Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Session Laws - 1991, Regular Session
Key: (1) language to be deleted (2) new language
Laws of Minnesota 1991
CHAPTER 269-H.F.No. 299
An act relating to retirement; exempting certain
persons participating in the employee interchange
program from membership in the Minnesota state
retirement system; authorizing the continuation of
surviving spouse benefits in the event of remarriage;
revising pension plan actuarial reporting; providing a
supplemental retirement plan for state university and
community college personnel; allowing a purchase of
prior service credit; amending Minnesota Statutes
1990, sections 3.85, subdivision 11; 3A.04,
subdivision 1; 15.53, subdivision 2; 352B.11,
subdivision 2; 352C.04, subdivisions 1 and 4; 353.01,
subdivision 20; 353.31, subdivision 1; 353.657,
subdivision 2; 353B.11, subdivision 6; 354.05,
subdivision 15; 354.46, subdivision 1; 354A.011,
subdivision 26; 354B.01, by adding a subdivision;
356.20, subdivision 4; and 356.215, subdivisions 1, 2,
3, 4, 4a, 4b, 4d, 4e, 4f, 4g, 4h, 4i, 4j, 4k, 5, 6,
and 7; proposing coding for new law in Minnesota
Statutes, chapters 354B; and 423A; repealing Minnesota
Statutes 1990, sections 136.80; 136.81; 136.82;
136.83; 136.84; 136.85; 136.87; 352.85, subdivision 6;
352.86, subdivision 4; and 353A.09, subdivision 7.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
Section 1. Minnesota Statutes 1990, section 15.53,
subdivision 2, is amended to read:
Subd. 2. The period of individual assignment or detail
under an interchange program shall not exceed 24 months, nor
shall any person be assigned or detailed for more than 24 months
during any 36-month period, except when the assignment or detail
is made to coincide with an unclassified appointment under
section 15.06. Details relating to any matter covered in
sections 15.51 to 15.57 may be the subject of an agreement
between the sending and receiving agencies. Elected officials
shall not be assigned from a sending agency nor detailed to a
receiving agency.
Sec. 2. [423A.17] [AUTHORITY TO IMPLEMENT THE CONTINUATION
OF SURVIVING SPOUSE BENEFITS UPON REMARRIAGE.]
(a) Notwithstanding a provision of section 69.48; 423.387,
subdivision 1; 423.58, subdivision 1; 423.810, subdivision 1; or
424.24, subdivision 1, or other law governing a local police or
salaried firefighters relief association to the contrary, the
board of trustees of a local relief association governed by
section 69.77, with municipal approval as provided in section
69.77, subdivision 2i, may amend the bylaws of the relief
association to provide that a surviving spouse benefit is
payable for the life of the surviving spouse and remains payable
even in the event of the remarriage of the surviving spouse.
(b) If the surviving spouse benefit change described in
paragraph (a) is made, the change applies to a surviving spouse
benefit payable on the effective date of the change and to the
potential surviving spouses of all active, deferred, or retired
members of the relief association who have that status on the
effective date of the change.
(c) In addition, if the surviving spouse benefit change
described in paragraph (a) is made and the bylaws so provide, a
person who formerly was receiving surviving spouse benefits from
the relief association and who had those benefits discontinued
by virtue of the remarriage is entitled, upon application, to a
resumption of the surviving spouse benefit, beginning with the
last day of the month following receipt of the application by
the secretary of the relief association. Nothing in this
section authorizes the payment of a benefit amount to an estate.
(d) The bylaw amendment is not effective until a certified
copy of the amendment and the municipal approval has been filed
by the municipal clerk with the executive director of the
legislative commission on pensions and retirement, the state
auditor, and the secretary of state.
Sec. 3. [SERVICE EXCLUSION.]
Notwithstanding any law to the contrary, a person serving
in the state unclassified service under an employee interchange
program according to Minnesota Statutes, section 15.53, who
remains a member of another public pension plan during the state
unclassified service is not a member of the Minnesota state
retirement system for the service under the employee interchange
program.
Sec. 4. [EFFECTIVE DATE.]
Section 2 is effective on the day following final enactment.
ARTICLE 2
SURVIVING SPOUSE BENEFIT MODIFICATIONS
Section 1. Minnesota Statutes 1990, section 3A.04,
subdivision 1, is amended to read:
Subdivision 1. [SURVIVING SPOUSE.] Upon the death of a
member of the legislature while serving as a member, or upon the
death of a former legislator who has rendered at least the
number of years of service as required by section 3A.02,
subdivision 1, clause (1) and who was not receiving a retirement
allowance, the surviving spouse shall be entitled to receive a
survivor benefit in the amount of one-half of the retirement
allowance of the member of the legislature or former legislator
computed as though the member or former legislator had attained
at least the normal retirement age on the date of death and
based upon the average monthly salary as of the date of death or
as of the date of termination, whichever is applicable, and the
allowable service of the member or the former legislator or
eight years, whichever is greater. The augmentation provided in
section 3A.02, subdivision 4, if applicable, shall be applied
from the first day of the month next following the date of
termination of service as a member of the legislature to the
month of death. Upon the death of a former legislator who was
receiving a retirement allowance, the surviving spouse shall be
entitled to one-half of the amount of the allowance being paid
to the former legislator. The surviving spouse benefit shall be
paid during the lifetime of the surviving spouse, but shall
cease and terminate upon the remarriage of the surviving spouse.
Sec. 2. Minnesota Statutes 1990, section 352B.11,
subdivision 2, is amended to read:
Subd. 2. [DEATH; PAYMENT TO SPOUSE AND CHILDREN.] If a
member serving actively as a member, a member receiving the
disability benefit provided by section 352B.10, subdivision 1,
or a former member receiving a disability benefit as provided by
section 352B.10, subdivision 2, dies from any cause, the
surviving spouse and dependent children are entitled to benefit
payments as follows:
(a) A member with at least three 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 became or would have become 55.
(b) The surviving spouse of a member who had credit for
less than three years of service shall receive, for life, a
monthly annuity equal to 50 percent of that part 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 three years service and who died after becoming 55 years
old, may elect to receive a 100 percent joint and survivor
annuity, for life, notwithstanding a subsequent remarriage, in
lieu of the annuity prescribed in paragraph (b).
(d) The surviving spouse of any member who had credit for
three years or more and who was not 55 years old at death, shall
receive the benefit equal to 50 percent of the average monthly
salary as described in clause (b) until the deceased member
would have become 55 years old, 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
before the deceased member's 55th birth date, benefits or
annuities shall cease as of the date of remarriage. Remarriage
after 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 part of the average monthly salary
of the former member from which deductions were made for
retirement. A dependent child over 18 and under 23 years of age
also may receive the monthly benefit provided in this section,
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 part 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 must be made to
the surviving spouse, or if there is none, to the legal guardian
of the child. The maximum monthly benefit for any one family
must not be less than 50 nor exceed 70 percent of the average
monthly salary for any number of children.
(f) If the member dies under circumstances that entitle the
surviving spouse and dependent children to receive benefits
under the workers' compensation law, the workers' compensation
benefits received by them must not be deducted from the benefits
payable under this section.
