 percent new text end		new text begin 0.625 percent new text end

new text begin Subd. 3. new text end

new text begin Public Employees Retirement Association. new text end

new text begin The interest rates for all retirement
plans administered by the Public Employees Retirement Association are as follows:
new text end

	new text begin before July 1, 2015 new text end	new text begin 8.5 percent new text end
	new text begin from July 1, 2015, to June 30, 2017 new text end	new text begin 8.0 percent new text end
	new text begin after June 30, 2017 new text end	new text begin 7.5 percent new text end

new text begin Subd. 4. new text end

new text begin Teachers Retirement Association. new text end

new text begin The interest rates for the retirement plan
administered by the Teachers Retirement Association are as follows:
new text end

			new text begin Annual new text end		new text begin Monthly new text end
	new text begin 8.5 percent new text end		new text begin 0.71 percent new text end

new text begin Subd. 5. new text end

new text begin St. Paul Teachers Retirement Fund Association. new text end

new text begin The interest rates for the
retirement plan administered by the St. Paul Teachers Retirement Fund Association are as
follows:
new text end

		new text begin Annual new text end		new text begin Monthly new text end
new text begin before July 1, 2015 new text end	new text begin 8.5 percent new text end		new text begin 0.71 percent new text end
new text begin from July 1, 2015, to June 30, 2017 new text end	new text begin 8.0 percent new text end		new text begin 0.667 percent new text end
new text begin after June 30, 2017 new text end	new text begin 7.5 percent new text end		new text begin 0.625 percent new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 39.

Minnesota Statutes 2016, section 490.121, subdivision 4, is amended to read:

Subd. 4.

Allowable service.

(a) "Allowable service" means any calendar month, subject
to the service credit limit in subdivision 22, served as a judge at any time, during which the
judge received compensation for that service from the state, municipality, or county,
whichever applies, and for which the judge made any required member contribution. It also
includes any month served as a referee in probate for all referees in probate who were in
office before January 1, 1974.

(b) "Allowable service" also means a period of authorized leave of absence for which
the judge has made a payment in lieu of contributions, not in an amount in excess of the
service credit limit under subdivision 22. To obtain the service credit, the judge shall pay
an amount equal to the normal cost of the judges retirement plan on the date of return from
the leave of absence, as determined in the most recent actuarial report for the plan filed with
the Legislative Commission on Pensions and Retirement, multiplied by the judge's average
monthly salary rate during the authorized leave of absence and multiplied by the number
of months of the authorized leave of absence, plus deleted text begin annual compound interest at the rate of
8.5 percent until June 30, 2015, and eight percent thereafterdeleted text end new text begin interest at the applicable annual
rate or rates specified in section 356.59, subdivision 2, compounded annually, new text end from the date
of the termination of the leave to the date on which payment is made. The payment must
be made within one year of the date on which the authorized leave of absence terminated.
Service credit for an authorized leave of absence is in addition to a uniformed service leave
under section 490.1211.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 40.

Minnesota Statutes 2016, section 490.1211, is amended to read:

490.1211 UNIFORMED SERVICE.

(a) A judge who is absent from employment by reason of service in the uniformed
services, as defined in United States Code, title 38, section 4303(13), and who returns to
state employment as a judge upon discharge from service in the uniformed service within
the time frame required in United States Code, title 38, section 4312(e), may obtain service
credit for the period of the uniformed service, provided that the judge did not separate from
uniformed service with a dishonorable or bad conduct discharge or under other than honorable
conditions.

(b) The judge may obtain credit by paying into the fund equivalent member contribution
based on the contribution rate or rates in effect at the time that the uniformed service was
performed multiplied by the full and fractional years being purchased and applied to the
annual salary rate. The annual salary rate is the average annual salary during the purchase
period that the judge would have received if the judge had continued to provide employment
services to the state rather than to provide uniformed service, or if the determination of that
rate is not reasonably certain, the annual salary rate is the judge's average salary rate during
the 12-month period of judicial employment rendered immediately preceding the purchase
period.

(d) If the member equivalent contributions provided for in this section are not paid in
full, the judge's allowable service credit must be prorated by multiplying the full and
fractional number of years of uniformed service eligible for purchase by the ratio obtained
by dividing the total member contributions received by the total member contributions
otherwise required under this section.

(e) To receive allowable service credit under this section, the contributions specified in
this section and section 490.121 must be transmitted to the fund during the period which
begins with the date on which the individual returns to judicial employment and which has
a duration of three times the length of the uniformed service period, but not to exceed five
years. If the determined payment period is calculated to be less than one year, the
contributions required under this section to receive service credit may be within one year
from the discharge date.

(f) The amount of allowable service credit obtainable under this section and section
490.121 may not exceed five years, unless a longer purchase period is required under United
States Code, title 38, section 4312.

(g) The state court administrator shall pay interest on all equivalent member and employer
contribution amounts payable under this section. Interest must be deleted text begin computed at the rate of
8.5 percent until June 30, 2015, and eight percent thereafterdeleted text end new text begin at the applicable annual rate or
rates specified in section 356.59, subdivision 2, new text end compounded annuallynew text begin ,new text end from the end of each
fiscal year of the leave or break in service to the end of the month in which payment is
received.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 41.

Minnesota Statutes 2016, section 490.124, subdivision 12, is amended to read:

Subd. 12.

Refund.

(a) A person who ceases to be a judge is entitled to a refund in an
amount that is equal to all of the member's employee contributions to the judges' retirement
fund plus interest computed under section 352.22, subdivision 2.

(b) A refund of contributions under paragraph (a) terminates all service credits and all
rights and benefits of the judge and the judge's survivors under this chapter.

(c) A person who becomes a judge again after taking a refund under paragraph (a) may
reinstate the previously terminated allowable service credit, rights, and benefits by repaying
the total amount of the previously received refund. The refund repayment must include
interest deleted text begin on the total amount previously received at the annual rate of 8.5 percent until June
30, 2015, and eight percent thereafterdeleted text end new text begin at the applicable annual rate or rates specified in
section 356.59, subdivision 2new text end , compounded annually, from the date on which the refund
was received until the date on which the refund is repaid.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

ARTICLE 7

CONTRIBUTION RATES

Section 1.

Minnesota Statutes 2016, section 352.04, subdivision 2, is amended to read:

Subd. 2.

Employee contributions.

(a) The employee contribution to the fund must be
equal to the following percent of salary:

	deleted text begin from July 1, 2010, to June 30, 2014 deleted text end	deleted text begin 5 deleted text end
	from July 1, 2014, deleted text begin and thereafterdeleted text end new text begin to June 30, 2017 new text end	5.5
	new text begin from July 1, 2017, to June 30, 2018 new text end	new text begin 5.75 new text end
	new text begin after June 30, 2018 new text end	new text begin 6 new text end

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

new text begin (c) Contribution increases under paragraph (a) must be paid starting the first day of the
first full pay period after the effective date of the increase.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 2.

Minnesota Statutes 2016, section 352.04, subdivision 3, is amended to read:

Subd. 3.

Employer contributions.

new text begin (a) new text end The employer contribution to the fund must be
equal to the following percent of salary:

	deleted text begin from July 1, 2010, to June 30, 2014 deleted text end	deleted text begin 5 deleted text end
	from July 1, 2014, deleted text begin and thereafterdeleted text end new text begin to June 30, 2017 new text end	5.5
	new text begin from July 1, 2017, to June 30, 2018 new text end	new text begin 5.875 new text end
	new text begin after June 30, 2018 new text end	new text begin 6.25 new text end

new text begin (b) Contribution increases under paragraph (a) must be paid starting the first day of the
first full pay period after the effective date of the increase.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 3.

Minnesota Statutes 2016, section 352.92, subdivision 1, is amended to read:

Subdivision 1.

Employee contributions.

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

	deleted text begin from July 1, 2010, to June 30, 2014 deleted text end	deleted text begin 8.6 deleted text end
	from July 1, 2014, deleted text begin and thereafterdeleted text end new text begin to June 30, 2017 new text end	9.1
	new text begin after June 30, 2017 new text end	new text begin 9.6 new text end

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

new text begin (c) Contribution increases under paragraph (a) must be paid starting the first day of the
first full pay period after the effective date of the increase.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 4.

Minnesota Statutes 2016, section 352.92, subdivision 2, is amended to read:

Subd. 2.

Employer contributions.

new text begin (a) new text end The employer shall contribute for covered
correctional employees an amount equal to the following percent of salary:

	deleted text begin from July 1, 2010, to June 30, 2014 deleted text end	deleted text begin 12.1 deleted text end
	from July 1, 2014, deleted text begin and thereafterdeleted text end new text begin to June 30, 2017 new text end	12.85
	new text begin after June 30, 2017 new text end	new text begin 14.4 new text end

new text begin (b) Contribution increases under paragraph (a) must be paid starting the first day of the
first full pay period after the effective date of the increase.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 5.

Minnesota Statutes 2016, section 352.92, is amended by adding a subdivision to
read:

new text begin Subd. 2a. new text end

new text begin Supplemental employer contribution. new text end

new text begin (a) Effective July 1, 2018, the employer
shall pay a supplemental contribution. The supplemental contribution shall be 1.45 percent
of salary for covered correctional employees from July 1, 2018, through June 30, 2019;
2.95 percent of salary for covered correctional employees from July 1, 2019, through June
30, 2020; and 4.45 percent of salary for covered correctional employees thereafter. The
supplemental contribution rate of 4.45 percent shall remain in effect until the market value
of the assets of the correctional state employees retirement plan of the Minnesota State
Retirement System equals or exceeds the actuarial accrued liability of the plan as determined
by the actuary retained under section 356.214. The expiration of the supplemental employer
contribution is effective the first day of the first full pay period of the fiscal year immediately
following the issuance of the actuarial valuation upon which the expiration is based.
new text end

new text begin (b) The supplemental contribution under paragraph (a) must be paid starting the first
day of the first full pay period after the effective date.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 6.

Minnesota Statutes 2016, section 352B.02, subdivision 1a, is amended to read:

Subd. 1a.

Member contributions.

(a) The member contribution is the following
percentage of the member's salary:

	deleted text begin (1) before the first day of the first pay period beginning after July 1, 2014 deleted text end	deleted text begin 12.4 percent deleted text end
	deleted text begin (2) on or after the first day of the first pay period beginning afterdeleted text end new text begin from new text end July 1, 2014, to June 30, 2016	13.4 deleted text begin percent deleted text end
	deleted text begin (3) after June 30, 2016 deleted text end new text begin from July 1, 2016, to June 30, 2017 new text end	14.4 deleted text begin percent deleted text end
	new text begin from July 1, 2017, to June 30, 2019 new text end	new text begin 14.9 new text end
	new text begin after June 30, 2019 new text end	new text begin 15.4 new text end

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

new text begin (c) Contribution increases under paragraph (a) must be paid starting the first day of the
first full pay period after the effective date of the increase.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 7.

Minnesota Statutes 2016, section 352B.02, subdivision 1c, is amended to read:

Subd. 1c.

Employer contributionsnew text begin and supplemental employer contributionnew text end .

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

	deleted text begin (1) before the first day of the first pay period beginning after July 1, 2014 deleted text end	deleted text begin 18.6 percent deleted text end
	deleted text begin (2) on or after the first day of the first pay period beginning afterdeleted text end new text begin from new text end July 1, 2014, to June 30, 2016	20.1 deleted text begin percent deleted text end
	deleted text begin (3) after June 30, 2016 deleted text end new text begin from July 1, 2016, to June 30, 2017 new text end	21.6 deleted text begin percent deleted text end
	new text begin from July 1, 2017, to June 30, 2018 new text end	new text begin 22.35 new text end
	new text begin after June 30, 2018 new text end	new text begin 23.1 new text end

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

new text begin (c) Contribution increases under paragraph (a) must be paid starting the first day of the
first full pay period after the effective date of the increase.
new text end

new text begin (d) Effective July 1, 2017, department heads shall pay a supplemental employer
contribution. The supplemental contribution shall be 1.75 percent of the salary upon which
deductions are made from July 1, 2017, through June 30, 2018; three percent of the salary
upon which deductions are made from July 1, 2018, through June 30, 2019; five percent of
the salary which deductions are made from July 1, 2019, through June 30, 2020; and seven
percent of the salary upon which deductions are made thereafter. The supplemental
contribution must be paid starting the first day of the first full pay period after the effective
date. The supplemental contribution rate of seven percent shall remain in effect until the
market value of the assets of the State Patrol retirement plan of the Minnesota State
Retirement System equals or exceeds the actuarial accrued liability of the plan as determined
by the actuary retained under section 356.214. The expiration of the supplemental employer
contribution is effective the first day of the first full pay period of the fiscal year immediately
following the issuance of the actuarial valuation upon which the expiration is based.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 8.

Minnesota Statutes 2016, section 352D.04, subdivision 2, is amended to read:

Subd. 2.

Contribution rates.

(a) The money used to purchase shares under this section
is the employee and employer contributions provided in this subdivision.

(b) The employee contribution is an amount equal to deleted text begin thedeleted text end new text begin 5.5 new text end percent of salary deleted text begin specified
in section 352.04, subdivision 2, or 352.045, subdivision 3adeleted text end .

(d) For members of the legislature, the contributions under this subdivision also must
be made on per diem payments received during a regular or special legislative session, but
may not be made on per diem payments received outside of a regular or special legislative
session, on the additional compensation attributable to a leadership position under section
3.099, subdivision 3, living expense payments under section 3.101, or special session living
expense payments under section 3.103.

(e) For a judge who is a member of the unclassified plan under section 352D.02,
subdivision 1, paragraph (c), clause (16), the employee contribution rate is eight percent of
salary, and there is no employer contribution.

(f) These contributions must be made in the manner provided in section 352.04,
subdivisions 4, 5, and 6.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 9.

Minnesota Statutes 2016, section 353.65, subdivision 2, is amended to read:

Subd. 2.

Employee contribution.

(a) For members other than members who were active
members of the former Minneapolis Firefighters Relief Association on December 29, 2011,
or for members other than members who were active members of the former Minneapolis
Police Relief Association on December 29, 2011, the employee contribution is an amount
equal to the following percentage of the total salary of each member, as follows: deleted text begin 9.6 percent
before calendar year 2014; 10.2 percent in calendar year 2014; and 10.8 percent in calendar
year 2015 and thereafter.
deleted text end

	new text begin before January 1, 2018 new text end	new text begin 10.8 percent new text end
	new text begin from January 1, 2018, through December 31, 2018 new text end	new text begin 11.3 percent new text end
	new text begin from January 1, 2019, and thereafter new text end	new text begin 11.8 percent new text end

(b) For members who were active members of the former Minneapolis Firefighters Relief
Association on December 29, 2011, the employee contribution is an amount equal to eight
percent of the monthly unit value under section 353.01, subdivision 10a, multiplied by 80
and expressed as a biweekly amount for each member. The employee contribution made
by a member with at least 25 years of service credit as an active member of the former
Minneapolis Firefighters Relief Association must be deposited in the postretirement health
care savings account established under section 352.98.

(c) For members who were active members of the former Minneapolis Police Relief
Association on December 29, 2011, the employee contribution is an amount equal to eight
percent of the monthly unit value under section 353.01, subdivision 10b, multiplied by 80
and expressed as a biweekly amount for each member. The employee contribution made
by a member with at least 25 years of service credit as an active member of the former
Minneapolis Police Relief Association must be deposited in the postretirement health care
savings account established under section 352.98.

(d) Contributions under this section must be made by deduction from salary in the manner
provided in subdivision 4. Where any portion of a member's salary is paid from other than
public funds, the member's employee contribution is based on the total salary received from
all sources.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 10.

Minnesota Statutes 2016, section 353.65, subdivision 3, is amended to read:

Subd. 3.

Employer contribution.

(a) With respect to members other than members who
were active members of the former Minneapolis Firefighters Relief Association on December
29, 2011, or for members other than members who were active members of the former
Minneapolis Police Relief Association on December 29, 2011, the employer contribution
is an amount equal to the following percentage of the total salary of each member, as follows:
deleted text begin 14.4 percent before calendar year 2014; 15.3 percent in calendar year 2014; and 16.2 percent
in calendar year 2015 and thereafter.
deleted text end

	new text begin before January 1, 2018 new text end	new text begin 16.2 percent new text end
	new text begin from January 1, 2018, through December 31, 2018 new text end	new text begin 16.95 percent new text end
	new text begin from January 1, 2019, and thereafter new text end	new text begin 17.7 percent new text end

(b) With respect to members who were active members of the former Minneapolis
Firefighters Relief Association on December 29, 2011, the employer contribution is an
amount equal to the amount of the member contributions under subdivision 2, paragraph
(b).

(c) With respect to members who were active members of the former Minneapolis Police
Relief Association on December 29, 2011, the employer contribution is an amount equal
to the amount of the member contributions under subdivision 2, paragraph (c).

(d) Contributions under this subdivision must be made from funds available to the
employing subdivision by the means and in the manner provided in section 353.28.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 11.

Minnesota Statutes 2016, section 354A.12, subdivision 1, is amended to read:

Subdivision 1.

Employee contributions.

(a) The contribution required to be paid by
each member of the St. Paul Teachers Retirement Fund Association is the percentage of
total salary specified below for the applicable association and program:

	Program	Percentage of Total Salary
St. Paul Teachers Retirement Fund Association
	deleted text begin basic program after June 30, 2014 deleted text end	deleted text begin 9 percent deleted text end
	deleted text begin basic program after June 30, 2015 deleted text end	deleted text begin 9.5 percent deleted text end
	basic program after June 30, 2016	10 percent
	new text begin basic program after June 30, 2021 new text end	new text begin 10.25 percent new text end
	deleted text begin coordinated program after June 30, 2014 deleted text end	deleted text begin 6.5 percent deleted text end
	deleted text begin coordinated program after June 30, 2015 deleted text end	deleted text begin 7 percent deleted text end
	coordinated program after June 30, 2016	7.5 percent
	new text begin coordinated program after June 30, 2021 new text end	new text begin 7.75 percent new text end

(b) Contributions must be made by deduction from salary and must be remitted directly
to the St. Paul Teachers Retirement Fund Association at least once each month.

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 12.

Minnesota Statutes 2016, section 354A.12, subdivision 2a, is amended to read:

Subd. 2a.

Employer regular and additional contributions.

(a) The employing units
shall make the following employer contributions to the teachers retirement fund association:

(1) for deleted text begin anydeleted text end new text begin each new text end coordinated member of the St. Paul Teachers Retirement Fund
Association, the employing unit shall make a regular employer contribution to the retirement
fund association in an amount equal to the designated percentage of the salary of the
coordinated member as provided below:

	deleted text begin after June 30, 2014 deleted text end	deleted text begin 5.5 percent deleted text end
	deleted text begin after June 30, 2015 deleted text end	deleted text begin 6 percent deleted text end
	after June 30, 2016	6.25 percent
	after June 30, 2017	deleted text begin 6.5deleted text end new text begin 7 new text end percent
	new text begin after June 30, 2018 new text end	new text begin 7.75 percent new text end
	new text begin after June 30, 2019 new text end	new text begin 8.25 percent new text end
	new text begin after June 30, 2020 new text end	new text begin 9 percent new text end

(2) for deleted text begin anydeleted text end new text begin each new text end basic member of the St. Paul Teachers Retirement Fund Association,
the employing unit shall make a regular employer contribution to the respective retirement
fund in an amount according to the schedule below:

	deleted text begin after June 30, 2014 deleted text end	deleted text begin 9 percent of salary deleted text end
	deleted text begin after June 30, 2015 deleted text end	deleted text begin 9.5 percent of salary deleted text end
	after June 30, 2016	9.75 percent of salary
	after June 30, 2017	deleted text begin 10deleted text end new text begin 10.5 new text end percent of salary
	new text begin after June 30, 2018 new text end	new text begin 11.25 percent of salary new text end
	new text begin after June 30, 2019 new text end	new text begin 11.75 percent of salary new text end
	new text begin after June 30, 2020 new text end	new text begin 12.5 percent of salary new text end

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

(4) for deleted text begin adeleted text end new text begin each new text end coordinated member of the St. Paul Teachers Retirement Fund Association,
the employing unit shall make an additional employer contribution to the respective fund
in an amount equal to 3.84 percent of the coordinated member's salary.

(b) The regular and additional employer contributions must be remitted directly to the
St. Paul Teachers Retirement Fund Association at least once each month. Delinquent amounts
are payable with interest under the procedure in subdivision 1a.

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

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

ARTICLE 8

DIRECT STATE AID

Section 1.

Minnesota Statutes 2016, section 353.65, is amended by adding a subdivision
to read:

new text begin Subd. 3b. new text end

new text begin Direct state aid. new text end

new text begin The state shall pay $4,500,000 on October 1, 2017, and
October 1, 2018, to the public employees police and fire retirement plan. By October 1 of
each year after 2018, the state shall pay to the public employees police and fire retirement
plan $9,000,000. The commissioner of management and budget shall pay the aid specified
in this subdivision. The amount required is appropriated annually from the general fund to
the commissioner of management and budget.
new text end

Sec. 2.

Minnesota Statutes 2016, section 354A.12, subdivision 3a, is amended to read:

Subd. 3a.

Direct state aid to first class city teachers retirement fund associations.

(a) The state shall pay $2,827,000 to the St. Paul Teachers Retirement Fund Association.

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

new text begin (c) In addition to the amounts specified in paragraphs (a) and (b), the state shall pay
$5,000,000 as state aid to the St. Paul Teachers Retirement Fund Association.
new text end

deleted text begin (c)deleted text end new text begin (d) new text end The aid under this subdivision is payable October 1 annually. The commissioner
of management and budget shall pay the aid specified in this subdivision. The amount
required is appropriated annually from the general fund to the commissioner of management
and budget.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

ARTICLE 9

MINNESOTA STATE RETIREMENT SYSTEM
ADMINISTRATIVE PROVISIONS

Section 1.

Minnesota Statutes 2016, section 3A.03, subdivision 2, is amended to read:

Subd. 2.

Refund.

(b) The refund of contributions as provided in paragraph (a) terminates all rights of a
former member of the legislature and the survivors of the former member under this chapter.

(d) However, the member may reinstate the rights and credit for service previously
forfeited under this chapter if the member repays all refunds taken, plus interest at the rate
of 8.5 percent until June 30, 2015, and eight percent thereafter compounded annually from
the date on which the refund was taken to the date on which the refund is repaid.new text begin Repayment
must be made as provided in section 352.23, paragraph (d).
new text end

(e) No person may be required to apply for or to accept a refund.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 2.

Minnesota Statutes 2016, section 3A.03, subdivision 3, is amended to read:

Subd. 3.

Legislators retirement fund.

(a) The legislators retirement fund, a special
retirement fund, is created within the state treasury. The legislators retirement fund must
be credited with any investment proceeds on the assets of the retirement fund.

(b) The payment of annuities under section 3A.115, paragraph (b), is appropriated from
the legislators retirement fund.

new text begin (c) The legislators retirement fund may receive transfers of general fund proceeds.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 3.

Minnesota Statutes 2016, section 16A.14, subdivision 2a, is amended to read:

Subd. 2a.

Exceptions.

The allotment and encumbrance system does not apply to:

(1) appropriations for the courts or the legislature;

(2) payment of unemployment benefitsdeleted text begin .deleted text end new text begin ; and
new text end

new text begin (3) transactions within the defined contribution funds administered by the Minnesota
State Retirement System.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 4.

Minnesota Statutes 2016, section 352.01, subdivision 2a, is amended to read:

Subd. 2a.

Included employees.

(a) "State employee" includes:

(1) employees of the Minnesota Historical Society;

(2) employees of the State Horticultural Society;

(3) employees of the Minnesota Crop Improvement Association;

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

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

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

(7) employees of the legislature who are appointed without a limit on the duration of
their employment;

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

(9) employees of the Minnesota Safety Council;

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

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

(12) judges of the Tax Court;

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

(14) personnel who are employed as seasonal employees in the classified or unclassified
service;

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

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

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

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

(19) employees of the Minnesota Sports Facilities Authority;

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

(21) employees of the Minnesota State Retirement System;

(22) employees of the State Agricultural Society;

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

(24) if approved for coverage by the Board of Directors of Conservation Corps Minnesota,
employees of Conservation Corps Minnesota so employed on June 30, 2003deleted text begin .deleted text end new text begin ; and
new text end

new text begin (25) employees of the Perpich Center for Arts Education who are covered by the general
state employees retirement plan of the Minnesota State Retirement System as of July 1,
2016.
new text end

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 5.

Minnesota Statutes 2016, section 352.03, subdivision 5, is amended to read:

Subd. 5.

Executive directordeleted text begin ;deleted text end new text begin , deputy director, andnew text end assistant director.

(a) The new text begin board
shall appoint an new text end executive director, in this chapter called the director, deleted text begin of the system must
be appointed by the boarddeleted text end on the basis of deleted text begin fitnessdeleted text end new text begin educationnew text end , experience in the retirement
field, deleted text begin and leadershipdeleted text end abilitynew text begin to manage and lead system staff, and ability to assist the board
in setting a vision for the systemnew text end . The director must have had at least five years' experience
deleted text begin on the administrative staff of a major retirement systemdeleted text end new text begin in either an executive level
management position or in a position with responsibility for the governance, management,
or administration of a retirement plannew text end .

(b) The executive directornew text begin , deputy director,new text end and assistant director must be in the
unclassified service but appointees may be selected from civil service lists if desired.
Notwithstanding any law to the contrary, the board must set the salary of the executive
director. The salary of the executive director must not exceed the limit for a position listed
in section 15A.0815, subdivision 2. The salary of the new text begin deputy director and new text end assistant director
must be set in accordance with section 43A.18, subdivision 3.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 6.

Minnesota Statutes 2016, section 352.03, subdivision 6, is amended to read:

Subd. 6.

Duties and powers of executive director.

The management of the system is
vested in the director, who is the executive and administrative head of the system. new text begin The
director may appoint a deputy director and an assistant director with the approval of the
board. new text end The director shall be advisor to the board on matters pertaining to the system and
shall also act as the secretary of the board. The director shall:

(1) attend meetings of the board;

(2) prepare and recommend to the board appropriate rules to carry out this chapter;

(3) establish and maintain an adequate system of records and accounts following
recognized accounting principles and controls;

deleted text begin (4) designate an assistant director with the approval of the board;
deleted text end

deleted text begin (5)deleted text end new text begin (4) new text end appoint any employees, both permanent and temporary, that are necessary to
carry out the provisions of this chapter;

deleted text begin (6)deleted text end new text begin (5) new text end organize the work of the system as the director deems necessary to fulfill the
functions of the system, and define the duties of its employees and delegate to them any
powers or duties, subject to the control of the director and under conditions the director may
prescribe. Appointments to exercise delegated power must be by written order and shall be
filed with the secretary of state;

deleted text begin (7)deleted text end new text begin (6) new text end with the advice and consent of the board, contract for the services of an approved
actuary, professional management services, and any other consulting services as necessary
and fix the compensation for those services. The contracts are not subject to competitive
bidding under chapter 16C. Any approved actuary retained by the executive director shall
function as the actuarial advisor of the board and the executive director, and may perform
actuarial valuations and experience studies to supplement those performed by the actuary
retained under section 356.214. Any supplemental actuarial valuations or experience studies
shall be filed with the executive director of the Legislative Commission on Pensions and
Retirement. Professional management services may not be contracted for more often than
once in six years. Copies of professional management survey reports must be transmitted
to the secretary of the senate, the chief clerk of the house of representatives, and the
Legislative Reference Library as provided by section 3.195, and to the executive director
of the commission at the time as reports are furnished to the board. Only management firms
experienced in conducting management surveys of federal, state, or local public retirement
systems are qualified to contract with the director;

deleted text begin (8)deleted text end new text begin (7) new text end with the advice and consent of the board provide in-service training for the
employees of the system;

deleted text begin (9)deleted text end new text begin (8) new text end make refunds of accumulated contributions to former state employees and to the
designated beneficiary, surviving spouse, legal representative, or next of kin of deceased
state employees or deceased former state employees, as provided in this chapter;

deleted text begin (10)deleted text end new text begin (9) new text end determine the amount of the annuities and disability benefits of employees
covered by the system and authorize payment of the annuities and benefits beginning as of
the dates on which the annuities and benefits begin to accrue, in accordance with the
provisions of this chapter;

deleted text begin (11)deleted text end new text begin (10) new text end pay annuities, refunds, survivor benefits, salaries, and necessary operating
expenses of the system;

deleted text begin (12)deleted text end new text begin (11) new text end certify funds available for investment to the State Board of Investment;

deleted text begin (13)deleted text end new text begin (12) new text end with the advice and approval of the board request the State Board of Investment
to sell securities when the director determines that funds are needed for the system;

deleted text begin (14)deleted text end new text begin (13) new text end prepare and submit to the board and the legislature an annual financial report
covering the operation of the system, as required by section 356.20;

deleted text begin (15)deleted text end new text begin (14) new text end prepare and submit biennial and annual budgets to the board and with the
approval of the board submit the budgets to the Department of Management and Budget;
and

deleted text begin (16)deleted text end new text begin (15) new text end with the approval of the board, perform other duties required to administer the
retirement and other provisions of this chapter and to do its business.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 7.

Minnesota Statutes 2016, section 352.113, subdivision 4, is amended to read:

Subd. 4.

Medical or psychological examinations; authorization for payment of
benefit.

(a) Any physician, psychologist, chiropractor, deleted text begin ordeleted text end physician assistantnew text begin , or nurse
practitionernew text end providing any service specified in this section must be licensed.

(b) An applicant shall provide a detailed report signed by a physician, and at least one
additional report signed by a physician, deleted text begin chiropractor,deleted text end psychologist, deleted text begin ordeleted text end new text begin chiropractor, new text end physician
assistantnew text begin , or nurse practitionernew text end with evidence to support an application for total and permanent
disability. The reports must include an expert opinion regarding whether the employee is
permanently and totally disabled within the meaning of section 352.01, subdivision 17, and
that the disability arose before the employee was placed on any paid or unpaid leave of
absence or terminated public service.

(c) If there is medical evidence that supports the expectation that at some point the person
applying for the disability benefit will no longer be disabled, the decision granting the
disability benefit may provide for a termination date upon which the total and permanent
disability can be expected to no longer exist. When a termination date is part of the decision
granting benefits, prior to the benefit termination the executive director shall review any
evidence provided by the disabled employee to show that the disabling condition for which
benefits were initially granted continues. If the benefits cease, the disabled employee may
follow the appeal procedures described in section 356.96 or may reapply for disability
benefits using the process described in this subdivision.

(d) Any claim to disability must be supported by a report from the employer indicating
that there is no available work that the employee can perform with the disabling condition
and that all reasonable accommodations have been considered. Upon request of the executive
director, an employer shall provide evidence of the steps the employer has taken to attempt
to provide reasonable accommodations and continued employment to the claimant.

(e) The director shall also obtain written certification from the employer stating whether
the employment has ceased or whether the employee is on sick leave of absence because
of a disability that will prevent further service to the employer and that the employee is not
entitled to compensation from the employer.

(f) The medical adviser shall consider the reports of the deleted text begin physicians, physician assistants,
psychologists, and chiropractorsdeleted text end new text begin physician, psychologist, chiropractor, physician assistant,
or nurse practitioner new text end and any other evidence supplied by the employee or other interested
parties. If the medical adviser finds the employee totally and permanently disabled, the
adviser shall make appropriate recommendation to the director in writing together with the
date from which the employee has been totally disabled. The director shall then determine
if the disability occurred deleted text begin within 18 months of filing the application,deleted text end while still in the
employment of the statedeleted text begin , and the propriety of authorizing payment of a disability benefit as
provided in this sectiondeleted text end new text begin and constitutes a total and permanent disability as defined in section
352.01, subdivision 17new text end .

(g) A terminated employee may apply for a disability benefit within 18 months of
termination as long as the disability occurred while in the employment of the state. The fact
that an employee is placed on leave of absence without compensation because of disability
does not bar that employee from receiving a disability benefit.

new text begin (h) Upon appeal, the board of directors may extend the disability benefit application
deadline in paragraph (g) by an additional 18 months if the terminated employee is
determined by the board of directors to have a cognitive impairment that made it unlikely
that the terminated employee understood that there was an application deadline or that the
terminated employee was able to meet the application deadline.
new text end

deleted text begin (h)deleted text end new text begin (i)new text end Unless the payment of a disability benefit has terminated because the employee
is no longer totally disabled, or because the employee has reached normal retirement age
as provided in this section, the disability benefit must cease with the last payment received
by the disabled employee or which had accrued during the lifetime of the employee unless
there is a spouse surviving. In that event, the surviving spouse is entitled to the disability
benefit for the calendar month in which the disabled employee died.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 8.

Minnesota Statutes 2016, section 352.113, subdivision 14, is amended to read:

Subd. 14.

Disabilitant earnings reports.

Disability benefit recipients must report all
earnings from reemployment and income from workers' compensation to the system annually
by May 15 in a format prescribed by the executive director. new text begin The executive director may
waive the earnings report requirement for any disabled employee who is not required to
undergo regular medical or psychological examinations under subdivision 6. new text end If the form is
not submitted by June 15, benefits must be suspended effective July 1. If the form deemed
acceptable by the executive director is received after the June 15 deadline, benefits shall be
reinstated retroactive to July 1.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 9.

Minnesota Statutes 2016, section 352.23, is amended to read:

352.23 TERMINATION OF RIGHTS; REPAYMENT OF REFUND.

(b) Terminated service credits and rights must not again be restored until the former
employee acquires at least six months of allowable service credit after taking the last refunddeleted text begin .
In that event, the employee may repaydeleted text end new text begin and repays new text end all refunds previously taken from the
retirement fundnew text begin with interest as provided in paragraph (d)new text end .

(d) Payments under this section for repayment of refunds are to be paid with interest at
the rate of 8.5 percent until June 30, 2015, and eight percent thereafter compounded annually
from the date the refund was taken until the date the refund is repaid. deleted text begin Theydeleted text end new text begin Repayment new text end may
be deleted text begin paid in a lump sum or by payroll deduction in the manner provided in section 352.04.
Payment may bedeleted text end made in new text begin partial payments consistent with section 356.44 during employment
or in new text end a lump sum up to six months after termination from service.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 10.

Minnesota Statutes 2016, section 352B.11, subdivision 4, is amended to read:

Subd. 4.

Reentry into state service.

When a former member, who has become separated
from state service that entitled the member to membership and has received a refund of
retirement payments, reenters the state service in a position that entitles the member to
membership, that member shall receive credit for the period of prior allowable state service
if the member repays into the fund the amount of the refund, plus interest on it at the rate
of 8.5 percent until June 30, 2015, and eight percent thereafter compounded annuallydeleted text begin , at
any time before subsequent retirement. Repayment may be made in installments or in a
lump sumdeleted text end .new text begin Repayment must be made as provided in section 352.23, paragraph (d).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 11.

Minnesota Statutes 2016, section 352D.02, subdivision 1, is amended to read:

Subdivision 1.

Coverage.

(a) Employees enumerated in paragraph (c), clauses (2), (3),
(4), (6) to (14), and (16) to (18), if they are in the unclassified service of the state or
Metropolitan Council and are eligible for coverage under the general state employees
retirement plan under chapter 352, are participants in the unclassified program under this
chapter deleted text begin unless the employee gives notice to the executive director of the Minnesota State
Retirement System within one year following the commencement of employment in the
unclassified service that the employee desires coverage under the general state employees
retirement plan. For the purposes of this chapter, an employee who does not file notice with
the executive director is deemed to have exercised the option to participate in the unclassified
programdeleted text end .

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

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

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

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

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

(5) a member of the legislature;

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

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

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

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

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

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

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

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

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

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

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

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

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 12.

Minnesota Statutes 2016, section 352D.02, subdivision 3, is amended to read:

Subd. 3.

Transfer to general employees retirement plan.

(a) deleted text begin If permitted under
paragraph (b), an employeedeleted text end new text begin A person in the unclassified program and new text end referred to in
subdivision 1, paragraph (c), clauses (2) to (4), (6) to (14), and (16) to (18), deleted text begin who is credited
with shares in the unclassified program and has credit for allowable servicedeleted text end may elect to
terminate participation in the unclassified program and be covered by the general new text begin state
new text end employees retirement plandeleted text begin . (b) An employee specified in paragraph (a) is permitted to
terminate participation in the unclassified program and be covered bydeleted text end new text begin if the person files an
election to transfer to new text end the general new text begin state new text end employees retirement plan deleted text begin if the employeedeleted text end new text begin with the
executive director of the Minnesota State Retirement System as provided in paragraph (b)
and the person's current employment or appointmentnew text end :

(1) deleted text begin was employeddeleted text end new text begin began new text end before July 1, 2010, and new text begin the person new text end has at least ten years of
deleted text begin allowable servicedeleted text end new text begin covered employmentnew text end ; or

(2) deleted text begin was first employeddeleted text end new text begin began new text end after June 30, 2010, and new text begin the person new text end has no more than seven
years of allowable servicenew text begin in the unclassified programnew text end .

deleted text begin Thedeleted text end new text begin (b) An new text end election new text begin to transfer new text end must be in writingnew text begin ,new text end on a form provided by the executive
director, and deleted text begin can be made no later than one month following the termination of covered
employment.deleted text end new text begin delivered to the executive director:
new text end

new text begin (1) for persons described in paragraph (a), clause (1), no later than one month following
the termination of covered employment; or
new text end

new text begin (2) for persons described in paragraph (a), clause (2), no later than one month following
the termination of employment in a position covered by the unclassified program.
new text end

new text begin For purposes of this chapter, an employee who does not file an election to transfer with
the executive director is deemed to have exercised the option to participate in the unclassified
program.
new text end

(c) If the transfer election is made, the executive director shall redeem the employee's
total shares and credit to the employee's account in the general employees retirement plan
the amount of contributions that would have been credited had the employee been covered
by the general employees retirement plan during the employee's entire covered employment.
The balance of money redeemed and not credited to the employee's account must be
transferred to the general employees retirement plan, except that the executive director must
determine:

(1) the employee contributions paid to the unclassified program; and

(2) the employee contributions that would have been paid to the general employees
retirement plan for the comparable period, if the individual had been covered by that plan.

