Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Session Laws - 1984, Regular Session
Key: (1) language to be deleted (2) new language
Laws of Minnesota 1984
CHAPTER 564-S.F.No. 147
An act relating to retirement; making various changes
in benefits, contributions, and financing in laws
governing various public pension funds; directing
reimbursement or credit of certain public pension
contributions; appropriating funds; amending Minnesota
Statutes 1982, sections 3.85, by adding subdivisions;
352.04, subdivisions 2 and 3; 352.113, subdivision 3;
352.115, subdivision 1; 352.12, subdivisions 1 and 2;
352.22, subdivision 2; 352.92; 352.93, subdivisions 2
and 3; 352.95, subdivision 1a; 352B.11, subdivision 2;
353.27, subdivision 3a; 353.30, subdivision 1c;
353.31, subdivision 1; 353.32, subdivision 1a; 353.33,
subdivision 2; 353.651, subdivision 3; 354.42,
subdivision 5; 354.44, subdivision 6; 354.46,
subdivisions 1 and 2; 354.47, subdivision 1; 354.48,
subdivisions 2 and 3a; 354.49, subdivisions 2 and 3;
354.62, subdivision 5; 354A.23, by adding a
subdivision; 354A.37, subdivisions 3 and 4; 356.20,
subdivision 4; and 356.215, subdivision 4; Minnesota
Statutes 1983 Supplement, sections 3A.03, subdivision
2; 352.113, subdivision 2; 352.115, subdivision 8;
352B.02, subdivision 1; 352B.11, subdivision 1;
352C.09, subdivision 2; 353.32, subdivision 1; and
353.34, subdivision 2; Laws 1983, chapters 301,
section 225, subdivision 1, and by adding a
subdivision; and 314, article 12, section 1,
subdivision 2; proposing new law coded in Minnesota
Statutes, chapter 356; repealing Minnesota Statutes
1982, sections 352.022; 353.38; 354.07, subdivision 8;
and Laws 1983, chapter 301, section 225, subdivision 2.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1. Minnesota Statutes 1982, section 3.85, is
amended by adding a subdivision to read:
Subd. 11. [RULES FOR PENSION VALUATIONS AND COST
ESTIMATES.] The commission shall by June 30, 1985, adopt rules
prescribing specific detailed methods of calculating,
evaluating, and displaying current and proposed law liabilities,
costs, and actuarial equivalents of all public employee pension
plans in Minnesota. These rules shall be consistent with the
general direction prescribed in chapter 356.
There is appropriated from the general fund to the
commission not to exceed $75,000 in fiscal year 1985, and
$25,000 in each fiscal year thereafter for developing,
implementing, and annually updating the rules adopted pursuant
to this section.
Sec. 2. Minnesota Statutes 1982, section 3.85, is amended
by adding a subdivision to read:
Subd. 12. [LEGISLATIVE COMMISSION ON PENSIONS AND
RETIREMENT TO PREPARE VALUATIONS AND MAKE REPORTS TO
LEGISLATURE.] (a) The legislative commission on pensions and
retirement shall annually contract with an established actuarial
consulting firm to conduct valuations and finance adequacy
studies for the funds specified in (b). The contract shall also
include provisions for performing cost analyses of proposals for
changes in benefit and funding policies.
(b) The plans which the legislative commission on pension
and retirement shall include in the contract for valuation and
analysis are:
(1) the Statewide Teachers Retirement Association;
(2) the General Plan, Minnesota State Retirement System;
(3) the Correctional Plan, Minnesota State Retirement
System;
(4) the State Patrol Plan, Minnesota State Retirement
System;
(5) the Judges Plan, Minnesota State Retirement System;
(6) the Minneapolis Employees Retirement Fund;
(7) the General Plan, Public Employees Retirement
Association;
(8) the Police and Fire Plan, Public Employees Retirement
Association;
(9) the Duluth Teachers Retirement Association;
(10) the Minneapolis Teachers Retirement Association;
(11) the St. Paul Teachers Retirement Association; and
(12) the Legislator's Retirement Plan.
(c) The annual contracts shall include the following
objectives:
(1) Every year beginning in fiscal year 1986, the contract
shall specify completion of standard valuations for the period
ending June 30 of the preceding fiscal year with contents as
described in section 356.215, subdivision 4; and cash flow
forecasts through the amortization target date.
(2) Every four years, beginning in fiscal year 1986, the
contract shall specify completion of an experience study for the
four-year period ending June 30 of the preceding fiscal year.
The experience study shall evaluate the appropriateness of
continuing to use for future valuations the assumptions relating
to: individual salary progression; rate of return on
investments; payroll growth; mortality; withdrawal; disability;
retirement; and any other experience-related factor that could
impact the future financial condition of the retirement funds.
(d) The commission shall annually prepare a report to the
legislature summarizing the results of the valuations and cash
flow projections and shall include with its report
recommendations concerning the appropriateness of the support
rates to achieve proper funding of the retirement funds by the
required funding dates. It shall also, within two months of the
completion of the quadrennial experience studies, prepare a
report to the legislature on the appropriateness of the
valuation assumptions listed in paragraph (c), clause (2).
(e) Beginning with the fiscal year commencing July 1, 1985,
there is annually appropriated to the commission $400,000 for
the purchase of actuarial consulting services to prepare annual
valuations, cash flow forecasts, and cost analyses of benefit or
funding proposals.
(f) There is appropriated quadrennially, beginning in
fiscal year 1986, $100,000 for the purchase of actuarial
consulting services to perform the experience study described in
paragraph (c), clause (2).
Sec. 3. Minnesota Statutes 1983 Supplement, section 3A.03,
subdivision 2, is amended to read:
Subd. 2. [REFUND.] (1) Any person who has made
contributions pursuant to subdivision 1 who is no longer a
member of the legislature is entitled to receive upon
application to the director a refund of all contributions
credited to the member's account with interest at the rate of
3-1/2 five percent per annum compounded annually after the third
year of service.
(2) The refund of contributions as provided in clause (1)
above terminates all rights of a former member of the
legislature or his or her survivors under this chapter. Should
the former member of the legislature again be a member of the
legislature after having taken a refund as provided above, he or
she shall be considered a new member. However, a new member may
reinstate the rights and credit for service forfeited, provided
the new member repays all refunds taken plus interest thereon at
six percent per annum compounded annually.
(3) No person shall be required to apply for or accept a
refund.
Sec. 4. Minnesota Statutes 1982, section 352.04,
subdivision 2, is amended to read:
Subd. 2. [EMPLOYEE CONTRIBUTIONS.] The employee
contribution to the fund shall be an amount equal to 3.46 3.73
percent of salary, beginning with the first full pay period
after December 31, 1981 June 30, 1984. These contributions
shall be made by deduction from salary in the manner provided in
subdivision 4.
Sec. 5. Minnesota Statutes 1982, section 352.04,
subdivision 3, is amended to read:
Subd. 3. [EMPLOYER CONTRIBUTIONS.] The employer
contribution to the fund shall be an amount equal to the total
amount deducted from the salaries of employees on each payroll
abstract, plus an additional 1.58 percent of salary beginning
with the first full pay period after July 1, 1982. For the
period beginning with the first full pay period after December
31, 1981, and ending with the last full pay period before July
1, 1982, the contribution shall be an amount equal to 3.46
percent of salary plus an additional 1.74 percent of salary. The
employer contribution shall be made in the manner provided in
subdivisions 5 and 6 3.90 percent of salary beginning with the
first full pay period after June 30, 1984.
Sec. 6. Minnesota Statutes 1983 Supplement, section
352.113, subdivision 2, is amended to read:
Subd. 2. [APPLICATION; ACCRUAL OF BENEFITS.] An employee
making claim for a total and permanent disability benefit shall
file a written application therefor in the office of the system
in a form and manner prescribed by the executive director. The
benefit shall begin to accrue 90 days the day following the
commencement of disability or the day following the last day
paid whichever is later but in no event earlier than 60 days
prior to the date the application is filed with the director.