(g) The surviving spouse of a deceased former member who
had credit for three or more years of allowable service, but not
the spouse of a former member receiving a disability benefit
under section 352B.10, subdivision 2, is entitled to receive the
100 percent joint and survivor annuity at the time the deceased
member would have become 55 years old, if the surviving spouse
has not remarried before that date. If a former member dies who
does not qualify for other benefits under this chapter, the
surviving spouse or, if none, the children or heirs are entitled
to a refund of the accumulated deductions left in the fund plus
interest at the rate of six percent per year compounded annually.
Sec. 3. Minnesota Statutes 1990, section 352C.04,
subdivision 1, is amended to read:
Subdivision 1. [SURVIVING SPOUSE BENEFIT.] Upon the death
of a constitutional officer or commissioner while actively
serving in office, or a former constitutional officer or
commissioner with at least eight years of allowable service, the
surviving spouse is entitled to a survivor benefit in the amount
of one-half of the retirement allowance of the constitutional
officer or commissioner or the former constitutional officer or
commissioner computed as though the constitutional officer or
commissioner or the former constitutional officer or
commissioner were at least age 62 on the date of death and based
upon the attained allowable service or eight years, whichever is
greater. The augmentation provided in section 352C.033, if
applicable, shall be applied to the month of death. Upon the
death of a former constitutional officer or commissioner
receiving a retirement allowance, the surviving spouse shall be
entitled to one-half of the amount of the retirement allowance
being paid to the former constitutional officer or commissioner
as of the date of death. The benefit shall be paid to a
surviving spouse eligible therefor during the remainder of the
spouse's natural life or until remarriage. Upon remarriage, the
spouse shall no longer be eligible for the benefit except as
provided in section 356.31.
Sec. 4. Minnesota Statutes 1990, section 352C.04,
subdivision 4, is amended to read:
Subd. 4. [APPLICATION FOR SURVIVOR BENEFITS.] A surviving
spouse or a guardian of the estate of the dependent child or
children entitled to the payment of benefits under this section
shall file an application for the benefit with the director, and
payment shall commence as of the first day of the month next
following the filing of the application and shall be retroactive
to the first of the month following the death of the
constitutional officer or commissioner or the former
constitutional officer or commissioner; provided, however, that
no payment shall be retroactive for more than 12 months prior to
the month in which the application is filed with the director.
Such benefits shall be paid on the first day of each calendar
month for that month. The surviving spouse benefit shall cease
with the payment for the month in which the surviving spouse
dies or remarries as the case may be. The dependent child's
benefit shall cease with the payment for the month in which the
child no longer qualifies for payment as a dependent child.
Sec. 5. Minnesota Statutes 1990, section 353.01,
subdivision 20, is amended to read:
Subd. 20. [SURVIVING SPOUSE.] "Surviving spouse" means the
unremarried spouse of a deceased member who was legally married
to the member at the time of death, or at the time the member
became totally and permanently disabled.
Sec. 6. Minnesota Statutes 1990, 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 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 $1,000, and the minimum benefit per family shall not be
less than 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. 7. Minnesota Statutes 1990, section 353.657,
subdivision 2, is amended to read:
Subd. 2. The spouse, for life or until remarriage, shall
receive a monthly benefit equal to 50 percent of the member's
average full-time monthly salary rate as a police officer or
firefighter in effect over the last six months of allowable
service preceding the month in which death occurred.
Sec. 8. Minnesota Statutes 1990, section 353B.11,
subdivision 6, is amended to read:
Subd. 6. [DISCONTINUATION; SURVIVING SPOUSE BENEFIT.] (a)
Except as specified in paragraph (b) or (c), a surviving spouse
benefit shall terminate upon the death or the subsequent
marriage of the person entitled to receive or receiving a
surviving spouse benefit.
(b) A surviving spouse benefit shall terminate upon the
subsequent marriage of the person entitled to receive or
receiving a surviving spouse benefit but shall recommence at the
appropriate amount without any retroactive payments in the event
of the termination of the subsequent marriage for any reason for
the former members of the following consolidating relief
associations:
(1) Albert Lea firefighters relief association;
(2) Albert Lea police relief association;
(3) Duluth firefighters relief association;
(4) Duluth police pension association;
(5) Minneapolis fire department relief association;
(6) (5) St. Paul fire department relief association; and
(7) (6) St. Paul police relief association.
(c) A surviving spouse benefit shall terminate only upon
the death of the person entitled to receive or receiving a
surviving spouse benefit for the former members of the following
consolidating relief associations:
(1) Anoka police relief association;
(2) Buhl police relief association;
(3) Chisholm fire department relief association;
(4) Chisholm police relief association;
(5) Crookston fire department relief association;
(6) Duluth police relief association;
(7) Faribault fire department relief association;
(8) Hibbing firefighters relief association;
(9) Hibbing police relief association;
(10) Mankato fire department relief association;
(2) (11) Red Wing fire department relief association;
(12) Red Wing police relief association;
(13) Rochester fire department relief association;
(14) Rochester police relief association;
(15) St. Cloud fire department relief association;
(16) St. Louis Park fire department relief association;
(17) St. Louis Park police relief association;
(18) South St. Paul firefighters relief association;
(3) (19) South St. Paul police relief association;
(4) (20) West St. Paul firefighters relief association; and
(5) (21) Winona fire department relief association; and
(22) Winona police relief association.
Sec. 9. Minnesota Statutes 1990, section 354.05,
subdivision 15, is amended to read:
Subd. 15. [DEPENDENT SPOUSE.] "Dependent spouse" means the
spouse of a deceased member who has not remarried and was living
with and dependent upon the member at the time of death.
Sec. 10. Minnesota Statutes 1990, 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 .....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 $1,000 for any one family, and
the minimum benefit per family shall not be less than 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 section 354.47, subdivision 1. 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. 11. Minnesota Statutes 1990, section 354A.011,
subdivision 26, is amended to read:
Subd. 26. [SPOUSE.] "Spouse" means the person who was
legally married to and living with the member immediately prior
to the member's death and who has not remarried subsequent to
the member's death.
Sec. 12. [SURVIVING SPOUSE BENEFITS.]
Subdivision 1. Notwithstanding any laws to the contrary,
the benefit payable to the surviving spouse of a deceased
deferred or deceased retired former member of the following
consolidated relief associations is as specified in subdivision
2:
(a) Chisholm fire relief association;
(b) Chisholm police relief association;
(c) Hibbing fire relief association; and
(d) Hibbing police relief association.
The benefit specified in subdivision 2 is payable to
current and prospective surviving spouses eligible to receive a
benefit under the benefit provisions of the applicable local
relief association benefit plan.
Subd. 2. The benefit provided for individuals identified
in subdivision 1 is 50 percent of the annuity amount being
received by the former member immediately prior to death, unless
the survivor benefit computed under prior law is greater.
Sec. 13. [EFFECTIVE DATE.]
(a) Sections 1 to 11 are effective the day following final
enactment.
