1st Unofficial Engrossment - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to retirement; increasing Minnesota state retirement contributions; 1.3 providing inclusions to correctional retirement plan; allowing coverage for 1.4 prior service; allowing service credit transfers and purchases; modifying certain 1.5 retirement plan administrative provisions; requiring certain reports; modifying 1.6 certain retirement plan coverages; making changes to Social Security coverage; 1.7 modifying investment authority; providing changes to certain retirement funds, 1.8 plans, and associations; recodifying various plans; correcting coverage error; 1.9 amending Minnesota Statutes 2004, sections 3A.01, subdivisions 1, 2, 6, 8, 1.10 by adding subdivisions; 3A.011; 3A.02, subdivisions 1, 1b, 3, 4, 5; 3A.03, 1.11 subdivisions 1, 2; 3A.04, subdivisions 1, 2, 3, 4, by adding a subdivision; 1.12 3A.05; 3A.07; 3A.10, subdivision 1; 3A.12; 6.72; 69.77, subdivision 9; 136F.45, 1.13 subdivision 1a; 352.04, subdivisions 2, 3; 352.113, subdivision 7a; 352.116, 1.14 subdivisions 3a, 3b; 352.90; 352.91, subdivisions 1, 2, 3c, 3d, 3e, 3f, 3g, by 1.15 adding subdivisions; 352.92, subdivisions 1, 2; 352B.02, subdivisions 1a, 1.16 1c; 352C.091, subdivision 1; 352C.10; 352D.02, subdivision 1; 352D.04, 1.17 subdivision 2; 352F.04; 353.01, subdivisions 2a, 11a, 11b, 12, 16, by adding 1.18 a subdivision; 353.03, subdivisions 1, 1a, by adding a subdivision; 353.27, 1.19 subdivisions 7, 7a, 7b; 353.29, subdivision 8; 353.30, subdivisions 3a, 3b; 1.20 353.32, subdivisions 1a, 1b; 353.33, subdivisions 1, 9; 353.34, subdivision 1; 1.21 353.656, subdivisions 3, 4, 6a; 353D.01, subdivision 2; 353D.02, subdivision 3, 1.22 by adding subdivisions; 353D.03, by adding subdivisions; 353E.02, subdivision 1.23 3; 353F.04; 354.45, subdivision 1a; 354A.08; 354A.28, subdivision 5; 354A.32, 1.24 subdivision 1a; 354D.05; 355.01, subdivision 3g; 355.02, subdivisions 1, 3, by 1.25 adding subdivisions; 356.219, subdivisions 3, 6; 356.24, subdivision 1; 356.50; 1.26 422A.05, subdivision 2c; 422A.06, subdivisions 3, 5, 8; 422A.101, subdivision 1.27 3; 423B.07; 424A.001, by adding a subdivision; 424A.02, subdivision 8b; 1.28 424A.05, subdivision 3; 424A.10; 490.121, subdivisions 1, 6, 7, 13, 14, 15, 1.29 22, by adding subdivisions; 490.122; 490.123, subdivisions 1, 1a, 1b, 1c, 2, 3; 1.30 490.124, subdivisions 1, 2, 3, 4, 5, 8, 9, 10, 11, 12, 13; 490.125, subdivisions 1, 1.31 2; 490.126, as amended; 490.133; 525.05; Minnesota Statutes 2005 Supplement, 1.32 sections 353.01, subdivision 2d; 353.028, subdivision 3; 353.28, subdivision 1.33 6; 353.656, subdivision 1; 353F.02, subdivision 4; 356A.06, subdivision 7; 1.34 422A.06, subdivision 7; 423B.09, subdivision 1; 490.121, subdivision 4; Laws 1.35 2004, chapter 267, article 8, section 41; proposing coding for new law in 1.36 Minnesota Statutes, chapters 352; 352C; 353; 355; 422A; 423B; proposing 1.37 coding for new law as Minnesota Statutes, chapter 490A; repealing Minnesota 1.38 Statutes 2004, sections 3A.01, subdivisions 3, 4, 6a, 7; 3A.02, subdivision 2.1 2; 3A.04, subdivision 1a; 3A.09; 43A.34, subdivision 1; 352C.01; 352C.011; 2.2 352C.021, subdivisions 1, 2, 3, 4, 5, 6, 7; 352C.031, subdivisions 1, 2, 4, 2.3 5, 6; 352C.033; 352C.04; 352C.051; 352C.09; 352C.091, subdivisions 2, 2.4 3; 422A.101, subdivision 4; 490.021; 490.025; 490.101; 490.102; 490.103; 2.5 490.105; 490.106; 490.107; 490.108; 490.109; 490.1091; 490.12; 490.121, 2.6 subdivisions 2, 3, 5, 8, 9, 10, 11, 12, 16, 17, 18, 19; 490.124, subdivision 6; 2.7 490.132; 490.15; 490.16; 490.18; Minnesota Statutes 2005 Supplement, sections 2.8 352C.021, subdivision 1a; 490.121, subdivision 20. 2.9 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 2.10 ARTICLE 1 2.11 MINNESOTA STATE RETIREMENT SYSTEM 2.12 CONTRIBUTION INCREASES 2.13 Section 1. Minnesota Statutes 2004, section 352.04, subdivision 2, is amended to read: 2.14 Subd. 2. Employee contributions. The employee contribution to the fund must be 2.15 equal to4.0the following percent of salary.:2.16 before July 1, 20074.00 2.17 from July 1, 2007, to June 30, 2008 4.25 2.18 from July 1, 2008, to June 30, 2009 4.50 2.19 from July 1, 2009, to June 30, 2010 4.75 2.20 from July 1, 2010, and thereafter 5.00. 2.21 These contributions must be made by deduction from salary as provided in 2.22 subdivision 4. 2.23 Sec. 2. Minnesota Statutes 2004, section 352.04, subdivision 3, is amended to read: 2.24 Subd. 3. Employer contributions. The employer contribution to the fund must be 2.25 equal to4.0the following percent of salary.:2.26 before July 1, 2007 4.00 2.27 from July 1, 2007, to June 30, 2008 4.25 2.28 from July 1, 2008, to June 30, 2009 4.50 2.29 from July 1, 2009, to June 30, 2010 4.75 2.30 from July 1, 2010, and thereafter 5.00. 2.31 Sec. 3. [352.045] PROCEDURE FOR REVISING EMPLOYEE AND 2.32 EMPLOYER CONTRIBUTIONS IN CERTAIN INSTANCES. 3.1 Subdivision 1. Application. This section applies to the general state employees 3.2 retirement plan and the correctional state employees retirement plan under this chapter, 3.3 and to the state patrol retirement plan under chapter 352B. 3.4 Subd. 2. Determination. For purposes of this section, a contribution sufficiency 3.5 exists if, for purposes of the applicable plan, the total of the employee contributions, 3.6 the employer contributions, and any additional employer contributions, if applicable, 3.7 exceeds the total of the normal cost, the administrative expenses, and the amortization 3.8 contribution of the retirement plan as reported in the most recent actuarial valuation of the 3.9 retirement plan prepared by the actuary retained under section 356.214 and prepared under 3.10 section 356.215 and the standards for actuarial work of the Legislative Commission on 3.11 Pensions and Retirement. For purposes of this section, a contribution deficiency exists 3.12 if, for the applicable plan, the total employee contributions, employer contributions, and 3.13 any additional employer contributions are less than the total of the normal cost, the 3.14 administrative expenses, and the amortization contribution of the retirement plan as 3.15 reported in the most recent actuarial valuation of the retirement plan prepared by the 3.16 actuary retained under section 356.214 and prepared under section 356.215 and the 3.17 standards for actuarial work of the Legislative Commission on Pensions and Retirement. 3.18 Subd. 3. Contribution rate revision. Notwithstanding the contribution rate 3.19 provisions stated in plan law, the employee and employer contribution rates must be 3.20 adjusted: 3.21 (1) if, after July 1, 2011, the regular actuarial valuations of the applicable plan under 3.22 section 356.215 indicate that there is a contribution sufficiency under subdivision 2 equal 3.23 to or greater than 0.5 percent of covered payroll for two consecutive years, the employee 3.24 and employer contribution rates for the applicable plan must be decreased as determined 3.25 under subdivision 4 to a level such that the sufficiency equals no more than 0.25 percent of 3.26 covered payroll based on the most recent actuarial valuation; or 3.27 (2) if, after July 1, 2011, the regular actuarial valuations of the applicable plan under 3.28 section 356.215 indicate that there is a deficiency equal to or greater than 0.5 percent of 3.29 covered payroll for two consecutive years, the employee and employer contribution rates 3.30 for the applicable plan must be increased as determined under subdivision 4 to a level such 3.31 that no deficiency exists based on the most recent actuarial valuation. 3.32 Subd. 4. Reporting, commission review. (a) The contribution rate increase or 3.33 decrease must be determined by the executive director of the Minnesota State Retirement 3.34 System, must be reported to the chair and the executive director of the Legislative 3.35 Commission on Pensions and Retirement on or before the next February 1, and, if the 3.36 Legislative Commission on Pensions and Retirement does not recommend against the 4.1 rate change or does not recommend a modification in the rate change, is effective on the 4.2 next July 1 following the determination by the executive director that a contribution 4.3 deficiency or sufficiency has existed for two consecutive fiscal years based on the most 4.4 recent actuarial valuations under section 356.215. If the actuarially required contribution 4.5 exceeds or is less than the total support provided by the combined employee and employer 4.6 contribution rates for the applicable plan by more than 0.5 percent of covered payroll, the 4.7 applicable plan employee and employer contribution rates must be adjusted incrementally 4.8 over one or more years to a level such that there remains a contribution sufficiency of no 4.9 more than 0.25 percent of covered payroll. 4.10 (b) No incremental adjustment may exceed 0.25 percent of payroll for either the 4.11 employee or employer contribution rates per year in which any adjustment is implemented. 4.12 For an applicable plan, a contribution rate adjustment under this section must not be 4.13 made until at least two years have passed since fully implementing a previous adjustment 4.14 under this section. 4.15 Sec. 4. Minnesota Statutes 2004, section 352.92, subdivision 1, is amended to read: 4.16 Subdivision 1. Employee contributions. Employee contributions of covered 4.17 correctional employees must be in an amount equal to5.69the following percent of salary.:4.18 before July 1, 2007 5.69 4.19 from July 1, 2007, to June 30, 2008 6.40 4.20 from July 1, 2008, to June 30, 2009 7.00 4.21 from July 1, 2009, to June 30, 2010 7.70 4.22 from July 1, 2010, and thereafter 8.60. 4.23 These contributions must be made by deduction from salary as provided in section 4.24 352.04, subdivision 4. 4.25 Sec. 5. Minnesota Statutes 2004, section 352.92, subdivision 2, is amended to read: 4.26 Subd. 2. Employer contributions. The employer shall contribute for covered 4.27 correctional employees an amount equal to7.98the following percent of salary.:4.28 before July 1, 2007 7.98 4.29 from July 1, 2007, to June 30, 2008 9.10 4.30 from July 1, 2008, to June 30, 2009 10.10 5.1 from July 1, 2009, to June 30, 2010 11.10 5.2 from July 1, 2010, and thereafter 12.10. 5.3 Sec. 6. Minnesota Statutes 2004, section 352B.02, subdivision 1a, is amended to read: 5.4 Subd. 1a. Member contributions. Each member shall pay a sum equal to8.40the 5.5 following percent of the member's salary, which shall constitute the member contribution 5.6 to the fund.:5.7 before July 1, 2007 8.40 5.8 from July 1, 2007, to June 30, 2008 9.10 5.9 from July 1, 2008, to June 30, 2009 9.80 5.10 from July 1, 2009, and thereafter 10.40. 5.11 These contributions must be made by deduction from salary as provided in section 5.12 352.04, subdivision 4. 5.13 Sec. 7. Minnesota Statutes 2004, section 352B.02, subdivision 1c, is amended to read: 5.14 Subd. 1c. Employer contributions. In addition to member contributions, 5.15 department heads shall pay a sum equal to12.60the following percent of the salary upon 5.16 which deductions were made, which shall constitute the employer contribution to the fund.:5.17 before July 1, 2007 12.60 5.18 from July 1, 2007, to June 30, 2008 13.60 5.19 from July 1, 2008, to June 30, 2009 14.60 5.20 from July 1, 2009, and thereafter 15.60. 5.21 Department contributions must be paid out of money appropriated to departments 5.22 for this purpose. 5.23 Sec. 8. Minnesota Statutes 2004, section 352D.04, subdivision 2, is amended to read: 5.24 Subd. 2. Contribution rates. (a) The money used to purchase shares under this 5.25 section is the employee and employer contributions provided in this subdivision. 5.26 (b) The employee contribution is an amount equal tothe employee contribution5.27specified in section 352.04, subdivision 2four percent of salary. 5.28 (c) The employer contribution is an amount equal to six percent of salary. 5.29 (d) These contributions must be made in the manner provided in section 352.04, 5.30 subdivisions 4, 5, and 6. 6.1 (e) For members of the legislature, the contributions under this subdivision also must 6.2 be made on per diem payments received during a regular or special legislative session, but 6.3 may not be made on per diem payments received outside of a regular or special legislative 6.4 session, on the additional compensation attributable to a leadership position under section 6.5 3.099, subdivision 3, living expense payments under section 3.101, or special session 6.6 living expense payments under section 3.103. 6.7 (f) For a judge who is a member of the unclassified plan under section 352D.02, 6.8 subdivision 1, paragraph (c), clause (16), the employee contribution rate is eight percent 6.9 of salary, and there is no employer contribution. 6.10 Sec. 9. EFFECTIVE DATE. 6.11 (a) Sections 1, 2, 3, and 8 are effective July 1, 2007. 6.12 (b) Sections 4, 5, 6, and 7 are effective July 1, 2006. 6.13 ARTICLE 2 6.14 MSRS-CORRECTIONAL RETIREMENT PLAN INCLUSIONS 6.15 Section 1. Minnesota Statutes 2004, section 352.90, is amended to read: 6.16 352.90 POLICY. 6.17 It is the policy of the legislature to provide special retirement benefits for and special 6.18 contributionsforby certain correctional employees who may be required to retire at 6.19 an early age because they lose the mental or physical capacity required to maintain the 6.20 safety, security, discipline, and custody of inmates at state correctional facilities or of 6.21 patients at the Minnesota Security Hospitalor at, of patients in the MinnesotaSexual6.22Psychopathic Personality Treatment CenterSex Offender Program, or of patients in the 6.23 Minnesota extended treatment optionson-campusprogramat the Cambridge Regional6.24Human Services Center. 6.25 Sec. 2. Minnesota Statutes 2004, section 352.91, subdivision 1, is amended to read: 6.26 Subdivision 1. Qualifying jobs. "Covered correctional service" means service 6.27 performed by a state employee, as defined in section 352.01, employed at a state 6.28 correctional facility, the Minnesota Security Hospital, or the MinnesotaSexual6.29Psychopathic Personality Treatment CenterSex Offender Program as: 6.30 (1) a corrections officer 1; 6.31 (2) a corrections officer 2; 6.32 (3) a corrections officer 3; 6.33 (4) a corrections officer supervisor; 7.1 (5) a correctionsofficer 4lieutenant; 7.2 (6) a corrections captain; 7.3 (7) a security counselor;or7.4 (8) a security counselor lead; or 7.5 (9) a corrections canine officer. 7.6 Sec. 3. Minnesota Statutes 2004, section 352.91, subdivision 2, is amended to read: 7.7 Subd. 2. Maintenance, correctional industry, and trades. "Covered correctional 7.8 service" also means service rendered at any time by state employees as maintenance 7.9 personneland, correctional industry personnel, or members of trades certified by the 7.10 commissioner of employee relations to the executive director as beingregularlyengaged 7.11 for at least 75 percent of the employee's working time in the rehabilitation, treatment, 7.12 custody, or supervision of inmates at a Minnesota correctional facility, or of patients at 7.13 the Minnesota Security Hospital oratthe MinnesotaSexual Psychopathic Personality7.14Treatment CenterSex Offender Program. 7.15 Sec. 4. Minnesota Statutes 2004, section 352.91, subdivision 3c, is amended to read: 7.16 Subd. 3c. Nursing personnel. (a) "Covered correctional service" means service by 7.17 a state employee in one of the employment positions at a correctional facility or at the 7.18 Minnesota Security Hospital, or in the Minnesota Sex Offender Program that are specified 7.19 in paragraph (b), provided thatif at least 75 percent of the employee's working time is 7.20 spent in direct contact with inmates or patients and the fact of this direct contact is certified 7.21 to the executive director by the appropriate commissioner, unless the person elects to7.22retain the current retirementcoverage under Laws 1996, chapter 408, article 8, section 21. 7.23 (b) The employment positions are as follows: 7.24 (1) registered nurse - senior; 7.25 (2) registered nurse; 7.26 (3) registered nurse - principal; 7.27 (4) licensed practical nurse 2; and 7.28 (5) registered nursepractitioneradvance practice. 7.29 Sec. 5. Minnesota Statutes 2004, section 352.91, subdivision 3d, is amended to read: 7.30 Subd. 3d. Other correctional personnel. (a) "Covered correctional service" means 7.31 service by a state employee in one of the employment positions at a correctional facility or 7.32 at the Minnesota Security Hospital specified in paragraph (b), provided thatif at least 75 7.33 percent of the employee's working time is spent in direct contact with inmates or patients 8.1 and the fact of this direct contact is certified to the executive director by the appropriate 8.2 commissioner, unless the person elects to retain the current retirement coverage under8.3Laws 1996, chapter 408, article 8, section 21. 8.4 (b) The employment positions are as follows: baker,; central services administrative 8.5 specialist, intermediate; central services administrative specialist, principal; chaplain; 8.6 chemical dependency counselor supervisor,; chief cook,; cook,; cook coordinator,8.7corrections behavior therapist, corrections behavior therapist specialist, corrections parent8.8education coordinator,; corrections program therapist 1; corrections program therapist 2; 8.9 corrections program therapist 3; corrections inmate program coordinator; corrections 8.10 transitions program coordinator; corrections security caseworker,; corrections security 8.11 caseworker career,; corrections teaching assistant,; delivery van driver; dentist,; electrician 8.12 supervisor,; general maintenance worker; general repair worker,; laundry coordinator; 8.13 library/information research services specialist,; library/information research services 8.14 specialist senior,; library technician; plumber supervisor,; psychologist 1; psychologist 8.15 3,; recreation therapist,; recreation therapist coordinator,; recreation program assistant,; 8.16 recreation therapist senior, stores clerk senior,; sports medicine specialist; water treatment 8.17 plant operator, work therapy technician,; work therapy assistant,; work therapy program 8.18 coordinator; and work therapy technician. 8.19(c) "Covered correctional service" also means service as the director or as an8.20assistant group supervisor of the Phoenix/Pomiga treatment/behavior change program of8.21the Department of Corrections.8.22 Sec. 6. Minnesota Statutes 2004, section 352.91, subdivision 3e, is amended to read: 8.23 Subd. 3e. Minnesota extended treatment options program; Cambridge. (a) 8.24 "Covered correctional service" means service by a state employee in one of thefollowing8.25 employment positions with the Minnesota extended treatment optionson-campusprogram 8.26at the Cambridge Regional Human Services Centerspecified in paragraph (b) if at least 75 8.27 percent of the employee's working time is spent in direct contact with patients who are 8.28 in the Minnesota extended treatment options program and if service in such a position 8.29 is certified to the executive director by the commissioner of human services, unless the8.30person elects to retain current retirement coverage undersection 6. 8.31 (b) The employment positions are: 8.32 (1) behavior analystI1; 8.33 (2) behavior analyst 2; 8.34 (3) behavior analyst 3; 8.35 (4) group supervisor; 9.1 (5) group supervisor assistant; 9.2 (6) human services support specialist; 9.3(3)(7) mental retardation residential program lead; 9.4(4)(8) psychologist 2; 9.5(5)(9) recreation program assistant; 9.6(6)(10) recreation therapist senior; 9.7(7)(11) registered nurse senior; 9.8(8)(12) skills development specialist;and9.9(9)(13) social worker senior; 9.10 (14) social worker specialist; and 9.11 (15) speech pathology specialist. 9.12 Sec. 7. Minnesota Statutes 2004, section 352.91, subdivision 3f, is amended to read: 9.13 Subd. 3f. Additional Department of Human Services personnel. (a) "Covered 9.14 correctional service" means service by a state employee in one of the employment 9.15 positions specified in paragraph (b) at the Minnesota Security Hospital or in the Minnesota 9.16Sexual Psychopathic Personality Treatment Center, provided thatSex Offender Program if 9.17 at least 75 percent of the employee's working time is spent in direct contact with patients 9.18 and thefactdetermination of this direct contact is certified to the executive director by the 9.19 commissioner of human services. 9.20 (b) The employment positions are: 9.21 (1) behavior analyst 2; 9.22 (2)licensed practical nurse 1behavior analyst 3; 9.23 (3) chemical dependency counselor senior; 9.24 (4) client advocate; 9.25 (5) dental assistant registered; 9.26 (6) group supervisor; 9.27 (7) group supervisor assistant; 9.28 (8) licensed practical nurse 1; 9.29 (9) occupational therapist; 9.30 (10) occupational therapist, senior; 9.31 (11) office and administrative specialist senior; 9.32(4)(12) psychologist 1; 9.33 (13) psychologist 2; 9.34(5)(14) psychologist 3; 9.35 (15) recreation program assistant; 10.1 (16) recreation therapist senior; 10.2 (17) rehabilitation counselor senior; 10.3 (18) skills development specialist; 10.4 (19) social worker senior; 10.5 (20) social worker specialist; 10.6(6) behavior analyst 3(21) social worker specialist, senior; 10.7 (22) speech pathology clinician; 10.8 (23) work therapy assistant; and 10.9(7) social worker senior(24) work therapy program coordinator. 10.10 Sec. 8. Minnesota Statutes 2004, section 352.91, subdivision 3g, is amended to read: 10.11 Subd. 3g. Additional Corrections Department personnel. (a) "Covered 10.12 correctional service" means service by a state employee in one of the employment 10.13 positionsat the designated Minnesota correctional facilityspecified in paragraph (b) if at 10.14 least 75 percent of the employee's working time is spent in direct contact with inmates 10.15 and thefactdetermination of this direct contact is certified to the executive director by 10.16 the commissioner of corrections. 10.17 (b) The qualifying employment positionsand the designated correctional facilities10.18 are: 10.19 (1) corrections discipline unit supervisor, at the Minnesota Correctional10.20Facility-Faribault, the Minnesota Correctional Facility-Lino Lakes, the Minnesota10.21Correctional Facility-Oak Park Heights, the Minnesota Correctional Facility-Rush City,10.22and the Minnesota Correctional Facility-St. Cloud; 10.23 (2) dental assistant registered, at the Minnesota Correctional Facility-Faribault, the10.24Minnesota Correctional Facility-Lino Lakes, the Minnesota Correctional Facility-Moose10.25Lake, the Minnesota Correctional Facility-Oak Park Heights, and the Minnesota10.26Correctional Facility-Red Wing; 10.27 (3) dental hygienist, at the Minnesota Correctional Facility-Shakopee and the10.28Minnesota Correctional Facility-Rush City; 10.29 (4) psychologist 2, at the Minnesota Correctional Facility-Faribault, the Minnesota10.30Correctional Facility-Lino Lakes, the Minnesota Correctional Facility-Moose Lake,10.31the Minnesota Correctional Facility-Oak Park Heights, the Minnesota Correctional10.32Facility-Red Wing, the Minnesota Correctional Facility-Rush City, the Minnesota10.33Correctional Facility-St. Cloud, the Minnesota Correctional Facility-Shakopee, and the10.34Minnesota Correctional Facility-Stillwater;orand 11.1 (5) sentencing to service crew leader involved with the inmate community work 11.2 crew program, at the Minnesota Correctional Facility-Faribault and the Minnesota11.3Correctional Facility-Lino Lakes. 11.4 Sec. 9. Minnesota Statutes 2004, section 352.91, is amended by adding a subdivision 11.5 to read: 11.6 Subd. 3h. Employment occupation name changes. (a) If the occupational title of a 11.7 state employee covered by the Minnesota correctional employees retirement plan changes 11.8 from the applicable title listed in subdivision 1, 2, 2a, 3c, 3d, 3e, 3f, or 3g, qualification for 11.9 coverage by the correctional state employees retirement plan continues until the July 1 11.10 next following the title change if the commissioner of employee relations certifies to the 11.11 executive director of the Minnesota State Retirement System and to the executive director 11.12 of the Legislative Commission on Pensions and Retirement that the duties, requirements, 11.13 and responsibilities of the new occupational title are substantially identical to the duties, 11.14 requirements, and responsibilities of the prior occupational title. 11.15 (b) If the commissioner of employee relations does not certify a new occupational 11.16 title under paragraph (a), eligibility for future correctional state employees retirement 11.17 coverage terminates as of the start of the first payroll period next following the effective 11.18 date of the occupational title change. 11.19 (c) For consideration by the Legislative Commission on Pensions and Retirement 11.20 during the legislative session next following an occupational title change involving a 11.21 state employee in covered correctional service, the commissioner of employee relations 11.22 shall submit the applicable draft proposed legislation accommodating the occupational 11.23 title change in this section. 11.24 Sec. 10. Minnesota Statutes 2004, section 352.91, is amended by adding a subdivision 11.25 to read: 11.26 Subd. 3i. Lateral transfers to new correctional facilities. If a new correctional 11.27 facility is established, a state employee rendering covered correctional service immediately 11.28 before the transfer remains eligible for coverage by the correctional state employees 11.29 retirement plan for future state employment at the new facility if the person is employed in 11.30 the same occupational title at the new facility. The eligibility for future coverage continues 11.31 until the July 1 next following the effective date of the establishment of the new facility. 11.32 Sec. 11. Minnesota Statutes 2004, section 352.91, is amended by adding a subdivision 11.33 to read: 12.1 Subd. 4b. Department of Corrections; procedure for coverage change 12.2 considerations. (a) The commissioner of corrections shall appoint a standing review 12.3 committee to review and determine positions that should be included in legislative 12.4 requests for correctional employees retirement plan coverage under subdivision 4a. 12.5 (b) Periodically, the Department of Corrections will convene meetings of the 12.6 review committee. The review committee must review all requests and the supporting 12.7 documentation for coverage by the correctional employees retirement plan and must 12.8 determine which classes or positions meet the statutory requirements for coverage. The 12.9 review committee also must determine if incumbents of and recent retirees from classes or 12.10 positions determined for inclusion in correctional employees retirement plan coverage 12.11 have prior Department of Corrections employment which also qualified as correctional 12.12 service and which should be transferred from the general state employees retirement plan 12.13 to the plan and the initial date for each potential service credit transfer. 12.14 (c) The department must provide a notice of each determination and of the 12.15 employee's right to appeal from the review committee to each employee who requested 12.16 inclusion. Appeals must be filed with the agency human resource manager within 30 days 12.17 of the date of the notice of determination. 12.18 (d) The commissioner of corrections shall appoint a standing appeals committee to 12.19 hear appeals of determinations for coverage. The appeal committee must include relevant 12.20 department employees and employee representatives. Appeal committee determinations 12.21 are final. 12.22 (e) All positions approved for inclusion must be forwarded to the commissioner 12.23 of corrections for the preparation of legislation to implement the coverage change and 12.24 submission. The commissioner will submit a written recommendation documenting 12.25 classes or positions that should or should not be covered by the correctional employees 12.26 retirement plan. Documentation of each request and the final determination must be 12.27 retained in the Department of Corrections' office of human resource management. 12.28 Sec. 12. COVERAGE FOR PRIOR STATE SERVICE FOR CERTAIN 12.29 PERSONS. 12.30 Subdivision 1. Election of prior state coverage. (a) An employee in the 12.31 occupational position of laundry coordinator or delivery van driver at the Minnesota 12.32 Correctional Facility-Faribault who has future retirement coverage transferred to the 12.33 correctional state employees retirement plan under section 5 is entitled to elect to obtain 12.34 prior service credit for eligible correctional state service performed after June 30, 1997, 12.35 and before July 1, 2006, with the Department of Corrections and an employee who had 13.1 future retirement coverage transferred to the correctional state employees retirement 13.2 plan under Laws 2004, chapter 267, article 1, section 1, is entitled to elect to obtain 13.3 prior service credit for eligible correctional state service performed at the Minnesota 13.4 Correctional Facility-Rush City before August 1, 2004. All prior service credit in either 13.5 instance must be purchased. 13.6 (b) Eligible correctional state service is either a prior period of continuous service 13.7 after June 30, 1997, at the Minnesota Correctional Facility-Faribault, or a prior period 13.8 of continuous service at the Minnesota Correctional Facility-Rush City before August 1, 13.9 2004, whichever applies, performed as an employee of the Department of Corrections that 13.10 would have been eligible for the correctional state employees retirement plan coverage 13.11 under section 1, if that prior service had been performed after August 1, 2004, or June 30, 13.12 2006, rather than before August 1, 2004, or July 1, 2006, whichever applies. Service is 13.13 continuous if there has been no period of discontinuation of eligible state service for a 13.14 period greater than 30 calendar days. 13.15 (c) The commissioner of corrections shall certify eligible correctional state service 13.16 to the commissioner of employee relations and to the executive director of the Minnesota 13.17 State Retirement System. 13.18 (d) A correctional employee covered under section 1 is entitled to purchase the past 13.19 service if the department certifies that the employee met the eligibility requirements for 13.20 coverage. The employee must make additional employee contributions. Payment for past 13.21 service must be completed by June 30, 2007. 13.22 Subd. 2. Payment for prior service. (a) An employee electing to obtain prior 13.23 service credit under subdivision 1 must pay an additional employee contribution for 13.24 that prior service. The additional member contribution is the contribution differential 13.25 percentage applied to the actual salary paid to the employee during the period of the 13.26 prior eligible correctional state service, plus interest at the rate of 8.5 percent per annum, 13.27 compounded annually. The contribution differential percentage is the difference between 13.28 5.69 percent of salary and the applicable employee contribution rate of the general state 13.29 employees retirement plan during the period of the prior eligible correctional state service. 13.30 (b) The additional member contribution may be paid only in a lump sum. Payment 13.31 must accompany the election to obtain prior service credit. No election or payment may 13.32 be made by the person or accepted by the executive director of the Minnesota State 13.33 Retirement System after June 30, 2007. 13.34 Subd. 3. Transfer of assets. (a) Assets must be transferred from the general state 13.35 employees retirement plan to the correctional state employees retirement plan in an 13.36 amount equal to the present value of benefits earned under the general state employees 14.1 retirement plan for each employee transferring to the correctional state employees 14.2 retirement plan under this section, as determined by the actuary retained under Minnesota 14.3 Statutes, section 356.214, in accordance with Minnesota Statutes, section 356.215, 14.4 multiplied by the accrued liability funding ratio of active members as derived from the 14.5 most recent actuarial valuation prepared by the actuary retained under Minnesota Statutes, 14.6 section 356.214. The transfer of assets must be made within 30 days after the employee 14.7 elects to transfer the coverage to the correctional state employees retirement plan. 14.8 (b) The Department of Corrections shall pay the cost of the actuarial work performed 14.9 by the actuary retained under Minnesota Statutes, section 356.214, under paragraph (a) 14.10 upon receipt of a billing from the executive director of the Public Employees Retirement 14.11 Association. 14.12 Subd. 4. Effect of the asset transfer. Upon the transfer of assets in subdivision 14.13 3, service credit in the general state employees retirement plan of the Minnesota State 14.14 Retirement System is forfeited and may not be reinstated. The service credit and 14.15 transferred assets must be credited to the correctional state employees retirement plan. 14.16 Sec. 13. SERVICE CREDIT TRANSFER TO CORRECTIONAL PLAN. 14.17 Subdivision 1. Authorization. If the review of the corrections program director 14.18 position of the eligible individual under Minnesota Statutes 2005 Supplement, section 14.19 352.91, subdivision 4a, results in the inclusion of the corrections program director position 14.20 in the correctional state employees retirement plan of the Minnesota State Retirement 14.21 System by legislative enactment during the 2006 or 2007 legislative sessions, an eligible 14.22 individual specified in subdivision 2 is authorized to have service credit in the Minnesota 14.23 State Retirement System general state employees retirement plan for employment as 14.24 a corrections program director from June 17, 1995, to June 5, 2001, transferred from 14.25 the Minnesota State Retirement System general state employees retirement plan to the 14.26 Minnesota State Retirement System correctional state employees retirement plan, if all 14.27 conditions required by this section are met. 14.28 Subd. 2. Eligibility. An eligible individual is an individual who: 14.29 (1) was born on November 14, 1956; 14.30 (2) is currently employed as a corrections lieutenant; 14.31 (3) was covered by the Minnesota State Retirement System correctional state 14.32 employees retirement plan for service provided from November 1, 1980, to June 16, 1995; 14.33 (4) was covered by the Minnesota State Retirement System general state employees 14.34 retirement plan for employment as a corrections program director from June 17, 1995, to 14.35 June 5, 2001; and 15.1 (5) is covered by the Minnesota State Retirement System correctional state 15.2 employees retirement plan for employment as a corrections lieutenant beginning June 15.3 6, 2001. 15.4 Subd. 3. Employee equivalent contribution. To receive the transfer of service 15.5 credit specified in subdivision 1, the individual must pay to the executive director of the 15.6 Minnesota State Retirement System the difference between the employee contribution rate 15.7 for the general state employees retirement plan and the employee contribution rate for 15.8 the correctional state employees retirement plan in effect during the period eligible for 15.9 transfer applied to the eligible individual's salary at the time each additional contribution 15.10 would have been deducted from pay if coverage had been provided by the correctional 15.11 state employees retirement plan. These amounts shall be paid in a lump sum by September 15.12 1, 2005, or prior to termination of service, whichever is earlier, plus 8.5 percent annual 15.13 compound interest from the applicable payroll deduction date until paid. 15.14 Subd. 4. Employer equivalent. The eligible individual shall also pay to the 15.15 executive director of the Minnesota State Retirement System the difference between 15.16 the employer contribution rate for the general state employees retirement plan and the 15.17 employer contribution rate for the correctional state employees retirement plan in effect 15.18 during the period eligible for transfer applied to the eligible individual's salary at the 15.19 time each additional contribution would have been deducted from pay if coverage had 15.20 been provided by the correctional state employees retirement plan. These amounts shall 15.21 be paid in a lump sum at the same time as the amount under subdivision 3, with interest 15.22 as specified in that subdivision. 15.23 Subd. 5. Transfer of assets. If payments under subdivisions 3 and 4 are made, 15.24 assets must be transferred from the general state employees retirement plan fund to the 15.25 correctional state employees retirement plan fund in an amount equal to the present value 15.26 of benefits earned by the eligible individual under the general state employees retirement 15.27 plan, as determined by the actuary retained under section 356.214 in accordance with 15.28 Minnesota Statutes, section 356.215. The transfer of assets must be made within 45 days 15.29 after the receipt of payments under subdivisions 3 and 4. 15.30 Subd. 6. Effect of the asset transfer. Upon transfer of assets in subdivision 5, 15.31 service credit in the general state employees retirement plan of the Minnesota State 15.32 Retirement System is forfeited and may not be reinstated. The service credit and 15.33 transferred assets must be credited to the correctional state employees retirement plan. 15.34 Subd. 7. Payment of actuarial calculation costs. The expense for the calculations 15.35 by the actuary under subdivision 5 must be paid by the Department of Corrections. 16.1 Sec. 14. EFFECTIVE DATE. 16.2 (a) Sections 1 to 8 and 12, are effective the first day of the first payroll period next 16.3 following the date of enactment. 16.4 (b) Sections 9, 10, and 11 are effective the day following final enactment. 16.5 (c) Section 13 is effective July 1, 2006, applies retroactively to permit a transfer 16.6 by an eligible individual of service credit before January 1, 2008, even if the eligible 16.7 individual has terminated active state employment before July 1, 2007, and, if the eligible 16.8 individual is in receipt of a retirement annuity from the correctional state employees 16.9 retirement plan of the Minnesota State Retirement System on or before July 1, 2007, 16.10 allows the eligible individual to have the retirement annuity recalculated on the basis 16.11 of any transferred service credit. 16.12 (d) The addition of the reference to "correctional industry" in section 3 is a 16.13 clarification of the existing provision and is not intended to be the basis for the addition of 16.14 any employment position to plan coverage beyond the employment positions included 16.15 on January 15, 2006, unless there is a change in the duties of an employment position 16.16 connected with correctional industries that increases the regularly occurring direct inmate 16.17 contact of the position to in excess of 75 percent and the inclusion of the position as 16.18 "correctional industry personnel" is approved by the commissioner of employee relations. 16.19 ARTICLE 3 16.20 RETIREMENT PLAN ADMINISTRATIVE PROVISIONS 16.21 Section 1. Minnesota Statutes 2004, section 136F.45, subdivision 1a, is amended to 16.22 read: 16.23 Subd. 1a. Subsequent vendor contracts. (a) The board may limit the number 16.24 of vendors under subdivision 1. 16.25 (b) In addition to any other tax-sheltered annuity program investment options, the 16.26 board may offer as an investment option the Minnesota supplemental investment fund 16.27 administered by the State Board of Investment under section 11A.17. 16.28 (c)For the tax-sheltered annuity program vendor contracts executed after July 1,16.292000,The board shall actively solicit participation of and shall include as vendors lower 16.30 expense and "no-load" mutual funds or equivalent investment products as those terms are 16.31 defined by the federal Securities and Exchange Commission.To the extent possible, in16.32addition to a range of insurance annuity contract providers and other mutual fund provider16.33arrangements, the board must assure that no less than five insurance annuity providers16.34and no less than one nor more than three lower expense and "no-load" mutual funds or16.35equivalent investment products will be made available for direct-access by employee17.1participants.To the extent that offering a lower expense "no-load" product increases the 17.2 total necessary and reasonable expenses of the program and if the board is unable to 17.3 negotiate a rebate of fees from the mutual fund or equivalent investment product providers, 17.4 the board may charge the participants utilizing the lower expense "no-load" mutual fund 17.5 products a fee to cover those expenses. The participant fee may not exceed one percent 17.6 of the participant's annual contributions or $20 per participant per year, whichever is 17.7 greater. Any excess fee revenue generated under this subdivision must be reimbursed to 17.8 participant accounts in the manner provided in subdivision 3a. 17.9 Sec. 2. Minnesota Statutes 2004, section 352.113, subdivision 7a, is amended to read: 17.10 Subd. 7a. Temporary reemployment benefit reduction waiver. (a) A reduction in 17.11 benefits under subdivision 7, or a termination of benefits due to the disabled employee 17.12 resuming a gainful occupation from which earnings are equal to or more than the 17.13 employee's salary at the date of disability or the salary currently paid for similar positions 17.14 does not apply until six months after the individual returns to a gainful occupation. 17.15 (b) No deductions for the retirement fund may be taken from the salary of a disabled 17.16 person who is attempting to return to work under this provision unless the member waives 17.17 further disability benefits. 17.18 (c) A member may return to employment and continue disability benefit payments 17.19 under this subdivision only once while receiving disability benefits from a plan 17.20 administered by the Minnesota State Retirement System. 17.21 Sec. 3. Minnesota Statutes 2004, section 352.116, subdivision 3a, is amended to read: 17.22 Subd. 3a. Bounce-back annuity. (a) If a retired employee or disabilitant selects 17.23 a joint and survivor annuity option under subdivision 3 after June 30, 1989, the retired 17.24 employee or disabilitant must receive a normal single-life annuity if the designated 17.25 optional annuity beneficiary dies before the retired employee or disabilitant. Under this 17.26 option, no reduction may be made in the annuity to provide for restoration of the normal 17.27 single-life annuity in the event of the death of the designated optional annuity beneficiary. 17.28 (b)A retired employee or disabilitant who selected an optional joint and survivor17.29annuity before July 1, 1989, but did not choose an option that provides that the normal17.30single-life annuity is payable to the retired employee or the disabilitant if the designated17.31optional annuity beneficiary dies first, is eligible for restoration of the normal single-life17.32annuity if the designated optional annuity beneficiary dies first, without further actuarial17.33reduction of the person's annuity. A retired employee or disabilitant who selected an17.34optional joint and survivor annuity, but whose designated optional annuity beneficiary died18.1before July 1, 1989, shall receive a normal single-life annuity after that date, but shall not18.2receive retroactive payments for periods before that dateThe annuity adjustment specified 18.3 in paragraph (a) also applies to joint and survivor annuity options under subdivision 18.4 3 elected prior to July 1, 1989. The annuity adjustment under this paragraph occurs on 18.5 July 1, 1989, or on the first day of the first month following the death of the designated 18.6 optional annuity beneficiary, whichever is later. This paragraph should not be interpreted 18.7 as authorizing retroactive payments. 