Sec. 7. Minnesota Statutes 1982, section 352.113,
subdivision 3, is amended to read:
Subd. 3. [COMPUTATION OF BENEFITS.] The total and
permanent disability benefit shall be computed in the manner
provided in section 352.115. The disability benefit shall be
the normal annuity without reduction for each month the employee
is under age 65 at the time of becoming disabled. A disabled
employee may elect to receive the normal disability benefit or
an optional annuity as provided in section 352.116, subdivision
3. The election of an optional annuity shall be made prior to
the commencement of payment of the disability benefit and shall
be effective 30 days after receipt of the election or the date
on which the disability begins to accrue as provided in
subdivision 2, whichever occurs later. Upon becoming effective,
the optional annuity shall begin to accrue on the same date as
provided for the disability benefit.
Sec. 8. Minnesota Statutes 1982, section 352.115,
subdivision 1, is amended to read:
Subdivision 1. [AGE AND SERVICE REQUIREMENTS.] After
separation from state service any employee (a) who has attained
the age of at least 62 55 years and who is entitled to credit
for not less than ten years allowable service or (b) who has
attained the age of at least 58 years and who is entitled to
received credit for not less than 20 30 years allowable service
regardless of age is entitled upon application to a retirement
annuity.
Sec. 9. Minnesota Statutes 1983 Supplement, section
352.115, subdivision 8, is amended to read:
Subd. 8. [ACCRUAL OF ANNUITY.] State employees shall make
application for an annuity but such application shall not be
made more than 60 days prior to the time the employee is
eligible to retire by reason of both age and service
requirements. If the director determines an applicant for
annuity has fulfilled all the requirements of the law to entitle
him to an annuity, he shall authorize payment thereof in
accordance with the provisions of this chapter and payment shall
be made pursuant to this authorization. An annuity shall begin
to accrue no earlier than 60 days prior to the date the
application is filed with the director except that if an
optional annuity as provided in section 352.116, subdivision 3
is selected the annuity shall begin to accrue 30 days after the
application is filed with the director, but in no event prior to
the day following the termination of state service or prior to
the day the employee is eligible to retire by reason of both age
and service requirements. The retirement annuity shall cease
with the last payment which had accrued to the retired employee
during his lifetime unless he elected an optional annuity
provided in section 352.116, subdivision 3, and he had become
entitled to payment thereof. The joint and last survivor
annuity shall cease with the last payment received by the
survivor in his or her lifetime. If a retired employee had not
selected an optional annuity, or a survivor annuity is not
payable under the option, and a spouse survives, such spouse
shall be entitled only to the annuity for the calendar month in
which the retired employee died. If an optional annuity is
payable after the death of the retired employee, the survivor
shall be entitled to the annuity for the calendar month in which
the retired employee died.
Sec. 10. Minnesota Statutes 1982, section 352.12,
subdivision 1, is amended to read:
Subdivision 1. [DEATH BEFORE TERMINATION OF SERVICE.] If
an employee dies before his state service has terminated and
neither a survivor annuity nor a reversionary annuity is payable
or if a former employee who has sufficient service credit to be
entitled to an annuity dies before the benefit has become
payable, the director shall make a refundment to his last
designated beneficiary or, if there be none, to his surviving
spouse or, if none, to the employee's surviving children in
equal shares or, if none, to the employee's surviving parents in
equal shares or, if none, to the representative of his estate in
an amount equal to his accumulated contributions plus interest
thereon to the date of death at the rate of three and one-half
five percent per annum compounded annually. In the event an
employee dies who has received a refundment which he had
subsequently repaid in full, interest shall be paid on such
repaid refundment only from the date of repayment. If the
repayment was made in installments, interest shall be paid only
from the date installment payments began. The designated
beneficiary, surviving spouse or representative of the estate of
an employee who had received a disability benefit shall not be
entitled to interest upon any balance remaining to his credit in
the fund at the time of death.
Sec. 11. Minnesota Statutes 1982, section 352.12,
subdivision 2, is amended to read:
Subd. 2. [SURVIVING SPOUSE BENEFIT.] If an employee or
former employee who has attained the age of at least 62 55 years
and has credit for not less than ten years allowable service or
who has attained the age of at least 58 years and has credit for
not less than 20 years allowable service dies before his state
service has terminated or if an employee who has filed a valid
application for an annuity or disability benefit prior to the
termination of his state service or who has credit for not less
than 30 years of allowable service, regardless of age attained,
dies before the an annuity or disability benefit has become
payable, notwithstanding any designation of beneficiary to the
contrary, his or her surviving spouse may elect to receive, in
lieu of the refundment refund with interest provided in
subdivision 1, an annuity equal to the joint and 50 100 percent
survivor annuity which the employee could have qualified for had
he retired or she terminated service on the date of death,. The
annuity shall be computed as provided in section 352.115,
subdivisions 1, 2, and 3, and section 352.116, subdivisions 1
and 3. The annuity shall cease with the last payment received
by the surviving spouse in his or her lifetime. An amount equal
to the excess, if any, of the accumulated contributions which
were credited to the account of the deceased employee over and
above the total of the benefits paid and payable to the
surviving spouse shall be paid to the deceased employee's last
designated beneficiary or, if none, to the surviving children of
the deceased spouse in equal shares or, if none, to the
surviving parents of the deceased spouse or, if none, to the
representative of the estate of such deceased spouse. Any
employee may request in writing that this subdivision not apply
and that payment be made only to his designated beneficiary as
otherwise provided by this chapter.
Sec. 12. Minnesota Statutes 1982, section 352.22,
subdivision 2, is amended to read:
Subd. 2. [AMOUNT OF REFUNDMENT.] Except as provided in
subdivision 3, any person who ceased to be a state employee
after June 30, 1973, by reason of termination of state service
shall receive a refundment in an amount equal to his accumulated
contributions plus interest at the rate of three and one-half
five percent per annum compounded annually on deductions taken
after the third year of coverage except that if the employee,
due to age, could not qualify for an annuity upon reaching
compulsory retirement age had he continued in covered
employment, he shall be paid interest from the date of
coverage. Such interest shall be computed to the first day of
the month in which the refund is processed and shall be based on
fiscal year balances.
Sec. 13. Minnesota Statutes 1982, section 352.92, is
amended to read:
352.92 [CORRECTIONAL EMPLOYEE CONTRIBUTIONS.]
Subdivision 1. [EMPLOYEE CONTRIBUTIONS.] Beginning with
the first full pay period after July 1, 1982 1984, in lieu of
employee contributions payable under section 352.04, subdivision
2, contributions by covered correctional employees shall be in
an amount equal to 4.50 4.90 percent of salary. For the period
beginning with the first full pay period after December 31,
1981, and ending with the last full pay period before July 1,
1982, the contribution shall be in an amount equal to 3.78
percent of salary.
Subd. 2. [EMPLOYER CONTRIBUTIONS.] Beginning with the
first full pay period after July 1, 1982 1984, in lieu of
employer contributions payable under section 352.04, subdivision
3, the employer shall contribute for covered correctional
employees (1) an amount equal to 1-1/2 times the deduction from
salaries of covered correctional employees on each payroll
abstract, plus (2) an additional amount of 1.32 percent of
salaries of covered correctional employees on each payroll
abstract. For the period beginning with the first full pay
period after December 31, 1981, and ending with the last full
pay period before July 1, 1982, the contribution shall be an
amount equal to 5.66 percent of salaries of covered correctional
employees on each payroll abstract plus an additional amount
equal to 3.16 percent of salaries of covered correctional
employees on each payroll abstract 8.70 percent of salary.
Sec. 14. Minnesota Statutes 1982, section 352.93,
subdivision 2, is amended to read:
Subd. 2. The monthly annuity under this section shall be
determined by multiplying the average monthly salary by the
number of years, or completed months, of covered correctional
service by 2.5 percent for the first 20 25 years of correctional
service and two percent for each year thereafter; provided
however, the monthly annuity shall not exceed 75 percent of the
average monthly salary.