Section 12 is effective for the former relief associations
of the city of Chisholm the day following approval by the
Chisholm city council and upon compliance with Minnesota
Statutes, section 645.021. Section 12 is effective for the
former relief associations of the city of Hibbing the day
following approval by the Hibbing city council and upon
compliance with Minnesota Statutes, section 645.021.
(b) The elimination of the surviving spouse benefit
discontinuation requirement provided for in sections 1 to 11
also applies to any surviving spouse receiving a surviving
spouse benefit on the date of final enactment of the act and the
potential surviving spouses of active, deferred or retired plan
members who have that status on the effective date of the
change. Sections 1 to 11 do not apply to persons who formerly
were receiving surviving spouse benefits and had those benefits
discontinued by virtue of a remarriage and may not be considered
to authorize the payment of any retroactive survivor benefit
amounts to any person or to an estate.
ARTICLE 3
PUBLIC PENSION PLAN ACTUARIAL REPORTING REVISIONS
Section 1. Minnesota Statutes 1990, section 3.85,
subdivision 11, is amended to read:
Subd. 11. [VALUATIONS AND REPORTS TO LEGISLATURE.] (a) The
commission shall contract with an established actuarial
consulting firm to conduct annual actuarial valuations and
financial adequacy studies for the retirement plans named in
paragraph (b). The contract shall must include provisions for
performing cost analyses of proposals for changes in benefit and
funding policies.
(b) The contract for actuarial valuation and analysis shall
must include the following retirement plans:
(1) the statewide teachers retirement plan, teachers
retirement association;
(2) the general state employees retirement plan, Minnesota
state retirement system;
(3) the correctional employees retirement plan, Minnesota
state retirement system;
(4) the state patrol retirement plan, Minnesota state
retirement system;
(5) the judges retirement plan, Minnesota state retirement
system;
(6) the Minneapolis employees retirement plan, Minneapolis
employees retirement fund;
(7) the general public employees retirement plan, public
employees retirement association;
(8) the public employees police and fire plan, public
employees retirement association;
(9) the Duluth teachers retirement plan, Duluth teachers
retirement fund association;
(10) the Minneapolis teachers retirement plan, Minneapolis
teachers retirement fund association;
(11) the St. Paul teachers retirement plan, St. Paul
teachers retirement fund association;
(12) the legislator's legislators retirement plan,
Minnesota state retirement system; and
(13) the elective state officers retirement plan, Minnesota
state retirement system; and
(14) the public employees local government correctional
service retirement plan, public employees retirement
association, if there are any participants in that plan.
(c) Every year The contract shall must specify completion
of standard annual actuarial valuations for the valuation
calculations on a fiscal year basis with their contents
as described specified in section 356.215, subdivisions 4 to 4k,
and cash flow forecasts through the amortization target date and
the standards for actuarial work adopted by the commission.
For every plan year The contract shall must
specify preparation completion of an exhibit on the experience
of the fund for inclusion in the annual actuarial valuation and
completion of a periodic experience study annual experience data
collection and processing and a quadrennial published experience
study for the plans listed in paragraph (b), clauses (1), (2),
and (7), as provided for in the standards for actuarial work
adopted by the commission. The experience study shall data
collection, processing, and analysis must evaluate the
appropriateness of continuing to use for future valuations the
assumptions relating to the following:
(1) individual salary progression;
(2) rate of return on investments based on current asset
value;
(3) payroll growth;
(4) mortality; withdrawal; disability;
(5) retirement; and any other experience-related factor
that could impact the future financial condition of the
retirement funds age;
(6) withdrawal; and
(7) disablement.
(d) The actuary retained by the commission shall annually
prepare a report to the legislature, including the commentary on
the actuarial valuation calculations for the plans named in
paragraph (b) and summarizing the results of the valuations and
cash flow projections actuarial valuation calculations. It The
commission-retained actuary shall include with its the report
the actuary's recommendations concerning the appropriateness of
the support rates to achieve proper funding of the retirement
funds by the required funding dates. It The commission-retained
actuary shall, within two months of the completion as part of
the periodic quadrennial published experience studies
study, prepare a report include recommendations to the
legislature on the appropriateness of the actuarial valuation
assumptions required for evaluation in the periodic experience
study.
(e) If the actuarial gain and loss analysis in the
actuarial valuation calculations indicates a persistent pattern
of sizable gains or losses, as directed by the commission, the
actuary retained by the commission shall prepare a special
experience study for a plan listed in paragraph (b), clause (3),
(4), (5), (6), (8), (9), (10), (11), (12), (13), or (14), in the
manner provided for in the standards for actuarial work adopted
by the commission.
(f) The term of the contract between the commission and the
actuary retained by the commission is two years, plus not to
exceed two one-year extensions before competitive bidding. The
contract is subject to competitive bidding procedures as
specified by the commission.
Subd. 12. [ALLOCATION OF ACTUARIAL COST.] (a) The
commission shall assess each retirement plan specified
in subdivision 11, paragraph (b), other than clauses (12) and
(13), for a portion of the compensation paid to the actuary
retained by the commission for the cost of its actuarial
valuations valuation calculations and quadrennial experience
studies. The assessment shall be that part is 72 percent of the
amount of contract compensation for the actuarial consulting
firm retained by the commission for those functions that bears
the same relationship that the total active, deferred, inactive,
and benefit recipient membership of the retirement plan bears to
the total action, deferred, inactive, and benefit recipient
membership of all retirement plans specified in paragraph
(b) actuarial valuation calculations, including the public
employees police and fire plan consolidation accounts of the
public employees retirement association, annual experience data
collection and processing, and quadrennial experience studies.
The portion of the total assessment payable by each
retirement system or pension plan must be determined as follows:
(1) Each pension plan specified in subdivision 11,
paragraph (b), clauses (1) to (14), must pay the following
indexed amount based on its total active, deferred, inactive,
and benefit recipient membership:
up to 2,000 members, inclusive $2.55 per member
2,001 through 10,000 members $1.13 per member
over 10,000 members $0.11 per member
The amount specified is applicable for the assessment of
the July 1, 1991, to June 30, 1992, fiscal year actuarial
compensation amounts. For the July 1, 1992, to June 30, 1993,
fiscal year and subsequent fiscal year actuarial compensation
amounts, the amount specified must be increased at the same
percentage increase rate as the implicit price deflator for
state and local government purchases of goods and services for
the 12-month period ending with the first quarter of the
calendar year following the completion date for the actuarial
valuation calculations, as published by the federal Department
of Commerce, and rounded upward to the nearest full cent.
(2) The total per-member portion of the allocation must be
determined, and that total per-member amount must be subtracted
from the total amount for allocation. Of the remainder dollar
amount, the following per-retirement system and per-pension plan
charges must be determined and the charges must be paid by the
system or plan:
(i) 37.87 percent is the total additional per-retirement
system charge, of which one-seventh must be paid by each
retirement system specified in subdivision 11, paragraph (b),
clauses (1), (2), (6), (7), (9), (10), and (11).