18.8(c) A retired employee or disabilitant who took a further actuarial reduction to elect18.9an optional joint and survivor annuity that provides that the normal annuity is payable18.10to the retired employee or disabilitant if the designated optional beneficiary died before18.11July 1, 1989, shall have the annuity increased as of July 1, 1989, to the amount the person18.12would have received if, at the time of retirement or disability, the person had selected only18.13optional survivor coverage that would not have provided for restoration of the normal18.14annuity upon the death of the designated optional annuity beneficiary. Any annuity or18.15benefit increase under this paragraph is effective only for payments made after June 30,18.161989, and is not retroactive for payments made before July 1, 1989.18.17 Sec. 4. Minnesota Statutes 2004, section 352.116, subdivision 3b, is amended to read: 18.18 Subd. 3b. Bounce-back annuity. (a) The board of directors must provide a joint 18.19 and survivor annuity option to members of the correctional employees and State Patrol 18.20 retirement funds. Under this option, if a former member or disabilitant selects a joint 18.21 and survivor annuity option after June 30, 1989, the former member or disabilitant must 18.22 receive a normal single life annuity if the designated optional annuity beneficiary dies 18.23 before the former member or disabilitant. Under this option, no reduction may be made 18.24 in the person's annuity to provide for restoration of the normal single life annuity in the 18.25 event of the death of the designated optional annuity beneficiary. 18.26 (b)A former member or disabilitant of the correctional or State Patrol fund who18.27selected an optional joint and survivor annuity before July 1, 1989, but did not choose an18.28option that provides that the normal single life annuity is payable to the former member18.29or the disabilitant if the designated optional annuity beneficiary dies first, is eligible for18.30restoration of the normal single life annuity if the designated optional annuity beneficiary18.31dies first, without further actuarial reduction of the person's annuity. A former member18.32or disabilitant who selected an optional joint and survivor annuity, but whose designated18.33optional annuity beneficiary died before July 1, 1989, shall receive a normal single life18.34annuity after that date, but shall not receive retroactive payments for periods before that18.35dateThe annuity adjustment specified in paragraph (a) also applies to joint and survivor 19.1 annuity options elected prior to July 1, 1989. The annuity adjustment under this paragraph 19.2 occurs on July 1, 1989, or on the first day of the first month following the death of the 19.3 designated optional annuity beneficiary, whichever is later. This paragraph should not be 19.4 interpreted as authorizing retroactive payments. 19.5(c) A former member or disabilitant who took a further actuarial reduction to elect19.6an optional joint and survivor annuity that provides that the normal annuity is payable to19.7the former member or disabilitant if the designated optional beneficiary died before July19.81, 1989, shall have their annuity increased as of July 1, 1989, to the amount the person19.9would have received if, at the time of retirement or disability, the person had selected only19.10optional survivor coverage that would not have provided for restoration of the normal19.11annuity upon the death of the designated optional annuity beneficiary. Any annuity or19.12benefit increase under this paragraph is effective only for payments made after June 30,19.131989, and is not retroactive for payments made before July 1, 1989.19.14 Sec. 5. Minnesota Statutes 2004, section 353.01, subdivision 2a, is amended to read: 19.15 Subd. 2a. Included employees. (a) Public employees whose salary from one 19.16 governmental subdivision exceeds $425 in any month shall participate as members of the 19.17 association. If the salary is less than $425 in a subsequent month, the employee retains 19.18 membership eligibility. Eligible public employees shall participate as members of the 19.19 association with retirement coverage by the public employees retirement plan or the public 19.20 employees police and fire retirement plan under this chapter, or the local government 19.21 correctional employees retirement plan under chapter 353E, whichever applies, as a 19.22 condition of their employment on the first day of employment unless they: 19.23 (1) are specifically excluded under subdivision 2b; 19.24 (2) do not exercise their option to elect retirement coverage in the association as 19.25 provided in subdivision 2d, paragraph (a); or 19.26 (3) are employees of the governmental subdivisions listed in subdivision 2d, 19.27 paragraph (b), where the governmental subdivision has not elected to participate as a 19.28 governmental subdivision covered by the association. 19.29 (b) A public employee who was a member of the association on June 30, 2002, 19.30 based on employment that qualified for membership coverage by the public employees 19.31 retirement plan or the public employees police and fire plan under this chapter, or the local 19.32 government correctional employees retirement plan under chapter 353E as of June 30, 19.33 2002, retains that membership until the employee terminates public employment under 19.34 subdivision 11a or terminates membership under subdivision 11b. 20.1 (c) Public employees under paragraph (a) includes physicians under section 20.2 353D.01, subdivision 2, who do not elect public employees defined contribution plan 20.3 coverage under section 353D.02, subdivision 2. 20.4 Sec. 6. Minnesota Statutes 2005 Supplement, section 353.01, subdivision 2d, is 20.5 amended to read: 20.6 Subd. 2d. Optional membership. (a) Membership in the association is optional 20.7 by action of the individual employee for the following public employees who meet the 20.8 conditions set forth in subdivision 2a: 20.9 (1) members of the coordinated plan who are also employees of labor organizations 20.10 as defined in section 353.017, subdivision 1, for their employment by the labor 20.11 organization only if they elect to have membership under section 353.017, subdivision 2; 20.12 (2) persons who are elected or persons who are appointed to elected positions other 20.13 than local governing body elected positions who elect to participate by filing a written 20.14 election for membership; 20.15 (3) members of the association who are appointed by the governor to be a state 20.16 department head and who elect not to be covered by the general state employees retirement 20.17 plan of the Minnesota State Retirement System under section 352.021; 20.18 (4) city managers as defined in section 353.028, subdivision 1, who do not elect to be 20.19 excluded from membership in the association under section 353.028, subdivision 2; and 20.20 (5) employees of the Port Authority of the city of St. Paulwho were at least age 4520.21 on January 1, 2003, who were at least age 45 on that date, and who elect to participate by 20.22 filing a written election for membership. 20.23 (b) Membership in the association is optional by action of the governmental 20.24 subdivision for the employees of the following governmental subdivisions under the 20.25 conditions specified: 20.26 (1) the Minnesota Association of Townships if the board of the association, at its 20.27 option, certifies to the executive director that its employees are to be included for purposes 20.28 of retirement coverage, in which case the status of the association as a participating 20.29 employer is permanent; 20.30 (2) a county historical society if the county in which the historical society is located, 20.31 at its option, certifies to the executive director that the employees of the historical society 20.32 are to be county employees for purposes of retirement coverage under this chapter. The 20.33 status as a county employee must be accorded to all similarly situated county historical 20.34 society employees and, once established, must continue as long as a person is an employee 20.35 of the county historical society; and 21.1 (3) Hennepin Healthcare System, Inc., a public corporation, with respect to 21.2 employees other than paramedics, emergency medical technicians, and protection officers, 21.3 if the corporate board establishes alternative retirement plans for certain classes of 21.4 employees of the corporation and certifies the employees to be excluded from future 21.5 retirement coverage. 21.6 (c) For employees who are covered by paragraph (a), clause (1), (2), or (3), or 21.7 covered by paragraph (b), clause (1) or (2), if the necessary membership election is 21.8 not made, the employee is excluded from retirement coverage under this chapter. For 21.9 employees who are covered by paragraph (a), clause (4), if the necessary election is not 21.10 made, the employee must become a member and have retirement coverage under this 21.11 chapter. For employees specified in paragraph (b), clause (3), membership continues until 21.12 the exclusion option is exercised for the designated class of employee. The option to 21.13 become a member, once exercised under this subdivision, may not be withdrawn until 21.14 termination of public service as defined under subdivision 11a. 21.15 Sec. 7. Minnesota Statutes 2004, section 353.01, subdivision 11a, is amended to read: 21.16 Subd. 11a. Termination of public service. (a) "Termination of public service" 21.17 occurs when a member resigns or is dismissed from public service by the employing 21.18 governmental subdivisionor when a position ends and the member who held the position21.19is not considered by the governmental subdivision to be on a temporary layoff,and 21.20 the employee does not, within 30 days of the date the employment relationship ended, 21.21 return to an employment position in the same governmental subdivision or when the 21.22 employer-employee relationship is severed due to the expiration of a layoff under 21.23 subdivision 12 or 12c. 21.24 (b) The termination of public service must be recorded in the association records 21.25 upon receipt of an appropriate notice from the governmental subdivision. 21.26 Sec. 8. Minnesota Statutes 2004, section 353.01, subdivision 11b, is amended to read: 21.27 Subd. 11b. Termination of membership. (a) "Termination of membership" means 21.28 the conclusion of membership in the association for a person who has not terminated 21.29 public service under subdivision 11a and occurs: 21.30 (1)upon termination of public service under subdivision 11a;21.31(2) when a member does not return to work within 30 days of the expiration of21.32an authorized temporary layoff under subdivision 12 or an authorized leave of absence21.33under subdivision 31 as evidenced by the appropriate record filed by the governmental21.34subdivision; or22.1(3)when a person files a written election with the association to discontinue 22.2 employee deductions under section 353.27, subdivision 7, paragraph (a), clause (1); 22.3 (2) when a city manager files a written election with the association to discontinue 22.4 employee deductions under section 353.028, subdivision 2; or 22.5 (3) when a member transfers to a temporary position and becomes excluded from 22.6 membership under subdivision 2b, clause (4). 22.7 (b) The termination of membership under clause (3) must be reported to the 22.8 association by the governmental subdivision. 22.9(c) If the employee subsequently returns to a position in the same governmental22.10subdivision, the employee shall not again be required to earn a salary in excess of $425 per22.11month to qualify for membership, unless the employee has taken a refund of accumulated22.12employee deduction plus interest under section353.34, subdivision 1.22.13 Sec. 9. Minnesota Statutes 2004, section 353.01, subdivision 12, is amended to read: 22.14 Subd. 12. Authorized temporary or seasonal layoff. "Authorized temporary 22.15 or seasonal layoff," including seasonal leave of absence, means a suspension of public 22.16 service for a limited period during a year authorized by the employing governmental 22.17 subdivision for aperiod not exceeding three months in any calendar year, as evidenced by22.18appropriate record of the employer and promptly transmitted to the associationmember 22.19 who is expected to return to the same position at the end of the layoff period and for which 22.20 there has been no termination of public service under subdivision 11a. 22.21 Sec. 10. Minnesota Statutes 2004, section 353.01, is amended by adding a subdivision 22.22 to read: 22.23 Subd. 12c. Indefinite layoff. "Indefinite layoff" occurs when a member is placed on 22.24 a layoff that is not a temporary or seasonal layoff under subdivision 12, for which no date 22.25 has been specified by the employing governmental subdivision for the employee's return 22.26 to work, and there has been no termination of public service under subdivision 11a. 22.27 Sec. 11. Minnesota Statutes 2004, section 353.01, subdivision 16, is amended to read: 22.28 Subd. 16. Allowable service; limits and computation. (a) "Allowable service" 22.29 means: 22.30 (1) service during years of actual membership in the course of which employee 22.31 contributions were made, periods covered by payments in lieu of salary deductions under 22.32 section 353.35; 23.1 (2) service in years during which the public employee was not a member but for 23.2 which the member later elected, while a member, to obtain credit by making payments to 23.3 the fund as permitted by any law then in effect; 23.4 (3) a period of authorized leave of absence with pay from which deductions for 23.5 employee contributions are made, deposited, and credited to the fund; 23.6 (4) a period of authorized personal, parental, or medical leave of absence without 23.7 pay, including a leave of absence covered under the federal Family Medical Leave Act, 23.8 that does not exceed one year, and during or for which a member obtained service credit 23.9 for each month in the leave period by payments to the fund made in place of salary 23.10 deductions. The payments must be made in an amount or amounts based on the member's 23.11 average salary on which deductions were paid for the last six months of public service, or 23.12 for that portion of the last six months while the member was in public service, to apply to 23.13 the period in either case that immediately precedes the commencement of the leave of 23.14 absence. If the employee elects to pay the employee contributions for the period of any 23.15 authorized personal, parental, or medical leave of absence without pay, or for any portion 23.16 of the leave, the employee shall also, as a condition to the exercise of the election, pay 23.17 to the fund an amount equivalent to the required employer and the additional employer 23.18 contributions, if any, for the employee. The payment must be made within one year from 23.19 the expiration of the leave of absence or within 20 days after termination of public service 23.20 under subdivision 11a, whichever is earlier. The employer, by appropriate action of its 23.21 governing body which is made a part of its official records and which is adopted before the 23.22 date of the first payment of the employee contribution, may certify to the association in 23.23 writing its commitment to pay the employer and additional employer contributions from 23.24 the proceeds of a tax levy made under section 353.28. Payments under this paragraph must 23.25 include interest at an annual rate of 8.5 percent compounded annually from the date of the 23.26 termination of the leave of absence to the date payment is made. An employee shall return 23.27 to public service and render a minimum of three months of allowable service in order to 23.28 be eligible to pay employee and employer contributions for a subsequent authorized leave 23.29 of absence without pay. Upon payment, the employee must be granted allowable service 23.30 credit for the purchased period; 23.31 (5) a periodic, repetitive leave that is offered to all employees of a governmental 23.32 subdivision. The leave program may not exceed 208 hours per annual normal work 23.33 cycle as certified to the association by the employer. A participating member obtains 23.34 service credit by making employee contributions in an amount or amounts based on the 23.35 member's average salary that would have been paid if the leave had not been taken. The 23.36 employer shall pay the employer and additional employer contributions on behalf of the 24.1 participating member. The employee and the employer are responsible to pay interest on 24.2 their respective shares at the rate of 8.5 percent a year, compounded annually, from the 24.3 end of the normal cycle until full payment is made. An employer shall also make the 24.4 employer and additional employer contributions, plus 8.5 percent interest, compounded 24.5 annually, on behalf of an employee who makes employee contributions but terminates 24.6 public service. The employee contributions must be made within one year after the end of 24.7 the annual normal working cycle or within 20 days after termination of public service, 24.8 whichever is sooner. The association shall prescribe the manner and forms to be used by a 24.9 governmental subdivision in administering a periodic, repetitive leave. Upon payment, the 24.10 member must be granted allowable service credit for the purchased period; 24.11 (6) an authorized temporary or seasonal layoff under subdivision 12, limited to three 24.12 months allowable service per authorized temporary or seasonal layoff in one calendar year. 24.13 An employee who has received the maximum service credit allowed for an authorized 24.14 temporary or seasonal layoff must return to public service and must obtain a minimum of 24.15 three months of allowable service subsequent to the layoff in order to receive allowable 24.16 service for a subsequent authorized temporary or seasonal layoff; or 24.17 (7) a period during which a member is absent from employment by a governmental 24.18 subdivision by reason of service in the uniformed services, as defined in United States 24.19 Code, title 38, section 4303(13), if the member returns to public service upon discharge 24.20 from service in the uniformed service within the time frames required under United 24.21 States Code, title 38, section 4312(e), provided that the member did not separate from 24.22 uniformed service with a dishonorable or bad conduct discharge or under other than 24.23 honorable conditions. The service is credited if the member pays into the fund equivalent 24.24 employee contributions based upon the contribution rate or rates in effect at the time 24.25 that the uniformed service was performed multiplied by the full and fractional years 24.26 being purchased and applied to the annual salary rate. The annual salary rate is the 24.27 average annual salary during the purchase period that the member would have received 24.28 if the member had continued to be employed in covered employment rather than to 24.29 provide uniformed service, or, if the determination of that rate is not reasonably certain, 24.30 the annual salary rate is the member's average salary rate during the 12-month period of 24.31 covered employment rendered immediately preceding the period of the uniformed service. 24.32 Payment of the member equivalent contributions must be made during a period which 24.33 begins with the date on which the individual returns to public employment and that is three 24.34 times the length of the military leave period, or within five years of the date of discharge 24.35 from the military service, whichever is less. If the determined payment period is less than 24.36 one year, the contributions required under this clause to receive service credit may be 25.1 made within one year of the discharge date. Payment may not be accepted following 20 25.2 days after termination of public service under subdivision 11a. If the member equivalent 25.3 contributions provided for in this clause are not paid in full, the member's allowable 25.4 service credit must be prorated by multiplying the full and fractional number of years of 25.5 uniformed service eligible for purchase by the ratio obtained by dividing the total member 25.6 contributions received by the total member contributions otherwise required under this 25.7 clause. The equivalent employer contribution, and, if applicable, the equivalent additional 25.8 employer contribution must be paid by the governmental subdivision employing the 25.9 member if the member makes the equivalent employee contributions. The employer 25.10 payments must be made from funds available to the employing unit, using the employer 25.11 and additional employer contribution rate or rates in effect at the time that the uniformed 25.12 service was performed, applied to the same annual salary rate or rates used to compute the 25.13 equivalent member contribution. The governmental subdivision involved may appropriate 25.14 money for those payments. The amount of service credit obtainable under this section may 25.15 not exceed five years unless a longer purchase period is required under United States Code, 25.16 title 38, section 4312. The employing unit shall pay interest on all equivalent member and 25.17 employer contribution amounts payable under this clause. Interest must be computed at 25.18 a rate of 8.5 percent compounded annually from the end of each fiscal year of the leave 25.19 or the break in service to the end of the month in which the payment is received. Upon 25.20 payment, the employee must be granted allowable service credit for the purchased period. 25.21 (b) For calculating benefits under sections 353.30, 353.31, 353.32, and 353.33 for 25.22 state officers and employees displaced by the Community Corrections Act, chapter 401, 25.23 and transferred into county service under section 401.04, "allowable service" means the 25.24 combined years of allowable service as defined in paragraph (a), clauses (1) to (6), and 25.25 section 352.01, subdivision 11. 25.26 (c) For a public employee who has prior service covered by a local police or 25.27 firefighters relief association that has consolidated with the Public Employees Retirement 25.28 Association or to which section 353.665 applies, and who has elected the type of benefit 25.29 coverage provided by the public employees police and fire fund either under section 25.30 353A.08 following the consolidation or under section 353.665, subdivision 4, "applicable 25.31 service" is a period of service credited by the local police or firefighters relief association 25.32 as of the effective date of the consolidation based on law and on bylaw provisions 25.33 governing the relief association on the date of the initiation of the consolidation procedure. 25.34 (d) No member may receive more than 12 months of allowable service credit in a 25.35 year either for vesting purposes or for benefit calculation purposes. 25.36 (e) MS 2002 (Expired) 26.1 Sec. 12. Minnesota Statutes 2005 Supplement, section 353.028, subdivision 3, is 26.2 amended to read: 26.3 Subd. 3. Deferred compensation; city contribution. (a) If an election of exclusion 26.4 under subdivision 2 is made, and if the city manager and the governing body of the city 26.5 additionally agree in writing that the additional compensation is to be deferred and is to 26.6 be contributed on behalf of the city manager to a deferred compensation program which 26.7 meets the requirements of section 457 of the Internal Revenue Code of 1986, as amended, 26.8 the governing body may compensate the city manager, in addition to the salary allowed 26.9 under any limitation imposed on salaries by law or charter, in an amount equal to the 26.10 employer contribution which would be required by section 353.27, subdivision 3, if the 26.11 city manager were a member of the general employees retirement plan. 26.12 (b) Alternatively, if an election of exclusion under subdivision 2 is made, the city 26.13 manager and the governing body of the city may agree in writing that the equivalent 26.14 employer contribution to the contribution under section 353.27, subdivision 3, be 26.15 contributed by the city to the defined contribution plan of the Public Employees 26.16 Retirement Association under chapter 353D. 26.17 Sec. 13. Minnesota Statutes 2004, section 353.03, subdivision 1, is amended to read: 26.18 Subdivision 1. Management; composition; election. (a) The management of the 26.19 public employees retirement fund is vested in an 11-member board of trustees consisting 26.20 of ten members and the state auditorwho. The state auditor may designate a deputy 26.21 auditor with expertise in pension matters as the auditor's representative on the board. The 26.22 governor shall appoint five trustees to four-year terms, one of whom shall be designated to 26.23 represent school boards, one to represent cities, one to represent counties, one who is a 26.24 retired annuitant, and one who is a public member knowledgeable in pension matters. The 26.25 membership of the association, including recipients of retirement annuities and disability 26.26 and survivor benefits, shall elect five trustees for terms of four years, one of whom must 26.27 be a member of the police and fire fund and one of whom must be a former member 26.28 who met the definition of public employee under section 353.01, subdivisions 2 and 26.29 2a, for at least five years prior to terminating membership or a member who receives a 26.30 disability benefit, for terms of four years. Terms expire on January 31 of the fourth year, 26.31 and positions are vacant until newly elected members are seated. Except as provided in 26.32 this subdivision, trustees elected by the membership of the association must be public 26.33 employees and members of the association. 26.34 (b) For seven days beginning October 1 of each year preceding a year in which 26.35 an election is held, the association shall accept at its office filings in person or by mail 27.1 of candidates for the board of trustees. A candidate shall submit at the time of filing a 27.2 nominating petition signed by 25 or more members of thefundassociation. No name may 27.3 be withdrawn from nomination by the nominee after October 15. At the request of a 27.4 candidate for an elected position on the board of trustees, the board shall mail a statement 27.5 of up to 300 words prepared by the candidate to all persons eligible to vote in the election 27.6 of the candidate. The board may adopt policies, subject to review and approval by the 27.7 secretary of state under paragraph (e), to govern the form and length of these statements, 27.8 timing of mailings, and deadlines for submitting materials to be mailed.These policies27.9must be approved by the secretary of state.The secretary of state shall resolve disputes 27.10 between the board and a candidate concerning application of these policies to a particular 27.11 statement. 27.12 (c) By January 10 of each year in which elections are to be held, the board shall 27.13 distribute by mail to the members ballots listing the candidates. No member may vote for 27.14 more than one candidate for each board position to be filled. A ballot indicating a vote for 27.15 more than one person for any position is void. No special marking may be used on the 27.16 ballot to indicate incumbents. Ballots mailed to the association must be postmarked no 27.17 later than January 31. The ballot envelopes must be so designated and the ballots counted 27.18 in a manner that ensures that each vote is secret. 27.19 (d) A candidate who:27.20(1)receives contributions or makes expenditures in excess of $100;, or 27.21(2)has given implicit or explicit consent for any other person to receive contributions 27.22 or make expenditures in excess of $100 for the purpose of bringing about the candidate's 27.23 election, shall file a report with the campaign finance and public disclosure board 27.24 disclosing the source and amount of all contributions to the candidate's campaign. The 27.25 campaign finance and public disclosure board shall prescribe forms governing these 27.26 disclosures. Expenditures and contributions have the meaning defined in section 10A.01. 27.27 These terms do not include the mailing made by the association board on behalf of the 27.28 candidate. A candidate shall file a report within 30 days from the day that the results of 27.29 the election are announced. The Campaign Finance and Public Disclosure Board shall 27.30 maintain these reports and make them available for public inspection in the same manner 27.31 as the board maintains and makes available other reports filed with it.By January 1027.32of each year in which elections are to be held the board shall distribute by mail to the27.33members ballots listing the candidates. No member may vote for more than one candidate27.34for each board position to be filled. A ballot indicating a vote for more than one person for27.35any position is void. No special marking may be used on the ballot to indicate incumbents.27.36The last day for mailing ballots to the fund is January 31. Terms expire on January 31 of28.1the fourth year, and positions are vacant until newly elected members are qualified. The28.2ballot envelopes must be so designed and the ballots counted in a manner that ensures28.3that each vote is secret.28.4 (e) The secretary of state shallsupervisereview and approve the procedures defined 28.5 by the board of trustees for conducting the elections specified in this subdivision, including 28.6 board policies adopted under paragraph (b). 28.7 (f) The board of trustees and the executive director shall undertake their activities 28.8 consistent with chapter 356A. 28.9 Sec. 14. Minnesota Statutes 2004, section 353.03, subdivision 1a, is amended to read: 28.10 Subd. 1a. Vacancy, how filled. Any vacancy on the board caused by death, 28.11 resignation, or removal of any trustee, or occurring because an elected trustee ceases to be 28.12 a public employee and an active member of the association, must be filled by the board 28.13 for trustees elected by members, and by the governor for other trustees, for the unexpired 28.14 portion of the term in which the vacancy occurs. The board shall adopt policies and 28.15 procedures governing how the vacancy of an elected trustee is to be filled. 28.16 Sec. 15. Minnesota Statutes 2004, section 353.03, is amended by adding a subdivision 28.17 to read: 28.18 Subd. 2b. Board legal authority. The board is authorized to take legal action when 28.19 necessary to effectively administer the various plans administered by the association, 28.20 consistent with applicable articles of incorporation, bylaws, law, and rules, as applicable, 28.21 and including but not limited to the recapture of overpaid annuities, benefits, or refunds, 28.22 and the correction of omitted or deficient deductions. 28.23 Sec. 16. Minnesota Statutes 2004, section 353.27, subdivision 7, is amended to read: 28.24 Subd. 7. Adjustment for erroneous receipts or disbursements. (a) Except 28.25 as provided in paragraph (b), erroneous employee deductions and erroneous employer 28.26 contributions and additional employer contributions for a person, who otherwise does not 28.27 qualify for membership under this chapter, are considered: 28.28 (1) valid if the initial erroneous deduction began before January 1, 1990. Upon 28.29 determination of the error by the association, the person may continue membership in the 28.30 association while employed in the same position for which erroneous deductions were 28.31 taken, or file a written election to terminate membership and apply for a refund upon 28.32 termination of public service or defer an annuity under section 353.34; or 29.1 (2) invalid, if the initial erroneous employee deduction began on or after January 29.2 1, 1990. Upon determination of the error, the association shallrequire the employer29.3to discontinue erroneous employee deductions and erroneous employer contributions29.4and additional employer contributions. Upon discontinuance, the association shall29.5 refund all erroneous employee deductionsto the person, with interest, under section29.6353.34, subdivision 2,and all erroneous employer contributionsand additional employer29.7contributions to the employeras specified in paragraph (d). No person may claim a right 29.8 to continued or past membership in the association based on erroneous deductions which 29.9 began on or after January 1, 1990. 29.10 (b) Erroneous deductions taken from the salary of a person who did not qualify 29.11 for membership in the association by virtue of concurrent employment before July 1, 29.12 1978, which required contributions to another retirement fund or relief association 29.13 established for the benefit of officers and employees of a governmental subdivision, are 29.14 invalid. Upon discovery of the error, the association shall remove all invalid service and 29.15 upon termination of public service, the association shall refund all erroneous employee 29.16 deductions to the person, with interest under section 353.34, subdivision 2, and all 29.17 erroneous employer contributions to the employer. This paragraph has both retroactive 29.18 and prospective application. 29.19 (c) Employer contributions and employee deductions taken in error from amounts 29.20 which are not salary under section 353.01, subdivision 10, are invalid upon discovery by 29.21 the association andmaymust be refundedat any timeas specified in paragraph (d). 29.22 (d) Upon discovery of the receipt of erroneous deductions and contributions under 29.23 paragraph (a), clause (2), or paragraph (c), the association must require the employer to 29.24 discontinue the erroneous employee deductions and erroneous employer contributions. 29.25 Upon discontinuation, the association must refund the invalid employee deductions to the 29.26 person without interest and invalid employer contributions to the employer or provide a 29.27 credit against future contributions payable by the employer for the amount of all erroneous 29.28 deductions and contributions. In the event a retirement annuity or disability benefit had 29.29 been computed using invalid service or salary, the association must adjust the annuity or 29.30 benefit and recover the overpayment under subdivision 7b. 29.31 (e) In the event a salary warrant or check from which a deduction for the retirement 29.32 fund was taken has been canceled or the amount of the warrant or check returned to the 29.33 funds of the department making the payment, a refund of the sum deducted, or a portion of 29.34 it that is required to adjust the deductions, must be made to the department or institution. 29.35 (f) Any refund to a member under this subdivision that would cause the plan to fail 29.36 to be a qualified plan under section 401(a) of the Internal Revenue Code, as amended, may 30.1 not be refunded and instead must be credited against future contributions payable by the 30.2 employer. The employer receiving the credit is responsible for refunding to the applicable 30.3 employee any amount that had been erroneously deducted from the person's salary. 30.4 Sec. 17. Minnesota Statutes 2004, section 353.27, subdivision 7a, is amended to read: 30.5 Subd. 7a. Deductions or contributions transmitted by error. (a) If employee 30.6 deductions and employer contributions were erroneously transmitted to the association, 30.7 but should have been transmitted to another Minnesota public pension plan, the 30.8 association shall transfer the erroneous employee deductions and employer contributions 30.9 to the appropriate retirement fund or individual account, as applicable, without interest. 30.10 The time limitations in subdivisions 7 and 12 do not apply. 30.11 (b) For purposes of this subdivision, a Minnesota public pension plan means a 30.12 plan specified in section 356.30, subdivision 3, or theplanplans governed bychapter30.13 chapters 353D and 354B. 30.14 (c) A potential transfer under paragraph (a) that would cause the plan to fail to be a 30.15 qualified plan under section 401(a) of the Internal Revenue Code, as amended, must not be 30.16 made by the executive director of the association. Within 30 days after being notified by 30.17 the Public Employees Retirement Association of an unmade potential transfer under this 30.18 paragraph, the employer of the affected person must transmit an amount representing the 30.19 applicable salary deductions and employer contributions, without interest, to the retirement 30.20 fund of the appropriate Minnesota public pension plan, or to the individual account if the 30.21 proper coverage is by a defined contribution plan. The association must provide a credit 30.22 for the amount of the erroneous salary deductions and employer contributions against 30.23 future contributions from the employer. 30.24 Sec. 18. Minnesota Statutes 2004, section 353.27, subdivision 7b, is amended to read: 30.25 Subd. 7b. Overpayments to members. In the event of an overpayment to a 30.26 member, retiree, beneficiary, or other person, the executive director shall recover the 30.27 overpayment by suspending or reducing the payment of a retirement annuity, refund, 30.28 disability benefit, survivor benefit, or optional annuity under this chapter until all 30.29 outstanding money has been recovered. 30.30 Sec. 19. Minnesota Statutes 2005 Supplement, section 353.28, subdivision 6, is 30.31 amended to read: 30.32 Subd. 6. Collection of unpaid amounts. (a) If a governmental subdivision which 30.33 receives the direct proceeds of property taxation fails to pay an amount due under chapter 31.1 353, 353A, 353B, 353C, or 353D, the executive director shall certify the amount to the 31.2 governmental subdivision for payment. If the governmental subdivision fails to remit the 31.3 sum so due in a timely fashion, the executive director shall certify the amount to the 31.4 applicable county auditor for collection. The county auditor shall collect the amount 31.5 out of the revenue of the governmental subdivision, or shall add the amount to the levy 31.6 of the governmental subdivision and make payment directly to the association. This 31.7 tax must be levied, collected, and apportioned in the manner that other taxes are levied, 31.8 collected, and apportioned. 31.9 (b) If a governmental subdivision which is not funded directly from the proceeds 31.10 of property taxation fails to pay an amount due under this chapter, the executive director 31.11 shall certify the amount to the governmental subdivision for payment. If the governmental 31.12 subdivision fails to pay the amount for a period of 60 days after certification, the executive 31.13 director shall certify the amount to the commissioner of finance, who shall deduct the 31.14 amount from any subsequent state-aid payment or state appropriation amount applicable 31.15 to the governmental subdivision and make payment directly to the association. 31.16 Sec. 20. Minnesota Statutes 2004, section 353.29, subdivision 8, is amended to read: 31.17 Subd. 8. Annuities; payment; evidence of receipt. Payment of any annuity or 31.18 benefit for a given month shall be mailed by the association to the annuitant, recipient 31.19 of a disability benefit, or survivor, or automatically deposited under section 356.401, 31.20 subdivision 2, during the first week of that month.Evidence of receipt of warrants issued31.21by the association in payment of an annuity or benefit shall be submitted by the payee31.22thereof to the association periodically at times specified by the board of trustees, together31.23with a written declaration that the annuitant or recipient of a disability benefit has or31.24has not returned to public service; that the surviving dependent spouse has or has not31.25remarried; and shall be furnished on forms provided by the executive director thereof,31.26before the association shall pay to the disability recipient or survivor for the next ensuing31.27month, the benefit to which the person otherwise may be entitled. In lieu of the evidence31.28of receipt of warrants for recipients of an annuity or a benefit,The board may contract 31.29 for professional services to identify deceased annuitants and benefit recipients through a 31.30 review of nationally maintained death records. 31.31 Sec. 21. Minnesota Statutes 2004, section 353.30, subdivision 3a, is amended to read: 31.32 Subd. 3a. Bounce-back annuity. (a) If a former member or disabilitant selects a 31.33 joint and survivor annuity option under subdivision 3 after June 30, 1989, the former 31.34 member or disabilitant must receive a normal single life annuity if the designated optional 32.1 annuity beneficiary dies before the former member or disabilitant. Under this option, no 32.2 reduction may be made in the person's annuity to provide for restoration of the normal 32.3 single life annuity in the event of the death of the designated optional annuity beneficiary. 32.4 (b)A former member or disabilitant who selected an optional joint and survivor32.5annuity before July 1, 1989, but did not choose an option that provides that the normal32.6single life annuity is payable to the former member or the disabilitant if the designated32.7optional annuity beneficiary dies first, is eligible for restoration of the normal single life32.8annuity if the designated optional annuity beneficiary dies first, without further actuarial32.9reduction of the person's annuity. A former member or disabilitant who selected an32.10optional joint and survivor annuity, but whose designated optional annuity beneficiary died32.11before July 1, 1989, shall receive a normal single life annuity after that date, but shall not32.12receive retroactive payments for periods before that dateThe annuity adjustment specified 32.13 in paragraph (a) also applies to joint and survivor annuity options under subdivision 32.14 3 elected prior to July 1, 1989. The annuity adjustment under this paragraph occurs on 32.15 July 1, 1989, or on the first day of the first month following the death of the designated 32.16 optional annuity beneficiary, whichever is later. This paragraph should not be interpreted 32.17 as authorizing retroactive payments. 32.18(c) A former member or disabilitant who took a further actuarial reduction to elect32.19an optional joint and survivor annuity that provides that the normal annuity is payable to32.20the former member or disabilitant if the designated optional beneficiary dies first but has32.21not died before July 1, 1989, shall have their annuity increased as of July 1, 1989, to the32.22amount the person would have received if, at the time of retirement or disability, the person32.23had selected only optional survivor coverage that would not have provided for restoration32.24of the normal annuity upon the death of the designated optional annuity beneficiary. Any32.25annuity or benefit increase under this paragraph is effective only for payments made after32.26June 30, 1989, and is not retroactive for payments made before July 1, 1989.32.27 Sec. 22. Minnesota Statutes 2004, section 353.30, subdivision 3b, is amended to read: 32.28 Subd. 3b. Bounce-back annuity. (a) The board of trustees must provide a joint 32.29 and survivor annuity option to members of the police and fire fund.Under this option, a32.30 If a joint and survivor annuity is elected on or after July 1, 1989, the former member or 32.31 disabilitant must receive a normal single life annuity if the designated optional annuity 32.32 beneficiary dies before the former member or disabilitant. Under this option, no reduction 32.33 may be made in the person's annuity to provide for restoration of the normal single life 32.34 annuity in the event of the death of the designated optional annuity beneficiary. 