Sec. 15. Minnesota Statutes 1982, section 352.93,
subdivision 3, is amended to read:
Subd. 3. The annuity under this section shall begin to
accrue as provided in section 352.115, subdivision 8, and shall
be paid for an additional 84 full calendar months or to the
first of the month following the month in which he the employee
becomes age 65, whichever occurs first, except that in no event
shall payment cease prior to the first of the month following
the month in which the employee becomes 62, and then be reduced
to the amount as calculated under section 352.115, except that
if this amount, when added to the social security benefit based
on state service the employee is eligible to receive at such
time, is less than the benefit payable under subdivision 2, the
retired employee shall receive an amount that when added to such
social security benefit will equal the amount payable under
subdivision 2. When an annuity is reduced under this
subdivision, the percentage adjustments, if any, that have been
applied to the original annuity under section 11A.18, prior to
the reduction, shall be compounded and applied to the reduced
annuity. A former correctional employee employed by the state
in a position covered by the regular plan between the ages of 58
and 65 shall receive a partial return of his correctional
contributions at retirement with five percent interest based on
the following formula:
Employee contributions Years and complete
contributed as a months of regular
correctional employee service between
in excess of the ages 58 and 65
contributions such X ....................
employee would have 7
contributed as a
regular employee
Sec. 16. Minnesota Statutes 1982, section 352.95,
subdivision 1a, is amended to read:
Subd. 1a. [OPTIONAL ANNUITY ELECTION.] A disabled
correctional employee may elect the normal disability benefit or
an optional annuity as provided in section 352.116, subdivision
3. The election of an optional annuity shall be made prior to
commencement of payment of the disability benefit and shall be
effective 30 days after receipt of the election or the date on
which the disability benefit begins to accrue as provided in
subdivision 3, whichever occurs later. Upon becoming effective,
the optional annuity shall begin to accrue on the same date as
provided for the disability benefit.
Sec. 17. Minnesota Statutes 1983 Supplement, section
352B.02, subdivision 1, is amended to read:
Subdivision 1. There is hereby established a state patrol
retirement fund, the membership of which shall consist of all
persons defined in section 352B.01, subdivision 2. Each member
shall pay a sum equal to 8.5 percent of the member's salary.
Member contribution amounts shall be deducted each pay period by
the department head, who shall cause the total amount of the
deductions to be paid to the state treasurer, and shall cause a
detailed report of all deductions to be made each pay period to
the executive director of the Minnesota state retirement
system. In addition thereto, there shall be paid out of money
appropriated to the departments for this purpose, by the
department heads, a sum equal to 12 18.9 percent of the salary
upon which deductions were made, and a sum equal to nine percent
of the salaries upon which deductions were made for the purpose
of amortizing the actuarial deficit of the fund.
These amounts shall be credited to the state patrol
retirement fund. All moneys received shall be deposited by the
state treasurer in the state patrol retirement fund. Out of the
fund shall be paid the administrative expenses of the retirement
fund, and the benefits and annuities as hereinafter provided.
The legislative auditor shall audit the fund and the executive
director shall procure an actuarial study of the fund in
accordance with chapter 356, the cost of which shall be borne by
the fund.
Sec. 18. Minnesota Statutes 1983 Supplement, section
352B.11, subdivision 1, is amended to read:
Subdivision 1. [REFUND OF PAYMENTS.] Should any member who
has not received other benefits under this chapter become
separated, either voluntarily or involuntarily, from state
service that entitled him or her to be a member, the member, or
in the event of the member's death, the member's estate, shall
be entitled to receive a refund of all payments which have been
made by salary deductions plus interest at the rate of five
percent per annum compounded annually upon application on a form
prescribed by the executive director.
Sec. 19. Minnesota Statutes 1982, section 352B.11,
subdivision 2, is amended to read:
Subd. 2. [DEATH; PAYMENT TO SPOUSE AND CHILDREN.] In the
event any member serving actively as a member, a member
receiving the disability benefit provided by section 352B.10,
clause (1), or a former member receiving a disability benefit as
provided by section 352B.10, clause (3) dies from any cause, the
surviving spouse and dependent child or dependent children shall
be entitled to benefit payments as follows:
(a) A member with at least ten years of allowable service
or a former member with at least 20 years of allowable service
is deemed to have elected a 100 percent joint and survivor
annuity payable to a surviving spouse only on or after the date
the member or former member attained or would have attained the
age of 55.
(b) The surviving spouse of a member who had credit for
less than ten years of service shall receive, for life, a
monthly annuity equal to 20 percent of that portion of the
average monthly salary of the member from which deductions were
made for retirement. If the surviving spouse remarries, the
annuity shall cease as of the date of the remarriage.
(c) The surviving spouse of a member who had credit for at
least ten years of service and who dies after attaining 55 years
of age, may elect to receive a 100 percent joint and survivor
annuity, for life, notwithstanding a subsequent remarriage, in
lieu of the annuity prescribed in clause (b).
(d) The surviving spouse of any member who had credit for
ten years or more and who was not 55 years of age at death,
shall receive the benefit equal to 20 percent of the average
monthly salary as described in clause (b) until the deceased
member would have reached his or her 55th birthday, and
beginning the first of the month following that date, may elect
to receive the 100 percent joint and survivor annuity. If the
surviving spouse remarries prior to the deceased member's 55th
birthdate, all benefits or annuities shall cease as of the date
of remarriage. Remarriage subsequent to the deceased member's
55th birthday shall not affect the payment of the benefit.
(e) Each dependent child shall receive a monthly annuity
equal to ten percent of that portion of the average monthly
salary of the former member from which deductions were made for
retirement. A dependent child over the age of 18 years and
under the age of 22 years also may receive the monthly benefit
provided herein, if the child is continuously attending an
accredited school as a full time student during the normal
school year as determined by the director. If the child does
not continuously attend school but separates from full time
attendance during any portion of a school year, the annuity
shall cease at the end of the month of separation. In addition,
a payment of $20 per month shall be prorated equally to
surviving dependent children when the former member is survived
by one or more dependent children. Payments for the benefit of
any qualified dependent child shall be made to the surviving
spouse, or if there be none, to the legal guardian of the
child. The maximum monthly benefit shall not exceed 40 percent
of the average monthly salary for any number of children.
(f) If the member shall die under circumstances which
entitle the surviving spouse and dependent children to receive
benefits under the workers' compensation law, amounts equal to
the workers' compensation benefits received by them shall not be
deducted from the benefits payable pursuant to this section.
(g) The surviving spouse of a deceased former member who
had credit for ten or more years of allowable service, but
excluding the spouse of a former member receiving a disability
benefit under the provisions of section 352B.10, clause (3),
shall be entitled to receive the 100 percent joint and survivor
annuity at such time as the deceased member would have reached
his or her 55th birthdate, provided the surviving spouse has not
remarried prior to that date. In the event of the death of a
former member who does not qualify for other benefits under this
chapter, the surviving spouse or, if none, the children or heirs
shall be entitled to receive a refund of the accumulated
deductions left in the fund plus interest at the rate of five
percent per annum compounded annually.
Sec. 20. Minnesota Statutes 1983 Supplement, section
352C.09, subdivision 2, is amended to read:
Subd. 2. (1) Any person who has made contributions
pursuant to subdivision 1 who is no longer a constitutional
officer or commissioner is entitled to receive upon application
to the director a refund of all contributions credited to his or
her account with interest at the rate of 3-1/2 five percent per
annum compounded annually after the third year of service.
(2) The refund of contributions as provided in clause (1)
above terminates all rights of a former constitutional officer
or commissioner or his or her survivors under the provisions of
this chapter. Should the former constitutional officer or
commissioner again hold such office after having taken a refund
as provided above, he or she shall be considered a new member
and may reinstate the rights and credit for service forfeited
provided he or she repays all refunds previously taken plus
interest at six percent per annum compounded annually.
(3) No person shall be required to apply for or accept a
refund.
Sec. 21. Minnesota Statutes 1982, section 353.27,
subdivision 3a, is amended to read:
Subd. 3a. [ADDITIONAL EMPLOYER CONTRIBUTION.] An
additional employer contribution shall be made equal to (a) two
and one-half percent of the total salary of each "basic member";
and (b) one and one-half one-quarter of one percent of the total
salary of each "coordinated member." These contributions shall
be made from funds available to the employing subdivision by the
means and in the manner provided in section 353.28.