(ii) 62.13 percent is the total additional per-pension plan
charge, of which one-thirteenth must be paid by each pension
plan specified in subdivision 11, paragraph (b), clauses (1) to
(13), if there are not any participants in the plan specified in
subdivision 11, paragraph (b), clause (14), or of which
one-fourteenth must be paid by each pension plan specified in
subdivision 11, paragraph (b), clauses (1) to (14), if there are
participants in the plan specified in subdivision 11, paragraph
(b), clause (14).
(b) The assessment shall must be made upon following the
completion of the actuarial valuations valuation calculations
and the experience studies analysis. The amount of the
assessment is appropriated from the retirement fund applicable
to the retirement plan. Receipts from assessments shall must be
deposited in the state treasury and credited to the general fund.
Sec. 2. Minnesota Statutes 1990, section 356.20,
subdivision 4, is amended to read:
Subd. 4. [CONTENTS OF FINANCIAL REPORT.] The financial
report required by this section shall include:
(1) must contain financial statements and disclosures that
indicate the financial operations and position of the retirement
plan and fund. The report must conform with generally accepted
governmental accounting principles, applied on a consistent
basis. The report must be audited. The report must include, as
part of its exhibits or footnotes, an exhibit actuarial
disclosure item based on the actuarial valuation calculations
prepared by the commission-retained actuary or by the actuary
retained by the retirement fund or plan, if applicable,
according to applicable actuarial requirements enumerated in
section 356.215, and specified in the most recent standards for
actuarial work adopted by the legislative commission on pensions
and retirement. The exhibit shall show the accrued assets of
the fund, the accrued liabilities, including accrued reserves,
and the unfunded actuarial accrued liability of the fund or plan
must be disclosed. The exhibit shall disclosure item must
contain the certificate of a declaration by the actuary retained
by the legislative commission on pensions and retirement or the
actuary retained by the fund or plan, whichever applies,
specifying that the required reserves for any retirement,
disability, or survivor benefits provided under a benefit
formula are computed in accordance with the entry age actuarial
cost method and any with the most recent applicable
standards for actuarial work adopted by the legislative
commission on pensions and retirement.
(a) Assets shown in the exhibit shall of the fund or plan
contained in the disclosure item must 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 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 actuarial
value of current assets as specified defined in section 356.215,
subdivision 4, including:
Cash, cash equivalents, and short-term securities
Fixed income investments
Equity investments
Real estate investments
Equity in the Minnesota postretirement investment fund
Other 1:
Value Value
at cost at market
Cash, cash equivalents, and
short-term securities ......... .........
Accounts receivable ......... .........
Accrued investment income ......... .........
Fixed income investments ......... .........
Equity investments other
than real estate ......... .........
Real estate investments ......... .........
Equipment ......... .........
Equity in the Minnesota
postretirement investment
fund ......... .........
Other ......... .........
Total assets
Value at cost .........
Value at market .........
Value of current assets .........
(c) (b) The exhibit shall include a statement of the
unfunded actuarial accrued liability of the fund which shall or
plan contained in the disclosure item must include the following
measures of unfunded actuarial accrued liability, using
the actuarial value of current assets as specified in section
356.215, subdivision 1:
(i) (1) unfunded actuarial accrued liability, which shall
be determined by subtracting the current assets and the present
value of future normal costs from the total current and expected
future benefit obligations; and
(ii) current (2) unfunded actuarial liability pension
benefit obligation, which is the total current benefit
obligations less determined by subtracting the total current
assets; and
(iii) current and future unfunded actuarial liability,
which is the total current and expected future benefit
obligations less the total current and expected future
assets from the actuarial present value of credited projected
benefits.
If the current assets of the fund or plan exceed the
actuarial accrued liabilities, the excess shall must be listed
disclosed and indicated as a surplus and indicated in the
exhibit following the itemization of benefit obligations.
(d) The exhibit shall include a footnote showing
accumulated member contributions without interest.
(e) Current liabilities shown in the exhibit shall include
the following items:
Current:
Accounts payable
Retirement annuity payments
Disability benefit payments
Survivor benefit payments
Refund to members
Accrued expenses
Suspense items
Total current liabilities ........................ .
(f) (c) The exhibit shall include a schedule which shall be
listed as the "current and expected future pension benefit
obligations." The schedule shall included in the disclosure
must contain the following information on the benefit
obligations:
1. Current (1) The pension benefit obligations obligation,
which shall be determined as the actuarial present value of
benefit obligations credited projected benefits on account of
service rendered to date, separately identified as follows:
(a) (i) For annuitants
Retirement annuities
Disability benefits
Surviving spouse and child benefits
(b) (ii) For former members without vested rights
(c) (iii) For deferred annuitants' benefits, including
any augmentation
(d) (iv) For active employees
Retirement annuities
Disability benefits
Refund liability due to death or
withdrawal
Survivors' benefits
Accumulated employee contributions,
including allocated investment income
Employer-financed benefits vested
Employer-financed benefits nonvested
Total current benefits obligations pension benefit
obligation;
2. Expected future benefit obligations which shall be the
actuarial value of benefit obligations on account of future
service for active employees
3. Total current and expected future benefit obligations
4. In addition to the foregoing, (2) If there are
additional benefits not appropriately covered by the
foregoing three items of benefit obligations, they shall be
listed separately a separate identification of the obligation.
(2) An income statement prepared 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 the payment of retirement annuities,
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 concerning
the membership and beneficiaries of the fund, with indications
of changes in the statistical data which may result from the
current year's operation.
(5) (d) Any additional statements or exhibits which or more
detailed or subdivided itemization of a disclosure item that
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 must 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. 3. Minnesota Statutes 1990, section 356.215,
subdivision 1, is amended to read:
Subdivision 1. [DEFINITIONS.] For the purposes of sections
3.85 and 356.20 to 356.23, each of the following terms shall
have the meaning given:
(1) "Actuarial valuation" means a set of calculations
prepared by the actuary retained by the legislative commission
on pensions and retirement if so required under section 3.85, or
otherwise, by an approved actuary, to determine the normal cost
and the accrued actuarial liabilities of a benefit plan,
according to a stated the entry age actuarial cost method and
based upon stated assumptions including, but not limited to
rates of interest, mortality, salary increase, disability,
withdrawal, and retirement and to determine the payment
necessary to amortize over a stated period any unfunded accrued
actuarial liability disclosed as a result of the actuarial
valuation and the resulting actuarial balance sheet of the
benefit plan.
(2) "Approved actuary" means a person who is regularly
engaged in the business of providing actuarial services and who
has at least 15 years of service to major public employee
pension or retirement funds or who is a fellow in the society of
actuaries.
(3) "Entry age actuarial cost method" means an actuarial
cost method under which the actuarial present value of the
projected benefits of each individual currently covered by the
benefit plan and included in the actuarial valuation is
allocated on a level basis over the service of the individual if
the benefit plan is governed by section 69.773 or over the
earnings of the individual if the benefit plan is governed by
any other law between the entry age and the assumed exit age,
with the portion of this actuarial present value which is
allocated to the valuation year to be the normal cost and the
portion of this actuarial present value not provided for at the
valuation date by the actuarial present value of future normal
costs to be the actuarial accrued liability, with aggregation in
the calculation process to be the sum of the calculated result
for each covered individual and with recognition given to any
different benefit formulas which may apply to various periods of
service.