33.1 (b)A former member or disabilitant of the police and fire fund who selected an33.2optional joint and survivor annuity before July 1, 1989, but did not choose an option33.3that provides that the normal single life annuity is payable to the former member or33.4the disabilitant if the designated optional annuity beneficiary dies first, is eligible for33.5restoration of the normal single life annuity if the designated optional annuity beneficiary33.6dies first, without further actuarial reduction of the person's annuity. A former member33.7or disabilitant who selected an optional joint and survivor annuity, but whose designated33.8optional annuity beneficiary died before July 1, 1989, shall receive a normal single life33.9annuity after that date, but shall not receive retroactive payments for periods before that33.10dateThe annuity adjustment specified in paragraph (a) also applies to joint and survivor 33.11 annuity options under subdivision 3 elected prior to July 1, 1989. The annuity adjustment 33.12 under this paragraph occurs on July 1, 1989, or on the first day of the first month following 33.13 the death of the designated optional annuity beneficiary, whichever is later. This paragraph 33.14 should not be interpreted as authorizing retroactive payments. 33.15(c) A former member or disabilitant who took a further actuarial reduction to elect33.16an optional joint and survivor annuity that provides that the normal annuity is payable to33.17the former member or disabilitant if the designated optional beneficiary dies first but has33.18not died before July 1, 1989, shall have their annuity increased as of July 1, 1989, to the33.19amount the person would have received if, at the time of retirement or disability, the person33.20had selected only optional survivor coverage that would not have provided for restoration33.21of the normal annuity upon the death of the designated optional annuity beneficiary. Any33.22annuity or benefit increase under this paragraph is effective only for payments made after33.23June 30, 1989, and is not retroactive for payments made before July 1, 1989.33.24 Sec. 23. Minnesota Statutes 2004, section 353.32, subdivision 1a, is amended to read: 33.25 Subd. 1a. Surviving spouse optional annuity. (a) If a member or former member 33.26 who has credit for not less than three years of allowable service and dies before the 33.27 annuity or disability benefit begins to accrue under section 353.29, subdivision 7, or 33.28 353.33, subdivision 2, notwithstanding any designation of beneficiary to the contrary, the 33.29 surviving spouse may elect to receive, instead of a refund with interest under subdivision 33.30 1, or surviving spouse benefits otherwise payable under section 353.31, an annuity equal 33.31 to the 100 percent joint and survivor annuity that the member could have qualified for 33.32 had the member terminated service on the date of death. 33.33 (b) If the member was under age 55 and has credit for at least 30 years of allowable 33.34 service on the date of death, the surviving spouse may elect to receive a 100 percent joint 33.35 and survivor annuity based on the age of the member and surviving spouse on the date 34.1 of death. The annuity is payable using the full early retirement reduction under section 34.2 353.30, subdivisions 1b and 1c, to age 55 and one-half of the early retirement reduction 34.3 from age 55 to the age payment begins. 34.4 (c) If the member was under age 55 and has credit for at least three years of 34.5 allowable service on the date of death but did not qualify for retirement, the surviving 34.6 spouse may elect to receive the 100 percent joint and survivor annuity based on the age of 34.7 the member and surviving spouse at the time of death. The annuity is payable using the 34.8 full early retirement reduction under section 353.30, subdivision 1, 1b, 1c, or 5, to age 55 34.9 and one-half of the early retirement reduction from age 55 to the age payment begins. 34.10 (d) Notwithstanding the definition of surviving spouse in section 353.01, subdivision 34.11 20, a former spouse of the member, if any, is entitled to a portion of the monthly surviving 34.12 spouse optional annuity if stipulated under the terms of a marriage dissolution decree filed 34.13 with the association. If there is no surviving spouse or child or children, a former spouse 34.14 may be entitled to a lump-sum refund payment under subdivision 1, if provided for in a 34.15 marriage dissolution decree but not a monthly surviving spouse optional annuity despite 34.16 the terms of a marriage dissolution decree filed with the association. 34.17 (e) The surviving spouse eligible for surviving spouse benefits under paragraph (a) 34.18 may apply for the annuity at any time after the date on which the deceased employee 34.19 would have attained the required age for retirement based on the employee's allowable 34.20 service. The surviving spouse eligible for surviving spouse benefits under paragraph (b) 34.21 or (c) may apply for an annuity any time after the member's death. The annuity must be 34.22 computed under sections 353.29, subdivisions 2 and 3; and 353.30, subdivisions 1, 1a, 34.23 1b, 1c, and 5; and353.31, subdivision 3. 34.24 (f) Sections 353.34, subdivision 3, and 353.71, subdivision 2, apply to a deferred 34.25 annuity or surviving spouse benefit payable under this subdivision. No payment may 34.26 accrue beyond the end of the month in which entitlement to the annuity has terminated 34.27 or upon expiration of the term certain benefit payment under subdivision 1b. An amount 34.28 equal to any excess of the accumulated contributions that were credited to the account of 34.29 the deceased employee over and above the total of the annuities paid and payable to the 34.30 surviving spouse must be paid to thedeceased member's last designated beneficiary or, if34.31none, as specified under subdivision 1surviving spouse's estate. 34.32 (g) A member may specify in writing that this subdivision does not apply and that 34.33 payment may be made only to the designated beneficiary as otherwise provided by this 34.34 chapter. The waiver of a surviving spouse annuity under this section does not make a 34.35 dependent child eligible for benefits under subdivision 1c. 35.1 Sec. 24. Minnesota Statutes 2004, section 353.32, subdivision 1b, is amended to read: 35.2 Subd. 1b. Survivor coverage term certain. (a) In lieu of the 100 percent optional 35.3 annuity under subdivision 1a, or a refund under subdivision 1, the surviving spouse of 35.4 a deceased member may elect to receive survivor coverage for a term certain offive,35.5 ten, 15, or 20 years, but monthly payments must not exceed 75 percent of the average 35.6 high-five monthly salary of the deceased member. The monthly term certain annuity must 35.7 be actuarially equivalent to the 100 percent optional annuity under subdivision 1a. 35.8 (b) If a surviving spouse elects a term certain annuity and dies before the expiration 35.9 of the specified term certain period, the commuted value of the remaining annuity 35.10 payments must be paid in a lump sum to the survivor's estate. 35.11 Sec. 25. Minnesota Statutes 2004, section 353.33, subdivision 1, is amended to read: 35.12 Subdivision 1. Age, service, and salary requirements. A coordinated member 35.13 who has at least three years of allowable service and becomes totally and permanently 35.14 disabled before normal retirement age, and a basic member who has at least three years 35.15 of allowable service and who becomes totally and permanently disabled is entitled to a 35.16 disability benefit in an amount determined under subdivision 3. If the disabled person's 35.17 public service has terminated at any time, at least two of the required three years of 35.18 allowable service must have been rendered after last becomingaan active member. A 35.19 repayment of a refund must be made within six months after the effective date of disability 35.20 benefits under subdivision 2 or within six months after the date of the filing of the 35.21 disability application, whichever is later. No purchase of prior service or payment made 35.22 in lieu of salary deductions otherwise authorized under section 353.01, subdivision 16, 35.23353.017, subdivision 4, or353.36, subdivision 2,may be made after the occurrence of the 35.24 disability for which an application under this section is filed. 35.25 Sec. 26. Minnesota Statutes 2004, section 353.33, subdivision 9, is amended to read: 35.26 Subd. 9. Return topublic serviceemployment. (a) Any person receiving a 35.27 disability benefit under this section who is restored toactive public service except persons35.28receiving benefits as provided inemployment not covered by subdivision 7,or 7a shall 35.29 have the disability benefit discontinued on the first day of the month following the return 35.30 to employment. 35.31 (b) If the person is employed by a governmental subdivision as defined under 35.32 section 353.01, subdivision 6, deductions must be taken for the retirement fund and upon 35.33 subsequent retirement have the retirement annuity payable based upon all allowable 35.34 service including that upon which the disability benefits were based. 36.1 (c) If the employment is not through public service covered under this chapter, the 36.2 account may be placed on a deferred status and the subsequent retirement annuity must 36.3 be calculated as provided in section 353.34, subdivision 3, if the person meets the length 36.4 of allowable service requirement stated in that subdivision; or the person may request a 36.5 refund of any remaining employee deductions. The refund shall be in an amount equal 36.6 to the accumulated employee deductions plus six percent interest compounded annually 36.7 less the sum of the disability benefits paid to the member. 36.8 Sec. 27. [353.335] DISABILITANT EARNINGS REPORTS. 36.9 Disability benefit recipients must report all earnings from reemployment and from 36.10 income from workers' compensation to the association annually by May 15 in a format 36.11 prescribed by the executive director. If the form is not submitted by May 15, benefits will 36.12 be suspended effective June 1. Upon receipt of the form, if the disability benefit recipient 36.13 is deemed to be eligible for continued payment, benefits will be reinstated retroactive 36.14 to June 1. 36.15 Sec. 28. Minnesota Statutes 2004, section 353.34, subdivision 1, is amended to read: 36.16 Subdivision 1. Refund or deferred annuity. (a) A former member is entitled 36.17 to a refund of accumulated employee deductions under subdivision 2, or to a deferred 36.18 annuity under subdivision 3. Application for a refund may not be made prior to the date 36.19 of termination of public serviceor the termination of membership, whichever is sooner. 36.20 Except as specified in paragraph (b), a refund must be paid within 120 days following 36.21 receipt of the application unless the applicant has again become a public employee 36.22 required to be covered by the association. 36.23 (b) If an individual wasgranted an authorized temporaryplaced on layoff under 36.24 section 353.01, subdivision 12 or 12c, a refund is not payable before termination of 36.25membershipservice under section 353.01, subdivision11b, clause (3)11a. 36.26 (c) An individual who terminates public service covered by the Public Employees 36.27 Retirement Association general plan, the Public Employees Retirement Association police 36.28 and fire plan, or the public employees local government corrections service retirement 36.29 plan, and who is employed by a different employer and becomes an active member 36.30 covered by one of the other two plans, may receive a refund of employee contributions 36.31 plus six percent interest compounded annually from the plan in which the member 36.32 terminated service. 36.33 Sec. 29. Minnesota Statutes 2004, section 353.656, subdivision 4, is amended to read: 37.1 Subd. 4. Limitation on disability benefit payments. (a) No member is entitled to 37.2 receive a disability benefit payment when there remains to the member's credit unused 37.3 annual leave or sick leave or under any other circumstances when, during the period of 37.4 disability, there has been no impairment of the person's salary as a police officeror, a 37.5 firefighter, or a paramedic as defined in section 353.64, subdivision 10, whichever applies. 37.6 (b) If a disabled member resumes a gainful occupation with earningsless than, 37.7 that when added to the normal disability benefit, and workers' compensation benefit 37.8 if applicable, exceed the disabilitant reemployment earnings limit, the amount of the 37.9 disability benefit must be reduced as provided in this paragraph. The disabilitant 37.10 reemployment earnings limit is the greater of: 37.11 (1) the salary earned at the date of disability; or 37.12 (2) 125 percent of the base salary currently paid by the employing governmental 37.13 subdivision for similar positions. 37.14 The disability benefit must be reduced by one dollar for each three dollars by which 37.15 the total amount of the current disability benefit, any workers' compensation benefits if 37.16 applicable, and actual earnings exceed the greater disabilitant reemployment earnings 37.17 limit. In no event may the disability benefit as adjusted under this subdivision exceed 37.18 the disability benefit originally allowed. 37.19 Sec. 30. Minnesota Statutes 2004, section 353D.01, subdivision 2, is amended to read: 37.20 Subd. 2. Eligibility. (a) Eligibility to participate in the defined contribution plan 37.21 is available to: 37.22 (1) elected local government officials of a governmental subdivision who elect to 37.23 participate in the plan under section 353D.02, subdivision 1, and who, for the elected 37.24 service rendered to a governmental subdivision, are not members of the Public Employees 37.25 Retirement Association within the meaning of section 353.01, subdivision 7; 37.26 (2) physicians who, if they did not elect to participate in the plan under section 37.27 353D.02, subdivision 2, would meet the definition of member under section 353.01, 37.28 subdivision 7; 37.29 (3) basic and advanced life support emergency medical service personnel employed 37.30 byor providing services forany public ambulance serviceor privately operated ambulance37.31service that receives an operating subsidy from a governmental entitythat elects to 37.32 participate under section 353D.02, subdivision 3; 37.33 (4) members of a municipal rescue squad associated with Litchfield in Meeker 37.34 County, or of a county rescue squad associated with Kandiyohi County, if an independent 37.35 nonprofit rescue squad corporation, incorporated under chapter 317A, performing 38.1 emergency management services, and if not affiliated with a fire department or ambulance 38.2 service and if its members are not eligible for membership in that fire department's or 38.3 ambulance service's relief association or comparable pension plan;and38.4 (5) employees of the Port Authority of the city of St. Paul who elect to participate in 38.5 the plan under section 353D.02, subdivision 5, and who are not members of the Public 38.6 Employees Retirement Association under section 353.01, subdivision 7; 38.7 (6) city managers who elected to be excluded from the general employees retirement 38.8 plan of the Public Employees Retirement Association under section 353.028 and who 38.9 elected to participate in the public employees defined contribution plan under section 38.10 353.028, subdivision 3, paragraph (b); and 38.11 (7) volunteer or emergency on-call firefighters serving in a municipal fire department 38.12 or an independent nonprofit firefighting corporation who are not covered by the public 38.13 employees police and fire retirement plan and who are not covered by a volunteer 38.14 firefighters relief association and who elect to participate in the public employees defined 38.15 contribution plan. 38.16 (b) For purposes of this chapter, an elected local government official includes 38.17 a person appointed to fill a vacancy in an elective office. Service as an elected local 38.18 government official only includes service for the governmental subdivision for which the 38.19 official was elected by the public-at-large. Service as an elected local government official 38.20 ceases and eligibility to participate terminates when the person ceases to be an elected 38.21 official. An elected local government official does not include an elected county sheriff. 38.22 (c) Individuals otherwise eligible to participate in the plan under this subdivision 38.23 who are currently covered by a public or private pension plan because of their employment 38.24 or provision of services are not eligible to participate in the public employees defined 38.25 contribution plan. 38.26 (d) A former participant is a person who has terminated eligible employment or 38.27 service and has not withdrawn the value of the person's individual account. 38.28 Sec. 31. Minnesota Statutes 2004, section 353D.02, subdivision 3, is amended to read: 38.29 Subd. 3. Eligible ambulance service personnel. Each public ambulance service 38.30or privately operated ambulance servicewith eligible personnelthat receives an operating38.31subsidy from a governmental entitymay elect to participate in the plan. If a service elects 38.32 to participate, its eligible personnel may elect to participate or to decline to participate. An 38.33 individual's election must be made within 30 days of the service's election to participate 38.34 or 30 days of the date on which the individual was employed by the service or began to 39.1 provide service for it, whichever date is later. An election by a service or an individual is 39.2 revocable. 39.3 Sec. 32. Minnesota Statutes 2004, section 353D.02, is amended by adding a 39.4 subdivision to read: 39.5 Subd. 6. City managers. City managers who elected to be excluded from the 39.6 general employees retirement plan of the Public Employees Retirement Association 39.7 under section 353.028, and who elected to participate in the plan under section 353.028, 39.8 subdivision 3, paragraph (b), shall file that election with the executive director. 39.9 Participation begins on the first day of the pay period next following the date of the 39.10 coverage election. An election to participate by a city manager is revocable. 39.11 Sec. 33. Minnesota Statutes 2004, section 353D.02, is amended by adding a 39.12 subdivision to read: 39.13 Subd. 7. Certain volunteer firefighters. Volunteer or emergency on-call firefighters 39.14 who are serving as members of a municipal fire department or an independent nonprofit 39.15 firefighting corporation and who are not covered for that firefighting service by the 39.16 public employees police and fire retirement plan under sections 353.63 to 353.68 or by 39.17 the applicable volunteer firefighters relief association under chapter 424A may elect to 39.18 participate in the plan. An eligible firefighter's election is irrevocable. No employer 39.19 contribution is payable by the fire department or the firefighting corporation unless the 39.20 municipal governing body or the firefighting corporation governing body, whichever 39.21 applies, ratifies the election. 39.22 Sec. 34. Minnesota Statutes 2004, section 353D.03, is amended by adding a 39.23 subdivision to read: 39.24 Subd. 5. City managers. A city manager who elects to participate in the plan 39.25 shall contribute an amount equal to the contribution under section 353.27, subdivision 39.26 2. The applicable city shall make a contribution equal to the contribution required under 39.27 section 353.27, subdivision 3. 39.28 Sec. 35. Minnesota Statutes 2004, section 353D.03, is amended by adding a 39.29 subdivision to read: 39.30 Subd. 6. Volunteer firefighters. (a) Unless paragraph (b) applies, a volunteer or 39.31 emergency on-call firefighter who elects to participate in the plan shall contribute at least 39.32 7.5 percent of any compensation received for firefighting services. 40.1 (b) If the municipality or the independent nonprofit firefighting corporation ratified 40.2 the election of plan coverage under section 353D.02, subdivision 6, the volunteer 40.3 firefighter and the employing unit shall contribute in total an amount equal at least to 7.5 40.4 percent of any compensation received for firefighting services. 40.5 Sec. 36. Minnesota Statutes 2004, section 353E.02, subdivision 3, is amended to read: 40.6 Subd. 3. County correctional institution. A county correctional institution is: 40.7 (1) a jail administered by a county; 40.8 (2) a correctional facility administered by a county;or40.9 (3) a regional correctional facility administered by or on behalf of multiple counties; 40.10 or 40.11 (4) a juvenile correctional facility administered by a county or on behalf of multiple 40.12 counties. 40.13 Sec. 37. Minnesota Statutes 2004, section 354.45, subdivision 1a, is amended to read: 40.14 Subd. 1a. Bounce-back annuity. (a) If a former member or disabilitant selects a 40.15 joint and survivor annuity option under subdivision 1 after June 30, 1989, the former 40.16 member or disabilitant must receive a normal single life annuity if the designated optional 40.17 annuity beneficiary dies before the former member or disabilitant. Under this option, no 40.18 reduction may be made in the person's annuity to provide for restoration of the normal 40.19 single life annuity in the event of the death of the designated optional annuity beneficiary. 40.20 (b)A former member or disabilitant who selected an optional joint and survivor40.21annuity before July 1, 1989, but did not choose an option that provides that the normal40.22single life annuity is payable to the former member or the disabilitant if the designated40.23optional annuity beneficiary dies first, is eligible for restoration of the normal single life40.24annuity if the designated optional annuity beneficiary dies first, without further actuarial40.25reduction of the person's annuity. A former member or disabilitant who selected an40.26optional joint and survivor annuity, but whose designated optional annuity beneficiary died40.27before July 1, 1989, shall receive a normal single life annuity after that date, but shall not40.28receive retroactive payments for periods before that dateThe annuity adjustment specified 40.29 in paragraph (a) also applies to joint and survivor annuity options under subdivision 40.30 1 elected prior to July 1, 1989. The annuity adjustment under this paragraph occurs on 40.31 July 1, 1989, or on the first day of the first month following the death of the designated 40.32 optional annuity beneficiary, whichever is later. This paragraph should not be interpreted 40.33 as authorizing retroactive payments. 41.1(c) The restoration of the normal single life annuity under this subdivision will take41.2effect on the first of the month following the date of death of the designated optional41.3annuity beneficiary or on the first of the month following one year before the date on41.4which a certified copy of the death record of the designated optional annuity beneficiary is41.5received in the office of the Teachers Retirement Association, whichever date is later.41.6 Sec. 38. Minnesota Statutes 2004, section 354A.32, subdivision 1a, is amended to read: 41.7 Subd. 1a. Bounce-back annuity. (a) If a former coordinated member or disabilitant 41.8 has selected a joint and survivor annuity option under subdivision 1 after June 30, 41.9 1989, the former member or disabilitant must receive a normal single life annuity if the 41.10 designated optional annuity beneficiary dies before the former member or disabilitant. 41.11 Under this option, no reduction may be made in the person's annuity to provide for 41.12 restoration of the normal single life annuity in the event of the death of the designated 41.13 optional annuity beneficiary. 41.14 (b)A former coordinated member or disabilitant who selected an optional joint41.15and survivor annuity before July 1, 1989, but did not choose an option that provides41.16that the normal single life annuity is payable to the former member or the disabilitant if41.17the designated optional annuity beneficiary dies first, is eligible for restoration of the41.18normal single life annuity if the designated optional annuity beneficiary dies first, without41.19further actuarial reduction of the person's annuity. A former member or disabilitant who41.20selected an optional joint and survivor annuity, but whose designated optional annuity41.21beneficiary died before July 1, 1989, shall receive a normal single life annuity after that41.22date, but shall not receive retroactive payments for periods before that dateThe annuity 41.23 adjustment specified in paragraph (a) also applies to joint and survivor annuity options 41.24 elected prior to July 1, 1989. The annuity adjustment under this paragraph occurs on 41.25 July 1, 1989, or on the first day of the first month following the death of the designated 41.26 optional annuity beneficiary, whichever is later. This paragraph should not be interpreted 41.27 as authorizing retroactive payments. 41.28 (c)A former coordinated member or disabilitant who took a further actuarial41.29reduction to elect an optional joint and survivor annuity that provides that the normal41.30annuity is payable to the former member or disabilitant if the designated optional41.31beneficiary dies first but has not died before July 1, 1989, shall have the annuity increased41.32as of July 1, 1989, to the amount the person would have received if, at the time of41.33retirement or disability, the person had selected only optional survivor coverage that41.34would not have provided for restoration of the normal annuity upon the death of the41.35designated optional annuity beneficiary. Any annuity or benefit increase under this42.1paragraph is effective only for payments made after June 30, 1989, and is not retroactive42.2for payments made before July 1, 1989.42.3(d)Unless otherwise specified in this subdivision, the restoration of the normal 42.4 single life annuity under this subdivision will take effect on the first of the month 42.5 following the date of death of the designated optional annuity beneficiary or on the first of 42.6 the month following one year before the date on which a certified copy of the death record 42.7 of the designated optional annuity beneficiary is received in the office of the appropriate 42.8 teachers retirement fund association, whichever date is later. 42.9 Sec. 39. Minnesota Statutes 2004, section 354D.05, is amended to read: 42.10 354D.05 CONTRIBUTIONS. 42.11 Subdivision 1. Member contributions.Eligible employees(a) Participants in the 42.12 individual retirement account plan who are specified in section 354D.02, subdivision 2, 42.13 clause (1) or (2), and who would otherwise beeligible to participate in themembers of a 42.14 Minnesota State Retirement System,thePublic Employees Retirement Association, orthe42.15 Teachers Retirement Association plan,but who participate in the individual retirement42.16account plan,shall make a member contributionin an amount equal to the member42.17contribution amount required by the plan for which the individual was originally eligible42.18for membership. The contributionas specified in section 354B.23, subdivision 1. 42.19 (b) For individual retirement account plan members specified in section 354D.02, 42.20 subdivision 2, clause (3), the member contribution is the employee contribution specified 42.21 in applicable law for the Minnesota State Retirement System, Public Employees 42.22 Retirement Association, or Teachers Retirement Association plan in which the individual 42.23 would otherwise be a member. 42.24 (c) Contributions under this subdivision must be made by payroll deduction each 42.25 pay period and must be in accordance with either section 403(b) or 414(h) of the Internal 42.26 Revenue Code. 42.27 Subd. 2. Employer contributions. (a) The employer ofeligible employeesan 42.28 employee described in subdivision 1who are eligible to participate in either the Minnesota42.29State Retirement System or the Public Employees Retirement Association shall, paragraph 42.30 (a), must make an employer contribution to the employee's individual retirement account 42.31 planin an amount equal to the employer contribution amount required by the plan for42.32which the individual was originally eligible for membershipaccount as specified in section 42.33 354B.23, subdivisions 3 and 4. 42.34 (b) The employer ofeligible employeesan employee described in subdivision 1 42.35who are eligible to participate in the Teachers Retirement Association shall, paragraph 43.1 (b), must make an employer contribution to the employee's individual retirement account 43.2 planin an amountaccount equal to the employer contribution including, if applicable, 43.3 any employer additional contribution required bysection354.42, subdivision 3, and43.4shall make an employer contribution to theapplicable plan law for the Minnesota State 43.5 Retirement System, Public Employees Retirement Association, or Teachers Retirement 43.6 Association inan amount equal towhich theemployer contribution required by section43.7354.42, subdivision 5individual would otherwise be a member. 43.8 Sec. 40. Minnesota Statutes 2004, section 356.24, subdivision 1, is amended to read: 43.9 Subdivision 1. Restriction; exceptions. (a) It is unlawful for a school district 43.10 or other governmental subdivision or state agency to levy taxes for, or to contribute 43.11 public funds to a supplemental pension or deferred compensation plan that is established, 43.12 maintained, and operated in addition to a primary pension program for the benefit of the 43.13 governmental subdivision employees other than: 43.14 (1) to a supplemental pension plan that was established, maintained, and operated 43.15 before May 6, 1971; 43.16 (2) to a plan that provides solely for group health, hospital, disability, or death 43.17 benefits; 43.18 (3) to the individual retirement account plan established by chapter 354B; 43.19 (4) to a plan that provides solely for severance pay under section 465.72 to a retiring 43.20 or terminating employee; 43.21 (5) for employees other than personnel employed by the Board of Trustees of the 43.22 Minnesota State Colleges and Universities and covered under the Higher Education 43.23 Supplemental Retirement Plan under chapter 354C, but including city managers covered 43.24 by an alternative retirement arrangement under section 353.028, subdivision 3, paragraph 43.25 (a), or by the defined contribution plan of the Public Employees Retirement Association 43.26 under section 353.028, subdivision 3, paragraph (b), if the supplemental plan coverage is 43.27 provided for in a personnel policy of the public employer or in the collective bargaining 43.28 agreement between the public employer and the exclusive representative of public 43.29 employees in an appropriate unit or in the individual employment contract between a city 43.30 and a city manager, in an amount matching employee contributions on a dollar for dollar 43.31 basis, but not to exceed an employer contribution of $2,000 a year per employee; 43.32 (i) to the state of Minnesota deferred compensation plan under section 352.96; or 43.33 (ii) in payment of the applicable portion of the contribution made to any investment 43.34 eligible under section 403(b) of the Internal Revenue Code, if the employing unit has 44.1 complied with any applicable pension plan provisions of the Internal Revenue Code with 44.2 respect to the tax-sheltered annuity program during the preceding calendar year; 44.3 (6) for personnel employed by the Board of Trustees of the Minnesota State Colleges 44.4 and Universities and not covered by clause (5), to the supplemental retirement plan under 44.5 chapter 354C, if the supplemental plan coverage is provided for in a personnel policy 44.6 or in the collective bargaining agreement of the public employer with the exclusive 44.7 representative of the covered employees in an appropriate unit, in an amount matching 44.8 employee contributions on a dollar for dollar basis, but not to exceed an employer 44.9 contribution of $2,700 a year for each employee; 44.10 (7) to a supplemental plan or to a governmental trust to save for postretirement 44.11 health care expenses qualified for tax-preferred treatment under the Internal Revenue 44.12 Code, if the supplemental plan coverage is provided for in a personnel policy or in the 44.13 collective bargaining agreement of a public employer with the exclusive representative of 44.14 the covered employees in an appropriate unit; 44.15 (8) to the laborer's national industrial pension fund for the employees of a 44.16 governmental subdivision who are covered by a collective bargaining agreement that 44.17 provides for coverage by that fund and that sets forth a fund contribution rate, but not to 44.18 exceed an employer contribution of $2,000 per year per employee; 44.19 (9) to the plumbers' and pipefitters' national pension fund or to a plumbers' and 44.20 pipefitters' local pension fund for the employees of a governmental subdivision who are 44.21 covered by a collective bargaining agreement that provides for coverage by that fund and 44.22 that sets forth a fund contribution rate, but not to exceed an employer contribution of 44.23 $2,000 per year per employee; 44.24 (10) to the international union of operating engineers pension fund for the employees 44.25 of a governmental subdivision who are covered by a collective bargaining agreement that 44.26 provides for coverage by that fund and that sets forth a fund contribution rate, but not to 44.27 exceed an employer contribution of $2,000 per year per employee; or 44.28 (11) to a supplemental plan organized and operated under the federal Internal 44.29 Revenue Code, as amended, that is wholly and solely funded by the employee's 44.30 accumulated sick leave, accumulated vacation leave, and accumulated severance pay. 44.31 (b) No governmental subdivision may make a contribution to a deferred 44.32 compensation plan operating under section 457 of the Internal Revenue Code for volunteer 44.33 or emergency on-call firefighters in lieu of providing retirement coverage under the federal 44.34 old age, survivors, and disability insurance program. 45.1 Sec. 41. Minnesota Statutes 2004, section 356.50, is amended to read: 45.2 356.50 SERVICE AND SALARY CREDIT FROM BACK PAY AWARDS IN 45.3 THE EVENT OF WRONGFUL DISCHARGE; ANNUITY AND DISABILITY 45.4 TREATMENT. 45.5 Subdivision 1. Application. (a) A person who is wrongfully discharged from public 45.6 employment that gave rise to coverage by a public employee pension plan enumerated 45.7 in section 356.30, subdivision 3, is entitled to obtain allowable service credit from the 45.8 applicable public employee pension plan for the applicable period caused by the wrongful 45.9 discharge. 45.10 (b) A person is wrongfully discharged for purposes of this section if: 45.11 (1) the person has been determined by a court of competent jurisdictionor, by an 45.12 arbitrator in binding arbitration, by the commissioner of veterans affairs, or by a board, 45.13 commission, or panel acting under section 197.46, whichever applies, to have been 45.14 wrongfully discharged from public employment; 45.15 (2) the person received an award of back pay with respect to that discharge; and 45.16 (3) the award does not include any amount for any lost or interrupted public pension 45.17 plan coverage. 45.18 Subd. 2. Service credit procedure.(c)(a) To obtain the public pension plan 45.19 allowable service credit, the eligible person under subdivision 1 shall pay the required 45.20 member contribution amount. The required member contribution amount is the member 45.21 contribution rate or rates in effect for the pension plan during the period of service covered 45.22 by the back pay award, applied to the unpaid gross salary amounts of the back pay award 45.23 including unemployment insurance, workers' compensation or wages from other sources 45.24 which reduced the back award. No contributions shall be made under this clause for 45.25 compensation covered by a public pension plan listed in section 356.30, subdivision 3, 45.26 for employment during the removal period. The person shall pay the required member 45.27 contribution amount within 60 days of the date of receipt of the back pay award,within45.2860 days of April 14, 1992,or within 60 days of a billing from the retirement fund, 45.29 whichever is later. 45.30(d)(b) The public employer who wrongfully discharged the public employee must 45.31 pay an employer contribution on the back pay award. The employer contribution must be 45.32 based on the employer contribution rate or rates in effect for the pension plan during the 45.33 period of service covered by the back pay award, applied to the salary amount on which 45.34 the member contribution amount was determined under paragraph(c)(a). Interest on both 45.35 the required member and employer contribution amount must be paid by the employer at 45.36 the annual compound rate of 8.5 percent per year, expressed monthly, between the date the 46.1 contribution amount would have been paid to the date of actual payment. The employer 46.2 payment must be made within 30 days of the payment under paragraph(c)(a). 46.3 Subd. 3. Employer reporting. The employer must report to the executive director 46.4 of the applicable pension plan that a person has been determined to be wrongfully 46.5 discharged and the employer must provide a copy of the written order or decision. 46.6 Subd. 4. Annuity repayment. Notwithstanding subdivisions 1 and 2, if after being 46.7 discharged, the person commences receipt of an annuity from the applicable plan, and it is 46.8 later determined that the person was wrongfully discharged, the person shall repay the 46.9 annuity received in a lump sum within 60 days of receipt of the back pay award. If the 46.10 annuity is not repaid, the person is not entitled to reinstatement in the applicable plan as 46.11 an active member, is not authorized to make payments under subdivision 2, paragraph 46.12 (a), and for subsequent employment with the employer, the person shall be treated as 46.13 a reemployed annuitant. 46.14 Subd. 5. Disability treatment. If a person is wrongfully discharged and prior to 46.15 reinstatement takes a refund of employee contributions under the applicable plan's refund 46.16 provision and fails to repay that refund, then not withstanding other law to the contrary, if 46.17 the person applies for a disability benefit and is approved for that benefit, the disability 46.18 benefit amount must be computed solely on the years of covered service provided 46.19 after reinstatement, the individual's salary for benefit computation purposes, and the 46.20 applicable plan accrual rates, rather than receiving a minimum disability benefit amount, if 46.21 applicable, specified in plan law. 46.22 Sec. 42. Laws 2004, chapter 267, article 8, section 41, is amended to read: 46.23 Sec. 41. REPEALER. 46.24 46.25(a)Minnesota Statutes 2002, sections 353.33, subdivision 5b; and 490.11, are 46.26 repealed on July 1, 2004. 46.27 46.28(b) Sections 3 and 19 are repealed on July 1, 2006.46.29 Sec. 43. EARLY RETIREMENT INCENTIVE. 46.30 Subdivision 1. Eligibility. An appointing authority in the executive or legislative 46.31 branch of state government or the Board of Public Defense or the Minnesota Historical 46.32 Society or the Minnesota State Colleges and Universities or any school district may offer 46.33 the early retirement incentive in this section to an employee who: 47.1 (1) has at least 15 years of allowable service in one or more of the funds listed in 47.2 Minnesota Statutes, section 356.30, subdivision 3, or has at least five years of coverage by 47.3 the individual retirement account plan governed by Minnesota Statutes, chapter 354B, and 47.4 upon retirement is immediately eligible for a retirement annuity or benefit from one or 47.5 more of these funds; and 47.6 (2) terminates state or teaching service after the effective date of this section and 47.7 before September 1, 2006. 47.8 Subd. 2. Incentive. (a) For an employee eligible under subdivision 1, the employer 47.9 may provide an amount up to $17,000, to be used: 47.10 (1) for an employee who terminates state service after the effective date of this 47.11 section and on or before July 15, 2006, for deposit in the employee's account in the health 47.12 care savings plan established by Minnesota Statutes, section 352.98; or 47.13 (2) for an employee who terminates state service after July 15, 2006, and before 47.14 September 1, 2006: 47.15 (i) notwithstanding Minnesota Statutes, section 352.01, subdivision 11, or 354.05, 47.16 subdivision 13, whichever applies, for purchase of service credit for unperformed service 47.17 sufficient to enable the employee to retire under Minnesota Statutes, section 352.116, 47.18 subdivision 1, paragraph (b); 353.30; or 354.44, subdivision 6, paragraph (b), whichever 47.19 applies; or 47.20 (ii) for purchase of a lifetime annuity or annuity for a specific number of years from 47.21 the state unclassified retirement program to provide additional benefits under Minnesota 47.22 Statutes, section 352D.06, subdivision 1. 47.23 (b) An employee is eligible for the payment under paragraph (a), clause (2), item 47.24 (i), if the employee uses money from a deferred compensation account that, combined 47.25 with the payment under paragraph (a), clause (2), item (i), would be sufficient to purchase 47.26 enough service credit to qualify for retirement under Minnesota Statutes, section 352.116, 47.27 subdivision 1, paragraph (b); 353.30, subdivision 1a; or 354.44, subdivision 6, paragraph 47.28 (b), whichever applies. 47.29 (c) The cost to purchase service credit under this section must be made in accordance 47.30 with Minnesota Statutes, section 356.551. 47.31 Subd. 3. Designation of positions; employer discretion. Before offering an 47.32 incentive under this section, an appointing authority must be experiencing employee 47.33 layoffs due to budget shortfalls or reorganization that would be offset by offering the 47.34 incentive. The appointing authority must document that the incentive payment is equal 47.35 to or less than the cost of the employee layoff. The appointing authority must designate 47.36 the job classifications or positions within the job classifications that qualify for the 48.1 incentive. The appointing authority may modify this designation at any time. Designation 48.2 of positions eligible for the incentive under this section, participation of individual 48.3 employees, and the amount of the payment under this section are at the sole discretion of 48.4 the appointing authority. Unilateral implementation of this section by the employer is not 48.5 an unfair labor practice under Minnesota Statutes, chapter 179A. 48.6 Sec. 44. PERA-GENERAL; PURCHASE OF SERVICE CREDIT FOR 48.7 ILLINOIS MUNICIPAL RETIREMENT PLAN COVERED SERVICE. 48.8 (a) Notwithstanding any provision of Minnesota Statutes, chapter 353, to the 48.9 contrary, a member of the general employees retirement plan of the Public Employees 48.10 Retirement Association who left active employment covered by Minnesota Statutes, 48.11 chapter 353, was employed in public employment covered by the Illinois municipal 48.12 retirement plan, and returned to active Minnesota local government employment may 48.13 purchase allowable service credit in the general employees retirement plan of the Public 48.14 Employees Retirement Association for the period of service covered by the Illinois 48.15 municipal retirement plan by authorizing the transfer of funds specified in paragraph (b) 48.16 and by making the payment specified in paragraph (c). 48.17 (b) If a person elects to obtain service credit under this section, the person shall 48.18 authorize an institution-to-institution transfer of the person's account in the Illinois 48.19 municipal retirement plan to the general employees retirement fund of the Public 48.20 Employees Retirement Association. 48.21 (c) If a person elects to obtain service credit under this section and authorizes an 48.22 account transfer under paragraph (b), the person shall pay the balance of the prior service 48.23 credit purchase payment calculated under Minnesota Statutes, section 356.551, in excess 48.24 of the account transfer amount. 48.25 (d) The election under this section must be made in writing on a form prescribed 48.26 by the executive director of the Public Employees Retirement Association. The person 48.27 making this election also must waive any retirement annuity or benefit from the Illinois 48.28 municipal retirement fund and must provide any reasonable documentation of the person's 48.29 compliance with qualification requirements to the executive director of the Public 48.30 Employees Retirement Association that is requested by the director. 