If clause (1) is greater than clause (2), the difference must be refunded to the employee
as provided in section 352.22. If clause (2) is greater than clause (1), the difference must
be paid by the employee within six months of electing general employees retirement plan
coverage or before the effective date of the annuity, whichever is sooner.

(d) An election under paragraph (b) to transfer coverage to the general employees
retirement plan is irrevocable during any period of covered employment.

(e) A person referenced in subdivision 1, paragraph (c), clause (1), (5), or (15), who is
credited with employee shares in the unclassified program is not permitted to terminate
participation in the unclassified program and be covered by the general employees retirement
plan.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 13.

Minnesota Statutes 2016, section 352D.05, subdivision 4, is amended to read:

Subd. 4.

Repayment of refund.

(a) A participant in the unclassified program may repay
regular refunds taken under section 352.22, as provided in section 352.23.

(b) A participant in the unclassified program or an employee covered by the general
employees retirement plan who has withdrawn the value of the total shares may repay the
refund taken and thereupon restore the service credit, rights and benefits forfeited by paying
into the fund the amount refunded plus interest at the rate of 8.5 percent until June 30, 2015,
and eight percent thereafter compounded annually from the date that the refund was taken
until the date that the refund is repaid. If the participant had withdrawn only the employee
shares as permitted under prior laws, repayment must be pro rata.

(c) deleted text begin Except as provided in section 356.441, the repayment of a refund under this section
must be made in a lump sumdeleted text end new text begin Repayment must be made as provided in section 352.23,
paragraph (d)new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 14.

Minnesota Statutes 2016, section 490.124, subdivision 12, is amended to read:

Subd. 12.

Refund.

(b) A refund of contributions under paragraph (a) terminates all service credits and all
rights and benefits of the judge and the judge's survivors under this chapter.

(c) A person who becomes a judge again after taking a refund under paragraph (a) may
reinstate the previously terminated allowable service credit, rights, and benefits by repaying
the total amount of the previously received refund. The refund repayment must include
interest on the total amount previously received at the annual rate of 8.5 percent until June
30, 2015, and eight percent thereafter, compounded annually, from the date on which the
refund was received until the date on which the refund is repaid.new text begin Repayment must be made
as provided in section 352.23, paragraph (d).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

ARTICLE 10

PUBLIC EMPLOYEES RETIREMENT ASSOCIATION
ADMINISTRATIVE PROVISIONS

Section 1.

Minnesota Statutes 2016, section 353.01, subdivision 2b, is amended to read:

Subd. 2b.

Excluded employees.

(a) The following public employees are not eligible to
participate as members of the association with retirement coverage by the general employees
retirement plan, the local government correctional employees retirement plan under chapter
353E, or the public employees police and fire retirement plan:

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

(2) public officers who are elected to a governing body, city mayors, or persons who
are appointed to fill a vacancy in an deleted text begin electivedeleted text end new text begin elected new text end office of a governing body, whose term
of office commences on or after July 1, 2002, for the service to be rendered in that deleted text begin electivedeleted text end
new text begin elected new text end position;

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

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

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

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

(7) employees who by virtue of their employment in one governmental subdivision are
required by law to be a member of and to contribute to any of the plans or funds administered
by the Minnesota State Retirement System, the Teachers Retirement Association, or the St.
Paul Teachers Retirement Fund Association, but this exclusion must not be construed to
prevent a person from being a member of and contributing to the Public Employees
Retirement Association and also belonging to and contributing to another public pension
plan or fund for other service occurring during the same period of time, and a person who
meets the definition of "public employee" in subdivision 2 by virtue of other service occurring
during the same period of time becomes a member of the association unless contributions
are made to another public retirement plan on the salary based on the other service or to the
Teachers Retirement Association by a teacher as defined in section 354.05, subdivision 2;

(8) persons who are members of a religious order and are excluded from coverage under
the federal Old Age, Survivors, Disability, and Health Insurance Program for the performance
of service as specified in United States Code, title 42, section 410(a)(8)(A), as amended, if
no irrevocable election of coverage has been made under section 3121(r) of the Internal
Revenue Code of 1954, as amended;

(9) persons who are:

(i) employed by a governmental subdivision who have not reached the age of 23 and
who are enrolled on a full-time basis to attend or are attending classes on a full-time basis
at an accredited school, college, or university in an undergraduate, graduate, or
professional-technical program, or at a public or charter high school;

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

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

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

(11) deleted text begin except for employees ofdeleted text end new text begin For the first three years of employment, foreign citizens
who are employed by a governmental subdivision, other than new text end Hennepin County or deleted text begin employees
ofdeleted text end Hennepin Healthcare System, Inc., deleted text begin foreign citizens who are employed by a governmental
subdivisiondeleted text end under deleted text begin adeleted text end new text begin one or more new text end work deleted text begin permitdeleted text end new text begin permits new text end or deleted text begin under an H-1b visadeleted text end initially issued
or extended for a combined period of less than three years of employment but upon extension
of the deleted text begin employment of the visa beyond the three-year period, the foreign citizen must be
reported for membership beginning on the first of the month following the extension if the
monthly earnings threshold as provided under subdivision 2a, paragraph (a), is metdeleted text end new text begin work
visasnew text end ;

(12) public hospital employees who elected not to participate as members of the
association before 1972 and who did not elect to participate from July 1, 1988, to October
1, 1988;

(13) except as provided in section 353.86, volunteer ambulance service personnel, as
defined in subdivision 35, but persons who serve as volunteer ambulance service personnel
may still qualify as public employees under subdivision 2 and may be members of the Public
Employees Retirement Association and participants in the general employees retirement
plan or the public employees police and fire plan, whichever applies, on the basis of
compensation received from public employment service other than service as volunteer
ambulance service personnel;

(14) except as provided in section 353.87, volunteer firefighters, as defined in subdivision
36, engaging in activities undertaken as part of volunteer firefighter duties, but a person
who is a volunteer firefighter may still qualify as a public employee under subdivision 2
and may be a member of the Public Employees Retirement Association and a participant
in the general employees retirement plan or the public employees police and fire plan,
whichever applies, on the basis of compensation received from public employment activities
other than those as a volunteer firefighter;

(15) pipefitters and associated trades personnel employed by Independent School District
No. 625, St. Paul, with coverage under a collective bargaining agreement by the pipefitters
local 455 pension plan who were either first employed after May 1, 1997, or, if first employed
before May 2, 1997, elected to be excluded under Laws 1997, chapter 241, article 2, section
12;

(16) electrical workers, plumbers, carpenters, and associated trades personnel who are
employed by Independent School District No. 625, St. Paul, or the city of St. Paul, who
have retirement coverage under a collective bargaining agreement by the Electrical Workers
Local 110 pension plan, the United Association Plumbers Local 34 pension plan, or the
pension plan applicable to Carpenters Local 322 who were either first employed after May
1, 2000, or, if first employed before May 2, 2000, elected to be excluded under Laws 2000,
chapter 461, article 7, section 5;

(17) bricklayers, allied craftworkers, cement masons, glaziers, glassworkers, painters,
allied tradesworkers, and plasterers who are employed by the city of St. Paul or Independent
School District No. 625, St. Paul, with coverage under a collective bargaining agreement
by the Bricklayers and Allied Craftworkers Local 1 pension plan, the Cement Masons Local
633 pension plan, the Glaziers and Glassworkers Local L-1324 pension plan, the Painters
and Allied Trades Local 61 pension plan, or the Twin Cities Plasterers Local 265 pension
plan who were either first employed after May 1, 2001, or if first employed before May 2,
2001, elected to be excluded under Laws 2001, First Special Session chapter 10, article 10,
section 6;

(18) plumbers who are employed by the Metropolitan Airports Commission, with
coverage under a collective bargaining agreement by the Plumbers Local 34 pension plan,
who either were first employed after May 1, 2001, or if first employed before May 2, 2001,
elected to be excluded under Laws 2001, First Special Session chapter 10, article 10, section
6;

(19) employees who are hired after June 30, 2002, solely to fill seasonal positions under
subdivision 12b which are limited in duration by the employer to 185 consecutive calendar
days or less in each year of employment with the governmental subdivision;

(20) persons who are provided supported employment or work-study positions by a
governmental subdivision and who participate in an employment or industries program
maintained for the benefit of these persons where the governmental subdivision limits the
position's duration to up to five years, including persons participating in a federal or state
subsidized on-the-job training, work experience, senior citizen, youth, or unemployment
relief program where the training or work experience is not provided as a part of, or for,
future permanent public employment;

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

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

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

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

(25) electricians or pipefitters employed by the Minneapolis Park and Recreation Board,
with coverage under a collective bargaining agreement by the IBEW local 292, or pipefitters
local 539 pension plan, who were first employed before May 2, 2015, and who elected to
be excluded under Laws 2015, chapter 68, article 11, section 5.

(b) Any person performing the duties of a public officer in a position defined in
subdivision 2a, paragraph (a), clause (3), is not an independent contractor and is not an
employee of an independent contractor.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 2.

Minnesota Statutes 2016, section 353.01, subdivision 10, is amended to read:

Subd. 10.

Salary.

(a) Subject to the limitations of section 356.611, "salary" means:

(1) the wages or periodic compensation payable to a public employee by the employing
governmental subdivision before:

(i) employee retirement deductions that are designated as picked-up contributions under
section 356.62;

(ii) any employee-elected deductions for deferred compensation, supplemental retirement
plans, or other voluntary salary reduction programs that would have otherwise been available
as a cash payment to the employee; and

(iii) employee deductions for contributions to a supplemental plan or to a governmental
trust established under section 356.24, subdivision 1, clause (7), to save for postretirement
health care expenses, unless otherwise excluded under paragraph (b);

(2) for a public employee who is covered by a supplemental retirement plan under section
356.24, subdivision 1, clause (8), (9), (10), or (12), the employer contributions to the
applicable supplemental retirement plan when an agreement between the parties establishes
that the contributions will either result in a mandatory reduction of employees' wages through
payroll withholdings, or be made in lieu of an amount that would otherwise be paid as
wages;

(3) a payment from a public employer through a grievance proceeding, settlement, or
court order that is attached to a specific earnings period in which the employee's regular
salary was not earned or paid to the member due to a suspension or a period of involuntary
termination that is not a wrongful discharge under section 356.50; provided the amount is
not less than the equivalent of the average of the hourly base salary rate in effect during the
last six months of allowable service prior to the suspension or period of involuntary
termination, plus any applicable increases awarded during the period that would have been
paid under a collective bargaining agreement or personnel policy but for the suspension or
involuntary termination, multiplied by the average number of regular hours for which the
employee was compensated during the six months of allowable service prior to the suspension
or period of involuntary termination, but not to exceed the compensation that the public
employee would have earned if regularly employed during the applicable period;

(4) deleted text begin for a member who is absent from employment due todeleted text end new text begin compensation paid during new text end an
authorized leave of absence, other than an authorized medical leave of absence, new text begin as long as
new text end the compensation paid during deleted text begin the leave if equivalent todeleted text end new text begin a pay period is not less than the
lesser of:
new text end

new text begin (i) the product of new text end the new text begin average new text end hourly base salary rate in effect during the six months of
allowable servicedeleted text begin , or portions thereof, prior todeleted text end new text begin immediately preceding new text end the leave, multiplied
by the average number of regular hours for which the employee was compensated new text begin each pay
period new text end during the six months of allowable service deleted text begin prior todeleted text end new text begin immediately preceding new text end the
deleted text begin applicabledeleted text end leave of absence;new text begin or
new text end

new text begin (ii) compensation equal to the value of the employee's total available accrued leave
hours;
new text end

(5) deleted text begin for a member who is absent from employment by reason ofdeleted text end new text begin compensation paid during
new text end an authorized medical leave of absence, new text begin other than a workers' compensation leave, as long
as new text end the compensation paid during deleted text begin the leave if specified in advance to be at leastdeleted text end new text begin a pay period
is not less than the lesser of:
new text end

new text begin (i) the product of new text end one-half ofdeleted text begin , but no more than equal to, the earnings the member
received, on which contributions were reported and allowable service crediteddeleted text end new text begin the average
hourly base salary rate in effect new text end during the six months new text begin of allowable service new text end immediately
preceding the deleted text begin medicaldeleted text end leave of absence; deleted text begin anddeleted text end new text begin or
new text end

new text begin (ii) compensation equal to the value of the employee's total available accrued leave
hours;
new text end

(6) for a public employee who receives performance or merit bonus payment under a
written compensation plan, policy, or collective bargaining agreement in addition to regular
salary or in lieu of regular salary increases, the compensation paid to the employee for
attaining or exceeding performance goals, duties, or measures during a specified period of
employment.

(b) Salary does not mean:

(1) fees paid to district court reporters;

(2) unused annual leave, vacation, or sick leave payments, in the form of lump-sum or
periodic payments;

(3) for the donor, payment to another person of the value of hours donated under a
benevolent vacation, personal, or sick leave donation program;

(4) any form of severance or retirement incentive payments;

(5) an allowance payment or per diem payments for or reimbursement of expenses;

(6) lump-sum settlements not attached to a specific earnings period;

(7) workers' compensation payments or disability insurance payments, including payments
from employer self-insurance arrangements;

(8) employer-paid amounts used by an employee toward the cost of insurance coverage,
flexible spending accounts, cafeteria plans, health care expense accounts, day care expenses,
or any payments in lieu of any employer-paid group insurance coverage, including the
difference between single and family rates that may be paid to a member with single coverage
and certain amounts determined by the executive director to be ineligible;

(9) employer-paid fringe benefits, including, but not limited to:

(i) employer-paid premiums or supplemental contributions for employees for all types
of insurance;

(ii) membership dues or fees for the use of fitness or recreational facilities;

(iii) incentive payments or cash awards relating to a wellness program;

(iv) the value of any nonmonetary benefits;

(v) any form of payment made in lieu of an employer-paid fringe benefit;

(vi) an employer-paid amount made to a deferred compensation or tax-sheltered annuity
program; and

(vii) any amount paid by the employer as a supplement to salary, either as a lump-sum
amount or a fixed or matching amount paid on a recurring basis, that is not available to the
employee as cash;

(10) the amount equal to that which the employing governmental subdivision would
otherwise pay toward single or family insurance coverage for a covered employee when,
through a contract or agreement with some but not all employees, the employer:

(i) discontinues, or for new hires does not provide, payment toward the cost of the
employee's selected insurance coverages under a group plan offered by the employer;

(ii) makes the employee solely responsible for all contributions toward the cost of the
employee's selected insurance coverages under a group plan offered by the employer,
including any amount the employer makes toward other employees' selected insurance
coverages under a group plan offered by the employer; and

(iii) provides increased salary rates for employees who do not have any employer-paid
group insurance coverages;

(11) except as provided in section 353.86 or 353.87, compensation of any kind paid to
volunteer ambulance service personnel or volunteer firefighters, as defined in subdivision
35 or 36;

(12) the amount of compensation that exceeds the limitation provided in section 356.611;

(13) amounts paid by a federal or state grant for which the grant specifically prohibits
grant proceeds from being used to make pension plan contributions, unless the contributions
to the plan are made from sources other than the federal or state grant; and

(14) bonus pay that is not performance or merit pay under paragraph (a), clause (6).

(c) Amounts, other than those provided under paragraph (a), clause (3), provided to an
employee by the employer through a grievance proceeding, a court order, or a legal settlement
are salary only if the settlement or court order is reviewed by the executive director and the
amounts are determined by the executive director to be consistent with paragraph (a) and
prior determinations.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 3.

Minnesota Statutes 2016, section 353.01, subdivision 47, is amended to read:

Subd. 47.

Vesting.

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

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

(1) a public employee who first became a member of the association before July 1, 2010,
is 100 percent vested when the person has accrued credit for not less than three years of
allowable service deleted text begin as defined under subdivision 16deleted text end new text begin in the general employees retirement plannew text end ;
and

(2) a public employee who first becomes a member of the association after June 30,
2010, is 100 percent vested when the person has accrued credit for not less than five years
of allowable service deleted text begin as defined under subdivision 16deleted text end new text begin in the general employees retirement
plannew text end .

(c) For purposes of qualifying for an annuity or benefit as a member of the local
government correctional deleted text begin employeesdeleted text end new text begin service new text end retirement plan:

(1) a public employee who first became a member of the association before July 1, 2010,
is 100 percent vested when the person has accrued credit for not less than three years of
allowable service deleted text begin as defined under subdivision 16deleted text end new text begin in the local government correctional
service retirement plannew text end ; and

(2) a public employee who first becomes a member of the association after June 30,
2010, is vested at the following percentages when the person has accrued deleted text begin crediteddeleted text end new text begin credit
for new text end allowable service deleted text begin as defined under subdivision 16, as followsdeleted text end new text begin in the local government
correctional service retirement plan, as followsnew text end :

(i) 50 percent after five years;

(ii) 60 percent after six years;

(iii) 70 percent after seven years;

(iv) 80 percent after eight years;

(v) 90 percent after nine years; and

(vi) 100 percent after ten years.

(d) For purposes of qualifying for an annuity or benefit as a member of the public
employees police and fire retirement plan:

(1) a public employee who first became a member of the association before July 1, 2010,
is 100 percent vested when the person has accrued credit for not less than three years of
allowable service deleted text begin as defined under subdivision 16deleted text end new text begin in the public employees police and fire
retirement plannew text end ;

(2) a public employee who first becomes a member of the association after June 30,
2010, and before July 1, 2014, is vested at the following percentages when the person has
accrued credited allowable service deleted text begin as defined under subdivision 16deleted text end new text begin in the public employees
police and fire retirement plannew text end , as follows:

(i) 50 percent after five years;

(ii) 60 percent after six years;

(iii) 70 percent after seven years;

(iv) 80 percent after eight years;

(v) 90 percent after nine years; and

(vi) 100 percent after ten years; and

(3) a public employee who first becomes a member of the association after June 30,
2014, is vested at the following percentages when the person has accrued deleted text begin crediteddeleted text end new text begin credit
for new text end allowable service deleted text begin as defined under subdivision 16deleted text end new text begin in the public employees police and
fire retirement plannew text end , as follows:

(i) 50 percent after ten years;

(ii) 55 percent after 11 years;

(iii) 60 percent after 12 years;

(iv) 65 percent after 13 years;

(v) 70 percent after 14 years;

(vi) 75 percent after 15 years;

(vii) 80 percent after 16 years;

(viii) 85 percent after 17 years;

(ix) 90 percent after 18 years;

(x) 95 percent after 19 years; and

(xi) 100 percent after 20 or more years.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 4.

Minnesota Statutes 2016, section 353.0162, is amended to read:

353.0162 deleted text begin REDUCED SALARY PERIODSdeleted text end SALARY CREDIT PURCHASEnew text begin FOR
PERIODS OF REDUCED SALARYnew text end .

(a) A member may purchase deleted text begin additionaldeleted text end new text begin differential new text end salary creditnew text begin , as described in paragraph
(c),new text end for a period specified in deleted text begin this sectiondeleted text end new text begin paragraph (b)new text end .

(b) The applicable period is a period during which the member is receiving deleted text begin adeleted text end new text begin no or
new text end reduced salary from the employer while the member is:

(1) receiving deleted text begin temporarydeleted text end workers' compensation payments related to the member's service
to the public employer;

(2) on an authorized leave of absencenew text begin , except that if the authorized leave of absence
exceeds 12 months, the period of leave for which differential salary credit may be purchased
is limited to 12 monthsnew text end ; or

(3) on an authorized deleted text begin partial paiddeleted text end leave of absence as a result of a budgetary or salary
savings program offered or mandated by a governmental subdivisionnew text begin , if certified to the
executive director by the governmental subdivisionnew text end .

(c) deleted text begin Thedeleted text end Differential salary deleted text begin amountdeleted text end new text begin credit new text end is the difference between the deleted text begin average monthlydeleted text end
salary received by the member during deleted text begin thedeleted text end new text begin a new text end period deleted text begin of reduced salary under this sectiondeleted text end
new text begin specified in paragraph (b) new text end and the deleted text begin average monthlydeleted text end salary of the member, excluding overtime,
on which contributions to the applicable plan deleted text begin weredeleted text end new text begin would have been new text end made during the period
deleted text begin of the last six months of covered employment occurring immediately before the period of
reduced salary, applied todeleted text end new text begin based on new text end the member's normal employment period, measured in
hours or otherwise, as applicablenew text begin , and rate of paynew text end .

(d) To receive deleted text begin eligibledeleted text end new text begin differential new text end salary credit, the member shall pay new text begin the plan, by
delivering payment to the executive director, new text end an amount equal to:

(1) the applicable employee contribution rate under section 353.27, subdivision 2; 353.65,
subdivision 2; or 353E.03, subdivision 1, as applicable, multiplied by the differential salary
amount;

(3) plus, if applicable, an equivalent employer additional amount equal to the additional
employer contribution rate in section 353.27, subdivision 3a, multiplied by the differential
salary amount.

(f) Payment under this section must include interest on the contribution amount or
amounts, whichever applies, at an 8.5 percent annual rate until June 30, 2015, and at an
eight percent annual rate thereafter, prorated for applicable months from the date on which
the period of reduced salary specified deleted text begin under this sectiondeleted text end new text begin in paragraph (b) new text end terminates to the
date on which the payment or payments are received by the executive director. Payment
under this section must be completed deleted text begin withindeleted text end new text begin by new text end the deleted text begin earlierdeleted text end new text begin earliest new text end ofnew text begin :
new text end

new text begin (1)new text end 30 days deleted text begin fromdeleted text end new text begin after new text end termination of public service by the employee under section
353.01, subdivision 11adeleted text begin , ordeleted text end new text begin ;
new text end

new text begin (2)new text end one year after the termination of the period specified in paragraph (b)deleted text begin , as further
restricted under this section.deleted text end new text begin ; or
new text end

new text begin (3) 30 days after the commencement of a disability benefit.
new text end

deleted text begin (g) The period for which additional allowable salary credit may be purchased is limited
to the period during which the person receives temporary workers' compensation payments
or for those business years in which the governmental subdivision offers or mandates a
budget or salary savings program, as certified to the executive director by a resolution of
the governing body of the governmental subdivision. For an authorized leave of absence,
the period for which allowable salary credit may be purchased may not exceed 12 months
of authorized leave.
deleted text end

deleted text begin (h) To purchasedeleted text end new text begin (g) If the member has purchased 12 months of differential new text end salary credit
deleted text begin for a subsequent period of temporary workers' compensation benefits or subsequent
authorized medical leave of absencedeleted text end , the member must return to public service and render
a minimum of three months of allowable servicenew text begin to purchase differential salary credit for a
subsequent leave of absencenew text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 5.

Minnesota Statutes 2016, section 353.03, subdivision 3, is amended to read:

Subd. 3.

Duties and powers.

(a) The board shall:

(1) elect a president and vice-president;

(2) approve the staffing complement, as recommended by the executive director,
necessary to administer the fund;

(3) adopt bylaws for its own government and for the management of the fund consistent
with the laws of the state and may modify them at pleasure;

(4) adopt, alter, and enforce reasonable rules consistent with the laws of the state and
the terms of the applicable benefit plans for the administration and management of the fund,
for the payment and collection of payments from members and for the payment of
withdrawals and benefits, and that are necessary in order to comply with the applicable
federal Internal Revenue Service and Department of Labor requirements;

(5) pass upon and allow or disallow all applications for membership in the fund and
allow or disallow claims for withdrawals, pensions, or benefits payable from the fund;

deleted text begin (6) authorize procedures for use of electronic signatures as defined in section 325L.02,
paragraph (h), on applications and forms required by the association;
deleted text end

deleted text begin (7)deleted text end new text begin (6) new text end adopt an appropriate mortality table based on experience of the fund as
recommended by the association actuary and approved under section 356.215, subdivision
18, with interest set at the rate specified in section 356.215, subdivision 8;

deleted text begin (8)deleted text end new text begin (7) new text end provide for the payment out of the fund of the cost of administering this chapter,
of all necessary expenses for the administration of the fund and of all claims for withdrawals,
pensions, or benefits allowed;

deleted text begin (9)deleted text end new text begin (8) new text end approve or disapprove all recommendations and actions of the executive director
made subject to its approval or disapproval by subdivision 3a; and

deleted text begin (10)deleted text end new text begin (9) new text end approve early retirement and optional annuity factors, subject to review by the
actuary retained by the Legislative Commission on Pensions and Retirement; establish the
schedule for implementation of the approved factors; and notify the Legislative Commission
on Pensions and Retirement of the implementation schedule.

(b) In passing upon all applications and claims, the board may summon, swear, hear,
and examine witnesses and, in the case of claims for disability benefits, may require the
claimant to submit to a medical examination by a physician of the board's choice, at the
expense of the fund, as a condition precedent to the passing on the claim, and, in the case
of all applications and claims, may conduct investigations necessary to determine their
validity and merit.

(c) The board may continue to authorize the sale of life insurance to members under the
insurance program in effect on January 1, 1985, but must not change that program without
the approval of the commissioner of management and budget. The association shall not
receive any financial benefit from the life insurance program beyond the amount necessary
to reimburse the association for costs incurred in administering the program. The association
shall not engage directly or indirectly in any other activity involving the sale or promotion
of goods or services, or both, whether to members or nonmembers.

(d) The board shall establish procedures governing reimbursement of expenses to board
members. These procedures must define the types of activities and expenses that qualify
for reimbursement, must provide that all out-of-state travel be authorized by the board, and
must provide for the independent verification of claims for expense reimbursement. The
procedures must comply with the applicable rules and policies of the Department of
Management and Budget and the Department of Administration.

(e) The board may purchase fiduciary liability insurance and official bonds for the
officers and members of the board of trustees and employees of the association and may
purchase property insurance or may establish a self-insurance risk reserve including, but
not limited to, data processing insurance and "extra-expense" coverage.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 6.

Minnesota Statutes 2016, section 353.29, subdivision 4, is amended to read:

Subd. 4.

Application for annuity.

Application for a retirement annuity new text begin or optional
annuity new text end may be made by a member or by a person deleted text begin authorized to actdeleted text end new text begin acting new text end on behalf of the
membernew text begin , upon proof of authority satisfactory to the executive directornew text end . Every application
deleted text begin for retirementdeleted text end must be made deleted text begin in writingdeleted text end on a form new text begin or in a format new text end prescribed by the executive
director and must be substantiated by deleted text begin writtendeleted text end proof of the member's age and identity. The
notarized signature of a member's spouse on a retirement annuity application acknowledging
the member's annuity selection meets the notice requirement to the spouse under section
356.46, subdivision 3. An application for a retirement annuity is not complete until all
necessary supporting documents are received by the executive director.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 7.

Minnesota Statutes 2016, section 353.29, subdivision 7, is amended to read:

Subd. 7.

deleted text begin Annuities; accrualdeleted text end new text begin Annuity starting datenew text end .

(a) Except as deleted text begin to elected public
officialsdeleted text end new text begin specified in paragraph (b)new text end , a retirement annuity granted under this chapter begins
deleted text begin withdeleted text end new text begin on new text end the first day of the first calendar month after the date of termination of public servicenew text begin
or up to six months before the first of the month in which a complete application is received
by the executive director under subdivision 4, whichever is laternew text end . The annuity must be paid
in equal monthly installments deleted text begin and does not accruedeleted text end new text begin , unless suspended or reduced under
section 353.37. Annuity payments shall not be paidnew text end beyond the end of the month in which
entitlement to the annuity has terminated.

(b) An annuity granted to an deleted text begin electivedeleted text end new text begin elected new text end public official deleted text begin accruesdeleted text end new text begin may begin new text end on the
day following new text begin the new text end expiration of new text begin the new text end public office deleted text begin or expiration of the right to hold that officedeleted text end new text begin
that qualified the elected official for membership under section 353.01, subdivision 2a or
2d, if a complete application is received by the executive director under subdivision 4 within
six months of the date of termination of public servicenew text end . The annuity for the month during
which the expiration occurred is prorated accordingly.

deleted text begin (d) An annuity payment may be made retroactive for up to one year prior to that month
in which a complete application is received by the executive director under subdivision 4.
deleted text end

deleted text begin (e)deleted text end new text begin (d) new text end If an annuitant dies before negotiating the check for the month in which death
occurs, payment must first be made to the surviving spouse, or if none, then to the designated
beneficiary, or if none, lastly to the estate.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 8.

Minnesota Statutes 2016, section 353.30, subdivision 3c, is amended to read:

Subd. 3c.

Effective date of bounce-back annuity.

In the event of the death of the
designated optional annuity beneficiary before the retired employee or disabilitant, the
restoration of the normal single life annuity under subdivision 3a or 3b will take effect on
the first of the month following the date of death of the designated optional annuity
beneficiary or on the first of the month following deleted text begin one yeardeleted text end new text begin six months new text end before deleted text begin the date on
which a certified copydeleted text end new text begin satisfactory verification new text end of the death deleted text begin recorddeleted text end is deleted text begin received in the office
of the public employees retirement associationdeleted text end new text begin established by the executive directornew text end ,
whichever date is later.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 9.

Minnesota Statutes 2016, section 353.32, subdivision 1, is amended to read:

Subdivision 1.

Before retirement.

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 10.

Minnesota Statutes 2016, section 353.34, subdivision 2, is amended to read:

Subd. 2.

Refund with interest.

(a) Except as provided in subdivision 1, any person who
ceases to be a public employee is entitled to receive a refund in an amount equal to
accumulated deductions deleted text begin withdeleted text end new text begin , less the sum of any disability benefits that have been paid by
the fund, plusnew text end annual compound interest to the first day of the month in which the refund
is processed.

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

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

(d) If the refund payable to a member is based on employee deductions that are
determined to be invalid under section 353.27, subdivision 7, the interest payable on the
invalid employee deductions is four percent.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 11.

Minnesota Statutes 2016, section 353.35, subdivision 1, is amended to read:

Subdivision 1.

Refund rights.

(b) A refund under section 353.651, subdivision 3, paragraph (c), does not result in a
forfeiture of salary credit for the allowable service credit covered by the refund.

(c) deleted text begin Thedeleted text end new text begin If a person forfeits service credits, rights, and benefits under paragraph (a), the
person's service credits, new text end rightsnew text begin ,new text end and benefits deleted text begin of a former member must notdeleted text end new text begin shall new text end be restored
deleted text begin untildeleted text end new text begin if new text end the person returns to deleted text begin active service and acquiresdeleted text end new text begin employment covered by the
association for new text end at least six months of allowable service deleted text begin credit after taking the last refunddeleted text end
and repays deleted text begin the refund or refunds taken and interestdeleted text end new text begin all amounts previously new text end received under
section 353.34, deleted text begin subdivisions 1 anddeleted text end new text begin subdivision new text end 2, plus interest at the annual rate of 8.5
percent until June 30, 2015, and eight percent thereafternew text begin ,new text end compounded annuallynew text begin , from the
date each amount was received to the date the amount is repaidnew text end . deleted text begin If the person elects to restore
service credit in a particular fund from which the person has taken more than one refund,
the person must repay all refunds to that fund. All refundsdeleted text end new text begin The repayment new text end must be deleted text begin repaiddeleted text end
new text begin made new text end within six months of the last deleted text begin date of terminationdeleted text end new text begin day new text end of public servicenew text begin employment.
A person may have service credits, rights, and benefits restored under this paragraph oncenew text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 12.

Minnesota Statutes 2016, section 353.37, subdivision 1, is amended to read:

Subdivision 1.

Salary maximums.

(a) The annuity of a person otherwise eligible for
an annuity from the general employees retirement plan of the Public Employees Retirement
Association, the public employees police and fire retirement plan, or the local government
correctional employees retirement plan must be suspended under subdivision 2 or reduced
under subdivision 3, whichever results in the higher annual annuity amount, deleted text begin ifdeleted text end new text begin upon new text end the
deleted text begin person reenters public service as a nonelectivedeleted text end new text begin person's employment as a nonelected new text end employee
of a governmental subdivision new text begin in a position not required by law to be a member of a plan
administered by the Minnesota State Retirement System, the Teachers Retirement
Association, or the St. Paul Teachers Retirement Fund Association, new text end or returns to work as
an employee of a labor organization that represents public employees who are association
members under this chapternew text begin ,new text end and salary for the reemployment service exceeds the annual
maximum earnings allowable for that age for the continued receipt of full benefit amounts
monthly under the federal Old Age, Survivors and Disability Insurance Program as set by
the secretary of health and human services under United States Code, title 42, section 403,
in any calendar year. If the person has not yet reached the minimum age for the receipt of
Social Security benefits, the maximum salary for the person is equal to the annual maximum
earnings allowable for the minimum age for the receipt of Social Security benefits.

(b) The provisions of paragraph (a) do not apply to the members of the general employees
plan of the Public Employees Retirement Association who were former members of MERF.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 13.

Minnesota Statutes 2016, section 353.64, subdivision 10, is amended to read:

Subd. 10.

Pension coverage for Hennepin Healthcare System, Inc.; paramedics and
emergency medical technicians.

An employee of Hennepin Healthcare System, Inc. is a
member of the public employees police and fire retirement plan under sections 353.63 to
353.68 if the person is:

(1) certified as a paramedic or emergency medical technician by the state under section
144E.28, subdivision 4;

(2) employed full time new text begin by Hennepin Healthcare System Inc., new text end asnew text begin :
new text end

new text begin (i)new text end a paramedic deleted text begin ordeleted text end new text begin ;
new text end

new text begin (ii) annew text end emergency medical technician deleted text begin by Hennepin Countydeleted text end ;new text begin or
new text end

new text begin (iii) a supervisor or manager of paramedics or emergency medical technicians;new text end and

(3) not eligible for coverage under the agreement signed between the state and the
secretary of the federal Department of Health and Human Services making the provisions
of the federal Old Age, Survivors, and Disability Insurance Act applicable to paramedics
and emergency medical technicians because the person's position is excluded after that date
from application under United States Code, title 42, sections 418(d)(5)(A) and 418(d)(8)(D),
and section 355.07.

Hennepin Healthcare System, Inc. shall deduct the employee contribution from the salary
of each full-time paramedic and emergency medical technician it employs as required by
section 353.65, subdivision 2, shall make the employer contribution for each full-time
paramedic and emergency medical technician it employs as required by section 353.65,
subdivision 3, and shall meet the employer recording and reporting requirements in section
353.65, subdivision 4.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 14.

Minnesota Statutes 2016, section 353F.02, subdivision 5a, is amended to read:

Subd. 5a.

Privatized former public employer.

"Privatized former public employer"
means a medical facility that was deleted text begin formerlydeleted text end included in the definition of governmental
subdivision under section 353.01, subdivision 6, new text begin on the day before the effective date of
privatization, new text end that is privatized and whose employees are certified for participation under
this chapter.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for privatizations with an effective date
of privatization under section 353F.02, subdivision 3, after June 30, 2017.
new text end

Sec. 15.

Minnesota Statutes 2016, section 353F.025, subdivision 2, is amended to read:

Subd. 2.

Reporting privatizations.

(a) If the actuarial calculations under subdivision
1, paragraph (c), indicate privatization can be approved because a net gain to the general
employees retirement plan of the Public Employees Retirement Association is expected, or
if paragraph (b) applies, the executive director shall, following acceptance of the actuarial
calculations by the board of trustees, forward notice and supporting documentation, including
a copy of the actuary's report and findings, to the chair and the executive director of the
Legislative Commission on Pensions and Retirement and the chairs and the ranking minority
members of the committees with jurisdiction over governmental operations in the house of
representatives and senate.

(b) If the calculations under subdivision 1, paragraph (c), indicate a net loss, the executive
director shall recommend to the board of trustees that the privatization be approved if the
chief clerical officer of the applicable governmental subdivision submits a resolution from
the governing body specifying that a lump sum payment will be made to the Public
Employees Retirement Association equal to the net loss, plus interest. The interest must be
computed using the applicable ultimate preretirement interest rate assumption under section
356.215, subdivision 8, expressed as a monthly rate, from the date of the actuarial valuation
from which the actuarial accrued liability data was used to determine the net loss in the
actuarial study under subdivision 1, to the date of payment, with annual compounding.
Payment must be made on or after the effective date of privatization.

(c) The Public Employees Retirement Association must maintain a list that includes the
names of all privatized former public employers in the association's comprehensive annual
financial report and on the association's Web site. deleted text begin Annually by March 1, the association
must submit to the executive director of the Legislative Commission on Pensions and
Retirement the names of any privatized former public employers approved since the
publication of the previous fiscal year's comprehensive annual financial report.
deleted text end

Sec. 16.

Minnesota Statutes 2016, section 353F.04, subdivision 2, is amended to read:

Subd. 2.

Exceptions.

The increased augmentation rates specified in subdivision 1 do
not apply to a privatized former public employee:

(1) beginning the first of the month in which the privatized former public employee
becomes covered again by a retirement plan enumerated in section 356.30, subdivision 3,
if the employee accrues at least six months of credited service in any single plan enumerated
in section 356.30, subdivision 3, except clause (6);

(2) beginning the first of the month in which the privatized former public employee
becomes covered again by the general employees retirement plan of the Public Employees
Retirement Association;

(3) beginning the first of the month after a privatized former public employee terminates
service with the deleted text begin successor entitydeleted text end new text begin privatized former public employernew text end ; or

(4) if the person begins receipt of a retirement annuity while employed by the employer
which assumed operations of or purchased the privatized former public employer.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for privatizations with an effective date
of privatization under section 353F.02, subdivision 3, after June 30, 2017.
new text end

Sec. 17.

Minnesota Statutes 2016, section 353F.05, is amended to read:

353F.05 AUTHORIZATION FOR ADDITIONAL ALLOWABLE SERVICE FOR
EARLY RETIREMENT PURPOSES.

(a) For the purpose of determining eligibility for early retirement benefits provided under
section 353.30, subdivision 1a, of the edition of Minnesota Statutes published in the year
before the year in which the privatization occurred, and notwithstanding any provision of
chapter 353, to the contrary, the years of allowable service for a privatized former public
employee who transfers employment on the effective date of privatization and does not
apply for a refund of contributions under section 353.34, subdivision 1, of the edition of
Minnesota Statutes published in the year before the year in which the privatization occurred,
or any similar provision, includes service with the deleted text begin successor employer to thedeleted text end privatized
former public employer following the effective date. The deleted text begin successordeleted text end new text begin privatized former public
new text end employer shall provide any reports that the executive director of the Public Employees
Retirement Association may reasonably request to permit calculation of benefits.