(4) "Experience study" means a report which provides
providing experience data and an actuarial analysis which
substantiate of the adequacy of the actuarial assumptions on
which actuarial valuations are based.
(5) "Expected future statutory supplemental contributions"
means the sum of future employee and employer contributions at
the rates specified in statute when the valuation is completed,
reduced by the present value of future normal costs.
(6) "Current assets" means the value of all assets at cost,
which includes including realized capital gains or losses, plus
one-third of any unrealized capital gains or losses.
(7) (6) "Unfunded actuarial accrued liability" means the
total current and expected future benefit obligations less,
reduced by the sum of current assets and the present value of
future normal costs.
(7) "Pension benefit obligation" means the actuarial
present value of credited projected benefits, determined as the
actuarial present value of benefits estimated to be payable in
the future as a result of employee service attributing an equal
benefit amount, including the effect of projected salary
increases and any step rate benefit accrual rate differences, to
each year of credited and expected future employee service.
Sec. 4. Minnesota Statutes 1990, section 356.215,
subdivision 2, is amended to read:
Subd. 2. [REQUIREMENTS.] It is the policy of the
legislature that it is necessary and appropriate to determine
annually the financial status of tax supported retirement and
pension plans for public employees. To achieve this goal, the
legislative commission on pensions and retirement shall have
prepared by the actuary retained by the commission annual
actuarial valuations and periodic experience studies of
the public pension and retirement plans enumerated in section
3.85, subdivision 12 11, clause paragraph (b), and quadrennial
experience studies of the retirement plans enumerated in section
3.85, subdivision 11, paragraph (b), clauses (1), (2), and (7).
The governing or managing board or administrative officials of
each public pension and retirement fund or plan enumerated in
section 356.20, subdivision 2, clauses (9), (10), and (12),
shall have prepared by an approved actuary annual actuarial
valuations and periodic experience studies of their respective
funds as provided in this section. This requirement shall also
apply applies to any fund which may be a that is the successor
to any organization enumerated in section 356.20, subdivision 2,
or to the governing or managing board or administrative
officials of any newly formed retirement fund or association
operating under the control or supervision of any public
employee group, governmental unit, or institution receiving a
portion of its support through legislative appropriations, and
any local police or fire fund coming within the provisions of
section 356.216.
Sec. 5. Minnesota Statutes 1990, section 356.215,
subdivision 3, is amended to read:
Subd. 3. [REPORTS.] The actuarial valuations required
annually shall must be made as of the beginning of each fiscal
year. Two copies of the valuation shall must be delivered to
the executive director of the legislative commission on pensions
and retirement, to the commissioner of finance and to the
legislative reference library, not later than the first day of
the sixth month occurring after the end of the previous fiscal
year. Two copies of any a quadrennial experience study prepared
periodically as provided for in the standards adopted by the
commission shall must be filed with the executive director of
the legislative commission on pensions and retirement, with the
commissioner of finance, and with the legislative reference
library, not later than the first day of the 11th month
occurring after the end of the last fiscal year of the four-year
period which the experience study covers. For actuarial
valuations and experience studies prepared at the direction of
the legislative commission on pensions and retirement, two
copies of the document shall must be delivered to the governing
or managing board or administrative officials of the applicable
public pension and retirement fund or plan.
Sec. 6. Minnesota Statutes 1990, section 356.215,
subdivision 4, is amended to read:
Subd. 4. [ACTUARIAL VALUATION; CONTENTS.] The actuarial
valuation shall must be made in conformity with the requirements
of the definition contained in subdivision 1 and the most recent
standards for actuarial work adopted by the legislative
commission on pensions and retirement. The actuarial
valuation shall must measure all aspects of the benefit plan of
the fund in accordance with changes in benefit plans, if any,
and salaries as will or can reasonably be anticipated to be in
force during the ensuing fiscal year. The actuarial
valuation shall must be prepared in accordance with the entry
age actuarial cost method.
The actuarial valuation required under this section shall
must include the information required in subdivisions 4a to 4k.
Sec. 7. Minnesota Statutes 1990, section 356.215,
subdivision 4a, is amended to read:
Subd. 4a. [NORMAL COST.] For each a fund providing any
benefits in whole or in part under a defined benefit plan, the
actuarial valuation shall contain an exhibit indicating must
indicate the level normal cost of the benefits provided by the
laws governing the fund as of the date of the valuation,
calculated in accordance with the entry age actuarial cost
method. The normal cost shall must be expressed as a level
percentage of the present value of future payroll payrolls of
the active participants of the fund as of the date of the
valuation.
Sec. 8. Minnesota Statutes 1990, section 356.215,
subdivision 4b, is amended to read:
Subd. 4b. [ACCRUED LIABILITY.] For each a fund providing
any benefits under a defined benefit plan, the actuarial
valuation shall must contain an exhibit indicating the actuarial
accrued liabilities of the fund, which shall be equal to. This
figure is the present value of all future benefits minus,
reduced by the present value of future normal costs, calculated
in accordance with the entry age actuarial cost method.
Sec. 9. Minnesota Statutes 1990, section 356.215,
subdivision 4d, is amended to read:
Subd. 4d. [INTEREST AND SALARY ASSUMPTIONS.] (a) For funds
governed by chapters 3A, 352, 352B, 352C, 353, 353C, and 354
other than the variable annuity fund governed by section 354.62,
and 490, the actuarial valuation shall must use a preretirement
interest assumption of 8.5 percent, a postretirement interest
assumption of five percent, and an a future salary increase
assumption that in each future year the salary on which a
retirement or other benefit is based is 1.065 multiplied by the
salary for the preceding year of 6.5 percent.
(b) For funds governed by chapter 354A, the actuarial
valuation shall must use preretirement and postretirement
assumptions of 8.5 percent and an a future salary increase
assumption that in each future year the salary on which a
retirement or other benefit is based is 1.065 multiplied by the
salary for the preceding year of 6.5 percent, but the actuarial
valuation shall must reflect the payment of postretirement
adjustments to retirees shall be, based on the methods specified
in the bylaws of the fund as approved by the legislature.
(c) For all other funds not specified in paragraph (a),
(b), or (d), the actuarial valuation shall must use a
preretirement interest assumption of five percent, a
postretirement interest assumption of five percent, and an a
future salary increase 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 of 3.5 percent.
(d) For funds governed by chapters 3A, 352C, and 490, the
actuarial valuation shall must use a preretirement interest
assumption of 8.5 percent, a postretirement interest assumption
of five percent, and an a future salary increase assumption that
of 6.5 percent in each future year in which the salary amount
payable is not determinable from section 3.099, 15A.081,
subdivision 6, or 15A.083, subdivision 1, whichever is
applicable applies, or from applicable compensation council
recommendations under section 15A.082, the salary on which a
retirement or other benefit is based is 1.065 multiplied by the
known or computed salary for the preceding year, whichever is
applicable.