Sec. 22. Minnesota Statutes 1982, section 353.30,
subdivision 1c, is amended to read:
Subd. 1c. Any person who has received credit for at least
30 years of allowable service or any person who has attained the
age of at least 62 55 years but not more than 65 years, and who
received credit for at least ten years of allowable service is
entitled upon application to a retirement annuity in an amount
equal to the normal annuity provided in section 353.29,
subdivisions 2 and 3, reduced by one-quarter of one percent for
each month that the member is under age 65 at the time of
retirement, except that for any member who has 30 or more years
of allowable service the reduction shall be applied only for
each month that the member is under age 62 at the time of
retirement.
Sec. 23. Minnesota Statutes 1982, section 353.31,
subdivision 1, is amended to read:
Subdivision 1. [BENEFITS FOR SURVIVING SPOUSE AND
DEPENDENT CHILDREN; BEFORE RETIREMENT.] Upon the death of a "
basic member" before retirement or upon the death of a "basic
member" who was disabled and receiving disability benefits
pursuant to section 353.33 at the time of death who has had at
least 18 months of credited allowable service, the surviving
spouse and dependent children of the member, as defined in
section 353.01, subdivisions 15 and 20, shall be entitled to
receive the monthly benefit provided below:
(a) Surviving spouse 30 50 percent of the member's
monthly average salary in
effect over the last full
six months of allowable
service preceding the month
in which death occurred
(b) Each dependent child 10 percent of the member's
monthly average salary in
effect over the last full
six months of allowable
service preceding the month
in which death occurred
Payments for the benefit of any dependent child, as defined
in section 353.01, subdivision 15, shall be made to the
surviving parent, or if there be none, to the legal guardian of
the child. The maximum monthly benefit for a family shall not
exceed $700 $1,000, and the minimum benefit per family shall not
be less than 30 50 percent of the "basic member's" specified
average monthly salary, subject to the aforementioned maximum.
The surviving spouse benefit shall terminate upon the remarriage
of the spouse, and the dependent children's benefit shall be
reduced pro tanto when any child is no longer dependent.
Any survivor of a "basic member" whose average salary was
less than $75 per month shall not be entitled to the benefits
provided in this subdivision. Prior to payment of any survivor
benefit pursuant to this subdivision, in lieu of that benefit,
the surviving dependent spouse may elect to receive the joint
and survivor annuity provided pursuant to section 353.32,
subdivision 1a.
Except for any benefits provided pursuant to section
353.32, subdivisions 1 and 1a, there are no survivor benefits
payable to the surviving spouse or dependent children of a
deceased "coordinated member".
Sec. 24. Minnesota Statutes 1983 Supplement, section
353.32, subdivision 1, is amended to read:
Subdivision 1. [BEFORE RETIREMENT.] If a member or former
member who terminated public service dies before retirement or
before he has received any retirement annuity and no other
payment of any kind is or may become payable to any person, a
refund shall be paid to his designated beneficiary or, if there
be none, to his surviving spouse, or, if none, to the legal
representative of his estate. Such refund shall be in an amount
equal to his accumulated deductions plus interest thereon at the
rate of 3-1/2 five percent per annum compounded annually less
the sum of any disability or survivor benefits, if any, that may
have been paid by the fund; provided that a survivor who has a
right to benefits pursuant to section 353.31 may waive such
benefits in writing, except such benefits for a dependent child
under the age of 18 years may only be waived pursuant to an
order of the district court.
Sec. 25. Minnesota Statutes 1982, section 353.32,
subdivision 1a, is amended to read:
Subd. 1a. [SURVIVING SPOUSE OPTIONAL ANNUITY.] If a member
or former member who has attained the age of at least 58 55
years and has credit for not less than 20 ten years of allowable
service, or has attained the age of at least 62 years and who
has credit for not less than 10 30 years of allowable service,
dies before public service has terminated, or if an employee who
has filed a valid application for an annuity or disability
benefit prior to termination of public service, regardless of
age attained, dies before the annuity or disability benefit has
become payable, notwithstanding any designation of beneficiary
to the contrary, the surviving spouse may elect to receive, in
lieu of a refund with interest provided in subdivision 1, or
survivor benefits otherwise payable pursuant to section 353.31,
an annuity equal to the 50 100 percent joint and survivor
annuity which the member could have qualified for had the member
terminated service on the date of death,. The annuity shall be
computed as provided in sections 353.29, subdivisions 2 and 3;
and 353.30, subdivisions 1, 1a, 1b and 1c. No payment shall
accrue beyond the end of the month in which entitlement to the
annuity has terminated. An amount equal to the excess, if any,
of the accumulated contributions which were credited to the
account of the deceased employee over and above the total of the
annuities paid and payable to the surviving spouse shall be paid
to the deceased member's last designated beneficiary or, if
none, to the legal representative of the estate of the deceased
member. Any member may specify in writing that this subdivision
shall not apply and that payment shall be made only to the
designated beneficiary, as otherwise provided by this chapter.
Sec. 26. Minnesota Statutes 1982, section 353.33,
subdivision 2, is amended to read:
Subd. 2. [APPLICATIONS; ACCRUAL OF BENEFITS.] Every claim
or demand for a total and permanent disability benefit shall be
initiated by written application in the manner and form
prescribed by the executive director, filed in the office of the
retirement association, showing compliance with the statutory
conditions qualifying the applicant for a total and permanent
disability benefit. A member or former member who became
totally and permanently disabled during his period of membership
may file his application for total and permanent disability
benefits within three years next following termination of public
service, but not thereafter. This benefit shall begin to accrue
90 days the day following the commencement of disability, 90
days preceding the filing of the application, or, if annual or
sick leave is paid for more than the said 90 day period, from
the date salary ceased whichever is later. No payment shall
accrue beyond the end of the month in which entitlement has
terminated. If the disabilitant dies prior to negotiating the
check for the month in which death occurs, payment will be made
to the surviving spouse, or if none, to the designated
beneficiary, or if none, to the estate.
Sec. 27. Minnesota Statutes 1983 Supplement, section
353.34, subdivision 2, is amended to read:
Subd. 2. [REFUND WITHOUT WITH INTEREST.] Except as
provided in subdivision 1, any person who ceases to be a public
employee shall receive a refund in an amount equal to his
accumulated deductions without interest for the first three
years of membership and thereafter accumulated deductions with
interest to the first day of the month in which the refund is
processed at the rate of three and one-half five percent per
annum compounded annually after the third year of membership
based on fiscal year balances.
Sec. 28. Minnesota Statutes 1982, section 353.651,
subdivision 3, is amended to read:
Subd. 3. [RETIREMENT ANNUITY FORMULA.] The average salary
as defined in subdivision 2, multiplied by two and one-half
percent per year of allowable service for the first 20 25 years
and two percent per year of allowable service thereafter, shall
determine the amount of the "normal" retirement annuity. If the
member has earned allowable service for performing services
other than those of a police officer or fire fighter, the
annuity representing such service shall be computed in
accordance with sections 353.29 and 353.30.
Sec. 29. Minnesota Statutes 1982, section 354.42,
subdivision 5, is amended to read:
Subd. 5. For the purpose of amortizing the unfunded
entry-age normal liability an additional employer contribution
shall be made in the amount of 3.05 4.48 percent of the salary
of each member for the purpose of amortizing the deficit in the
fund. For the fiscal year ending June 30, 1985, the
commissioner of finance shall increase allotments to state
agencies having members covered by the teachers retirement
association in an amount equal to 1.43 percent of the salaries
of basic and coordinated plan members of the teachers'
retirement fund.
This contribution shall be made in the manner provided in
section 354.43.
Sec. 30. Minnesota Statutes 1982, section 354.44,
subdivision 6, is amended to read:
Subd. 6. [COMPUTATION OF FORMULA PROGRAM RETIREMENT
ANNUITY.] (1) The formula retirement annuity hereunder shall be
computed in accordance with the applicable provisions of the
formula stated in clause (2) hereof on the basis of each
member's average salary for the period of his formula service
credit. For the purposes of computing the formula benefits
under the formula and variable program, if a combination of
these formulas is used, the formula percentages used will be
those percentages in each formula as continued for the
respective years of service from one formula to the next.