48.31 Sec. 45. TEMPORARY PROVISION; TRANSFER OF CERTAIN DEFERRED 48.32 COMPENSATION CONTRIBUTIONS. 48.33 Any amount contributed by a municipality or an independent nonprofit firefighting 48.34 corporation to the state deferred compensation program under Minnesota Statutes, section 49.1 352.96, for or on behalf of a volunteer or emergency on-call firefighter for whom no other 49.2 retirement coverage is provided for that firefighting service and for whom the deferred 49.3 compensation program contributions were made to avoid providing retirement coverage 49.4 under the federal old age, survivors, and disability insurance program and as such were 49.5 in error, if federal law so permits, may be transferred to the public employees defined 49.6 contribution plan for subsequent deposit in the individual account of the applicable 49.7 firefighter. 49.8 Sec. 46. REPEALER. 49.9 Minnesota Statutes 2004, section 43A.34, subdivision 1, is repealed. 49.10 Sec. 47. EFFECTIVE DATE. 49.11 (a) Sections 1 and 46 are effective the day following final enactment. 49.12 (b) Sections 2 to 11, 13 to 31, 36 to 38, and 42 are effective July 1, 2006. 49.13 (c) Section 39 is effective the first day of the first payroll period next following 49.14 final enactment. 49.15 (d) Sections 3, 4, 21, 22, 37, and 38 are not intended to increase, modify, impair, 49.16 or diminish the benefit entitlements specified in the sections of Minnesota Statutes being 49.17 amended. If the executive director of the Minnesota State Retirement System, the Public 49.18 Employees Retirement Association, the Teachers Retirement Association, or a first 49.19 class city teacher retirement fund association, whichever is applicable, determines that 49.20 any provision of those sections does increase, modify, impair, or diminish the benefit 49.21 entitlements as reflected in applicable law just prior to the effective date of this section, 49.22 the applicable executive director shall certify that determination and a recommendation 49.23 as to the required legislative correction to the chairs of the Legislative Commission on 49.24 Pensions and Retirement, the house Governmental Operations and Veterans Affairs Policy 49.25 Committee, the senate State and Local Governmental Operations Committee, and the 49.26 executive director of the Legislative Commission on Pensions and Retirement. 49.27 (e) Sections 12, 32 to 35, 40, 41, and 45 are effective the day following final 49.28 enactment. 49.29 ARTICLE 4 49.30 PERA-P&F RETIREMENT PLAN CHANGES 49.31 Section 1. Minnesota Statutes 2005 Supplement, section 353.656, subdivision 1, 49.32 is amended to read: 50.1 Subdivision 1. In line of duty; computation of benefits. (a) A member of the 50.2 police and fire plan who: 50.3 (1) has not met the requirements for a retirement annuity under section 353.651, 50.4 subdivision 1, or 50.5 (2) has met the requirements for a retirement annuity under section 353.651, 50.6 subdivision 1, but who does not have 20 years of credited service; and who becomes 50.7 disabled and physically unfit to perform duties as a police officer, firefighter, or paramedic 50.8 as defined under section 353.64, subdivision 10, as a direct result of an injury, sickness, or 50.9 other disability incurred in or arising out of any act of duty, which has or is expected to 50.10 render the member physically or mentally unable to perform the duties as a police officer, 50.11 firefighter, or paramedic as defined under section 353.64, subdivision 10, for a period of at 50.12 least one year, shall receive disability benefits during the period of such disability. 50.13 (b) The benefits must be in an amount equal to 60 percent of the "average salary" as 50.14 defined in section 353.01, subdivision 17a, plus an additional percent specified in section 50.15 356.315, subdivision 6, of that average salary for each year of service in excess of 20 50.16 years. If the disability under this subdivision occurs before the member has at least five 50.17 years of allowable service credit in the police and fire plan, the disability benefit must be 50.18 computed on the "average salary" from which deductions were made for contribution to 50.19 the police and fire fund. 50.20 Sec. 2. Minnesota Statutes 2004, section 353.656, subdivision 3, is amended to read: 50.21 Subd. 3. Nonduty disability benefit. (a) Any member of the police and fire plan 50.22 who: 50.23 (1) has not met the requirements for a retirement annuity under section 353.651, 50.24 subdivision 1, or 50.25 (2) has met the requirements for a retirement annuity under section 353.651, 50.26 subdivision 1, but who does not have 15 years of credited service; and who becomes 50.27 disabled after not less than one year of allowable service because of sickness or injury 50.28 occurring while not on duty as a police officer, firefighter, or paramedic as defined under 50.29 section 353.64, subdivision 10, and by reason of that sickness or injury the member has 50.30 been or is expected to be unable to perform the duties as a police officer, firefighter, or 50.31 paramedic as defined under section 353.64, subdivision 10, for a period of at least one 50.32 year, is entitled to receive a disability benefit. 50.33 (b) The benefit must be paid in the same manner as if the benefit were paid under 50.34 section 353.651. If a disability under this subdivision occurs after one but in less than 15 50.35 years of allowable service, the disability benefit must be the same as though the member 51.1 had at least 15 years service. For a member who is employed as a full-time firefighter 51.2 by the Department of Military Affairs of the state of Minnesota, allowable service as a 51.3 full-time state Military Affairs Department firefighter credited by the Minnesota State 51.4 Retirement System may be used in meeting the minimum allowable service requirement 51.5 of this subdivision. 51.6 Sec. 3. Minnesota Statutes 2004, section 353.656, subdivision 6a, is amended to read: 51.7 Subd. 6a. Disability survivor benefits. If a member who is receiving a disability 51.8 benefit under subdivision 1 or 3: 51.9(a)(1) dies before attaining the age65required for receipt of a retirement annuity 51.10 under section 353.651, subdivision 1, or within five years of the effective date of the 51.11 disability, whichever is later, the surviving spouse shall receive a survivor benefit under 51.12 section 353.657, subdivision 2 or 2a, unless the surviving spouse elected to receive a 51.13 refund under section 353.32, subdivision 1. The joint and survivor optional annuity under 51.14 subdivision 2a is based on the minimum disability benefit under subdivision 1 or 3, or the 51.15 deceased member's allowable service, whichever is greater.; 51.16(b)(2) is living at the age65required for receipt of a retirement annuity under 51.17 section 353.651, subdivision 1, or five years after the effective date of the disability, 51.18 whichever is later, the member may continue to receive a normal disability benefit, 51.19 or the member may elect a joint and survivor optional annuity under section 353.30. 51.20 The optional annuity is based on the minimum disability benefit under subdivision 1 or 51.21 3, or the member's allowable service, whichever is greater. The election of this joint 51.22 and survivor annuity must occur within 90 days of the age65required for receipt of a 51.23 retirement annuity under section 353.651, subdivision 1, or the five-year anniversary of the 51.24 effective date of the disability benefit, whichever is later. The optional annuity takes effect 51.25 the first of the month following the month in which the person attains the age65required 51.26 for receipt of a retirement annuity under section 353.651, subdivision 1, or reaches the 51.27 five-year anniversary of the effective date of the disability benefit, whichever is later.; or 51.28(c) if there is(3) has a dependent child or children underparagraph (a) or (b)clause 51.29 (1) or (2), the association shall grant a dependent child benefit under section 353.657, 51.30 subdivision 3. 51.31 Sec. 4. EFFECTIVE DATE. 51.32 Sections 1 to 3 are effective July 1, 2006. 52.1 ARTICLE 5 52.2 PRIVATIZATION RETIREMENT COVERAGE CHANGE 52.3 Section 1. Minnesota Statutes 2004, section 352F.04, is amended to read: 52.4 352F.04 AUGMENTATION INTERESTRATERATES FOR TERMINATED 52.5UNIVERSITY HOSPITALPRIVATIZED EMPLOYEES. 52.6 Subdivision 1. Enhanced augmentation rates. (a) The deferred annuity of a 52.7 terminated hospital employee who attained that status prior to the effective date of this 52.8 section is subject to augmentationin accordance withunder Minnesota Statutes 1994, 52.9 section 352.72, subdivision 2, except that the rate ofinterest for this purposeaugmentation 52.10 is 5.5 percent compounded annually until January 1 following the year in whichsuchthe 52.11 person attains age 55. From that date to the effective date of retirement, the augmentation 52.12 rate is 7.5 percent compounded annually.These52.13 (b) If a terminated hospital employee attained that status on or after the effective date 52.14 of this section, the augmentation rate is four percent compounded annually until January 52.15 1, following the year in which the person attains age 55. From that date to the effective 52.16 date of retirement, the augmentation rate is six percent compounded annually. 52.17 Subd. 2. Exceptions. The increased augmentation ratesare no longer applicable for52.18any time afterspecified in subdivision 1 do not apply if the terminatedhospital employee52.19or Academic Health Centeremployee: 52.20 (1) becomes covered again by a retirementfundplan enumerated in section 356.30, 52.21 subdivision 3. These increased deferred annuity augmentation rates do not apply to a52.22terminated transferred hospital employee or Academic Health Center employee who; or 52.23 (2) begins receipt of a retirement annuity while employed byFairviewthe employer 52.24 which assumed operations of the medical facility or other public employing unit or 52.25 purchased the medical facility or other public employing unit. 52.26 Sec. 2. Minnesota Statutes 2005 Supplement, section 353F.02, subdivision 4, is 52.27 amended to read: 52.28 Subd. 4. Medical facility. "Medical facility" means: 52.29 (1) Bridges Medical Services; 52.30 (2) the City of Cannon Falls Hospital; 52.31 (3) Clearwater County Memorial Hospital doing business as Clearwater Health 52.32 Services in Bagley; 52.33 (4) the Dassel Lakeside Community Home; 52.34 (5) the Fair Oaks Lodge, Wadena; 53.1(3)(6) the Glencoe Area Health Center; 53.2(4)(7) the Hutchinson Area Health Care; 53.3(5)(8) the Kanabec Hospital; 53.4(6)(9) the Luverne Public Hospital; 53.5(7)(10) the Northfield Hospital; 53.6(8)(11) the RenVilla Nursing Home; 53.7(9)(12) the Renville County Hospital in Olivia; 53.8(10)(13) the St. Peter Community Healthcare Center; and 53.9(11)(14) the Waconia-Ridgeview Medical Center. 53.10 Sec. 3. Minnesota Statutes 2004, section 353F.04, is amended to read: 53.11 353F.04 AUGMENTATION INTERESTRATERATES FOR TERMINATED 53.12 MEDICAL OR OTHER PUBLIC EMPLOYING UNIT FACILITY EMPLOYEES. 53.13 Subdivision 1. Enhanced augmentation rates. (a) The deferred annuity of 53.14 a terminated medical facility or other public employing unit employee is subject to 53.15 augmentationin accordance withunder section 353.71, subdivision 2, of the edition of 53.16 Minnesota Statutes published in the year in which the privatization occurred, except that 53.17 the rate ofinterest for this purposeaugmentation is as specified in paragraph (b) or (c), 53.18 whichever is applicable. 53.19 (b) This paragraph applies if the legislation adding the medical facility or other 53.20 employing unit to section 353F.02, subdivision 4 or 5, as applicable, was enacted before 53.21 July 26, 2005, and became effective before January 1, 2007. For a terminated medical 53.22 facility or other public employing unit employee, the augmentation rate is 5.5 percent 53.23 compounded annually until January 1 following the year in whichsuchthe person attains 53.24 age 55. From that date to the effective date of retirement, the augmentation rate is 7.5 53.25 percent compounded annually.These53.26 (c) If paragraph (b) is not applicable, the augmentation rate is four percent 53.27 compounded annually until January 1, following the year in which the person attains age 53.28 55. From that date to the effective date of retirement, the augmentation rate is six percent 53.29 compounded annually. 53.30 Subd. 2. Exceptions. The increased augmentation ratesare no longer applicable for53.31any time afterspecified in subdivision 1 do not apply if the terminated medical facility 53.32 or other public employing unit employee: 53.33 (1) becomes covered again by a retirementfundplan enumerated in section 356.30, 53.34 subdivision 3. These increased deferred annuity augmentation rates do not apply to a53.35terminated transferred medical facility or other public employing unit employee who; or 54.1 (2) begins receipt of a retirement annuity while employed by the employer which 54.2 assumed operations of the medical facility or other public employing unit or purchased the 54.3 medical facility or other public employing unit. 54.4 Sec. 4. EFFECTIVE DATE. 54.5 (a) Sections 1 and 3 are effective the day following final enactment and section 3 54.6 has effect retroactively from July 25, 2005. 54.7 (b) Section 2 with respect to the Cannon Falls Hospital District is effective upon the 54.8 latter of: 54.9 (1) the day after the governing body of the Cannon Falls Hospital District and its 54.10 chief clerical officer meet the requirements under Minnesota Statutes, section 645.021, 54.11 subdivisions 2 and 3; and 54.12 (2) the first day of the month following certification to the Cannon Falls Hospital 54.13 District by the executive director of the Public Employees Retirement Association that the 54.14 actuarial accrued liability of the special benefit coverage proposed for extension to the 54.15 privatized City of Cannon Falls Hospital employees under section 1 does not exceed the 54.16 actuarial gain otherwise to be accrued by the Public Employees Retirement Association, as 54.17 calculated by the consulting actuary retained under Minnesota Statutes, section 356.214. 54.18 The cost of the actuarial calculations must be borne by the current employer or by the 54.19 entity which is the employer following the privatization. 54.20 (c) Section 2, with respect to Clearwater County Memorial Hospital, is effective 54.21 upon the latter of: 54.22 (1) the day after the governing body of Clearwater County and its chief clerical 54.23 officer meet the requirements under Minnesota Statutes, section 645.021, subdivisions 2 54.24 and 3; and 54.25 (2) the first day of the month following certification to Clearwater County by the 54.26 executive director of the Public Employees Retirement Association that the actuarial 54.27 accrued liability of the special benefit coverage proposed for extension to the privatized 54.28 Clearwater Health Services employees under section 2 does not exceed the actuarial gain 54.29 otherwise to be accrued by the Public Employees Retirement Association, as calculated by 54.30 the consulting actuary retained under Minnesota Statutes, section 356.214. The cost of 54.31 the actuarial calculations must be borne by the current employer or by the entity which is 54.32 the employer following the privatization. 54.33 (d) Section 2 with respect to the Dassel Lakeside Community Home is effective 54.34 upon the latter of: 55.1 (1) the day after the governing body of the city of Dassel and its chief clerical officer 55.2 timely complete compliance with Minnesota Statutes, section 645.021, subdivisions 2 55.3 and 3; and 55.4 (2) the first day of the month next following certification to the Dassel City 55.5 Council by the executive director of the Public Employees Retirement Association that 55.6 the actuarial accrued liability of the special benefit coverage proposed for extension to 55.7 the privatized Dassel Lakeside Community Home employees under section 2 does not 55.8 exceed the actuarial gain otherwise to be accrued by the Public Employees Retirement 55.9 Association, as calculated by the consulting actuary retained under Minnesota Statutes, 55.10 section 356.214. The cost of the actuarial calculations must be borne by the city of Dassel 55.11 or by the entity which is the employer following the privatization. 55.12 ARTICLE 6 55.13 SOCIAL SECURITY COVERAGE CHANGES 55.14 Section 1. Minnesota Statutes 2004, section 355.01, subdivision 3g, is amended to read: 55.15 Subd. 3g. Local governmental subdivision. "Local governmental subdivision" 55.16 means: 55.17 (1) a political subdivision as defined in section 218(b) of the Social Security Act; 55.18 (2) an instrumentality of the state; 55.19 (3) an instrumentality of one or more of the political subdivisions of the state,55.20including the League of Minnesota Cities; 55.21 (4) an instrumentality of the state and one or more of its political subdivisions; 55.22 (5) a governmental subdivision as defined in section 353.01, subdivision 6; and 55.23 (6) any instrumentality established under a joint powers agreement under section 55.24 471.59 wherein the instrumentality is responsible for the employment and the payment of 55.25 the salaries of the employees of the instrumentality. 55.26 Sec. 2. Minnesota Statutes 2004, section 355.02, subdivision 1, is amended to read: 55.27 Subdivision 1. General authority. (a) The director, with the approval of the 55.28 governor, is hereby authorized to enter into an agreement on behalf of the state, its political 55.29 subdivisions, and its other governmental employers, with the federal Secretary of Health 55.30 and Human Services, consistent with the terms and provisions of this chapter, for the 55.31 purpose of extending the benefits of the federal old age, survivors, and disability insurance 55.32 system to employees of the state or any political subdivision thereof who hold positions 55.33 covered by a retirement system with respect to services specified in the agreement which 55.34 constitute "employment,."whenever so specifically authorized by the statutory provisions56.1of this state pertaining to any coverage group of such employees to which the agreement56.2may become applicable under the Social Security Act.56.3 (b)Under this specific authorizationThe agreement may contain those provisions 56.4 relating to coverage, benefits, contributions, effective date, modification and termination 56.5 of the agreement, administration, and other appropriate provisions as the director and the 56.6 federal Secretary of Health and Human Services shall agree upon, but, except as may be 56.7 otherwise required by or under the Social Security Act as to the services to be covered, 56.8 such agreement must provide in effect that: 56.9 (1) benefits will be provided for employees whose services are covered by the 56.10 agreement (and their dependents and survivors) on the same basis as though those services 56.11 constituted employment within the meaning of title II of the Social Security Act; 56.12 (2) the state or other employer will pay to the federal Secretary of the Treasury, at 56.13 such time or times as may be prescribed under the Social Security Act, contributions 56.14 with respect to wages, equal to the sum of the taxes which would be imposed by the 56.15 Federal Insurance Contributions Act if the services covered by the agreement constituted 56.16 employment within the meaning of that act; 56.17 (3) the agreement is effective with respect to services in employment covered by the 56.18 agreement performed after a date specified therein; and 56.19 (4) all services which constitute employment and are performed in the employ of 56.20 the state or any of its political subdivisions by employees thereof, may be covered by the 56.21 agreementwhenever so specifically authorized by the statutory provisions of this state56.22pertaining to any coverage group of such employees to which the agreement may become56.23applicable under the Social Security Act. 56.24 Sec. 3. Minnesota Statutes 2004, section 355.02, subdivision 3, is amended to read: 56.25 Subd. 3. Groups covered by Social Security. (a) The following groups having 56.26 coverage under a retirement plan in section 356.30, subdivision 3, except clauses (4) and 56.27 (8) must be covered by an agreement or a modification to an agreement between the 56.28 director and the federal Secretary of Health and Human Services: 56.29 (1) constitutional officers; 56.30 (2) Duluth teachers; 56.31 (3) educational employees; 56.32 (4) higher education employees; 56.33 (5) hospital employees; 56.34 (6) judges; 56.35 (7) legislators; 57.1 (8) Minneapolis teachers; 57.2 (9) public employees; 57.3 (10) St. Paul teachers; and 57.4 (11)special authority or district employees; and57.5(12)state employees. 57.6 (b) The following groups must be covered prospectively following the referendum 57.7 in subdivision 4 and the modification to the state Social Security agreement under 57.8 subdivision 1: 57.9 (1) special authority or district employees in positions covered by a retirement plan 57.10 provided by the employer; and 57.11 (2) local elected officials of a local governmental subdivision or of a special authority 57.12 or district holding positions covered by the defined contribution plan under chapter 353D. 57.13 (c) Each local governmental subdivision or special authority or district desiring 57.14 inclusion in the state Social Security agreement for groups covered by paragraph (b) must 57.15 request such coverage by submitting a formal resolution to the director, including therein 57.16 the desired starting date for Social Security coverage. 57.17 (d) For purposes of paragraph (b), clause (2), the defined contribution plan of the 57.18 Public Employees Retirement Association is considered a separate retirement system with 57.19 respect to each local governmental subdivision or special authority or district, and the 57.20 elected officials in a local governmental subdivision or in a special authority or district 57.21 must be treated separately and independently from the other governmental subdivisions. 57.22 Sec. 4. Minnesota Statutes 2004, section 355.02, is amended by adding a subdivision 57.23 to read: 57.24 Subd. 4. Referendum. The director shall authorize and supervise a referendum 57.25 under section 218(d)(6)(C) of the Social Security Act to be held on the date or dates set by 57.26 the local governmental subdivision or by the special authority or district desiring inclusion 57.27 under subdivision 3, paragraph (b). The referendum must permit each eligible employee 57.28 the opportunity to elect Social Security coverage. The notice of referendum required by 57.29 section 218(d) of the Social Security Act must contain a statement sufficient to inform 57.30 the person of the rights which accrue under the Social Security Act and the employee 57.31 contribution rates applicable to the program. The cost of the referendum must be borne 57.32 by the governmental subdivision. The director, on receiving satisfactory evidence that 57.33 the conditions required by section 218 of the Social Security Act have been met, must 57.34 so certify to the Secretary of Health and Human Services. 58.1 Sec. 5. Minnesota Statutes 2004, section 355.02, is amended by adding a subdivision 58.2 to read: 58.3 Subd. 5. Retroactive Social Security coverage. An employee or elected official 58.4 who elects Social Security coverage under subdivision 4 may obtain retroactive coverage 58.5 for the period specified in the modification of the agreement if the individual is employed 58.6 by the local governmental subdivision or by the special authority or district on the date of 58.7 the modification of the agreement. The employee or elected official must pay an amount 58.8 equal to the taxes which would have been imposed on the person by the Federal Insurance 58.9 Contributions Act had the service been covered at the time performed. The employing 58.10 local governmental subdivision or special authority or district must pay the necessary 58.11 employer contributions for the retroactive period. Nothing in this section shall require an 58.12 employee or elected official to elect retroactive Social Security coverage. 58.13 Sec. 6. [355.095] OPTIONAL MEDICARE COVERAGE FOR CERTAIN 58.14 PUBLIC EMPLOYEES. 58.15 Subdivision 1. Agreement. (a) The director, on behalf of the state, its political 58.16 subdivisions, and its other governmental employers, is authorized to enter into an 58.17 agreement with the Secretary of Health and Human Services to extend the provisions of 58.18 United States Code, title 42, section 426, 426-1, and 1395c, to the employees in paragraph 58.19 (b) who meet the requirements of United States Code, title 42, section 418(v)(2) and who 58.20 do not have coverage by the federal old age, survivors, and disability insurance program 58.21 for that employment under any previous modification of the agreement or previous 58.22 Medicare referendum. 58.23 (b) The applicable employees are: 58.24 (1) employees who are members of one of the retirement plans in section 356.30, 58.25 subdivision 3, except clauses (4) and (8), based on continuous employment since March 58.26 31, 1986; and 58.27 (2) employees of a special authority or district who have been continuously 58.28 employed by the special authority or district since March 31, 1986. 58.29 Subd. 2. Referendum. (a) Each local governmental subdivision or special authority 58.30 or district desiring inclusion in the state Social Security agreement under subdivision 1 58.31 must request such coverage by submitting a formal resolution to the director, including 58.32 therein the desired starting date for Social Security coverage. 58.33 (b) The director shall authorize a referendum on the question of extending the 58.34 provisions of United States Code, title 42, sections 426, 426-1, and 1395c. The director 58.35 shall supervise the referendum in accordance with the requirements of United States Code, 59.1 title 42, section 418, on the date or dates set. The cost of such referendum must be borne by 59.2 the requesting retirement plan, or the requesting special authority or district. The notice of 59.3 the referendum provided to each eligible employee must contain a statement sufficient to 59.4 inform the person of the rights available as an employee in Medicare qualified government 59.5 employment and the employee contribution rates applicable to the program. The 59.6 referendum must permit each eligible employee the opportunity to vote in such referendum 59.7 in accordance with the requirements in the Social Security Act. The director, on receiving 59.8 satisfactory evidence that the conditions specified in United States Code, title 42, section 59.9 418(d)(7) have been met, must so certify to the Secretary of Health and Human Services. 59.10 Subd. 3. Contributions. Employers must pay the necessary employer contributions 59.11 and make the necessary deductions from salary for employees who elect to participate in 59.12 the federal Medicare program under this section and as required by federal law. 59.13 Subd. 4. Retroactive Medicare coverage. An individual who obtains Medicare 59.14 coverage through the referendum under subdivision 2 may obtain retroactive coverage for 59.15 the period specified in the modification of the agreement if employed by the governmental 59.16 subdivision or by the special authority or district on the date of the modification of the 59.17 agreement. The individual must pay an amount equal to the Medicare taxes which would 59.18 have been imposed on the employee had the service been covered at the time performed. 59.19 The employing local governmental subdivision or special authority or district must pay 59.20 the necessary employer contributions for the retroactive Medicare coverage period. 59.21 Nothing in this section shall require an employee or elected official to elect retroactive 59.22 Medicare coverage. 59.23 Sec. 7. EFFECTIVE DATE. 59.24 Sections 1 to 6 are effective the day following final enactment. 59.25 ARTICLE 7 59.26 SUPPLEMENTAL RETIREMENT PLAN COVERAGE CHANGES 59.27 Section 1. Minnesota Statutes 2004, section 356.24, subdivision 1, is amended to read: 59.28 Subdivision 1. Restriction; exceptions. It is unlawful for a school district or other 59.29 governmental subdivision or state agency to levy taxes for, or to contribute public funds to 59.30 a supplemental pension or deferred compensation plan that is established, maintained, 59.31 and operated in addition to a primary pension program for the benefit of the governmental 59.32 subdivision employees other than: 59.33 (1) to a supplemental pension plan that was established, maintained, and operated 59.34 before May 6, 1971; 60.1 (2) to a plan that provides solely for group health, hospital, disability, or death 60.2 benefits; 60.3 (3) to the individual retirement account plan established by chapter 354B; 60.4 (4) to a plan that provides solely for severance pay under section 465.72 to a retiring 60.5 or terminating employee; 60.6 (5) for employees other than personnel employed by the Board of Trustees of the 60.7 Minnesota State Colleges and Universities and covered under the Higher Education 60.8 Supplemental Retirement Plan under chapter 354C, if the supplemental plan coverage is 60.9 provided for in a personnel policy of the public employer or in the collective bargaining 60.10 agreement between the public employer and the exclusive representative of public 60.11 employees in an appropriate unit, in an amount matching employee contributions on a 60.12 dollar for dollar basis, but not to exceed an employer contribution of $2,000 a year per 60.13 employee; 60.14 (i) to the state of Minnesota deferred compensation plan under section 352.96; or 60.15 (ii) in payment of the applicable portion of the contribution made to any investment 60.16 eligible under section 403(b) of the Internal Revenue Code, if the employing unit has 60.17 complied with any applicable pension plan provisions of the Internal Revenue Code with 60.18 respect to the tax-sheltered annuity program during the preceding calendar year; 60.19 (6) for personnel employed by the Board of Trustees of the Minnesota State Colleges 60.20 and Universities and not covered by clause (5), to the supplemental retirement plan under 60.21 chapter 354C, if the supplemental plan coverage is provided for in a personnel policy 60.22 or in the collective bargaining agreement of the public employer with the exclusive 60.23 representative of the covered employees in an appropriate unit, in an amount matching 60.24 employee contributions on a dollar for dollar basis, but not to exceed an employer 60.25 contribution of $2,700 a year for each employee; 60.26 (7) to a supplemental plan or to a governmental trust to save for postretirement 60.27 health care expenses qualified for tax-preferred treatment under the Internal Revenue 60.28 Code, if the supplemental plan coverage is provided for in a personnel policy or in the 60.29 collective bargaining agreement of a public employer with the exclusive representative of 60.30 the covered employees in an appropriate unit; 60.31 (8) to the laborer's national industrial pension fund or to a laborer's local pension 60.32 fund for the employees of a governmental subdivision who are covered by a collective 60.33 bargaining agreement that provides for coverage by that fund and that sets forth a fund 60.34 contribution rate, but not to exceed an employer contribution of$2,000$5,000 per year 60.35 per employee; 61.1 (9) to the plumbers' and pipefitters' national pension fund or to a plumbers' and 61.2 pipefitters' local pension fund for the employees of a governmental subdivision who are 61.3 covered by a collective bargaining agreement that provides for coverage by that fund 61.4 and that sets forth a fund contribution rate, but not to exceed an employer contribution 61.5 of$2,000$5,000 per year per employee; 61.6 (10) to the International Union of Operating Engineers pension fund for the 61.7 employees of a governmental subdivision who are covered by a collective bargaining 61.8 agreement that provides for coverage by that fund and that sets forth a fund contribution 61.9 rate, but not to exceed an employer contribution of$2,000$5,000 per year per employee; 61.10or61.11 (11) to a supplemental plan organized and operated under the federal Internal 61.12 Revenue Code, as amended, that is wholly and solely funded by the employee's 61.13 accumulated sick leave, accumulated vacation leave, and accumulated severance pay; or 61.14 (12) to the International Association of Machinists national pension fund for the 61.15 employees of a governmental subdivision who are covered by a collective bargaining 61.16 agreement that provides for coverage by that fund and that sets forth a fund contribution 61.17 rate, but not to exceed an employer contribution of $5,000 per year per employee. 61.18 Sec. 2. EFFECTIVE DATE. 61.19 Section 1 is effective the day following final enactment. 61.20 ARTICLE 8 61.21 RETIREMENT FUND INVESTMENT AUTHORITY CHANGES 61.22 Section 1. Minnesota Statutes 2004, section 69.77, subdivision 9, is amended to read: 61.23 Subd. 9. Local police and paid fire relief association investment authority. 61.24 (a) The funds of the association must be invested in securities that are authorized 61.25 investments under section 356A.06, subdivision 6 or 7, whichever applies.Up to 7561.26percent of the market value of the assets ofNotwithstanding any provision of section 61.27 356A.06, subdivision 6 or 7 to the contrary, the special fund of the relief association 61.28 may be additionally invested in: 61.29 (1) open-end investment companies registered under the federal Investment 61.30 Company Act of 1940, if the portfolio investments of the investment companies comply 61.31 with the type of securities authorized for investment under section 356A.06, subdivision 61.32 7, up to 75 percent of the market value of the assets of the fund; and 61.33 (2) domestic government and corporate debt obligations that are not rated in the top 61.34 four quality categories by a nationally recognized rating agency, and comparable unrated 62.1 securities if the percentage of these assets does not exceed five percent of the total assets 62.2 of the special fund or 15 percent of the special fund's nonequity assets, whichever is less, 62.3 the special fund's participation is limited to 50 percent of a single offering of the debt 62.4 obligations, and the special fund's participation is limited to 25 percent of an issuer's debt 62.5 obligations that are not rated in the top four quality categories. Securities held by the 62.6 association before June 2, 1989, that do not meet the requirements of this subdivision may 62.7 be retained after that date if they were proper investments for the association on that date. 62.8 (b) The governing board of the association may select and appoint investment 62.9 agencies to act for and in its behalf or may certify special fund assets for investment by the 62.10 State Board of Investment under section 11A.17. The governing board of the association 62.11 may certify general fund assets of the relief association for investment by the State Board 62.12 of Investment in fixed income pools or in a separately managed account at the discretion 62.13 of the State Board of Investment as provided in section 11A.14. The governing board of 62.14 the association may select and appoint a qualified private firm to measure management 62.15 performance and return on investment, and the firm shall use the formula or formulas 62.16 developed by the state board under section 11A.04, clause (11). 62.17 Sec. 2. Minnesota Statutes 2004, section 354A.08, is amended to read: 62.18 354A.08 AUTHORIZED INVESTMENTS. 62.19 In addition to investments authorized under section 356A.06, subdivision 7, a 62.20 teachers retirement fund association may receive, hold, and dispose of: 62.21 (1) real estate or personal property acquired by it, whether the acquisition was by 62.22 purchase, or any other lawful means, as provided in this chapter or in the association's 62.23 articles of incorporation.; and 62.24 (2) domestic government and corporate debt obligations that are not rated in the top 62.25 four quality categories by a nationally recognized rating agency, and comparable unrated 62.26 securities if the percentage of these assets does not exceed five percent of the total assets 62.27 of the pension plan or 15 percent of the pension plan's nonequity assets, whichever is less, 62.28 the pension plan's participation is limited to 50 percent of a single offering of the debt 62.29 obligations, and the pension plan's participation is limited to 25 percent of an issuer's debt 62.30 obligations that are not rated in the top four quality categories. 62.31 In addition to other authorized real estate investments, an association may also 62.32 invest funds in Minnesota situs nonfarm real estate ownership interests or loans secured 62.33 by mortgages or deeds of trust. The board may also certify assets for investment by the 62.34 State Board of Investment as provided under section 11A.17. 63.1 Sec. 3. Minnesota Statutes 2004, section 354A.28, subdivision 5, is amended to read: 63.2 Subd. 5. Investment. The assets of the annuity reserve fund must be invested, 63.3 reinvested, and retainedin the discretion ofby the board of trustees of the Minneapolis 63.4 Teachers Retirement Fund Association in authorized investments under section11A.2463.5 356A.06, subdivision 7. 63.6 Sec. 4. Minnesota Statutes 2004, section 356.219, subdivision 3, is amended to read: 63.7 Subd. 3. Content of reports. (a) The report required by subdivision 1 must include 63.8 a written statement of the investment policyin effect on June 30, 1997, if that statement63.9has not been previously submitted. Following thatdateinitial report, subsequent reports 63.10 must include investment policy changes and the effective date of each policy change 63.11 rather than a complete statement of investment policy, unless the state auditor requests 63.12 submission of a complete current statement. The report must also include the information 63.13 required by the following paragraphs, as applicable. 63.14 (b) If after four years of reporting under this paragraph, the total portfolio time 63.15 weighted rate of return, net of all investment related costs and fees, provided by the public 63.16 pension plan differs by no more than 0.1 percent from the comparable return for the plan 63.17 calculated by the office of the state auditor, and if a public pension plan has a total market 63.18 value of$10,000,000$25,000,000 or more as of the beginning of the calendar year, and if 63.19 the public pension plan's annual audit is performed by the state auditor or by the legislative 63.20 auditor, the report required by subdivision 1 must include the market value of the total 63.21 portfolio and the market value of eachinvestment account, investment portfolio, orasset 63.22 class included in the pension fund as of the beginning of the calendar year and as of the 63.23 end of the calendar year. At the discretion of the state auditor, the public pension plan may 63.24 be required to submit the market value of the total portfolio and the market value of each 63.25 investment account, investment portfolio, or asset class included in the pension fund for 63.26 each month, and the amount and date of each injection and withdrawal to the total portfolio 63.27 and to each investment account, investment portfolio, or asset class. Ifa public pension63.28plan once files a report under this paragraphthe market value of a public pension plan's 63.29 fund drops below $25,000,000 in a subsequent year, it must continue reporting under this 63.30 paragraph for any subsequent year in which the public pension plan is not fully invested as 63.31 specified in subdivision 1, paragraph (b),even if asset values drop below $10,000,000 in63.32market value in that subsequent yearexcept that if the public pension plan's annual audit 63.33 is not performed by the state auditor or legislative auditor, paragraph (c) applies. 63.34 (c) If paragraph (b) would apply if the annual audit were provided by the state 63.35 auditor or legislative auditor, the report required by subdivision 1 must include the market 64.1 value of the total portfolio and the market value of each asset class included in the pension 64.2 fund as of the beginning of the calendar year and for each month, and the amount and date 64.3 of each injection and withdrawal to the total portfolio and to each investment account, 64.4 investment portfolio, or asset class. 64.5 (d) For public pension plans to which paragraph (b) or (c) applies, the report required 64.6 by subdivision 1 must also include a calculation of the total time-weighted rate of return 64.7 available from index-matching investments assuming the asset class performance targets 64.8 and target asset mix indicated in the written statement of investment policy. The provided 64.9 information must include a description of indices used in the analyses and an explanation 64.10 of why those indices are appropriate. This paragraph does not apply to any fully invested 64.11 plan, as defined by subdivision 1, paragraph (b). Reporting by the State Board of 64.12 Investment under this paragraph is limited to information on the Minnesota public pension 64.13 plans required to be invested by the State Board of Investment under section 11A.23. 64.14(d)(e) If a public pension plan has a total market value of less than$10,000,00064.15 $25,000,000 as of the beginning of the calendar year and was never required to file under 64.16 paragraph (b) or (c), the report required by subdivision 1 must include the amount and 64.17 date of each total portfolio injection and withdrawal. In addition, the report must include 64.18 the market value of the total portfolio as of the beginning of the calendar year and for 64.19 each quarter. 64.20(e)(f) Any public pension plan reporting under paragraph (b) or(d) may(c) must 64.21 include computed time-weighted rates of return with the report, in addition to all other 64.22 required information, as applicable.If these returns are supplied, the individual who64.23computedThe chief administrative officer of the public pension plan submitting the returns 64.24 must certify on a form prescribed by the state auditor that the returns have been computed 64.25 by the pension plan's investment performance consultant or custodial bank. The chief 64.26 administrative officer of the public pension plan submitting the returns also must certify 64.27 that the returns are net of all costs and fees, including investment management fees, and 64.28 that the procedures used to compute the returns are consistent with Bank Administration 64.29 Institute studies of investment performance measurement andAssociation for Investment64.30Management and Researchpresentation standards set by the Certified Financial Analyst 64.31 Institute. If the certifications required under this paragraph are not provided, the reporting 64.32 requirements of paragraph (c) apply. 64.33(f)(g) For public pension plans reporting under paragraph(d)(e), the public pension 64.34 plan must retain supporting information specifying the date and amount of each injection 64.35 and withdrawal to each investment account and investment portfolio. The public pension 64.36 plan must also retain the market value of each investment account and investment 65.1 portfolio at the beginning of the calendar year and for each quarter. Information that is 65.2 required to be collected and retained for any given year or years under this paragraph 65.3 must be submitted to the Office of the State Auditor if the Office of the State Auditor 65.4 requests in writing that the information be submitted by a public pension plan or plans, 65.5 or be submitted by the State Board of Investment for any plan or plans for which the 65.6 State Board of Investment is the investment authority under this section. If the state 65.7 auditor requests information under this subdivision, and the public plan fails to comply, 65.8 the pension plan is subject to penalties under subdivision 5, unless penalties are waived by 65.9 the state auditor under that subdivision. 