Sec. 10. Minnesota Statutes 1990, section 356.215,
subdivision 4e, is amended to read:
Subd. 4e. [OTHER ASSUMPTIONS.] The actuarial valuation
shall must use assumptions concerning mortality, disability,
retirement, withdrawal, retirement age, and any other relevant
demographic or economic factor, which shall. These must be set
at levels consistent with those determined in the most
recent quadrennial experience study completed pursuant to under
subdivision 5, if required, or representative of the best
estimate of future experience, if a quadrennial experience study
is not required. The actuarial valuation shall must contain an
exhibit indicating any actuarial assumptions used in preparing
the valuation report.
Sec. 11. Minnesota Statutes 1990, section 356.215,
subdivision 4f, is amended to read:
Subd. 4f. [ACTUARIAL BALANCE SHEET PUBLIC SECTOR
ACCOUNTING DISCLOSURE INFORMATION.] The actuarial
valuation shall must contain an actuarial balance sheet, which
shall indicate current and expected future benefit obligations,
current and expected future assets, unfunded actuarial accrued
liability, current unfunded actuarial liability, and current and
future unfunded actuarial liability. Specifically, the balance
sheet for all funds, except local police, salaried firefighter,
and specified volunteer firefighter funds, shall include the
following:
CURRENT AND EXPECTED FUTURE ASSETS
Current assets
Cash, cash equivalents,
and short-term securities $...
Fixed income investments ...
Equity investments ...
Real estate investments ...
Equity in the Minnesota postretirement
investment fund ...
Other ...
Total current assets $...
Expected future assets
Present value of expected future
statutory 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 present value of credited
projected benefit obligations
on account of service rendered to date:
For annuitants
Retirement annuities $...
Disability benefits ...
Surviving spouse and
child benefits ...
For former members without
vested rights ...
For deferred annuitants' benefits,
including any augmentation ...
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 actuarial liability
(Total current benefit obligations less
total current assets): $...
Current and future unfunded actuarial
liability
(Total current and expected future benefit
obligations less total current and
expected future assets): $...
In addition to that itemization of benefit obligations,
separate items shall be shown for additional benefits, if any,
which may not be appropriately included in that
itemization those actuarial calculations necessary to allow the
retirement plan administration or participating employing units
to prepare the pension-related portions of annual financial
reporting that meet generally accepted accounting principles for
the public sector.
Sec. 12. Minnesota Statutes 1990, section 356.215,
subdivision 4g, is amended to read:
Subd. 4g. [AMORTIZATION CONTRIBUTIONS.] (a) In addition to
the exhibit indicating the level normal cost, the actuarial
valuation shall must contain an exhibit indicating the
additional annual contribution which would be required
sufficient to amortize the unfunded actuarial accrued
liability. For funds governed by chapters 3A, 352, 352B, 352C,
353, 353C, 354, 354A, and 490, the additional contribution shall
must be calculated on a level percentage of covered payroll
basis by the established date for full funding which is in
effect when the valuation is prepared. The level percent
additional contribution shall must be calculated assuming annual
payroll growth of 6.5 percent. For all other funds, the
additional annual contribution shall must be calculated on a
level annual dollar amount basis.
If, (b) For any fund other than the Minneapolis employees
retirement fund, after the first actuarial valuation date
occurring after June 1, 1989, if there has not been a change in
the actuarial assumptions used for calculating the actuarial
accrued liability of the fund, a change in the benefit plan
governing annuities and benefits payable from the fund, a change
in the actuarial cost method used in calculating the actuarial
accrued liability of all or a portion of the fund, or a
combination of the three, which change or changes by themselves
without inclusion of any other items of increase or decrease
produce a net increase in the unfunded actuarial accrued
liability of the fund, the established date for full funding for
the first actuarial valuation made after June 1, 1989, and each
successive actuarial valuation shall be is the first actuarial
valuation date which occurs occurring after June 1, 2020.
If, (c) For any fund or plan other than the Minneapolis
employees retirement fund, after the first actuarial valuation
date occurring after June 1, 1989, if there has been a change in
any or all of the actuarial assumptions used for calculating the
actuarial accrued liability of the fund, a change in the benefit
plan governing annuities and benefits payable from the fund, a
change in the actuarial cost method used in calculating the
actuarial accrued liability of all or a portion of the fund, or
a combination of the three, and the change or changes, by
themselves and without inclusion of any other items of increase
or decrease, produce a net increase in the unfunded actuarial
accrued liability in the fund, the established date for full
funding shall must be determined using the following procedure:
(i) the unfunded actuarial accrued liability of the fund
shall must be determined in accordance with the plan provisions
governing annuities and retirement benefits and the actuarial
assumptions in effect before an applicable change;
(ii) the level annual dollar contribution or level
percentage, whichever is applicable, which is needed to amortize
the unfunded actuarial accrued liability amount determined
pursuant to subclause under item (i) by the established date for
full funding in effect prior to before the change shall must be
calculated using the interest assumption specified in
subdivision 4d in effect before the change;
(iii) the unfunded actuarial accrued liability of the fund
shall must be determined in accordance with any new plan
provisions governing annuities and benefits payable from the
fund and any new actuarial assumptions and the remaining plan
provisions governing annuities and benefits payable from the
fund and actuarial assumptions in effect before the change;
(iv) the level annual dollar contribution or level
percentage, whichever is applicable, which is needed to amortize
the difference between the unfunded actuarial accrued liability
amount calculated pursuant to subclause under item (i) and the
unfunded actuarial accrued liability amount calculated pursuant
to subclause under item (iii) over a period of 30 years from the
end of the plan year in which the applicable change is effective
shall must be calculated using the applicable interest
assumption specified in subdivision 4d in effect after any
applicable change;
(v) the level annual dollar or level percentage
amortization contribution pursuant to subclause under
item (iv) shall must be added to the level annual dollar
amortization contribution or level percentage
calculated pursuant to subclause under item (ii);
(vi) the period in which the unfunded actuarial accrued
liability amount determined in subclause item (iii) will be is
amortized by the total level annual dollar or level percentage
amortization contribution computed pursuant to subclause under
item (v) shall must be calculated using the interest assumption
specified in subdivision 4d in effect after any applicable
change, rounded to the nearest integral number of years,
but which shall not to 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 to be less than the period of
years beginning in the plan year in which the determination of
the established date for full funding using the procedure set
forth in this clause is made and ending by the date for full
funding in effect before the change; and
(vii) the period determined pursuant to subclause under
item (vi) shall must be added to the date as of which the
actuarial valuation was prepared and the date obtained shall
be is the new established date for full funding.
(d) For the Minneapolis employees retirement fund, the
established date for full funding shall be is June 30, 2017.