For all years of formula service credit "average salary"
for the purpose of determining the member's retirement annuity
means the average salary upon which contributions were made and
upon which payments were made to increase the salary limitation
provided in Minnesota Statutes 1971, Section 354.511 for the
highest five successive years of formula service credit provided
however that such "average salary" shall not include any more
than the equivalent of 60 monthly salary payments.
(2) The average salary as defined in clause (1), multiplied
by the following percentages per year of formula service credit
shall determine the amount of the annuity to which the member
qualifying therefor is entitled:
Coordinated Member Basic Member
Each year of service 1.0 percent 2.0 percent
during first ten per year per year
Each year of service 1.5 percent 2.5 percent
thereafter per year per year
(3) Where any member retires prior to age 65 under a
formula annuity, he the member shall be paid a retirement
annuity in an amount equal to the normal annuity provided in
this subdivision and subdivision 7, reduced by one-half of one
percent for each month that the member is under age 65 to and
including age 60 and reduced by one-fourth of one percent for
each month under age 60 65 at the time of retirement except that
for any member who has 30 or more years of allowable service
credit, the reduction shall be applied only for each month which
the member is under age 62.
Sec. 31. Minnesota Statutes 1982, section 354.46,
subdivision 1, is amended to read:
Subdivision 1. [BASIC PROGRAM; BENEFITS FOR SPOUSE AND
CHILDREN OF TEACHER.] If a basic member who has at least 18
months of allowable service credit and who has an average salary
as defined in section 354.44, subdivision 6 equal to or greater
than $75 dies prior to retirement or if a former basic member
who, at the time of death, was totally and permanently disabled
and receiving disability benefits pursuant to section 354.48
dies prior to attaining the age of 65 years, the surviving
dependent spouse and dependent children of the basic member or
former basic member shall be entitled to receive a monthly
benefit as follows:
(a) Surviving
dependent
spouse .....30 50 percent of the basic member's monthly
average salary paid in the last full
fiscal year preceding death
(b) Each
dependent
child ......ten percent of the basic member's
monthly average salary paid in the
last full fiscal year preceding death
Payments for the benefit of any dependent child under the
age of 22 years shall be made to the surviving parent, or if
there be none, to the legal guardian of the child. The maximum
monthly benefit shall not exceed $700 $1,000 for any one family,
and the minimum benefit per family shall not be less than 30 50
percent of the basic member's average salary, subject to the
foregoing maximum. The surviving dependent spouse benefit shall
terminate upon remarriage, and the surviving dependent
children's benefit shall be reduced pro tanto when any surviving
child is no longer dependent.
If the basic member and the surviving dependent spouse are
killed in a common disaster and if the total of all survivors
benefits payable pursuant to this subdivision is less than the
accumulated deductions plus interest payable, the surviving
dependent children shall receive the difference in a lump sum
payment.
If the survivor benefits provided in this subdivision
exceed in total the monthly average salary of the deceased basic
member, these benefits shall be reduced to an amount equal to
the deceased basic member's monthly average salary.
Prior to payment of any survivor benefit pursuant to this
subdivision, in lieu of that benefit, the surviving dependent
spouse may elect to receive the joint and survivor annuity
provided pursuant to subdivision 2, or may elect to receive a
refund of accumulated deductions with interest in a lump sum as
provided pursuant to sections 354.47, subdivision 1 or 354.62,
subdivision 5, clause (3). If there are any surviving dependent
children, the surviving dependent spouse may elect to receive
the refund of accumulated deductions only with the consent of
the district court of the district in which the surviving
dependent child or children reside.
Sec. 32. Minnesota Statutes 1982, section 354.46,
subdivision 2, is amended to read:
Subd. 2. [DEATH WHILE ELIGIBLE DESIGNATED BENEFICIARY
BENEFIT.] The surviving spouse of any member or former member
who has attained the age of at least 55 years and has credit for
at least 20 ten years of allowable service or who has credit for
at least 30 years of allowable service irrespective of age shall
be entitled to joint and survivor annuity coverage in the event
of death of the member prior to retirement. If the surviving
spouse does not elect to receive a surviving spouse benefit
provided pursuant to subdivision 1, if applicable, or does not
elect to receive a refund of accumulated member contributions
provided pursuant to sections 354.47, subdivision 1, or 354.62,
subdivision 5, clause (3), whichever is applicable, the
surviving spouse shall be entitled to receive, upon written
application on a form prescribed by the executive director, a
benefit equal to the second portion of a 100 percent joint and
survivor annuity as provided pursuant to section 354.45 and
computed pursuant to section 354.44, subdivisions 2, 6 or 7,
whichever is applicable. If the member was a participant in the
variable annuity division, the applicable portion of the benefit
shall be computed pursuant to section 354.62, subdivision 5,
clause (1). The benefit shall be payable for life.
Sec. 33. Minnesota Statutes 1982, section 354.47,
subdivision 1, is amended to read:
Subdivision 1. [DEATH BEFORE RETIREMENT.] (1) If a member
dies before retirement and is covered pursuant to the provisions
of section 354.44, subdivision 2, and neither an optional
annuity, nor a reversionary annuity, nor a benefit pursuant to
section 354.46, subdivision 1 is payable to the survivors if the
member was a basic member, the surviving spouse, or if there is
no surviving spouse, the designated beneficiary shall be
entitled to an amount equal to the member's accumulated
deductions with interest credited to the account of the member
to the date of death.
(2) If a member dies before retirement and is covered
pursuant to the provisions of section 354.44, subdivisions 6 and
7, and neither an optional annuity, nor reversionary annuity,
nor the benefit described in section 354.46, subdivision 1 is
payable to the survivors if the member was a basic member, the
surviving spouse, or if there is no surviving spouse, the
designated beneficiary shall be entitled to an amount equal to
the member's accumulated deductions credited to the account of
the member as of June 30, 1957 and from July 1, 1957 to the date
of death the member's accumulated deductions plus interest at
the rate of 3-1/2 five percent per annum compounded annually.
(3) The amounts payable in clause (1) or clause (2) are in
addition to the amount payable in section 354.62, subdivision 5,
for the member's variable annuity account.
Sec. 34. Minnesota Statutes 1982, section 354.48,
subdivision 2, is amended to read:
Subd. 2. [APPLICATIONS.] Any person described in
subdivision 1 may make application for a total and permanent
disability benefit within 18 months following termination of
teaching service but not thereafter. This benefit shall begin
to accrue 90 days the day following the commencement of
disability or the day following the date on which salary ceases,
whichever is later, but shall not begin to accrue more than 90
days prior to the date the application is filed with the board.
If salary is being received for either annual or sick leave
during the period, payments shall accrue from the date salary
ceases.
Sec. 35. Minnesota Statutes 1982, section 354.48,
subdivision 3a, is amended to read:
Subd. 3a. [OPTIONAL ANNUITY ELECTION.] A disabled member
may elect to receive the normal disability benefit or an
optional annuity as provided in section 354.45, subdivision 1.
The election of an optional annuity shall be made prior to
commencement of payment of the disability benefit and shall be
effective 30 days after receipt of the election or and shall
begin to accrue on the same date on which the disability benefit
begins to accrue, whichever occurs later. Upon becoming
effective, the optional annuity shall begin to accrue on the
same date as provided for the disability benefit.
Sec. 36. Minnesota Statutes 1982, section 354.49,
subdivision 2, is amended to read:
Subd. 2. Except as provided in section 354.44, subdivision
1, any person who ceases to be a member by reason of termination
of teaching service, shall receive a refundment in an amount
equal to his accumulated deductions without with interest at the
rate of five percent per annum compounded annually plus any
variable annuity account accumulations payable pursuant to
section 354.62, subdivision 5, clause (4).
Sec. 37. Minnesota Statutes 1982, section 354.49,
subdivision 3, is amended to read:
Subd. 3. Any person who has attained the age of at least
65 with less than ten years of credited allowable service shall
be entitled to receive a refund in an amount equal to his
accumulated deductions plus interest in lieu of a proportionate
annuity pursuant to section 356.32 except those covered under
the provisions of section 354.44, subdivisions 6 or 7 in which
case the refund shall be an amount equal to his accumulated
deductions credited to his account as of June 30, 1957 and after
July 1, 1957 his accumulated deductions plus interest at the
rate of three and one-half five percent compounded annually.