(b) To be eligible for early retirement benefits under this section, the individual must
separate from service with the deleted text begin successor to thedeleted text end privatized former public employer. The
privatized former public employee, or an individual authorized to act on behalf of that
employee, may apply for an annuity following application procedures under section 353.29,
subdivision 4.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for privatizations with an effective date
of privatization under section 353F.02, subdivision 3, after June 30, 2017.
new text end

Sec. 18.

Minnesota Statutes 2016, section 353F.057, is amended to read:

353F.057 TERMINATION FROM SERVICE REQUIREMENT.

Upon termination of service from the privatized former public employer deleted text begin or any successor
entitydeleted text end after the effective date of privatization, a privatized former public employee must
separate from any employment relationship with the privatized former public employer deleted text begin or
any successor entitydeleted text end for at least 30 days to qualify to receive a retirement annuity under this
chapter.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for privatizations with an effective date
of privatization under section 353F.02, subdivision 3, after June 30, 2017.
new text end

Sec. 19.

Minnesota Statutes 2016, section 353F.06, is amended to read:

353F.06 APPLICATION OF REEMPLOYED ANNUITANT EARNINGS
LIMITATIONS.

If a privatized former public employee satisfies the separation from service requirement
in section 353F.057 and thereafter resumes employment with the privatized former public
employer or deleted text begin any successor entity ordeleted text end a governmental subdivision under section 353.01,
subdivision 6, the reemployed annuitant earnings limitations of section 353.37 apply.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for privatizations with an effective date
of privatization under section 353F.02, subdivision 3, after June 30, 2017.
new text end

Sec. 20.

Minnesota Statutes 2016, section 353F.07, is amended to read:

353F.07 EFFECT ON REFUND.

Notwithstanding any provision of chapter 353 to the contrary, privatized former public
employees may receive a refund of employee accumulated contributions plus interest as
provided in section 353.34, subdivision 2, at any time after the transfer of employment to
the deleted text begin successor employer of thedeleted text end privatized former public employer. If a privatized former
public employee has received a refund from a pension plan listed in section 356.30,
subdivision 3, the person may not repay that refund unless the person again becomes a
member of one of those listed plans and complies with section 356.30, subdivision 2.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for privatizations with an effective date
of privatization under section 353F.02, subdivision 3, after June 30, 2017.
new text end

Sec. 21.

new text begin [353F.09] APPLICATION TO SALES OF PRIVATIZED FORMER PUBLIC
EMPLOYERS.
new text end

new text begin A medical facility or other employing unit shall cease to be a privatized former public
employer and its employees shall cease to be considered privatized former public employees
under this chapter upon the sale of the operations of the medical facility or employing unit
to another employer or the sale of the medical facility or employing unit to another employer.
The privatized former public employees shall be entitled to benefits accrued under this
chapter to the date of the sale, but shall not accrue additional benefits after the date of the
sale.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin The section is effective for privatizations with an effective date
of privatization under section 353F.02, subdivision 3, after June 30, 2017, and for sales of
privatized former public employers after June 30, 2017.
new text end

Sec. 22. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2016, section 353.0161, new text end new text begin is repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

ARTICLE 11

TEACHERS RETIREMENT ASSOCIATION
ADMINISTRATIVE PROVISIONS

Section 1.

Minnesota Statutes 2016, section 354.05, subdivision 2, is amended to read:

Subd. 2.

Teacher.

(a) "Teacher" means:

(1) a person who renders service as a teacher, supervisor, principal, superintendent,
librarian, nurse, counselor, social worker, therapist, or psychologist innew text begin :
new text end

new text begin (i)new text end a public school of the state other than in Independent School District No. 625 deleted text begin or in
Independent School District No. 709, or in anydeleted text end new text begin ;
new text end

new text begin (ii) anew text end charter schooldeleted text begin , irrespective of the location of the school, or in anydeleted text end new text begin ;
new text end

new text begin (iii) anew text end charitable, penal, or correctional deleted text begin institutionsdeleted text end new text begin institution new text end of a governmental
subdivisiondeleted text begin ,deleted text end new text begin ;new text end or

new text begin (iv) the Perpich Center for Arts Education, except that any employee of the Perpich
Center for Arts Education who was covered by the Minnesota State Retirement System
general state employees retirement plan as of July 1, 2016, shall continue to be covered by
that plan and not by the Teachers Retirement Association;
new text end

new text begin (2) a personnew text end who is engaged in educational administration in connection with the state
public school system, whether the position be a public office or deleted text begin andeleted text end new text begin as new text end employment;

new text begin (3) a person who renders service as a charter school director or chief administrative
officer; provided, however, that if the charter school director or chief administrative officer
is covered by the Public Employees Retirement Association general employees retirement
plan on July 1, 2017, the charter school director or chief administrative officer shall continue
to be covered by that plan and not by the Teachers Retirement Association;
new text end

deleted text begin (2)deleted text end new text begin (4) new text end an employee of the Teachers Retirement Association;

deleted text begin (3)deleted text end new text begin (5) new text end a person who renders teaching service on a part-time basis and who also renders
other services for a single employing unit where the teaching service comprises at least 50
percent of the combined employment salary is a member of the association for all services
with the single employing unit or, if less than 50 percent of the combined employment
salary, the executive director determines all of the combined service is covered by the
association; or

deleted text begin (4)deleted text end new text begin (6) new text end a person who is not covered by the plans established under chapter 352D, 354A,
or 354B and who is employed by the Board of Trustees of the Minnesota State Colleges
and Universities system in an unclassified position as:

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

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

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

(iv) a teacher or a research assistant.

(b) "Teacher" does not mean:

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

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

deleted text begin (3) a person exempt from licensure under section 122A.30;
deleted text end

deleted text begin (4)deleted text end new text begin (2) new text end annuitants of the teachers retirement plan who are employed after retirement by
an employing unit that participates in the teachers retirement plan during the course of that
reemployment;

deleted text begin (5)deleted text end new text begin (3) new text end a person who is employed by the University of Minnesota;

deleted text begin (6)deleted text end new text begin (4) new text end a member or an officer of any general governing or managing board or body of
an employing unit that participates in the teachers retirement plan; or

deleted text begin (7)deleted text end new text begin (5) new text end a person employed by Independent School District No. 625 deleted text begin or Independent School
District No. 709deleted text end as a teacher as defined in section 354A.011, subdivision 27.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 2.

Minnesota Statutes 2016, section 354.05, is amended by adding a subdivision to
read:

new text begin Subd. 17a. new text end

new text begin Former spouse. new text end

new text begin "Former spouse" means a person who is no longer a spouse
of a member due to dissolution of the marriage, legal separation, or annulment.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 3.

Minnesota Statutes 2016, section 354.06, subdivision 2, is amended to read:

Subd. 2.

President; executive director.

The board shall annually elect one of its members
as president. It shall elect an executive director. Notwithstanding any law to the contrary,
the board must set the salary of the executive director. The salary of the executive director
must not exceed the limit for a position listed in section 15A.0815, subdivision 2. deleted text begin The salary
of the assistant executive director who shall be in the unclassified service, shall be set in
accordance with section 43A.18, subdivision 3.deleted text end The executive director shall serve during
the pleasure of the board and be the executive officer of the board, with such duties as the
board shall prescribe. The board shall employ all other clerks and employees necessary to
properly administer the association. The cost and expense of administering the provisions
of this chapter shall be paid by the association. The new text begin board shall appoint an new text end executive director
deleted text begin shall be appointed by the boarddeleted text end on the basis of deleted text begin fitnessdeleted text end new text begin educationnew text end , experience in the retirement
field deleted text begin and leadershipdeleted text end new text begin ,new text end abilitynew text begin to manage and lead system staff, and ability to assist the board
in setting a vision for the systemnew text end . The executive director shall have had at least five years
of experience on the administrative staff of a major retirement system.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 4.

Minnesota Statutes 2016, section 354.06, subdivision 2a, is amended to read:

Subd. 2a.

Duties of executive director.

The management of the association is vested
in the executive director who shall be the executive and administrative head of the
association. The executive director shall act as advisor to the board on all matters pertaining
to the association and shall also act as the secretary of the board. The executive director
shall:

(1) attend all meetings of the board;

(2) prepare and recommend to the board appropriate rules to carry out the provisions of
this chapter;

(3) establish and maintain an adequate system of records and accounts following
recognized accounting principles and controls;

(4) designatenew text begin , as necessary, a deputy executive director andnew text end an assistant executive director
in the unclassified servicenew text begin , as defined in section 43A.08, whose salaries shall be set in
accordance with section 43A.18, subdivision 3,new text end and two assistant executive directors in the
classified servicenew text begin , as defined in section 43A.07,new text end with the approval of the board, and appoint
such employees, both permanent and temporary, as are necessary to carry out the provisions
of this chapter;

(5) organize the work of the association as the director deems necessary to fulfill the
functions of the association, and define the duties of its employees and delegate to them
any powers or duties, subject to the director's control and under such conditions as the
director may prescribe;

(6) with the approval of the board, contract and set the compensation for the services of
an approved actuary, professional management services, and any other consulting services.
These contracts are not subject to the competitive bidding procedure prescribed by chapter
16C. An approved actuary retained by the executive director shall function as the actuarial
advisor of the board and the executive director and may perform actuarial valuations and
experience studies to supplement those performed by the actuary retained under section
356.214. Any supplemental actuarial valuations or experience studies shall be filed with
the executive director of the Legislative Commission on Pensions and Retirement. Copies
of professional management survey reports must be transmitted to the secretary of the senate,
the chief clerk of the house of representatives, and the Legislative Reference Library as
provided by section 3.195, and to the executive director of the commission at the same time
as reports are furnished to the board. Only management firms experienced in conducting
management surveys of federal, state, or local public retirement systems are qualified to
contract with the executive director;

(7) with the approval of the board, provide in-service training for the employees of the
association;

(8) make refunds of accumulated contributions to former members and to the designated
beneficiary, surviving spouse, legal representative, or next of kin of deceased members or
deceased former members, under this chapter;

(9) determine the amount of the annuities and disability benefits of members covered
by the association and authorize payment of the annuities and benefits beginning as of the
dates on which the annuities and benefits begin to accrue, under this chapter;

(10) pay annuities, refunds, survivor benefits, salaries, and necessary operating expenses
of the association;

(11) prepare and submit to the board and the legislature an annual financial report
covering the operation of the association, as required by section 356.20;

(12) certify funds available for investment to the State Board of Investment;

(13) with the advice and approval of the board, request the State Board of Investment
to sell securities on determining that funds are needed for the purposes of the association;

(14) prepare and submit biennial and annual budgets to the board and with the approval
of the board submit those budgets to the Department of Management and Budget; and

(15) with the approval of the board, perform such other duties as may be required for
the administration of the association and the other provisions of this chapter and for the
transaction of its business. The executive director may:

(i) reduce all or part of the accrued interest and fines payable by an employing unit for
reporting requirements under deleted text begin section 354.52deleted text end new text begin chapter 354new text end , based on an evaluation of any
extenuating circumstances of the employing unit;

(ii) assign association employees to conduct field audits of an employing unit to ensure
compliance with the provisions of this chapter; and

(iii) recover overpayments, if not repaid to the association, by suspending or reducing
the payment of a retirement annuity, refund, disability benefit, survivor benefit, or optional
annuity under this chapter until the overpayment, plus interest, has been recovered.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 5.

Minnesota Statutes 2016, section 354.095, is amended to read:

354.095 MEDICAL LEAVE.

new text begin (a) new text end Upon granting a medical leave, an employing unit must certify the leave to the
association on a form specified by the executive director. A member of the association who
is on an authorized medical leave of absence is entitled to receive allowable service credit,
not to exceed deleted text begin one yeardeleted text end new text begin five yearsnew text end , for the period of leave, upon making the prescribed
payment to the fund under section 354.72. A member may not receive more than one year
of allowable service credit during any fiscal year by making payment under this section. A
member may not receive disability benefits under section 354.48 and receive allowable
service credit under this section for the same period of time.

new text begin (b) The executive director shall reject an application for disability benefits under section
354.48 if the member is applying only because an employer-sponsored provider of private
disability insurance benefits requires such an application and the member would not have
applied for disability benefits in the absence of such requirement. The member shall submit
a copy of the disability insurance policy that requires an application for disability benefits
from the plan if the member wishes to assert that the application is only being submitted
because of the disability insurance policy requirement.
new text end

new text begin (c)new text end Notwithstanding the provisions of any agreement to the contrary, employee and
employer contributions may not be made to receive allowable service credit under this
section if the member does not retain the right to full reinstatement both during and at the
end of the medical leave.

new text begin EFFECTIVE DATE. new text end

new text begin Paragraphs (a) and (c) are effective July 1, 2018. Paragraph (b)
is effective retroactively from July 1, 2016.
new text end

Sec. 6.

Minnesota Statutes 2016, section 354.44, subdivision 3, is amended to read:

Subd. 3.

Application for retirement.

A member or a person authorized to act on behalf
of the member may make application for retirement provided the age and service
requirements under subdivision 1 are satisfied on or before the member's retirement annuity
accrual date under subdivision 4. The application may be made no earlier than deleted text begin 120deleted text end new text begin 180 new text end days
before the termination of teaching service. The application must be made on a form prescribed
by the executive director and is not complete until all necessary supporting documents are
received by the executive director.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2018.
new text end

Sec. 7.

Minnesota Statutes 2016, section 354.44, subdivision 9, is amended to read:

Subd. 9.

Determining applicable law.

A former teacher who returns to covered service
following a termination and who is not receiving a retirement annuity under this section
must have earned at least deleted text begin 85 daysdeleted text end new text begin one-half year new text end of credited service following the return to
covered service to be eligible for improved benefits resulting from any law change enacted
subsequent to that termination.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 8.

Minnesota Statutes 2016, section 354.45, is amended by adding a subdivision to
read:

new text begin Subd. 3. new text end

new text begin Payment upon death of former spouse. new text end

new text begin Upon the death of the former spouse
to whom payments are to be made before the end of the specified payment period, payments
shall be made according to the terms of a beneficiary form completed by the former spouse
or, if no beneficiary form, to the estate of the former spouse or as otherwise ordered by a
court of competent jurisdiction.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 9.

Minnesota Statutes 2016, section 354.46, subdivision 6, is amended to read:

Subd. 6.

Application.

(a) A beneficiary designation and an application for benefits under
this section must be in writing on a form prescribed by the executive director.

(b) Sections 354.55, subdivision 11, and 354.60 apply to a deferred annuity payable
under this section.

(c) Unless otherwise specified, the annuity must be computed under section 354.44,
subdivision 2 or 6, whichever is applicable.

new text begin (d) Each designated beneficiary eligible for a lifetime benefit under this subdivision may
apply for an annuity any time after the member's death. The benefit may not begin to accrue
more than six months before the date the application is filed with the executive director and
may not accrue before the member's death.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 10.

Minnesota Statutes 2016, section 354.48, subdivision 1, is amended to read:

Subdivision 1.

Age, service and salary requirements.

A member who is totally and
permanently disablednew text begin , who has not reached the normal retirement age as defined in section
354.05, subdivision 38,new text end and new text begin who new text end has at least three years of credited allowable service at the
time that the total and permanent disability begins is entitled to a disability benefit based
on this allowable service in an amount provided in subdivision 3. If the disabled member's
teaching service has terminated at any time, at least two of the required three years of
allowable service must have been rendered after last becoming a member. deleted text begin Any member
whose average salary is less than $75 per month is not entitled to disability benefits.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 11.

Minnesota Statutes 2016, section 354.512, is amended to read:

354.512 RECOVERY OF DEFICIENCIES.

In addition to any other remedies permitted under law, if an employing unit or other
entity required by law to make any form of payment to the Teachers Retirement Association
fails to make full payment deleted text begin within 60 days of notificationdeleted text end , the executive director is authorized
to certify the amount of deficiency to the commissioner of management and budget, who
shall deduct the amount from any state aid or appropriation applicable to the employing
unit or entity, and transmit the withheld aid or appropriation to the executive director for
deposit in the fund.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 12.

Minnesota Statutes 2016, section 354.52, subdivision 4, is amended to read:

Subd. 4.

Reporting and remittance requirements.

An employer shall remit all amounts
due to the association and furnish a statement indicating the amount due and transmitted
with any other information required by the executive director. If an amount due is not
received by the association within 14 calendar days of the payroll warrant, the amount
accrues interest at an annual rate of 8.5 percent compounded annually from the due date
until the amount is received by the association. All amounts due and other employer
obligations not remitted deleted text begin within 60 days of notification by the association mustdeleted text end new text begin may new text end be
certified to the commissioner of management and budget who shall deduct the amount from
any state aid or appropriation amount applicable to the employing unit.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 13.

Minnesota Statutes 2016, section 354.52, subdivision 4d, is amended to read:

Subd. 4d.

Annual base salary reporting.

An employing unit must provide deleted text begin the followingdeleted text end
new text begin annual base salary new text end datanew text begin , as defined in section 354.05, subdivision 41,new text end to the association on
or before June 30 of each fiscal yeardeleted text begin : (1) annual base salary, as defined in section 354.05,
subdivision 41; anddeleted text end new text begin .
new text end

deleted text begin (2) beginning and ending dates for the regular school work year.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 14.

Minnesota Statutes 2016, section 354.55, subdivision 11, is amended to read:

Subd. 11.

Deferred annuity; augmentation.

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

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

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

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

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

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

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

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

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

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

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

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

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

deleted text begin (j)deleted text end new text begin (i) new text end In no case may the annuity payable under this subdivision be less than the amount
of annuity payable under section 354.44, subdivision 6.

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

deleted text begin (l)deleted text end new text begin (k) new text end The augmentation provided by this subdivision applies to the benefit provided in
section 354.46, subdivision 2.

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

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2018.
new text end

Sec. 15.

Minnesota Statutes 2016, section 354.66, subdivision 2, is amended to read:

Subd. 2.

Qualified part-time teacher program participation requirements.

(a) A
teacher in a Minnesota public elementary school, a Minnesota secondary school, or the
Minnesota State Colleges and Universities system who has three years or more of allowable
service in the association or three years or more of full-time teaching service in Minnesota
public elementary schools, Minnesota secondary schools, or the Minnesota State Colleges
and Universities system, by agreement with the board of the employing district or with the
authorized representative of the board, may be assigned to teaching service in a part-time
teaching position under subdivision 3. The agreement must be executed before October 1
of the school year for which the teacher deleted text begin requests to make retirement contributions under
subdivision 4deleted text end new text begin has been assigned to teaching service in a part-time teaching position under
this sectionnew text end . A copy of the executed agreement must be filed with the executive director of
the association. If the copy of the executed agreement is filed with the association after
October 1 of the school year for which the teacher deleted text begin requests to make retirement contributions
under subdivision 4deleted text end new text begin has been assigned to teaching service in a part-time teaching positionnew text end ,
the employing unit shall pay the fine specified in section 354.52, subdivision 6, for each
calendar day that elapsed since the October 1 due datenew text begin , unless the association waives the
finenew text end . The association may not accept an executed agreement that is received by the association
more than 15 months late. deleted text begin The association may not waive the fine required by this section.
deleted text end

(b) Notwithstanding paragraph (a), if the teacher is also a legislator:

(1) the agreement in paragraph (a) must be executed before March 1 of the school year
for which the teacher requests to make retirement contributions under subdivision 4; and

(2) the fines specified in paragraph (a) apply if the employing unit does not file the
executed agreement with the executive director of the association by March 1.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 16.

Minnesota Statutes 2016, section 354.72, subdivision 1, is amended to read:

Subdivision 1.

Application.

This section applies to any strike period under section
354.05, subdivision 13, clause (6), and to any period of authorized leave of absence deleted text begin without
paydeleted text end under sections 354.093, 354.094, 354.095, and 354.096 for which the teacher obtains
credit for allowable service by making payment as specified in this section to the Teachers
Retirement Association fund. Each year of an extended leave of absence under section
354.094 is considered to be a separate leave for purposes of this section.

Sec. 17.

Minnesota Statutes 2016, section 423A.02, subdivision 3, is amended to read:

Subd. 3.

Reallocation of amortization state aid.

(a) Seventy percent of the difference
between $5,720,000 and the current year amortization aid distributed under subdivision 1
that is not distributed for any reason to a municipality must be distributed by the
commissioner of revenue according to this paragraph. The commissioner shall distribute
60 percent of the amounts derived under this paragraph to the Teachers Retirement
Association, and 40 percent to the St. Paul Teachers Retirement Fund Association to fund
the unfunded actuarial accrued liabilities of the respective funds. These payments must be
made on July 15 each fiscal year. If the St. Paul Teachers Retirement Fund Association deleted text begin or
the Duluth Teachers Retirement Fund Associationdeleted text end becomes fully funded, the association's
eligibility for its portion of this aid ceases. Amounts remaining in the undistributed balance
account at the end of the biennium if aid eligibility ceases cancel to the general fund.

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

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

ARTICLE 12

ST. PAUL TEACHERS RETIREMENT FUND ASSOCIATION
ADMINISTRATIVE PROVISIONS

Section 1.

Minnesota Statutes 2016, section 354A.093, subdivision 4, is amended to read:

Subd. 4.

Eligible payment period.

(a) To receive service credit under this section, the
contributions specified in this section must be transmitted to the deleted text begin applicable first class citydeleted text end
new text begin St. Paul new text end Teachers Retirement Fund Association during the period which begins with the
date the individual returns to teaching service and which has a duration of three times the
length of the uniformed service period, but not to exceed five years.

(b) Notwithstanding paragraph (a), if the payment period determined under paragraph
(a) is less than one year, the contributions required under this section to receive service
credit may be made within one year from the discharge date.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 2.

Minnesota Statutes 2016, section 354A.38, is amended to read:

354A.38 EFFECT OF REFUND; REPAYMENT OF REFUND.

Subdivision 1.

Effect of refund; termination of service credit.

If a coordinated member
or former coordinated member applies for and deleted text begin acceptsdeleted text end new text begin is issued new text end a refund pursuant to section
354A.37, all allowable service which was credited to the member or former member shall
be terminated.

Subd. 2.

Repayment of refund.

A coordinated member with at least two years of
allowable service credited subsequent to the member's last application for and deleted text begin acceptancedeleted text end
new text begin payment new text end of a refund pursuant to section 354A.37 shall be entitled to repay the refund. The
amount of the refund repayment shall be calculated pursuant to subdivision 3. If the member
has deleted text begin previously applied for and accepteddeleted text end new text begin taken new text end more than one refund, deleted text begin and the previous refund
ordeleted text end new text begin all new text end refunds deleted text begin have not beendeleted text end new text begin must be new text end repaiddeleted text begin , then the member shall be entitled only to repay
all outstanding refunds and shall not be entitled to repay only the most recent refunddeleted text end new text begin pro
ratanew text end .

Subd. 3.

Computation of refund repayment amount.

If the coordinated member elects
to repay a refund under subdivision 2, the repayment to the fund must be in an amount equal
to refunds the member has deleted text begin accepteddeleted text end new text begin been issuednew text end plus interest at the deleted text begin rate of 8.5 percent until
June 30, 2015, and eight percent thereafterdeleted text end new text begin applicable annual rate or rates specified in section
356.59, subdivision 5, new text end compounded annuallynew text begin ,new text end from the date that the refund was deleted text begin accepteddeleted text end
new text begin issued new text end to the date that the refund is repaid.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

ARTICLE 13

RETIREMENT SYSTEMS, GENERALLY
ADMINISTRATIVE PROVISIONS

Section 1.

Minnesota Statutes 2016, section 356.32, subdivision 2, is amended to read:

Subd. 2.

Covered retirement plans.

The provisions of this section apply to the following
retirement plans:

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

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

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

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

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

(6) new text begin the local government correctional service retirement plan of the Public Employees
Retirement Association, established under chapter 353E;
new text end

new text begin (7) new text end the Teachers Retirement Association, established under chapter 354; and

deleted text begin (7)deleted text end new text begin (8) new text end the St. Paul Teachers Retirement Fund Association, established under chapter
354A.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 2.

Minnesota Statutes 2016, section 356.47, subdivision 3, is amended to read:

Subd. 3.

Payment.

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

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

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

(d) new text begin If the amount under subdivision 2 is an eligible rollover distribution as defined in
section 356.635, subdivisions 4 and 5, the applicable retirement plan shall provide notice
and an election:
new text end

new text begin (1) to the member regarding the member's right to elect a direct rollover under section
356.635, subdivisions 3 to 7, new text end in lieu of deleted text begin thedeleted text end new text begin a new text end direct payment deleted text begin of the person's amount under
subdivision 2, on or after the payment date under paragraph (a), if the federal Internal
Revenue Code so permits, the retired member may elect to have all or any portion of the
payment amount under this section paid in the form of a direct rollover to an eligible
retirement plan as defined in section 402(c) of the federal Internal Revenue Code that is
specified by the retired member. If the retired member dies with a balance remaining payable
under this section, the surviving spouse of the retired member, or if none, the deceased
person's designated beneficiary, or if none, the administrator of the deceased person's estate
may elect a direct rollover under this paragraph.deleted text end new text begin ; or
new text end

new text begin (2) if paragraph (c) applies and the amount is to be paid to a person who is a distributee
as defined in section 356.635, subdivision 7, to the distributee regarding the distributee's
right to elect a direct rollover under section 356.635, subdivisions 3 to 7, in lieu of a direct
payment.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 3.

Minnesota Statutes 2016, section 356.635, is amended by adding a subdivision to
read:

new text begin Subd. 9a. new text end

new text begin Definitions. new text end

new text begin (a) The following definitions apply for purposes of this subdivision
and subdivisions 10 to 12.
new text end

new text begin (b) "Annual addition" means the sum for the limitation year of all pretax and after-tax
contributions made by the member or the member's employer and credited to an account in
the name of the member in any defined contribution plan maintained by the employer.
new text end

new text begin (c) "Compensation" means the compensation actually paid or made available to a member
for any limitation year, including all items of remuneration described in Code of Federal
Regulations, title 26, section 1.415(c)-2(b), and excluding all items of remuneration described
in Code of Federal Regulations, title 26, section 1.415(c)-2(c). Compensation for pension
plan purposes for any limitation year shall not exceed the applicable federal compensation
limit described in section 356.611, subdivision 2.
new text end

new text begin (d) "Limitation year" means the calendar year or fiscal year, whichever is applicable to
the particular pension plan.
new text end

new text begin (e) "Maximum permissible benefit" means an annual benefit of $160,000, automatically
adjusted under section 415(d) of the Internal Revenue Code for each limitation year ending
after December 31, 2001, payable in the form of a single life annuity. The new limitation
shall apply to limitation years ending with or within the calendar year of the date of the
adjustment, but a member's benefits shall not reflect the adjusted limit prior to January 1 of
that calendar year. The maximum permissible benefit amount shall be further adjusted as
follows:
new text end

new text begin (1) if the member has less than ten years of participation, the maximum permissible
benefit shall be multiplied by a fraction, the numerator of which is the number of years (or
part thereof, but not less than one year) of participation in the plan, and the denominator of
which is ten;
new text end

new text begin (2) if the annual benefit begins before the member has attained age 62, the determination
as to whether the maximum permissible benefit limit has been satisfied shall be made, in
accordance with regulations prescribed by the United States secretary of the treasury, by
reducing the limit so that the limit, as so reduced, equals an annual benefit, beginning when
the annual benefit actually begins, which is equivalent to a $160,000, as adjusted, annual
benefit beginning at age 62; and
new text end

new text begin (3) if the annual benefit begins after the member has attained age 65, the determination
as to whether the maximum permissible benefit limit has been satisfied shall be made, in
accordance with regulations prescribed by the United States secretary of the treasury, by
increasing the limit so that the limit, as so increased, equals an annual benefit, beginning
when the annual benefit actually begins, which is equivalent to a $160,000, as adjusted,
annual benefit beginning at age 65.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 4.

Minnesota Statutes 2016, section 356.635, subdivision 10, is amended to read:

Subd. 10.

new text begin Annual new text end benefit limitationsnew text begin ; defined benefit plansnew text end .

new text begin (a) The annual benefit
payable to a member shall not exceed the maximum permissible benefit. If the benefit the
member would otherwise receive for a limitation year would result in the payment of an
annual benefit in excess of the maximum permissible benefit, the benefit shall be reduced
to the extent necessary so the benefit does not exceed the maximum permissible benefit.
new text end

new text begin (b) new text end For purposes of applying the deleted text begin limits of section 415(b) of the Internal Revenue Code,
a retirementdeleted text end new text begin limitation in paragraph (a), an annual new text end benefit that is payable in any form other
than a single life annuity deleted text begin and that is subject to section 417(e)(3) of the Internal Revenue
Code mustdeleted text end new text begin shall new text end be adjusted to an actuarially equivalent single life annuity that equals, if
the annuity starting date is in a plan year beginning after 2005, the annual amount of the
single life annuity commencing at the same annuity starting date that has the same actuarial
present value as the deleted text begin participant'sdeleted text end new text begin member's new text end form of benefit, using whichever of the following
produces the greatest annual amount:

(1) the interest rate and the mortality table or other tabular factor specified in the plan
for adjusting benefits in the same form;

(2) a 5.5 percent interest rate assumption and the applicable mortality table; or

(3) the applicable interest rate under section 417(e)(3) of the Internal Revenue Code and
the applicable mortality table, divided by 1.05.

new text begin (c) If a member participated in more than one pension plan in which the employer
participates, the benefits under each plan must be reduced proportionately to satisfy the
limitation in paragraph (a).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 5.

Minnesota Statutes 2016, section 356.635, is amended by adding a subdivision to
read:

new text begin Subd. 11. new text end

new text begin Annual addition limitation; defined contribution plans. new text end

new text begin The annual additions
by or on behalf of a member to a defined contribution plan for any limitation year shall not
exceed the lesser of (1) 100 percent of the member's compensation for the limitation year
or (2) the dollar limit in effect for the limitation year under section 415(c)(1)(A) of the
Internal Revenue Code, as adjusted by the United States secretary of the treasury under
section 415(d)(1)(C) of the Internal Revenue Code.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 6.

Minnesota Statutes 2016, section 356.635, is amended by adding a subdivision to
read:

new text begin Subd. 12. new text end

new text begin Incorporation by reference. new text end

new text begin Any requirements of section 415(b) and (c) of
the Internal Revenue Code and related regulations and agency guidance not addressed by
subdivisions 10 and 11 shall be considered incorporated by reference, including provisions
applicable to qualified police and firefighters and to survivor and disability benefits.
Subdivisions 10 to 12 shall be interpreted in a manner that is consistent with the requirements
of section 415(b) and (c) of the Internal Revenue Code and the related regulations.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 7.

Minnesota Statutes 2016, section 356.635, is amended by adding a subdivision to
read:

new text begin Subd. 13. new text end

new text begin Correction of errors. new text end

new text begin The executive director of each plan may correct an
operational, demographic, employer eligibility, or plan document error as the executive
director deems necessary or appropriate to preserve and protect the plan's tax qualification
under section 401(a) of the Internal Revenue Code, including as provided in the Internal
Revenue Service's Employee Plans Compliance Resolution System (EPCRS) or any successor
thereto. To the extent deemed necessary by the executive director to implement correction,
the executive director may:
new text end

new text begin (1) make distributions;
new text end

new text begin (2) transfer assets; or
new text end

new text begin (3) recover an overpayment by reducing future benefit payments or designating
appropriate revenue or source of funding that will restore to the plan the amount of the
overpayment.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 8.

Minnesota Statutes 2016, section 356.96, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

(a) Unless the language or context clearly indicates that a
different meaning is intended, for the purpose of this section, the terms in deleted text begin paragraphs (b)
to (e)deleted text end new text begin this subdivision new text end have the meanings given them.

(b) deleted text begin "Chief administrative officer"deleted text end new text begin "Executive director" new text end means the executive director of
a covered pension plan or the executive director's designee or representative.

(c) "Covered pension plan" means a plan enumerated in section 356.20, subdivision 2,
clauses (1) to (4), (8), and (11) to (14), but does not mean the deferred compensation plan
administered under sections 352.965 and 352.97 or to the postretirement health care savings
plan administered under section 352.98.

(d) "Governing board" means the Board of Trustees of the Public Employees Retirement
Association, the Board of Trustees of the Teachers Retirement Association, or the Board
of Directors of the Minnesota State Retirement System.

(e) "Person" deleted text begin includesdeleted text end new text begin means new text end an active, retired, deferred, or nonvested inactive participant
in a covered pension plan or a beneficiary of a participant, or an individual who has applied
to be a participant or who is or may be a survivor of a participant, or new text begin the representative of
new text end a state agency or other governmental unit that employs active participants in a covered
pension plan.

new text begin (f) "Petitioner" means a person who has filed a petition for review of an executive
director's determination under this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 9.

Minnesota Statutes 2016, section 356.96, subdivision 2, is amended to read:

Subd. 2.

Right to deleted text begin reviewdeleted text end new text begin appeal to executive director; determinationnew text end .

A deleted text begin determination
made by the chief administrative officerdeleted text end new text begin person may appeal a decision by the staff new text end of a
covered pension plan regarding deleted text begin adeleted text end new text begin the new text end person's eligibility, benefits, or other rights under the
plan deleted text begin with which the person does not agreedeleted text end new text begin to the executive director of the plan. The appeal
must be in writing and be delivered to the executive director. The executive director may
overturn, modify, or affirm the staff's decision. The executive director's determinationnew text end is
subject to review under this section.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 10.

Minnesota Statutes 2016, section 356.96, subdivision 3, is amended to read:

Subd. 3.

Notice of determination.

deleted text begin If the applicable chief administrative officer denies
an application or a written request, modifies a benefit, or terminates a benefit of a person
claiming a right or potential rights under a covered pension plan, the chief administrative
officer shall notify that person through a written notice containing: deleted text end new text begin The executive director
shall issue a written notice of determination to the person who files an appeal under
subdivision 2. The notice of determination must be delivered by certified mail to the address
to which the most recent benefit payment was sent or, if that address is that of a financial
institution, to the last known address of the person. The notice of determination shall include
the following:
new text end

(1) a statement of the reasons for the determination;

(2) a deleted text begin noticedeleted text end new text begin statement new text end that the person may petition the governing board of the covered
pension plan for a review of the determination and that a person's petition for review must
be filed in the administrative office of the covered pension plan deleted text begin withindeleted text end new text begin no later than new text end 60 days
deleted text begin of the receiptdeleted text end new text begin after the date new text end of the written notice of deleted text begin thedeleted text end determination;

(3) a statement indicating that a failure to petition for review within 60 days precludes
the person from deleted text begin contesting indeleted text end any deleted text begin otherdeleted text end new text begin further new text end administrative new text begin or judicial new text end review deleted text begin or court
procedure the issues determined by the chief administrative officerdeleted text end new text begin of the executive director's
determinationnew text end ;

(4) a statement indicating that all relevant materials, documents, affidavits, and other
records that the person wishes to be reviewed in support of the petition new text begin and a list of any
witnesses who will testify before the governing board, along with a summary of their
testimony, new text end must be filed with deleted text begin and received indeleted text end the administrative office of the covered pension
plan at least 15 days before the date of the hearing under subdivision 10new text begin or as directed by
the administrative law judge who conducts a fact-finding conference under subdivision 7,
paragraph (b), or a contested case hearing under subdivision 12, paragraph (b)new text end ; deleted text begin and
deleted text end

(5) a summary of this section, including all filing requirements and deadlinesdeleted text begin .deleted text end new text begin ; and
new text end

new text begin (6) the statement required under subdivision 4, paragraph (a), if applicable.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 11.

Minnesota Statutes 2016, section 356.96, subdivision 4, is amended to read:

Subd. 4.

Termination of benefits.

(a) If deleted text begin a covered pension plan decides todeleted text end new text begin the executive
director's determination will new text end terminate a benefit that is being paid to a person, deleted text begin before
terminating the benefit, the chief administrative officer must, in addition to the other
procedures prescribed in this section, provide the individual with written notice of the
pending benefit termination by certified mail. The notice must explain the reason for the
pending benefit termination. The person must be given andeleted text end new text begin the notice of determination must
also state that the person has the new text end opportunity to explain, in writing, in person, by telephone,
or by e-mail, the reasons that the benefit should not be terminated.

(b) If the deleted text begin chief administrative officer is unable to contact the person anddeleted text end new text begin notice of
determination is returned as undeliverable, and the person cannot be reached by any other
reasonable means of communication, and the executive director new text end determines that a failure
to terminate the benefit will result in unauthorized payment by a covered pension plan, the
deleted text begin chief administrative officerdeleted text end new text begin executive director new text end may terminate the benefit immediately deleted text begin upon
mailing a written notice containing the information required by subdivision 3 to the address
to which the most recent benefit payment was sent and, if that address is that of a financial
institution, to the last known address of the persondeleted text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 12.

Minnesota Statutes 2016, section 356.96, subdivision 5, is amended to read:

Subd. 5.

Petition for review.

(a) new text begin Upon receipt of the notice of determination required
in subdivision 3, new text end a person deleted text begin who claims a right under subdivision 2deleted text end may petition new text begin the governing
board of the covered pension plan new text end for a review of deleted text begin that decision by the governing board of
the covered pension plandeleted text end new text begin the executive director's determinationnew text end .

(b) deleted text begin A petition under this section must be sent to the chief administrative officer by mail
and must be postmarkeddeleted text end new text begin The petitioner must file the petition for review with the
administrative office of the covered pension plan new text end no later than 60 days after the deleted text begin person
receiveddeleted text end new text begin date of new text end the notice new text begin of determination new text end required by subdivision 3. new text begin Filing of the petition
is effective upon mailing or personal delivery. new text end The petition must include the deleted text begin person'sdeleted text end
new text begin petitioner's new text end statement of the reason or reasons that the deleted text begin person believes the decision of the
chief administrative officerdeleted text end new text begin determination of the executive director new text end should be reversed or
modified. deleted text begin The petition may include all documentation and written materials that the petitioner
deems to be relevant. In developing a record for review by the board when a decision is
appealed, the chief administrative officer may direct that the applicant participate in a
fact-finding session conducted by an administrative law judge assigned by the Office of
Administrative Hearings and, as applicable, participate in a vocational assessment conducted
by a qualified rehabilitation counselor on contract with the applicable retirement system.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 13.

Minnesota Statutes 2016, section 356.96, subdivision 6, is amended to read:

Subd. 6.

Failure to petition.

If a timely petition for review under subdivision 5 is not
filed with the deleted text begin chiefdeleted text end administrative deleted text begin officer,deleted text end new text begin office of new text end the covered pension deleted text begin plan'sdeleted text end new text begin plan, the
executive director's new text end determination is final and is not subject to further administrative or
judicial review.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 14.

Minnesota Statutes 2016, section 356.96, subdivision 7, is amended to read:

Subd. 7.

Notice of hearingnew text begin ; fact-finding; filing and timing requirementsnew text end .

(a) After
receiving a petition, the deleted text begin chief administrative officerdeleted text end new text begin executive director new text end must schedule a
deleted text begin timelydeleted text end new text begin hearing to new text end review deleted text begin ofdeleted text end the petition before the governing board of the covered pension
plannew text begin or the executive director may defer the scheduling of a hearing until after a fact-finding
conference under paragraph (b)new text end . deleted text begin The review must be scheduled to take into consideration
any necessary accommodations to allow the petitioner to participate in the governing board's
review.
deleted text end

new text begin (b) The executive director may direct the petitioner to participate in a fact-finding
conference conducted by an administrative law judge assigned by the Office of
Administrative Hearings. The fact-finding conference is an informal proceeding not subject
to the provisions of Minnesota Rules, chapter 1400, except that part 1400.7300 shall govern
the admissibility of evidence and part 1400.8603 shall govern how the fact-finding conference
is conducted. The administrative law judge must issue a report and a recommendation to
the governing board.
new text end

new text begin (c) If the petitioner's claim relates to disability benefits, the executive director may direct
the petitioner to participate in a vocational assessment conducted by a qualified rehabilitation
counselor under contract with the covered pension plan. The counselor must issue a report
regarding the assessment to the governing board.
new text end

deleted text begin (b)deleted text end new text begin (d) new text end Not less than 30 calendar days before the new text begin date new text end scheduled new text begin for the new text end hearing deleted text begin datedeleted text end new text begin
before the governing boardnew text end , the deleted text begin chief administrative officerdeleted text end new text begin executive director new text end must deleted text begin provide
by mail todeleted text end new text begin notify new text end the petitioner deleted text begin an acknowledgment of the receipt of the person's petition
and a follow-up noticedeleted text end of the time and place of the meeting at which the governing board
is scheduled to deleted text begin consider the petition anddeleted text end new text begin conduct the hearing. If there has been no fact-finding
conference under paragraph (b), not less than 15 days before the date scheduled for the
hearing, the petitioner and the executive director new text end must provide deleted text begin a copydeleted text end new text begin to the governing board
and the other party copies new text end of all deleted text begin relevant documents,deleted text end new text begin documentary new text end evidencedeleted text begin , summaries,
and recommendations assembled by or on behalf of the plan administration to be considered
by the governing boarddeleted text end new text begin that will be presented and a list of witnesses who will testify, along
with a summary of their testimonynew text end .

deleted text begin (c) All documents and materials that the petitioner wishes to be part of the record for
review must be filed with the chief administrative officer and must be received in the offices
of the covered pension plan at least 15 days before the date of the meeting at which the
petition is scheduled to be heard.
deleted text end

deleted text begin (d) Adeleted text end new text begin (e) The new text end petitioner may request a deleted text begin continuancedeleted text end new text begin postponement new text end of deleted text begin adeleted text end new text begin the date new text end scheduled
new text begin for the new text end hearing deleted text begin if the request is received by the chief administrative officer withindeleted text end new text begin before
the governing board within a reasonable time, but no later than new text end ten calendar days deleted text begin ofdeleted text end new text begin before
new text end the scheduled new text begin hearing new text end date deleted text begin of the applicable board meeting. The chief administrative officer
must reschedule the review within a reasonable time. Only one continuance may be granted
to any petitionerdeleted text end new text begin . A petitioner shall be granted only one postponement unless the applicable
covered pension plan agrees to additional postponementsnew text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 15.

Minnesota Statutes 2016, section 356.96, subdivision 8, is amended to read:

Subd. 8.

Record for review.

(a) All evidence, including all records, documents, and
affidavits in the possession of the covered pension plan of which the covered pension plan
desires to avail itself and be considered by the governing board, and all evidence which the
petitioner wishes to present to the governing board, including any evidence which would
otherwise be classified by law as "private," must be made part of the hearing record.

(b) The deleted text begin chief administrative officerdeleted text end new text begin executive director new text end must provide a copy of the record
to each member of the governing board at least deleted text begin sevendeleted text end new text begin five new text end days before the scheduled hearing
date.

(c) deleted text begin Any additional document, affidavit, or other relevant information that the petitioner
requests be part of the record may be admitted with the consent of the governing board.deleted text end new text begin If
a fact-finding conference under subdivision 7, paragraph (b), is not conducted, the record
is limited to those materials provided to the petitioner in accordance with subdivision 7,
paragraph (d), those filed by the petitioner with the covered pension plan in a timely manner
in accordance with subdivision 7, paragraph (e), any vocational assessment report under
subdivision 7, paragraph (c), and any testimony at the hearing before the governing board.
Any additional evidence may be placed in the record pursuant to subdivision 10, paragraph
(b).
new text end

new text begin (d) If a fact-finding conference under subdivision 7, paragraph (b), or a contested case
hearing under subdivision 12, paragraph (b), is conducted, the record before the governing
board must be limited to the following:
new text end

new text begin (1) the record from the Office of Administrative Hearings;
new text end

new text begin (2) seven-page submissions by the petitioner and a representative of the covered pension
plan commenting on the administrative law judge's recommendation; and
new text end

new text begin (3) any vocational assessment report under subdivision 7, paragraph (c).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 16.

Minnesota Statutes 2016, section 356.96, subdivision 9, is amended to read:

Subd. 9.

Amended determination.

At any time before the hearing before the governing
board, for good cause shown and made part of the records of the plan, the deleted text begin chief administrative
officerdeleted text end new text begin executive director new text end may reverse, alter, amend, or modify the prior decision which is
subject to review under this section by issuing an amended deleted text begin decisiondeleted text end new text begin determination to the
petitionernew text end . Upon doing so, the deleted text begin chief administrative officerdeleted text end new text begin executive director new text end may cancel
the governing board's scheduled review of the person's petition and deleted text begin shall sodeleted text end notify the
petitioner.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 17.

Minnesota Statutes 2016, section 356.96, subdivision 10, is amended to read:

Subd. 10.

new text begin Board new text end hearing.

(a) The governing board shall hold a timely hearing on a
petition for review as part of a regularly scheduled board meeting, or as part of a special
meeting if so scheduled. All governing board members who participate in the
decision-making process must be familiar with the record. The governing board shall make
its decision on a petition solely on the record as submitted and on the proceedings of the
hearing.

new text begin (b)new text end At the hearing, the petitioner, the petitioner's deleted text begin attorney, and the chief administrative
officerdeleted text end new text begin representative, if any, the executive director and a representative of the covered
pension plan who does not also serve as the governing board's legal advisor during the
board's decision-making process, new text end may state and discuss with the governing board their
positions with respect to the petition. new text begin If no fact-finding conference under subdivision 7,
paragraph (b), or contested case hearing under subdivision 12, paragraph (b), was conducted,
additional evidence may be received in the form of testimony from previously disclosed
witnesses. new text end The governing board may allow further documentation to be placed in the record
at the board meeting only with the agreement of both the deleted text begin chief administrative officerdeleted text end
new text begin executive director new text end and the petitioner. The deleted text begin chief administrative officerdeleted text end new text begin executive director
new text end may not otherwise participate in the board's decision-making process.

deleted text begin (b) When a petition presents a contested issue of law, an assistant attorney general may
participate and may argue on behalf of the legal position taken by the chief administrative
officer if that assistant attorney general does not also serve as the governing board's legal
advisor during the board's decision-making process.
deleted text end

deleted text begin (c) A motion by a board member, supported by a summary of the relevant facts,
conclusions and reasons, as properly amended and approved by a majority of the governing
board, constitutes the board's final decision. A verbatim statement of the board's final
decision must be served upon the petitioner. If the decision is contrary to the petitioner's
desired outcome, the notice shall inform the petitioner of the appeal rights set forth in
subdivision 13.
deleted text end

deleted text begin (d)deleted text end new text begin (c) new text end If a petitioner who received timely notice of a scheduled hearing fails to appear,
the governing board may nevertheless hear the petition and issue a decision.

new text begin (d) The governing board's decision shall be made upon a motion by a board member
and approval by a majority of the governing board. The governing board must issue its
decision as a written order containing findings of fact, conclusions of law, and the board's
decision no later than 30 days after the hearing. If the decision is contrary to the petitioner's
desired outcome, the notice must inform the petitioner of the appeal rights set forth in
subdivision 13.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 18.

Minnesota Statutes 2016, section 356.96, subdivision 11, is amended to read:

Subd. 11.

Disability medical issues.

deleted text begin (a)deleted text end If deleted text begin a person petitions the governing boarddeleted text end new text begin the
petitioner seeks new text end to reverse or modify a determination deleted text begin which founddeleted text end new text begin by the executive director
new text end that there deleted text begin exists nodeleted text end new text begin was insufficient new text end medical data deleted text begin supportingdeleted text end new text begin to support new text end an application for
disability benefits, the new text begin governing new text end board may reverse that determination only if there is deleted text begin in
factdeleted text end medical evidence supporting the application. The new text begin governing new text end board has the discretion
to resubmit a disability benefit application at any time to a medical advisor for
reconsideration, and the resubmission may include an instruction that further medical
examinations be obtained.

deleted text begin (b) The governing board may make a determination contrary to the recommendation of
the medical advisor only if there is expert medical evidence in the record to support its
contrary decision. If there is no medical evidence contrary to the opinion of the medical
advisor in the record and the medical advisor attests that the decision was made in accordance
with the applicable disability standard, the board must follow the decision of the medical
advisor regarding the cause of the disability.
deleted text end

deleted text begin (c) The obligation of the governing board to follow the decision of the medical advisor
under paragraph (b) does not apply to instances when the governing board makes a
determination different from the recommendation of the medical advisor on issues that do
not involve medical issues.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 19.

Minnesota Statutes 2016, section 356.96, subdivision 12, is amended to read:

Subd. 12.

Referral for administrative hearing.

(a) deleted text begin Notwithstanding any provision of
sections 14.03, 14.06, and 14.57 to 14.69 to the contrary, a challenge to a determination of
the chief administrative officer of a covered pension plandeleted text end new text begin A fact-finding conference under
subdivision 7, paragraph (b), new text end must be conducted exclusively under the procedures set forth
in this section and deleted text begin isdeleted text end not new text begin as new text end a contested case under chapter 14.

(b) deleted text begin Notwithstanding the provisions of paragraph (a),deleted text end A governing board, in its sole
discretion, may refer a petition brought under this section to the Office of Administrative
Hearings for a contested case hearing under sections 14.57 to 14.69.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 20.

Minnesota Statutes 2016, section 356.96, subdivision 13, is amended to read:

Subd. 13.

Appeal of the governing board's decision; judicial review.

deleted text begin Withindeleted text end new text begin No later
than new text end 60 days deleted text begin ofdeleted text end new text begin after new text end the date of the mailing of the notice of the governing board's decision,
the petitioner may appeal the decision by filing a writ of certiorari with the Court of Appeals
under section 606.01 and Rule 115 of the Minnesota Rules of Civil Appellate Procedure.
Failure by a person to appeal to the Court of Appeals within the 60-day period precludes
the person from later raising, in any subsequent administrative hearing or court proceeding,
those substantive and procedural issues that reasonably should have been raised upon a
timely appeal.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 21. new text begin REPEALER.
new text end

new text begin (a) new text end new text begin Minnesota Statutes 2016, section 356.611, subdivisions 3, 3a, 4, and 5, new text end new text begin are repealed.
new text end

new text begin (b) new text end new text begin Minnesota Statutes 2016, section 356.96, subdivisions 14 and 15, new text end new text begin are repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin Paragraph (a) is effective July 1, 2017. Paragraph (b) is effective
the day following final enactment.
new text end

ARTICLE 14

ACTUARIAL ASSUMPTION CHANGES

Section 1.

Minnesota Statutes 2016, section 356.215, subdivision 8, is amended to read:

Subd. 8.

Interest and salary assumptions.

(a) The actuarial valuation must use the
applicable following interest assumption:

(1) select and ultimate interest rate assumption

plan	ultimate interest rate assumption
teachers retirement plan	8.5%

The select preretirement interest rate assumption for the period through June 30, 2017,
is eight percent.

(2) single rate interest rate assumption

plan	interest rate assumption
general state employees retirement plan	8%
correctional state employees retirement plan	8
State Patrol retirement plan	8
legislators retirement plan, and for the constitutional officers calculation of total plan liabilities	0
judges retirement plan	8
general public employees retirement plan	8
public employees police and fire retirement plan	8
local government correctional service retirement plan	8
St. Paul teachers retirement plan	8
Bloomington Fire Department Relief Association	6
local monthly benefit volunteer firefighter relief associations	5
monthly benefit retirement plans in the statewide volunteer firefighter retirement plan	6

(b)(1) If funding stability has been attained, the valuation must use a postretirement
adjustment rate actuarial assumption equal to the postretirement adjustment rate specified
in section deleted text begin 354A.27, subdivision 7;deleted text end 354A.29, subdivision 9deleted text begin ;deleted text end new text begin ,new text end or 356.415, subdivision 1,
whichever applies.

(2) If funding stability has not been attained, the valuation must use a select postretirement
adjustment rate actuarial assumption equal to the postretirement adjustment rate specified
in section deleted text begin 354A.27, subdivision 6a;deleted text end 354A.29, subdivision 8deleted text begin ;deleted text end new text begin ,new text end or 356.415, subdivision 1a,
1b, 1c, 1d, 1e, or 1f, whichever applies, for a period ending when the approved actuary
estimates that the plan will attain the defined funding stability measure, and thereafter an
ultimate postretirement adjustment rate actuarial assumption equal to the postretirement
adjustment rate under section deleted text begin 354A.27, subdivision 7;deleted text end 354A.29, subdivision 9deleted text begin ;deleted text end new text begin ,new text end or 356.415,
subdivision 1, for the applicable period or periods beginning when funding stability is
projected to be attained.

(1) single rate future salary increase assumption

plan	future salary increase assumption
legislators retirement plan		5%
judges retirement plan		2.75
Bloomington Fire Department Relief Association		4

(2) age-related future salary increase deleted text begin age-related select and ultimate future salary increase
assumption or graded rate future salary increasedeleted text end assumption

plan	future salary increase assumption
local government correctional service retirement plan	assumption B
St. Paul teachers retirement plan	assumption A

For deleted text begin plans other thandeleted text end the St. Paul Teachers
Retirement deleted text begin plan and the local government
correctional service retirement plan, the select
calculation is:deleted text end new text begin Fund Association, new text end during deleted text begin thedeleted text end new text begin a
new text end designated select periodnew text begin of 15 years, in
addition to the age-based rates shown belownew text end ,
a designated percentage rate new text begin of 0.2 percent new text end is
multiplied by the result of deleted text begin the designated
integerdeleted text end new text begin 15 new text end minus T, where T is the number of
completed years of service, and is added to
the applicable future salary increase
assumption. deleted text begin The designated select period is
ten years and the designated integer is ten for
the local government correctional service
retirement plan and 15 for the St. Paul
Teachers Retirement Fund Association. The
designated percentage rate is 0.2 percent for
the St. Paul Teachers Retirement Fund
Association.
deleted text end

The ultimate future salary increase assumption is:

age	A	B
16	5.9%	8.75%
17	5.9	8.75
18	5.9	8.75
19	5.9	8.75
20	5.9	8.75
21	5.9	8.5
22	5.9	8.25
23	5.85	8
24	5.8	7.75
25	5.75	7.5
26	5.7	7.25
27	5.65	7
28	5.6	6.75
29	5.55	6.5
30	5.5	6.5
31	5.45	6.25
32	5.4	6.25
33	5.35	6.25
34	5.3	6
35	5.25	6
36	5.2	5.75
37	5.15	5.75
38	5.1	5.75
39	5.05	5.5
40	5	5.5
41	4.95	5.5
42	4.9	5.25
43	4.85	5
44	4.8	5
45	4.75	4.75
46	4.7	4.75
47	4.65	4.75
48	4.6	4.75
49	4.55	4.75
50	4.5	4.75
51	4.45	4.75
52	4.4	4.75
53	4.35	4.75
54	4.3	4.75
55	4.25	4.5
56	4.2	4.5
57	4.15	4.25
58	4.1	4
59	4.05	4
60	4	4
61	4	4
62	4	4
63	4	4
64	4	4
65	4	3.75
66	4	3.75
67	4	3.75
68	4	3.75
69	4	3.75
70	4	3.75

(3) service-related deleted text begin ultimatedeleted text end future salary increase assumption

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

service length	A	B	C	D	E	F
1	deleted text begin 10.25deleted text end new text begin 14new text end %	deleted text begin 11.78deleted text end new text begin 11.5new text end %	deleted text begin 12deleted text end new text begin 9.5new text end %	12.75%	7.75%	5.75%
2	deleted text begin 7.85 deleted text end new text begin 11.5 new text end	deleted text begin 8.65 deleted text end new text begin 8.5 new text end	deleted text begin 9 deleted text end new text begin 9.5 new text end	10.75	7.25	5.6
3	deleted text begin 6.65 deleted text end new text begin 6.25 new text end	deleted text begin 7.21 deleted text end new text begin 7 new text end	deleted text begin 8 deleted text end new text begin 7.75 new text end	8.75	6.75	5.45
4	deleted text begin 5.95 deleted text end new text begin 5.5 new text end	deleted text begin 6.33 deleted text end new text begin 6 new text end	deleted text begin 7.5 deleted text end new text begin 7.25 new text end	7.75	6.5	5.3
5	deleted text begin 5.45 deleted text end new text begin 5.25 new text end	deleted text begin 5.72 deleted text end new text begin 5.5 new text end	deleted text begin 7.25 deleted text end new text begin 7 new text end	6.25	6.25	5.15
6	deleted text begin 5.05 deleted text end new text begin 5.15 new text end	deleted text begin 5.27 deleted text end new text begin 5.2 new text end	7	5.85	6	5
7	deleted text begin 4.75 deleted text end new text begin 5 new text end	deleted text begin 4.91 deleted text end new text begin 4.9 new text end	6.85	5.55	5.75	4.85
8	deleted text begin 4.45 deleted text end new text begin 4.75 new text end	deleted text begin 4.62 deleted text end new text begin 4.8 new text end	6.7	5.35	5.6	4.7
9	deleted text begin 4.25 deleted text end new text begin 4.5 new text end	deleted text begin 4.38 deleted text end new text begin 4.7 new text end	6.55	5.15	5.45	4.55
10	deleted text begin 4.15 deleted text end new text begin 4.25 new text end	deleted text begin 4.17 deleted text end new text begin 4.5 new text end	6.4	5.05	5.3	4.4
11	deleted text begin 3.95 deleted text end new text begin 4.2 new text end	deleted text begin 3.99 deleted text end new text begin 4.25 new text end	6.25	4.95	5.15	4.3
12	deleted text begin 3.85 deleted text end new text begin 4.15 new text end	deleted text begin 3.83 deleted text end new text begin 4.1 new text end	6	4.85	5	4.2
13	deleted text begin 3.75 deleted text end new text begin 4.1 new text end	deleted text begin 3.69 deleted text end new text begin 4 new text end	5.75	4.75	4.85	4.1
14	deleted text begin 3.55 deleted text end new text begin 4.05 new text end	deleted text begin 3.57 deleted text end new text begin 3.9 new text end	5.5	4.65	4.7	4
15	deleted text begin 3.45 deleted text end new text begin 4 new text end	deleted text begin 3.45 deleted text end new text begin 3.9 new text end	5.25	4.55	4.55	3.9
16	deleted text begin 3.35 deleted text end new text begin 3.95 new text end	deleted text begin 3.35 deleted text end new text begin 3.85 new text end	5	4.55	4.4	3.8
17	deleted text begin 3.25 deleted text end new text begin 3.9 new text end	deleted text begin 3.26 deleted text end new text begin 3.8 new text end	4.75	4.55	4.25	3.7
18	deleted text begin 3.25 deleted text end new text begin 3.85 new text end	deleted text begin 3.25 deleted text end new text begin 3.75 new text end	4.5	4.55	4.1	3.6
19	deleted text begin 3.25 deleted text end new text begin 3.8 new text end	deleted text begin 3.25 deleted text end new text begin 3.75 new text end	deleted text begin 4.25 deleted text end new text begin 4.3 new text end	4.55	3.95	3.5
20	deleted text begin 3.25 deleted text end new text begin 3.75 new text end	deleted text begin 3.25 deleted text end new text begin 3.75 new text end	deleted text begin 4 deleted text end new text begin 4.2 new text end	4.55	3.8	3.5
21	deleted text begin 3.25 deleted text end new text begin 3.7 new text end	deleted text begin 3.25 deleted text end new text begin 3.75 new text end	deleted text begin 3.9 deleted text end new text begin 4.1 new text end	4.45	3.75	3.5
22	deleted text begin 3.25 deleted text end new text begin 3.65 new text end	deleted text begin 3.25 deleted text end new text begin 3.7 new text end	deleted text begin 3.8 deleted text end new text begin 4 new text end	4.35	3.75	3.5
23	deleted text begin 3.25 deleted text end new text begin 3.6 new text end	deleted text begin 3.25 deleted text end new text begin 3.6 new text end	deleted text begin 3.7 deleted text end new text begin 3.9 new text end	4.25	3.75	3.5
24	deleted text begin 3.25 deleted text end new text begin 3.55 new text end	deleted text begin 3.25 deleted text end new text begin 3.6 new text end	deleted text begin 3.6 deleted text end new text begin 3.8 new text end	4.25	3.75	3.5
25	deleted text begin 3.25 deleted text end new text begin 3.5 new text end	deleted text begin 3.25 deleted text end new text begin 3.6 new text end	deleted text begin 3.5 deleted text end new text begin 3.7 new text end	4.25	3.75	3.5
26	deleted text begin 3.25 deleted text end new text begin 3.5 new text end	deleted text begin 3.25 deleted text end new text begin 3.5 new text end	deleted text begin 3.5 deleted text end new text begin 3.6 new text end	4.25	3.75	3.5
27	deleted text begin 3.25 deleted text end new text begin 3.5 new text end	deleted text begin 3.25 deleted text end new text begin 3.5 new text end	3.5	4.25	3.75	3.5
28	deleted text begin 3.25 deleted text end new text begin 3.5 new text end	deleted text begin 3.25 deleted text end new text begin 3.5 new text end	3.5	4.25	3.75	3.5
29	deleted text begin 3.25 deleted text end new text begin 3.5 new text end	deleted text begin 3.25 deleted text end new text begin 3.5 new text end	3.5	4.25	3.75	3.5
30 or more	deleted text begin 3.25 deleted text end new text begin 3.5 new text end	deleted text begin 3.25 deleted text end new text begin 3.5 new text end	3.5	4.25	3.75	3.5

plan	payroll growth assumption
general state employees retirement plan of the Minnesota State Retirement System	3.5%
correctional state employees retirement plan	3.5
State Patrol retirement plan	3.5
judges retirement plan	2.75
general employees retirement plan of the Public Employees Retirement Association	3.5
public employees police and fire retirement plan	3.5
local government correctional service retirement plan	3.5
teachers retirement plan	deleted text begin 3.75 deleted text end new text begin 3.5 new text end
St. Paul teachers retirement plan	4

(e) The assumptions set forth in paragraphs (c) and (d) continue to apply, unless a
different salary assumption or a different payroll increase assumption:

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

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017, and applies to actuarial
valuations prepared on or after that date.
new text end

ARTICLE 15

VOLUNTEER FIREFIGHTER RELIEF ASSOCIATIONS MODIFICATIONS

Section 1.

Minnesota Statutes 2016, section 356A.06, subdivision 7, is amended to read:

Subd. 7.

Expanded list of authorized investment securities.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

An investment in any corporation must not exceed five percent of the total outstanding
shares of that corporation, except that an expanded list plan may hold up to 20 percent of
the shares of a real estate investment trust and up to 20 percent of the shares of a closed
mutual fund.new text begin Purchase of shares of exchange-traded or mutual funds shall be consistent
with paragraph (b).
new text end

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

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

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

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

(iv) international securities.

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

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

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

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

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

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

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

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

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2018.
new text end

Sec. 2.

Minnesota Statutes 2016, section 424A.001, subdivision 2, is amended to read:

Subd. 2.

Fire department.

"Fire department" includes a municipal fire department deleted text begin ordeleted text end new text begin ,new text end
an independent nonprofit firefighting corporationnew text begin , and a fire department established as or
operated by a joint powers entity under section 471.59new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2018.
new text end

Sec. 3.

Minnesota Statutes 2016, section 424A.001, is amended by adding a subdivision
to read:

new text begin Subd. 2a. new text end

new text begin Municipal. new text end

new text begin "Municipal" means of a city or township.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2018.
new text end

Sec. 4.

Minnesota Statutes 2016, section 424A.001, subdivision 3, is amended to read:

Subd. 3.

Municipality.

"Municipality" means a deleted text begin municipalitydeleted text end new text begin city or townshipnew text end which
has established a fire department with which the relief association is directly associated, deleted text begin or
the municipalitiesdeleted text end new text begin a city or townshipnew text end which deleted text begin havedeleted text end new text begin hasnew text end entered into a contract with the
independent nonprofit firefighting corporation of which the relief association is deleted text begin a subsidiarydeleted text end new text begin
directly associated, or a city or township that has entered into a contract with a joint powers
entity established under section 471.59 of which the relief association is directly associatednew text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2018.
new text end

Sec. 5.

Minnesota Statutes 2016, section 424A.001, subdivision 10, is amended to read:

Subd. 10.

Volunteer firefighter.

"Volunteer firefighter" means a person who is a member
of the applicable fire department or the independent nonprofit firefighting corporation and
is eligible for membership in the applicable relief association and:

(i) is engaged in providing emergency response services or delivering fire education or
prevention services as a member of a deleted text begin municipaldeleted text end fire departmentdeleted text begin , a joint powers entity fire
department, or an independent nonprofit firefighting corporationdeleted text end ;

(ii) is trained in or is qualified to provide fire suppression duties or to provide fire
prevention duties under subdivision 8; and

(iii) meets any other minimum firefighter and service standards established by the fire
department deleted text begin or the independent nonprofit firefighting corporationdeleted text end or specified in the articles
of incorporation or bylaws of the relief association.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2018.
new text end

Sec. 6.

Minnesota Statutes 2016, section 424A.002, subdivision 1, is amended to read:

Subdivision 1.

Authorization.

A deleted text begin municipaldeleted text end fire department deleted text begin or an independent nonprofit
firefighting corporationdeleted text end , with approval by the applicable municipality or municipalities,
may establish a new volunteer firefighter relief association or may retain an existing volunteer
firefighter relief association. A deleted text begin municipaldeleted text end fire department deleted text begin or an independent nonprofit
firefighting corporationdeleted text end may be associated with only one volunteer firefighter relief
association at one time.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2018.
new text end

Sec. 7.

new text begin [424A.003] CERTIFICATION OF SERVICE CREDIT.
new text end

new text begin (a) When a municipal fire department, a joint powers fire department, or an independent
nonprofit firefighting corporation is directly associated with the volunteer firefighters relief
association, the fire chief shall certify annually by March 31 the service credit for the
previous calendar year of each volunteer firefighter rendering active service with the fire
department.
new text end

new text begin (b) The certification shall be made to an officer of the relief association's board of trustees
and to the municipal clerk or clerk-treasurer of the largest municipality in population served
by the associated fire department.
new text end

new text begin (c) The fire chief shall notify each volunteer firefighter rendering active service with
the fire department of the amount of service credit rendered by the firefighter for the previous
calendar year. The service credit notification and a description of the process and deadlines
for the firefighter to challenge the fire chief's determination of service credit must be provided
to the firefighter 60 days prior to its certification to the relief association and municipality.
If the service credit amount is challenged, the fire chief shall accept and consider any
additional pertinent information and shall make a final determination of service credit.
new text end

new text begin (d) The service credit certification must be expressed as the number of completed months
of the previous year during which an active volunteer firefighter rendered at least the
minimum level of duties as specified and required by the fire department under the rules,
regulations, and policies applicable to the fire department. No more than one year of service
credit may be certified for a calendar year.
new text end

new text begin (e) If a volunteer firefighter who is a member of the relief association leaves active
firefighting service to render active military service that is required to be governed by the
federal Uniformed Services Employment and Reemployment Rights Act, as amended, the
firefighter must be certified as providing service credit for the period of the military service,
up to the applicable limit of the federal Uniformed Services Employment and Reemployment
Rights Act. If the volunteer firefighter does not return from the military service in compliance
with the federal Uniformed Services Employment and Reemployment Rights Act, the service
credits applicable to that military service credit period are forfeited and canceled at the end
of the calendar year in which the time limit set by federal law occurs.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2018.
new text end

Sec. 8.

Minnesota Statutes 2016, section 424A.01, subdivision 1, is amended to read:

Subdivision 1.

Minors.

No volunteer firefighters relief association associated with a
municipalitynew text begin , a joint powers entity,new text end or an independent nonprofit firefighting corporation
may include as a relief association member a minor serving as a volunteer firefighter.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2018.
new text end

Sec. 9.

Minnesota Statutes 2016, section 424A.01, is amended by adding a subdivision to
read:

new text begin Subd. 4a. new text end

new text begin Prohibition on receipt of concurrent service credit. new text end

new text begin No firefighter may be
credited with service credit in a volunteer firefighters relief association for the same hours
of service for which coverage is already provided in a fund operated pursuant to chapter
353.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2018, and applies to service
rendered on or after that date.
new text end

Sec. 10.

Minnesota Statutes 2016, section 424A.01, subdivision 5, is amended to read:

Subd. 5.

Fire prevention personnel.

(a) If the deleted text begin fire department is a municipal department
and thedeleted text end applicable municipality deleted text begin approves, or if the fire department is an independent nonprofit
firefighting corporation and the contracting municipalitydeleted text end or municipalities approve, the fire
department may employ or otherwise utilize the services of persons as volunteer firefighters
to perform fire prevention duties and to supervise fire prevention activities.

(b) Personnel serving in fire prevention positions are eligible to be members of the
applicable volunteer firefighter relief association and to qualify for service pension or other
benefit coverage of the relief association on the same basis as fire department personnel
who perform fire suppression duties.

(c) Personnel serving in fire prevention positions also are eligible to receive any other
benefits under the applicable law or practice for services on the same basis as personnel
who are employed to perform fire suppression duties.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2018.
new text end

Sec. 11.

Minnesota Statutes 2016, section 424A.01, is amended by adding a subdivision
to read:

new text begin Subd. 5a. new text end

new text begin Volunteer emergency medical personnel. new text end

new text begin Volunteer emergency medical
personnel are eligible to be members of the applicable volunteer firefighters relief association
and to qualify for service pension or other benefit coverage of the relief association on the
same basis as fire department personnel who perform or supervise fire suppression or fire
prevention duties, if:
new text end

new text begin (1) the fire department employs or otherwise uses the services of persons solely as
volunteer emergency medical personnel to perform emergency medical response duties or
supervise emergency medical response activities;
new text end

new text begin (2) the bylaws of the relief association authorize the eligibility; and
new text end

new text begin (3) the eligibility is approved by:
new text end

new text begin (i) the municipality, if the fire department is a municipal department;
new text end

new text begin (ii) the joint powers board, if the fire department is a joint powers entity; or
new text end

new text begin (iii) the contracting municipality or municipalities, if the fire department is an independent
nonprofit firefighting corporation.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2018, and applies to service
rendered on or after that date.
new text end

Sec. 12.

Minnesota Statutes 2016, section 424A.01, subdivision 6, is amended to read:

Subd. 6.

Return to active firefighting after break in service.

(a) This subdivision
new text begin governs the service pension calculation requirements of a firefighter who returns to active
service after a break in service and new text end applies to all breaks in service, except that the resumption
service requirements of this subdivision do not apply to leaves of absence made available
by federal statute, such as the Family Medical Leave Act, United States Code, title 29,
section 2691, and the Uniformed Services Employment and Reemployment Rights Act,
United States Code, title 38, section 4301, and do not apply to leaves of absence made
available by state statute, such as the Parental Leave Act, section 181.941; the Leave for
Organ Donation Act, section 181.9456; the Leave for Civil Air Patrol Service Act, section
181.946; the Leave for Immediate Family Members of Military Personnel Injured or Killed
in Active Service Act, section 181.947; or the Protection of Jurors' Employment Act, section
593.50.

(b)(1) If a firefighter who has ceased to perform or supervise fire suppression and fire
prevention duties for at least 60 days resumes performing active firefighting with the fire
department associated with the relief association, if the bylaws of the relief association so
permit, the firefighter may again become an active member of the relief association. A
firefighter who returns to active service and membership is subject to the service pension
calculation requirements under this section.

(2) A firefighter who has been granted an approved leave of absence not exceeding one
year by the fire department or by the relief association is exempt from the minimum period
of resumption service requirement of this section.

(3) A person who has a break in service not exceeding one year but has not been granted
an approved leave of absence and who has not received a service pension or disability benefit
may be made exempt from the minimum period of resumption service requirement of this
section by the relief association bylaws.

(4) If the bylaws so provide, a firefighter who returns to active relief association
membership under this paragraph may continue to collect a monthly service pension,
notwithstanding the service pension eligibility requirements under chapter 424A.

(c) If a former firefighter who has received a service pension or disability benefit returns
to active relief association membership under paragraph (b), the firefighter may qualify for
the receipt of a service pension from the relief association for the resumption service period
if the firefighter meets the service requirements of section 424A.016, subdivision 3, or
424A.02, subdivision 2. No firefighter may be paid a service pension more than once for
the same period of service.

(d) If a former firefighter who has not received a service pension or disability benefit
returns to active relief association membership under paragraph (b), the firefighter may
qualify for the receipt of a service pension from the relief association for the original and
resumption service periods if the firefighter meets the service requirements of section
424A.016, subdivision 3, or 424A.02, subdivision 2, based on the original and resumption
years of service credit.

(e) A firefighter who returns to active lump-sum relief association membership under
paragraph (b) and who qualifies for a service pension under paragraph (c) must have, upon
a subsequent cessation of duties, any service pension for the resumption service period
calculated as a separate benefit. If a lump-sum service pension had been paid to the firefighter
upon the firefighter's previous cessation of duties, a second lump-sum service pension for
the resumption service period must be calculated by applying the service pension amount
in effect on the date of the firefighter's termination of the resumption service for all years
of the resumption service.

(f) A firefighter who had not been paid a lump-sum service pension returns to active
relief association membership under paragraph (b), who did not meet the minimum period
of resumption service requirement specified in the relief association's bylaws, but who does
meet the minimum service requirement of section 424A.02, subdivision 2, based on the
firefighter's original and resumption years of active service, must have, upon a subsequent
cessation of duties, a service pension for the original and resumption service periods
calculated by applying the service pension amount in effect on the date of the firefighter's
termination of the resumption service, or, if the bylaws so provide, based on the service
pension amount in effect on the date of the firefighter's previous cessation of duties. The
service pension for a firefighter who returns to active lump-sum relief association membership
under this paragraph, but who had met the minimum period of resumption service requirement
specified in the relief association's bylaws, must be calculated by applying the service
pension amount in effect on the date of the firefighter's termination of the resumption service.

(g) If a firefighter receiving a monthly benefit service pension returns to active monthly
benefit relief association membership under paragraph (b), and if the relief association
bylaws do not allow for the firefighter to continue collecting a monthly service pension,
any monthly benefit service pension payable to the firefighter is suspended as of the first
day of the month next following the date on which the firefighter returns to active
membership. If the firefighter was receiving a monthly benefit service pension, and qualifies
for a service pension under paragraph (c), the firefighter is entitled to an additional monthly
benefit service pension upon a subsequent cessation of duties calculated based on the
resumption service credit and the service pension accrual amount in effect on the date of
the termination of the resumption service. A suspended initial service pension resumes as
of the first of the month next following the termination of the resumption service. If the
firefighter was not receiving a monthly benefit service pension and meets the minimum
service requirement of section 424A.02, subdivision 2, a service pension must be calculated
by applying the service pension amount in effect on the date of the firefighter's termination
of the resumption service for all years of service credit.

(h) A firefighter who was not receiving a monthly benefit service pension returns to
active relief association membership under paragraph (b), who did not meet the minimum
period of resumption service requirement specified in the relief association's bylaws, but
who does meet the minimum service requirement of section 424A.02, subdivision 2, based
on the firefighter's original and resumption years of active service, must have, upon a
subsequent cessation of duties, a service pension for the original and resumption service
periods calculated by applying the service pension amount in effect on the date of the
firefighter's termination of the resumption service, or, if the bylaws so provide, based on
the service pension amount in effect on the date of the firefighter's previous cessation of
duties. The service pension for a firefighter who returns to active relief association
membership under this paragraph, but who had met the minimum period of resumption
service requirement specified in the relief association's bylaws, must be calculated by
applying the service pension amount in effect on the date of the firefighter's termination of
the resumption service.

(i) For defined contribution plans, a firefighter who returns to active relief association
membership under paragraph (b) and who qualifies for a service pension under paragraph
(c) or (d) must have, upon a subsequent cessation of duties, any service pension for the
resumption service period calculated as a separate benefit. If a service pension had been
paid to the firefighter upon the firefighter's previous cessation of duties, and if the firefighter
meets the minimum service requirement of section 424A.016, subdivision 3, based on the
resumption years of service, a second service pension for the resumption service period
must be calculated to include allocations credited to the firefighter's individual account
during the resumption period of service and deductions for administrative expenses, if
applicable.

(j) For defined contribution plans, if a firefighter who had not been paid a service pension
returns to active relief association membership under paragraph (b), and who meets the
minimum service requirement of section 424A.016, subdivision 3, based on the firefighter's
original and resumption years of service, must have, upon a subsequent cessation of duties,
a service pension for the original and resumption service periods calculated to include
allocations credited to the firefighter's individual account during the original and resumption
periods of service and deductions for administrative expenses, if applicable, less any amounts
previously forfeited under section 424A.016, subdivision 4.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 13.

Minnesota Statutes 2016, section 424A.015, subdivision 1, is amended to read:

Subdivision 1.

Separation from active service; exception.

(a) No service pension is
payable to a person while the person remains an active member of the respective fire
department, and a person who is receiving a service pension is not entitled to receive any
other benefits from the special fund of the relief association.

(b) No relief association as defined in section 424A.001, subdivision 4, may pay a service
pension or disability benefit to a former member of the relief association if that person has
not separated from active service with the fire department to which the relief association is
directly associated, unless:

(1) the person discontinues volunteer firefighter duties with the deleted text begin municipality or the
independent nonprofit firefighting corporation, whichever applies,deleted text end new text begin fire departmentnew text end and
performs duties within the deleted text begin municipaldeleted text end fire department deleted text begin or corporationdeleted text end on a full-time basis;

(2) the governing body of the municipality deleted text begin ordeleted text end new text begin ,new text end of the new text begin independent nonprofit firefighting
new text end corporationnew text begin , or of the joint powers entitynew text end has filed its determination with the board of trustees
of the relief association that the person's experience with and service to the fire department
in that person's full-time capacity would be difficult to replace; and

(3) the bylaws of the relief association were amended to provide for the payment of a
service pension or disability benefit for such full-time employees.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2018.
new text end

Sec. 14.

Minnesota Statutes 2016, section 424A.015, is amended by adding a subdivision
to read:

new text begin Subd. 7. new text end

new text begin Combined service pensions. new text end

new text begin (a) A volunteer firefighter with credit for service
as an active firefighter in more than one volunteer firefighters relief association is entitled
to a prorated service pension from each relief association if:
new text end

new text begin (1) the articles of incorporation or bylaws of the relief associations provide;
new text end

new text begin (2) the applicable requirements of paragraphs (b) and (c) are met; and
new text end

new text begin (3) the volunteer firefighter otherwise qualifies.
new text end

new text begin (b) A volunteer firefighter receiving a prorated service pension under this subdivision
must have a total combined amount of service credit from the two or more relief associations
of ten years or more, unless the bylaws of every affected relief association specify less than
a ten-year service vesting requirement, in which case, the total amount of required service
credit is the longest service vesting requirement of the relief associations. The member must
have one year or more of service credit in each relief association. The prorated service
pension must be based on:
new text end

new text begin (1) for defined benefit relief associations, the service pension amount in effect for the
relief association on the date on which active volunteer firefighting services covered by that
relief association terminate; and
new text end

new text begin (2) for defined contribution relief associations, the member's individual account balance
on the date on which active volunteer firefighting services covered by that relief association
terminate.
new text end

new text begin (c) To receive a prorated service pension under this subdivision, the firefighter must
become a member of the second or succeeding association and must give notice of
membership to the prior association within two years of the date of termination of active
service with the prior association. The second or subsequent relief association secretary
must certify the notice.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2018.
new text end

Sec. 15.

Minnesota Statutes 2016, section 424A.016, subdivision 2, is amended to read:

Subd. 2.

Defined contribution service pension eligibility.

(a) A relief association,
when its articles of incorporation or bylaws so provide, may pay out of the assets of its
special fund a defined contribution service pension to each of its members who:

(1) separates from active service with the fire department;

(2) reaches age 50;

(3) completes at least five years of active service as an active member of the deleted text begin municipaldeleted text end
fire department to which the relief association is associated;

(4) completes at least five years of active membership with the relief association before
separation from active service; and

(5) complies with any additional conditions as to age, service, and membership that are
prescribed by the bylaws of the relief association.

(b) In the case of a member who has completed at least five years of active service as
an active member of the fire department to which the relief association is associated on the
date that the relief association is established and incorporated, the requirement that the
member complete at least five years of active membership with the relief association before
separation from active service may be waived by the board of trustees of the relief association
if the member completes at least five years of inactive membership with the relief association
before the date of the payment of the service pension. During the period of inactive
membership, the member is not entitled to receive any disability benefit coverage, is not
entitled to receive additional individual account allocation of fire state aid or municipal
contribution towards a service pension, and is considered to have the status of a person
entitled to a deferred service pension.

(c) The service pension earned by a volunteer under this chapter and the articles of
incorporation and bylaws of the relief association may be paid whether or not the municipality
or new text begin independent new text end nonprofit firefighting corporation to which the relief association is associated
qualifies for the receipt of fire state aid under chapter 69.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2018.
new text end

Sec. 16.

Minnesota Statutes 2016, section 424A.02, subdivision 1, is amended to read:

Subdivision 1.

Authorization.

(a) A defined benefit relief association, when its articles
of incorporation or bylaws so provide, may pay out of the assets of its special fund a defined
benefit service pension to each of its members who: (1) separates from active service with
the fire department; (2) reaches age 50; (3) completes at least five years of active service
as an active member of the deleted text begin municipaldeleted text end fire department to which the relief association is
associated; (4) completes at least five years of active membership with the relief association
before separation from active service; and (5) complies with any additional conditions as
to age, service, and membership that are prescribed by the bylaws of the relief association.
A service pension computed under this section may be prorated monthly for fractional years
of service as the bylaws or articles of incorporation of the relief association so provide. The
bylaws or articles of incorporation may define a "month," but the definition must require a
calendar month to have at least 16 days of active service. If the bylaws or articles of
incorporation do not define a "month," a "month" is a completed calendar month of active
service measured from the member's date of entry to the same date in the subsequent month.
The service pension earned by a volunteer firefighter under this chapter and the articles of
incorporation and bylaws of the volunteer firefighters relief association may be paid whether
or not the municipality or new text begin independent new text end nonprofit firefighting corporation to which the relief
association is associated qualifies for the receipt of fire state aid under chapter 69.

(b) In the case of a member who has completed at least five years of active service as
an active member of the fire department to which the relief association is associated on the
date that the relief association is established and incorporated, the requirement that the
member complete at least five years of active membership with the relief association before
separation from active service may be waived by the board of trustees of the relief association
if the member completes at least five years of inactive membership with the relief association
before the date of the payment of the service pension. During the period of inactive
membership, the member is not entitled to receive disability benefit coverage, is not entitled
to receive additional service credit towards computation of a service pension, and is
considered to have the status of a person entitled to a deferred service pension under
subdivision 7.

(c) No municipality deleted text begin ordeleted text end new text begin , independentnew text end nonprofit firefighting corporationnew text begin , or joint powers
entitynew text end may delegate the power to take final action in setting a service pension or ancillary
benefit amount or level to the board of trustees of the relief association or to approve in
advance a service pension or ancillary benefit amount or level equal to the maximum amount
or level that this chapter would allow rather than a specific dollar amount or level.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2018.
new text end

Sec. 17.

Minnesota Statutes 2016, section 424A.02, subdivision 3, is amended to read:

Subd. 3.

Flexible service pension maximums.

(a) Annually on or before August 1 as
part of the certification of the financial requirements and minimum municipal obligation
determined under section 424A.092, subdivision 4, or 424A.093, subdivision 5, as applicable,
the secretary or some other official of the relief association designated in the bylaws of each
defined benefit relief association shall calculate and certify to the governing body of the
applicable municipality the average amount of available financing per active covered
firefighter for the most recent three-year period. The amount of available financing includes
any amounts of fire state aid and police and firefighter retirement supplemental state aid
received or receivable by the relief association, any amounts of municipal contributions to
the relief association raised from levies on real estate or from other available revenue sources
exclusive of fire state aid, and one-tenth of the amount of assets in excess of the accrued
liabilities of the relief association calculated under section 424A.092, subdivision 2;
424A.093, subdivisions 2 and 4; or 424A.094, subdivision 2, if any.

(b) The maximum service pension which the defined benefit relief association has
authority to provide for in its bylaws for payment to a member retiring after the calculation
date when the minimum age and service requirements specified in subdivision 1 are met
must be determined using the table in paragraph (c) or (d), whichever applies.

(c) For a defined benefit relief association where the governing bylaws provide for a
monthly service pension to a retiring member, the maximum monthly service pension amount
per month for each year of service credited that may be provided for in the bylaws is the
greater of the service pension amount provided for in the bylaws on the date of the calculation
of the average amount of the available financing per active covered firefighter or the
maximum service pension figure corresponding to the average amount of available financing
per active covered firefighter:

Minimum Average Amount of Available Financing per Firefighter		Maximum Service Pension Amount Payable per Month for Each Year of Service
$ ...		$ .25
41		.50
81		1.00
122		1.50
162		2.00
203		2.50
243		3.00
284		3.50
324		4.00
365		4.50
405		5.00
486		6.00
567		7.00
648		8.00
729		9.00
810		10.00
891		11.00
972		12.00
1053		13.00
1134		14.00
1215		15.00
1296		16.00
1377		17.00
1458		18.00
1539		19.00
1620		20.00
1701		21.00
1782		22.00
1823		22.50
1863		23.00
1944		24.00
2025		25.00
2106		26.00
2187		27.00
2268		28.00
2349		29.00
2430		30.00
2511		31.00
2592		32.00
2673		33.00
2754		34.00
2834		35.00
2916		36.00
2997		37.00
3078		38.00
3159		39.00
3240		40.00
3321		41.00
3402		42.00
3483		43.00
3564		44.00
3645		45.00
3726		46.00
3807		47.00
3888		48.00
3969		49.00
4050		50.00
4131		51.00
4212		52.00
4293		53.00
4374		54.00
4455		55.00
4536		56.00
4617		57.00
4698		58.00
4779		59.00
4860		60.00
4941		61.00
5022		62.00
5103		63.00
5184		64.00
5265		65.00
5346		66.00
5427		67.00
5508		68.00
5589		69.00
5670		70.00
5751		71.00
5832		72.00
5913		73.00
5994		74.00
6075		75.00
6156		76.00
6237		77.00
6318		78.00
6399		79.00
6480		80.00
6561		81.00
6642		82.00
6723		83.00
6804		84.00
6885		85.00
6966		86.00
7047		87.00
7128		88.00
7209		89.00
7290		90.00
7371		91.00
7452		92.00
7533		93.00
7614		94.00
7695		95.00
7776		96.00
7857		97.00
7938		98.00
8019		99.00
8100		100.00
any amount in excess of
8100		100.00

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

Minimum Average Amount of Available Financing per Firefighter		Maximum Lump-Sum Service Pension Amount Payable for Each Year of Service
$ ...		$ 10
11		20
16		30
23		40
27		50
32		60
43		80
54		100
65		120
77		140
86		160
97		180
108		200
131		240
151		280
173		320
194		360
216		400
239		440
259		480
281		520
302		560
324		600
347		640
367		680
389		720
410		760
432		800
486		900
540		1000
594		1100
648		1200
702		1300
756		1400
810		1500
864		1600
918		1700
972		1800
1026		1900
1080		2000
1134		2100
1188		2200
1242		2300
1296		2400
1350		2500
1404		2600
1458		2700
1512		2800
1566		2900
1620		3000
1672		3100
1726		3200
1753		3250
1780		3300
1820		3375
1834		3400
1888		3500
1942		3600
1996		3700
2023		3750
2050		3800
2104		3900
2158		4000
2212		4100
2265		4200
2319		4300
2373		4400
2427		4500
2481		4600
2535		4700
2589		4800
2643		4900
2697		5000
2751		5100
2805		5200
2859		5300
2913		5400
2967		5500
3021		5600
3075		5700
3129		5800
3183		5900
3237		6000
3291		6100
3345		6200
3399		6300
3453		6400
3507		6500
3561		6600
3615		6700
3669		6800
3723		6900
3777		7000
3831		7100
3885		7200
3939		7300
3993		7400
4047		7500
4101		7600
4155		7700
4209		7800
4263		7900
4317		8000
4371		8100
4425		8200
4479		8300
4533		8400
4587		8500
4641		8600
4695		8700
4749		8800
4803		8900
4857		9000
4911		9100
4965		9200
5019		9300
5073		9400
5127		9500
5181		9600
5235		9700
5289		9800
5343		9900
5397		10,000
deleted text begin any amount in excess of deleted text end new text begin 5451 new text end		new text begin 10,100 new text end
deleted text begin 5397 deleted text end new text begin 5505 new text end		deleted text begin 10,000 deleted text end new text begin 10,200 new text end
new text begin 5559 new text end		new text begin 10,300 new text end
new text begin 5613 new text end		new text begin 10,400 new text end
new text begin 5667 new text end		new text begin 10,500 new text end
new text begin 5721 new text end		new text begin 10,600 new text end
new text begin 5775 new text end		new text begin 10,700 new text end
new text begin 5829 new text end		new text begin 10,800 new text end
new text begin 5883 new text end		new text begin 10,900 new text end
new text begin 5937 new text end		new text begin 11,000 new text end
new text begin 5991 new text end		new text begin 11,100 new text end
new text begin 6045 new text end		new text begin 11,200 new text end
new text begin 6099 new text end		new text begin 11,300 new text end
new text begin 6153 new text end		new text begin 11,400 new text end
new text begin 6207 new text end		new text begin 11,500 new text end
new text begin 6261 new text end		new text begin 11,600 new text end
new text begin 6315 new text end		new text begin 11,700 new text end
new text begin 6369 new text end		new text begin 11,800 new text end
new text begin 6423 new text end		new text begin 11,900 new text end
new text begin 6477 new text end		new text begin 12,000 new text end
new text begin 6531 new text end		new text begin 12,100 new text end
new text begin 6585 new text end		new text begin 12,200 new text end
new text begin 6639 new text end		new text begin 12,300 new text end
new text begin 6693 new text end		new text begin 12,400 new text end
new text begin 6747 new text end		new text begin 12,500 new text end
new text begin 6801 new text end		new text begin 12,600 new text end
new text begin 6855 new text end		new text begin 12,700 new text end
new text begin 6909 new text end		new text begin 12,800 new text end
new text begin 6963 new text end		new text begin 12,900 new text end
new text begin 7017 new text end		new text begin 13,000 new text end
new text begin 7071 new text end		new text begin 13,100 new text end
new text begin 7125 new text end		new text begin 13,200 new text end
new text begin 7179 new text end		new text begin 13,300 new text end
new text begin 7233 new text end		new text begin 13,400 new text end
new text begin 7287 new text end		new text begin 13,500 new text end
new text begin 7341 new text end		new text begin 13,600 new text end
new text begin 7395 new text end		new text begin 13,700 new text end
new text begin 7449 new text end		new text begin 13,800 new text end
new text begin 7503 new text end		new text begin 13,900 new text end
new text begin 7557 new text end		new text begin 14,000 new text end
new text begin 7611 new text end		new text begin 14,100 new text end
new text begin 7665 new text end		new text begin 14,200 new text end
new text begin 7719 new text end		new text begin 14,300 new text end
new text begin 7773 new text end		new text begin 14,400 new text end
new text begin 7827 new text end		new text begin 14,500 new text end
new text begin 7881 new text end		new text begin 14,600 new text end
new text begin 7935 new text end		new text begin 14,700 new text end
new text begin 7989 new text end		new text begin 14,800 new text end
new text begin 8043 new text end		new text begin 14,900 new text end
new text begin 8097 new text end		new text begin 15,000 new text end
new text begin any amount in excess of 8097 new text end		new text begin 15,000 new text end

(e) For a defined benefit relief association in which the governing bylaws provide for a
monthly benefit service pension as an alternative form of service pension payment to a
lump-sum service pension, the maximum service pension amount for each pension payment
type must be determined using the applicable table contained in this subdivision.

(f) If a defined benefit relief association establishes a service pension in compliance
with the applicable maximum contained in paragraph (c) or (d) and the minimum average
amount of available financing per active covered firefighter is subsequently reduced because
of a reduction in fire state aid or because of an increase in the number of active firefighters,
the relief association may continue to provide the prior service pension amount specified
in its bylaws, but may not increase the service pension amount until the minimum average
amount of available financing per firefighter under the table in paragraph (c) or (d), whichever
applies, permits.

(g) No defined benefit relief association is authorized to provide a service pension in an
amount greater than the largest applicable flexible service pension maximum amount even
if the amount of available financing per firefighter is greater than the financing amount
associated with the largest applicable flexible service pension maximum.

(h) The method of calculating service pensions must be applied uniformly for all years
of active service. Credit must be given for all years of active service except for caps on
service credit if so provided in the bylaws of the relief association.

new text begin EFFECTIVE DATE; LOCAL APPROVAL. new text end

new text begin (a) For relief associations other than the
Eden Prairie volunteer firefighters relief association, this section is effective January 1,
2018.
new text end

new text begin (b) For the Eden Prairie volunteer firefighters relief association, this section is effective
the day after the city council of Eden Prairie and its chief clerical officer timely complete
their compliance with Minnesota Statutes, section 645.021, subdivisions 2 and 3, or January
1, 2018, whichever is earlier.
new text end

Sec. 18.

Minnesota Statutes 2016, section 424A.02, subdivision 3a, is amended to read:

Subd. 3a.

Penalty for paying pension greater than applicable maximum.

(a) If a
defined benefit relief association pays a service pension greater than the maximum service
pension associated with the applicable average amount of available financing per active
covered firefighter under the table in subdivision 3, paragraph (c) or (d), whichever applies,
the maximum service pension under subdivision 3, paragraph (f), or the applicable maximum
service pension amount specified in subdivision 3, paragraph (g), whichever is less, the
state auditor shall:

(1) disqualify the municipality or the new text begin independent new text end nonprofit firefighting corporation
associated with the relief association from receiving fire state aid by making the appropriate
notification to the municipality and the commissioner of revenue, with the disqualification
applicable for the next apportionment and payment of fire state aid; and

(2) order the treasurer of the applicable relief association to recover the amount of the
overpaid service pension or pensions from any retired firefighter who received an
overpayment.

(b) Fire state aid amounts from disqualified municipalities for the period of
disqualifications under paragraph (a), clause (1), must be credited to the amount of fire
insurance premium tax proceeds available for the next subsequent fire state aid
apportionment.

(c) The amount of any overpaid service pension recovered under paragraph (a), clause
(2), must be credited to the amount of fire insurance premium tax proceeds available for
the next subsequent fire state aid apportionment.

(d) The determination of the state auditor that a relief association has paid a service
pension greater than the applicable maximum must be made on the basis of the information
filed by the relief association and the municipality with the state auditor under sections
69.011, subdivision 2, and 69.051, subdivision 1 or 1a, whichever applies, and any other
relevant information that comes to the attention of the state auditor. The determination of
the state auditor is final. An aggrieved municipality, relief association, or person may appeal
the determination under section 480A.06.

(e) The state auditor may certify, upon learning that a relief association overpaid a service
pension based on an error in the maximum service pension calculation, the municipality or
new text begin independent new text end nonprofit firefighting corporation associated with the relief association for fire
state aid if (1) there is evidence that the error occurred in good faith, and (2) the relief
association has initiated recovery of any overpayment amount. Notwithstanding paragraph
(c), all overpayments recovered under this paragraph must be credited to the relief
association's special fund.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2018.
new text end

Sec. 19.

Minnesota Statutes 2016, section 424A.02, subdivision 7, is amended to read:

Subd. 7.

Deferred service pensions.

(a) A member of a defined benefit relief association
is entitled to a deferred service pension if the member separates from active service and
membership and has completed the minimum service and membership requirements in
subdivision 1. The requirement that a member separate from active service and membership
is waived for persons who have discontinued their volunteer firefighter duties and who are
employed on a full-time basis under section 424A.015, subdivision 1.

(b) The deferred service pension is payable when the former member reaches at least
age 50, or at least the minimum age specified in the bylaws governing the relief association
if that age is greater than age 50, and when the former member makes a valid written
application.

(c) A defined benefit relief association that provides a lump-sum service pension governed
by subdivision 3 may, when its governing bylaws so provide, pay interest on the deferred
lump-sum service pension during the period of deferral. If provided for in the bylaws, interest
must be paid in one of the following manners:

(1) at the investment performance rate actually earned on that portion of the assets if the
deferred benefit amount is invested by the relief association in a separate account established
and maintained by the relief association;

(2) at the investment performance rate actually earned on that portion of the assets if the
deferred benefit amount is invested in a separate investment vehicle held by the relief
association; or

(3) at an interest rate of up to five percent, compounded annually, as set by the board of
trustees.

(d) Any change in the interest rate set by the board of trustees under paragraph (c), clause
(3), must be ratified by the governing body of the municipality new text begin or joint powers entity new text end served
by the fire department to which the relief association is directly associated, or by the
independent nonprofit firefighting corporation, as applicable.

(e) Interest under paragraph (c), clause (3), is payable beginning on the January 1 next
following the date on which the deferred service pension interest rate as set by the board of
trustees was ratified by the governing body of the municipality new text begin or joint powers entity new text end served
by the fire department to which the relief association is directly associated, or by the
independent nonprofit firefighting corporation, as applicable.

(f) Unless the bylaws of a relief association that has elected to pay interest or additional
investment performance on deferred lump-sum service pensions under paragraph (c) specifies
a different interest or additional investment performance method, including the interest or
additional investment performance period starting date and ending date, the interest or
additional investment performance on a deferred service pension is creditable as follows:

(1) for a relief association that has elected to pay interest or additional investment
performance under paragraph (c), clause (1) or (3), beginning on the first day of the month
next following the date on which the member separates from active service and membership
and ending on the last day of the month immediately before the month in which the deferred
member commences receipt of the deferred service pension; or

(2) for a relief association that has elected to pay interest or additional investment
performance under paragraph (c), clause (2), beginning on the date that the member separates
from active service and membership and ending on the date that the separate investment
vehicle is valued immediately before the date on which the deferred member commences
receipt of the deferred service pension.

(g) For a deferred service pension that is transferred to a separate account established
and maintained by the relief association or separate investment vehicle held by the relief
association, the deferred member bears the full investment risk subsequent to transfer and
in calculating the accrued liability of the volunteer firefighters relief association that pays
a lump-sum service pension, the accrued liability for deferred service pensions is equal to
the separate relief association account balance or the fair market value of the separate
investment vehicle held by the relief association.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2018.
new text end

Sec. 20.

Minnesota Statutes 2016, section 424A.04, subdivision 1, is amended to read:

Subdivision 1.

Membership.

(a) A relief association that is directly associated with a
municipal fire department must be managed by a board of trustees consisting of nine
members. Six trustees must be elected from the membership of the relief association and
three trustees must be drawn from the officials of the municipalities served by the fire
department to which the relief association is directly associated. The bylaws of a relief
association which provides a monthly benefit service pension may provide that one of the
six trustees elected from the relief association membership may be a retired member receiving
a monthly pension who is elected by the membership of the relief association. The three
municipal trustees must be one elected municipal official and one elected or appointed
municipal official who are designated as municipal representatives by the municipal
governing board annually and the chief of the municipal fire department.

(b) A relief association that is a subsidiary of an independent nonprofit firefighting
corporation must be managed by a board of trustees consisting of nine members. Six trustees
must be elected from the membership of the relief association, two trustees must be drawn
from the officials of the municipalities served by the fire department to which the relief
association is directly associated, and one trustee must be the fire chief serving with the
independent nonprofit firefighting corporation. The bylaws of a relief association may
provide that one of the six trustees elected from the relief association membership may be
a retired member receiving a monthly pension who is elected by the membership of the
relief association. The two municipal trustees must be elected or appointed municipal
officials, selected as follows:

(1) if only one municipality contracts with the independent nonprofit firefighting
corporation, the municipal trustees must be two officials of the contracting municipality
who are designated annually by the governing body of the municipality; or

(2) if two or more municipalities contract with the independent nonprofit corporation,
the municipal trustees must be one official from each of the two largest municipalities in
population who are designated annually by the governing bodies of the applicable
municipalities.

(c) The municipal trustees for a relief association that is directly associated with a fire
department operated as or by a joint powers entity must be the fire chief of the fire department
and two trustees designated annually by the joint powers board. The municipal trustees for
a relief association that is directly associated with a fire department service area township
must be the fire chief of the fire department and two trustees designated by the township
board.

(d) If a relief association lacks the municipal board members provided for in paragraph
(a), (b), or (c) because the fire department is not located in or associated with deleted text begin an organizeddeleted text end new text begin
anew text end municipalitydeleted text begin ,deleted text end new text begin ornew text end joint powers entitydeleted text begin , or townshipdeleted text end , the municipal board members must be
the fire chief of the fire department and two board members appointed from the fire
department service area by the board of commissioners of the applicable county.

(e) The term of the appointed municipal board members is one year or until the person's
successor is qualified, whichever is later.

(f) A municipal trustee under paragraph (a), (b), (c), or (d) has all the rights and duties
accorded to any other trustee, except the right to be an officer of the relief association board
of trustees.

(g) A board must have at least three officers, who are a president, a secretary and a
treasurer. These officers must be elected from among the elected trustees by either the full
board of trustees or by the relief association membership, as specified in the bylaws. In no
event may any trustee hold more than one officer position at any one time. The terms of the
elected trustees and of the officers of the board must be specified in the bylaws of the relief
association, but may not exceed three years. If the term of the elected trustees exceeds one
year, the election of the various trustees elected from the membership must be staggered
on as equal a basis as is practicable.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2018.
new text end

Sec. 21.

Minnesota Statutes 2016, section 424A.07, is amended to read:

424A.07 NONPROFIT FIREFIGHTING CORPORATIONS; ESTABLISHMENT
OF RELIEF ASSOCIATIONS.

Before paying any service pensions or retirement benefits under section 424A.02 or
before becoming entitled to receive any amounts of fire state aid upon transmittal from a
contracting municipality under section 69.031, subdivision 5, deleted text begin adeleted text end new text begin an independentnew text end nonprofit
firefighting corporation shall establish a volunteer firefighters relief association governed
by this chapter.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2018.
new text end

Sec. 22.

Minnesota Statutes 2016, section 424A.091, subdivision 3, is amended to read:

Subd. 3.

Remedy for noncompliance; determination.

(a) A municipality in which
there exists a firefighters relief association as specified in subdivision 1 which does not
comply with the applicable provisions of sections 424A.091 to 424A.096 or the provisions
of any applicable special law relating to the funding or financing of the association does
not qualify initially to receive, and is not entitled subsequently to retain, fire state aid under
sections 69.011 to 69.051 until the reason for the disqualification specified by the state
auditor is remedied, whereupon the municipality or relief association, if otherwise qualified,
is entitled to again receive fire state aid for the year occurring immediately subsequent to
the year in which the disqualification is remedied.

(b) The state auditor shall determine if a municipality to which a firefighters' relief
association is directly associated or a firefighters relief association fails to comply with the
provisions of sections 424A.091 to 424A.096 or the funding or financing provisions of any
applicable special law based upon the information contained in the annual financial report
of the firefighters relief association required under section 69.051, the actuarial valuation
of the relief association, if applicable, the relief association officers' financial requirements
of the relief association and minimum municipal obligation determination documentation
under section 424A.092, subdivisions 3 and 4; 424A.093, subdivisions 4 and 5; or 424A.094,
subdivision 2, if requested to be filed by the state auditor, the applicable municipal or
new text begin independent new text end nonprofit firefighting corporation budget, if requested to be filed by the state
auditor, and any other relevant documents or reports obtained by the state auditor.

(c) The municipality or new text begin independent new text end nonprofit firefighting corporation and the associated
relief association are not eligible to receive or to retain fire state aid if:

(1) the relief association fails to prepare or to file the financial report or financial
statement under section 69.051;

(2) the relief association treasurer is not bonded in the manner and in the amount required
by section 69.051, subdivision 2;

(3) the relief association officers fail to determine or improperly determine the accrued
liability and the annual accruing liability of the relief association under section 424A.092,
subdivisions 2, 2a, and 3, paragraph (c), clause (2), if applicable;

(4) if applicable, the relief association officers fail to obtain and file a required actuarial
valuation or the officers file an actuarial valuation that does not contain the special fund
actuarial liability calculated under the entry age normal actuarial cost method, the special
fund current assets, the special fund unfunded actuarial accrued liability, the special fund
normal cost under the entry age normal actuarial cost method, the amortization requirement
for the special fund unfunded actuarial accrued liability by the applicable target date, a
summary of the applicable benefit plan, a summary of the membership of the relief
association, a summary of the actuarial assumptions used in preparing the valuation, and a
signed statement by the actuary attesting to its results and certifying to the qualifications of
the actuary as an approved actuary under section 356.215, subdivision 1, paragraph (c);

(5) the municipality failed to provide a municipal contribution, or the new text begin independent
new text end nonprofit firefighting corporation failed to provide a corporate contribution, in the amount
equal to the minimum municipal obligation if the relief association is governed under section
424A.092, or the amount necessary, when added to the fire state aid actually received in
the plan year in question, to at least equal in total the calculated annual financial requirements
of the special fund of the relief association if the relief association is governed under section
424A.093, and, if the municipal or corporate contribution is deficient, the municipality
failed to include the minimum municipal obligation certified under section 424A.092,
subdivision 3, or 424A.093, subdivision 5, in its budget and tax levy or the new text begin independent
new text end nonprofit firefighting corporation failed to include the minimum corporate obligation certified
under section 424A.094, subdivision 2, in the corporate budget;

(6) the defined benefit relief association did not receive municipal ratification for the
most recent plan amendment when municipal ratification was required under section 424A.02,
subdivision 10; 424A.092, subdivision 6; or 424A.093, subdivision 6;

(7) the relief association invested special fund assets in an investment security that is
not authorized under section 424A.095;

(8) the relief association had an administrative expense that is not authorized under
section 69.80 or 424A.05, subdivision 3, or the municipality had an expenditure that is not
authorized under section 424A.08;

(9) the relief association officers fail to provide a complete and accurate public pension
plan investment portfolio and performance disclosure under section 356.219;

(10) the relief association fails to obtain the acknowledgment from a broker of the
statement of investment restrictions under section 356A.06, subdivision 8b;

(11) the relief association officers permitted to occur a prohibited transaction under
section 356A.06, subdivision 9, or 424A.04, subdivision 2a, or failed to undertake correction
of a prohibited transaction that did occur; or

(12) the relief association pays a defined benefit service pension in an amount that is in
excess of the applicable service pension maximum under section 424A.02, subdivision 3.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2018.
new text end

Sec. 23.

Minnesota Statutes 2016, section 424A.094, subdivision 3, is amended to read:

Subd. 3.

Authorized pension disbursements.

Authorized disbursements of assets of
the special fund of the subsidiary relief association of the new text begin independent new text end nonprofit firefighting
corporation shall be governed by the provisions of section 424A.05.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2018.
new text end

Sec. 24.

Minnesota Statutes 2016, section 424A.10, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

For purposes of this section:

(1) "qualified recipient" means deleted text begin an individualdeleted text end new text begin a volunteer firefighter new text end who receives a
lump-sum distribution of pension or retirement benefits from a volunteer firefighters relief
association or from the voluntary statewide lump-sum volunteer firefighter retirement plan
deleted text begin for service that the individual has performed as a volunteer firefighterdeleted text end ;

(2) "survivor of a deceased active or deferred volunteer firefighter" means the surviving
spouse of a deceased active or deferred volunteer firefighter or, if none, the surviving child
or children of a deceased active or deferred volunteer firefighter;

(3) "active volunteer firefighter" means a person whonew text begin :
new text end

new text begin (i)new text end regularly renders fire suppression servicenew text begin , the performance or supervision of authorized
fire prevention duties, or the performance or supervision of authorized emergency medical
response activities new text end for a deleted text begin municipaldeleted text end fire department deleted text begin or an independent nonprofit firefighting
corporation, whodeleted text end new text begin ;
new text end

new text begin (ii)new text end has met the statutory and other requirements for relief association membershipdeleted text begin ,deleted text end new text begin ;new text end and
deleted text begin who
deleted text end

new text begin (iii)new text end is deemed by the relief association under law and its bylaws to be a fully qualified
member of the relief association or from the voluntary statewide lump-sum volunteer
firefighter retirement plan for at least one month; deleted text begin and
deleted text end

(4) "deferred volunteer firefighter" means a former active volunteer firefighter whonew text begin :
new text end

new text begin (i)new text end terminated active firefighting service, new text begin the performance or supervision of authorized
fire prevention duties, or the performance or supervision of authorized emergency medical
response activities; and
new text end

new text begin (ii) new text end has sufficient service credit from the applicable relief association or from the voluntary
statewide lump-sum volunteer firefighter retirement plan to be entitled to a service pension
under the bylaws of the relief association, but has not applied for or has not received the
service pensiondeleted text begin .deleted text end new text begin ; and
new text end

new text begin (5) "volunteer firefighter" includes an individual whose services were utilized to perform
or supervise fire prevention duties if authorized under section 424A.01, subdivision 5, and
individuals whose services were used to perform emergency medical response duties or
supervise emergency medical response activities if authorized under section 424A.01,
subdivision 5a.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2018.
new text end

Sec. 25.

Minnesota Statutes 2016, section 424B.20, subdivision 4, is amended to read:

Subd. 4.

Benefit trust fund establishment.

(a) After the settlement of nonbenefit legal
obligations of the special fund of the volunteer firefighters relief association under subdivision
3, the board of the relief association shall transfer the remaining assets of the special fund,
as securities or in cash, as applicable, to the chief financial official of the municipality in
which the associated fire department was located if the fire department was a municipal fire
department or to the chief financial official of the municipality with the largest population
served by the fire department if the fire department was an independent nonprofit firefighting
corporation. new text begin If the fire department was a joint powers entity, the remaining assets of the
special fund shall be transferred to the chief financial official of the municipality designated
as the fiscal agent in the joint powers agreement or, if the agreement does not designate a
municipality as the fiscal agent, the remaining assets of the special fund shall be transferred
to the chief financial official of the municipality with the largest population served by the
joint powers fire department. new text end The board shall also compile a schedule of the relief association
members to whom a service pension is or will be owed, any beneficiary to whom a benefit
is owed, the amount of the service pension or benefit payable based on the applicable bylaws
and state law and the service rendered to the date of the dissolution, and the date on which
the pension or benefit would first be payable under the bylaws of the relief association and
state law.

(b) The municipality deleted text begin in which is locateddeleted text end new text begin receiving the remaining assets of the special
fund of new text end a volunteer firefighters relief association that is dissolving under this section shall
establish a separate account in the municipal treasury which must function as a trust fund
for members of the volunteer firefighters relief association and their beneficiaries to whom
the volunteer firefighters relief association owes a service pension or other benefit under
the bylaws of the relief association and state law. Upon proper application, on or after the
initial date on which the service pension or benefit is payable, the municipal treasurer shall
pay the pension or benefit due, based on the schedule prepared under paragraph (a) and the
other records of the dissolved relief association. The trust fund under this section must be
invested and managed consistent with chapter 356A and section 424A.095. Upon payment
of the last service pension or benefit due and owing, any remaining assets in the trust fund
cancel to the general fund of the municipalitydeleted text begin .deleted text end new text begin or, if the fire department was a joint powers
entity, any remaining assets in the trust fund cancel to the general fund of each municipality
that was a contracting party to the joint powers agreement as specified in the joint powers
agreement. If the joint powers agreement does not specify how the remaining assets are to
be distributed among the contracting parties, each of the contracting parties shall receive a
pro rata share of the remaining assets based on the proportion of total operating contributions
each contracting municipality made to the joint powers entity over the most recent ten
calendar years. new text end If the special fund of the volunteer firefighters relief association had an
unfunded actuarial accrued liability upon dissolution, the municipality is liable for that
unfunded actuarial accrued liability.new text begin If the fire department was a joint powers entity, the
contracting municipalities are liable for their share of the unfunded actuarial accrued liability
as specified in the joint powers agreement. If the joint powers agreement does not specify
liability for any unfunded actuarial accrued liability, the contracting municipalities are liable
for their pro rata share of the unfunded actuarial accrued liability based on the proportion
of total operating contributions each contracting municipality made to the joint powers
entity over the most recent ten calendar years.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2018.
new text end

Sec. 26. new text begin EDEN PRAIRIE VOLUNTEER FIREFIGHTERS RELIEF ASSOCIATION
SERVICE PENSIONS; RETURN TO ACTIVE SERVICE.
new text end

new text begin (a) Notwithstanding any provision of Minnesota Statutes, section 424A.01, subdivision
6, section 424A.02, subdivision 2, or any other provision of law to the contrary, if the bylaws
of the Eden Prairie volunteer firefighters relief association so provide, a former firefighter
who has received a lump-sum service pension or is receiving a monthly benefit service
pension and returns to active relief association membership under Minnesota Statutes,
section 424A.01, subdivision 6, paragraph (b), is entitled to receive an unreduced lump-sum
service pension for the resumption service period if the firefighter completes at least three
years of active service as an active member of the fire department during the resumption
service period and completes at least three years of active membership with the relief
association during the resumption service period.
new text end

new text begin (b) A lump-sum service pension must be calculated by applying the service pension
amount in effect on the date of the firefighter's termination of the resumption service for all
years of the resumption service. No firefighter may be paid a service pension more than
once for the same period of service. Payment of a lump-sum service pension shall have no
effect on the firefighter's previous service pension.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the Eden Prairie City Council
and its chief clerical officer timely complete their compliance with Minnesota Statutes,
section 645.021, subdivisions 2 and 3.
new text end

Sec. 27. new text begin CITY OF AUSTIN; ALLOCATION OF FIRE STATE AID FOR
FIREFIGHTERS.
new text end

new text begin (a) Notwithstanding any law to the contrary, the city of Austin must annually:
new text end

new text begin (1) determine the amount of state aid required under the bylaws of the Austin Parttime
Firefighters Relief Association to fund the volunteer firefighters' service pensions;
new text end

new text begin (2) transmit to the Austin Parttime Firefighters Relief Association any supplemental
state aid received under Minnesota Statutes, section 423A.022;
new text end

new text begin (3) transmit to the Austin Parttime Firefighters Relief Association an amount of fire
state aid under Minnesota Statutes, sections 69.011 to 69.051, equal to the difference between
the amount determined under clause (1) and the amount transmitted under clause (2); and
new text end

new text begin (4) transmit the remaining balance of fire state aid under Minnesota Statutes, sections
69.011 to 69.051, for the payment of the employer contribution requirements for firefighters
covered by the public employees police and fire retirement plan under Minnesota Statutes,
section 353.65, subdivision 3.
new text end

new text begin (b) Notwithstanding Minnesota Statutes, section 69.031, subdivision 5, the city of Austin
has no liability to the relief association related to payments it made or will make to the
public employees police and fire retirement plan from fire state aid for 2013, 2014, 2015,
2016, and 2017.
new text end

new text begin (c) This section expires July 1, 2018.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of the
city of Austin and its chief clerical officer comply with Minnesota Statutes, section 645.021,
subdivisions 2 and 3, and applies retroactively from January 1, 2013.
new text end

Sec. 28. new text begin FIRE STATE AID WORK GROUP.
new text end

new text begin (a) The executive director of the Public Employees Retirement Association shall convene
a Fire State Aid Work Group to study and make recommendations to the Legislative
Commission on Pensions and Retirement on:
new text end

new text begin (1) the current requirement that all fire state aid provided to municipalities with
firefighters as defined in Minnesota Statutes, section 424A.001, subdivision 10, or 353G.01,
subdivision 15, must be used to fund service pensions governed by Minnesota Statutes,
chapter 424A or 353G; and
new text end

new text begin (2) modifying the requirement to allow municipalities to allocate a portion of fire state
aid to pay employer contributions on behalf of firefighters covered by the public employees
police and fire retirement plan under Minnesota Statutes, section 353.65, subdivision 3.
new text end

new text begin (b) In making recommendations with information provided by Public Employees
Retirement Association and Legislative Commission on Pensions and Retirement staff, the
work group shall consider:
new text end

new text begin (1) the history and purpose of fire state aid;
new text end

new text begin (2) the history, purpose, and utilization of Minnesota Statutes 2012, section 353A.10,
subdivision 6, which allowed certain municipalities to allocate a portion of fire state aid to
pay public employees police and fire employer contributions;
new text end

new text begin (3) the impact on current volunteer firefighters, volunteer firefighter recruitment and
retention, and municipalities if fire state aid is allocated between service pensions and public
employees police and fire employer contributions; and
new text end

new text begin (4) a presentation by a city of Austin official and a representative from the Austin
Part-Time Firefighters Relief Association on the city of Austin's current allocation of fire
state aid.
new text end

new text begin (c) Members of the work group shall include:
new text end

new text begin (1) two representatives of Minnesota cities, appointed by the League of Minnesota Cities;
new text end

new text begin (2) two representatives of Minnesota fire chiefs, who are fire chiefs from fire departments
with both volunteer firefighters covered by either a volunteer firefighter relief association
governed by Minnesota Statutes, chapter 424A, or the voluntary statewide volunteer
firefighter retirement plan governed by Minnesota Statutes, chapter 353G, and firefighters
covered by the public employees police and fire retirement plan governed by Minnesota
Statutes, section 353.64, appointed by the Minnesota State Fire Chiefs Association;
new text end

new text begin (3) two representatives of Minnesota volunteer firefighters, who are active volunteer
firefighters, appointed by the Minnesota State Fire Departments Association;
new text end

new text begin (4) one representative of the Office of the State Auditor, designated by the state auditor;
and
new text end

new text begin (5) one representative of the Department of Revenue, designated by the commissioner
of revenue.
new text end

new text begin (d) The work group shall elect a chair from among its members.
new text end

new text begin (e) The work group shall submit a report by December 31, 2017, that contains the work
group's recommendations to the chair, vice-chair, and executive director of the Legislative
Commission on Pensions and Retirement. The report shall include recommendations
regarding:
new text end

new text begin (1) municipalities allocating a portion of fire state aid to pay employer contributions to
the public employees police and fire retirement plan;
new text end

new text begin (2) implementation of policies if fire state aid is divided, including the determination
of:
new text end

new text begin (i) the entities that will decide how the fire state aid is allocated;
new text end

new text begin (ii) how the allocation will be documented;
new text end

new text begin (iii) how the allocation may be amended, if at all;
new text end

new text begin (iv) what entity allocates the fire state aid; and
new text end

new text begin (v) whether a government agency must monitor and enforce the allocation;
new text end

new text begin (3) the scope of allowable allocations of fire state aid; and
new text end

new text begin (4) other issues the work group determines are relevant.
new text end

new text begin (e) The work group expires the day following the last day of the 2018 legislative session.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 29. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2016, section 424A.02, subdivision 13, new text end new text begin is repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2018.
new text end

ARTICLE 16

MSRS-ADMINISTERED RETIREMENT PLAN MODIFICATIONS

Section 1.

Minnesota Statutes 2016, section 352.113, subdivision 2, is amended to read:

Subd. 2.

Application; accrual of benefits.

new text begin (a) new text end An employee making claim for a total
and permanent disability benefit, or someone acting on behalf of the employee upon proof
of authority satisfactory to the director, shall file a written application for benefits in the
office of the systemnew text begin on or before the deadline specified in subdivision 4, paragraph (g)new text end .

new text begin (b)new text end The application must be in a form and manner prescribed by the executive director.

new text begin (c)new text end The benefit shall begin to accrue the day following the start of disability or the day
following the last day paid, whichever is later, but not earlier than 180 days before the date
the application is filed with the director.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 2.

Minnesota Statutes 2016, section 352.91, subdivision 3f, is amended to read:

Subd. 3f.

Additional Department of Human Services personnel.

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

(b) The employment positions are:

(1) behavior analyst 2;

(2) behavior analyst 3;

(3) certified occupational therapy assistant 1;

(4) certified occupational therapy assistant 2;

(5) chemical dependency counselor senior;

(6) client advocate;

(7) clinical program therapist 2;

(8) clinical program therapist 3;

(9) clinical program therapist 4;

(10) customer services specialist principal;

(11) dental assistant registered;

(12) group supervisor;

(13) group supervisor assistant;

(14) human services support specialist;

(15) licensed alcohol and drug counselor;

(16) licensed practical nurse;

(17) management analyst 3;

(18) occupational therapist;

(19) occupational therapist, senior;

new text begin (20) physical therapist;
new text end

deleted text begin (20)deleted text end new text begin (21) new text end psychologist 1;

deleted text begin (21)deleted text end new text begin (22) new text end psychologist 2;

deleted text begin (22)deleted text end new text begin (23) new text end psychologist 3;

deleted text begin (23)deleted text end new text begin (24) new text end recreation program assistant;

deleted text begin (24)deleted text end new text begin (25) new text end recreation therapist lead;

deleted text begin (25)deleted text end new text begin (26) new text end recreation therapist senior;

deleted text begin (26)deleted text end new text begin (27) new text end rehabilitation counselor senior;

deleted text begin (27)deleted text end new text begin (28) new text end security supervisor;

deleted text begin (28)deleted text end new text begin (29) new text end skills development specialist;

deleted text begin (29)deleted text end new text begin (30) new text end social worker senior;

deleted text begin (30)deleted text end new text begin (31) new text end social worker specialist;

deleted text begin (31)deleted text end new text begin (32) new text end social worker specialist, senior;

deleted text begin (32)deleted text end new text begin (33) new text end special education program assistant;

deleted text begin (33)deleted text end new text begin (34) new text end speech pathology clinician;

deleted text begin (34)deleted text end new text begin (35) new text end work therapy assistant; and

deleted text begin (35)deleted text end new text begin (36) new text end work therapy program coordinator.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective on the first day of the first payroll period
occurring after the date of enactment and applies to prospective service only.
new text end

Sec. 3.

Minnesota Statutes 2016, section 352.91, subdivision 3g, is amended to read:

Subd. 3g.

Additional Corrections Department personnel.

(a) "Covered correctional
service" means service by a state employee in one of the employment positions specified
in paragraph (b) if at least 75 percent of the employee's working time is spent in direct
contact with inmates and the determination of this direct contact is certified to the executive
director by the commissioner of corrections.

(b) The qualifying employment positions are:

(1) corrections discipline unit supervisor;

(2) dental assistant registered;

(3) dental hygienist;

(4) new text begin food service supervisor;
new text end

new text begin (5) medical assistant, certified;
new text end

new text begin (6) new text end psychologist 2; and

deleted text begin (5)deleted text end new text begin (7) new text end sentencing to service crew leader involved with the inmate community work
crew program.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 4.

Minnesota Statutes 2016, section 352.91, is amended by adding a subdivision to
read:

new text begin Subd. 4c. new text end

new text begin Department of Human Services; procedure for coverage change
considerations. new text end

new text begin (a) The commissioner of human services shall appoint a standing review
committee to review and determine classifications or positions that may be included in
legislative requests for correctional state employees retirement plan coverage under
subdivision 4a.
new text end

new text begin (b) The department's human resources director shall convene a meeting of the review
committee only at the request of a labor organization or a member of the department's
management team.
new text end

new text begin (c) The review committee must review all requests and the supporting documentation
for coverage by the correctional state employees retirement plan and must make a
recommendation to the commissioner regarding which classifications or positions meet the
statutory requirements for coverage. The review committee must also make a
recommendation to the commissioner regarding classifications or positions that no longer
meet the statutory requirement for coverage by the correctional state employees retirement
plan and removal of the classification or position from the applicable statute.
new text end

new text begin (d) The department's human resources director must provide a notice of each
determination and of the employee's right to appeal the determination. Appeals must be
filed with the department's human resources director within 30 days of the date of the notice
of determination.
new text end

new text begin (e) The commissioner of human services shall review appeals of determinations for
coverage. The commissioner's determinations are final.
new text end

new text begin (f) All classifications or positions recommended by the review committee for inclusion
in or exclusion from the correctional state employees retirement plan must be forwarded to
the commissioner of human services for the preparation of legislation to implement the
coverage change and submission. If the commissioner determines that the employment
position is appropriate for inclusion in or exclusion from the correctional state employees
retirement plan, the commissioner shall submit a written recommendation documenting
classifications or positions that should or should not be covered by the correctional state
employees retirement plan. The department's human resources director must retain the
documentation of each request and the final determination.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 5.

Minnesota Statutes 2016, section 352D.06, subdivision 1, is amended to read:

Subdivision 1.

Annuity; reserves.

When a participant attains at least age 55, terminates
from covered service, and applies for a retirement annuity, the cash value of the participant's
shares must be transferred to the general state employees retirement fund and deleted text begin mustdeleted text end be used
to provide an annuity for the deleted text begin retired employeedeleted text end new text begin participant new text end based upon the participant's age
when the benefit begins to accrue deleted text begin according to the reserve basis used by the general state
employees retirement plan in determining pensions and reservesdeleted text end .

new text begin (a) Except for participants described in paragraph (b), the monthly amount of the annuity
must be determined using the actuarial assumptions in effect for the general state employees
retirement plan under section 356.215 on the accrual date.
new text end

new text begin (b) For any participant who retires on or after July 1, 2017, and before July 1, 2020,
when the participant is at least age 63 or has had at least 26 years of covered service, the
monthly amount of the annuity must be determined using the actuarial assumptions in effect
for the general state employees retirement plan under section 356.215 on June 30, 2016.
new text end

new text begin Subd. 1a. new text end

new text begin Postretirement adjustments. new text end

The annuity under deleted text begin thisdeleted text end subdivision new text begin 1 new text end is eligible
for postretirement adjustments under section 356.415.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 6.

Minnesota Statutes 2016, section 352F.04, subdivision 1, is amended to read:

Subdivision 1.

Enhanced augmentation rates.

deleted text begin (a)deleted text end The deferred annuity of a terminated
hospital employee deleted text begin who attained that status before June 2, 2006,deleted text end is subject to augmentation
under Minnesota Statutes 1994, section 352.72, subdivision 2, except that the rate of
augmentation deleted text begin is 5.5 percent compounded annually untildeleted text end new text begin to be applied each new text end January 1 new text begin is the
new text end following deleted text begin the year in which the person attains age 55.deleted text end new text begin :
new text end

	new text begin January 1, 2018 new text end	new text begin 4.5 percent new text end
	new text begin January 1, 2019 new text end	new text begin 3.75 percent new text end
	new text begin January 1, 2020 new text end	new text begin 3.0 percent new text end
	new text begin January 1, 2021 new text end	new text begin 2.25 percent new text end
	new text begin January 1, 2022 new text end	new text begin 1.5 percent new text end
	new text begin January 1, 2023 new text end	new text begin 0.75 percent new text end
	new text begin After December 31, 2023, the deferred annuity must not be augmented. new text end

new text begin Augmentation for each year is effective as of January 1 of that year.
new text end

deleted text begin From that date to the effective date of retirement, the augmentation rate is 7.5 percent
compounded annually.
deleted text end

deleted text begin (b) If a terminated hospital employee attained that status on or after June 2, 2006, the
augmentation rate is four percent compounded annually until January 1, following the year
in which the person attains age 55. From that date to the effective date of retirement, the
augmentation rate is six percent compounded annually.
deleted text end

Sec. 7.

Minnesota Statutes 2016, section 352F.04, subdivision 2, is amended to read:

Subd. 2.

deleted text begin Exceptionsdeleted text end new text begin Exceptionnew text end .

The deleted text begin increaseddeleted text end new text begin enhanced new text end augmentation rates specified
in subdivision 1 do not apply if the terminated new text begin hospital new text end employeedeleted text begin :
deleted text end

deleted text begin (1) becomes covered again by a retirement plan enumerated in section 356.30, subdivision
3; or
deleted text end

deleted text begin (2)deleted text end begins receipt of a retirement annuity new text begin under chapter 352 before age 62 new text end while employed
by the employer which assumed operations of the medical facility or other public employing
unit or purchased the medical facility or other public employing unit.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from July 1, 2015.
new text end

Sec. 8.

Minnesota Statutes 2016, section 352F.04, is amended by adding a subdivision to
read:

new text begin Subd. 3. new text end

new text begin Return to covered employment. new text end

new text begin (a) If a terminated hospital employee becomes
covered by a retirement plan enumerated in section 356.30, subdivision 3, the employee
shall be entitled to whichever of the following annuities produces the highest monthly
payment:
new text end

new text begin (1) the deferred annuity and augmentation to which the employee would have been
entitled under subdivision 1 reduced by the dollar amount of any annuity earned under any
enumerated retirement plan after the effective date defined in section 352F.02, subdivision
3;
new text end

new text begin (2) a combined service annuity calculated under section 356.30; or
new text end

new text begin (3) an annuity calculated under section 352.72 for coverage by more than one retirement
system using the augmentation rates set forth in section 352.72, subdivision 2, paragraph
(a).
new text end

new text begin (b) This subdivision applies to any terminated hospital employee who begins to receive
a retirement annuity under chapter 352 on or after July 1, 2015.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 9. new text begin ANNUITY ADJUSTMENT.
new text end

new text begin Under Minnesota Statutes, section 352F.04, subdivision 3, if any terminated hospital
employee began to receive a retirement annuity under Minnesota Statutes, chapter 352, as
adjusted under Minnesota Statutes, chapter 352F, on or after July 1, 2015, but prior to the
effective date of this section, the terminated hospital employee's annuity must be recalculated
under Minnesota Statutes, section 352F.04, subdivision 3, and, if the monthly amount as
recalculated exceeds the monthly amount being received by the terminated hospital employee,
the Minnesota State Retirement System shall:
new text end

new text begin (1) begin paying the recalculated monthly amount as of the first payment date after the
effective date of this section; and
new text end

new text begin (2) pay the sum of the difference between the amount the terminated hospital employee
received each month since commencement of the annuity and the amount the terminated
hospital employee would have received under Minnesota Statutes, section 352F.04,
subdivision 3, for that month. The sum of the difference each month shall be paid in a lump
sum to the terminated hospital employee along with the first payment of the recalculated
amount under clause (1).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 10. new text begin COVERAGE TRANSFER DATES.
new text end

new text begin (a) The coverage transfer under Minnesota Statutes, section 352.91, subdivision 3g,
paragraph (b), clause (4), also covers employment in that position on or after April 18, 2016,
for purposes of Minnesota Statutes, section 352.955, subdivisions 1, 3, 4, 5, and 6.
new text end

new text begin (b) The coverage change under Minnesota Statutes, section 352.91, subdivision 3g,
paragraph (b), clause (5), is prospective only.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

ARTICLE 17

PERA-ADMINISTERED RETIREMENT PLAN MODIFICATIONS

Section 1.

Minnesota Statutes 2016, section 353.01, subdivision 43, is amended to read:

Subd. 43.

Line of duty death.

"Line of duty death" meansnew text begin :
new text end

new text begin (1)new text end a death that occurs while performing or as a direct result of performing normal or
less frequent duties which are specific to protecting the property and personal safety of
others and that present inherent dangers that are specific to the positions covered by the
public employees police and fire plandeleted text begin .deleted text end new text begin ; or
new text end

new text begin (2) a death that is determined by the commissioner of public safety to meet the
requirements of section 299A.41, subdivision 3.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2016, section 353G.01, subdivision 9, is amended to read:

Subd. 9.

Municipality.

"Municipality" means a governmental entity specified in section
69.011, subdivision 1, paragraph (b), clauses (1), (2), and (5)deleted text begin .deleted text end new text begin , a city or township that has
entered into a contract with an independent nonprofit firefighting corporation, or a city or
township that has entered into a contract with a joint powers entity established under section
471.59.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3.

Minnesota Statutes 2016, section 353G.01, is amended by adding a subdivision to
read:

new text begin Subd. 9a. new text end

new text begin Relief association. new text end

new text begin "Relief association" means a volunteer firefighter relief
association established under chapter 424A to which records, assets, and liabilities related
to lump-sum or monthly benefits for active and former firefighters will be transferred from
the retirement fund upon satisfaction of the requirements of section 353G.17.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 4.

Minnesota Statutes 2016, section 353G.02, subdivision 6, is amended to read:

Subd. 6.

Initial administrative expenses of the monthly benefit retirement division;
allocation of reimbursement.

deleted text begin (a)deleted text end The administration expenses incurred by the Public
Employees Retirement Association in the establishment of the monthly benefit retirement
division of the voluntary statewide volunteer firefighter retirement plan, including any
computer programming expenses and any actuarial consultant expenses, are payable from
the assets of the initial monthly benefit volunteer firefighter relief association that elects to
transfer its administration to the voluntary statewide volunteer firefighter retirement plan,
following the transfer of assets.

deleted text begin (b) The administrative expenses in excess of $33,600 paid under paragraph (a) must be
reimbursed by the next nine monthly benefit volunteer firefighter relief associations that
transfer plan administration to the voluntary statewide volunteer firefighter retirement plan.
The reimbursement charge for each of the nine is three-tenths of one percent of the market
value of assets of the volunteer firefighter relief association as of December 31, 2012. The
reimbursement amounts, up to the amount of administrative expenses actually incurred
under paragraph (a) in excess of $33,600, must be credited to the account of the fire
department associated with the former monthly benefit volunteer firefighter relief association
that first transferred plan administration to the volunteer firefighter retirement plan.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 5.

Minnesota Statutes 2016, section 353G.03, subdivision 3, is amended to read:

Subd. 3.

Composition.

(a) The advisory board consists of deleted text begin eightdeleted text end new text begin ten new text end members.

(b) The advisory board members are:

(1) one representative of Minnesota townships, appointed by the Minnesota Association
of Townships;

(2) two representatives of Minnesota cities, appointed by the League of Minnesota Cities;

(3) one representative of Minnesota fire chiefs, who is a fire chief, appointed by the
Minnesota State Fire Chiefs Association;

(4) two representatives of Minnesota volunteer firefighters, all who are active volunteer
firefighters, one of whom is covered by the lump-sum retirement division and one of whom
is covered by the monthly benefit retirement division, appointed by the Minnesota State
Fire Chiefs Association;

(5) deleted text begin one representativedeleted text end new text begin three representativesnew text end of Minnesota volunteer firefighters who deleted text begin isdeleted text end
new text begin are new text end covered by the lump-sum retirement division, appointed by the Minnesota State Fire
Departments Association; and

(6) one representative of the Office of the State Auditor, designated by the state auditor.

Sec. 6.

Minnesota Statutes 2016, section 353G.08, subdivision 3, is amended to read:

Subd. 3.

Authorized account disbursements.

The assets of a lump-sum retirement
account or of a monthly benefit retirement account of the retirement fund may only be
disbursed for:

(1) the administrative expenses of the retirement plan;

(2) the investment expenses of the retirement fund;

(3) the service pensions payable under section 353G.10, 353G.11, 353G.14, or 353G.15;

(4) the survivor benefits payable under section 353G.12; deleted text begin and
deleted text end

(5) the disability benefit coverage insurance premiums under section 353G.115new text begin ; and
new text end

new text begin (6) a transfer of assets under section 353G.17new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 7.

Minnesota Statutes 2016, section 353G.11, subdivision 1, is amended to read:

Subdivision 1.

Service pension levels; lump-sum retirement division.

Except as
provided in subdivision 1a, the lump-sum retirement division of the retirement plan provides
the following levels of service pension amounts per full year of good time service credit to
be selected at the election of coverage:

(1) a minimum service pension level of $500 per year;

(2) a maximum service pension level deleted text begin of $7,500 per yeardeleted text end new text begin equal to the largest amount
permitted under section 424A.02, subdivision 3, paragraph (d), as a maximum lump-sum
service pension amount payable for each year of servicenew text end ; and

(3) deleted text begin 69deleted text end service pension levels between the minimum level and the maximum level in
$100 increments.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 8.

new text begin [353G.17] TRANSFER AUTHORIZED.
new text end

new text begin Subdivision 1. new text end

new text begin Entity to initiate transfer. new text end

new text begin (a) An entity operating a fire department with
firefighters who are covered by the retirement plan may initiate the transfer of records,
assets, and liabilities related to the firefighters' lump-sum or monthly benefits under the
retirement plan to a relief association that, at the time of the transfer, will be associated with
the entity. The entity may be a municipality, an independent nonprofit firefighting
corporation, or a joint powers entity.
new text end

new text begin (b) A transfer is initiated by filing with the executive director the following:
new text end

new text begin (1) a notice of intent to initiate a transfer;
new text end

new text begin (2) a copy of the resolutions of the entity approving the transfer of records, assets, and
liabilities from the retirement plan to a relief association; and
new text end

new text begin (3) for each firefighter, the firefighter's name, address, telephone number, and e-mail
address, if any.
new text end

new text begin (c) The notice shall inform the executive director of the following:
new text end

new text begin (1) the transfer effective date, which shall comply with paragraph (d);
new text end

new text begin (2) the name of the relief association and the municipality, independent nonprofit
firefighting corporation, or joint powers entity with which the relief association is associated;
and
new text end

new text begin (3) a summary of the type and level of pension or retirement benefits, including any
ancillary benefits, provided by the relief association or, in the case of a new relief association,
to be provided, and related terms and conditions.
new text end

new text begin (d) If the notice of intent to transfer is filed with the executive director before September
1, the transfer takes effect on the next January 1. If the notice of intent to transfer is filed
after August 31, the transfer takes effect on the January 1 following the one-year anniversary
of the filing of the notice.
new text end

new text begin Subd. 2. new text end

new text begin Approval by the relief association. new text end

new text begin (a) Before a transfer of records, assets,
and liabilities from the retirement plan to a relief association may occur, the board of trustees
of the relief association shall adopt resolutions as follows:
new text end

new text begin (1) approving and accepting the transfer of records, assets, and liabilities from the
retirement plan; and
new text end

new text begin (2) amending the bylaws of the relief association as necessary to add the firefighters
whose benefits are being transferred from the retirement plan and to provide that each benefit
being transferred retains vesting, distribution, and other rights to which the firefighter, for
whom the benefit is being transferred, is entitled under the terms of the retirement plan to
the date of the transfer.
new text end

new text begin The board of trustees shall file a copy of the resolutions with the executive director.
new text end

new text begin (b) The board of trustees of the relief association shall file with the state auditor the
following:
new text end

new text begin (1) a copy of the resolutions required under paragraph (a);
new text end

new text begin (2) a copy of the bylaws of the relief association and any bylaw amendments;
new text end

new text begin (3) a copy of the relief association's investment policy;
new text end

new text begin (4) a statement that a board of trustees has been duly elected and each trustee's name,
address, telephone number, and e-mail address, if any;
new text end

new text begin (5) a copy of the most recent annual financial, investment, and plan administration report
filed under section 69.051, unless the due date for the first such report has not yet occurred;
and
new text end

new text begin (6) a copy of the documentation indicating that a special fund has been established with
a financial institution to receive a transfer of assets from the retirement plan.
new text end

new text begin (c) Upon receipt of the information and documents required under paragraph (b), the
state auditor shall issue to the relief association and the executive director written
confirmation of receipt of all required information and documents.
new text end

new text begin Subd. 3. new text end

new text begin Approval by the firefighters. new text end

new text begin (a) A transfer under subdivision 1 shall not occur
unless the active firefighters whose benefits are to be transferred from the retirement plan
to a relief association approve the transfer by a vote of the firefighters conducted by the
executive director.
new text end

new text begin (b) The approval of the firefighters shall be determined by a vote of all active firefighters
whose benefits are to be transferred. An affirmative vote of a majority of the firefighters
voting shall constitute approval.
new text end

new text begin (c) The executive director shall provide a voting ballot and the following to each active
firefighter:
new text end

new text begin (1) a summary of the benefits currently provided to the firefighters under the retirement
plan;
new text end

new text begin (2) a copy of the resolutions of the municipality approving the transfer;
new text end

new text begin (3) a copy of the resolutions of the board of trustees approving the transfer;
new text end

new text begin (4) a copy of the notice of intent to transfer required under subdivision 1;
new text end

new text begin (5) a copy of the state auditor's confirmation required under subdivision 2, paragraph
(c); and
new text end

new text begin (6) the instructions and time frame for voting. Firefighters shall be given no less than
30 days in which to vote.
new text end

new text begin (d) The vote of any firefighter, including whether or not the firefighter voted, shall not
be disclosed to any officer or member of the staff of the municipality or to any officer,
trustee, or member of the staff of the relief association.
new text end

new text begin (e) The executive director shall tally the votes and report the results to the relief
association and the municipality.
new text end

new text begin Subd. 4. new text end

new text begin Transfer process. new text end

new text begin (a) Upon completion of the actions required under
subdivisions 1 to 3, the retirement plan shall transfer to the relief association as of the
effective date identified in the notice under subdivision 1, the records, assets, and liabilities
related to the former and current firefighters with benefits under the retirement plan, along
with any assets in excess of liabilities credited to the lump-sum account or the monthly
benefit retirement account attributable to the firefighters and the municipality.
new text end

new text begin (b) The executive director:
new text end

new text begin (1) shall transfer the assets in cash;
new text end

new text begin (2) shall transfer any accounts receivable associated with the lump-sum account or
monthly benefit retirement account;
new text end

new text begin (3) shall settle any accounts payable from the account before the transfer; and
new text end

new text begin (4) may deduct from the assets to be transferred reasonable costs incurred by the
retirement plan to conduct the voting process and complete the transfer.
new text end

new text begin Subd. 5. new text end

new text begin Relief association obligations and rights upon transfer from the retirement
plan. new text end

new text begin (a) Upon transfer of the assets of the lump-sum account or monthly benefit retirement
account, the pension liabilities attributable to the benefits for the former and current
firefighters shall become the obligation of the special fund of the relief association.
new text end

new text begin (b) Upon the transfer of the assets of the lump-sum account or monthly benefit retirement
account, the board of trustees of the relief association has legal title to and management
responsibility for the transferred assets as trustees for persons having a beneficial interest
in those assets arising out of the benefit coverage provided by the account.
new text end

new text begin (c) The relief association is the successor in interest with respect to all claims against
the retirement plan relating to the transferred lump-sum account or monthly benefit retirement
account, except for claims alleging any act or acts by the retirement plan or its fiduciaries
that were not done in good faith or that constituted a breach of fiduciary responsibility under
chapter 356A.
new text end

new text begin (d) The value of each volunteer firefighter's benefit in the retirement plan on the day
before the asset transfer shall be no less than the value of the volunteer firefighter's benefit
on the day after the asset transfer. The relief association shall give credit, with respect to
each firefighter whose benefit is being transferred, for all past service, including service
credit with the retirement plan and with any predecessor relief association, to the extent
credit is given for such service in the records of the retirement plan for that firefighter.
new text end

new text begin (e) Upon completion of the transfer of records, assets, and liabilities, the executive
director shall provide written notice to the state auditor, the commissioner of revenue, and
the secretary of state that the transfer is complete.
new text end

new text begin Subd. 6. new text end

new text begin Failure to obtain approval, certification, or verification. new text end

new text begin If the municipality,
board of trustees, or firefighters fail to approve the transfer under subdivision 1, 2, or 3 or
the requirements of subdivision 2, paragraph (b), are not met, the transfer of records, assets,
and liabilities from the retirement plan to the relief association shall not occur.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 9. new text begin BROOK PARK; LOWERING SERVICE PENSION LEVEL.
new text end

new text begin (a) Notwithstanding any law to the contrary, the Public Employees Retirement Association
must lower the annual service pension level for the Brook Park lump-sum account benefits
payable to its volunteer firefighters under Minnesota Statutes, section 353G.11, subdivision
2, from $1,200 to $600, retroactively from January 1, 2016.
new text end

new text begin (b) The city of Brook Park must annually review the service pension level to determine
if the level is appropriate, taking into account the city's need to recruit and retain volunteer
firefighters.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin Paragraph (a) is effective the day following final enactment.
Paragraph (b) is effective the day after the governing body of the city of Brook Park and
its chief clerical officer timely complete their compliance with Minnesota Statutes, section
645.021, subdivisions 2 and 3.
new text end

ARTICLE 18

GENERALLY APPLICABLE RETIREMENT CHANGES

Section 1.

Minnesota Statutes 2016, section 356.24, subdivision 1, is amended to read:

Subdivision 1.

Restriction; exceptions.

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

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

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

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

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

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

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

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

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

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

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

(8) to the laborers national industrial pension fund or to a laborers local pension fund
for the employees of a governmental subdivision who are covered by a collective bargaining
agreement that provides for coverage by that fund and that sets forth a fund contribution
rate, but not to exceed an employer contribution of deleted text begin $5,000deleted text end new text begin $7,000new text end per year per employee;

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

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

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

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

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

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

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

new text begin [356.631] ADDITIONAL SOURCES OF FUNDING.
new text end

new text begin Notwithstanding any other provision of law to the contrary, in addition to all sources of
funding described in Minnesota Statutes, section 356.63, paragraphs (a) and (b), any public
retirement plan described in Minnesota Statutes, section 356.63, paragraph (b), is authorized
to accept, at its discretion, for deposit in its fund the following:
new text end

new text begin (1) gifts;
new text end

new text begin (2) donations;
new text end

new text begin (3) bequests; and
new text end

new text begin (4) life insurance death benefits.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2016, sections 352.04, subdivision 11; and 353.34, subdivision 6, new text end new text begin
are repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

ARTICLE 19

SMALL GROUP RETIREMENT CHANGES

Section 1. new text begin MSRS-GENERAL RETIREMENT ELIGIBILITY CLARIFICATION;
SERVICE CREDIT PURCHASE IN CERTAIN INSTANCES.
new text end

new text begin (a) Notwithstanding any provision of law to the contrary, an eligible person described
in paragraph (b) is entitled to purchase prior uncredited service credit under paragraph (c)
and, if the service credit purchase is made, to have an effective start date for active retirement
plan membership of June 1, 1989, and to retire under Minnesota Statutes, section 352.116,
subdivision 1.
new text end

new text begin (b) An eligible person is a person who:
new text end

new text begin (1) was born on the dates as follows:
new text end

	new text begin employee new text end	new text begin birth date new text end
	new text begin A new text end	new text begin October 2, 1968 new text end
	new text begin B new text end	new text begin June 12, 1965 new text end
	new text begin C new text end	new text begin August 10, 1958 new text end
	new text begin D new text end	new text begin April 29, 1963 new text end
	new text begin E new text end	new text begin April 11, 1955 new text end
	new text begin F new text end	new text begin August 13, 1966 new text end
	new text begin G new text end	new text begin April 22, 1961 new text end
	new text begin H new text end	new text begin December 31, 1958 new text end
	new text begin I new text end	new text begin October 10, 1966 new text end
	new text begin J new text end	new text begin February 4, 1961 new text end
	new text begin K new text end	new text begin August 21, 1963 new text end
	new text begin L new text end	new text begin January 23, 1960 new text end
	new text begin M new text end	new text begin September 19, 1966 new text end
	new text begin N new text end	new text begin November 3, 1961 new text end
	new text begin O new text end	new text begin June 13, 1958 new text end
	new text begin P new text end	new text begin June 23, 1954 new text end
	new text begin Q new text end	new text begin October 20, 1956 new text end
	new text begin R new text end	new text begin July 28, 1955 new text end
	new text begin S new text end	new text begin May 6, 1960 new text end
	new text begin T new text end	new text begin March 19, 1966 new text end
	new text begin U new text end	new text begin August 19, 1966 new text end
	new text begin V new text end	new text begin March 14, 1959 new text end

new text begin (2) became an employee of the Minnesota Department of Transportation prior to July
1, 1989, in a position which was not covered by the general state employees retirement plan
of the Minnesota State Retirement System;
new text end

new text begin (3) was eventually employed as a permanent employee after June 30, 1989, and covered
by the general state employees retirement plan of the Minnesota State Retirement System
on the dates as follows:
new text end

	new text begin employee new text end	new text begin membership record date new text end
	new text begin A new text end	new text begin September 27, 1989 new text end
	new text begin B new text end	new text begin September 27, 1989 new text end
	new text begin C new text end	new text begin September 26, 1989 new text end
	new text begin D new text end	new text begin September 27, 1989 new text end
	new text begin E new text end	new text begin September 26, 1989 new text end
	new text begin F new text end	new text begin September 13, 1989 new text end
	new text begin G new text end	new text begin September 1, 1989 new text end
	new text begin H new text end	new text begin September 27, 1989 new text end
	new text begin I new text end	new text begin September 27, 1989 new text end
	new text begin J new text end	new text begin September 13, 1989 new text end
	new text begin K new text end	new text begin September 13, 1989 new text end
	new text begin L new text end	new text begin September 26, 1989 new text end
	new text begin M new text end	new text begin August 30, 1989 new text end
	new text begin N new text end	new text begin September 26, 1989 new text end
	new text begin O new text end	new text begin September 13, 1989 new text end
	new text begin P new text end	new text begin September 27, 1989 new text end
	new text begin Q new text end	new text begin September 27, 1989 new text end
	new text begin R new text end	new text begin September 27, 1989 new text end
	new text begin S new text end	new text begin September 13, 1989 new text end
	new text begin T new text end	new text begin September 13, 1989 new text end
	new text begin U new text end	new text begin September 27, 1989 new text end
	new text begin V new text end	new text begin September 26, 1989 new text end

new text begin (4) was sent annual statements by the Minnesota State Retirement System between July
1, 2005, and July 1, 2015, indicating eligibility for a retirement benefit under Minnesota
Statutes, section 352.116, subdivision 1; and
new text end

new text begin (5) was sent notification from the Minnesota State Retirement System revising the start
date for general state employees retirement plan membership from a date before July 1,
1989, to a date after June 30, 1989, and indicating consequent inapplicability of Minnesota
Statutes, section 352.116, subdivision 1.
new text end

new text begin (c) An eligible person may purchase allowable service credit in the general state
employees retirement plan of the Minnesota State Retirement System by paying an amount
equal to the employer contributions and employee contributions that would have been paid
from June 1, 1989, to the end of the month prior to the date the employee entered covered
service plus interest at the rate of 8.5 percent until June 30, 2015, and eight percent thereafter
compounded annually on the combined employer and employee contribution amount from
the date the contributions would have been paid to the date the Minnesota State Retirement
System receives payment for this service credit purchase. The payment must be made in a
lump sum.
new text end

new text begin (d) An eligible person who purchases allowable service credit under paragraph (c) has
a June 1, 1989, start date for the purpose of allowable service credited by the general state
employees retirement plan of the Minnesota State Retirement System and is eligible for a
retirement annuity under Minnesota Statutes, section 352.116, subdivision 1.
new text end

new text begin (e) Authority to purchase prior uncredited service credit under this section expires one
year from the effective date of this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2. new text begin PERA-GENERAL; PURCHASE OF SERVICE CREDIT FOR ST. CLOUD
STATE UNIVERSITY EMPLOYEE.
new text end

new text begin (a) Notwithstanding any provision of law to the contrary, an eligible person described
in paragraph (b) is entitled to purchase from the general employees retirement plan of the
Public Employees Retirement Association allowable service credit under Minnesota Statutes,
section 353.01, subdivision 16, for the period of service described in paragraph (c).
new text end

new text begin (b) An eligible person is a person who:
new text end

new text begin (1) was born on September 1, 1960;
new text end

new text begin (2) was an employee of St. Cloud State University on March 14, 2016;
new text end

new text begin (3) was a member of the general employees retirement plan of the Public Employees
Retirement Association on March 14, 2016;
new text end

new text begin (4) was employed by St. Cloud Technical College on April 1, 1993, and was a member
of the general employees retirement plan of the Public Employees Retirement Association;
and
new text end

new text begin (5) changed employment within St. Cloud State University on February 22, 2006, and
was erroneously placed into the higher education individual retirement account plan from
February 22, 2006, until May 10, 2011, by the Minnesota State Colleges and Universities
system.
new text end

new text begin (c) The period of uncredited service authorized for purchase is the period of February
22, 2006, until May 10, 2011, during which time the eligible person was erroneously placed
into and contributed to the higher education individual retirement account plan.
new text end

new text begin (d) The eligible person's member contributions to the higher education individual
retirement account plan must be transferred to the Public Employees Retirement Association
with any earned investment returns on those contributions. The eligible person must pay
the member contributions that the eligible person would have made to the Public Employees
Retirement Association on the eligible person's compensation from the Minnesota State
Colleges and Universities system for the period of service described in paragraph (c) as if
the person had been covered by the Public Employees Retirement Association during the
period, plus annual compound interest on that amount at the rate of 8.5 percent from February
22, 2006, until June 30, 2015, and eight percent from July 1, 2015, until the date on which
payment is made to the Public Employees Retirement Association, less the transferred
member contributions and investment earnings.
new text end

new text begin (e) Upon transfer of the equivalent member contribution amount and any additional
payments under paragraph (d), the balance of the eligible person's higher education individual
retirement account plan account must be transferred to the Public Employees Retirement
Association within 60 days following the receipt of the eligible person's payment under
paragraph (d).
new text end

new text begin (f) Upon the transfer of the amounts under paragraphs (d) and (e), the Minnesota State
Colleges and Universities system shall pay the prior service credit purchase payment amount
calculated under Minnesota Statutes, section 356.551, less any amounts received under
paragraphs (d) and (e), within 60 days following the receipt of the eligible person's payment
under paragraph (d).
new text end

new text begin (g) Upon the transfers and payments under paragraph (f), the eligible person must be
credited by the Public Employees Retirement Association with allowable service credit for
Minnesota State Colleges and Universities System employment from February 22, 2006,
until May 10, 2011.
new text end

new text begin (h) Authority to make a service credit purchase under this section expires one year from
the effective date of this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3. new text begin TRA COVERAGE ELECTION AND PERA REFUND REPAYMENT
AUTHORITY FOR CERTAIN MNSCU EMPLOYEE.
new text end

new text begin (a) Notwithstanding any provision of Minnesota Statutes, chapter 353 or 354B, to the
contrary, an eligible person described in paragraph (b) is eligible to become a coordinated
member of the Teachers Retirement Association and to purchase service and salary credit
in the Teachers Retirement Association coordinated plan retroactively from July 1, 2001,
upon repaying a member contribution refund taken from the general employees retirement
plan of the Public Employees Retirement Association under paragraph (c), upon making
an election under paragraph (e), and upon making all required payments under paragraphs
(f) and (g).
new text end

new text begin (b) An eligible person is a person who:
new text end

new text begin (1) was born April 4, 1956;
new text end

new text begin (2) was employed by a governmental subdivision in 1995, with retirement coverage in
the general employees retirement plan of the Public Employees Retirement Association,
for which a refund of member contributions and interest was taken before 2001;
new text end

new text begin (3) was employed by St. Cloud State University in the late 1990s, with retirement
coverage in the general state employees retirement plan of the Minnesota State Retirement
System;
new text end

new text begin (4) was hired as an academic advisor by St. Cloud State University on July 1, 2001, with
retirement coverage in the higher education individual retirement account plan; and
new text end

new text begin (5) was not informed of the option to elect Teachers Retirement Association coverage
in the coverage election authorized by Minnesota Statutes 2001, section 354B.21, so remained
in the higher education individual retirement account plan.
new text end

new text begin (c) The refund repayment required by Minnesota Statutes, section 356.551, subdivision
1, paragraph (c), must be calculated under Minnesota Statutes, section 353.35, subdivision
1, paragraph (c).
new text end

new text begin (d) Authority to repay a refund under this section expires one year from the effective
date of this section.
new text end

new text begin (e) To be eligible for coverage by the Teachers Retirement Association, an eligible
person must submit a written application to the executive director of the Teachers Retirement
Association on a form provided by the Teachers Retirement Association. The application
must include all documentation of the applicability of this section and any other relevant
information that the executive director may require. Teachers Retirement Association plan
membership commences after the date of the retirement coverage election under this section
and past salary and service credit is granted for past Minnesota State Colleges and
Universities system employment from July 1, 2001, until the executive director receives
the written application specified in this paragraph and receipts of the payments specified in
paragraphs (c), (f), and (g). Coverage by the Teachers Retirement Association is in lieu of
coverage by the individual retirement account plan.
new text end

new text begin (f) If the eligible person makes the retirement coverage election under paragraph (e),
the eligible person's member contributions to the higher education individual retirement
account plan must be transferred to the Teachers Retirement Association with any earned
investment returns on those contributions. If the transferred member contributions and
investment earnings are less than the calculated amount of the member contributions that
the eligible person would have made to the Teachers Retirement Association on the eligible
person's compensation from the Minnesota State Colleges and Universities system for the
period from July 1, 2001, to the date of the retirement coverage election if the person had
been covered by the Teachers Retirement Association during the period, plus annual
compound interest at the rate of 8.5 percent, then the eligible person shall pay the balance
of that calculated member contribution obligation within 30 days of the retirement coverage
election.
new text end

new text begin (g) Upon the transfer of the equivalent member contribution amount and any additional
payment under paragraph (f), the balance of the eligible person's higher education individual
retirement account plan account must be transferred to the Teachers Retirement Association.
If the amounts under paragraph (f) and the individual retirement account plan balance under
this paragraph are less than the prior service credit purchase payment amount calculated
under Minnesota Statutes, section 356.551, the Minnesota State Colleges and Universities
system shall pay the difference within 60 days of the retirement election date.
new text end

new text begin (h) The authority to make a retirement coverage election under this section expires one
year from the effective date of this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 4. new text begin TRA COVERAGE FOR CERTAIN MESABI RANGE COMMUNITY AND
TECHNICAL COLLEGE FACULTY MEMBERS.
new text end

new text begin (a) Notwithstanding any provision of law to the contrary, an eligible person described
in paragraph (b) is authorized to become a coordinated member of the Teachers Retirement
Association and to purchase service and salary credit in the Teachers Retirement Association
coordinated plan retroactive from July 19, 2000, or September 15, 2000, whichever is
applicable, upon making an election under paragraph (c) and upon making all required
payments under paragraphs (d) and (e).
new text end

new text begin (b) An eligible person is a person who:
new text end

new text begin (1) either:
new text end

new text begin (i) was born on September 25, 1964, and has been employed at Mesabi Range Community
and Technical College and a contributing member of the higher education individual
retirement account plan since July 19, 2000; or
new text end

new text begin (ii) was born on October 15, 1963, and has been employed at Mesabi Range Community
and Technical College and a contributing member of the higher education individual
retirement account plan since September 15, 2000;
new text end

new text begin (2) was classified in the unlimited full-time category on August 21, 2012;
new text end

new text begin (3) became eligible for an election of Teachers Retirement Association coverage under
Laws 2009, chapter 169, article 6, section 1; and
new text end

new text begin (4) was not offered an election of Teachers Retirement Association coverage by the
Minnesota State Colleges and Universities system.
new text end

new text begin (c) To be eligible for coverage by the Teachers Retirement Association, an eligible
person must submit a written application to the executive director of the Teachers Retirement
Association on a form provided by the Teachers Retirement Association. The application
must include all documentation of the applicability of this section and any other relevant
information that the executive director may require. Teachers Retirement Association plan
membership commences after the date of the retirement coverage election under this section
and past salary and service credit is granted for past Minnesota State Colleges and
Universities system employment from July 19, 2000, or September 15, 2000, whichever is
applicable, until the executive director receives the written application specified in this
paragraph and receipts of the payments specified in paragraphs (d) and (e). Coverage by
the Teachers Retirement Association is in lieu of coverage by the individual retirement
account plan.
new text end

new text begin (d) If the eligible person makes the retirement coverage election under paragraph (c),
the eligible person shall make a contribution to the Teachers Retirement Association equal
to the excess, if any, of the employee contributions that the eligible person would have made
if the Teachers Retirement Association had provided coverage from July 19, 2000, or
September 15, 2000, whichever is applicable, rather than the individual retirement account
plan. These additional contribution amounts shall include 8.5 percent annual compound
interest computed from the date the contribution would have been made if deducted from
salary until paid. The total amount to be paid under this paragraph shall be determined by
the executive director of the Teachers Retirement Association and written notification of
the amount required under this paragraph must be transmitted to the eligible person.
new text end

new text begin (e) If payment is made under paragraph (d), the value of the applicable eligible person's
higher education individual retirement account plan account shall be transferred to the
Teachers Retirement Association.
new text end

new text begin (f) The Teachers Retirement Association shall determine the required purchase payment
amount calculated under Minnesota Statutes, section 356.551, imposed upon the Teachers
Retirement Association under this section due to the salary and service credit purchase.
new text end

new text begin (g) From the total amount computed under paragraph (f), the executive director of the
Teachers Retirement Association shall subtract the amounts received under paragraphs (d)
and (e). The Minnesota State Colleges and Universities system must transmit the remaining
amount, if any, to the executive director of the Teachers Retirement Association within 60
days following the receipt of the payments under paragraphs (d) and (e).
new text end

new text begin (h) The authority to make a retirement coverage election under this section expires one
year from the effective date of this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 5. new text begin TEACHERS RETIREMENT ASSOCIATION COVERAGE ELECTION
AND MINNESOTA STATE RETIREMENT SYSTEM REFUND REPAYMENT
AUTHORITY FOR CERTAIN WINONA STATE UNIVERSITY EMPLOYEE.
new text end

new text begin (a) Notwithstanding any provision of Minnesota Statutes, chapter 352 or 354B, to the
contrary, an eligible person described in paragraph (b) is eligible to become a coordinated
member of the Teachers Retirement Association and to purchase service and salary credit
in the Teachers Retirement Association coordinated plan retroactively from January 1, 1995,
upon repaying a member contribution refund taken from the general employees retirement
plan of the Minnesota State Retirement System under paragraph (c), upon making an election
under paragraph (e), and upon making all required payments under paragraphs (f), (g), and
(h).
new text end

new text begin (b) An eligible person is a person who:
new text end

new text begin (1) was born November 11, 1957;
new text end

new text begin (2) began state employment in 1981, with retirement coverage in the general employees
retirement plan of the Minnesota State Retirement System for which a refund of member
contributions and interest was taken;
new text end

new text begin (3) was employed by Winona State University on September 11, 1989, with retirement
coverage in the higher education individual retirement account plan; and
new text end

new text begin (4) was not informed of the option to elect Teachers Retirement Association coverage
in the coverage election authorized under Laws 1994, chapter 508, article 1, section 10, so
remained in the higher education individual retirement account plan.
new text end

new text begin (c) The refund repayment required by Minnesota Statutes, section 356.551, subdivision
1, paragraph (c), must be calculated under Minnesota Statutes, section 352.23.
new text end

new text begin (d) Authority to repay a refund under this section expires one year from the effective
date of this section.
new text end

new text begin (e) To be eligible for coverage by the Teachers Retirement Association, an eligible
person must submit a written application to the executive director of the Teachers Retirement
Association on a form provided by the Teachers Retirement Association. The application
must include all relevant documentation and information that the executive director may
require. Teachers Retirement Association plan membership commences after the date of
the retirement coverage election under this section and past salary and service credit is
granted for past Minnesota State Colleges and Universities system employment from January
1, 1995, until the executive director receives the written application specified in this
paragraph and receipts of the payments specified in paragraphs (c), (f), (g), and (h). Coverage
by the Teachers Retirement Association is in lieu of coverage by the individual retirement
account plan.
new text end

new text begin (f) If the eligible person makes the retirement coverage election under paragraph (e),
the eligible person's member contributions to the higher education individual retirement
account plan account from January 1, 1995, to the date of the retirement coverage election
must be transferred to the Teachers Retirement Association, with any earned investment
returns on those contributions. If the transferred member contributions and investment
earnings are less than the calculated amount of the member contributions that the eligible
person would have made to the Teachers Retirement Association on the eligible person's
compensation from the Minnesota State Colleges and Universities system for the period
from January 1, 1995, to the date of the retirement coverage election, if the person had been
covered by the Teachers Retirement Association during the period, plus annual compound
interest at the rate of 8.5 percent, then the eligible person shall pay the balance of that
calculated member contribution obligation within 30 days of the retirement coverage election.
new text end

new text begin (g) Upon the transfer of the equivalent member contribution amount and any additional
payment under paragraph (f), the employer contributions made on behalf of the eligible
member to the higher education individual retirement account plan account from January
1, 1995, to the date of the retirement coverage election must be transferred to the Teachers
Retirement Association, with any earned investment returns on those contributions.
new text end

new text begin (h) If the amounts under paragraphs (f) and (g) are less than the prior service credit
purchase payment amount under Minnesota Statutes, section 356.551, the Minnesota State
Colleges and Universities system shall pay the difference within 60 days following receipt
of the amounts transmitted under paragraphs (f) and (g).
new text end

new text begin (i) The authority to make a retirement coverage election under this section expires one
year from the effective date of this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 6. new text begin PERA COVERAGE ELECTION AND SERVICE CREDIT PURCHASE;
DULUTH TOWNSHIP CLERK.
new text end

new text begin (a) Notwithstanding any provision of Minnesota Statutes, chapter 353 or 353D, to the
contrary, an eligible person described in paragraph (b) is eligible to purchase from the
general employees retirement plan of the Public Employees Retirement Association allowable
service credit under section 353.01, subdivision 16, for the period of service described in
paragraph (c).
new text end

new text begin (b) An eligible person is a person who:
new text end

new text begin (1) was born on July 19, 1953;
new text end

new text begin (2) became a member of the public employees defined contribution plan of the Public
Employees Retirement Association on January 7, 1997, as the elected clerk for Duluth
township;
new text end

new text begin (3) should have become a member of the public employees general plan of the Public
Employees Retirement Association on April 12, 2001, when the elected clerk position
became an appointed position;
new text end

new text begin (4) erroneously remained in the public employees defined contribution plan until February
2017; and
new text end

new text begin (5) retroactively joined the public employees general plan to January 1, 2014, pursuant
to section 353.27, subdivision 12.
new text end

new text begin (c) The period of uncredited service authorized for purchase is the period of April 12,
2001, until December 31, 2013.
new text end

new text begin (d) Any member contributions made to the public employees defined contribution plan,
plus any earned investments returns on those contributions, remaining after the transfer
associated with the cost of omitted salary deductions pursuant to section 353.27, subdivision
12, may be transferred to the public employees general plan of the Public Employees
Retirement Association upon request from the eligible person. The transfer must occur
within 60 days of the request. Authority to request a transfer under this section expires
December 31, 2017.
new text end

new text begin (e) Any employer contributions made to the public employees defined contribution plan,
plus any earned investment returns on those contributions, remaining after the transfer
associated with the cost of omitted salary deductions pursuant to section 353.27, subdivision
12, must be transferred to the public employees general plan of the Public Employees
Retirement Association at the same time as the transfer that occurs under paragraph (d).
new text end

new text begin (f) If the eligible person requests a transfer under paragraph (d), the eligible person must
pay the member contributions that the eligible person would have made to the Public
Employees Retirement Association on the eligible person's compensation from the Duluth
township for the period of service described in paragraph (c) as if the person had been
covered by the public employees general plan, plus annual compound interest on that amount
at the rate of 8.5 percent from April 12, 2001, until June 30, 2015, and eight percent from
July 1, 2015, until the date payment is made to the Public Employees Retirement Association,
less the transferred member contributions and investment earnings.
new text end

new text begin (g) Upon the transfer of the amounts under paragraphs (d), (e), and (f), Duluth township
shall pay the prior service credit purchase payment amount calculated under Minnesota
Statutes, section 356.551, less any amounts received under paragraphs (d), (e), and (f),
within 60 days following the receipt of the eligible person's payment under paragraph (f).
new text end

new text begin (h) Upon the transfer and payment under paragraph (g), the eligible person must be
credited by the Public Employees Retirement Association with allowable service credit for
Duluth township employment from April 12, 2001, until December 31, 2013.
new text end

new text begin (h) Authority to make a service credit purchase under this section expires one year from
the effective date of this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

ARTICLE 20

TECHNICAL CORRECTIONS

Section 1.

Minnesota Statutes 2016, section 353.01, subdivision 16, is amended to read:

Subd. 16.

Allowable service; limits and computation.

(a) "Allowable service" means:

(2) periods of service covered by payments in lieu of salary deductions under sections
353.27, subdivisions 12 and 12a, and 353.35;

(5) a period of authorized leave of absence without pay, or with pay that is not included
in the definition of salary under subdivision 10, paragraph (a), clause (4) or (5), for which
salary deductions are not authorized, and for which a member obtained service credit for
up to 12 months of the authorized leave period by payment under section deleted text begin 353.0161 ordeleted text end
353.0162, to the fund made in place of salary deductions;

(6) a periodic, repetitive leave that is offered to all employees of a governmental
subdivision. The leave program may not exceed 208 hours per annual normal work cycle
as certified to the association by the employer. A participating member obtains service credit
by making employee contributions in an amount or amounts based on the member's average
salary, excluding overtime pay, that would have been paid if the leave had not been taken.
The employer shall pay the employer and additional employer contributions on behalf of
the participating member. The employee and the employer are responsible to pay interest
on their respective shares at the rate of 8.5 percent until June 30, 2015, and eight percent
thereafter, compounded annually, from the end of the normal cycle until full payment is
made. An employer shall also make the employer and additional employer contributions,
plus 8.5 percent interest until June 30, 2015, and eight percent interest thereafter, compounded
annually, on behalf of an employee who makes employee contributions but terminates public
service. The employee contributions must be made within one year after the end of the
annual normal working cycle or within 30 days after termination of public service, whichever
is sooner. The executive director shall prescribe the manner and forms to be used by a
governmental subdivision in administering a periodic, repetitive leave. Upon payment, the
member must be granted allowable service credit for the purchased period;

(8) a period during which a member is absent from employment by a governmental
subdivision by reason of service in the uniformed services, as defined in United States Code,
title 38, section 4303(13), if the member returns to public service with the same governmental
subdivision upon discharge from service in the uniformed service within the time frames
required under United States Code, title 38, section 4312(e), provided that the member did
not separate from uniformed service with a dishonorable or bad conduct discharge or under
other than honorable conditions. The service must be credited if the member pays into the
fund equivalent employee contributions based upon the contribution rate or rates in effect
at the time that the uniformed service was performed multiplied by the full and fractional
years being purchased and applied to the annual salary rate. The annual salary rate is the
average annual salary during the purchase period that the member would have received if
the member had continued to be employed in covered employment rather than to provide
uniformed service, or, if the determination of that rate is not reasonably certain, the annual
salary rate is the member's average salary rate during the 12-month period of covered
employment rendered immediately preceding the period of the uniformed service. Payment
of the member equivalent contributions must be made during a period that begins with the
date on which the individual returns to public employment and that is three times the length
of the military leave period, or within five years of the date of discharge from the military
service, whichever is less. If the determined payment period is less than one year, the
contributions required under this clause to receive service credit may be made within one
year of the discharge date. Payment may not be accepted following 30 days after termination
of public service under subdivision 11a. If the member equivalent contributions provided
for in this clause are not paid in full, the member's allowable service credit must be prorated
by multiplying the full and fractional number of years of uniformed service eligible for
purchase by the ratio obtained by dividing the total member contributions received by the
total member contributions otherwise required under this clause. The equivalent employer
contribution, and, if applicable, the equivalent additional employer contribution must be
paid by the governmental subdivision employing the member if the member makes the
equivalent employee contributions. The employer payments must be made from funds
available to the employing unit, using the employer and additional employer contribution
rate or rates in effect at the time that the uniformed service was performed, applied to the
same annual salary rate or rates used to compute the equivalent member contribution. The
governmental subdivision involved may appropriate money for those payments. The amount
of service credit obtainable under this section may not exceed five years unless a longer
purchase period is required under United States Code, title 38, section 4312. The employing
unit shall pay interest on all equivalent member and employer contribution amounts payable
under this clause. Interest must be computed at the rate of 8.5 percent until June 30, 2015,
and eight percent thereafter, compounded annually, from the end of each fiscal year of the
leave or the break in service to the end of the month in which the payment is received. Upon
payment, the employee must be granted allowable service credit for the purchased period;
or

(9) a period specified under section 353.0162.

(b) No member may receive more than 12 months of allowable service credit in a year
either for vesting purposes or for benefit calculation purposes.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2016, section 353.012, is amended to read:

353.012 UNIVERSITY OF MINNESOTA EMPLOYEES; FURLOUGH SERVICE
AND SALARY CREDIT.

A furloughed employee of the University of Minnesota who is a member of the public
employees police and fire plan may obtain allowable service and salary credit for the furlough
period. The allowable service and salary credit authorization is a leave of absence
authorization for purposes of section deleted text begin 353.0161 and the purchase payment procedure of
section 353.0161, subdivision 2, appliesdeleted text end new text begin 353.0162new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3.

Minnesota Statutes 2016, section 353.32, subdivision 4, is amended to read:

Subd. 4.

Lack, or death, of beneficiary.

If a member or former member dies without
having designated a beneficiary or if the beneficiary should die before making application
for refund, and if there is no surviving spouse, and if the legal representative of such member
or former member does not apply for refund within five years from the date of death of the
member or former member, the accumulated deductions to the member or former member's
credit at the time of death shall be disposed of in the manner provided in section deleted text begin 353.34,
subdivision 6deleted text end new text begin 356.631new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 4.

Minnesota Statutes 2016, section 354A.011, subdivision 29, is amended to read:

Subd. 29.

Vesting; vested.

deleted text begin (a)deleted text end "Vesting" or "vested" means having entitlement to a
nonforfeitable annuity or benefit from deleted text begin adeleted text end new text begin the St. Paul Teachers Retirement Fund Association
new text end coordinated member program deleted text begin administered by a teachers retirement fund association by
having credit for sufficient allowable service under paragraph (b) or (c), whichever appliesdeleted text end new text begin
when the teacher has accrued credit for at least three years of allowable servicenew text end .

deleted text begin (b) For purposes of qualifying for an annuity or a benefit as a coordinated plan member
of the St. Paul Teachers Retirement Fund Association, the teacher is vested when the teacher
has accrued credit for at least three years of service.
deleted text end

deleted text begin (c) For purposes of qualifying for an annuity or a benefit as a coordinated plan member
of the Duluth Teachers Retirement Fund Association:
deleted text end

deleted text begin (1) a teacher who first became a member of the plan before July 1, 2010, is vested when
the teacher has accrued at least three years of service; and
deleted text end

deleted text begin (2) a teacher who first became a member of the plan after June 30, 2010, is vested when
the teacher has accrued at least five years of service.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 5.

Minnesota Statutes 2016, section 354A.095, is amended to read:

354A.095 PARENTAL AND MATERNITY LEAVE.

Basic or coordinated members of the St. Paul Teachers Retirement Fund Association
deleted text begin and new coordinated members of the Duluth Teachers Retirement Fund Association,deleted text end who
are granted parental or maternity leave of absence by the employing authority, are entitled
to obtain service credit not to exceed one year for the period of leave upon payment to the
deleted text begin applicabledeleted text end fund by the end of the fiscal year following the fiscal year in which the leave of
absence terminated. The amount of the payment must include the total required employee
and employer contributions for the period of leave prescribed in section 354A.12. Payment
must be based on the member's average monthly salary rate upon return to teaching service,
and is payable without interest. Payment must be accompanied by a certified or otherwise
adequate copy of the resolution or action of the employing authority granting or approving
the leave.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 6.

Minnesota Statutes 2016, section 354A.12, subdivision 3c, is amended to read:

Subd. 3c.

Termination of supplemental contributions and direct matching and state
aid.

deleted text begin (a)deleted text end The supplemental contributions payable to the St. Paul Teachers Retirement Fund
Association by Independent School District No. 625 under section 423A.02, subdivision 3,
and all forms of aid under subdivision 3a to the St. Paul Teachers Retirement Fund
Association must continue until the actuarial value of assets of the fund equal or exceed the
actuarial accrued liability of the fund as determined in the most recent actuarial report for
the fund by the actuary retained under section 356.214 or until the established date for full
funding under section 356.215, subdivision 11, whichever occurs earlier.

deleted text begin (b) The aid to the Duluth Teachers Retirement Fund Association under section 423A.02,
subdivision 3, and all forms of state aid under subdivision 3a to the Duluth Teachers
Retirement Fund Association must continue until the current assets of the fund equal or
exceed the actuarial accrued liability of the fund as determined in the most recent actuarial
report for the fund by the actuary retained under section 356.214 or until the established
date for full funding under section 356.215, subdivision 11, whichever occurs earlier.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 7.

Minnesota Statutes 2016, section 354A.31, subdivision 3, is amended to read:

Subd. 3.

Resumption of teaching after commencement of a retirement annuity.

(a)
Any person who retired and is receiving a coordinated program retirement annuity under
the provisions of sections 354A.31 to 354A.41 or any person receiving a basic program
retirement annuity under the governing sections in the articles of incorporation or bylaws
and who has resumed teaching service for the school district in which the teachers retirement
fund association exists is entitled to continue to receive retirement annuity payments, except
that all or a portion of the annuity payments must be deferred during the calendar year
immediately following the calendar year in which the person's salary from the teaching
service is in an amount greater than $46,000. The amount of the annuity deferral is one-third
the salary amount in excess of $46,000 and must be deducted from the annuity payable for
the calendar year immediately following the calendar year in which the excess amount was
earned.

(b) If the person is retired for only a fractional part of the calendar year during the initial
year of retirement, the maximum reemployment salary exempt from triggering a deferral
as specified in this subdivision must be prorated for that calendar year.

(c) After a person has reached the Social Security normal retirement age, no deferral
requirement is applicable regardless of the amount of any compensation received for teaching
service for the school district in which the teachers retirement fund association exists.

(d) The amount of the retirement annuity deferral must be handled or disposed of as
provided in section 356.47.

deleted text begin (e) Notwithstanding other paragraphs of this subdivision, for any retired Duluth Teachers
Retirement Fund Association member whose effective date of retirement is after June 30,
2013, amounts specified as deferred under this subdivision must instead be forfeited to the
Duluth Teachers Retirement Fund Association fund.
deleted text end

deleted text begin (f)deleted text end new text begin (e) new text end Notwithstanding other paragraphs of this subdivision, for any retired St. Paul
Teachers Retirement Fund Association basic or coordinated program member whose effective
date of retirement is after June 30, 2013, amounts specified as deferred under this subdivision
must instead be forfeited to the St. Paul Teachers Retirement Fund Association fund.

deleted text begin (g)deleted text end new text begin (f) new text end For the purpose of this subdivision, salary from teaching service includes: (i) all
income for services performed as a consultant or independent contractor; or income resulting
from working with the school district in any capacity; and (ii) the greater of either the income
received or an amount based on the rate paid with respect to an administrative position,
consultant, or independent contractor in the school district in which the teachers retirement
fund association exists and at the same level as the position occupied by the person who
resumes teaching service.

deleted text begin (h)deleted text end new text begin (g) new text end On or before February 15 of each year, each applicable employing unit shall
report to the teachers retirement fund association the amount of postretirement salary as
defined in this subdivision, earned as a teacher, consultant, or independent contractor during
the previous calendar year by each retiree of the teachers retirement fund association for
teaching service performed after retirement. The report must be in a format approved by
the executive secretary or director.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 8.

Minnesota Statutes 2016, section 354A.35, subdivision 2, is amended to read:

Subd. 2.

Death while eligible to retire; surviving spouse optional annuity.

(a) The
surviving spouse of a vested coordinated member who dies prior to retirement may elect to
receive, instead of a refund with interest under subdivision 1, an annuity equal to the 100
percent joint and survivor annuity the member could have qualified for had the member
terminated service on the date of death. The surviving spouse eligible for a surviving spouse
benefit under this paragraph may apply for the annuity at any time after the date on which
the deceased employee would have attained the required age for retirement based on the
employee's allowable service. A surviving spouse eligible for surviving spouse benefits
under paragraph (b) or (c) may apply for an annuity at any time after the member's death.
The member's surviving spouse shall be paid a joint and survivor annuity under section
354A.32 and computed under section 354A.31.

(b) If the member was under age 55 and has credit for at least 30 years of allowable
service on the date of death, the surviving spouse may elect to receive a 100 percent joint
and survivor annuity based on the age of the member and surviving spouse on the date of
death. The annuity is payable using the full early retirement reduction under section 354A.31,
subdivision 6, paragraph (a), to age 55 and one-half of the early retirement reduction from
age 55 to the age payment begins.

deleted text begin (c) If a vested member of the Duluth Teachers Retirement Fund Association was under
age 55 on the date of death but did not yet qualify for retirement, the surviving spouse may
elect to receive the 100 percent joint and survivor annuity based on the age of the member
and the survivor at the time of death. The annuity is payable using the full early retirement
reduction under section 354A.31, subdivision 6 or 7, to age 55 and one-half of the early
retirement reduction from age 55 to the date payment begins.
deleted text end

deleted text begin (d)deleted text end new text begin (c) new text end If a vested member of the St. Paul Teachers Retirement Fund Association was
under age 55 on the date of death but did not yet qualify for retirement, the surviving spouse
may elect to receive the 100 percent joint and survivor annuity based on the age of the
member and the survivor at the time of death. The annuity is payable using the full early
retirement reduction under section 354A.31, subdivision 6 or 7, to age 55 and one-half of
the actuarial equivalent reduction from age 55 to the date payment begins. The actuarial
equivalent reduction is calculated so that the reduced annuity is the actuarial equivalent of
the annuity that would be payable to the member if the member deferred receipt of the
annuity and the annuity amount were augmented at an annual rate of 2.5 percent compounded
annually from the day the annuity begins to accrue until the normal retirement age.

deleted text begin (e)deleted text end new text begin (d) new text end Sections 354A.37, subdivision 2, and 354A.39 apply to a deferred annuity or
surviving spouse benefit payable under this section. The benefits are payable for the life of
the surviving spouse, or upon expiration of the term certain benefit payment under subdivision
2b.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 9.

Minnesota Statutes 2016, section 356.47, subdivision 1, is amended to read:

Subdivision 1.

Application.

(a) This section applies to the balance of annual retirement
annuities on the amount of retirement annuity reductions after reemployed annuitant earnings
limitations for retirement plans governed by section 352.115, subdivision 10; 353.37; or
354.44, subdivision 5.

deleted text begin (b) This section also applies to the balance of annual retirement annuities on the amount
of retirement annuity reductions under section 354A.31, subdivision 3, for members of the
Duluth Teachers Retirement Fund Association whose effective date of retirement is before
July 1, 2013.
deleted text end

deleted text begin (c)deleted text end new text begin (b) new text end This section also applies to the balance of annual retirement annuities on the
amount of retirement annuity reductions under section 354A.31, subdivision 3, for members
of the St. Paul Teachers Retirement Fund Association whose effective date of retirement is
before July 1, 2013.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 10.

Minnesota Statutes 2016, section 423A.02, subdivision 5, is amended to read:

Subd. 5.

Termination of state aid programs.

The amortization state aid and additional
amortization state aid programs terminate as of the December 31, next following the date
of the actuarial valuation when the assets of the St. Paul Teachers Retirement Fund
Association equal the actuarial accrued liability of that plan deleted text begin or when the assets of the Duluth
Teachers Retirement Fund Association equal the actuarial accrued liability of that plan,
whichever is laterdeleted text end .

Sec. 11. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2016, section 354A.12, subdivision 2c, new text end new text begin is repealed.
new text end

ARTICLE 21

APPROPRIATIONS

Section 1. new text begin APPROPRIATIONS; GENERAL FUND PENSION CONTRIBUTION
INCREASES.
new text end

new text begin (a) $5,698,000 in fiscal year 2018 and $11,115,000 in fiscal year 2019 are appropriated
from the general fund to the entities specified in paragraph (b) to offset employer pension
contribution increases to executive branch state agencies, boards, commissions, constitutional
offices, and the legislature required under this act. These appropriations are for increases
in employer contributions to the Minnesota State Retirement System general employees,
correctional employees, and state patrol retirement plans. The base for fiscal year 2020 and
later is $11,115,000.
new text end

new text begin (b) The commissioner of management and budget must determine an allocation of the
amount appropriated in paragraph (a) for each executive branch state agency, board,
commission, constitutional office, and the legislature for each fiscal year. Each allocation
is directly appropriated to each of these entities as specified by the commissioner. The
amounts appropriated in fiscal year 2019 are added to agency budget bases for fiscal year
2020 and later. The commissioner of management and budget must report the amounts
appropriated under this section to the chairs and ranking minority members of the house of
representatives Ways and Means Committee and the senate Finance Committee by August
15, 2017.
new text end

Sec. 2. new text begin APPROPRIATIONS; NONGENERAL FUND PENSION CONTRIBUTION
INCREASES.
new text end

new text begin (a) The amounts necessary to pay increased nongeneral fund employer contribution
increases in this act in fiscal years 2018 and 2019 are appropriated from any nongeneral
fund that is specified by the commissioner of management and budget under paragraph (b).
These appropriations shall offset employer pension contribution increases to executive
branch state agencies, boards, and commissions required under this act. These appropriations
are for increases in employer contributions to the Minnesota State Retirement System general
employees, correctional employees, and state patrol retirement plans.
new text end

new text begin (b) The commissioner of management and budget must determine the appropriate fund
and amount required under paragraph (a) for each executive branch state agency, board,
and commission, for each fiscal year. The amounts appropriated in fiscal year 2019 are
added to agency budget bases for fiscal year 2020 and later. The commissioner of
management and budget must report the amounts appropriated under this section to the
chairs and ranking minority members of the house of representatives Ways and Means
Committee and the senate Finance Committee by August 15, 2017.
new text end

Sec. 3. new text begin APPROPRIATIONS; ST. PAUL TEACHERS RETIREMENT FUND.
new text end

new text begin $1,950,000 in fiscal year 2018 and $3,250,000 in fiscal year 2019 are appropriated from
the general fund to the commissioner of management and budget for payment to the St.
Paul Teachers Retirement Fund Association for increased pension contributions. The base
in fiscal year 2020 is $5,200,000 and the base for fiscal year 2021 and later is $6,500,000.
new text end

Sec. 4. new text begin APPROPRIATIONS; JUDICIAL BRANCH.
new text end

new text begin (a) $73,000 in fiscal year 2018 and $146,000 in fiscal year 2019 are appropriated from
the general fund to the Supreme Court for increased employer pension contributions to the
Minnesota State Retirement System general employees plan. The amount appropriated in
fiscal year 2019 is added to the agency budget base for fiscal years 2020 and later.
new text end

new text begin (b) $15,000 in fiscal year 2018 and $30,000 in fiscal year 2019 are appropriated from
the general fund to the Court of Appeals for increased employer pension contributions to
the Minnesota State Retirement System general employees plan. The amount appropriated
in fiscal year 2019 is added to the agency budget base for fiscal years 2020 and later.
new text end

new text begin (c) $344,000 in fiscal year 2018 and $687,000 in fiscal year 2019 are appropriated from
the general fund to the district courts for increased employer pension contributions to the
Minnesota State Retirement System general employees plan. The amount appropriated in
fiscal year 2019 is added to the agency budget base for fiscal years 2020 and later.
new text end

new text begin (d) $139,000 in fiscal year 2018 and $279,000 in fiscal year 2019 are appropriated from
the general fund to the Board of Public Defense for increased employer pension contributions
to the Minnesota State Retirement System general employees plan. The amount appropriated
in fiscal year 2019 is added to the agency budget base for fiscal years 2020 and later.
new text end

new text begin (e) $31,000 in fiscal year 2018 and $62,000 in fiscal year 2019 are appropriated from
the general fund to the Guardian ad Litem Board for increased employer pension
contributions to the Minnesota State Retirement System general employees plan. The amount
appropriated in fiscal year 2019 is added to the agency budget base for fiscal years 2020
and later.
new text end

new text begin (f) $1,000 in fiscal year 2019 is appropriated from the general fund to the Board of
Judicial Standards for increased employer pension contributions to the Minnesota State
Retirement System general employees plan. The amount appropriated in fiscal year 2019
is added to the agency budget base for fiscal years 2020 and later.
new text end

ARTICLE 22

UNIFORM LABOR STANDARDS

Section 1.

new text begin [181.741] EXPRESS PREEMPTION; UNIFORMITY OF PRIVATE
EMPLOYER MANDATES.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the terms defined in this
subdivision have the meanings given them.
new text end

new text begin (b) "Employer" means a private person employing one or more employees in the state.
new text end

new text begin (c) "Local government" means a home rule charter city, statutory city, town, county, the
Metropolitan Council, a metropolitan agency as defined in section 473.121, subdivision 5a,
or a special district.
new text end

new text begin Subd. 2. new text end

new text begin Express preemption. new text end

new text begin (a) A local government must not adopt, enforce, or
administer an ordinance, local resolution, or local policy requiring an employer to pay an
employee a wage higher than the applicable state minimum wage rate provided in section
177.24.
new text end

new text begin (b) A local government must not adopt, enforce, or administer an ordinance, local
resolution, or local policy requiring an employer to provide either paid or unpaid leave time.
new text end

new text begin (c) A local government must not adopt, enforce, or administer an ordinance, local
resolution, or local policy regulating the hours or scheduling of work time that an employer
provides to an employee. This paragraph does not preempt an ordinance, local resolution,
or local policy limiting the hours a business may operate.
new text end

new text begin (d) A local government must not adopt, enforce, or administer an ordinance, local
resolution, or local policy requiring an employer to provide an employee particular benefits
or terms of employment.
new text end

new text begin Subd. 3. new text end

new text begin Local governments as employers and contractors. new text end

new text begin This section does not
regulate wages, hours, benefits, paid or unpaid leave, attendance policies, or other terms of
employment that a local government:
new text end

new text begin (1) provides to its own employee;
new text end

new text begin (2) requires an employer to provide to its employee, to the extent that employer is
providing goods or services, including construction, to the local government, and the
requirement applies specifically to work performed in providing goods or services to the
local government; or
new text end

new text begin (3) requires an employer to provide to its employee, to the extent that employer is
receiving funding from the local government or is providing goods or services, including
construction, funded in whole or in part by the local government, when the requirement is
an express condition of the funding.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon final enactment and applies to
ordinances, local policies, and local resolutions enacted on or after January 1, 2016.
new text end

ARTICLE 23

RATIFICATIONS

Section 1. new text begin LABOR AGREEMENT RATIFIED; MINNESOTA GOVERNMENT
ENGINEERING COUNCIL.
new text end

new text begin The arbitration award and labor agreement between the state of Minnesota and the
Minnesota Government Engineering Council, submitted to the Legislative Coordinating
Commission Subcommittee on Employee Relations on July 28, 2016, and implemented as
provided in Minnesota Statutes, section 3.855, subdivision 2, are ratified.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from May 22, 2017.
new text end

Sec. 2. new text begin RATIFICATIONS CONTINGENT ON ENACTMENT.
new text end

new text begin The legislative ratifications and approvals of memorandums of understanding in section
3, subdivisions 1 to 11, and amendments to compensation plans in section 4, subdivisions
1 to 7, are conditional on this bill being enacted into law. If this bill is not enacted into law,
the memorandums of understanding in section 3, subdivisions 1 to 11, and amendments to
compensation plans in section 4, subdivisions 1 to 7, are neither approved nor ratified.
new text end

Sec. 3. new text begin MEMORANDUMS OF UNDERSTANDING TO COLLECTIVE
BARGAINING AGREEMENTS.
new text end

new text begin Subdivision 1. new text end

new text begin American Federation of State, County, and Municipal Employees,
Council 5. new text end

new text begin The memorandum of understanding that provides paid parental leave, entered
into between the state of Minnesota and the American Federation of State, County, and
Municipal Employees, Council 5, submitted to the Legislative Coordinating Commission
Subcommittee on Employee Relations on October 14, 2016, and that was implemented as
provided in Minnesota Statutes, section 3.855, subdivision 2, is ratified.
new text end

new text begin Subd. 2. new text end

new text begin American Federation of State, County, and Municipal Employees, Unit
225. new text end

new text begin The memorandum of understanding that provides paid parental leave, entered into
between the state of Minnesota and the American Federation of State, County, and Municipal
Employees, Unit 225, Radio Communications Operators, submitted to the Legislative
Coordinating Commission Subcommittee on Employee Relations on October 14, 2016, and
that was implemented as provided in Minnesota Statutes, section 3.855, subdivision 2, is
ratified.
new text end

new text begin Subd. 3. new text end

new text begin American Federation of State, County, and Municipal Employees, Unit 8.
new text end

new text begin The memorandum of understanding that provides paid parental leave, entered into between
the state of Minnesota and the American Federation of State, County, and Municipal
Employees, Unit 8, Corrections Officers, submitted to the Legislative Coordinating
Commission Subcommittee on Employee Relations on October 14, 2016, and that was
implemented as provided in Minnesota Statutes, section 3.855, subdivision 2, is ratified.
new text end

new text begin Subd. 4. new text end

new text begin Minnesota Association of Professional Employees. new text end

new text begin The memorandum of
understanding that provides paid parental leave, entered into between the state of Minnesota
and the Minnesota Association of Professional Employees, submitted to the Legislative
Coordinating Commission Subcommittee on Employee Relations on October 14, 2016, and
that was implemented as provided in Minnesota Statutes, section 3.855, subdivision 2, is
ratified.
new text end

new text begin Subd. 5. new text end

new text begin Middle Management Association. new text end

new text begin The memorandum of understanding that
provides paid parental leave, entered into between the state of Minnesota and the Middle
Management Association, submitted to the Legislative Coordinating Commission
Subcommittee on Employee Relations on October 14, 2016, and that was implemented as
provided in Minnesota Statutes, section 3.855, subdivision 2, is ratified.
new text end

new text begin Subd. 6. new text end

new text begin Minnesota Nurses Association. new text end

new text begin The memorandum of understanding that
provides paid parental leave, entered into between the state of Minnesota and the Minnesota
Nurses Association, submitted to the Legislative Coordinating Commission Subcommittee
on Employee Relations on October 14, 2016, and that was implemented as provided in
Minnesota Statutes, section 3.855, subdivision 2, is ratified.
new text end

new text begin Subd. 7. new text end

new text begin State Residential Schools Education Association. new text end

new text begin The memorandum of
understanding that provides paid parental leave, entered into between the state of Minnesota
and the State Residential Schools Education Association, submitted to the Legislative
Coordinating Commission Subcommittee on Employee Relations on October 14, 2016, and
that was implemented as provided in Minnesota Statutes, section 3.855, subdivision 2, is
ratified.
new text end

new text begin Subd. 8. new text end

new text begin Minnesota Law Enforcement Association. new text end

new text begin The memorandum of understanding
that provides paid parental leave, entered into between the state of Minnesota and the
Minnesota Law Enforcement Association, submitted to the Legislative Coordinating
Commission Subcommittee on Employee Relations on October 14, 2016, and that was
implemented as provided in Minnesota Statutes, section 3.855, subdivision 2, is ratified.
new text end

new text begin Subd. 9. new text end

new text begin Minnesota Government Engineering Council. new text end

new text begin The memorandum of
understanding that provides paid parental leave, entered into between the state of Minnesota
and the Minnesota Government Engineering Council, submitted to the Legislative
Coordinating Commission Subcommittee on Employee Relations on October 14, 2016, and
that was implemented as provided in Minnesota Statutes, section 3.855, subdivision 2, is
ratified.
new text end

new text begin Subd. 10. new text end

new text begin Minnesota State University Administrative and Service Faculty. new text end

new text begin The
memorandum of understanding that provides paid parental leave, entered into between the
state of Minnesota and the Minnesota State University Administrative and Service Faculty,
submitted to the Legislative Coordinating Commission Subcommittee on Employee Relations
on October 28, 2016, and that was implemented as provided in Minnesota Statutes, section
3.855, subdivision 2, is ratified.
new text end

new text begin Subd. 11. new text end

new text begin Minnesota State College Faculty. new text end

new text begin The memorandum of understanding that
provides paid parental leave, entered into between the state of Minnesota and the Minnesota
State College Faculty, submitted to the Legislative Coordinating Commission Subcommittee
on Employee Relations on October 28, 2016, and that was implemented as provided in
Minnesota Statutes, section 3.855, subdivision 2, is ratified.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from May 22, 2017.
new text end

Sec. 4. new text begin AMENDMENTS TO COMPENSATION PLANS.
new text end

new text begin Subdivision 1. new text end

new text begin Commissioners' Plan amendment. new text end

new text begin The amendment to the
Commissioners' Plan that provides paid parental leave, as proposed by the state of Minnesota
and submitted to the Legislative Coordinating Commission Subcommittee on Employee
Relations on October 14, 2016, is ratified.
new text end

new text begin Subd. 2. new text end

new text begin Managerial Plan amendment. new text end

new text begin The amendment to the Managerial Plan that
provides paid parental leave, as proposed by the state of Minnesota and submitted to the
Legislative Coordinating Commission Subcommittee on Employee Relations on October
14, 2016, is ratified.
new text end

new text begin Subd. 3. new text end

new text begin Medical Specialists' Addendum to the Commissioners' Plan amendment.
new text end

new text begin The amendment to the Medical Specialists' Addendum to the Commissioners' Plan that
provides paid parental leave, as proposed by the state of Minnesota and submitted to the
Legislative Coordinating Commission Subcommittee on Employee Relations on October
14, 2016, is ratified.
new text end

new text begin Subd. 4. new text end

new text begin Office of Higher Education Unclassified Personnel Compensation Plan
amendment. new text end

new text begin The amendment to the Office of Higher Education Unclassified Personnel
Compensation Plan that provides paid parental leave, as proposed by the state of Minnesota
and submitted to the Legislative Coordinating Commission Subcommittee on Employee
Relations on October 14, 2016, is ratified.
new text end

new text begin Subd. 5. new text end

new text begin State Board of Investment Salary Administration Plan amendment. new text end

new text begin The
amendment to the State Board of Investment Salary Administration Plan that provides paid
parental leave, as proposed by the state of Minnesota and submitted to the Legislative
Coordinating Commission Subcommittee on Employee Relations on October 14, 2016, is
ratified.
new text end

new text begin Subd. 6. new text end

new text begin MNsure Compensation Plan amendment. new text end

new text begin The amendment to the MNsure
Compensation Plan that provides paid parental leave, as proposed by the state of Minnesota
and submitted to the Legislative Coordinating Commission Subcommittee on Employee
Relations on October 14, 2016, is ratified.
new text end

new text begin Subd. 7. new text end

new text begin Minnesota State Personnel Plan for Administrators amendment. new text end

new text begin The
amendment to the Minnesota State Personnel Plan for Administrators that provides paid
parental leave, as proposed by the state of Minnesota and submitted to the Legislative
Coordinating Commission Subcommittee on Employee Relations on October 31, 2016, is
ratified.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from May 22, 2017.
new text end

ARTICLE 24

WAGE THEFT PREVENTION

Section 1.

Minnesota Statutes 2016, section 181.03, subdivision 1, is amended to read:

Subdivision 1.

Prohibited practices.

deleted text begin An employer may not, directly or indirectly and
with intent to defraud:
deleted text end

new text begin (a) No employer shall intentionally commit wage theft.
new text end

new text begin (b) For purposes of this section, wage theft is committed if an employer, with intent to
defraud:
new text end

new text begin (1) fails to pay an employee all wages to which that employee is entitled;
new text end

deleted text begin (1) causedeleted text end new text begin (2) directly or indirectly causesnew text end any employee to give a receipt for wages for
a greater amount than that actually paid to the employee for services rendered;

deleted text begin (2)deleted text end new text begin (3)new text end directly or indirectly deleted text begin demanddeleted text end new text begin demandsnew text end or deleted text begin receivedeleted text end new text begin receivesnew text end from any employee
any rebate or refund from the wages owed the employee under contract of employment with
the employer; deleted text begin or
deleted text end

deleted text begin (3) in any manner makedeleted text end new text begin (4) makesnew text end or deleted text begin attemptdeleted text end new text begin attemptsnew text end to make it appear new text begin in any manner
new text end that the wages paid to any employee were greater than the amount actually paid to the
employeedeleted text begin .deleted text end new text begin ; or
new text end

new text begin (5) retaliates against an employee for asserting rights or remedies under this section,
including but not limited to filing a complaint with the Department of Labor and Industry
or telling the employer of intention to file a complaint.
new text end

Sec. 2.

new text begin [181.033] WAGE CLAIM CITATIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Citations. new text end

new text begin (a) Upon presentation of clear and convincing evidence
establishing the occurrence of wage theft and following a reasonable opportunity for the
employer to respond, the commissioner may issue a citation for failure to pay wages up to
$1,000 by serving the citation on the employer. The citation shall direct the employer to
pay to the commissioner any back pay and gratuities owed to the employee within 15
business days from issuance of the citation. The citation may require the employer to correct
the violation, may require the employer to cease and desist from committing the violation,
and may assess a monetary penalty up to $1,000 in the aggregate. In determining the amount
of the monetary penalty, the commissioner shall consider the factors described in section
14.045, subdivision 3. If the citation includes a penalty assessment, then the penalty is due
and payable on the date the citation becomes final.
new text end

new text begin (b) The commissioner shall vacate the citation if within five business days after the
commissioner issues the citation, the employer provides to the commissioner evidence
acceptable to the commissioner that the employer has paid the wages specified in the citation.
new text end

new text begin Subd. 2. new text end

new text begin Administrative review. new text end

new text begin (a) Within 15 business days after the commissioner
issues a citation under subdivision 1, the employer to whom the citation is issued may
request an expedited hearing before an administrative law judge to review the citation. The
request for hearing must be in writing and must be served on the commissioner at the address
specified in the citation. If the employer does not request a hearing or if the employer's
written request for hearing is not served on the commissioner by the 15th business day after
the commissioner issues the citation, the citation becomes a final order of the commissioner.
The hearing request must state the reasons for seeking review of the citation.
new text end

new text begin (b) The employer to whom the citation is issued and the commissioner are the parties
to the expedited hearing. The commissioner must notify the employer to whom the citation
is issued of the time and place of the hearing at least 15 business days before the hearing.
new text end

new text begin (c) The hearing shall be conducted under Minnesota Rules, parts 1400.8510 to 1400.8612,
as modified by this section. If a hearing has been held, the commissioner shall not issue a
final order until at least five days after the date of the administrative law judge's report. Any
person aggrieved by the administrative law judge's report may, within those five days, serve
written comments to the commissioner on the report and the commissioner shall consider
and enter the comments in the record. The commissioner's final order shall comply with
sections 14.61, subdivision 2, and 14.62, subdivisions 1 and 2a, and may be appealed in the
manner provided in sections 14.63 to 14.69.
new text end

new text begin Subd. 3. new text end

new text begin Effect on other laws. new text end

new text begin Nothing in this section shall be construed to limit the
application of other state or federal laws.
new text end

APPENDIX

Repealed Minnesota Statutes: 17-4724

3A.12 COVERAGE BY MORE THAN ONE RETIREMENT SYSTEM OR ASSOCIATION.

Subdivision 1.

Entitlement to annuity.

(a) Any legislator who has been a member of a retirement plan listed in paragraph (b) is entitled, when otherwise qualified, to a retirement allowance or annuity from each plan if the total allowable service in all plans or in any two of these plans totals ten or more years.

(b) This section applies to any retirement plan or program administered by the Minnesota State Retirement System, or any retirement plan administered by the Public Employees Retirement Association, including the Public Employees Retirement Association police and fire fund, or the Teachers Retirement Association, or the Minneapolis employees retirement plan, or the State Patrol retirement plan, or any other public employee retirement system in the state of Minnesota having a like provision.

(d) No portion of the allowable service upon which the retirement annuity from one plan is based is again used in the computation for benefits from another plan. The annuity from each plan must be determined by the appropriate provisions of the law, except that the requirement that a person must have a minimum number of years of allowable service in the respective system or association does not apply for the purposes of this section if the combined service in two or more of these plans equals ten or more years. The augmentation of deferred annuities provided in section 3A.02, subdivision 4, applies to the annuities accruing under this section.

Subd. 2.

Refund repayment.

A former legislator who has received a refund as provided in section 3A.03, subdivision 2, who is a currently contributing member of a retirement plan specified in subdivision 1, paragraph (b), may repay the refund as provided in section 3A.03, subdivision 2. A member of the legislature who has received a refund from any of the retirement plans specified in subdivision 1 may repay the refund to the respective plan under such terms and conditions consistent with the law governing the retirement plan if the law governing the plan permits the repayment of refunds. If the total amount to be repaid, including principal and interest exceeds $2,000, repayment maybe made in three equal installments over a period of 18 months, with the interest accrued during the period of the repayment added to the final installment.

352.04 STATE EMPLOYEES RETIREMENT FUND, CONTRIBUTIONS BY EMPLOYEE AND EMPLOYER.

Subd. 11.

Gifts and bequests.

The director may credit to the retirement fund any money received in the form of donations, gifts, appropriations, bequests, or otherwise, or derived from it.

352.045 PROCEDURE FOR REVISING EMPLOYEE AND EMPLOYER CONTRIBUTIONS IN CERTAIN INSTANCES.

Subdivision 1.

Application.

This section applies to the general state employees retirement plan established under this chapter, the correctional state employees retirement plan established under this chapter, and the state patrol retirement plan established under chapter 352B.

Subd. 2.

Determination.

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

Subd. 3a.

Contribution rate revision; general state employees retirement plan.

(a) Notwithstanding the contribution rates as specified in law governing the applicable retirement plan, the board of directors of the Minnesota State Retirement System may adjust the employee and employer contribution rates for the general state employees retirement plan if the regular actuarial valuation of the plan prepared under section 356.215 indicates that there is a contribution sufficiency greater than one percent of covered payroll or that there is a contribution deficiency under subdivision 2 equal to or greater than one-half of one percent of covered payroll.

(b) If the actuarially determined contribution of the plan is less than the total support provided by the combined employee and employer contribution rates by more than one percent of covered payroll, the plan employee and employer contribution rates may be decreased incrementally over one or more years to a level such that there remains a contribution sufficiency of at least one percent of covered payroll. Any decrease in employee and employer contribution rates must not result in total contributions that are less than the sum of the normal cost and administrative expenses of the retirement plan.

(c) If the actuarially required contribution exceeds the total support provided by the employee and employer contribution rates, the board of directors may increase the employee and employer contribution rates equally to eliminate that contribution deficiency.

(d) To determine if an adjustment is to be made, the board of directors shall consult with the approved actuary retained under section 356.214 and shall take into consideration factors that include, but are not limited to, the contribution rates calculated based on the actuarial value of assets and calculated based on the market value of assets; the funded ratio calculated based on the actuarial value of assets; the funded ratio calculated based on the market value of assets; the remaining number of years to the amortization target date; the recent experience of the investment markets; and the results of the 30-year funding, disbursements, and contribution projections prepared every other year as required under the standards for actuarial work adopted by the Legislative Commission on Pensions and Retirement.

(e) Any adjustment to the contribution rates must be reported to the chair and the executive director of the Legislative Commission on Pensions and Retirement by January 15 following receipt of the most recent annual actuarial valuation prepared under section 356.215. The report must include draft legislation to revise the employee and employer contributions stated in plan law. If the Legislative Commission on Pensions and Retirement does not recommend against the rate change or does not recommend a modification in the rate change, the adjustment becomes effective on the first day of the first full payroll period in the fiscal year following receipt of the most recent actuarial valuation that gave rise to the adjustment.

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

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

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

Subd. 3b.

Contribution rate revision; correctional state employees retirement plan and State Patrol retirement plan.

(a) Subdivision 3a applies to the correctional state employees retirement plan under this chapter and to the State Patrol retirement plan established under chapter 352B, except as specified in paragraph (b) or (c).

(b) Any limitations on the amount of contribution rate changes stated in subdivision 3a apply only to the amount of the employee contribution revision. The employer contribution for the correctional state employees retirement plan or the State Patrol retirement plan, whichever is applicable, must be adjusted so that the employer contribution is equal to 60 percent of the sum of employee plus employer contributions.

(c) For the State Patrol retirement plan, a contribution sufficiency of up to two percent of covered payroll, rather than one percent, may be held in reserves without taking action to reduce employee and employer contributions.

352.72 COVERAGE BY MORE THAN ONE RETIREMENT SYSTEM.

Subdivision 1.

Entitlement to annuity.

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

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

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

Subd. 2.

Computation of deferred annuity.

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

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

Subd. 4.

Refund repayment.

Any person who has received a refund from the state employees retirement fund, and who is a member of a public retirement system included in subdivision 1, may repay the refund with interest to the state employees retirement fund. If a refund is repaid to the fund and more than one refund has been received from the fund, all refunds must be repaid. Repayment must be made as provided in section 352.23, and under terms and conditions consistent with that section as agreed upon with the director.

Subd. 5.

Early retirement.

The requirements and provisions for retirement before normal retirement age in sections 352.115, subdivision 1, and 352.116 also apply to an employee fulfilling the requirements with a combination of service as provided in subdivision 1.

352B.30 COVERAGE BY MORE THAN ONE RETIREMENT SYSTEM OR ASSOCIATION.

Subdivision 1.

Entitlement to annuity.

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

Subd. 2.

Computation of deferred annuity.

Deferred annuities must be computed according to this chapter on the basis of allowable service before termination of service and augmented as provided in this chapter. The required reserves applicable to a deferred annuity must be augmented by interest compounded annually from the first day of the month following the month in which the member terminated service, or July 1, 1971, whichever is later, to the first day of the month in which the annuity begins to accrue. The rates of interest used for this purpose must be five percent per year compounded annually until January 1, 1981, three percent per year compounded annually after January 1, 1981, until January 1, 2012, if the employee became an employee before July 1, 2006, 2.5 percent compounded annually if the employee becomes an employee after June 30, 2006, and two percent per year compounded annually after December 31, 2011, irrespective of when the employee was first employed. The mortality table and interest assumption used to compute the annuity must be those in effect when the member files application for annuity.

Subd. 3.

Refund repayment.

A person who has received a refund from the State Patrol retirement fund who is a member of a public retirement system included in subdivision 1, may repay the refund with interest to the State Patrol retirement fund as provided in section 352B.11, subdivision 4.

Subd. 4.

1997 postretirement fund interest changes.

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

353.0161 AUTHORIZED LEAVE OF ABSENCE SERVICE CREDIT PURCHASE PROCEDURE.

Subdivision 1.

Application.

This section applies to employees covered by any plan specified in this chapter or chapter 353E for any period of authorized leave of absence specified in section 353.01, subdivision 16, paragraph (a), clause (5), for which the employee obtains credit for allowable service by making payment as specified in this section to the applicable fund.

Subd. 2.

Purchase procedure.

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

(b) If payment is received by the executive director within one year from the date the member returned to work following the authorized leave, or within 30 days after the date of termination of public service if the member did not return to work, the payment amount is equal to the employee and employer contribution rates specified in law for the applicable plan at the end of the leave period, or at termination of public service, whichever is earlier, multiplied by the employee's average monthly salary, excluding overtime, upon which deductions were paid during the six months, or portion thereof, before the commencement of the leave of absence and by the number of months of the leave of absence for which the employee wants allowable service credit. Payments made under this paragraph must include compound interest at the monthly rate of 0.71 percent until June 30, 2015, and 0.667 percent per month thereafter from the last day of the leave period until the last day of the month in which payment is received.

(c) If payment is received by the executive director after one year, the payment amount is the amount determined under section 356.551. Payment under this paragraph must be made before the date the person terminates public service under section 353.01, subdivision 11a.

Subd. 3.

Restriction on subsequent purchases.

To purchase salary credit or service credit for a subsequent authorized leave of absence period, the member must return to public service and render a minimum of three months of allowable service credit.

353.27 GENERAL EMPLOYEES RETIREMENT FUND.

Subd. 3b.

Change in employee and employer contributions in certain instances.

(a) For purposes of this section:

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

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

(b) Notwithstanding the contribution rate provision specified under subdivisions 2, 3, and 3a, the board of trustees of the Public Employees Retirement Association may adjust the employee and employer contributions to the general employees retirement plan under subdivisions 2 and 3 if the regular actuarial valuation of the general employees retirement plan of the Public Employees Retirement Association prepared under section 356.215 indicates that there is a contribution sufficiency under paragraph (a) greater than one percent of covered payroll or that there is a contribution deficiency under paragraph (a) equal to or greater than one-half of one percent of covered payroll.

(c) If the actuarially determined contribution of the general employees retirement plan is less than the total support provided by the combined employee and employer contribution rates under subdivisions 2, 3, and 3a, by more than one percent of covered payroll, the general employees retirement plan coordinated program employee and employer contribution rates under subdivisions 2 and 3 may be decreased over one or more years to a level such that there remains a contribution sufficiency of at least one percent of covered payroll. Any decrease in employee and employer contribution rates must not result in total contributions that are less than the total of the normal cost of the retirement plan and the administrative expenses of the retirement plan.

(d) If the actuarially determined contribution exceeds the total support provided by the combined employee and employer contribution rates under subdivisions 2, 3, and 3a, the board of trustees may increase the employee and matching employer contribution rates to eliminate that contribution deficiency.

(e) To determine if an adjustment is to be made, the board of trustees shall consult with the approved actuary retained under section 356.214 and shall take into consideration factors that include, but are not limited to, the contribution rates based on actuarial value of assets and contribution rates based on the market value of assets; the funded ratio based on the actuarial value of assets and based on the market value of assets; the number of years remaining to the amortization target date; the recent experience of the investment markets; and the results of the 30-year funding, disbursements, and contributions projections prepared every other year as required under the standards for actuarial work adopted by the Legislative Commission on Pensions and Retirement.

(f) Any adjustment to the contribution rates must be reported to the chair and the executive director of the Legislative Commission on Pensions and Retirement by January 15 following the receipt of the most recent annual actuarial valuation prepared under section 356.215. If the Legislative Commission on Pensions and Retirement does not recommend against the rate change or does not recommend a modification in the rate change, the recommended adjustment becomes effective for any salary paid on or after the January 1 next following the legislative session in which the Legislative Commission on Pensions and Retirement did not take any action to disapprove or modify the Public Employees Retirement Association Board of Trustees' adjustment to the employee and employer rates.

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

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

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

353.34 RIGHTS UPON TERMINATION OF MEMBERSHIP.

Subd. 6.

Additions to fund.

The board of trustees may credit to the general employees retirement fund any money received in the form of contributions, donations, gifts, appropriations, bequests, or otherwise.

353.71 COVERAGE BY MORE THAN ONE RETIREMENT SYSTEM; DEFERRED ANNUITY; AUGMENTATION.

Subdivision 1.

Eligibility.

Any person who has been a member of a defined benefit retirement plan administered by the Public Employees Retirement Association, or a retirement plan administered by the Minnesota State Retirement System, or the Teachers Retirement Association, or any other public retirement system in the state of Minnesota having a like provision, except a retirement plan providing benefits for police officers or firefighters governed by sections 424A.091 to 424A.096, or by Laws 2013, chapter 111, article 5, sections 31 to 42, is entitled, when qualified, to an annuity from each retirement plan if the total allowable service in all retirement plans or in any two of these retirement plans totals the number of years of allowable service required to receive a normal retirement annuity for that retirement plan, provided that no portion of the allowable service upon which the retirement annuity from one retirement plan is based is again used in the computation for benefits from another retirement plan and provided further that the person has not taken a refund from any one of these retirement plans since the person's membership in that association or system last terminated. The annuity from each fund must be determined by the appropriate provisions of the law except that the requirement that a person must have at least a specific minimum period of allowable service in the respective association or system does not apply for the purposes of this section if the combined service in two or more of these retirement plans equals the number of years of allowable service required to receive a normal retirement annuity for that retirement plan.

354.42 CONTRIBUTIONS BY EMPLOYER AND EMPLOYEE.

Subd. 4a.

Determination.

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

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

Subd. 4b.

Contribution rate revision.

(a) Notwithstanding the contribution rate provisions under subdivisions 2 and 3, the Board of Trustees of the Teachers Retirement Association may adjust the employee and employer contribution rates if the regular actuarial valuation of the plan under section 356.215 indicates that there is a contribution sufficiency under subdivision 4a equal to or greater than one percent of covered payroll or if the regular valuation of the plan under section 356.215 indicates that there is a deficiency equal to or greater than one-half of one percent of covered payroll. Any decrease in employee and employer contribution rates must not result in the total of contribution rates that is less than the total of normal cost and administrative expenses.

(b) To determine if an adjustment is to be made, the board of trustees shall consult with the approved actuary retained under section 356.214 and shall take into consideration factors that include, but are not limited to, the contribution rates based on actuarial value of assets and contribution rates based on the market value of assets; the funded ratio based on the actuarial value of assets and based on the market value of assets; the number of years remaining to the amortization target date; the recent experience of the investment markets; and the results of the 30-year funding, disbursements, and contributions projections prepared every other year as required under the standards for actuarial work adopted by the Legislative Commission on Pensions and Retirement.

Subd. 4c.

Contribution sufficiency measures.

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

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

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

Subd. 4d.

Reporting; commission review.

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

354.60 SERVICE IN OTHER PUBLIC RETIREMENT FUNDS; ANNUITY.

Any person who has been a member of the Minnesota state retirement system or the Public Employees Retirement Association including the Public Employees Retirement Association police and fire fund or the Teachers Retirement Association or the Minnesota State Patrol Retirement Association, or any other public employee retirement system in the state of Minnesota having a like provision but excluding all other funds providing benefits for police officers or firefighters shall be entitled when qualified to an annuity from each fund if the person's total allowable service in all three funds or in any two of these funds totals three or more years, provided no portion of the allowable service upon which the retirement annuity from one fund is based is again used in the computation for benefits from another fund and provided further that the person has not taken a refund from any one of these three funds since the person's membership in that association has terminated. The annuity from each fund shall be determined by the appropriate provisions of the law except that the requirement that an annuitant have at least three years' membership service or three years of allowable service in the respective association shall not apply for the purposes of this section provided the combined service in two or more of these funds equals three or more years.

354A.12 CONTRIBUTIONS BY EMPLOYEE AND EMPLOYER.

Subd. 2c.

Duluth Teachers Retirement Fund Association; employer contributions for reemployed annuitants.

The school district shall make the regular employer contributions and additional employer contributions specified in subdivision 2a on behalf of any retired member of the Duluth Teachers Retirement Fund Association who is reemployed by Independent School District No. 709, including providing service to the school district as an independent contractor or as an employee of an independent contractor.

354A.29 ST. PAUL TEACHERS RETIREMENT FUND ASSOCIATION POSTRETIREMENT ADJUSTMENT.

Subd. 8.

Calculation of postretirement adjustments; percentage based.

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

	Funding ratio	Postretirement increase
	Less than 80 percent	1 percent
	At least 80 percent but less than 90 percent	2 percent

(b) The amount determined under paragraph (a) is the full postretirement increase to be applied as a permanent increase to the regular payment of each eligible member on January 1 of the next calendar year. For any eligible member whose effective date of benefit commencement occurred after January 1 of the calendar year immediately before the postretirement increase is applied, the amount determined under paragraph (a) must be reduced by 50 percent.

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

(d) If, following a postretirement increase under paragraph (a), the accrued liability funding ratio, based on the actuarial value of assets, falls below 80 percent for two consecutive actuarial valuations, the applicable postretirement increase must be reduced to one percent until January 1 of the calendar year next following the date on which the requirements for an increase under paragraph (a) are again satisfied.

Subd. 9.

Calculation of postretirement adjustments.

(a) This subdivision applies if the requirements of subdivision 8, paragraph (c), have been satisfied.

(b) A percentage adjustment must be paid under this subdivision to eligible persons under subdivision 7.

(c) The amount of 2.5 percent is the full postretirement adjustment to be applied as a permanent increase to the regular payment of each eligible member on January 1 of the next calendar year. For any eligible member whose effective date of benefit commencement occurred after January 1 of the calendar year immediately before the postretirement adjustment is applied, the postretirement adjustment amount must be reduced by 50 percent.

(d) In the event the accrued liability funding ratio based on the actuarial value of assets falls below 90 percent for two consecutive actuarial valuations, the applicable postretirement increase must be determined under subdivision 8 until January 1 of the calendar year next following the date on which the requirements of subdivision 8, paragraph (c), are again satisfied.

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

Any person who has been a member of the Minnesota State Retirement System, the Public Employees Retirement Association including the Public Employees Retirement Association Police and Fire Fund, the Teachers Retirement Association, the Minnesota State Patrol Retirement Association, the legislators retirement plan, the constitutional officers retirement plan, the St. Paul Teachers Retirement Fund Association coordinated program, or any other public employee retirement system in the state of Minnesota having a like provision, but excluding all other funds providing retirement benefits for police officers or firefighters, is entitled, when qualified, to an annuity from each fund if the person's total allowable service in all of the funds or in any two or more of the funds totals three or more years, provided that no portion of the allowable service upon which the retirement annuity from one fund is based is used again in the computation for a retirement annuity from another fund and provided further that the person has not taken a refund from any of funds or associations since the person's membership in the fund or association has terminated. The annuity from each fund or association must be determined by the appropriate provisions of the law governing each fund or association, except that the requirement that a person must have at least three years of allowable service in the respective fund or association does not apply for the purposes of this section, provided that the aggregate service in two or more of these funds equals three or more years.

356.611 LIMITATION ON PUBLIC EMPLOYEE SALARIES FOR PENSION PURPOSES.

Subd. 3.

Maximum benefit limitations.

An annuitant's annual benefit, if necessary, must be reduced to the extent required by section 415(b) of the federal Internal Revenue Code, as adjusted by the United States secretary of the treasury under section 415(d) of the federal Internal Revenue Code for any applicable increases in the cost of living, including applicable increases in the cost of living after the member's termination of employment. If an annuitant participated in more than one pension plan in which the employer participates, the benefits under each plan must be reduced proportionately, if necessary, to satisfy the applicable limitation.

Subd. 3a.

Maximum annual addition limitation, defined contribution plans.

The annual additions on behalf of a member to a defined contribution plan for any limitation year shall not exceed the applicable limitation on annual additions under section 415(c) of the federal Internal Revenue Code, as adjusted by the United States secretary of the treasury under section 415(d) of the federal Internal Revenue Code.

Subd. 4.

Compensation.

For purposes of this section, compensation means a member's compensation actually paid or made available for any limitation year including all items of remuneration described in federal treasury regulation section 1.415 (c)-2(b) and excluding all items of remuneration described in federal treasury regulation section 1.415 (c)-2(c). Compensation for pension plan purposes for any limitation year shall not exceed the applicable federal compensation limit described in subdivision 2.

Subd. 5.

Limitation year.

Unless otherwise specifically provided, for purposes of section 415 of the federal Internal Revenue Code, the limitation year of a pension plan covered by this section is the calendar year or fiscal year, whichever is applicable.

356.96 PENSION PLAN APPEAL PROCEDURES.

Subd. 14.

Petitions without notice.

Notwithstanding the petition notice and requirements under this section, a person who believes that the person's rights have been affected by a decision made by the administration of a covered pension plan may request a review under this section by the appropriate governing board. The petition under this subdivision must be made within 45 days of the time that the person knew or should have known of the disputed decision.

Subd. 15.

Governing board review panel.

Any covered pension plan subject to this section, by motion duly made and adopted, may appoint a panel of governing board members to hear and determine any or all petitions brought under this section. The governing board review panel must contain a minimum number of board members that would otherwise constitute a quorum of board members under the governing body's rules and procedures.

424A.02 DEFINED BENEFIT RELIEF ASSOCIATIONS; SERVICE PENSIONS.

Subd. 13.

Combined service pensions.

(a) If the articles of incorporation or bylaws of the defined benefit relief associations so provide, a volunteer firefighter with credit for service as an active firefighter in more than one defined benefit volunteer firefighters relief association is entitled, when the applicable requirements of paragraph (b) are met and when otherwise qualified, to a prorated service credit from each relief association.

(b) A volunteer firefighter receiving a prorated service pension under this subdivision must have a total amount of service credit of ten years or more, if the bylaws of every affected relief association do not specify only a five-year service vesting requirement, or five years or more, if the bylaws of every affected relief association require only a five-year service vesting requirement, as a member of two or more relief associations otherwise qualified. The member must have one year or more of service credit in each relief association. The prorated service pension must be based on the service pension amount in effect for the relief association on the date on which active volunteer firefighting services covered by that relief association terminate. To receive a service pension under this subdivision, the firefighter must become a member of the second or succeeding association and must give notice of membership to the prior association within two years of the date of termination of active service with the prior association. The notice must be attested to by the second or subsequent relief association secretary.

HF 4

Bill Text Versions

Current Version - as introduced

ARTICLE 1

MINNESOTA STATE RETIREMENT SYSTEM BENEFIT AND CONTRIBUTION CHANGES

Section 1.

Subd. 4.

Deferred annuities augmentation.

new text begin EFFECTIVE DATE. new text end

Sec. 2.

Subd. 1a.

Actuarial reduction for early retirement.

new text begin EFFECTIVE DATE. new text end

Sec. 3.

Subd. 2.

Amount of refund.

Sec. 4.

new text begin Subd. 2b. new text end

new text begin Refund repayment. new text end

new text begin EFFECTIVE DATE. new text end

Sec. 5.

Subd. 3.

Deferred annuity.

new text begin EFFECTIVE DATE. new text end

Sec. 6.

new text begin Subd. 3a. new text end

new text begin Computation of deferred annuity. new text end

new text begin EFFECTIVE DATE. new text end

Sec. 7.

new text begin Subd. 2b. new text end

new text begin Computation of deferred annuity. new text end

new text begin EFFECTIVE DATE. new text end

Sec. 8.

Subdivision 1.

Combined service.

new text begin EFFECTIVE DATE. new text end

Sec. 9.

Subd. 25.

Tier I.

new text begin EFFECTIVE DATE. new text end

Sec. 10.

Subd. 26.

Tier II.

new text begin EFFECTIVE DATE. new text end

Sec. 11. new text begin REPEALER.new text end

new text begin EFFECTIVE DATE. new text end

ARTICLE 2

PUBLIC EMPLOYEES RETIREMENT ASSOCIATION CHANGES

Section 1. new text begin PERA BOARD OF TRUSTEES; REFORM PROPOSAL REQUIREMENT.new text end

Sec. 2. new text begin REPEALER.new text end

new text begin EFFECTIVE DATE. new text end

ARTICLE 3

TEACHERS RETIREMENT ASSOCIATION

Section 1.

Subd. 3.

Aid expiration.

new text begin EFFECTIVE DATE. new text end

Sec. 2. new text begin REPEALER.new text end

new text begin EFFECTIVE DATE. new text end

ARTICLE 4

ST. PAUL TEACHERS RETIREMENT FUND ASSOCIATION BENEFIT AND CONTRIBUTION CHANGES

Section 1.

Subd. 3a.

Actuarial equivalent.

new text begin EFFECTIVE DATE. new text end

Sec. 2.

Subd. 7.

deleted text begin Eligibility for payment ofdeleted text end Postretirement adjustments.

new text begin EFFECTIVE DATE. new text end

Sec. 3.

Subd. 7.

Reduction for early retirement.

new text begin EFFECTIVE DATE. new text end

Sec. 4.

Subd. 2.

Eligibility for deferred retirement annuity.

new text begin EFFECTIVE DATE. new text end

Sec. 5.

Subd. 3.

Computation of refund amount.

MINNESOTA STATE RETIREMENT SYSTEM BENEFIT AND CONTRIBUTION
CHANGES

Sec. 11. new text begin REPEALER.
new text end

Section 1. new text begin PERA BOARD OF TRUSTEES; REFORM PROPOSAL REQUIREMENT.
new text end

Sec. 2. new text begin REPEALER.
new text end

Sec. 2. new text begin REPEALER.
new text end

ST. PAUL TEACHERS RETIREMENT FUND ASSOCIATION BENEFIT AND
CONTRIBUTION CHANGES

Sec. 6. new text begin REPEALER.
new text end

POSTRETIREMENT ADJUSTMENTS FOR STATEWIDE PLANS
AND GENERAL PROVISIONS

new text begin [356.311] COVERAGE BY MORE THAN ONE PLAN.
new text end

Annual postretirement adjustments; deleted text begin generallydeleted text end new text begin Minnesota State
Retirement System general state employees retirement plan, legislators retirement
plan, and unclassified state employees retirement programnew text end .

Annual postretirement adjustments; Minnesota State Retirement System
deleted text begin plans other than State Patroldeleted text end new text begin correctional state employees new text end retirement plan.

Annual postretirement adjustments; PERA; general employees retirement
plan deleted text begin and local government correctional retirement plandeleted text end .

Annual postretirement adjustments; Minnesota State Retirement System
judges retirement plan.

new text begin Annual postretirement adjustments; PERA local government correctional
retirement plan. new text end

Sec. 14. new text begin STUDY.
new text end