Sec. 13. Minnesota Statutes 1990, section 356.215,
subdivision 4h, is amended to read:
Subd. 4h. [ACTUARIAL GAINS AND LOSSES.] The actuarial
valuation shall must contain an exhibit consisting of an
analysis by the actuary explaining the net increase or decrease
in the unfunded actuarial accrued liability since the last
valuation must be provided. The explanation shall must
subdivide the net increase or decrease in the unfunded actuarial
accrued liability into at least the following parts:
(a) increases or decreases in the unfunded actuarial
accrued liability because of changes in benefits;
(b) increases and decreases in the unfunded actuarial
accrued liability because of each change, if any, changes in
actuarial assumptions;
(c) increases or decreases in the unfunded actuarial
accrued liability separately by source attributable to actuarial
gains or losses resulting from any experience deviations of from
the assumptions on which the valuation is based, as follows:
(i) actual investment earnings,;
(ii) actual postretirement mortality rates, and;
(iii) actual salary increase rates from the assumptions on
which the valuations are based; and
(iv) the remainder of the increase or decrease not
attributable to any separate source;
(d) increases or decreases in unfunded actuarial accrued
liability because of other reasons, including the effect of any
amortization contribution paid or additional amortization
contribution previously calculated but unpaid; and
(e) increases or decreases in unfunded actuarial accrued
liability because of changes in eligibility requirements or
groups included in the membership of the fund.
Sec. 14. Minnesota Statutes 1990, section 356.215,
subdivision 4i, is amended to read:
Subd. 4i. [MEMBERSHIP TABULATION.] The actuarial valuation
shall must contain an exhibit consisting of 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 must be made for each general benefit
program. The tabulations shall must be prepared by the
administration of the pension fund and must contain the
following information:
(a) (1) Active members Number
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
(b) (2) Annuitants Number
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 clause (2)
must be made separately for each of the following classes
of annuitants benefit recipients:
(a) (1) service retirement annuitants;
(b) (2) disability benefit recipients;
(c) (3) Surviving spouse survivor benefit recipients
(d) Surviving child benefit recipients; and
(e) (4) deferred annuitants.
Sec. 15. Minnesota Statutes 1990, section 356.215,
subdivision 4j, is amended to read:
Subd. 4j. [ADMINISTRATIVE EXPENSES.] The actuarial
valuation shall contain an exhibit indicating a statement of
must indicate the administrative expenses of the fund, expressed
both in dollars and also as a percentage of covered payroll.
Sec. 16. Minnesota Statutes 1990, section 356.215,
subdivision 4k, is amended to read:
Subd. 4k. [PLAN SUMMARY.] The actuarial valuation
shall must contain an exhibit indicating a summary of the
principal provisions of the plan upon which the valuation is
based.
Sec. 17. Minnesota Statutes 1990, section 356.215,
subdivision 5, is amended to read:
Subd. 5. [QUADRENNIAL EXPERIENCE STUDY; CONTENTS.] Each A
quadrennial experience study shall, if required, must contain an
actuarial analysis of the experience of the fund or association
and a comparison of the experience with the actuarial
assumptions on which the most recent actuarial valuation of the
retirement fund or relief association was based, and shall also
contain a statement of the average ages at which service
retirements have taken place.
Sec. 18. Minnesota Statutes 1990, section 356.215,
subdivision 6, is amended to read:
Subd. 6. [ACTUARIAL SERVICES BY APPROVED ACTUARIES.] Each
(a) The actuarial valuation or quadrennial experience
study shall must be made and any actuarial consulting services
for a retirement fund or plan shall must be provided by an
approved actuary. The actuarial valuation or quadrennial
experience study shall must include a certification declaration
that it has been prepared in accordance with the provisions
of according to sections 356.20 to 356.23 and the most recent
standards for actuarial work adopted by the legislative
commission on pensions and retirement.
(b) Actuarial valuations, or experience studies prepared by
an actuary retained by a retirement fund or plan must be
submitted to the legislative commission on pensions and
retirement within ten days of the submission of the document to
the retirement fund or plan.
Sec. 19. Minnesota Statutes 1990, section 356.215,
subdivision 7, is amended to read:
Subd. 7. [ESTABLISHMENT OF ACTUARIAL ASSUMPTIONS.]
Actuarial assumptions used for actuarial valuations under this
section that are other than those set forth in this section may
be changed only with the approval of the legislative commission
on pensions and retirement. A change in the applicable
actuarial assumptions may be proposed by the governing board of
the applicable pension fund or relief association, by the
actuary retained by the legislative commission on pensions and
retirement, by the actuarial advisor retained by to a pension
fund governed by chapter 352, 353, 354, or 354A, or by the
actuary retained by a local police or firefighters relief
association governed by sections 69.77 or 69.771 to 69.776, if
one is retained.
Sec. 20. [356.217] [MODIFICATIONS IN ACTUARIAL SERVICES.]
(a) The actuary retained by the legislative commission on
pensions and retirement is not required to prepare actuarial
valuations of the public employees local government correctional
employees retirement plan unless the plan is implemented by a
county under Minnesota Statutes, section 353C.04.
(b) The cost of any requested benefit projections by the
commission-retained actuary relating to the Minnesota
postretirement investment fund for the state board of investment
is payable by the state board of investment.
(c) Actuarial valuations under Minnesota Statutes, section
356.215, for July 1, 1991, and thereafter, are not required to
have an individual commentary section. The commentary section,
if omitted from the individual plan actuarial valuation, must be
included in an appropriate generalized format as part of the
report to the legislature under Minnesota Statutes, section
3.85, subdivision 11.
(d) Actuarial valuations under Minnesota Statutes, section
356.215, for July 1, 1991, and thereafter, are not required to
contain separate actuarial valuation results for basic and
coordinated programs unless each program has a membership of at
least ten percent of the total membership of the fund.
Actuarial valuations under Minnesota Statutes, section 356.215,
for July 1, 1991, and thereafter, are not required to contain
cash flow forecasts.
(e) Actuarial valuations of the public employees police and
fire fund local consolidation accounts for July 1, 1991, and
thereafter, are not required to contain separate tabulations or
summaries of active member, service retirement, disability
retirement, and survivor data for each local consolidation
account.
(f) The commission-retained actuary is:
(1) required to publish experience findings for plans for
which experience findings are required only on a quadrennial
basis for the four-year period ending June 30, 1992, and every
four years thereafter;
(2) not required to prepare a separate experience analysis
or publish separate experience findings for basic and
coordinated programs if separate actuarial valuation results for
the programs are not required; and
(3) not required to calculate investment rate of return
experience results on any basis other than current asset value
as defined in Minnesota Statutes, section 356.215, subdivision
1, clause (6).
Sec. 21. [REPEALER.]
Minnesota Statutes 1990, sections 352.85, subdivision 6;
352.86, subdivision 4; and 353A.09, subdivision 7, are repealed.
Sec. 22. [EFFECTIVE DATE.]
Sections 1 to 21 are effective the day following final
enactment.
ARTICLE 4
MISCELLANEOUS RETIREMENT PROVISIONS
Section 1. Minnesota Statutes 1990, section 354B.01, is
amended by adding a subdivision to read:
Subd. 1a. [SUPPLEMENTAL PLAN.] "Supplemental plan" means
the supplemental retirement plan established in sections 354B.07
to 354B.09.
Sec. 2. [354B.06] [RULES.]
The state university system and the community college
system may adopt rules to administer the provisions of sections
354B.07 to 354B.09. The systems may deposit member
contributions in a nontreasury account established under chapter
136, an account or accounts established under section 11A.17, or
other appropriate accounts of the state board of investment for
investment under procedures established by the state board of
investment.