Sec. 38. Minnesota Statutes 1982, section 354.62,
subdivision 5, is amended to read:
Subd. 5. [VARIABLE RETIREMENT ANNUITY.] (1) At retirement
the amount of the member's variable account accumulation in the
employee variable annuity contribution account, based on the
valuation at the previous fiscal year end plus any contributions
made by the person since the end of the previous fiscal year,
and an equal amount from the employer variable annuity
contribution account shall be transferred to the variable
annuity reserve account, and the variable retirement annuity for
the member shall be determined by the member's age, and sex, and
the amount transferred for the member to the variable annuity
reserve account at the date of retirement. The amount of the
annuity shall be calculated on the basis of an appropriate
annuity table of mortality with an interest assumption as
provided in section 354.07, subdivision 1 of eight percent,
except that if the member elects to have the accumulation
transferred to the Minnesota postretirement investment fund as
authorized by clause (8), the annuity shall be calculated with
an interest assumption of five percent.
(2) Whenever the admitted value of the annuity reserve
account of the variable annuity division, as of June 30 of any
year, exceeds or is less than the then present value of all
variable annuities in force, determined in accordance with the
rate of interest and approved actuarial tables then in effect,
by at least two percent of the present value, the amount of each
variable annuity payment shall be proportionately increased or
decreased for the following year.
(3) The death benefit payable in the event of a member's
death prior to retirement shall be a lump sum refund of a
member's variable account accumulation, based on the valuation
at the previous fiscal year end plus any contributions made by
the person since the end of the previous fiscal year, to the
surviving spouse, or if there is no surviving spouse to the
designated beneficiary. Except that if a member has made an
election in accordance with section 354.46, then the surviving
spouse shall receive a joint and survivor annuity as described
in section 354.44 and computed as provided in clause (1). An
amount equal to the lump sum refund made in this clause shall be
transferred from the employer contribution account to the
variable annuity turnover account.
(4) Except as provided in section 354.44, subdivision 7,
any person who ceases to be a member by reason of termination of
teaching service, shall be entitled to a lump sum refundment of
the member's variable account accumulations, based on the
valuation at the previous fiscal year end plus any contributions
made by the person since the end of the previous fiscal year.
Application for a refundment may be made no sooner than 30 days
after termination of teaching service if the applicant has not
again become a teacher. Repayment of a refundment upon
resumption of teaching is not permitted under this section. An
amount equal to the refundment to the member shall be
transferred from the employer contribution account to the
variable annuity turnover account.
(5) If a member is determined to be totally and permanently
disabled as provided in sections 354.05, subdivision 14; and
354.48, the member shall be entitled to the annuity provided in
this subdivision.
(6) Those members eligible for retirement as provided in
section 354.44, subdivision 1 shall upon application for the
annuity provided therein be entitled to the annuity provided in
this subdivision. The annuity elected in accordance with
sections 354.44, and 354.45 shall be the annuity applicable to
this subdivision.
(7) Notwithstanding section 356.18, increases in annuity
payments pursuant to this section shall be made automatically
unless written notice is filed by the annuitant with the
teachers retirement association board requesting that the
increase not be made.
(8) At retirement, a member may elect to have the amount of
the member's variable annuity accumulation in the employee
variable annuity contribution account and an equal amount from
the employer variable annuity contribution account transferred
to the Minnesota post-retirement investment fund as provided in
section 354.63, subdivision 2, clause (2). This election may
also be made by a surviving spouse who receives an annuity under
clause (3) of this subdivision. The election shall be made on a
form provided by the executive secretary.
Sec. 39. Minnesota Statutes 1982, section 354A.23, is
amended by adding a subdivision to read:
Subd. 3. Notwithstanding anything to the contrary in the
articles and bylaws of the basic programs enumerated in chapter
354A, the payment of interest on refunds and interest on
repayment of refunds shall be computed in the same manner as for
the coordinated programs covered by chapter 354A.
Sec. 40. Minnesota Statutes 1982, section 354A.37,
subdivision 3, is amended to read:
Subd. 3. [COMPUTATION OF REFUND AMOUNT.] A former
coordinated member who qualifies for a refund pursuant to
subdivision 1 shall receive a refund equal to the amount of the
former coordinated member's accumulated contributions without
with interest at the rate of five percent per annum compounded
annually.
Sec. 41. Minnesota Statutes 1982, section 354A.37,
subdivision 4, is amended to read:
Subd. 4. [CERTAIN REFUNDS AT AGE 65.] Any coordinated
member who has attained the age of at least 65 with less than
ten years of allowable service credit and has terminated active
teaching service shall be entitled to a refund in lieu of a
proportionate annuity pursuant to section 356.32. The refund
shall be equal to the coordinated member's accumulated employee
contributions plus interest at the rate of 3-1/2 five percent
compounded annually.
Sec. 42. Minnesota Statutes 1982, section 356.20,
subdivision 4, is amended to read:
Subd. 4. [CONTENTS OF FINANCIAL REPORT.] Each financial
report required by this section shall include:
(1) An exhibit prepared according to applicable actuarial
standards enumerated in section 356.215, and specified in rules
adopted by the legislative commission on pensions and retirement
by an approved actuary as defined in section 356.215,
subdivision 6 showing the accrued assets of the fund, the
accrued liabilities, including accrued reserves, and the accrued
unfunded liability of the fund. The exhibit shall contain the
certificate of an approved actuary certifying that the required
reserves for any benefits provided under a benefit formula are
computed in accordance with the Entry Age Normal Cost (Level
Normal Cost) actuarial method and rules adopted by the
legislative commission on pensions and retirement.
(a) Assets shown in the exhibit shall include the following
items of actual assets:
Cash in office
Deposits in banks
Accounts receivable:
Accrued members' contributions
Accrued employer contributions
Other
Accrued interest on investments
Dividends on stocks, declared but not yet received
Investment in bonds at amortized cost
Investment in stocks at cost
Investment in real estate
Equipment at cost, less depreciation
Other
Total assets ........................ .
(b) The exhibit shall include a statement of the unfunded
accrued liability of the fund. If the assets of the fund exceed
the liabilities, the excess shall be listed as surplus and
indicated in the exhibit following the item of reserves.
(c) The exhibit shall include a footnote showing
accumulated member contributions without interest.
(d) Current liabilities shown in the exhibit shall include
the following items:
Current:
Accounts payable
Annuity payments
Survivor benefit payments
Refund to members
Accrued expenses
Suspense items
Total current liabilities ........................ .
(e) The exhibit shall include an item for accrued necessary
reserves which shall be listed as "total reserves required as
per attached schedule." The attached schedule shall contain the
owing information on the reserves required:
1. For active members
a. Retirement benefits
b. Disability benefits
c. Refund liability due to death or withdrawal
d. Survivors' benefits
2. For deferred annuitants
3. For former members without vested rights
4. For annuitants
a. Retirement
b. Disability annuities
c. Surviving spouses' annuities
d. Surviving children's annuities
5. In addition to the foregoing, if there are additional
benefits not appropriately covered by the foregoing four items
of reserves required, they shall be listed separately.
(2) An income statement on an accrual basis showing all
income and all deductions from income for the fiscal year. The
statement shall show separate items for employee contributions,
employer regular contributions, employer additional
contributions if provided by law, investment income, profit on
the sale of investments, and other income, if any.
(3) A statement of deductions from income, which shall
include separate items for benefit payments, retirement
benefits, disability benefits, surviving spouse benefits,
surviving children's benefits, refunds to members terminating
employment, refunds due to death of members and due to death of
annuitants, the increase in total reserves required, general
administrative expense incurred, loss on sale of investments,
and any other deductions.
(4) A statement showing appropriate statistics as to
membership and beneficiaries of the fund, with indications of
changes in the statistical data which may result from the
current year's operation.
(5) Any additional statements or exhibits which will enable
the management of the fund to portray a true interpretation of
the fund's financial condition, except that the term "surplus"
or the term "excess of assets" shall not be used except as
otherwise specifically provided for in this section, nor shall
any representation of assets and liabilities other than as
provided for in this section be included in the additional
statements or exhibits.
(6) A more detailed or subdivided itemization of any of the
items required by this section, if the management of the fund so
desires.
Sec. 43. Minnesota Statutes 1982, section 356.215,
subdivision 4, is amended to read:
Subd. 4. [ACTUARIAL VALUATIONS; CONTENTS.] Actuarial
valuations shall be made in conformity with the requirements of
the definition contained in subdivision 1 and rules adopted by
the legislative commission on pensions and retirement. Each
actuarial valuation shall measure all aspects of the fund in
accordance with changes in benefit plans, if any, and salaries
as will be in force during the ensuing fiscal year. Each
actuarial valuation shall be in accordance with the entry age
normal cost (level normal cost) method.
Each actuarial valuation required under this section shall
include:
(1) For each fund providing any benefits under a benefit
formula, the level normal cost of the benefits provided by the
laws governing the fund as of the date of the valuation,
computed in accordance with the entry age normal cost (level
normal cost) method. The normal cost shall be expressed as a
level percentage of the future payroll of the active
participants of the fund as of the date of the valuation.
(2) The accrued liabilities of the fund which shall be
equal to the present value of all benefits minus the present
value of future normal costs calculated in accordance with the
entry age normal cost method.
(3) For each fund providing benefits under the money
purchase or defined contribution method, the member
contributions accumulated at interest, as apportioned to members
accounts, to the date of the valuation. These accumulations
shall be separately tabulated in such manner as to reflect
properly any differences in money purchase or defined
contribution annuity rates which may apply.
(4) An For funds governed by chapters 3A, 352, 352B, 352C,
353, 354, 354A, and 490, a preretirement interest assumption of
five eight percent, a post-retirement interest assumption of
five percent, and an assumption that in each future year the
salary on which a retirement or other benefit is based is 1.035
1.065 multiplied by the salary for the preceding year. For all
other funds, a preretirement interest assumption of five
percent, a post-retirement interest assumption of five percent,
and an assumption that in each future year the salary on which a
retirement or other benefit is based is 1.035 multiplied by the
salary for the preceding year.
(5) Other assumptions as to mortality, disability,
retirement, withdrawal, entry age and retirement age that are
appropriate to the fund, which shall be set forth in the
valuation report at levels consistent with those determined in
the most recent experience study completed pursuant to section
356.215, subdivision 5, and set forth in the valuation report.
(6) An actuarial balance sheet showing accrued assets,
accrued liabilities, and the deficit from full funding of
liabilities (unfunded accrued liability). The accrued
liabilities shall include the following required reserves:
(a) For active members
1. Retirement benefits
2. Disability benefits
3. Refund liability due to death or withdrawal
4. Survivors' benefits
(b) For deferred annuitants' benefits
(c) For former members without vested rights
(d) For annuitants
1. Retirement annuities
2. Disability annuities
3. Surviving spouses' annuities
4. Surviving children's annuities
current and expected future benefit obligations, current and
expected future assets, and the current and expected future
unfunded liabilities. Specifically, the balance sheet shall be
organized in the following manner:
[CURRENT AND EXPECTED FUTURE ASSETS]
Current Assets
Cash and equivalents $...
Fixed income investments ...
Equity investments ...
Total Current Assets $...
Expected Future Assets
Present value of expected
future supplemental
contributions ...
Present value of
future normal costs ...
Total Expected Future Assets $...
Total Current and Expected
Future Assets $...
[CURRENT AND EXPECTED FUTURE BENEFIT OBLIGATIONS]
Current Benefit Obligations
Actuarial value of benefit obligations on
account of service rendered to date:
For annuitants
Retirement annuities $...
Disability annuities ...
Surviving spouses' annuities ...
Surviving children's annuities ...
For former members without vested rights ...
For deferred annuitants' benefits ...
For active employees
Retirement benefits ...
Disability benefits ...
Refund liability due to death
or withdrawal ...
Survivors' benefits ...
Total Current Benefit
Obligations $...
Expected Future Benefit Obligations
Actuarial value of benefit obligations on
account of future service for active
employees ...
Total Current and Expected Future
Benefit Obligations $...
Current Unfunded Liability
(Total Current Benefit Obligations less
Total Current Assets): $...
Current and Future Unfunded Liability
(Total Current and Expected Future Benefit
Obligations less
Total Current and Expected Future Assets): $...
For the purpose of this subdivision, the terms
(a) "expected future statutory supplemental contributions"
means the sum of future employee and employer contributions at
the rates specified in statute at the time the valuation is
completed reduced by the present value of future normal costs;
and
(b) "current assets" means the value of all assets at cost,
plus one-third of any unrealized capital gains or losses, plus
realized income, including realized capital gains or losses.
In addition to the above required reserves itemization of
benefit obligations, separate items shall be shown for
additional benefits, if any, which may not be appropriately
included in the reserves listed list shown above.
(7) In addition to the level normal cost, the additional
annual contribution which would be required to retire the
current unfunded accrued liability. For funds governed by
chapters 3A, 352, 352B, 352C, 353, 354, 354A, and 490, the
additional contribution shall be calculated on a level dollar
basis by the established date for full funding which is in
effect at the time of the valuation percent basis by the
established date for full funding which is in effect at the time
of the valuation. The level percent additional contribution
shall be calculated assuming annual payroll growth of 6.5
percent. For all other funds, the additional annual
contribution shall be calculated on a level dollar basis.
If, after the first actuarial valuation date occurring
after June 1, 1979, there has not been a change in any or all of
the actuarial assumptions used for calculating the accrued
liability of the fund, a change in the benefit plan governing
annuities and benefits payable from the fund, a change in the
actuarial cost method used in calculating the accrued liability
of all or a portion of the fund, or a combination of the three,
which change or changes by themselves without inclusion of any
other items of increase or decrease produce a net increase in
the unfunded accrued liability of the fund, the established date
for full funding for the first actuarial valuation made after
June 1, 1979 and each successive actuarial valuation shall be
the first actuarial valuation date which occurs after June 1,
2009.
If after the first actuarial valuation date occurring after
June 1, 1979, there has been a change in any or all of the
actuarial assumptions used for calculating the accrued liability
of the fund, a change in the benefit plan governing annuities
and benefits payable from the fund, a change in the actuarial
cost method used in calculating the accrued liability of all or
a portion of the fund, or a combination of the three, which
change or changes by themselves without inclusion of any other
items of increase or decrease produce a net increase in the
unfunded accrued liability in the fund, the established date for
full funding shall be determined using the following procedure:
(i) The unfunded accrued liability of the fund shall be
determined in accordance with the plan provisions governing
annuities and retirement benefits and the actuarial assumptions
in effect prior to an applicable change;
(ii) The level annual dollar contribution or level
percentage, whichever is applicable, which is needed to amortize
the unfunded accrued liability amount determined pursuant to
subclause (i) by the established date for full funding in effect
prior to the change shall be calculated using the interest
assumption specified in clause (4) in effect prior to the change;
(iii) The unfunded accrued liability of the fund shall be
determined in accordance with any new plan provisions governing
annuities and benefits payable from the fund and any new
actuarial assumptions and the remaining plan provisions
governing annuities and benefits payable from the fund and
actuarial assumptions in effect prior to the change;
(iv) The level annual dollar contribution or level
percentage, whichever is applicable, which is needed to amortize
the difference between the unfunded accrued liability amount
calculated pursuant to subclause (i) and the unfunded accrued
liability amount calculated pursuant to subclause (iii) over a
period of 30 years from the end of the plan year in which the
applicable change is effective shall be calculated using the
interest assumption specified in clause (4) in effect subsequent
to any applicable change;
(v) The level annual dollar or level percentage
amortization contribution pursuant to subclause (iv) shall be
added to the level annual dollar amortization contribution or
level percentage calculated pursuant to subclause (ii);
(vi) The period in which the unfunded accrued liability
amount determined in subclause (iii) will be amortized by the
total level annual dollar or level percentage amortization
contribution computed pursuant to subclause (v) shall be
calculated using the interest assumption specified in clause (4)
in effect subsequent to any applicable change, rounded to the
nearest integral number of years, but which shall not exceed a
period of 30 years from the end of the plan year in which the
determination of the established date for full funding using the
procedure set forth in this clause is made and which shall not
be less than the period of years beginning in the plan year in
which the determination of the established date for full funding
using the procedure set forth in this clause is made and ending
by the date for full funding in effect prior to the change; and
(vii) The period determined pursuant to subclause (vi)
shall be added to the date as of which the actuarial valuation
was prepared and the date obtained shall be the new established
date for full funding.
(8) An actuarial balance sheet shall not include as an
asset the present value of the contributions required under
clause (7).
(9) (8) An analysis by the actuary explaining the increase
or decrease in the unfunded accrued liability since the last
valuation. The explanation shall subdivide the increase or
decrease in unfunded accrued liability into at least the
following parts:
(a) Increases or decreases in unfunded accrued liability
because of changes in benefits;
(b) Increases and decreases in unfunded accrued liability
because of each change, if any, in actuarial assumptions;
(c) Actuarial gains or losses resulting from any deviations
of actual investment earnings, actual mortality rates, actual
salary increase rates, actual disability rates, actual
withdrawal rates and actual retirement rates from the
assumptions on which the valuations are based;
(d) Increases or decreases in unfunded accrued liability
because of other reasons, including the effect of the
amortization contribution required under clause (7); and
(e) Increases or decreases in unfunded accrued liability
because of changes in eligibility requirements or groups
included in the membership of the fund.
(10) (9) A tabulation of active membership and annuitants
in the fund. If the membership of a fund is under more than one
general benefit program, a separate tabulation shall be made for
each general benefit program. The tabulations shall be submitted
in the following form:
Annual
(a) Active members Number Payroll
As of last valuation date
new entrants
Total
Separations from active service
Refund of contributions
Separation with deferred annuity
Separation with neither refund
nor deferred annuity
Disability
Death
Retirement with service annuity
Total separations
As of current valuation date
Annual Annuity
(b) Annuitants Number Benefit
As of last valuation date
New entrants
Total
Terminations
Deaths
Other
Total terminations
As of current valuation date
The tabulation required under subclause (b) shall be made
separately for each of the following classes of annuitants:
(a) Service retirement annuitants
(b) Disabled annuitants
(c) Surviving spouse annuitants
(d) Surviving children annuitants
(e) Deferred annuitants
(11) (10) A statement of the administrative expenses in
dollars and also as a percentage of covered payroll.
(12) (11) A summary of the principal provisions of the plan
upon which the valuation is based.
Sec. 44. [356.70] [EARLY RETIREMENT.]
Subdivision 1. [COMBINED AGE AND SERVICE REQUIREMENT.] Any
member of a retirement plan established pursuant to chapters
352, 353, 354, or 354A who has attained the age of at least 55
years and whose attained age plus credited allowable service
totals 85, is entitled, upon application prior to December 31,
1986, to the normal retirement annuity provided in these
chapters without any reduction in annuity by reason of such
early retirement.
Subd. 2. [REPORTS.] The retirement associations to which
this section applies shall request and the employing units of
members retiring under the provisions of this section shall
provide to the retirement association information on the salary,
retirement contributions, and social security contributions paid
by the employing unit to individuals filling the position
vacated by the retiree. The employing unit shall also provide
information on net savings, if any, made possible by the
provisions of this section.
The retirement associations shall prepare reports to the
legislature summarizing this information and other information
in its possession relating to characteristics of retirees
retiring under the provisions of this section including:
(a) age at time of retirement;
(b) years of service;
(c) salary at time of retirement;
(d) high-five average salary used to determine the
retirement annuity; and
(e) monthly benefit.
The reports shall be made to the legislature within 30 days
following the end of calendar years 1984, 1985, and 1986 and
shall cover all retirees retiring under the provisions of this
section.
Sec. 45. Laws 1983, chapter 301, section 225, subdivision
1, is amended to read:
Subdivision 1. [REIMBURSEMENT REQUIRED.] Any public
employee or official who retires from January 1, 1983 to June
30, 1985, and whose pension contributions were increased by Laws
1982, Third Special Session chapter 1, article 2, section 2,
subdivision 1, paragraph (v) and who has not previously received
a refund of those contributions, must, upon application, be
reimbursed for the amount of increased contributions paid by the
official or employee because of that law. Reimbursement must be
in a lump sum to the employee or official, or his or her
survivor, at the same time as the first annuity payment between
October 1 and October 15, 1984, except that refunds to employees
or officials retiring or terminating service prior to October 1,
1984, shall be paid at the same time as the first annuity
payment or within 90 days after termination, as the case may
be. The amount of the reimbursement is the amount that the
employee's or official's contributions increased because of Laws
1982, Third Special Session chapter 1, article 2, section 2,
subdivision 1, paragraph (v) plus interest at the then current
rate paid on refunds by the relief or retirement association.
Reimbursement shall be paid by the retirement or relief
association to which the employee belongs. Reimbursement may be
made without application if the governing board of the
appropriate retirement system or association determines that
this method is feasible.
Sec. 46. Laws 1983, chapter 301, section 225, is amended
by adding a subdivision to read:
Subd. 1a. [CREDIT REQUIRED.] The executive director of the
Minnesota state retirement system shall credit to the share
account in the supplemental retirement fund of any participant
in the unclassified employees program established by Minnesota
Statutes, chapter 352D, an amount equal to the amount by which
employer contributions on behalf of that participant were
reduced by reason of the law cited in subdivision 1. Funds
sufficient to make the credits required by this subdivision are
appropriated from the general fund to the executive director.
Sec. 47. [COMMISSIONER OF FINANCE TO REDUCE ALLOTMENTS.]
The commissioner of finance shall reduce the fiscal year
1985 allotments to any agencies or institutions receiving a
state appropriation pursuant to Laws 1983, chapters 258, 293,
301, or 312 and having employees contributing to the public
employees retirement association, state employees retirement
fund, the correctional employees retirement fund, and the
highway patrol retirement fund. The reduction shall be in an
amount equal to the estimated fiscal year 1985 salaries of
members of these plans multiplied by the differences between the
employer contribution rate in effect prior to July 1, 1984, and
the employer rate in effect after June 30, 1984.
Sec. 48. [ANNUAL APPROPRIATION.]
There is appropriated and transferred from the general fund
to the commissioner of finance, $1,000,000 annually for
distribution among those local police and salaried firefighters
relief associations that receive amortization state aid
according to Minnesota Statutes, section 423A.02. Distribution
shall be made according to that proportion the unfunded accrued
liability of each relief association bears to the total unfunded
accrued liabilities of all relief associations as reported in
the most recent actuarial valuations of the relief associations
that receive amortization state aid according to section
423A.02. Moneys shall be distributed to the relief associations
at the same time fire and police department state aid is
distributed according to section 69.021.
Sec. 49. Laws 1983, chapter 314, article 12, section 1,
subdivision 2, is amended to read:
Subd. 2. [TEACHERS RETIREMENT ASSOCIATION: TEACHERS
STATEWIDE.] To the teachers retirement association, to meet the
state's obligation prescribed in Minnesota Statutes, section
354.43, there is appropriated:
$87,508,200.........1984,
$92,137,200 104,476,000.........1985.
Sec. 50. [TEACHERS RETIREMENT ASSOCIATION FUNDING.]
There is appropriated to the commissioner of finance from
the general fund $1,965,000 for the purpose of meeting the
increased contribution requirements for the teacher's retirement
fund necessitated by the passage of section 29, during the
fiscal year commencing July 1, 1984.
Sec. 51. [REPEALER.]
Minnesota Statutes 1982, sections 352.022; 353.38; and
354.07, subdivision 8; and Laws 1983, chapter 301, section 225,
subdivision 2, are repealed.
Sec. 52. [EFFECTIVE DATES.]
Sections 1 through 5, 10, 12, 13, 17 through 21, 24, 27,
29, 33, 36, 37, 39 through 41, and 47 through 50 are effective
July 1, 1984. The remaining sections are effective the day
following final enactment. The provisions of section 43 are
applicable to all valuations performed beginning with the
valuations for the fiscal year ending June 30, 1984.
Approved April 26, 1984
Official Publication of the State of Minnesota
Revisor of Statutes