65.10 Sec. 5. Minnesota Statutes 2004, section 356.219, subdivision 6, is amended to read: 65.11 Subd. 6. Investment disclosure report. (a) The state auditor shall prepare an annual 65.12 report to the legislature on the investment performance of the various public pension plans 65.13 subject to this section. The content of the report is specified in paragraphs (b) to(e)(f). 65.14 (b) For each public pension plan reporting under subdivision 3, paragraph (b), the 65.15 state auditor shallcompute andreport total portfolio and asset class time-weighted rates of 65.16 return, net of all investment-related costs and fees. If the state auditor has required a plan 65.17 to submit the market value of the total portfolio and the market value of each investment 65.18 account, investment portfolio, or asset class included in the pension fund for each month, 65.19 and the amount and date of each injection and withdrawal to the total portfolio and to each 65.20 investment account, investment portfolio, or asset class as prescribed under subdivision 65.21 3, paragraph (b), the state auditor shall also compute and report total portfolio and asset 65.22 class time-weighted rates of return, net of all costs and fees. 65.23 (c) For each public pension plan reporting under subdivision 3, paragraph (c), the 65.24 state auditor shall compute and report total portfolio and asset class time-weighted rates of 65.25 return, net of all costs and fees. 65.26 (d) For each public pension plan reporting under subdivision 3, paragraph(d)(e), 65.27 the state auditor shall compute and report total portfolio time-weighted rates of return, net 65.28 of all costs and fees. If the state auditor has requested data for a plan under subdivision 3, 65.29 paragraph(f)(g), the state auditor may also compute and report asset class time-weighted 65.30 rates of return, net of all costs and fees. 65.31(d)(e) The report by the state auditor must include the information submitted by the 65.32 pension plans under subdivision 3, paragraph(c)(d), or a synopsis of that information. 65.33(e)(f) The report by the state auditor may also include a presentation of multiyear 65.34 performance, information collected under subdivision 4, and any other information or 65.35 analysis deemed appropriate by the state auditor. 66.1 Sec. 6. Minnesota Statutes 2005 Supplement, section 356A.06, subdivision 7, is 66.2 amended to read: 66.3 Subd. 7. Expanded list of authorized investment securities. (a) Authority. 66.4 Except to the extent otherwise authorized by lawor bylaws, a covered pension plan not 66.5 described by subdivision 6, paragraph (a),mayshall invest its assets only in accordance 66.6 with this subdivision. 66.7 (b) Securities generally. The covered pension plan has the authority to purchase, 66.8 sell, lend, or exchange the securities specified in paragraphs (c) to(h)(i), including 66.9 puts and call options and future contracts traded on a contract market regulated by a 66.10 governmental agency or by a financial institution regulated by a governmental agency. 66.11 These securities may be owned as units in commingled trusts that own the securities 66.12 described in paragraphs (c) to(h)(i), including real estate investment trusts and insurance 66.13 company commingled accounts, including separate accounts. 66.14 (c) Government obligations. The covered pension plan may invest funds in 66.15 governmental bonds, notes, bills, mortgages, and other evidences of indebtedness 66.16 provided the issue is backed by the full faith and credit of the issuer or the issue is rated 66.17 among the top four quality rating categories by a nationally recognized rating agency. The 66.18 obligations in which funds may be invested under this paragraph include guaranteed or 66.19 insured issues of (1) the United States, its agencies, its instrumentalities, or organizations 66.20 created and regulated by an act of Congress; (2) Canada and its provinces, provided 66.21 the principal and interest is payable in United States dollars; (3) the states and their 66.22 municipalities, political subdivisions, agencies, or instrumentalities; (4) the International 66.23 Bank for Reconstruction and Development, the Inter-American Development Bank, the 66.24 Asian Development Bank, the African Development Bank, or any other United States 66.25 government sponsored organization of which the United States is a member, provided the 66.26 principal and interest is payable in United States dollars. 66.27 (d) Corporate obligations. The covered pension plan may invest funds in bonds, 66.28 notes, debentures, transportation equipment obligations, or any other longer term 66.29 evidences of indebtedness issued or guaranteed by a corporation organized under the laws 66.30 of the United States or any state thereof, or the Dominion of Canada or any province 66.31 thereof if they conform to the following provisions: 66.32 (1) the principal and interest of obligations of corporations incorporated or organized 66.33 under the laws of the Dominion of Canada or any province thereof must be payable in 66.34 United States dollars; and 66.35 (2) obligations must be rated among the top four quality categories by a nationally 66.36 recognized rating agency. 67.1 (e) Other obligations. (1) The covered pension plan may invest funds in 67.2 bankers acceptances, certificates of deposit, deposit notes, commercial paper, mortgage 67.3 participation certificates and pools, asset backed securities, repurchase agreements and 67.4 reverse repurchase agreements, guaranteed investment contracts, savings accounts, and 67.5 guaranty fund certificates, surplus notes, or debentures of domestic mutual insurance 67.6 companies if they conform to the following provisions: 67.7 (i) bankers acceptances and deposit notes of United States banks are limited to those 67.8 issued by banks rated in the highest four quality categories by a nationally recognized 67.9 rating agency; 67.10 (ii) certificates of deposit are limited to those issued by (A) United States banks and 67.11 savings institutions that are rated in the highest four quality categories by a nationally 67.12 recognized rating agency or whose certificates of deposit are fully insured by federal 67.13 agencies; or (B) credit unions in amounts up to the limit of insurance coverage provided 67.14 by the National Credit Union Administration; 67.15 (iii) commercial paper is limited to those issued by United States corporations or 67.16 their Canadian subsidiaries and rated in the highest two quality categories by a nationally 67.17 recognized rating agency; 67.18 (iv) mortgage participation or pass through certificates evidencing interests in pools 67.19 of first mortgages or trust deeds on improved real estate located in the United States where 67.20 the loan to value ratio for each loan as calculated in accordance with section 61A.28, 67.21 subdivision 3, does not exceed 80 percent for fully amortizable residential properties and 67.22 in all other respects meets the requirements of section 61A.28, subdivision 3; 67.23 (v) collateral for repurchase agreements and reverse repurchase agreements is 67.24 limited to letters of credit and securities authorized in this section; 67.25 (vi) guaranteed investment contracts are limited to those issued by insurance 67.26 companies or banks rated in the top four quality categories by a nationally recognized 67.27 rating agency or to alternative guaranteed investment contracts where the underlying 67.28 assets comply with the requirements of this subdivision; 67.29 (vii) savings accounts are limited to those fully insured by federal agencies; and 67.30 (viii) asset backed securities must be rated in the top four quality categories by a 67.31 nationally recognized rating agency. 67.32 (2) Sections 16A.58, 16C.03, subdivision 4, and 16C.05 do not apply to certificates 67.33 of deposit and collateralization agreements executed by the covered pension plan under 67.34 clause (1), item (ii). 67.35 (3) In addition to investments authorized by clause (1), item (iv), the covered 67.36 pension plan may purchase from the Minnesota Housing Finance Agency all or any part of 68.1 a pool of residential mortgages, not in default, that has previously been financed by the 68.2 issuance of bonds or notes of the agency. The covered pension plan may also enter into 68.3 a commitment with the agency, at the time of any issue of bonds or notes, to purchase 68.4 at a specified future date, not exceeding 12 years from the date of the issue, the amount 68.5 of mortgage loans then outstanding and not in default that have been made or purchased 68.6 from the proceeds of the bonds or notes. The covered pension plan may charge reasonable 68.7 fees for any such commitment and may agree to purchase the mortgage loans at a price 68.8 sufficient to produce a yield to the covered pension plan comparable, in its judgment, 68.9 to the yield available on similar mortgage loans at the date of the bonds or notes. The 68.10 covered pension plan may also enter into agreements with the agency for the investment 68.11 of any portion of the funds of the agency. The agreement must cover the period of the 68.12 investment, withdrawal privileges, and any guaranteed rate of return. 68.13 (f) Corporate stocks. The covered pension plan may invest funds in stocks or 68.14 convertible issues of any corporation organized under the laws of the United States or the 68.15 states thereof, any corporation organized under the laws of the Dominion of Canada or its 68.16 provinces, or any corporation listed on an exchange regulated by an agency of the United 68.17 States or of the Canadian national government, if they conform to the following provisions: 68.18 (1) the aggregate value ofcorporate stockinvestments under this paragraph, plus 68.19 paragraphs (g) and (k), plus equity investments under paragraphs (h), (i), and (j), as 68.20 adjusted for realizedprofitsgains and losses, must not exceed 85 percent of the market 68.21 or book value, whichever is less, of a fund, less the aggregate value of investments68.22according to paragraph (h); and 68.23 (2) investments must not exceed five percent of the total outstanding shares of 68.24 any one corporation. 68.25 (g) Developed market foreign stocks investments. In addition to investments 68.26 authorized under paragraph (f), the covered pension fund may invest in foreign stock 68.27 sold on an exchange in any developed market country included in the Europe, Australia, 68.28 and Far East Index. 68.29 (h) Commingled or mutual investments. The covered pension plan may invest 68.30 in index funds or mutual funds, including index mutual funds, through bank-sponsored 68.31 collective funds and shares of open-end investment companies registered under the 68.32 Federal Investment Company Act of 1940, if the investments of the index or mutual fund 68.33 comply with paragraphs (c) to (j). 68.34 (i) Real estate investment trust; related investments. The covered pension plan 68.35 may invest in real estate investment trusts secured by mortgages or deeds of trust and 69.1 sold on an exchange, and insurance company commingled accounts, including separate 69.2 accounts, of a debt or equity nature. 69.3 (j) Exchange traded funds.The covered pension plan may invest funds in exchange 69.4 traded funds, subject to the maximums, the requirements, and the limitations set forth in 69.5paragraph (d), (e), (f), or (h), whichever appliesparagraphs (c) to (i), as applicable. 69.6(h)(k) Other investments.(1) In addition to the investments authorized in 69.7 paragraphs (b) to(g)(j), and subject to the provisions in clause (2), the covered pension 69.8 plan may invest funds in: 69.9 (i) venture capital investment businesses through participation in limited partnerships 69.10 and corporations; 69.11 (ii) real estate ownership interests or loans secured by mortgages or deeds of trust 69.12 through investment in limited partnerships,or bank sponsored collective funds, trusts, and69.13insurance company commingled accounts, including separate accounts; 69.14 (iii) regional and mutual funds through bank sponsored collective funds and 69.15 open-end investment companies registered under the Federal Investment Company Act of 69.16 1940 which do not qualify under paragraph (h); 69.17 (iv) resource investments through limited partnerships, private placements, and 69.18 corporations; and 69.19 (v) international debt securities and emerging market equity securities. 69.20 (2) The investments authorized in clause (1) must conform to the following 69.21 provisions: 69.22 (i) the aggregate value of all investments made according to clause (1) may not 69.23 exceed3520 percent of the market value of the fund for which the covered pension 69.24 plan is investing; 69.25 (ii) there must be at least four unrelated owners of the investment other than the 69.26 covered pension plan for investments made under clause (1), item (i), (ii), (iii), or (iv); 69.27 (iii) covered pension plan participation in an investment vehicle is limited to 20 69.28 percent thereof for investments made under clause (1), item (i), (ii), (iii), or (iv); and 69.29 (iv) covered pension plan participation in a limited partnership does not include a 69.30 general partnership interest or other interest involving general liability. The covered 69.31 pension plan may not engage in any activity as a limited partner which creates general 69.32 liability. 69.33 Sec. 7. TRANSITION PROVISION. 70.1 A covered pension plan with investments that on the day prior to the effective date 70.2 of this section do not comply with section 3 shall divest of any assets not in compliance 70.3 before January 1, 2008. 70.4 Sec. 8. EFFECTIVE DATE. 70.5 Sections 1 to 5 are effective the day following final enactment. 70.6 ARTICLE 9 70.7 MINNEAPOLIS EMPLOYEES RETIREMENT FUND CHANGES 70.8 Section 1. Minnesota Statutes 2004, section 422A.05, subdivision 2c, is amended to 70.9 read: 70.10 Subd. 2c. Minneapolis employees retirement fund investment authority. (a) For 70.11 investments made on or after July 1, 1991, the board shall invest funds only in investments 70.12 authorized by section 356A.06, subdivision 7. 70.13 (b) However, in addition to real estate investments authorized under paragraph (a), 70.14 the board may also make loans to purchasers of Minnesota situs nonfarm residential real 70.15 estate that is owned by the Minneapolis Employees Retirement Fund. The loans must 70.16 be secured by mortgages or deeds of trust. 70.17 (c) For investments made before July 1, 1991, the board may, but is not required to, 70.18 comply with paragraph (a). However, with respect to these investments, the board shall 70.19 act in accordance with subdivision 2a and chapter 356A. 70.20 (d) The board may certify assets for investment by the State Board of Investment 70.21 under section 11A.14, subject to any restrictions established by the State Board of 70.22 Investment, and section 11A.17. 70.23 Sec. 2. Minnesota Statutes 2004, section 422A.06, subdivision 3, is amended to read: 70.24 Subd. 3. Deposit accumulation fund. (a) The deposit accumulation fund consists 70.25 of the assets held in the fund, including amounts contributed by or for employees, amounts 70.26 contributed by the city, amounts contributed by municipal activities supported in whole or 70.27 in part by revenues other than taxes and amounts contributed by any public corporation, 70.28 amounts paid by the state, and by income from investments. 70.29 (b) There must be paid from the fund the amounts required to be transferred to the 70.30 retirement benefit fund, or the disability benefit fund, refunds of contributions, including 70.31 the death-while-active refund specified in section 422A.22, subdivision 4, postretirement 70.32 increases in retirement allowances granted under Laws 1965, chapter 688, or Laws 1969, 70.33 chapter 859, and expenses of the administration of the retirement fund which were not 71.1 charged by the retirement board against the income of the retirement benefit fund from 71.2 investments as the cost of handling the investments of the retirement benefit fund. 71.3 (c) To the extent that the deposit accumulation fund has insufficient assets to transfer 71.4 the total value of the required reserves for retirement annuities to either the fund under 71.5 subdivisions 5 and 7 or the retirement benefit fund under subdivisions 5 and 8 as required, 71.6 the deposit accumulation fund has a transfer amount payable on which an interest charge 71.7 accrues. The executive director must determine the interest charge for the period that 71.8 transfer amount payable remains unpaid at an annual rate equal to five percent plus 71.9 the percentage increase in the amount of the annual Consumer Price Index for urban 71.10 wage earners and clerical workers as calculated by the Bureau of Labor Statistics of the 71.11 United States Department of Labor from the previous June 30. The interest charge must 71.12 be reflected in the books of the Minneapolis Employees Retirement Fund and assessed 71.13 against the deposit accumulation fund based on the average quarterly transfer amount 71.14 payable balance outstanding. Any revenue received by the deposit accumulation fund 71.15 subsequent to unpaid transfers must be transferred from the deposit accumulation fund 71.16 to the disability benefit fund or to the retirement fund, whichever applies, must first be 71.17 applied to any remaining interest charge and then must be applied to the principal amount 71.18 of transfer amount payable outstanding. 71.19 Sec. 3. Minnesota Statutes 2004, section 422A.06, subdivision 5, is amended to read: 71.20 Subd. 5. Transfer of reserves to retirement benefit fund; adjustments of 71.21 annuities and benefits. (a) Assets equal to the required reserves for retirement annuities 71.22 as determined in accordance with the appropriate mortality table adopted by the board of 71.23 trustees based on the experience of the fund as recommended by thecommission-retained71.24 actuary retained under section 356.214 and using the postretirement interest assumption 71.25 specified in section 356.215, subdivision 8,shallmust be transferred to the disability 71.26 benefit fund as provided in subdivision 7, or the retirement benefit fund, except for any 71.27 amounts payable from the survivor benefit fund, as of date of retirement. 71.28 (b) If a full transfer amount is not payable from the deposit accumulation fund, the 71.29 applicable fund must be credited with an interest-bearing transfer amount receivable. 71.30(b)(c) Annuity paymentsshallmust be adjusted in accordance with this chapter, 71.31 except that no minimum retirement payments described in this chaptershallmust include 71.32 any amounts payable from the survivors' benefit fund or disability benefit fund and 71.33 supplemented benefits specifically financed by statute. 72.1(c)(d) Increases in annuity paymentspursuant tounder this sectionshallmust be 72.2 made automatically unless written notice on a form prescribed by the board is filed with 72.3 the retirement board requesting that the increase not be made. 72.4(d)(e) Any additional annuity which began to accrue on July 1, 1973, or which 72.5 began to accrue on January 1, 1974, pursuant to Laws 1973, chapter 770, section 1,shall72.6 must be considered as part of the base amount to be used in determining any postretirement 72.7 adjustments payablepursuant tounder the provisions of subdivision 8. 72.8 Sec. 4. Minnesota Statutes 2005 Supplement, section 422A.06, subdivision 7, is 72.9 amended to read: 72.10 Subd. 7. Disability benefit fund. (a) A disability benefit fund is established, 72.11 containing the required reserves for disability allowances under this chapter unless 72.12 subdivision 3, paragraph (c), applies. A proportionate share of income from investments 72.13 must be allocated to this fund and any interest charge under subdivision 3, paragraph (c), 72.14 must be credited to the fund. There must be paid from this fund the disability allowances 72.15 payable under this chapter. 72.16 (b) In the event of the termination of any disability allowance for any reason other 72.17 than the death of the recipient, the balance of the required reserves for the disability 72.18 allowance as of the date of the termination must be transferred from the disability benefit 72.19 fund to the deposit accumulation fund. 72.20 (c) At the end of each fiscal year, as part of the annual actuarial valuation, a 72.21 determination must be made of the required reserves for all disability allowances being 72.22 paid from the disability benefit fund. Any excess of assets over actuarial required reserves 72.23 in the disability benefit fund must be transferred to the deposit accumulation fund. Unless 72.24 subdivision 3, paragraph (c), applies, any excess of actuarial reserves over assets in the 72.25 disability benefit fund must be funded by a transfer of the appropriate amount of assets 72.26 from the deposit accumulation fund. 72.27 Sec. 5. Minnesota Statutes 2004, section 422A.06, subdivision 8, is amended to read: 72.28 Subd. 8. Retirement benefit fund. (a) The retirement benefit fundshall consist72.29 consists of amounts held for payment of retirement allowances for members retired 72.30pursuant tounder this chapter, including any transfer amount payable under subdivision 3, 72.31 paragraph (c). 72.32 (b) Unless subdivision 3, paragraph (c), applies, assets equal to the required reserves 72.33 for retirement allowancespursuant tounder this chapter determined in accordance with 72.34 the appropriate mortality table adopted by the board of trustees based on the experience of 73.1 the fund as recommended by thecommission-retainedactuaryshallretained under section 73.2 356.214, must be transferred from the deposit accumulation fund to the retirement benefit 73.3 fund as of the last business day of the month in which the retirement allowance begins. 73.4 The income from investments of these assetsshallmust be allocated to this fund and any 73.5 interest charge under subdivision 3, paragraph (c), must be credited to the fund. There 73.6shallmust be paid from this fund the retirement annuities authorized by law. A required 73.7 reserve calculation for the retirement benefit fund must be made by the actuary retained 73.8by the Legislative Commission on Pensions and Retirementunder section 356.214 and 73.9 must be certified to the retirement board by thecommission-retainedactuary. 73.10 (c) The retirement benefit fundshallmust be governed by the applicable laws 73.11 governing the accounting and audit procedures, investment, actuarial requirements, 73.12 calculation and payment of postretirement benefit adjustments, discharge of any deficiency 73.13 in the assets of the fund when compared to the actuarially determined required reserves, 73.14 and other applicable operations and procedures regarding the Minnesota postretirement 73.15 investment fund in effect on June 30, 1997, established under Minnesota Statutes 1996, 73.16 section 11A.18, and any legal or administrative interpretations of those laws of the State 73.17 Board of Investment, the legal advisor to the Board of Investment and the executive 73.18 director of the State Board of Investment in effect on June 30, 1997. If a deferred yield 73.19 adjustment account is established for the Minnesota postretirement investment fund 73.20 before June 30, 1997, under Minnesota Statutes 1996, section 11A.18, subdivision 5, the 73.21 retirement board shall also establish and maintain a deferred yield adjustment account 73.22 within this fund. 73.23 (d) Annually, following the calculation of any postretirement adjustment payable 73.24 from the retirement benefit fund, the board of trustees shall submit a report to the 73.25 executive director of the Legislative Commission on Pensions and Retirement and to the 73.26 commissioner of finance indicating the amount of any postretirement adjustment and 73.27 the underlying calculations on which that postretirement adjustment amount is based, 73.28 including the amount of dividends, the amount of interest, and the amount of net realized 73.29 capital gains or losses utilized in the calculations. 73.30 (e) With respect to a former contributing member who began receiving a retirement 73.31 annuity or disability benefit under section 422A.151, paragraph (a), clause (2), after June 73.32 30,1997, or with respect to a survivor of a former contributing member who began 73.33 receiving a survivor benefit under section 422A.151, paragraph (a), clause (2), after June 73.34 30, 1997, the reserves attributable to the one percent lower amount of the cost-of-living 73.35 adjustment payable to those annuity or benefit recipients annually must be transferred back 73.36 to the deposit accumulation fund to the credit of the Metropolitan Airports Commission. 74.1 The calculation of this annual reduced cost-of-living adjustment reserve transfer must 74.2 be reviewed by the actuary retainedby the Legislative Commission on Pensions and74.3Retirementunder section 356.214. 74.4 Sec. 6. Minnesota Statutes 2004, section 422A.101, subdivision 3, is amended to read: 74.5 Subd. 3. State contributions. (a) Subject to the limitation set forth in paragraph (c), 74.6 the state shall pay to the Minneapolis Employees Retirement Fund annually an amount 74.7 equal to the amount calculated under paragraph (b). 74.8 (b) The payment amount is an amount equal to the financial requirements of the 74.9 Minneapolis Employees Retirement Fund reported in the actuarial valuation of the fund 74.10 prepared by the commission-retained actuary pursuant to section 356.215 for the most 74.11 recent year but based on a target date for full amortization of the unfunded actuarial 74.12 accrued liabilities by June 30, 2020, less the amount of employee contributions required 74.13 pursuant to section 422A.10, and the amount of employer contributions required pursuant 74.14 to subdivisions 1a, 2, and 2a. Payments shall be made September 15 annually. 74.15 (c) The annual state contribution under this subdivision may not exceed $9,000,000, 74.16 plus the cost of the annual supplemental benefit determined under section 356.43. 74.17 (d) If the amount determined under paragraph (b) exceeds$11,910,000$9,000,000, 74.18 the excess must be allocated to and paid to the fund by the employers identified in 74.19 subdivisions 1a and 2, other than units of metropolitan government. Each employer's 74.20 share of the excess is proportionate to the employer's share of the fund's unfunded 74.21 actuarial accrued liability as disclosed in the annual actuarial valuation prepared by 74.22 the actuary retainedby the Legislative Commission on Pensions and Retirementunder 74.23 section 356.214 compared to the total unfunded actuarial accrued liability attributed 74.24 to all employers identified in subdivisions 1a and 2, other than units of metropolitan 74.25 government. Payments must be made in equal installments as set forth in paragraph (b). 74.26 Sec. 7. [422A.27] ADDITIONAL INVESTMENT AUTHORITY. 74.27 In addition to investment authority specified in other law, assets of the fund may 74.28 be invested in domestic government and corporate debt obligations that are not rated in 74.29 the top four quality categories by a nationally recognized rating agency, and comparable 74.30 unrated securities if the percentage of these assets does not exceed five percent of the total 74.31 assets of the fund or 15 percent of the fund's nonequity assets, whichever is less, the 74.32 fund's participation is limited to 50 percent of a single offering of the debt obligations, 74.33 and the fund's participation is limited to 25 percent of an issuer's debt obligations that are 74.34 not rated in the top four quality categories. 75.1 Sec. 8. REPEALER. 75.2 Minnesota Statutes 2004, section 422A.101, subdivision 4, is repealed. 75.3 Sec. 9. EFFECTIVE DATE; LOCAL APPROVAL. 75.4 Sections 1 to 8 are effective retroactively on June 30, 2005, once the city council of 75.5 the city of Minneapolis and its chief clerical officer timely complete their compliance with 75.6 Minnesota Statutes, section 645.021, subdivisions 2 and 3. 75.7 ARTICLE 10 75.8 MINNEAPOLIS POLICE RELIEF ASSOCIATION CHANGES 75.9 Section 1. Minnesota Statutes 2004, section 423B.07, is amended to read: 75.10 423B.07 AUTHORIZED FUND DISBURSEMENTS. 75.11 The police pension fund may be used only for the payment of: 75.12 (1) service, disability, or dependency pensions; 75.13 (2) notwithstanding a contrary provision of section 69.80, the salaries of the elected 75.14 members of the board of trustees in an amount not to exceedthreeseven units for the 75.15 president and five units for other elected board members; 75.16 (3) expenses of officers and employees of the association in connection with the 75.17 protection of the fund; 75.18 (4) expenses of operating and maintaining the association, including the 75.19 administrative expenses related to the administration of the insurance plan authorized 75.20 in section 423B.08; and 75.21 (5) other expenses authorized by section 69.80, or other applicable law. 75.22 Sec. 2. Minnesota Statutes 2005 Supplement, section 423B.09, subdivision 1, is 75.23 amended to read: 75.24 Subdivision 1. Minneapolis police; persons entitled to receive pensions. The 75.25 association shall grant pensions payable from the police pension fund in monthly 75.26 installments to persons entitled to pensions in the manner and for the following purposes. 75.27 (a) An active member or a deferred pensioner who has performed duty as a member 75.28 of the police department of the city for five years or more, upon written application after 75.29 retiring from duty and reaching at least age 50, is entitled to be paid monthly for life a 75.30 service pension. Active members, deferred members, and service pensioners are entitled 75.31 to a service pension according to the following schedule:76.1 A B 76.2 5 years 76.24 Column A is applicable until December 31, 2005, and applies retroactively to 76.25 January 1, 2005, for a service pensioner who retired before January 1, 2005. Column B 76.26 applies on and after January 1, 2006. 76.27 Fractional years of service may not be used in computing pensions. 76.28 (b) An active member who after five years' service but less than 20 years' service 76.29 with the police department of the city, becomes superannuated so as to be permanently 76.30 unable to perform the person's assigned duties, is entitled to be paid monthly for life a 77.1 superannuation pension equal to four units for five years of service and an additional two 77.2 units for each full year of service over five years and less than 20 years. 77.3 (c) An active member who is not eligible for a service pension and who, while a 77.4 member of the police department of the city, becomes diseased or sustains an injury while 77.5 in the service that permanently unfits the member for the performance of police duties is 77.6 entitled to be paid monthly for life a pension equal to 34 units while so disabled. 77.7 Sec. 3. [423B.23] RECOMPUTATION OF DISABLED BENEFIT PROHIBITED. 77.8 Notwithstanding section 423A.11, the Board of Directors of the Minneapolis Police 77.9 Relief Association shall not recompute the disability benefit of a member who became 77.10 permanently disabled as the result of a service-related disease or injury. Any prior 77.11 recomputation of a disabled member's service-related disability pension shall be revoked 77.12 upon the member's request and upon the member's signed and sworn agreement to waive 77.13 any right to a recomputation of that benefit in the future. Nonservice-related disability 77.14 pension benefits that were recomputed at full 25-year service pensions shall remain 77.15 in effect. 77.16 Sec. 4. EFFECTIVE DATE; LOCAL APPROVAL. 77.17 (a) Section 1 is effective the day after the date of approval by the city council of 77.18 the city of Minneapolis and the timely completion by the chief clerical officer of the city 77.19 of Minneapolis of compliance with Minnesota Statutes, section 645.021, subdivisions 77.20 2 and 3. 77.21 (b) Section 2 is effective the day after the governing body of the city of Minneapolis 77.22 and its chief clerical officer timely complete their compliance with Minnesota Statutes, 77.23 section 645.021, subdivisions 2 and 3. 77.24 (c) Section 3 is effective the day after the governing body of the city of Minneapolis 77.25 and its chief clerical officer timely complete their compliance with Minnesota Statutes, 77.26 section 645.021, subdivisions 2 and 3. 77.27 ARTICLE 11 77.28 RECODIFICATION OF VARIOUS 77.29 STATEWIDE SPECIALTY RETIREMENT PLANS 77.30 Section 1. Minnesota Statutes 2004, section 3A.01, subdivision 1, is amended to read: 77.31 Subdivision 1. Purposes. Each of the terms defined in this section, for the purposes 77.32 of this chapter8.08.5 units 9.0 units 76.3 6 years9.610.1 units 10.6 units 76.4 7 years11.211.7 units 12.2 units 76.5 8 years12.813.3 units 13.8 units 76.6 9 years14.414.9 units 15.4 units 76.7 10 years16.016.5 units 17.0 units 76.8 11 years17.618.1 units 18.6 units 76.9 12 years19.219.7 units 20.2 units 76.10 13 years20.821.3 units 21.8 units 76.11 14 years22.422.9 units 23.4 units 76.12 15 years24.024.5 units 25.0 units 76.13 16 years25.626.1 units 26.6 units 76.14 17 years27.227.7 units 28.2 units 76.15 18 years28.829.3 units 29.8 units 76.16 19 years30.430.9 units 31.4 units 76.17AB76.18 20 years 34.5 units 35.0 units 76.19 21 years 36.1 units 36.6 units 76.20 22 years 37.7 units 38.2 units 76.21 23 years 39.3 units 39.8 units 76.22 24 years 40.9 units 41.4 units 76.23 25 years 42.5 units 43.0 unitsshall be givenhas themeaningsmeaning ascribedto them. 78.1 Sec. 2. Minnesota Statutes 2004, section 3A.01, is amended by adding a subdivision to 78.2 read: 78.3 Subd. 1a. Actuarial equivalent. "Actuarial equivalent" means the condition of one 78.4 allowance or benefit having an equal actuarial present value to another allowance or 78.5 benefit, determined by the actuary retained under section 356.214 as of a given date at a 78.6 specified age with each actuarial present value based on the mortality table applicable for 78.7 the plan and approved under section 356.215, subdivision 18, and using the applicable 78.8 preretirement or postretirement interest rate assumption specified in section 356.215, 78.9 subdivision 8. 78.10 Sec. 3. Minnesota Statutes 2004, section 3A.01, is amended by adding a subdivision to 78.11 read: 78.12 Subd. 1b. Average monthly salary. "Average monthly salary" means the average 78.13 of the member's highest five successive years of salary that was received as a member 78.14 of the legislature and upon which the member has made contributions under section 78.15 3A.03, subdivision 1, or for which the member of the legislature has made payments for 78.16 past service under Minnesota Statutes 2004, section 3A.02, subdivision 2, or has made, 78.17 before July 1, 1994, payments in lieu of contributions under Minnesota Statutes 1992, 78.18 section 3A.031. 78.19 Sec. 4. Minnesota Statutes 2004, section 3A.01, is amended by adding a subdivision to 78.20 read: 78.21 Subd. 1c. Constitutional officer. "Constitutional officer" means a person who was 78.22 duly elected, qualifies for, and serves as the governor, the lieutenant governor, the attorney 78.23 general, the secretary of state, or the state auditor of the state of Minnesota. 78.24 Sec. 5. Minnesota Statutes 2004, section 3A.01, subdivision 2, is amended to read: 78.25 Subd. 2. Dependent child. (a) "Dependent child" means any natural or adopted 78.26 child of a deceased member of the legislature or a former legislator who is under the age 78.27 of 18, or who is under the age of 22 and is a full-time student, and who, in either case, is 78.28 unmarried and was actually dependent for more than one-half of support uponsuchthe 78.29 legislator for a period of at least 90 days immediatelyprior tobefore the legislator's 78.30 death.It78.31 (b) The term also includes any child of the member of the legislature or former 78.32 legislator who was conceived during the lifetime of, and who was born after the death of, 79.1 the member or former legislator.This subdivision shall be retroactive as to any dependent79.2child under the age of 22 years as of April 1,1975.79.3 Sec. 6. Minnesota Statutes 2004, section 3A.01, subdivision 6, is amended to read: 79.4 Subd. 6. Director. "Director" means the executive director of the Minnesota State 79.5 Retirement System who was appointed under section 352.03, subdivision 5. 79.6 Sec. 7. Minnesota Statutes 2004, section 3A.01, is amended by adding a subdivision to 79.7 read: 79.8 Subd. 6b. Former legislator. "Former legislator" means a legislator who has 79.9 ceased to be a member of the legislature for any reason, including, but not limited to, the 79.10 expiration of the term for which a member of the legislature was elected or the death 79.11 of the member. 79.12 Sec. 8. Minnesota Statutes 2004, section 3A.01, is amended by adding a subdivision to 79.13 read: 79.14 Subd. 6c. Member of the legislature. "Member of the legislature" means a 79.15 person who was a member of the house of representatives or of the senate of the state of 79.16 Minnesota who has subscribed to the oath of office after July 1, 1965, and who was first 79.17 elected to a legislative office before July 1, 1997, and retained coverage by the plan under 79.18 Laws 1997, chapter 233, article 2, section 15. 79.19 Sec. 9. Minnesota Statutes 2004, section 3A.01, subdivision 8, is amended to read: 79.20 Subd. 8. Normal retirement age. "Normal retirement age" means the age of6079.21years with regard to any member of the legislature whose service terminates prior to the79.22beginning of the 1981 legislative session, and the age of62 yearswith regard to any79.23member of the legislature whose service terminates after the beginning of the 1981 session. 79.24 Sec. 10. Minnesota Statutes 2004, section 3A.01, is amended by adding a subdivision 79.25 to read: 79.26 Subd. 9. Retirement. "Retirement" means the period of time after which a former 79.27 legislator is entitled to a retirement allowance. 79.28 Sec. 11. Minnesota Statutes 2004, section 3A.01, is amended by adding a subdivision 79.29 to read: 80.1 Subd. 10. Salary. (a) "Salary" means the regular compensation payable under law 80.2 to a member of the legislature and paid to the person for service as a legislator. 80.3 (b) The term includes the monthly compensation paid to the member of the 80.4 legislature and the per diem payments paid during a regular or special session to the 80.5 member of the legislature. 80.6 (c) The term does not include per diem payments paid to a member of the legislature 80.7 other than during the regular or special session; additional compensation attributable to a 80.8 leadership position under section 3.099, subdivision 3; living expense payments under 80.9 section 3.101; and special session living expense payments under section 3.103. 80.10 Sec. 12. Minnesota Statutes 2004, section 3A.011, is amended to read: 80.11 3A.011 ADMINISTRATION OF PLAN. 80.12 The executive director and the board of directors of the Minnesota State Retirement 80.13 System shall administer the legislators retirement plan in accordance with this chapter 80.14 and chapter 356A. 80.15 Sec. 13. Minnesota Statutes 2004, section 3A.02, subdivision 1, is amended to read: 80.16 Subdivision 1. Qualifications. (a) A former legislator is entitled, upon written 80.17 application to the director, to receive a retirement allowance monthly, if the person: 80.18 (1) has either served at least six full years, without regard to the application of 80.19 section 3A.10, subdivision 2, or has served during all or part of four regular sessions as a 80.20 member of the legislature, which service need not be continuous; 80.21 (2) has attained the normal retirement age; 80.22 (3) has retired as a member of the legislature; and 80.23 (4) has made all contributions provided for in section 3A.03, has made payments 80.24 for past service under subdivision 2, or has made payments in lieu of contributions under 80.25 Minnesota Statutes 1992, section 3A.031,prior tobefore July 1, 1994. 80.26 (b)This paragraph applies to members of the legislature who terminate service as80.27a legislator before July 1, 1997. For service rendered before the beginning of the 197980.28legislative session, but not to exceed eight years of service, the retirement allowance is80.29an amount equal to five percent per year of service of that member's average monthly80.30salary. For service in excess of eight years rendered before the beginning of the 197980.31legislative session, and for service rendered after the beginning of the 1979 legislative80.32session,Unless the former legislator has legislative service before January 1, 1979, the 80.33 retirement allowance is an amount equal to 2-1/2 percent per year of service of that 80.34 member's average monthly salary.81.1(c) This paragraph applies to members of the legislature who terminate service as81.2a legislator after June 30, 1997. The retirement allowance is an amount equal to the81.3applicable rate or rates under paragraph (b) per year of service of the member's average81.4monthly salaryand adjusted for that person on an actuarial equivalent basis to reflect the 81.5 change in the postretirement interest rate actuarial assumption under section 356.215, 81.6 subdivision 8, from five percent to six percent. The adjustment must be calculated by or, 81.7 alternatively, the adjustment procedure must be specified by, the actuary retainedby the81.8Legislative Commission on Pensions and Retirementunder section 356.214. The purpose 81.9 of this adjustment is to ensure that the total amount of benefits that the actuary predicts 81.10 an individual member will receive over the member's lifetime under this paragraph will 81.11 be the same as the total amount of benefits the actuary predicts the individual member 81.12 would receive over the member's lifetime under the law in effect before enactment of this 81.13 paragraph. If the former legislator has legislative service before January 1, 1979, the 81.14 person's benefit must include the additional benefit amount in effect on January 1,1979, 81.15 and adjusted as otherwise provided in this paragraph. 81.16(d)(c) The retirement allowance accrues beginning with the first day of the month 81.17 of receipt of the application, but not before age 60, and for the remainder of the former 81.18 legislator's life, if the former legislator is not serving as a member of the legislature or as a 81.19 constitutional officeror commissioneras defined in section352C.021, subdivisions 2 and81.2033A.01, subdivision 1c. The annuity does not begin to accrueprior tobefore the person's 81.21 retirement as a legislator. No annuity payment may be made retroactive for more than 180 81.22 days before the date that the annuity application is filed with the director. 81.23(e)(d) Any member who has served during all or part of four regular sessions is 81.24 considered to have served eight years as a member of the legislature. 81.25(f)(e) The retirement allowance ceases with the last payment that accrued to the 81.26 retired legislator during the retired legislator's lifetime, except that the surviving spouse, if 81.27 any, is entitled to receive the retirement allowance of the retired legislator for the calendar 81.28 month in which the retired legislator died. 81.29 Sec. 14. Minnesota Statutes 2004, section 3A.02, subdivision 1b, is amended to read: 81.30 Subd. 1b. Reduced retirement allowance. (a) Upon separation from service after 81.31 the beginning of the 1981 legislative session, a former member of the legislature who has 81.32 attained the age set by the board of directors of the Minnesota State Retirement System 81.33 and who is otherwise qualifiedin accordance withunder subdivision 1 is entitled, upon 81.34 making written application onforms supplieda form prescribed by the director, to a 81.35 reduced retirement allowancein. The reduced retirement allowance is an amount equal 82.1 to the retirement allowance specified in subdivision 1, paragraph (b), that is reduced so 82.2 that the reducedannuityallowance is the actuarial equivalent of theannuityallowance 82.3 that would be payable if the former member of the legislature deferred receipt of the 82.4annuityallowance and theannuityallowance amountwerewas augmented at an annual 82.5 rate of three percent compounded annually from the date theannuityallowance begins to 82.6 accrue until age 62. 82.7 (b) The age set by the board of directors under paragraph (a) cannot belessan earlier 82.8 age than the early retirement age under section 352.116, subdivision 1a. 82.9 (c) If there is an actuarial cost to the plan of resetting the early retirement age under 82.10 paragraph (a), the retired legislator is required to pay an additional amount to cover the 82.11 full actuarial value. The additional amount must be paid in a lump sum within 30 days of 82.12 the certification of the amount by the executive director. 82.13 (d) The executive director of the Minnesota State Retirement System shall report 82.14 to the Legislative Commission on Pensions and Retirement on the utilization of this 82.15 provision annually on or before September 1, 2000. 82.16 Sec. 15. Minnesota Statutes 2004, section 3A.02, subdivision 3, is amended to read: 82.17 Subd. 3. Appropriation. The amounts required for payment of retirement 82.18 allowances provided by this section are appropriated annually to the director from the 82.19 participation of the legislators retirement plan in the Minnesota postretirement investment 82.20 fundand shall. The retirement allowance must be paid monthly to the recipients entitled 82.21theretoto those retirement allowances. 82.22 Sec. 16. Minnesota Statutes 2004, section 3A.02, subdivision 4, is amended to read: 82.23 Subd. 4. Deferred annuities augmentation. (a) The deferredannuityretirement 82.24 allowance of any former legislator must be augmented as provided herein. 82.25 (b) The required reserves applicable to the deferredannuityretirement allowance, 82.26 determined as of the date the benefit begins to accrue using an appropriate mortality table 82.27 and an interest assumption of six percent, must be augmented from the first of the month 82.28 following the termination of active service, or July 1, 1973, whichever is later, to the 82.29 first day of the month in which theannuityallowance begins to accrue, at the following 82.30 annually compounded rateof five percent per annum compounded annually until January82.311, 1981, and thereafter at the rate of three percent per annum compounded annually until82.32January 1 of the year in which the former legislator attains age 55. From that date to the82.33effective date of retirement, the rate is five percent compounded annually.or rates: 82.34 (1) five percent until January 1, 1981; 83.1 (2) three percent from January 1, 1981, or from the first day of the month following 83.2 the termination of active service, whichever is later, until January 1 of the year in which 83.3 the former legislator attains age 55; and 83.4 (3) five percent from the period end date under clause (2) to the effective date of 83.5 retirement. 83.6(b) The retirement allowance of, or the survivor benefit payable on behalf of, a83.7former member of the legislature who terminated service before July 1, 1997, which is83.8not first payable until after June 30, 1997, must be increased on an actuarial equivalent83.9basis to reflect the change in the postretirement interest rate actuarial assumption under83.10section 356.215, subdivision 8, from five percent to six percent under a calculation83.11procedure and tables adopted by the board of directors of the Minnesota State Retirement83.12System and approved by the actuary retained by the Legislative Commission on Pensions83.13and Retirement.83.14 Sec. 17. Minnesota Statutes 2004, section 3A.02, subdivision 5, is amended to read: 83.15 Subd. 5. Optional annuities. (a) The board of directors shall establish an optional 83.16 retirement annuity in the form of a joint and survivor annuity and an optional retirement 83.17 annuity in the form of a period certain and life thereafter. Except as provided in paragraph 83.18 (b), these optional annuity forms must be actuarially equivalent to the normalannuity83.19 allowance computed under this section, plus the actuarial value of any surviving spouse 83.20 benefit otherwise potentially payable at the time of retirement under section 3A.04, 83.21 subdivision 1. An individual selecting an optional annuity under this subdivisionwaives83.22 and the person's spouse waive any rights to surviving spouse benefits under section 3A.04, 83.23 subdivision 1. 83.24 (b) If a retired legislator selects the joint and survivor annuity option, the retired 83.25 legislator must receive a normal single-lifeannuityallowance if the designated optional 83.26 annuity beneficiary dies before the retired legislator and no reduction may be made in the 83.27 annuity to provide for restoration of the normal single-lifeannuityallowance in the event 83.28 of the death of the designated optional annuity beneficiary. 83.29 (c) The surviving spouse of a legislator who has attained at least age 60 and who dies 83.30 while a member of the legislature may elect an optional joint and survivor annuity under 83.31 paragraph (a), in lieu of surviving spouse benefits under section 3A.04, subdivision 1. 83.32 Sec. 18. Minnesota Statutes 2004, section 3A.03, subdivision 1, is amended to read: 83.33 Subdivision 1. Percentage. (a) Every member of the legislature shall contribute 83.34 nine percent of total salary,. 84.1 (b) The contribution must be made by payroll deduction, toand must be paid into 84.2 the state treasury and deposited in the general fund.It shall be the duty of84.3 (c) The directortomust record the periodic contributions of each member of the 84.4 legislature and must creditsucheach contribution to the member's account. 84.5 Sec. 19. Minnesota Statutes 2004, section 3A.03, subdivision 2, is amended to read: 84.6 Subd. 2. Refund. (a) A former member who has made contributions under 84.7 subdivision 1 and who is no longer a member of the legislature is entitled to receive, upon 84.8 written application to the executive director on a form prescribed by the executive director, 84.9 a refund from the general fund of all contributions credited to the member's account with 84.10 interest computed as provided in section 352.22, subdivision 2. 84.11 (b) The refund of contributions as provided in paragraph (a) terminates all rights 84.12 of a former member of the legislature and the survivors of the former member under 84.13 this chapter. 84.14 (c) If the former member of the legislature again becomes a member of the 84.15 legislature after having taken a refund as provided in paragraph (a), the membermust be84.16consideredis anewmember ofthis planthe unclassified employees retirement program of 84.17 the Minnesota State Retirement System. 84.18 (d) However, the member may reinstate the rights and credit for service previously 84.19 forfeited under this chapter if the member repays all refunds taken, plus interest at an 84.20 annual rate of 8.5 percent compounded annually from the date on which the refund was 84.21 taken to the date on which the refund is repaid. 84.22(d)(e) No person may be required to apply for or to accept a refund. 84.23 Sec. 20. Minnesota Statutes 2004, section 3A.04, subdivision 1, is amended to read: 84.24 Subdivision 1. Surviving spouse. (a) Upon the death of a member of the legislature 84.25 while serving assucha memberafter June 30, 1973, or upon the death of a former member 84.26 of the legislature with at leastthe number ofsix full years of serviceas required by section84.273A.02, subdivision 1, clause (1)or service in all or part of four regular legislative sessions, 84.28 the surviving spouseshall be paidis entitled to a survivor benefitin the amount of. 84.29 (b) The surviving spouse benefit is one-half of the retirement allowance of the 84.30 member of the legislature computed as though the member were at least normal retirement 84.31 age on the date of death and based upon the member's allowable service or upon eight 84.32 years, whichever is greater. The augmentation provided in section 3A.02, subdivision 4, if 84.33 applicable,shallmust be applied for the period up to, and including, the month of death. 85.1 (c) Upon the death of a former legislator receiving a retirement allowance, the 85.2 surviving spouseshall beis entitled to one-half of the amount of the retirement allowance 85.3 being paid to the legislator.Such85.4 (d) The surviving spouse benefitshall be paid duringis payable for the lifetime 85.5 of the surviving spouse. 85.6 Sec. 21. Minnesota Statutes 2004, section 3A.04, subdivision 2, is amended to read: 85.7 Subd. 2. Dependent children. (a) Upon the death of a member of the legislature 85.8 while serving as a member, or upon the death of a former member of the legislature who 85.9 has rendered at leastthe number ofsix full years of serviceas required by section3A.02,85.10subdivision 1, clause (1)or service in all or part of four regular legislative sessions and 85.11 who was not receiving a retirement allowance, each dependent child of the member or 85.12 former legislatorshall beis entitled to receive a survivor benefit in the following amount: 85.13 (1) for the first dependent child, a monthlyallowance which equalsbenefit equal to 85.14 25 percent of the monthly retirement allowance of the member of the legislature or the 85.15 former legislator computed as though the member or the former legislator had attained at 85.16 least the normal retirement age on the date of death and based upon the average monthly 85.17 salary as of the date of death or as of the date of termination, whicheveris applicable85.18 applies, and the member's allowable service or eight years,whichever is greater; 85.19 (2) for each additional dependent child, a monthlyallowance which equalsbenefit 85.20 equal to 12-1/2 percent of the monthly retirement allowance of the member or the former 85.21 legislator computed as provided inthe case of the first childclause (1);butand 85.22 (3) the total amount paid to the surviving spouse and to the dependent child or 85.23 childrenshallmay not exceed, in any one month, 100 percent of the monthly retirement 85.24 allowance of the member or of the former legislator computed as provided inthe case of85.25the first childclause (1). 85.26 (b) The augmentation provided in section 3A.02, subdivision 4, if applicable, 85.27shall be appliedapplies from the first day of the month next following the date of the 85.28 termination of the person from service as a member of the legislature to the month of 85.29 the death of the person. 85.30 (c) Upon the death of a former legislator who was receiving a retirement allowance, 85.31thea surviving dependent childshall beis entitled to the applicable percentage specified 85.32abovein paragraph (a), clause (1) or (2), whichever applies, of the amount of the 85.33 allowance which was paid to the former legislator for the month immediatelyprior to85.34 before the date of death of the former legislator. 86.1 (d) The payments for dependent childrenshallmust be made to the surviving spouse 86.2 or to the guardian of the estate of the dependent children, if there is one. 86.3 Sec. 22. Minnesota Statutes 2004, section 3A.04, subdivision 3, is amended to read: 86.4 Subd. 3. Payment. The survivingspouse'sspouse and dependentchildren'schild 86.5 or children survivor benefits payable under this sectionshall be paidare payable by the 86.6 director monthly in the same manner as retirement allowances are authorized to be paid 86.7 by this chapter. 86.8 Sec. 23. Minnesota Statutes 2004, section 3A.04, subdivision 4, is amended to read: 86.9 Subd. 4. Death refunds. (a) Upon the death of a member of the legislature or 86.10 of a former legislator who was not receiving a retirement allowance,without leaving 86.11 either a surviving spouse or a dependent child or dependent children, the last designated 86.12 beneficiary named on a form that was filed with the director before the death of the 86.13 legislator, or if no designation is filed, the estate of the member or the former legislator, 86.14 upon application,shall beis entitled to a refund. 86.15 (b) The refund is the amount of contributions credited to the person's account plus 86.16 interest as provided in section 3A.03, subdivision 2,clause (2)paragraph (a). 86.17 Sec. 24. Minnesota Statutes 2004, section 3A.04, is amended by adding a subdivision 86.18 to read: 86.19 Subd. 5. Appropriation. The survivor benefits and the death refunds authorized by 86.20 this section are appropriated to the director from the general fund when they are due and 86.21 payable. 86.22 Sec. 25. Minnesota Statutes 2004, section 3A.05, is amended to read: 86.23 3A.05 APPLICATION FOR SURVIVOR BENEFIT. 86.24 (a) Applications for survivor benefitspursuant tounder section 3A.04shallmust be 86.25 filed with the director by the surviving spouse and dependent child or children entitled 86.26 to benefitspursuant tounder section 3A.04, or by the guardian of the estate, if there is 86.27 one, of the dependent child or children. 86.28 (b) Survivor benefitsshallaccrue as of the first day of the month following the death 86.29 of the member of the legislature or former legislator and paymentsshallcommence as 86.30 of the first of the month next following the filing of the application, andshall beare 86.31 retroactive to the date the benefit accrues; provided, however, that no payment shall be87.1retroactive for more thanor the first of the month occurring 12 monthsprior tobefore the 87.2 month in which the application is filed with the director, whichever is earlier. 87.3 Sec. 26. Minnesota Statutes 2004, section 3A.07, is amended to read: 87.4 3A.07 APPLICATION. 87.5 (a) Except as provided in paragraph (b), this chapter applies to members of the 87.6 legislature in service after July 1, 1965, who otherwise meet the requirements of this 87.7 chapter. 87.8 (b) Members of the legislature who were elected for the first time after June 30, 87.9 1997, or members of the legislature who were elected before July 1, 1997, and who, after 87.10 July 1, 1998, elect not to be members of the plan established by this chapter are covered 87.11 by the unclassified employees retirement program governed by chapter 352D. 87.12 (c) The post-July 1, 1998, coverage election under paragraph (b) is irrevocable 87.13 and must be made on a form prescribed by the director. The second chance referendum 87.14 election under Laws 2002, chapter 392, article 15, also is irrevocable. 87.15 Sec. 27. Minnesota Statutes 2004, section 3A.10, subdivision 1, is amended to read: 87.16 Subdivision 1. Service credit for legislative term. (a) In the case of a member of 87.17 the house of representatives, one full term of officeshallmust be considered two full years 87.18 of service, notwithstanding the fact that the oath of officemay bewas taken on different 87.19 days each biennium. 87.20 (b) In the case of a member of the senate, one full term of officeshallmust be 87.21 considered four full years of service, notwithstanding the fact that the oath of officemay87.22bewas taken on different days at the start of each term. 87.23 (c) For purposes of this chapter, a legislative termshallmust be deemed to 87.24 commence on January1st1 and to end on December31st31. 87.25 Sec. 28. Minnesota Statutes 2004, section 3A.12, is amended to read: 87.26 3A.12 COVERAGE BY MORE THAN ONE RETIREMENT SYSTEM OR 87.27 ASSOCIATION. 87.28 Subdivision 1. Entitlement to annuity. (a) Any legislator who has beenan87.29employee covered bya member of a retirement plan listed in paragraph (b) is entitled, 87.30 when otherwise qualified, to a retirement allowance or annuity from each plan if the total 87.31 allowable service in all plans or in any two of these plans totals ten or more years. 87.32 (b) This section applies to any retirement plan or program administered by the 87.33 Minnesota State Retirement System, ora member ofany retirement plan administered 88.1 by the Public Employees Retirement Association, including the Public Employees 88.2 Retirement Association police and fire fund, or the Teachers Retirement Association, or 88.3 the Minneapolis employees retirementfundplan, or the State Patrol retirementfund88.4 plan, or any other public employee retirement system in the state of Minnesota having a 88.5 like provisionbut excluding all. 88.6 (c) This section does not apply to otherfundsretirement plans providing benefits for 88.7 police or firefighters, shall be entitled when qualified to an annuity from each fund if the88.8total allowable service for which the legislator has credit in all funds or in any two of these88.9funds totals ten or more years, provided. 88.10 (d) No portion of the allowable service upon which the retirement annuity from one 88.11fundplan is based is again used in the computation for benefits from anotherfundplan. 88.12 The annuity from eachfund shallplan must be determined by the appropriate provisions 88.13 of the law, except that the requirement that a person must haveat least tena minimum 88.14 number of years of allowable service in the respective system or associationshalldoes not 88.15 apply for the purposes of this sectionprovidedif the combined service in two or more 88.16 of thesefundsplans equals ten or more years. The augmentation of deferred annuities 88.17 provided in section 3A.02, subdivision 4,shall applyapplies to the annuities accruing 88.18hereunderunder this section. 88.19 Subd. 2. Refund repayment.AnyA former legislator who has received a refund as 88.20 provided in section 3A.03, subdivision 2, who is a currently contributing member of a 88.21 retirementfundplan specified in subdivision 1, paragraph (b), may repay the refund as 88.22 provided in section 3A.03, subdivision 2.AnyA member of the legislature who has 88.23 received a refund from any of thefundsretirement plans specified in subdivision 1,may 88.24 repay the refund to the respectivefundplan under such terms and conditions consistent 88.25 with the law governingsuch fundthe retirement plan if the law governingsuch fundthe 88.26 plan permits the repayment of refunds. If the total amount to be repaid, including principal 88.27 and interest exceeds $2,000, repayment maybe made in three equal installments over a 88.28 period of 18 months, with the interest accrued during the period of the repayment added 88.29 to the final installment. 88.30 Sec. 29. [352C.001] RETIREMENT PLAN; APPLICATION. 88.31 (a) The retirement plan applicable to a former constitutional officer who was first 88.32 elected to a constitutional office after July 1, 1967, and before July 1, 1997, is the 88.33 applicable portions of this chapter and chapter 356 in effect on the date on which the 88.34 person terminated active service as a constitutional officer. 89.1 (b) Nothing in this section or section 30 or 33, subdivision 2, is intended to reduce 89.2 the benefits of former constitutional officers or to adversely modify their eligibility for 89.3 benefits in effect as of the day before the effective date of this section. 89.4 Sec. 30. Minnesota Statutes 2004, section 352C.091, subdivision 1, is amended to read: 89.5 Subdivision 1. Administrative agency and standards.This chapter(a) The elected 89.6 officers retirement plan must be administered by the board of directors and the executive 89.7 director of the Minnesota State Retirement System. 89.8 (b) The elected state officers retirement plan must be administered consistent with 89.9this chapterthe applicable statutory provisions governing the plan and chapters 356 and 89.10 356A. 89.11 Sec. 31. Minnesota Statutes 2004, section 352C.10, is amended to read: 89.12 352C.10 BENEFIT ADJUSTMENTS. 89.13 Retirement allowances payable to retired constitutional officerspursuant to section89.14352C.031and surviving spouse benefits payablepursuant to section352C.04, shallmust 89.15 be adjusted in the same manner, at the same times and in the same amounts as are benefits 89.16 payable from the Minnesota postretirement investment fund to retirees of a participating 89.17 public pension fund. 89.18 Sec. 32. Minnesota Statutes 2004, section 352D.02, subdivision 1, is amended to read: 89.19 Subdivision 1. Coverage. (a) Employees enumerated in paragraph (c), clauses (2), 89.20 (3), (4), and (6) to (14), if they are in the unclassified service of the state or Metropolitan 89.21 Council and are eligible for coverage under the general state employees retirement plan 89.22 under chapter 352, are participants in the unclassified plan under this chapter unless the 89.23 employee gives notice to the executive director of the Minnesota State Retirement System 89.24 within one year following the commencement of employment in the unclassified service 89.25 that the employee desires coverage under the general state employees retirement plan. 89.26 For the purposes of this chapter, an employee who does not file notice with the executive 89.27 director is deemed to have exercised the option to participate in the unclassified plan. 89.28 (b) Persons referenced in paragraph (c),clauses (1) andclause (5), are participants 89.29 in the unclassified program under this chapter unless the personiswas eligible to elect 89.30 different coverage under section 3A.07or352C.011and, after July 1,1998, electselected 89.31 retirement coverage by the applicable alternative retirement plan. Persons referenced 89.32 in paragraph (c), clause (15), are participants in the unclassified program under this 90.1 chapter for judicial employment in excess of the service credit limit in section 490.121, 90.2 subdivision 22. 90.3 (c) Enumerated employees and referenced persons are: 90.4 (1) the governor, the lieutenant governor, the secretary of state, the state auditor, 90.5 and the attorney general; 90.6 (2) an employee in the Office of the Governor, Lieutenant Governor, Secretary 90.7 of State, State Auditor, Attorney General; 90.8 (3) an employee of the State Board of Investment; 90.9 (4) the head of a department, division, or agency created by statute in the unclassified 90.10 service, an acting department head subsequently appointed to the position, or an employee 90.11 enumerated in section 15A.0815 or 15A.083, subdivision 4; 90.12 (5) a member of the legislature; 90.13 (6) a full-time unclassified employee of the legislature or a commission or agency of 90.14 the legislature who is appointed without a limit on the duration of the employment or a 90.15 temporary legislative employee having shares in the supplemental retirement fund as a 90.16 result of former employment covered by this chapter, whether or not eligible for coverage 90.17 under the Minnesota State Retirement System; 90.18 (7) a person who is employed in a position established under section 43A.08, 90.19 subdivision 1, clause (3), or in a position authorized under a statute creating or establishing 90.20 a department or agency of the state, which is at the deputy or assistant head of department 90.21 or agency or director level; 90.22 (8) the regional administrator, or executive director of the Metropolitan Council, 90.23 general counsel, division directors, operations managers, and other positions as designated 90.24 by the council, all of which may not exceed 27 positions at the council and the chair; 90.25 (9) the executive director, associate executive director, and not to exceed nine 90.26 positions of the Higher Education Services Office in the unclassified service, as designated 90.27 by the Higher Education Services Office before January 1, 1992, or subsequently 90.28 redesignated with the approval of the board of directors of the Minnesota State Retirement 90.29 System, unless the person has elected coverage by the individual retirement account 90.30 plan under chapter 354B; 90.31 (10) the clerk of the appellate courts appointed under article VI, section 2, of the 90.32 Constitution of the state of Minnesota; 90.33 (11) the chief executive officers of correctional facilities operated by the Department 90.34 of Corrections and of hospitals and nursing homes operated by the Department of Human 90.35 Services; 90.36 (12) an employee whose principal employment is at the state ceremonial house; 91.1 (13) an employee of the Minnesota Educational Computing Corporation; 91.2 (14) an employee of the State Lottery who is covered by the managerial plan 91.3 established under section 43A.18, subdivision 3; and 91.4 (15) a judge who has exceeded the service credit limit in section 490.121, 91.5 subdivision 22. 91.6 Sec. 33. REPEALER; EFFECT ON BENEFIT COVERAGE. 91.7 Subdivision 1. Legislators retirement plan; repealed as obsolete. Minnesota 91.8 Statutes 2004, sections 3A.01, subdivisions 3, 4, 6a, and 7; 3A.02, subdivision 2; 3A.04, 91.9 subdivision 1a; and 3A.09, are repealed. 91.10 Subd. 2. Elective state officers retirement plan; repealed as obsolete. Minnesota 91.11 Statutes 2004, sections 352C.01; 352C.011; 352C.021, subdivisions 1, 2, 3, 4, 5, 6, and 91.12 7; 352C.031, subdivisions 1, 2, 4, 5, and 6; 352C.033; 352C.04; 352C.051; 352C.09; 91.13 and 352C.091, subdivisions 2 and 3, and Minnesota Statutes 2005 Supplement, section 91.14 352C.021, subdivision 1a, are repealed. 91.15 Sec. 34. EFFECTIVE DATE. 91.16 Sections 1 to 33 are effective July 1, 2006. 91.17 ARTICLE 12 91.18 JUDGES RETIREMENT PLAN AND 91.19 BOARD ON JUDICIAL STANDARDS RECODIFICATION 91.20 Section 1. Minnesota Statutes 2004, section 490.121, subdivision 1, is amended to read: 91.21 Subdivision 1. Scope. For purposes of sections 490.121 to 490.132, unless the 91.22 context clearly indicates otherwise, each of the terms defined in this sectionhavehas the 91.23meaningsmeaning giventhem unless the context clearly indicates otherwiseit. 91.24 Sec. 2. Minnesota Statutes 2004, section 490.121, is amended by adding a subdivision 91.25 to read: 91.26 Subd. 2a. Actuarial equivalent. "Actuarial equivalent" means the condition of one 91.27 annuity or benefit having an equal actuarial present value as another annuity or benefit, 91.28 determined as of a given date with each actuarial present value based on the appropriate 91.29 mortality table adopted by the board of directors of the Minnesota State Retirement 91.30 System based on the experience of the fund as recommended by the actuary retained 91.31 under section 356.214 and approved under section 356.215, subdivision 18, and using the 92.1 applicable preretirement or postretirement interest rate assumption specified in section 92.2 356.215, subdivision 8. 92.3 Sec. 3. Minnesota Statutes 2005 Supplement, section 490.121, subdivision 4, is 92.4 amended to read: 92.5 Subd. 4. Allowable service. (a) "Allowable service" means any calendar month, 92.6 subject to the service credit limit in subdivision 22, served as a judge at any time,orduring 92.7 which the judge received compensation for that service from the state, municipality, 92.8 or county, whichever applies, and for which the judge made any required member 92.9 contribution. It also includes any month served as a referee in probate for all referees in 92.10 probate who were in officeprior tobefore January 1, 1974. 92.11 (b) "Allowable service" also means a period of authorized leave of absence for 92.12 which the judge has made a payment in lieu of contributions, not in an amount in excess 92.13 of the service credit limit under subdivision 22. To obtain the service credit, the judge 92.14 shall pay an amount equal to the normal cost of the judges retirement plan on the date of 92.15 return from the leave of absence, as determined in the most recent actuarial report for the 92.16 plan filed with the Legislative Commission on Pensions and Retirement, multiplied by the 92.17 judge's average monthly salary rate during the authorized leave of absence and multiplied 92.18 by the number of months of the authorized leave of absence, plus annual compound 92.19 interest at the rate of 8.5 percent from the date of the termination of the leave to the date 92.20 on which payment is made. The payment must be made within one year of the date on 92.21 which the authorized leave of absence terminated. Service credit for an authorized leave 92.22 of absence is in addition to a uniformed service leave under section 490.1211. 92.23 (c) "Allowable service" does not mean service as a retired judge. 92.24 Sec. 4. Minnesota Statutes 2004, section 490.121, subdivision 6, is amended to read: 92.25 Subd. 6. Annuity. "Annuity" means the payments that are made each year to an 92.26 annuitant from the judges' retirement fund, pursuant to the provisions ofunder sections 92.27 490.121 to 490.132. 92.28 Sec. 5. Minnesota Statutes 2004, section 490.121, subdivision 7, is amended to read: 92.29 Subd. 7. Annuitant. "Annuitant" means a former judge, a surviving spouse, or a 92.30 dependent child who is entitled to and is receiving an annuity underthe provisions of92.31 sections 490.121 to 490.132. 93.1 Sec. 6. Minnesota Statutes 2004, section 490.121, is amended by adding a subdivision 93.2 to read: 93.3 Subd. 7a. Approved actuary. "Approved actuary" means an actuary as defined in 93.4 section 356.215, subdivision 1, paragraph (c). 93.5 Sec. 7. Minnesota Statutes 2004, section 490.121, is amended by adding a subdivision 93.6 to read: 93.7 Subd. 7b. Court. "Court" means any court of this state that is established by the 93.8 Minnesota Constitution. 93.9 Sec. 8. Minnesota Statutes 2004, section 490.121, is amended by adding a subdivision 93.10 to read: 93.11 Subd. 7c. Dependent surviving child. "Dependent surviving child" means any 93.12 natural or adopted child of a deceased judge who has not reached the age of 18 years, or 93.13 having reached the age of 18, is under age 22 and who is a full-time student throughout 93.14 the normal school year, is unmarried, and is actually dependent for more than one-half of 93.15 the child's support upon the judge for a period of at least 90 days before the judge's death. 93.16 It also includes any natural child of the judge who was born after the death of the judge. 93.17 Sec. 9. Minnesota Statutes 2004, section 490.121, subdivision 13, is amended to read: 93.18 Subd. 13. Disability. "Disability" means the permanent inability of a judge to 93.19 continue to perform the functions of judge by reason of a physical or mental impairment 93.20 resulting from a sickness or an injury. 93.21 Sec. 10. Minnesota Statutes 2004, section 490.121, subdivision 14, is amended to read: 93.22 Subd. 14. Disability retirement date. "Disability retirement date" means the last 93.23 day of the first month after the date on which the governor determines, upon receipt of the 93.24 voluntary application by the judge or otherwise, that a judge suffers from a disability. 93.25 Sec. 11. Minnesota Statutes 2004, section 490.121, subdivision 15, is amended to read: 93.26 Subd. 15. Disability retirement annuity. "Disability retirement annuity" means an 93.27 annuity to which a judge is entitled under section 490.124, subdivisions 1 and 4, after the 93.28 retirementfor reasonof the judge because of a disability. 93.29 Sec. 12. Minnesota Statutes 2004, section 490.121, is amended by adding a subdivision 93.30 to read: 94.1 Subd. 15a. Early retirement date. "Early retirement date" means the last day of 94.2 the month after a judge attains the age of 60 but before the judge reaches the normal 94.3 retirement date. 94.4 Sec. 13. Minnesota Statutes 2004, section 490.121, is amended by adding a subdivision 94.5 to read: 94.6 Subd. 15b. Early retirement annuity. "Early retirement annuity" means an annuity 94.7 to which a judge is entitled under section 490.124, subdivisions 1 and 3, upon retirement 94.8 by the judge at an early retirement date. 94.9 Sec. 14. Minnesota Statutes 2004, section 490.121, is amended by adding a subdivision 94.10 to read: 94.11 Subd. 21b. Judge. "Judge" means a judge or a justice of any court as defined 94.12 under subdivision 7b. 94.13 Sec. 15. Minnesota Statutes 2004, section 490.121, is amended by adding a subdivision 94.14 to read: 94.15 Subd. 21c. Judges' retirement fund; retirement fund; fund. "Judges' retirement 94.16 fund," "retirement fund," or "fund" means the fund created by section 490.123. 94.17 Sec. 16. Minnesota Statutes 2004, section 490.121, is amended by adding a subdivision 94.18 to read: 94.19 Subd. 21d. Mandatory retirement date. "Mandatory retirement date" means the 94.20 last day of the month in which a judge has attained 70 years of age. 94.21 Sec. 17. Minnesota Statutes 2004, section 490.121, is amended by adding a subdivision 94.22 to read: 94.23 Subd. 21e. Normal retirement annuity. Except as otherwise provided in sections 94.24 490.121 to 490.132, "normal retirement annuity" means an annuity to which a judge is 94.25 entitled under section 490.124, subdivision 1, upon retirement on or after the normal 94.26 retirement date of the judge. 94.27 Sec. 18. Minnesota Statutes 2004, section 490.121, is amended by adding a subdivision 94.28 to read: 94.29 Subd. 21f. Normal retirement date. "Normal retirement date" means the last day 94.30 of the month in which a judge attains the age of 65. 95.1 Sec. 19. Minnesota Statutes 2004, section 490.121, subdivision 22, is amended to read: 95.2 Subd. 22. Service credit limit. "Service credit limit" means the greater of: (1) 95.3 24 years of allowable service under this chapter490; or (2) for judges with allowable 95.4 service renderedprior tobefore July 1, 1980, the number of years of allowable service 95.5 under chapter 490, which, when multiplied by the percentage listed in section 356.315, 95.6 subdivision 7 or 8, whichever is applicable to each year of service, equals 76.8. 95.7 Sec. 20. Minnesota Statutes 2004, section 490.121, is amended by adding a subdivision 95.8 to read: 95.9 Subd. 23. Surviving spouse. "Surviving spouse" means the surviving legally 95.10 married spouse of a deceased judge. 95.11 Sec. 21. Minnesota Statutes 2004, section 490.121, is amended by adding a subdivision 95.12 to read: 95.13 Subd. 24. Survivor's annuity. "Survivor's annuity" means an annuity to which a 95.14 surviving spouse or dependent child is entitled under section 490.124, subdivision 9. 95.15 Sec. 22. Minnesota Statutes 2004, section 490.122, is amended to read: 95.16 490.122 ADMINISTRATION OF JUDGES' RETIREMENT. 95.17 Subdivision 1. Administration. The policy-making, management, and 95.18 administrative functions governing the operation of the judges' retirement fund and the 95.19 administration ofsections490.121to490.132this chapter are vested in the board of 95.20 directors and executive director of the Minnesota State Retirement Systemwith such. In 95.21 administering the plan and fund, the board and the director have the same duties, authority, 95.22 and responsibility as are provided in chapter 352. 95.23 Subd. 2. Inapplicability of certain laws. Except as otherwise specified, no 95.24 provision of chapter 352 applies to the judges' retirement fund or any judge. 95.25 Subd. 3. Fiduciary responsibility. Fiduciary activitiesofrelating to the uniform 95.26 judges' retirementand Survivors' Annuities for Judgesplan must be undertaken in a 95.27 manner consistent with chapter 356A. 95.28 Sec. 23. Minnesota Statutes 2004, section 490.123, subdivision 1, is amended to read: 95.29 Subdivision 1. Fund creation; revenue and authorized disbursements. (a) There 95.30 is created a special fund to be known as the "judges' retirement fund." 96.1 (b) The judges' retirement fund must be credited with all contributions,; all interest, 96.2 dividends, and other investment proceeds; and all other income authorized by this chapter 96.3 or other applicable law. 96.4 (c) From this fund there are appropriated the payments authorized by sections 96.5 490.121 to 490.132, in the amounts and at the times provided, including the necessary and 96.6 reasonable expenses of the Minnesota State Retirement System in administering the fund 96.7 and the transfers to the Minnesota postretirement investment fund. 96.8 Sec. 24. Minnesota Statutes 2004, section 490.123, subdivision 1a, is amended to read: 96.9 Subd. 1a. Member contribution rates. (a) A judge who is covered by the federal 96.10 Old Age, Survivors, Disability, and Health Insurance Program and whose service does not 96.11 exceed the service credit limit in section 490.121, subdivision 22, shall contribute to the 96.12 fund from each salary payment a sum equal to 8.00 percent of salary. 96.13 (b)A judge not so covered whose service does not exceed the service credit limit in96.14section490.121, subdivision 22, shall contribute to the fund from each salary payment a96.15sum equal to8.15percent of salary.96.16(c)The contribution under this subdivision is payable by salary deduction. 96.17 The deduction must be made by the state court administrator under section 352.04, 96.18 subdivisions 4, 5, and 8. 96.19 Sec. 25. Minnesota Statutes 2004, section 490.123, subdivision 1b, is amended to read: 96.20 Subd. 1b. Employer contribution rate. (a) The employer contribution rate to the 96.21 fund on behalf of a judge is 20.5 percent of salaryand. The employer obligation continues 96.22 after a judge exceeds the service credit limit in section 490.121, subdivision 22. 96.23 (b) The employer contribution must be paid by the state court administratorand. 96.24 The employer contribution is payable at the same time as member contributions are made 96.25 under subdivision 1a or as employee contributions are made to the unclassifiedplan in96.26 program governed by chapter 352D for judges whose service exceeds the limit in section 96.27 490.121, subdivision 22, are remitted. 96.28 Sec. 26. Minnesota Statutes 2004, section 490.123, subdivision 1c, is amended to read: 96.29 Subd. 1c. Additional employer contribution.In the event thatIf the employer 96.30 contribution under subdivision 1b and the assets of the judges retirement fund are 96.31 insufficient to meet reserve transfers to the Minnesota postretirement investment fund 96.32 or payments of survivor benefitsbefore July 1, 1993in a month, the necessary amount 96.33 is appropriated from the general fund to the executive director of the Minnesota State 97.1 Retirement System, upon the certification of the required amount by the executive director 97.2 to the commissioner of finance. 97.3 Sec. 27. Minnesota Statutes 2004, section 490.123, subdivision 2, is amended to read: 97.4 Subd. 2. Commissioner of finance. The commissioner of financeshall beis the ex 97.5 officio treasurer of the judges' retirement fundand the. The commissioner's general bond 97.6 to the stateshallmust besoconditionedasto cover all liability for acting as the treasurer 97.7 ofthisthe fund. Allmoneysmoney received by the commissionerpursuant tounder this 97.8 sectionshallmust be set aside in the state treasury to the credit of the judges' retirement 97.9 fund.The commissioner shall transmit monthly to the executive director described in97.10section352.03, subdivision 5, a detailed statement of all amounts so received and credited97.11to the fund. The commissioner shall pay out the fund only upon vouchers signed by said97.12executive director; provided that vouchers for investment may be signed by the secretary97.13of the State Board of Investment.97.14 Sec. 28. Minnesota Statutes 2004, section 490.123, subdivision 3, is amended to read: 97.15 Subd. 3. Investment. (a) The executive directorreferred to in subdivision 2of the 97.16 Minnesota State Retirement System shall, from time to time, certify to the State Board 97.17 of Investment such portions of the judges' retirement fund as in the director's judgment 97.18 may not be required for immediate use. 97.19 (b) Assets from the judges' retirement fundshallmust be transferred to the 97.20 Minnesota postretirement investment fund for retirement and disability benefits as 97.21 provided in sections11A.18 and 352.119. 97.22 (c) The State Board of Investment shall thereupon invest and reinvest sums so 97.23 transferred, or certified, in such securities as are duly authorized legal investments for such 97.24 purposes under section 11A.24 in compliance with sections 356A.04 and 356A.06. 97.25 Sec. 29. Minnesota Statutes 2004, section 490.124, subdivision 1, is amended to read: 97.26 Subdivision 1. Basic retirement annuity. (a) Except as qualified hereinafter from 97.27 and after the mandatory retirement date, the normal retirement date, the early retirement 97.28 date, or one year from the disability retirement date, as the case may be, a retiring judge 97.29 is eligible to receive a retirement annuityshall be payable to a retiring judgefrom the 97.30 judges' retirement fundin. 97.31 (b) The retirement annuity is an amount equal to: (1) the percent specified in section 97.32 356.315, subdivision 7, multiplied by the judge's final average compensation with that 97.33 result then multiplied by the number of years and fractions of years of allowable service 98.1 renderedprior tobefore July 1, 1980; plus (2) the percent specified in section 356.315, 98.2 subdivision 8, multiplied by the judge's final average compensation with that result then 98.3 multiplied by the number of years and fractions of years of allowable service rendered 98.4 after June 30, 1980. 98.5 (c) Service that exceeds the service credit limit in section 490.121, subdivision 22, 98.6 must be excluded in calculating the retirement annuity, but the compensation earned by 98.7 the judge during this period of judicial service must be used in determining a judge's final 98.8 average compensation and calculating the retirement annuity. 98.9 Sec. 30. Minnesota Statutes 2004, section 490.124, subdivision 2, is amended to read: 98.10 Subd. 2. Minimum service requirement; extension of term.No(a) Unless section 98.11 356.30 applies, a judgeshall beis not eligible for an annuity at the normal retirement date 98.12 or the early retirement date if the judge has less than five years of allowable service. 98.13 (b) A judge whoshall retireretires on or, as permitted under sections 490.121 to 98.14 490.132, after the judge's mandatory retirement date,shall beis entitled to a proportionate 98.15 annuity based upon the allowable service of the judge at the date of retirement. 98.16A judge who was in office on December 31, 1973, and thereafter and who, by the98.17date on which the current term expires, would not be eligible to retire with full benefits98.18under statutes in effect on December 31, 1973, may apply to the governor for an extension98.19to serve up to three additional years, stating the intention of the judge to retire upon98.20attaining eligibility to receive a retirement allowance. Notwithstanding section490.125,98.21the governor shall forthwith make a written order accepting the retirement application,98.22and extending the term of office of the judge for the period of time, not to exceed three98.23years, as may be necessary to make the judge eligible for retirement, solely for purposes98.24of computing benefits hereunder.98.25 Sec. 31. Minnesota Statutes 2004, section 490.124, subdivision 3, is amended to read: 98.26 Subd. 3. Early reduced retirement. The retirement annuityprovided byunder 98.27 subdivision 1 of any judgeelectingwho elects to retire at an early retirement dateshall98.28 must be reduced by one-half of one percent per month from the retirement date to the 98.29 normal retirement date. 98.30 Sec. 32. Minnesota Statutes 2004, section 490.124, subdivision 4, is amended to read: 98.31 Subd. 4. Disability retirement. (a) When the governor determines that a judge is 98.32 disabled under section 490.121, subdivision 13, notice of the governor's determination 99.1 must be sent to the judge, to the chief justice of the Supreme Court, to the state court 99.2 administrator, and to the executive director of the Minnesota State Retirement System. 99.3 (b) From and after disability retirement date, a disabled judgeshall beis entitled to 99.4 continuation of the judge's full salary payable by the judge's employer, as if the judge's 99.5 office were not vacated by retirement, for a period of up to one full year, but in no event 99.6 beyond the judge's mandatory retirement date. During this year the judgewillis entitled 99.7 to earn additional service credit in the judges' retirement plan. The salaryearned will be99.8 payable to a disabled judge is subject to retirement deductions andwillmust be included 99.9 in computing final average compensation of the judge.Thereafter99.10 (c) At the conclusion of the year of continued salary following a disability or 99.11 upon the judge's mandatory retirement date, whichever is earlier, the disabled judge is 99.12 entitled to a disability retirement annuity computed as provided in subdivision 1shall be99.13paid, provided that. If the computed retirement annuity is a smaller amount, the judge 99.14shallis entitled to receive a minimum annuity of 25 percent of the judge's final average 99.15 compensation. 99.16 Sec. 33. Minnesota Statutes 2004, section 490.124, subdivision 5, is amended to read: 99.17 Subd. 5. Deferred benefits. (a)AnyA benefit to which a judge is entitled under this 99.18 section may be deferred until the early or normal retirement date or later, notwithstanding 99.19 the termination ofsuchthe judge's service prior thereto. 99.20 (b) The retirement annuity of, or the survivor benefit payable on behalf of, a former 99.21 judge, who terminated service before July 1, 1997, which is not first payable until after 99.22 June 30, 1997, must be increased on an actuarial equivalent basis to reflect the change in 99.23 the postretirement interest rate actuarial assumption under section 356.215, subdivision 99.24 8, from five percent to six percent under a calculation procedure and tables adopted by 99.25 the board of directors of the Minnesota State Retirement System and approved by the 99.26 actuary retainedby the Legislative Commission on Pensions and Retirementunder section 99.27 356.214. 99.28 Sec. 34. Minnesota Statutes 2004, section 490.124, subdivision 8, is amended to read: 99.29 Subd. 8. Exclusive normal retirement benefits.Any(a) Except as provided in 99.30 paragraph (b), a judge who retires after December 31, 1973,shall beis entitled to a 99.31 retirement pension, retirement compensation or other retirement payment under statutes 99.32 applicable solely to judgespursuant tounder this section only, except that any such. 99.33 (b) A judge who was in officeprior tobefore January 1, 1974, who retires at or after 99.34 normal retirement age may then elect to receive during the judge's lifetime a normal 100.1 retirement annuity computed on the basis of retirement compensation provided for such 100.2 judge under statutes in effect on December 31, 1973, in lieu of the amount of normal 100.3 retirement annuity otherwise computed under sections 490.121 to 490.132. 100.4For purposes of this subdivision, the Conciliation Court of the city of Duluth shall be100.5deemed to have been a court of record by the statutes in effect on December 31, 1973.100.6 Sec. 35. Minnesota Statutes 2004, section 490.124, subdivision 9, is amended to read: 100.7 Subd. 9. Survivors' annuity. (a) Upon the death of a judgeprior tobefore 100.8 retirement, or upon the death of a person who has qualified for an annuity under this 100.9 section but who ceases to be a judgeprior tobefore retirement and who has not received a 100.10 refund of contributionspursuant tounder subdivision 12, a surviving spouse is entitled 100.11 to, or, if there be no surviving spouse, dependent children,shallare entitled to receive an 100.12 annuity, payable monthly, equal in total to 60 percent of the normal retirement annuity 100.13 which would have been payable to the judge or former judge had the date of death been 100.14 the normal retirement date, provided that the. 100.15 (b) The annuity payable to a surviving spouse or to dependent childrenshall receive100.16an annuityis an amount of not less than 25 percent of the judge's or the former judge's 100.17 final average compensation. 100.18If a judge, whose surviving spouse was not entitled to survivors benefits provided100.19solely for judges under statutes in effect prior to January 1, 1974, shall have died prior to100.20retirement on or after May 23, 1973 and before January 1, 1974, a surviving spouse and100.21dependent children, if any, shall be entitled to survivors benefits as provided hereunder as100.22if such judge had died on January 1, 1974.100.23 Sec. 36. Minnesota Statutes 2004, section 490.124, subdivision 10, is amended to read: 100.24 Subd. 10. Prior survivors' benefits; limitation. (a) Benefits providedpursuant100.25tounder Minnesota Statutes 2004, section 490.102, subdivision 6, or 490.1091, for a 100.26 surviving spouse of a retired judge, payable after the death of the judge,shall beare 100.27 limited to:100.28(a)spouses of judges who have retiredprior tobefore January 1, 1974; and. 100.29 (b)spouses of judges in office on December 31, 1973 and thereafter who elect100.30to continue contributions pursuant to section490.102, subdivision 6or490.109. The100.31contributions shall be in addition to contributions pursuant to section 490.123, and upon100.32retirement the judge may not elect to receive any optional annuity pursuant to subdivision100.3311 unless the judge and the spouse shall waive any benefits pursuant to section 490.102,100.34subdivision 6 or490.1091.101.1 No other judge in office on or after January 1, 1974,shall beis required to contribute 101.2pursuant tounder Minnesota Statutes 2004, section 490.102, subdivision 6, or 490.109. 101.3 Sec. 37. Minnesota Statutes 2004, section 490.124, subdivision 11, is amended to read: 101.4 Subd. 11. Limitation on survivor benefits; optional annuities. (a) No survivor 101.5 or death benefits may be paid in connection with the death of a judge who retires after 101.6 December 31, 1973, except as otherwise provided in sections 490.121 to 490.132. 101.7 (b) Except as provided in subdivision 10, a judge may elect to receive, instead of 101.8 the normal retirement annuity, an optional retirement annuity in the form of either (1) an 101.9 annuity payable for a period certain and for life after that period, (2) a joint and survivor 101.10 annuity without reinstatementin the event ofif the designated beneficiarypredeceasing101.11 predeceases the retired judge, or (3) a joint and survivor annuity with reinstatementin the101.12event ofif the designated beneficiarypredeceasingpredeceases the retired judge. 101.13 (c) An optional retirement annuity must be actuarially equivalent to a single-life 101.14 annuity with no term certain and must be established by the board of directors of the 101.15 Minnesota State Retirement System. In establishing these optional retirement annuity 101.16 forms, the board shall obtain the written recommendation of the actuary retainedby101.17the Legislative Commission on Pensions and Retirementunder section 356.214. The 101.18 recommendations must be retained as a part of the permanent records of the board. 101.19 Sec. 38. Minnesota Statutes 2004, section 490.124, subdivision 12, is amended to read: 101.20 Subd. 12. Refund. (a) A person who ceases to be a judgebut who does not qualify101.21for a retirement annuity or other benefit under section490.121is entitled to a refund in 101.22 an amount that is equal to all of the member's employee contributions to the judges' 101.23 retirement fund plus interest computed under section 352.22, subdivision 2. 101.24 (b) A refund of contributions under paragraph (a) terminates all service credits and 101.25 all rights and benefits of the judge and the judge's survivors under this chapter. 101.26 (c) A person who becomes a judge again after taking a refund under paragraph 101.27 (a) may reinstate the previously terminated allowable servicecreditscredit, rights, and 101.28 benefits by repaying the total amount of the previously received refund. The refund 101.29 repayment must include interest on the total amount previously received at an annual rate 101.30 of 8.5 percent, compounded annually, from the date on which the refund was received 101.31 until the date on which the refund is repaid. 101.32 Sec. 39. Minnesota Statutes 2004, section 490.124, subdivision 13, is amended to read: 102.1 Subd. 13. Death refund. If a judge who has not received other benefits under this 102.2 chapter dies and there are no survivor benefits payable under this chapter, a refund plus 102.3 interest as provided in subdivision 12 is payable to the last designated beneficiary named 102.4 on a form filed with the director before the death of the judge, or, if no designation is on 102.5 file,the refund is payableto the estate of the deceased judge. 102.6 Sec. 40. Minnesota Statutes 2004, section 490.125, subdivision 1, is amended to read: 102.7 Subdivision 1. Mandatory retirement age. Except as otherwise provided in 102.8 sections 490.121 to 490.132,eacha judge shallretireterminate active service as a judge 102.9 on the judge's mandatory retirement date. 102.10 Sec. 41. Minnesota Statutes 2004, section 490.125, subdivision 2, is amended to read: 102.11 Subd. 2. Exception.Except as provided by sections 490.025, subdivision 3,102.12490.102, subdivisions 3 and 3a and 490.12, subdivision 2,Any judge in office on 102.13 December 31, 1973 who shall have attained 70 years of age on or prior to such date shall 102.14 retire upon the expiration of the term of office of such judge. 102.15 Sec. 42. Minnesota Statutes 2004, section 490.126, as amended by Laws 2005, First 102.16 Special Session chapter 8, article 10, section 79, is amended to read: 102.17 490.126 PROCEDURES. 102.18 Subdivision 1. Compulsory retirement. Proceedings for compulsory retirement 102.19 of a judge, if necessary,shallmust be conducted in accordance with rules issued by the 102.20 Supreme Courtpursuant tounder section490.16490A.02. 102.21 Subd. 2. Vacancies. Any judge may make written application to the governor for 102.22 retirement. The governor thereupon shall direct the judge's retirement by written order 102.23 which, when filed in the Office of the Secretary of State,shall effecteffects a vacancy in 102.24 the office to be filled as provided by law. 102.25 Subd. 3. Application for annuity or refund. An application for an annuity or a 102.26 refund under sections 490.121 to 490.132 may be made by the potential annuitant or by 102.27 someone authorized to act for the potential annuitant. Every application for an annuity 102.28 or refund,withaccompanied by a proof of age and by a record of years of service 102.29 when required,shallmust be submitted to thegoverning bodyexecutive director of the 102.30 Minnesota State Retirement System in a form prescribed byitthe director. 102.31 Subd. 4. Manner of payment. Unless otherwise specifically provided by statute or 102.32 agreed upon by the annuitant and thegoverning bodyboard of directors of the Minnesota 102.33 state retirement system, annuities payable under sections 490.121 to 490.132shallmust 103.1 be paid in the manner and at the intervals as prescribed by the executive director of the 103.2 Minnesota state retirement system. The annuityshall ceaseceases with the last payment 103.3 received by the annuitant while living. 103.4 Subd. 5. Exemption from process; no assignment. The provisions of section 103.5 356.401 apply to the judges retirement plan. 103.6 Sec. 43. Minnesota Statutes 2004, section 490.133, is amended to read: 103.7 490.133 RETIREMENT; TRANSITION PROVISIONS; TRANSFER TO 103.8 COURT OF APPEALS. 103.9 (a) If a judge to whom or to whose survivors benefits would be payable under 103.10 Minnesota Statutes 2004, sections 490.101 to 490.12, is elected or appointed to the Court 103.11 of Appeals, that judge and the judge's survivors, shallcontinue to be eligible for benefits 103.12 under those sections and not under sections 490.121to 490.132. 103.13 (b) Inthatthe case of a judge to whom paragraph (a) applies, the service of the 103.14 judge in the Court of Appealsshallmust be added to the prior service as district judge, 103.15 probate judge, or judge of any other court of record in determining eligibility and the 103.16 compensation of a judge of the Court of Appeals at the time of the judge's death, disability, 103.17 or retirementshall beis the "compensation allotted to the office" for the purposes of 103.18 calculating benefit amounts. 103.19 (c) All other judges of the Court of Appeals and their survivorsshall beare subject 103.20 to the retirement and survivor's annuity provisions of sections 490.121 to 490.132. 103.21 Sec. 44. [490A.01] BOARD OF JUDICIAL STANDARDS; ESTABLISHMENT. 103.22 Subdivision 1. Establishment; composition. The Board on Judicial Standards is 103.23 established. The board is a continuation of the board established by Laws 1971, chapter 103.24 909, sections 1and 2, as amended. 103.25 Subd. 2. Composition; appointment. (a) The board consists of one judge of the 103.26 Court of Appeals, three trial court judges, two lawyers who have practiced law in the state 103.27 for at least ten years, and four citizens who are not judges, retired judges, or lawyers. 103.28 (b) All members must be appointed by the governor with the advice and consent of 103.29 the senate. Senate confirmation is not required for judicial members. 103.30 Subd. 3. Term maximum; membership termination. No member may serve more 103.31 than two full four-year terms or their equivalent. Membership terminates if a member 103.32 ceases to hold the position that qualified the member for appointment. 104.1 Subd. 4. Member terms; compensation; removal. The membership terms, 104.2 compensation, removal of members, and filling of vacancies on the board are as provided 104.3 in section 15.0575. 104.4 Subd. 5. Executive secretary appointment; salary. (a) The board shall appoint 104.5 the executive secretary. 104.6 (b) The salary of the executive secretary of the board is 85 percent of the maximum 104.7 salary provided for an administrative law judge under section 15A.083, subdivision 6a. 104.8 Sec. 45. [490A.02] JUDICIAL STANDARDS BOARD; POWERS. 104.9 Subdivision 1. Judicial disqualification. A judge is disqualified from acting as a 104.10 judge, without a loss of salary, while there is pending an indictment or any information 104.11 charging the judge with a crime that is punishable as a felony under either Minnesota law 104.12 or federal law, or while there is pending a recommendation to the Supreme Court by the 104.13 Board on Judicial Standards for the judge's removal or retirement. 104.14 Subd. 2. Judicial suspension. On receipt of a recommendation of the Board on 104.15 Judicial Standards or on its own motion, the Supreme Court may suspend a judge from 104.16 office without salary when the judge pleads guilty to or no contest to or is found guilty of 104.17 a crime that is punishable as a felony under either Minnesota law or federal law or any 104.18 other crime that involves moral turpitude. If the conviction is reversed, the suspension 104.19 terminates and the judge must be paid a salary for the period of suspension. If the judge 104.20 is suspended and the conviction becomes final, the Supreme Court shall remove the 104.21 judge from office. 104.22 Subd. 3. Judicial disability. On receipt of a recommendation of the Board on 104.23 Judicial Standards, the Supreme Court may retire a judge for a disability that the court 104.24 determines seriously interferes with the performance of the judge's duties and is or is 104.25 likely to become permanent, and censure or remove a judge for an action or inaction that 104.26 may constitute persistent failure to perform the judge's duties, incompetence in performing 104.27 the judge's duties, habitual intemperance, or conduct prejudicial to the administration of 104.28 justice that brings the judicial office into disrepute. 104.29 Subd. 4. Authority to reopen matters. The board is specifically empowered to 104.30 reopen any matter wherein any information or evidence was previously precluded by a 104.31 statute of limitations or by a previously existing provision of time limitation. 104.32 Subd. 5. Retirement status. (a) A judge who is retired by the Supreme Court must 104.33 be considered to have retired voluntarily. 105.1 (b) This section and section 490A.01 must not affect the right of a judge who 105.2 is suspended, retired, or removed hereunder from qualifying for any pension or other 105.3 retirement benefits to which the judge would otherwise be entitled by law to receive. 105.4 Subd. 6. Eligibility for judicial office; practice law. A judge removed by the 105.5 Supreme Court is ineligible for any future service in a judicial office. The question of 105.6 the right of a removed judge to practice law in this state must be referred to the proper 105.7 authority for review. 105.8 Subd. 7. Supreme court rules. The Supreme Court shall make rules to implement 105.9 this section. 105.10 Sec. 46. [490A.03] PERSONS AFFECTED. 105.11 The provisions of sections 490A.01 and 490A.02 apply to all judges, judicial 105.12 officers, and referees. 105.13 Sec. 47. Minnesota Statutes 2004, section 525.05, is amended to read: 105.14 525.05 JUDGE OR REFEREE; GROUNDS FOR DISQUALIFICATION. 105.15 The following shall be grounds for disqualification of any judge or referee from 105.16 acting in any matter: (1) That the judge or the judge's spouse or any of either of their kin 105.17 nearer than first cousin is interested as representative, heir, devisee, legatee, ward, or 105.18 creditor in the estate involved therein; (2) that it involves the validity or interpretation of a 105.19 will drawn or witnessed by the judge; (3) that the judge may be a necessary witness in the 105.20 matter; (4) that it involves a property right in respect to which the judge has been engaged 105.21 or is engaged as an attorney; or (5) that the judge was engaged in a joint enterprise for 105.22 profit with the decedent at the time of death or that the judge is then engaged in a joint 105.23 enterprise for profit with any person interested in the matter as representative, heir, 105.24 devisee, legatee, ward, or creditor. When grounds for disqualification exist, the judge may, 105.25 and upon proper petition of any person interested in the estate must, request another 105.26 judge or a judge who has retiredas provided in section490.12, subdivision 2,to act in 105.27 the judge's stead in the matter. 105.28 Sec. 48. REVISOR'S INSTRUCTION. 105.29 (a) In Minnesota Statutes, chapters 352, 352D, 355, 356,and 487, the revisor of 105.30 statutes shall change references to "sections 490.121 to 490.132" to "chapter 490." 105.31 (b) In Minnesota Statutes, chapter 490, the revisor of statutes shall change references 105.32 to "sections 490.121 to 490.132" to "this chapter." 106.1 (c) In Minnesota Statutes, sections 175A.01, subdivision 4, and 271.01, subdivision 106.2 1, the revisor of statutes shall change references to "sections 490.15 and 490.16" to 106.3 "sections 490A.01 and 490A.02." 106.4 Sec. 49. REPEALER. 106.5 Subdivision 1. Judicial retirement plans; repealed as obsolete. Minnesota 106.6 Statutes 2004, sections 490.021; 490.025; 490.101; 490.102; 490.103; 490.105; 490.106; 106.7 490.107; 490.108; 490.109; 490.1091; 490.12; 490.121, subdivisions 2, 3, 5, 8, 9, 10, 11, 106.8 12, 16, 17, 18, and 19; 490.124, subdivision 6; and 490.132, and Minnesota Statutes 2005 106.9 Supplement, section 490.121, subdivision 20, are repealed. 106.10 Subd. 2. Judicial standards board; repealed for relocation as Minnesota 106.11 Statutes, chapter 490A. Minnesota Statutes 2004, sections 490.15; 490.16; and 490.18, 106.12 are repealed. 106.13 Subd. 3. Uniform judicial retirement plan; no benefit diminishment intended; 106.14 procedure. Sections 1 to 49 are not intended to reduce or increase the entitlement of 106.15 active, deferred, or retired judges to retirement annuities or benefits as of July 1, 2006, as 106.16 reflected in the records of the Minnesota State Retirement System. If the executive director 106.17 of the Minnesota State Retirement System determines that any provision of sections 1 to 106.18 47 functions to modify, impair, or diminish the retirement annuity or benefit entitlement 106.19 of any judge that had accrued or earned before July 1, 2006, the executive director shall 106.20 certify that determination and a recommendation as to the required legislative correction 106.21 to the chair of the Legislative Commission on Pensions and Retirement, the chair of 106.22 the senate State and Local Government Operations Committee, the chair of the house 106.23 Governmental Operations and Veterans Affairs Policy Committee, and the executive 106.24 director of the Legislative Commission on Pensions and Retirement on or before the 106.25 October 1 next following that determination. 106.26 Sec. 50. EFFECTIVE DATE. 106.27 Sections 1 to 49 are effective July 1, 2006. 106.28 ARTICLE 13 106.29 JUDGES RETIREMENT PLAN AND RELATED CHANGES 106.30 Section 1. Minnesota Statutes 2004, section 3A.02, subdivision 5, is amended to read: 106.31 Subd. 5. Optional annuities. (a) The board of directors shall establish an optional 106.32 retirement annuity in the form of a joint and survivor annuity and an optional retirement 106.33 annuity in the form of a period certain and life thereafter. Except as provided in paragraph 107.1 (b), these optional annuity forms must be actuarially equivalent to the normal annuity 107.2 computed under this section, plus the actuarial value of any surviving spouse benefit 107.3 otherwise potentially payable at the time of retirement under section 3A.04, subdivision 1. 107.4 An individual selecting an optional annuity under this subdivision waives any rights to 107.5 surviving spouse benefits under section 3A.04, subdivision 1. 107.6 (b) If a retired legislator selects the joint and survivor annuity option, the retired 107.7 legislator must receive a normal single-life annuity if the designated optional annuity 107.8 beneficiary dies before the retired legislator and no reduction may be made in the annuity 107.9 to provide for restoration of the normal single-life annuity in the event of the death of the 107.10 designated optional annuity beneficiary. 107.11 (c) The surviving spouse of a legislator who has attained at least age6055 and who 107.12 dies while a member of the legislature may elect an optional joint and survivor annuity 107.13 under paragraph (a), in lieu of surviving spouse benefits under section 3A.04, subdivision 107.14 1. 107.15 Sec. 2. Minnesota Statutes 2004, section 3A.04, subdivision 1, is amended to read: 107.16 Subdivision 1. Surviving spouse. Upon the death of a member of the legislature 107.17 while serving as such member after June 30, 1973, or upon the death of a former member 107.18 of the legislature with at least the number of years of service as required by section 3A.02, 107.19 subdivision 1, clause (1), if section 3A.02, subdivision 5, paragraph (c), does not apply, 107.20 the surviving spouse shall be paid a survivor benefit in the amount of one-half of the 107.21 retirement allowance of the member of the legislature computed as though the member 107.22 were at least normal retirement age on the date of death and based upon allowable 107.23 service or eight years whichever is greater. The augmentation provided in section 3A.02, 107.24 subdivision 4, if applicable, shall be applied to the month of death. Upon the death of a 107.25 former legislator receiving a retirement allowance, the surviving spouse shall be entitled 107.26 to one-half of the amount of the allowance being paid to the legislator. Such benefit shall 107.27 be paid during the lifetime of the surviving spouse. 107.28 Sec. 3. Minnesota Statutes 2004, section 490.124, subdivision 9, is amended to read: 107.29 Subd. 9. Survivors' annuity. (a) Upon the death of a judge prior to retirement, or 107.30 upon the death of a person who has qualified for an annuity but who ceases to be a judge 107.31 prior to retirement and has not received a refund of contributions pursuant to subdivision 107.32 12, a surviving spouse or, if there be no surviving spouse, dependent children, shall 107.33 receive an annuity, payable monthly, equal to 60 percent of the normal retirement annuity 107.34 which would have been payable to the judge or former judge had the date of death been 108.1 the normal retirement date, provided that the surviving spouse or dependent children 108.2 shall receive an annuity of not less than 25 percent of the judge's or former judge's final 108.3 average compensation. 108.4 (b) The surviving spouse of a deceased judge may elect to receive, in lieu of the 108.5 annuity under paragraph (a), an annuity equal to the 100 percent joint and survivor annuity 108.6 which the judge or former judge could have qualified for on the date of death. 108.7 (c) If a judge, whose surviving spouse was not entitled to survivors benefits provided 108.8 solely for judges under statutes in effect prior to January 1, 1974, shall have died prior to 108.9 retirement on or after May 23, 1973, and before January 1, 1974, a surviving spouse and 108.10 dependent children, if any, shall be entitled to survivors benefits as provided hereunder as 108.11 if such judge had died on January 1, 1974. 108.12 Sec. 4. EFFECTIVE DATE. 108.13 (a) Sections 1 and 2 are effective the day following final enactment. 108.14 (b) Section 3 is effective January 1, 2006, and applies to the surviving spouse of 108.15 any judge who died on or after that date. 108.16 ARTICLE 14 108.17 VOLUNTEER FIRE RELIEF ASSOCIATION CHANGES 108.18 Section 1. Minnesota Statutes 2004, section 6.72, is amended to read: 108.19 6.72 STATE AUDITOR; REPORT TO LEGISLATURE ON VOLUNTEER 108.20 FIREFIGHTERS' RELIEF ASSOCIATIONS. 108.21 Subdivision 1. Reporting requirements.Commencing November 15, 1981, and108.22every two years thereafter(a) Annually, the state auditor shall report to the legislature on 108.23 the general financial condition of the various volunteer firefighters' relief associations in 108.24 the state as of December 31 of the year preceding the filing of the report. 108.25 (b) Two copies of the report shall be filed with the executive director of the 108.26 Legislative Commission on Pensions and Retirement and ten copies of the report shall be 108.27 filed with the director of the Legislative Reference Library. 108.28 Subd. 2. Contents of report. The reportshallmust includethe aggregate totalsfor 108.29 all volunteer firefighters' relief associations directly associated with the municipal fire 108.30 departments and all volunteer firefighters' relief associations subsidiary to independent 108.31 nonprofit firefighting corporations, theaggregate totals by the various benefit types and the108.32individual results for each volunteer firefighters' relief association listed by various benefit108.33types specified in subdivision 3. Thefollowingitems shall be reported in each instance: 108.34 (1) amount of accrued liability, 109.1 (2) amount of the assets of the special fund, 109.2 (3) amount of surplus or unfunded accrued liability, 109.3 (4) funding ratio, 109.4 (5) amount of annual accruing liability or normal cost, 109.5 (6) amount of annual required contribution to amortize the unfunded accrued 109.6 liability, 109.7 (7) amount of total required contribution, 109.8 (8) amount of fire state aid and supplemental fire state aid, 109.9 (9) amount of any municipal contributions, 109.10 (10) amount of administrative expenses, 109.11 (11) amount of service pension disbursements, 109.12 (12) amount of other retirement benefit disbursements, 109.13 (13) number of active members, 109.14 (14) number of retired members, 109.15 (15) number of deferred members, 109.16 (16) amount of fidelity bond of secretary and treasurer, 109.17 (17) amount of lump sum or monthly service pension accrued per year of service 109.18 credit, 109.19 (18) minimum retirement age required for commencement of a service pension, 109.20 (19) minimum years of active service credit required for commencement of service 109.21 pension, 109.22 (20) minimum years of active membership credit required for commencement of 109.23 service pension, and 109.24 (21) type and amount of other retirement benefits. 109.25 Subd. 3.Benefit categoriesReport format.For purposes of compilingThe report 109.26 required by this section, the various benefit types shall be as follows:109.27(1) volunteer firefighters' relief associations paying a lump sum service pension of:109.28(i) less than $50 per year of service,109.29(ii) $50 or more, but less than $100 per year of service,109.30(iii) $100 or more, but less than $200 per year of service,109.31(iv) $200 or more, but less than $300 per year of service,109.32(v) $300 or more per year of service;109.33(2) volunteer firefighters' relief associations paying a monthly benefit service109.34pension of:109.35(i) less than $2 per month per year of service,109.36(ii) $2 or more per month per year of service;110.1(3) volunteer firefighters' relief associations paying a defined contribution service110.2pension;110.3(4) volunteer firefighters' relief associations paying no service pensionmust be 110.4 organized in a manner that the state auditor determines to provide fair representation of 110.5 the condition of the various volunteer firefighters' relief associations. 110.6 Sec. 2. Minnesota Statutes 2004, section 424A.001, is amended by adding a 110.7 subdivision to read: 110.8 Subd. 10. Volunteer firefighter. "Volunteer firefighter" means a person who: 110.9 (1) was a member of the applicable fire department or the firefighting corporation 110.10 and a member of the relief association on July 1, 2006; or 110.11 (2) became a member of the applicable fire department or the firefighting corporation 110.12 and is eligible for membership in the applicable relief association after June 30, 2006, and 110.13 (i) is engaged in providing emergency response services or delivering fire education 110.14 or prevention services as a member of a municipal fire department, a joint powers entity 110.15 fire department, or an independent nonprofit firefighting corporation; 110.16 (ii) is trained in or is qualified to provide fire suppression duties or to provide fire 110.17 prevention duties under subdivision 8; and 110.18 (iii) meets any other minimum firefighter and service standards established by the 110.19 fire department or firefighting corporation or specified in the articles of incorporation or 110.20 bylaws of the relief association. 110.21 Sec. 3. Minnesota Statutes 2004, section 424A.02, subdivision 8b, is amended to read: 110.22 Subd. 8b. Transfer to individual retirement account. A relief association that is 110.23 a qualified pension plan under section 401(a) of the federal Internal Revenue Code, as 110.24 amended, and that provides a lump sum service pension, at the written request ofathe 110.25 applicable retiring member or, following the death of the active member, at the written 110.26 request of the deceased member's surviving spouse, may directly transfer the eligible 110.27 member's lump sum pension or the death, funeral, or survivor benefit attributable to the 110.28 member, whichever applies, to themember'srequesting person's individual retirement 110.29 account under section 408(a) of the federal Internal Revenue Code, as amended. 110.30 Sec. 4. Minnesota Statutes 2004, section 424A.05, subdivision 3, is amended to read: 110.31 Subd. 3. Authorized disbursements from the special fund. (a) Disbursements 110.32 from the special fund are not permitted to be made for any purpose other than one of 110.33 the following: 111.1 (1) for the payment of service pensions to retired members of the relief association if 111.2 authorized and paid pursuant to law and the bylaws governing the relief association; 111.3 (2) for the payment of temporary or permanent disability benefits to disabled 111.4 members of the relief association if authorized and paid pursuant to law and specified in 111.5 amount in the bylaws governing the relief association; 111.6 (3) for the payment of survivor benefits to surviving spouses and surviving children, 111.7 or if none, to designated beneficiaries, of deceased members of the relief association, 111.8 and if survivors and if no designated beneficiary, for the payment of a death benefit to 111.9 the estate of the deceased active firefighter, if authorized by and paid pursuant to law and 111.10 specified in amount in the bylaws governing the relief association; 111.11 (4) for the payment of any funeral benefits to the surviving spouse, or if no surviving 111.12 spouse, the estate, of the deceased member of the relief association if authorized by law 111.13 and specified in amount in the bylaws governing the relief association; 111.14 (5) for the payment of the fees, dues and assessments to the Minnesota State Fire 111.15 Department Association, to the Minnesota Area Relief Association Coalition, and to 111.16 the state Volunteer Firefighters Benefit Association in order to entitle relief association 111.17 members to membership in and the benefits of these associations or organizations; and 111.18 (6) for the payment of administrative expenses of the relief association as authorized 111.19 pursuant to section 69.80. 111.20 (b) For purposes of this chapter, a designated beneficiary must be a natural person. 111.21 Sec. 5. Minnesota Statutes 2004, section 424A.10, is amended to read: 111.22 424A.10 STATE SUPPLEMENTAL BENEFIT; VOLUNTEER 111.23 FIREFIGHTERS. 111.24 Subdivision 1.DefinitionDefinitions. For purposes of this section,: 111.25 (1) "qualified recipient" means an individual who receives a lump sum distribution of 111.26 pension or retirement benefits from a firefighters' relief association for service performed 111.27 as a volunteer firefighter; 111.28 (2) "survivor of a deceased active or deferred volunteer firefighter" means the legally 111.29 married spouse of a deceased volunteer firefighter, or, if none, the surviving minor child or 111.30 minor children of a deceased volunteer firefighter; 111.31 (3) "active volunteer firefighter" means a person who regularly renders fire 111.32 suppression service for a municipal fire department or an independent nonprofit firefighting 111.33 corporation, who has met the statutory and other requirements for relief association 111.34 membership, and who has been a fully qualified member of the relief association for 111.35 at least one month; and 112.1 (4) "deferred volunteer firefighter" means a former active volunteer firefighter who 112.2 terminated active firefighting service, has sufficient service credit from the applicable 112.3 relief association to be entitled to a service pension, but has not applied for or has not 112.4 received the service pension. 112.5 Subd. 2. Payment of supplemental benefit. (a) Upon the payment by a firefighters' 112.6 relief association of a lump sum distribution to a qualified recipient, the association must 112.7 pay a supplemental benefit to the qualified recipient. Notwithstanding any law to the 112.8 contrary, the relief association may pay the supplemental benefit out of its special fund. 112.9 The amount of this benefit equals ten percent of the regular lump sum distribution that 112.10 is paid on the basis of service as a volunteer firefighter. In no case may the amount of 112.11 the supplemental benefit exceed $1,000. 112.12 (b) Upon the payment by a relief association of a lump sum survivor benefit or 112.13 funeral benefit to a survivor of a deceased active volunteer firefighter or of a deceased 112.14 deferred volunteer firefighter, the association may pay a supplemental survivor benefit 112.15 to the survivor of the deceased active or deferred volunteer firefighter from the special 112.16 fund of the relief association if its articles of incorporation or bylaws so provide. The 112.17 amount of the supplemental survivor benefit is 20 percent of the survivor benefit or funeral 112.18 benefit, but not to exceed $2,000. 112.19 Subd. 3. State reimbursement. (a) By February 15 of each year, the treasurer of 112.20 the relief association shall apply to the commissioner of revenue for state reimbursement 112.21 of the amount of supplemental benefits paid under subdivision 2 during the preceding 112.22 calendar year. By March 15 the commissioner shall reimburse the relief association for the 112.23 amount of the supplemental benefits paid to qualified recipients. 112.24 (b) The commissioner of revenue shall prescribe the form of and supporting 112.25 information that must be supplied as part of the application for state reimbursement. 112.26 (c) The reimbursement payment must be deposited in the special fund of the relief 112.27 association. 112.28 (d) A sum sufficient to make the payments is appropriated from the general fund 112.29 to the commissioner of revenue. 112.30 Subd. 4. In lieu of income tax exclusion. (a) The supplemental benefit provided 112.31 by this section is in lieu of the state income tax exclusion for lump sum distributions of 112.32 retirement benefits paid to volunteer firefighters. 112.33 (b) If the law is modified to exclude or exempt volunteer firefighters' lump sum 112.34 distributions from state income taxation, the supplemental benefits under this section 112.35 may no longer be paid beginning with the first calendar year in which the exclusion or 113.1 exemption is effective. This subdivision does not apply to exemption of all or part of a 113.2 lump sum distribution under section 290.032 or 290.0802. 113.3 Subd. 5. Retroactive reimbursement in certain instances. A supplemental 113.4 survivor or funeral benefit may be paid by a relief association for the death of an active 113.5 volunteer firefighter or of a deferred volunteer firefighter that occurred on or after August 113.6 1, 2005, if the relief association articles of incorporation or bylaws so provide for a 113.7 supplemental survivor benefit and for retroactivity. 113.8 Sec. 6. RANDALL FIREMEN'S RELIEF ASSOCIATION; REVISED BENEFIT 113.9 FOR SPOUSE OF DECEASED FIREFIGHTER. 113.10 Subdivision 1. Application. This section applies to a surviving spouse of a person 113.11 who: 113.12 (1) was born on June 21, 1973; 113.13 (2) as a member of the Randall Firemen's Relief Association provided one year and 113.14 ten months of service to the associated fire department and had one year of service credit 113.15 in the association on the date of death; and 113.16 (3) was killed in a construction accident on October 28, 2005. 113.17 Subd. 2. Eligibility for benefit. Notwithstanding any law to the contrary, the 113.18 eligible person described in subdivision 1 is entitled to receive a survivor benefit from the 113.19 Randall Firemen's Relief Association benefit plan as revised in November 2005, not to 113.20 exceed the survivor benefit amount that would be applicable if the firefighter had lived 113.21 until a day after the effective date of the increased minimum surviving spouse benefit 113.22 approved by the Randall City Council in November 2005, consistent with Minnesota 113.23 Statutes, section 424A.02, subdivision 9. 113.24 Subd. 3. Restrictions. This section does not authorize payment of more than 113.25 a single survivor benefit to the eligible individual specified in subdivision 1. If a 113.26 survivor benefit has been paid to the eligible individual by the Randall Firemen's Relief 113.27 Association, this section authorizes payment to the eligible individual of the difference 113.28 between the amount previously paid and the amount payable under the Randall Firemen's 113.29 Relief Association benefit plan as revised in November 2005. 113.30 Sec. 7. EFFECTIVE DATE. 113.31 (a) Sections 1 and 4 are effective July 1, 2006. 113.32 (b) Section 2 is effective January 1, 2008. 113.33 (c) Section 3 is effective the day following final enactment and applies retroactively 113.34 to January 1, 2006. 114.1 (d) Section 6 is effective the day after the date on which the Randall City Council and 114.2 the chief clerical office of the city of Randall complete, in a timely manner, compliance 114.3 with Minnesota Statutes, section 645.021, subdivisions 2 and 3. 114.4 ARTICLE 15 114.5 ONE PERSON AND SMALL GROUP RETIREMENT PROVISIONS 114.6 Section 1. CORRECTING PLAN COVERAGE ERROR BY PROVIDING A 114.7 PUBLIC EMPLOYEES POLICE AND FIRE RETIREMENT PLAN ANNUITY. 114.8 Subdivision 1. Purpose. The annuity provided under this section is intended 114.9 to compensate for an error in pension coverage. Due to the employment specified in 114.10 subdivision 2, an eligible individual specified in subdivision 2 should have become a 114.11 member of the public employees police and fire retirement plan but was incorrectly placed 114.12 in the St. Paul Fire Department Relief Association retirement plan. 114.13 Subd. 2. Eligibility. (a) An eligible individual under paragraph (b) is authorized to 114.14 receive the benefit specified in subdivision 4, upon satisfying all requirements specified 114.15 in this section. 114.16 (b) An eligible individual is an individual who: 114.17 (1) was born on April 24, 1951; 114.18 (2) was hired as a St. Paul firefighter with a certified appointment date of June 13, 114.19 1980, but first earned salary as a St. Paul firefighter on June 30, 1980; 114.20 (3) was erroneously placed in the St. Paul Fire Department Relief Association 114.21 retirement plan due to that employment; and 114.22 (4) terminated from the St. Paul Fire Department employment on January 3, 1990. 114.23 Subd. 3. Additional employee contribution or refund amount. (a) If a valid 114.24 annuity application is made under subdivision 7, the executive director of the Public 114.25 Employees Retirement Association shall determine the employee contributions that 114.26 an eligible individual under subdivision 2 would have made to the public employees 114.27 police and fire retirement plan fund, if coverage had been provided by that plan for 114.28 the employment period specified in subdivision 2, and from each of these contribution 114.29 amounts the employee contribution actually made by the eligible individual to the St. Paul 114.30 Fire Department Relief Association for the same payroll period shall be subtracted. These 114.31 differences, plus 8.5 percent annual compound interest from the date the public employees 114.32 police and fire retirement plan contribution would have been made until the first of the 114.33 month after a valid annuity application has been received, shall be aggregated. 114.34 (b) If the aggregate amount under paragraph (a) is a positive number, the total 114.35 amount shall be paid in a lump sum to the executive director of the Public Employees 115.1 Retirement Association. The executive director shall notify the eligible individual 115.2 in writing of the required amount. To be eligible for the current or deferred annuity 115.3 specified in subdivision 4, the eligible individual must pay the amount required under this 115.4 paragraph, if applicable, within three months of the executive director's notification. 115.5 (c) If the aggregate amount computed under paragraph (a) is a negative amount, the 115.6 value of the contributions that the eligible employee made to the local relief association 115.7 exceeded the value of employee contributions that would have been made to the public 115.8 employees police and fire fund. This aggregate negative amount shall be multiplied by 115.9 minus one and the resulting amount shall be refunded to the eligible individual by the city 115.10 of St. Paul. The executive director shall inform the eligible individual of the refund 115.11 amount in writing, and shall notify the city of St. Paul. The city of St. Paul shall pay this 115.12 amount to the eligible individual within 30 days of notification. 115.13 Subd. 4. Benefit amount. The eligible individual is entitled to apply for an annuity, 115.14 as further specified in subdivision 7, and to receive a public employees police and fire 115.15 retirement plan retirement annuity computed based on the version of Minnesota Statutes, 115.16 chapter 353, in effect on the date that the eligible individual terminated from St. Paul Fire 115.17 Department Relief Association employment. 115.18 Subd. 5. Calculation of reserves; payment by city of St. Paul. The executive 115.19 director of the Public Employees Retirement Association shall compute the full required 115.20 reserves for the annuity determined under subdivision 4 using all applicable actuarial 115.21 assumptions for the public employees police and fire retirement plan. This amount, after 115.22 deducting the amount received by the Public Employees Retirement Association under 115.23 subdivision 3, paragraph (b), if applicable, is to be paid to the executive director of the 115.24 Public Employees Retirement Association in a lump sum by the city of St. Paul. The 115.25 executive director shall notify the chief administrative officer of the city of St. Paul in 115.26 writing of the payment amount required under this subdivision. This notification shall be 115.27 made by the executive director within one month following the receipt by the executive 115.28 director of any amount required under subdivision 3, paragraph (b), if applicable. The 115.29 city of St. Paul must pay the amount required under this subdivision within 30 days after 115.30 receipt of the executive director's notification. 115.31 Subd. 6. Actions upon failure to pay. If the city of St. Paul fails to transmit the 115.32 amount required under subdivision 5 in a timely manner, or fails to make a timely refund 115.33 under subdivision 3, paragraph (c), if applicable, the executive director of the Public 115.34 Employees Retirement Association shall notify the commissioner of finance of this 115.35 nonpayment or nonpayments, and the commissioner of finance shall deduct the applicable 115.36 amount or amounts from any state aid otherwise payable to the city and transmit the 116.1 amount required under subdivision 5 to the executive director for deposit in the public 116.2 employees police and fire fund. If the city of St. Paul fails to make a payment required 116.3 under subdivision 3, paragraph (c), if applicable, the commissioner of finance will make 116.4 any necessary refund, with reimbursement through the withholding of aid, as stated in 116.5 this subdivision. 116.6 Subd. 7. Annuity application. An eligible individual described in subdivision 2 116.7 shall apply in writing on forms provided by the Public Employees Retirement Association 116.8 for the annuity provided by this section. The application must be made before January 1, 116.9 2007, and must include all necessary documentation of the applicability of this section and 116.10 any other relevant information which the executive director may require. 116.11 Subd. 8. Service credit grant. Service credit in the public employees police and 116.12 fire retirement plan for the eligible individual's employment period as a St. Paul firefighter 116.13 shall be granted following the filing of a valid application for an annuity under subdivision 116.14 7 and receipt by the executive director of any amount applicable under subdivision 3, 116.15 paragraph (b). 116.16 Sec. 2. PERA-P&F; PURCHASE OF SERVICE CREDIT. 116.17 Subdivision 1. Eligibility. An eligible person may purchase allowable service credit 116.18 from the public employees police and fire plan for the period from November 23, 1984, 116.19 to March 16, 1985. An eligible person is a person who: 116.20 (1) is currently a member of the public employees police and fire plan; and 116.21 (2) was employed by the city of Faribault as a firefighter since November 23, 1984, 116.22 but was not covered by the public employees police and fire plan from November 23, 116.23 1984, until March 16, 1985, despite the provided firefighting service. 116.24 Subd. 2. Purchase requirements. An eligible person must apply to the executive 116.25 director of the Public Employees Retirement Association to make the service credit 116.26 purchase authorized in this section. The application must be in writing and must contain 116.27 documentation required by the executive director. 116.28 Subd. 3. Payment. If an eligible person meets the requirements to purchase service 116.29 credit under this section, the public employees police and fire fund must be paid the 116.30 amount determined under Minnesota Statutes, section 356.551. 116.31 Subd. 4. Additional requirements. (a) In addition to the one-year payment 116.32 limitation in Minnesota Statutes, section 356.551, the authority provided by this section 116.33 is voided if the amount required under subdivision 3, from an eligible person is not 116.34 paid to the executive director of the Public Employees Retirement Association prior to 116.35 termination of service by the eligible person. 117.1 (b) Notwithstanding Minnesota Statutes, section 356.551, allowable service credit in 117.2 the public employees police and fire plan for the eligible person must be granted upon 117.3 receipt by the executive director of payment from the eligible person of the amount 117.4 required under subdivision 3. 117.5 (c) If the city of Faribault fails to pay the amount required under subdivision 3, within 117.6 30 days of notification from the executive director of the amount required, the executive 117.7 director shall inform the commissioner of the Department of Finance of the amount of the 117.8 deficiency, and the amount must be deducted from any subsequent state aid to the city. 117.9 Sec. 3. TEACHERS RETIREMENT ASSOCIATION; PURCHASE OF PRIOR 117.10 SERVICE CREDIT FOR MONTANA TEACHING SERVICE. 117.11 (a) An eligible person described in paragraph (b) is authorized to purchase service 117.12 credit, in accordance with Minnesota Statutes, section 356.551, from the Teachers 117.13 Retirement Association coordinated program for a period of teaching service in Montana 117.14 public schools, not to exceed ten years. 117.15 (b) An eligible person is a person who: 117.16 (1) is currently an active member of the Teachers Retirement Association for 117.17 teaching service at the Northfield Middle School in Independent School District No. 659; 117.18 (2) was born on January 1, 1959; and 117.19 (3) was a teacher at the Pine Hills School in Miles City, Montana, for 11.2 years with 117.20 coverage for that service by the Montana Teachers Retirement System. 117.21 (c) An eligible person described in paragraph (b) is authorized to apply with the 117.22 executive director of the Teachers Retirement Association to make the service credit 117.23 purchase under this section. The application must be in writing and must include all 117.24 necessary documentation of the applicability of this section, and any other relevant 117.25 information which the executive director may require. The payment required under this 117.26 section to receive the service credit must be received by the executive director of the 117.27 Teachers Retirement Association before December 31, 2006, and before the eligible 117.28 person's retirement or termination from service. The service credit authorized by this 117.29 section shall be granted upon receipt of the service credit purchase payment by the 117.30 executive director. 117.31 (d) The authority under this section is voided if an eligible person under paragraph 117.32 (b) retains a right to an annuity from the Montana Teachers Retirement System. 117.33 Sec. 4. PERA-GENERAL; PUBLIC DEFENDER SERVICE CREDIT 117.34 PURCHASE. 118.1 (a) An eligible person described in paragraph (b) may purchase allowable service 118.2 credit in the general employees retirement plan of the Public Employees Retirement 118.3 Association for the period described in paragraph (c) by making the payment required 118.4 under paragraph (d). 118.5 (b) An eligible person is a person who: 118.6 (1) was born on October 7, 1949; 118.7 (2) was employed as a public defender by the Tenth Judicial District on July 1, 1987; 118.8 (3) was also retained as an independent contractor by Washington County as a 118.9 public defender as of June 12, 1989; 118.10 (4) was determined to have had deductions related to the Tenth Judicial District 118.11 employment for the general employees retirement plan of the Public Employees 118.12 Retirement Association taken in error and had those deductions returned on January 7, 118.13 1991; and 118.14 (5) is currently a member of the general state employees retirement plan of the 118.15 Minnesota State Retirement System. 118.16 (c) The period of allowable service credit available for purchase under this section 118.17 is 21 months. 118.18 (d) The prior service credit purchase payment must be calculated under Minnesota 118.19 Statutes, section 356.551. 118.20 Sec. 5. PUBLIC EMPLOYEES POLICE AND FIRE PLAN; EMPLOYEE 118.21 ORGANIZATION BUSINESS AGENT LEAVE OF ABSENCE SERVICE CREDIT 118.22 PURCHASE. 118.23 (a) An eligible person described in paragraph (b) is entitled to purchase allowable 118.24 service credit in the public employees police and fire retirement plan for the period 118.25 described in paragraph (c) by making the payment required under paragraph (d). 118.26 (b) An eligible person is a person who: 118.27 (1) was born on January 3, 1959; 118.28 (2) was employed by the Minnetonka Police Department before 1995; 118.29 (3) was granted a leave of absence from employment by the Minnetonka Police 118.30 Department in 1995 to serve as the business agent for an employee labor organization; and 118.31 (4) returned to employment with the Minnetonka Police Department from the leave 118.32 of absence in 1997. 118.33 (c) The period of service credit available for purchase under this section is one year. 118.34 (d) The prior service credit purchase payment must be calculated under Minnesota 118.35 Statutes, section 356.551. 119.1 Sec. 6. PERA-GENERAL; PUBLIC GOLF COURSE EMPLOYEE SERVICE 119.2 CREDIT PURCHASE. 119.3 (a) An eligible person described in paragraph (b) is entitled to purchase allowable 119.4 service credit from the general employees retirement plan of the Public Employees 119.5 Retirement Association for the period of employment by the city of Anoka at the 119.6 Greenhaven Golf Course between March 1, 1984, and December 28, 1997, that qualified as 119.7 employment by a public employee under Minnesota Statutes, section 353.01, subdivisions 119.8 2, 2a, and 2b, that was not previously credited by the retirement plan. 119.9 (b) An eligible person is a person who: 119.10 (1) was born on July 18, 1954; 119.11 (2) was first employed by the city of Anoka at the Greenhaven Golf Course as a 119.12 part-time employee in 1978; 119.13 (3) was incorrectly characterized as an independent contractor by the city of Anoka 119.14 during the period 1982-1998, although the person was provided health insurance and other 119.15 employment recognition during portions of that period; and 119.16 (4) became a member of the general employees retirement plan of the Public 119.17 Employees Retirement Association in 1998. 119.18 (c) The eligible person described in paragraph (b) must apply with the executive 119.19 director of the Public Employees Retirement Association to make the service credit 119.20 purchase under this section. The application must be in writing and must include all 119.21 necessary documentation of the applicability of this section and any other relevant 119.22 information that the executive director may require. 119.23 (d) Allowable service credit under Minnesota Statutes, section 353.01, subdivision 119.24 16, must be granted by the general employees retirement plan of the Public Employees 119.25 Retirement Association to the account of the eligible person upon the receipt of the prior 119.26 service credit purchase payment amount required under Minnesota Statutes, section 119.27 356.551. 119.28 (e) Of the prior service credit purchase payment amount under Minnesota Statutes, 119.29 section 356.551, the eligible person must pay an amount equal to the employee 119.30 contribution rate or rates in effect during the uncredited employment period applied to the 119.31 actual salary rates in effect during the period, plus annual compound interest at the rate of 119.32 8.5 percent from the date the member contribution payment should have been made if 119.33 made in a timely fashion until the date on which the contribution is actually made. If the 119.34 equivalent member contribution payment, plus interest, is made, the city of Anoka shall 119.35 pay the balance of the total prior service credit purchase payment amount under Minnesota 120.1 Statutes, section 356.551, within 60 days of notification by the executive director of the 120.2 Public Employees Retirement Association of the member contribution equivalent payment. 120.3 (f) Authority for an eligible person to make a prior service credit purchase under this 120.4 section expires on June 30, 2007. 120.5 (g) If the city of Anoka fails to pay its portion of the prior service credit purchase 120.6 payment amount under paragraph (e), the executive director of the Public Employees 120.7 Retirement Association must notify the commissioners of finance and revenue of that fact 120.8 and the commissioners shall order the deduction of the required payment amount from 120.9 the next subsequent payment of any state aid to the city of Anoka and be transmitted 120.10 to the general employees retirement fund. 120.11 Sec. 7. TEACHERS RETIREMENT ASSOCIATION; REFUND REPAYMENT 120.12 OF CERTAIN TRANSFERRED AMOUNTS. 120.13 (a) Notwithstanding Minnesota Statutes, section 352D.12 or 354.50, or any other 120.14 provision to the contrary, an eligible person described in paragraph (b) may repay to 120.15 the Teachers Retirement Association the amount specified in paragraph (c) and thereby 120.16 restore the person's prior allowable and formula service credit under Minnesota Statutes, 120.17 chapter 354. 120.18 (b) An eligible person is a person who: 120.19 (1) was born on July 17, 1947; 120.20 (2) taught for ten years with Independent School District No. 191, Burnsville; 120.21 (3) was employed by the Minnesota Educational Computing Corporation in 1984 120.22 and 1985; 120.23 (4) transferred accumulated employee contributions and an equal employer 120.24 contribution amount from the Teachers Retirement Association to the unclassified state 120.25 employees retirement program of the Minnesota State Retirement System in 1985; and 120.26 (5) after employment in the private sector in educational computing, returned 120.27 to teaching employed by Independent School District No. 196, Rosemount-Apple 120.28 Valley-Eagan. 120.29 (c) The amount of the refund to be repaid to the Teachers Retirement Association is 120.30 an amount equal to the amount transferred from the Teachers Retirement Association to 120.31 the unclassified state employees retirement program of the Minnesota State Retirement 120.32 System under Laws 1984, chapter 619, section 6, subdivision 3, plus compound annual 120.33 interest at the rate of 8.5 percent from the date on which the amount was transferred from 120.34 the Teachers Retirement Association to the date on which the transfer amount is repaid. 121.1 (d) Upon the repayment of the transfer amount, plus interest, the allowable and 121.2 formula service credit in the Teachers Retirement Association under Minnesota Statutes, 121.3 section 354.05, subdivisions 13 and 25, related to the transferred amount in 1985, must 121.4 be restored to the eligible person. 121.5 (e) The transfer amount repayment, plus interest, may be made through an institution 121.6 to institution transfer. 121.7 (f) This provision expires on July 1, 2007. 121.8 Sec. 8. TEACHERS RETIREMENT ASSOCIATION; PROSPECTIVE 121.9 TEACHERS RETIREMENT ASSOCIATION COVERAGE; PURCHASE OF 121.10 PAST SERVICE CREDIT. 121.11 (a) An eligible person described in paragraph (b) is authorized to become a 121.12 coordinated member of the Teachers Retirement Association, and to purchase service and 121.13 salary credit in the Teachers Retirement Association coordinated plan retroactive from 121.14 January 1, 1995, upon making an election under paragraph (c) and upon making the 121.15 required payment under paragraph (d). 121.16 (b) An eligible person is a person who: 121.17 (1) was born on September 10, 1958; 121.18 (2) has prior employment covered by the Public Employees Retirement Association 121.19 general plan; 121.20 (3) is the director of student support services at North Hennepin Community College; 121.21 (4) began working at North Hennepin Community College on February 3, 1992, with 121.22 coverage for that service by the higher education individual retirement account plan; and 121.23 (5) was not offered an election of Teachers Retirement Association coverage, as 121.24 required under Laws 1994, chapter 508, article 1, section 10. 121.25 (c)(1) To be eligible for coverage by the Teachers Retirement Association, an 121.26 eligible person must submit a written application to the executive director of the Teachers 121.27 Retirement Association on a form provided by the Teachers Retirement Association. The 121.28 application must include all documentation of the applicability of this section and any 121.29 other relevant information that the executive director may require. Following receipt by 121.30 the executive director of the written application specified in this paragraph and receipt 121.31 of the payment specified in paragraph (d): 121.32 (i) Teachers Retirement Association plan membership commences as of July 1, 2006; 121.33 (ii) individual retirement account plan coverage terminates for the applicable 121.34 eligible person; and 122.1 (iii) past salary and service credit is granted from January 1, 1995, as specified 122.2 in this section. 122.3 (2) The authority granted by this section is voided if the applicable eligible 122.4 individual terminates from Minnesota State Colleges and Universities system employment 122.5 prior to receipt by the executive director of the Teachers Retirement Association of the 122.6 application specified in this paragraph and the amount specified in paragraph (d). 122.7 (d) To receive the treatment specified in this section, an eligible person shall make 122.8 payment of the amount determined under Minnesota Statutes, section 356.551, to the 122.9 executive director of the Teachers Retirement Association for the period from January 1, 122.10 1995. The individual is authorized to cover the payment using assets transferred from the 122.11 eligible individual's individual retirement account plan account, or from any other sources 122.12 permitted by law. The total amount to be paid under this paragraph shall be determined 122.13 by the executive director of the Teachers Retirement Association. Written notification of 122.14 the amount required under this paragraph should be transmitted to the eligible individual. 122.15 The Teachers Retirement Association is authorized to utilize the actuary jointly retained 122.16 under Minnesota Statutes, section 356.214, to make the computations required under this 122.17 paragraph. The Teachers Retirement Association shall allocate the amount received under 122.18 this paragraph between the Teachers Retirement Association and the Public Employees 122.19 Retirement Association, or other applicable pension fund, as indicated by the full actuarial 122.20 cost determination required under this paragraph. 122.21 Sec. 9. TRA; PURCHASE OF UNCREDITED MEDICAL LEAVE. 122.22 (a) An eligible person described in paragraph (b) is entitled to purchase allowable 122.23 and formula service credit in the Teachers Retirement Association for any period of 122.24 medical leave that was not properly reported to the Teachers Retirement Association by 122.25 Independent School District No. 197, West St. Paul, and consequently not previously 122.26 audited under Minnesota Statutes, section 354.05, subdivision 13, upon the making of the 122.27 payments required under paragraphs (c) and (d). 122.28 (b) An eligible person is a person who: 122.29 (1) was born on August 24, 1948; 122.30 (2) was initially employed as a teacher in September 1970; 122.31 (3) is employed by Independent School District No. 197, West St. Paul; and 122.32 (4) took a medical leave during the 2003-2004 school year that was not reported to 122.33 the Teachers Retirement Association in a timely fashion. 123.1 (c) The eligible person shall make a payment equal to five percent of the person's 123.2 2004-2005 school year salary, plus compound interest at the rate of 8.5 percent per annum 123.3 from July 1, 2004, to the date on which the payment is made. 123.4 (d) Upon the payment under paragraph (c), the executive director of the Teachers 123.5 Retirement Association shall, within 30 days, notify Independent School District No. 197, 123.6 West St. Paul, of its obligation under this section. The school district's obligation is the 123.7 balance of the prior service credit purchase payment amount determined under Minnesota 123.8 Statutes, section 356.551, that exceeds the payment under paragraph (c). If the school 123.9 district fails to pay its obligation within 60 days following notification, the executive 123.10 director shall certify that failure and the amount due to the commissioner of finance, who 123.11 shall deduct the amount due from any subsequent state aid payable to Independent School 123.12 District No. 197, West St. Paul, plus interest at the rate of 0.71 percent per month from the 123.13 date of the payment under paragraph (c) to the date of the actual payment. 123.14 (e) This provision expires on July 1, 2008. 123.15 Sec. 10. INTERNATIONAL FALLS AND RED WING SCHOOL STRIKE 123.16 SERVICE CREDIT PROVISION. 123.17 Notwithstanding any provision of Minnesota Statutes, section 356.195, a teacher 123.18 who was covered by the Teachers Retirement Association and who was on strike 123.19 between September 20, 2002, and October 14, 2002, if the teacher was employed by 123.20 the International Falls public schools or was on strike between October 22, 2002, and 123.21 November 14, 2002, if the teacher was employed by the Red Wing public schools, is 123.22 authorized to make a payment to the Teachers Retirement Association and receive 123.23 allowable and formula service credit under Minnesota Statutes, section 354.05, 123.24 subdivisions 13 and 25, for the applicable strike period under Minnesota Statutes, section 123.25 356.195, subdivision 2, paragraph (c). 123.26 Sec. 11. PUBLIC EMPLOYEES RETIREMENT ASSOCIATION-GENERAL; 123.27 BLOOMINGTON PUBLIC SCHOOLS CUSTODIAN SERVICE CREDIT 123.28 PURCHASE AUTHORIZATION. 123.29 (a) Notwithstanding any provision of law to the contrary, an eligible person 123.30 specified in paragraph (b) may purchase allowable service credit in the general employees 123.31 retirement plan of the Public Employees Retirement Association for the years and 123.32 months that elapsed between the date of hire by Independent School District No. 271, 123.33 Bloomington, and the date on which the person was recorded as a member of the general 124.1 employees retirement plan of the Public Employees Retirement Association upon the 124.2 payment of the amount set forth in paragraph (c). 124.3 (b) An eligible person is a person who was employed by Independent School District 124.4 No. 271, Bloomington, on the applicable indicated employment date, but who was not 124.5 reported to the Public Employees Retirement Association as a member of the general 124.6 employees retirement plan until the applicable indicated membership record date, and who 124.7 consequently has an uncredited period of school district employment, as follows:124.8 employee employment datemembership record date 124.9 A August 29, 1985 January 1, 1989 124.10 B April 29, 1986 November 16, 1988 124.11 C January 7, 1987 June 12, 1989 124.12 D July 21, 1986 July 1, 1989 124.13 E May 22, 1988 June 12, 1989 124.14 F September 11, 1988 June 12, 1989 124.15 G February 9, 1989 June 16, 1989 124.16 H February 15, 1989 June 16, 1989 124.17 I March 25, 1989 June 12, 1989 124.18 (c) The prior service credit purchase payment amount is the amount determined 124.19 for each eligible person by the executive director of the Public Employees Retirement 124.20 Association under Minnesota Statutes, section 356.551. 124.21 (d) The eligible person shall pay an amount equal to the member contribution that 124.22 the person would have paid if the person had been a member of the general employees 124.23 retirement plan of the Public Employees Retirement Association during the period 124.24 between the applicable employment date and the applicable membership record date, 124.25 plus annual compound interest on the total amount at the rate of 8.5 percent from the 124.26 midpoint date of the uncredited employment period until the date on which the equivalent 124.27 member contribution is paid. Payment must be made by July 1, 2006, or by the date of the 124.28 termination of employment, whichever is earlier. 124.29 (e) If the eligible person makes the required payment under paragraph (d) in a timely 124.30 fashion, Independent School District No. 271, Bloomington, may pay the difference 124.31 between the amount determined under paragraph (c) and the amount paid under paragraph 124.32 (d). If Independent School District No. 271, Bloomington, does not pay that balance 124.33 within 30 days of notification by the executive director of the Public Employees Retirement 124.34 Association of the payment by an eligible person under paragraph (d), the executive 125.1 director shall notify the commissioner of finance of that fact and the commissioner of 125.2 finance shall deduct the balance, plus compound interest on that amount at the rate of 1.5 125.3 percent per month or portion of a month that has elapsed from the effective date of this 125.4 section, from any state aid payable to the school district and shall transmit that amount to 125.5 the executive director of the Public Employees Retirement Association. 125.6 (f) The eligible person shall provide any relevant documentation related to the 125.7 eligibility to make this service credit purchase that is required by the executive director of 125.8 the Public Employees Retirement Association. 125.9 (g) Only periods of employment when the eligible person would have been 125.10 eligible for coverage by the general employees retirement plan of the Public Employees 125.11 Retirement Association is purchasable under this section. 125.12 Sec. 12. PERA-GENERAL; AUTHORIZING TRANSFER OF COVERAGE 125.13 FROM DEFINED CONTRIBUTION PLAN IN CERTAIN INSTANCES. 125.14 (a) An eligible person described in paragraph (b) may elect under paragraph (c) to 125.15 transfer past retirement coverage from the defined contribution retirement plan of the 125.16 public employees retirement association to the general employees retirement plan of the 125.17 Public Employees Retirement Association by authorizing the transfer of assets specified in 125.18 paragraph (d) and making the additional payment, if any, specified in paragraph (e). 125.19 (b) An eligible person is a former public employee or official who: 125.20 (1) was born on August 2, 1950; 125.21 (2) served in the Minnesota house of representatives from 1975 to 1991; 125.22 (3) served in the Minnesota senate from 1991 to 2002; 125.23 (4) became the mayor of a Minnesota home rule city in January 2002; and 125.24 (5) elected retirement coverage by the defined contribution retirement plan of the 125.25 Public Employees Retirement Association on January 15, 2002. 125.26 (c) The election of the retirement coverage transfer must be made in writing within 125.27 180 days of the date of enactment of this act. The election must authorize the asset 125.28 transfer specified in paragraph (d) and must be accompanied with any payment amount 125.29 required under paragraph (e). Upon the transfer and payment, the electing eligible person 125.30 is entitled to allowable service and salary credit under Minnesota Statutes, section 353.01, 125.31 subdivisions 10 and 16, for the service and salary related to the defined contribution 125.32 retirement plan coverage period. 125.33 (d) The transfer amount is the total member and employer contributions and any 125.34 investment performance to the credit of the eligible person in the defined contribution 125.35 retirement plan of the Public Employees Retirement Association. 126.1 (e) The additional payment amount is the amount by which the transfer amount 126.2 under paragraph (d) is less than the amount that would be required to be transferred to 126.3 the Minnesota postretirement investment fund for the coordinated program of the general 126.4 employees retirement plan of the Public Employees Retirement Association retirement 126.5 annuity payable to the eligible person on the first day of the month next following the 126.6 date of enactment or on the first day of the month next following the day on which the 126.7 eligible person is first eligible to receive a retirement annuity from the general employees 126.8 retirement plan of the Public Employees Retirement Association if that date is later than 126.9 the date of enactment. The former employer of the eligible employee may pay a portion of 126.10 the additional payment amount, but not to exceed 52 percent of the total amount, at the 126.11 discretion of the former employer. 126.12 (f) The executive director of the Public Employees Retirement Association may 126.13 request any relevant documentation to verify a person's status as an eligible person under 126.14 this section and may audit city records to verify conformity with Minnesota Statutes, 126.15 section 353.01, subdivisions 10 and 16. 126.16 Sec. 13. MSRS-GENERAL; PAYMENT OF PORTION OF ANNUITY IN 126.17 CERTAIN MARRIAGE DISSOLUTIONS. 126.18 (a) Notwithstanding the provisions of Minnesota Statutes, section 518.58, 126.19 subdivision 4, or any other law to the contrary, if a court of competent jurisdiction 126.20 makes a finding meeting the requirements of paragraph (b), and that finding is filed with 126.21 the executive director of the Minnesota State Retirement System, an eligible person 126.22 described in paragraph (c) is entitled to immediately receive the person's designated 126.23 portion of the ex-spouse's public retirement plan annuity awarded as part of the applicable 126.24 marriage dissolution judgement that conformed with Minnesota Statutes, section 518.58, 126.25 subdivision 4, when issued. 126.26 (b) The finding necessary to implement this section would be: 126.27 (1) that the court in its marriage dissolution judgment intended that the eligible 126.28 person described in paragraph (c) receive a portion of the person's ex-spouse's public 126.29 retirement plan annuity in a timely fashion; 126.30 (2) that the ex-spouse has declined to commence receipt of that public retirement 126.31 plan annuity; and 126.32 (3) that the decision of the ex-spouse not to draw the public retirement plan annuity 126.33 was not reasonably done in pursuit of an end other than to frustrate the payment of a 126.34 portion of the retirement annuity to the eligible person. 126.35 (c) An eligible person is a person: 127.1 (1) who was born on August 12, 1944; 127.2 (2) who resides in Edina, Minnesota; 127.3 (3) who was married to a member of the general state employees retirement plan of 127.4 the Minnesota State Retirement System; and 127.5 (4) whose marriage was dissolved on December 15, 1999. 127.6 (d) If the immediate payment of the eligible person's designated portion of the 127.7 ex-spouse's public retirement plan annuity occurs under this section, the executive director 127.8 of the Minnesota State Retirement System shall establish a separate account for the 127.9 eligible person within the state employees retirement fund, shall credit that account with 127.10 the applicable percentage of the actuarial present value of the retirement annuity of the 127.11 ex-spouse under the marriage dissolution judgment, and shall reduce the account of the 127.12 ex-spouse by that amount. The present value of the subsequent retirement annuity of the 127.13 ex-spouse, when initiated, may not exceed the person's account value upon the division, 127.14 plus the value of any deferred annuity augmentation. 127.15 Sec. 14. MINNEAPOLIS EMPLOYEES RETIREMENT FUND; SERVICE 127.16 CREDIT PURCHASE FOR CERTAIN WORKERS' COMPENSATION INJURY 127.17 PERIODS. 127.18 (a) An eligible person described in paragraph (b) is entitled to purchase allowable 127.19 service credit from the Minneapolis Employees Retirement Fund for up to two years for 127.20 the period of the injury that qualified for a workers' compensation benefit but that was not 127.21 previously credited by the Minneapolis Employees Retirement Fund. 127.22 (b) An eligible person is a person who: 127.23 (1) was born on January 4, 1951; 127.24 (2) was first employed in the engineering department of the city of Minneapolis 127.25 in 1974; 127.26 (3) suffered an injury that, in 1978, qualified the person for workers' compensation 127.27 benefits; 127.28 (4) applied for disabled status in the Minneapolis Employees Retirement Fund in 127.29 1986 and accrued allowable service credit for the period from 1986 to 1991; and 127.30 (5) was advised by the Minneapolis Employees Retirement Fund to wait until 127.31 retirement age to pursue a claim for allowable service credit for the period from 1978 127.32 to 1985. 127.33 (c) The eligible person described in paragraph (b) must apply with the executive 127.34 director of the Minneapolis Employees Retirement Fund to make a service credit purchase 127.35 under this section. The application must be in writing and must include all necessary 128.1 documentation of the applicability of this section and any other relevant information that 128.2 the executive director may require. 128.3 (d) Allowable service credit under Minnesota Statutes, sections 422A.15, 128.4 subdivisions 1 and 4, and 422A.19, must be granted by the Minneapolis Employees 128.5 Retirement Fund to the eligible person upon receipt from the applicable eligible person of 128.6 the portion of the prior service credit purchase payment amount payable under paragraph 128.7 (e) in a lump sum. 128.8 (e) Notwithstanding any provision of Minnesota Statutes, section 356.551, to the 128.9 contrary, to obtain the service credit an eligible person must pay an amount equal to 128.10 one-half of the prior service credit purchase payment amount determined under Minnesota 128.11 Statutes, section 356.551. Payment must be made before July 1, 2007, or prior to 128.12 termination of Minneapolis Employees Retirement Fund covered employment, whichever 128.13 is earlier. 128.14 (f) If the eligible person makes the payment under paragraph (e), the city of 128.15 Minneapolis must pay the remaining balance of the prior service credit purchase payment 128.16 amount determined under Minnesota Statutes, section 356.551, within 30 days of the 128.17 payment by the eligible person. The executive director of the Minneapolis Employees 128.18 Retirement Fund must notify the chief financial officer of the city of Minneapolis of 128.19 its payment amount and its payment due date if the eligible person makes the required 128.20 payment. If the city of Minneapolis fails to pay its portion of the required prior service 128.21 credit purchase payment amount, the executive director of the Minneapolis Employees 128.22 Retirement Fund must notify the commissioner of finance of that fact within 30 days of the 128.23 city payment due date and the commissioner of finance must order that the required city 128.24 payment be deducted from any state aid otherwise payable to the city and be transmitted 128.25 to the Minneapolis Employees Retirement Fund. 128.26 Sec. 15. CERTAIN NORTH ST. PAUL CITY ELECTED OFFICIALS; SERVICE 128.27 CREDIT PURCHASES. 128.28 (a) An eligible person described in paragraph (b) is entitled, upon making written 128.29 application, to purchase service credit in the coordinated program of the general employees 128.30 retirement plan of the Public Employees Retirement Association under paragraph (c) and 128.31 to have future retirement coverage by the coordinated program of the general employees 128.32 retirement plan of the Public Employees Retirement Association for future North St. 128.33 Paul city elected official service. 128.34 (b) An eligible person is an elected official who has been serving the city of North 128.35 St. Paul since January 1, 2001, who was not informed of the option to be a member of the 129.1 coordinated program of the general employees retirement plan of the Public Employees 129.2 Retirement Association on January 1, 2001, when the minimum salary eligibility 129.3 requirement for membership was first met, who was in elected office on June 30, 2002, 129.4 when the coordinated program of the general employees retirement plan of the Public 129.5 Employees Retirement Association was closed to membership by elected officials, and 129.6 who was born on January 29, 1932, March 1, 1951, or December 7, 1951. 129.7 (c) The purchase payment amount for the prior service credit purchase must be 129.8 calculated under Minnesota Statutes, section 356.551. The eligible person must pay an 129.9 amount equal to the employee contributions to the general employees retirement plan of 129.10 the Public Employees Retirement Association that the person would have made from 129.11 january 1, 2001, to the date of the purchase, plus annual compound interest at the rate of 129.12 8.5 percent from the date on which payment should have been made if a membership 129.13 election option had been exercised in 2001 to the date of actual payment. If the eligible 129.14 person makes the required employee contribution equivalent payment, the executive 129.15 director of the Public Employees Retirement Association shall notify the city of North 129.16 St. Paul of the balance of the prior service credit purchase payment amount under 129.17 Minnesota Statutes, section 356.551. The city of North St. Paul shall pay the certified 129.18 payment amount to the Public Employees Retirement Association within 60 days of the 129.19 certification, plus interest at the rate of 0.71 percent per month, compounded monthly, 129.20 from the date of the employee contribution equivalent payment until the date on which the 129.21 balance of the total purchase payment is paid. 129.22 (d) This section expires on January 1, 2007. 129.23 Sec. 16. PERA-P&F; PURCHASE OF SERVICE CREDIT. 129.24 Subdivision 1. Eligibility. An eligible person may purchase allowable service credit 129.25 from the public employees police and fire plan for a period of service as a police officer 129.26 provided to the city of Eveleth immediately prior to January 1, 1978, not to exceed 14 129.27 months. An eligible person is a person who: 129.28 (1) is currently a member of the public employees police and fire plan; 129.29 (2) was first employed by the city of Eveleth police department on November 29, 129.30 1976; and 129.31 (3) was born on June 5, 1956. 129.32 Subd. 2. Purchase requirements. An eligible person must apply to the executive 129.33 director of the Public Employees Retirement Association to make the service credit 129.34 purchase authorized in this section. This application for a purchase of service credit under 130.1 Minnesota Statutes, section 356.551, must be in writing and must contain documentation 130.2 required by the executive director. 130.3 Subd. 3. Additional requirements; restrictions. (a) In addition to the one-year 130.4 payment time limit in Minnesota Statutes, section 356.551, the authority provided by this 130.5 section is voided if the payment amount is not paid to the executive director of the Public 130.6 Employees Retirement Association prior to termination of service by the eligible person. 130.7 (b) This section is voided if the eligible person received a refund of contributions 130.8 relating to the eligible period stated in subdivision 1, due to Laws 1977, chapter 61, section 130.9 4, or any other refund provision in applicable law or plan documents. 130.10 (c) This section is voided relating to any portion of the eligible period specified in 130.11 subdivision 1 which was properly excluded from coverage by statute, law, or ordinance 130.12 then in effect, or if the lack of coverage was due to an election made by the eligible 130.13 individual, or by a failure by that individual to obtain the applicable service credit under 130.14 service credit purchase authority in effect when the service was rendered or within two 130.15 years following the merger of the Eveleth Police Relief Association members into the 130.16 Public Employees Retirement Association police and fire plan as authorized by Laws 130.17 1977, chapter 61. 130.18 Subd. 4. Payment. (a) If an eligible person meets the requirements to purchase 130.19 service credit under this section, the public employees police and fire fund must be paid 130.20 the amount determined under Minnesota Statutes, section 356.551. Of this amount: 130.21 (1) the eligible person must pay an amount equal to the employee contribution rate 130.22 during the period of service to be purchased, applied to the actual salary in effect during 130.23 that period, plus interest at the rate of 8.5 percent per year compounded annually from 130.24 the date on which the contributions should have been made to the date on which payment 130.25 is made under this section; and 130.26 (2) the city of Eveleth must pay the remainder of the amount determined under 130.27 Minnesota Statutes, section 356.551. 130.28 (b) If the city of Eveleth fails to pay the amount required under paragraph (a), clause 130.29 (2), within 30 days of notification from the executive director of the amount required, the 130.30 executive director shall inform the commissioner of the Department of Finance of the 130.31 amount of the deficiency, and the amount must be deducted from any subsequent state 130.32 aid to the city. 130.33 Sec. 17. TEACHERS RETIREMENT ASSOCIATION; PURCHASE OF 130.34 SERVICE CREDIT FOR AN UNCREDITED EXTENDED LEAVE. 131.1 (a) An eligible person described in paragraph (b) is authorized to purchase allowable 131.2 and formula service credit in the Teachers Retirement Association for any period of an 131.3 eligible person's extended leave that was not properly reported to the Teachers Retirement 131.4 Association by Independent School District No. 831, Forest Lake. Allowable formula 131.5 service credit and salary credit is granted under Minnesota Statutes, section 354.05, 131.6 subdivision 13, to the eligible person upon making the payment required under paragraph 131.7 (c). 131.8 (b) An eligible person is a person who: 131.9 (1) was born on November 23, 1949; 131.10 (2) was initially employed as a teacher in September 1974; 131.11 (3) is employed by Independent School District No. 831, Forest Lake; and 131.12 (4) took an extended leave for the 2001-2002 school year that was not reported 131.13 to the Teachers Retirement Association in a timely fashion as required by Minnesota 131.14 Statutes, section 354.094. 131.15 (c) The eligible person is authorized to make an employee equivalent contribution 131.16 payment equal to ten percent of the person's school year salary received during the year 131.17 immediately preceding the extended leave, plus compound interest at the rate of 8.5 131.18 percent per annum from July 1, 2001, to the date on which the lump sum payment is made. 131.19 (d) If the eligible person makes the payment under paragraph (c), the executive 131.20 director of the Teachers Retirement Association shall, within 30 days, notify Independent 131.21 School District No. 831, Forest Lake, of its obligation under this section. The school 131.22 district's obligation is the balance of the prior service credit purchase payment amount 131.23 determined under Minnesota Statutes, section 356.551, which exceeds the payment under 131.24 paragraph (c). If the school district fails to pay its obligation within 60 days following 131.25 notification, the executive director shall certify that failure and the amount due to the 131.26 commissioner of finance, who shall deduct the amount due from any subsequent state aid 131.27 payable to Independent School District No. 831, Forest Lake, plus interest at the rate of 131.28 0.71 percent per month from the date of the payment under paragraph (c) to the date of 131.29 the actual payment. 131.30 (e) This provision expires on July 1, 2007, or upon termination of covered service, 131.31 whichever is earlier. 131.32 Sec. 18. EFFECTIVE DATE. 131.33 (a) Sections 1 to 11 and 13 are effective the day following final enactment. 132.1 (b) Section 12 is effective the day following the date on which the city council of 132.2 the city of St. Paul and its chief clerical officer timely complete their compliance with 132.3 Minnesota Statutes, section 645.021, subdivisions 2 and 3. 132.4 (c) Section 14 is effective the day following the date on which the city council of the 132.5 city of Minneapolis and its chief clerical officer timely complete their compliance with 132.6 Minnesota Statutes, section 645.021, subdivisions 2 and 3. 132.7 (d) Section 12 expires July 1, 2007. 132.8 (e) Sections 16 and 17 are effective the day following final enactment.