Sec. 3. [354B.07] [SUPPLEMENTAL RETIREMENT PLAN.]
Subdivision 1. [ESTABLISHMENT.] The supplemental
retirement plan for personnel employed by the state university
board and the state board for community colleges who are in the
unclassified service of the state commencing July 1 following
the completion of the second year of their full-time contract is
governed by this section. An unclassified employee employed by
the state university board or the state board for community
colleges in subsidized on-the-job training, work experience, or
public service employment as an enrollee under the federal
Comprehensive Employment and Training Act is not included in the
supplemental retirement plan provided for in this section after
March 30, 1978, unless the unclassified employee has as of the
later of March 30, 1978, or the date of employment sufficient
service credit in the retirement fund providing primary
retirement coverage to meet the minimum vesting requirements for
a deferred retirement annuity, or the board agrees in writing to
make the employer contribution required by this section on
account of that unclassified employee from revenue sources other
than funds provided under the federal Comprehensive Employment
and Training Act, or the unclassified employee agrees in writing
to make the employer contribution required by this section in
addition to the member contribution.
Subd. 2. [REDEMPTIONS.] The chancellor of the state
university system and the chancellor of the state community
college system shall redeem all shares in the accounts of the
Minnesota supplemental investment fund held on behalf of
personnel in the supplemental plan who elect an investment
option other than the supplemental investment fund, except that
shares in the guaranteed return account may not be redeemed
until the expiration dates for the guaranteed investment
contracts. The chancellors shall transfer the cash realized to
the financial institutions selected by the state university
board and the community college board under section 354B.05.
Sec. 4. [354B.08] [SALARY DEDUCTIONS, MATCHING FUNDS.]
Subdivision 1. [DEDUCTIONS.] The state university board
and the state board for community colleges shall deduct from the
salary of each person described in section 354B.07 a sum equal
to five percent of the person's annual salary paid between
$6,000 and $15,000. The deduction must be made in the same
manner as other retirement deductions are made from the salary
of the person. The employer shall make a contribution to the
plan on behalf of every covered person in an amount equal to the
deductions made from the salary of the person. If an agreement
is made under section 356.24 for additional employer
contributions, an amount equal to the additional employer
contribution must be deducted from the person's annual salary
above $15,000 as specified in this subdivision. Two percent of
the amount of the salary deductions and employer contributions
may be used by the state university board and the state board
for community colleges for payment of necessary and reasonable
administrative expenses.
Subd. 2. [ADMINISTRATION.] The chancellor of the state
university system and the chancellor of the state community
college system shall administer the supplemental retirement plan
for their employees. The chancellors shall invest contributions
made under this section, less amounts used for administrative
expenses, as authorized by law. The retirement contributions
and death benefits provided by annuity contracts or custodial
accounts purchased by the chancellors are owned by the plan and
must be paid in accordance with the annuity contracts or
custodial accounts.
Sec. 5. [354B.09] [TAX SHELTER PROVISIONS.]
Subdivision 1. [AGREEMENTS; ADJUSTMENTS.] For the purpose
of, and to permit the participation in a tax shelter under
provisions of sections 501(c) and 403(b) and related provisions
of the Internal Revenue Code, the state university board and the
board for community colleges may enter into agreements to reduce
or adjust salaries downward for persons defined in section
354B.07, subdivision 1, and to pay as employer an amount
equivalent to the salary reduction in the same manner as
deductions would have been paid by the person under section
354B.08, subdivision 1.
Subd. 2. [RULES.] Subject to the approval of their
governing boards, the chancellors of the state university system
and community college system may adopt rules and procedures
consistent with sections 354B.07 to 354B.09 which permit, if
possible, participation in a tax shelter under provisions of the
Internal Revenue Code.
Sec. 6. [TRANSFER.]
The executive director of the teachers retirement
association shall transfer the administrative records of the
supplemental retirement plan to the chancellor of the state
university system and the chancellor of the state community
college system on July 1, 1991.
Sec. 7. [PURCHASE OF PRIOR SERVICE CREDIT.]
Subdivision 1. [ELIGIBILITY.] Notwithstanding the
limitations in Minnesota Statutes, section 353.27, subdivision
12, a member of the public employees retirement association born
on August 22, 1956, who was employed by the city of Minneapolis
as a construction equipment operator beginning on June 24, 1983,
on a temporary or seasonal basis, and who first became eligible
for public employees retirement association membership during
1985, but for whom no employee or employer contributions were
made until September 1986, may purchase allowable service credit
from the public employees retirement association for the period
of eligible service between January 1985 and September 1986 upon
receipt by the association of the amount specified in
subdivision 2.
Subd. 2. [PURCHASE PAYMENT AMOUNT.] To purchase credit for
prior eligible service under subdivision 1, there must be paid
to the public employees retirement association an amount equal
to the present value, on the date of payment, of the amount of
the additional retirement annuity obtained by purchase of the
additional service credit. Calculation of this amount must be
made using the applicable preretirement interest rate specified
in Minnesota Statutes, section 356.215, subdivision 4d, and the
mortality table adopted for the fund. The calculation must
assume continuous future service in the association until, and
retirement at, the age at which the minimum requirements of the
retirement association for normal retirement or retirement with
an annuity unreduced for retirement at an early age, including
Minnesota Statutes, section 356.30, are met with the additional
service credit purchased. The calculation must also assume a
future salary history that includes annual salary increases at
the salary increase rate specified in section 356.215,
subdivision 4d. The member must establish in the records of the
association proof of the service for which the purchase of prior
service is requested. The manner of the proof of service must
be in accordance with procedures prescribed by the executive
director of the association. The portion of the total cost of
the purchase to be paid by the member is specified in
subdivision 3. The remaining portion of total cost is to be
paid by the employer, as specified in subdivision 4.
Subd. 3. [MEMBER PAYMENT.] To receive credit for the
eligible service between January 1985 and September 1986, the
member must pay an amount equal to the employee contribution
rate or rates in effect during the period or periods of prior
eligible non-credited service, applied to the actual salary rate
in effect during the period or periods of prior service, plus
six percent interest compounded annually from the date on which
the contributions would otherwise have been made to the date on
which the payment is made. Payment must be made in one lump sum
before July 1, 1992.
Subd. 4. [EMPLOYER PAYMENT; SERVICE CREDIT.] Within 60
days of receipt by the association of the member contribution
specified in subdivision 3, the city of Minneapolis shall pay an
amount equal to the difference between the amount specified in
subdivision 2 and the member payment specified in subdivision
3. This amount must be paid in one lump sum. The period of
allowable service may be credited to the account of the person
only after the receipt of full payment by the executive director.
Sec. 8. [REPEALER.]
Minnesota Statutes 1990, sections 136.80; 136.81; 136.82;
136.83; 136.84; 136.85; and 136.87, are repealed.
Sec. 9. [EFFECTIVE DATE.]
Sections 1 to 6 and 8 are effective July 1, 1991. Section
7 is effective the day following final enactment.
Presented to the governor May 29, 1991
Signed by the governor June 1, 1991, 3:34 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes