1.1 	A bill for an act
1.2 	relating to retirement; providing financial solvency measures for Minnesota State 
1.3 	Retirement System, Teachers Retirement Association, St. Paul Teachers Retirement 
1.4 	Fund Association; increasing contribution rates; reducing certain postretirement 
1.5 	adjustment increase rates; modifying investment return assumptions; extending 
1.6 	amortization target dates;amending Minnesota Statutes 2016, sections 3A.03, 
1.7 	subdivision 2; 352.01, subdivision 13a; 352.017, subdivision 2; 352.04, subdivisions 
1.8 	2, 3, 8, 9; 352.23; 352.27; 352.92, subdivisions 1, 2, by adding a subdivision; 
1.9 	352.955, subdivision 3; 352B.013, subdivision 2; 352B.02, subdivisions 1a, 1c; 
1.10 	352B.085; 352B.086; 352B.11, subdivision 4; 352D.05, subdivision 4; 352D.11, 
1.11 	subdivision 2; 352D.12; 354.42, subdivision 3; 354.50, subdivision 2; 354.51, 
1.12 	subdivision 5; 354.52, subdivision 4; 354.53, subdivision 5; 354A.011, subdivision 
1.13 	3a; 354A.093, subdivision 6; 354A.096; 354A.12, subdivisions 1a, 2a, 7; 354A.29, 
1.14 	subdivision 7; 354A.34; 354A.38, subdivision 3; 356.215, subdivisions 8, 11; 
1.15 	356.415, subdivisions 1a, 1d, 1e, 1f; 490.121, subdivisions 4, 25, 26; 490.1211; 
1.16 	490.124, subdivision 12; proposing coding for new law in Minnesota Statutes, 
1.17 	chapter 356; repealing Minnesota Statutes 2016, sections 354A.29, subdivisions 
1.18 	8, 9; 356.415, subdivision 1.
1.19 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.20 	ARTICLE 1
1.21 	GENERAL PROVISIONS

1.22 	Section 1. Minnesota Statutes 2016, section 356.215, subdivision 8, is amended to read:
1.23 		Subd. 8.Interest and salary Actuarial  assumptions. (a) The actuarial valuation must 
1.24 	use the applicable following interestinvestment return assumption:
1.25 	(1) select and ultimate interest rate assumption

1.271.26
	plan
	ultimate interest rate 
assumption
		
1.28	teachers retirement plan
	8.5%
		
2.1 	The select preretirement interest rate assumption for the period through June 30, 2017, 
2.2 	is eight percent.
2.3 	(2) single rate interest rate assumption

2.62.4
2.5
	plan
	interest rate
investment return
assumption
		
2.7	teachers retirement plan
	7.5%
		
2.8	general state employees retirement plan
	8% 7.5
		
2.9	correctional state employees retirement plan
	8 7.5
		
2.10	State Patrol retirement plan
	8 7.5
		
2.11
2.12
2.13	legislators retirement plan, and for the 
constitutional officers calculation of total plan 
liabilities
	0
		
2.14	judges retirement plan
	8 7.5
		
2.15	general public employees retirement plan
	8
		
2.16	public employees police and fire retirement plan
	8
		
2.17
2.18	local government correctional service retirement 
plan
	8
		
2.19	St. Paul teachers retirement plan
	8 7.5
		
2.20	Bloomington Fire Department Relief Association
	6
		
2.21
2.22	local monthly benefit volunteer firefighter relief 
associations
	5
		
2.23
2.24	monthly benefit retirement plans in the statewide 
volunteer firefighter retirement plan
	6
		
2.25 	(b)(1) If funding stability has been attained, The actuarial valuation for each of the 
2.26 	covered retirement plans listed in section 356.415, subdivision 2, must use atake into account 
2.27 	the postretirement adjustment rate actuarial assumption equal to the postretirement adjustment 
2.28 	rateor rates applicable to the plan as specified in section 354A.27, subdivision 7; 354A.29, 
2.29 	subdivision 9;7, or 356.415, subdivision 1, whichever applies.
2.30 	(2) If funding stability has not been attained, the valuation must use a select postretirement 
2.31 	adjustment rate actuarial assumption equal to the postretirement adjustment rate specified 
2.32 	in section 354A.27, subdivision 6a; 354A.29, subdivision 8; or 356.415, subdivision 1a, 
2.33 	1b, 1c, 1d, 1e, or 1f, whichever applies, for a period ending when the approved actuary 
2.34 	estimates that the plan will attain the defined funding stability measure, and thereafter an 
2.35 	ultimate postretirement adjustment rate actuarial assumption equal to the postretirement 
2.36 	adjustment rate under section 354A.27, subdivision 7; 354A.29, subdivision 9; or 356.415, 
2.37 	subdivision 1, for the applicable period or periods beginning when funding stability is 
2.38 	projected to be attained.
3.1 	(c) The actuarial valuation must use the applicable following single rate future salary 
3.2 	increase assumption, the applicable following modified single rate future salary increase 
3.3 	assumption, or the applicable following graded rate future salary increase assumption:
3.4 	(1) single rate future salary increase assumption

3.5	plan
	future salary increase assumption
	
3.6	legislators retirement plan
		5%
	
3.7	judges retirement plan
		2.75
	
3.8	Bloomington Fire Department Relief Association
		4
	
3.9 	(2) age-related future salary increase age-related select and ultimate future salary increase 
3.10 	assumption or graded rate future salary increase assumption

3.11	plan
	future salary increase assumption
	
3.12	local government correctional service retirement plan
	assumption B
	
3.13	St. Paul teachers retirement plan
	assumption A
	
3.14 	For plans other than the St. Paul teachers 
3.15 	retirement plan and the local government 
3.16 	correctional service retirement plan, the select 
3.17 	calculation is: during the designated select 
3.18 	period, a designated percentage rate is 
3.19 	multiplied by the result of the designated 
3.20 	integer minus T, where T is the number of 
3.21 	completed years of service, and is added to 
3.22 	the applicable future salary increase 
3.23 	assumption. The designated select period is 
3.24 	ten years and the designated integer is ten for 
3.25 	the local government correctional service 
3.26 	retirement plan and 15 for the St. Paul 
3.27 	Teachers Retirement Fund Association. The 
3.28 	designated percentage rate is 0.2 percent for 
3.29 	the St. Paul Teachers Retirement Fund 
3.30 	Association.
3.31 	The ultimate future salary increase assumption is:

3.32	age
	A
	B
		
3.33	16
	5.9%
	8.75%
		
3.34	17
	5.9
	8.75
		
3.35	18
	5.9
	8.75
		
4.1	19
	5.9
	8.75
		
4.2	20
	5.9
	8.75
		
4.3	21
	5.9
	8.5
		
4.4	22
	5.9
	8.25
		
4.5	23
	5.85
	8
		
4.6	24
	5.8
	7.75
		
4.7	25
	5.75
	7.5
		
4.8	26
	5.7
	7.25
		
4.9	27
	5.65
	7
		
4.10	28
	5.6
	6.75
		
4.11	29
	5.55
	6.5
		
4.12	30
	5.5
	6.5
		
4.13	31
	5.45
	6.25
		
4.14	32
	5.4
	6.25
		
4.15	33
	5.35
	6.25
		
4.16	34
	5.3
	6
		
4.17	35
	5.25
	6
		
4.18	36
	5.2
	5.75
		
4.19	37
	5.15
	5.75
		
4.20	38
	5.1
	5.75
		
4.21	39
	5.05
	5.5
		
4.22	40
	5
	5.5
		
4.23	41
	4.95
	5.5
		
4.24	42
	4.9
	5.25
		
4.25	43
	4.85
	5
		
4.26	44
	4.8
	5
		
4.27	45
	4.75
	4.75
		
4.28	46
	4.7
	4.75
		
4.29	47
	4.65
	4.75
		
4.30	48
	4.6
	4.75
		
4.31	49
	4.55
	4.75
		
4.32	50
	4.5
	4.75
		
4.33	51
	4.45
	4.75
		
4.34	52
	4.4
	4.75
		
4.35	53
	4.35
	4.75
		
4.36	54
	4.3
	4.75
		
4.37	55
	4.25
	4.5
		
4.38	56
	4.2
	4.5
		
5.1	57
	4.15
	4.25
		
5.2	58
	4.1
	4
		
5.3	59
	4.05
	4
		
5.4	60
	4
	4
		
5.5	61
	4
	4
		
5.6	62
	4
	4
		
5.7	63
	4
	4
		
5.8	64
	4
	4
		
5.9	65
	4
	3.75
		
5.10	66
	4
	3.75
		
5.11	67
	4
	3.75
		
5.12	68
	4
	3.75
		
5.13	69
	4
	3.75
		
5.14	70
	4
	3.75
		
5.15 	(3) service-related ultimate future salary increase assumption

5.16
5.17	general state employees retirement plan of the Minnesota 
State Retirement System
	assumption A
	
5.18
5.19	general employees retirement plan of the Public 
Employees Retirement Association
	assumption B
	
5.20	Teachers Retirement Association
	assumption C
	
5.21	public employees police and fire retirement plan
	assumption D
	
5.22	State Patrol retirement plan
	assumption E
	
5.23
5.24	correctional state employees retirement plan of the 
Minnesota State Retirement System
	assumption F

5.25
5.26	service 
length
	A
	B
	C
	D
	E
	F
	
5.27	1
	10.25%
	11.78%
	12%
	12.75%
	7.75%
	5.75%
	
5.28	2
	7.85
	8.65
	9
	10.75
	7.25
	5.6
	
5.29	3
	6.65
	7.21
	8
	8.75
	6.75
	5.45
	
5.30	4
	5.95
	6.33
	7.5
	7.75
	6.5
	5.3
	
5.31	5
	5.45
	5.72
	7.25
	6.25
	6.25
	5.15
	
5.32	6
	5.05
	5.27
	7
	5.85
	6
	5
	
5.33	7
	4.75
	4.91
	6.85
	5.55
	5.75
	4.85
	
5.34	8
	4.45
	4.62
	6.7
	5.35
	5.6
	4.7
	
5.35	9
	4.25
	4.38
	6.55
	5.15
	5.45
	4.55
	
5.36	10
	4.15
	4.17
	6.4
	5.05
	5.3
	4.4
	
5.37	11
	3.95
	3.99
	6.25
	4.95
	5.15
	4.3
	
5.38	12
	3.85
	3.83
	6
	4.85
	5
	4.2
	
6.1	13
	3.75
	3.69
	5.75
	4.75
	4.85
	4.1
	
6.2	14
	3.55
	3.57
	5.5
	4.65
	4.7
	4
	
6.3	15
	3.45
	3.45
	5.25
	4.55
	4.55
	3.9
	
6.4	16
	3.35
	3.35
	5
	4.55
	4.4
	3.8
	
6.5	17
	3.25
	3.26
	4.75
	4.55
	4.25
	3.7
	
6.6	18
	3.25
	3.25
	4.5
	4.55
	4.1
	3.6
	
6.7	19
	3.25
	3.25
	4.25
	4.55
	3.95
	3.5
	
6.8	20
	3.25
	3.25
	4
	4.55
	3.8
	3.5
	
6.9	21
	3.25
	3.25
	3.9
	4.45
	3.75
	3.5
	
6.10	22
	3.25
	3.25
	3.8
	4.35
	3.75
	3.5
	
6.11	23
	3.25
	3.25
	3.7
	4.25
	3.75
	3.5
	
6.12	24
	3.25
	3.25
	3.6
	4.25
	3.75
	3.5
	
6.13	25
	3.25
	3.25
	3.5
	4.25
	3.75
	3.5
	
6.14	26
	3.25
	3.25
	3.5
	4.25
	3.75
	3.5
	
6.15	27
	3.25
	3.25
	3.5
	4.25
	3.75
	3.5
	
6.16	28
	3.25
	3.25
	3.5
	4.25
	3.75
	3.5
	
6.17	29
	3.25
	3.25
	3.5
	4.25
	3.75
	3.5
	
6.18	30 or more
	3.25
	3.25
	3.5
	4.25
	3.75
	3.5
	
6.19 	(d) The actuarial valuation must use the applicable following payroll growth assumption 
6.20 	for calculating the amortization requirement for the unfunded actuarial accrued liability 
6.21 	where the amortization retirement is calculated as a level percentage of an increasing payroll:

6.22	plan
	payroll growth assumption
	
6.23
6.24	general state employees retirement plan of the Minnesota 
State Retirement System
	3.5%
	
6.25	correctional state employees retirement plan
	3.5
	
6.26	State Patrol retirement plan
	3.5
	
6.27	judges retirement plan
	2.75
	
6.28
6.29	general employees retirement plan of the Public 
Employees Retirement Association
	3.5
	
6.30	public employees police and fire retirement plan
	3.5
	
6.31	local government correctional service retirement plan
	3.5
	
6.32	teachers retirement plan
	3.75
	
6.33	St. Paul teachers retirement plan
	4
	
6.34 	(e) The assumptions set forth in paragraphs (c) and (d) continue to apply, unless a 
6.35 	different salary assumption or a different payroll increase assumption:
6.36 	(1) has been proposed by the governing board of the applicable retirement plan;
7.1 	(2) is accompanied by the concurring recommendation of the actuary retained under 
7.2 	section 356.214, subdivision 1, if applicable, or by the approved actuary preparing the most 
7.3 	recent actuarial valuation report if section 356.214 does not apply; and
7.4 	(3) has been approved or deemed approved under subdivision 18.

7.5 	EFFECTIVE DATE. This section is effective July 1, 2017.

7.6 	Sec. 2. Minnesota Statutes 2016, section 356.215, subdivision 11, is amended to read:
7.7 		Subd. 11.Amortization contributions. (a) In addition to the exhibit indicating the level 
7.8 	normal cost, the actuarial valuation of the retirement plan must contain an exhibit for financial 
7.9 	reporting purposes indicating the additional annual contribution sufficient to amortize the 
7.10 	unfunded actuarial accrued liability and must contain an exhibit for contribution 
7.11 	determination purposes indicating the additional contribution sufficient to amortize the 
7.12 	unfunded actuarial accrued liability. For the retirement plans listed in subdivision 8, paragraph 
7.13 	(c), but excluding the legislators retirement plan, the additional contribution must be 
7.14 	calculated on a level percentage of covered payroll basis by the established date for full 
7.15 	funding in effect when the valuation is prepared, assuming annual payroll growth at the 
7.16 	applicable percentage rate set forth in subdivision 8, paragraph (d). For all other retirement 
7.17 	plans and for the legislators retirement plan, the additional annual contribution must be 
7.18 	calculated on a level annual dollar amount basis.
7.19 	(b) For any retirement plan other than a retirement plan governed by paragraph (d), (e), 
7.20 	(f), (g), (h), (i), or (j), if there has not been a change in the actuarial assumptions used for 
7.21 	calculating the actuarial accrued liability of the fund, a change in the benefit plan governing 
7.22 	annuities and benefits payable from the fund, a change in the actuarial cost method used in 
7.23 	calculating the actuarial accrued liability of all or a portion of the fund, or a combination 
7.24 	of the three, which change or changes by itself or by themselves without inclusion of any 
7.25 	other items of increase or decrease produce a net increase in the unfunded actuarial accrued 
7.26 	liability of the fund, the established date for full funding is the first actuarial valuation date 
7.27 	occurring after June 1, 2020.
7.28 	(c) For any retirement plan, if there has been a change in any or all of the actuarial 
7.29 	assumptions used for calculating the actuarial accrued liability of the fund, a change in the 
7.30 	benefit plan governing annuities and benefits payable from the fund, a change in the actuarial 
7.31 	cost method used in calculating the actuarial accrued liability of all or a portion of the fund, 
7.32 	or a combination of the three, and the change or changes, by itself or by themselves and 
7.33 	without inclusion of any other items of increase or decrease, produce a net increase in the 
8.1 	unfunded actuarial accrued liability in the fund, the established date for full funding must 
8.2 	be determined using the following procedure:
8.3 	(i) the unfunded actuarial accrued liability of the fund must be determined in accordance 
8.4 	with the plan provisions governing annuities and retirement benefits and the actuarial 
8.5 	assumptions in effect before an applicable change;
8.6 	(ii) the level annual dollar contribution or level percentage, whichever is applicable, 
8.7 	needed to amortize the unfunded actuarial accrued liability amount determined under item 
8.8 	(i) by the established date for full funding in effect before the change must be calculated 
8.9 	using the interest assumption specified in subdivision 8 in effect before the change;
8.10 	(iii) the unfunded actuarial accrued liability of the fund must be determined in accordance 
8.11 	with any new plan provisions governing annuities and benefits payable from the fund and 
8.12 	any new actuarial assumptions and the remaining plan provisions governing annuities and 
8.13 	benefits payable from the fund and actuarial assumptions in effect before the change;
8.14 	(iv) the level annual dollar contribution or level percentage, whichever is applicable, 
8.15 	needed to amortize the difference between the unfunded actuarial accrued liability amount 
8.16 	calculated under item (i) and the unfunded actuarial accrued liability amount calculated 
8.17 	under item (iii) over a period of 30 years from the end of the plan year in which the applicable 
8.18 	change is effective must be calculated using the applicable interest assumption specified in 
8.19 	subdivision 8 in effect after any applicable change;
8.20 	(v) the level annual dollar or level percentage amortization contribution under item (iv) 
8.21 	must be added to the level annual dollar amortization contribution or level percentage 
8.22 	calculated under item (ii);
8.23 	(vi) the period in which the unfunded actuarial accrued liability amount determined in 
8.24 	item (iii) is amortized by the total level annual dollar or level percentage amortization 
8.25 	contribution computed under item (v) must be calculated using the interest assumption 
8.26 	specified in subdivision 8 in effect after any applicable change, rounded to the nearest 
8.27 	integral number of years, but not to exceed 30 years from the end of the plan year in which 
8.28 	the determination of the established date for full funding using the procedure set forth in 
8.29 	this clause is made and not to be less than the period of years beginning in the plan year in 
8.30 	which the determination of the established date for full funding using the procedure set forth 
8.31 	in this clause is made and ending by the date for full funding in effect before the change; 
8.32 	and
9.1 	(vii) the period determined under item (vi) must be added to the date as of which the 
9.2 	actuarial valuation was prepared and the date obtained is the new established date for full 
9.3 	funding.
9.4 	(d) For the general employees retirement plan of the Public Employees Retirement 
9.5 	Association, the established date for full funding is June 30, 2031.
9.6 	(e) For the Teachers Retirement Association, the established date for full funding is June 
9.7 	30, 2037 2047.
9.8 	(f) For the correctional state employees retirement plan of the Minnesota State Retirement 
9.9 	System, the established date for full funding is June 30, 2038.
9.10 	(g) For the judges retirement plan, the established date for full funding is June 30, 2038
9.11 	2047.
9.12 	(h) For the public employees police and fire retirement plan, the established date for full 
9.13 	funding is June 30, 2038.
9.14 	(i) For the St. Paul Teachers Retirement Fund Association, the established date for full 
9.15 	funding is June 30, 2042. In addition to other requirements of this chapter, the annual 
9.16 	actuarial valuation must contain an exhibit indicating the funded ratio and the deficiency 
9.17 	or sufficiency in annual contributions when comparing liabilities to the market value of the 
9.18 	assets of the fund as of the close of the most recent fiscal year 2047.
9.19 	(j) For the general state employees retirement plan of the Minnesota State Retirement 
9.20 	System, the established date for full funding is June 30, 2040 2047.
9.21 	(k) For the retirement plans for which the annual actuarial valuation indicates an excess 
9.22 	of valuation assets over the actuarial accrued liability, the valuation assets in excess of the 
9.23 	actuarial accrued liability must be recognized as a reduction in the current contribution 
9.24 	requirements by an amount equal to the amortization of the excess expressed as a level 
9.25 	percentage of pay over a 30-year period beginning anew with each annual actuarial valuation 
9.26 	of the plan.

9.27 	EFFECTIVE DATE. This section is effective July 1, 2017.

9.28 	Sec. 3. [356.59] INTEREST RATES.
9.29 		Subdivision 1.Applicable interest rates. Whenever the payment of interest is required 
9.30 	with respect to any payment, including refunds, remittances, shortages, contributions, or 
9.31 	repayments, the rate of interest is the rate or rates specified in subdivisions 2 to 5 for each 
9.32 	public retirement plan.
10.1 		Subd. 2.Minnesota State Retirement System. The interest rates for all retirement plans 
10.2 	administered by the Minnesota State Retirement System are as follows:

10.3				Annual
		Monthly
	
10.4		before July 1, 2015
	8.5 percent
	0.71 percent
	
10.5		from July 1, 2015, to June 30, 2017
	8.0 percent
	0.667 percent
	
10.6		after June 30, 2017
	7.5 percent
	0.625 percent
	
10.7 		Subd. 3.Teachers Retirement Association. The interest rates for the retirement plan 
10.8 	administered by the Teachers Retirement Association are as follows:

10.9				Annual
		Monthly
	
10.10		before July 1, 2017
	8.5 percent
	0.71 percent
	
10.11		after June 30, 2017
	7.5 percent
	0.625 percent
	
10.12 		Subd. 4.St. Paul Teachers Retirement Fund Association. The interest rates for the 
10.13 	retirement plan administered by the St. Paul Teachers Retirement Fund Association are as 
10.14 	follows:

10.15				Annual
		Monthly
	
10.16		before July 1, 2015
	8.5 percent
	0.71 percent
	
10.17		from July 1, 2015, to June 30, 2017
	8.0 percent
	0.667 percent
	
10.18		after June 30, 2017
	7.5 percent
	0.625 percent

10.19 	EFFECTIVE DATE. This section is effective July 1, 2017.

10.20 	Sec. 4.  REPEALER.
 10.21 	Minnesota Statutes 2016, section 356.415, subdivision 1, is repealed.

10.22 	EFFECTIVE DATE. This section is effective the day following final enactment.

10.23 	ARTICLE 2
10.24 	MINNESOTA STATE RETIREMENT SYSTEM

10.25 	Section 1. Minnesota Statutes 2016, section 3A.03, subdivision 2, is amended to read:
10.26 		Subd. 2.Refund.  (a) A former member who has made contributions under subdivision 
10.27 	1 and who is no longer a member of the legislature is entitled to receive, upon written 
10.28 	application to the executive director on a form prescribed by the executive director, a refund 
10.29 	from the general fund of all contributions credited to the member's account with interest 
10.30 	computed as provided in section 352.22, subdivision 2.
10.31 	(b) The refund of contributions as provided in paragraph (a) terminates all rights of a 
10.32 	former member of the legislature and the survivors of the former member under this chapter.
11.1 	(c) If the former member of the legislature again becomes a member of the legislature 
11.2 	after having taken a refund as provided in paragraph (a), the member is a member of the 
11.3 	unclassified employees retirement program of the Minnesota State Retirement System.
11.4 	(d) However, the member may reinstate the rights and credit for service previously 
11.5 	forfeited under this chapter if the member repays all refunds taken, plus interest at the rate 
11.6 	of 8.5 percent until June 30, 2015, and eight percent thereafter applicable annual rate or 
11.7 	rates specified in section 356.59, subdivision 2, compounded annually, from the date on 
11.8 	which the refund was taken to the date on which the refund is repaid.
11.9 	(e) No person may be required to apply for or to accept a refund.

11.10 	EFFECTIVE DATE. This section is effective July 1, 2017.

11.11 	Sec. 2. Minnesota Statutes 2016, section 352.01, subdivision 13a, is amended to read:
11.12 		Subd. 13a.Reduced salary during period of workers' compensation. An employee 
11.13 	on leave of absence receiving temporary workers' compensation payments and a reduced 
11.14 	salary or no salary from the employer who is entitled to allowable service credit for the 
11.15 	period of absence, may make payment to the fund for the difference between salary received, 
11.16 	if any, and the salary the employee would normally receive if not on leave of absence during 
11.17 	the period. The employee shall pay an amount equal to the employee and employer 
11.18 	contribution rate under section 352.04, subdivisions 2 and 3, on the differential salary amount 
11.19 	for the period of the leave of absence.
11.20 	The employing department, at its option, may pay the employer amount on behalf of its 
11.21 	employees. Payment made under this subdivision must include interest at the rate of 8.5 
11.22 	percent until June 30, 2015, and eight percent thereafter per year applicable annual rate or 
11.23 	rates specified in section 356.59, subdivision 2, and must be completed within one year of 
11.24 	the return from leave of absence.

11.25 	EFFECTIVE DATE. This section is effective July 1, 2017.

11.26 	Sec. 3. Minnesota Statutes 2016, section 352.017, subdivision 2, is amended to read:
11.27 		Subd. 2.Purchase procedure. (a) An employee covered by a plan specified in this 
11.28 	chapter may purchase credit for allowable service in that plan for a period specified in 
11.29 	subdivision 1 if the employee makes a payment as specified in paragraph (b) or (c), whichever 
11.30 	applies. The employing unit, at its option, may pay the employer portion of the amount 
11.31 	specified in paragraph (b) on behalf of its employees.
12.1 	(b) If payment is received by the executive director within one year from the date the 
12.2 	employee returned to work following the authorized leave, the payment amount is equal to 
12.3 	the employee and employer contribution rates specified in law for the applicable plan at the 
12.4 	end of the leave period multiplied by the employee's hourly rate of salary on the date of 
12.5 	return from the leave of absence and by the days and months of the leave of absence for 
12.6 	which the employee is eligible for allowable service credit. The payment must include 
12.7 	compound interest at the monthly rate of 0.71 percent until June 30, 2015, and 0.667 percent 
12.8 	per month thereafter applicable monthly rate or rates specified in section 356.59, subdivision 
12.9 	2,  from the last day of the leave period until the last day of the month in which payment is 
12.10 	received. If payment is received by the executive director after one year, the payment amount 
12.11 	is the amount determined under section 356.551. Payment under this paragraph must be 
12.12 	made before the date of termination from public employment covered under this chapter.
12.13 	(c) If the employee terminates employment covered by this chapter during the leave or 
12.14 	following the leave rather than returning to covered employment, payment must be received 
12.15 	by the executive director within 30 days after the termination date. The payment amount is 
12.16 	equal to the employee and employer contribution rates specified in law for the applicable 
12.17 	plan on the day prior to the termination date, multiplied by the employee's hourly rate of 
12.18 	salary on that date and by the days and months of the leave of absence prior to termination.

12.19 	EFFECTIVE DATE. This section is effective July 1, 2017.

12.20 	Sec. 4. Minnesota Statutes 2016, section 352.04, subdivision 2, is amended to read:
12.21 		Subd. 2.Employee contributions. (a) The employee contribution to the fund must be 
12.22 	equal to the following percent of salary:

12.23		from July 1, 2010, to June 30, 2014
	5
	
12.24		from July 1, 2014, and thereafter to June 30, 2017
	5.5
	
12.25		after June 30, 2017
	6
	
12.26 	(b) These contributions must be made by deduction from salary as provided in subdivision 
12.27 	4.
12.28 	(c) Contribution increases under paragraph (a) must be paid starting the first day of the 
12.29 	first full pay period after the effective date of the increase.

12.30 	EFFECTIVE DATE. This section is effective July 1, 2017.

13.1 	Sec. 5. Minnesota Statutes 2016, section 352.04, subdivision 3, is amended to read:
13.2 		Subd. 3.Employer contributions. (a) The employer contribution to the fund must be 
13.3 	equal to the following percent of salary:

13.4		from July 1, 2010, to June 30, 2014
	5
	
13.5		from July 1, 2014, and thereafterto June 30, 2017
	5.5
	
13.6		from July 1, 2017, to June 30, 2018
	6.5
	
13.7		from July 1, 2018, to June 30, 2019
	7
	
13.8		From July 1, 2019, to June 30, 2020
	7.5
	
13.9		after June 30, 2020
	8
	
13.10 	(b) Contribution increases under paragraph (a) must be paid starting the first day of the 
13.11 	first full pay period after the effective date of the increase.
13.12 	(c) The employer contribution rate must decrease to seven percent once the market value 
13.13 	of the assets of the general state employees retirement plan of the Minnesota State Retirement 
13.14 	System equals or exceeds the actuarial accrued liability of the plan as determined by the 
13.15 	actuary retained under section 356.214. The reduction is effective on the first day of the 
13.16 	first full pay period of the fiscal year immediately following the issuance of the actuarial 
13.17 	valuation upon which the reduction is based.

13.18 	EFFECTIVE DATE. This section is effective July 1, 2017.

13.19 	Sec. 6. Minnesota Statutes 2016, section 352.04, subdivision 8, is amended to read:
13.20 		Subd. 8.Department required to pay omitted salary deductions. (a) If a department 
13.21 	fails to take deductions past due for a period of 60 days or less from an employee's salary 
13.22 	as provided in this section, those deductions must be taken on later payroll abstracts.
13.23 	(b) If a department fails to take deductions past due for a period in excess of 60 days 
13.24 	from an employee's salary as provided in this section, the department, and not the employee, 
13.25 	must pay on later payroll abstracts the employee and employer contributions and an amount 
13.26 	equivalent to 8.5 percent until June 30, 2015, and eight percent thereafter of the total amount 
13.27 	due in lieu of interest, or if the delay in payment exceeds one year, 8.5 percent until June 
13.28 	30, 2015, and eight percent thereafter compound annual interest at the applicable annual 
13.29 	rate or rates specified in section 356.59, subdivision 2, compounded annually, from the date 
13.30 	the employee and employer contributions should have been deducted to the date payment 
13.31 	of the total amount due is paid by the department.
13.32 	(c) If a department fails to take deductions past due for a period of 60 days or less and 
13.33 	the employee is no longer in state service so that the required deductions cannot be taken 
14.1 	from the salary of the employee, the department must nevertheless pay the required employer 
14.2 	contributions. If any department fails to take deductions past due for a period in excess of 
14.3 	60 days and the employee is no longer in state service, the omitted contributions must be 
14.4 	recovered under paragraph (b).
14.5 	(d) If an employee from whose salary required deductions were past due for a period of 
14.6 	60 days or less leaves state service before the payment of the omitted deductions and 
14.7 	subsequently returns to state service, the unpaid amount is considered the equivalent of a 
14.8 	refund. The employee accrues no right by reason of the unpaid amount, except that the 
14.9 	employee may pay the amount of omitted deductions as provided in section 352.23.

14.10 	EFFECTIVE DATE. This section is effective July 1, 2017.

14.11 	Sec. 7. Minnesota Statutes 2016, section 352.04, subdivision 9, is amended to read:
14.12 		Subd. 9.Erroneous deductions, canceled warrants. (a) Deductions taken from the 
14.13 	salary of an employee for the retirement fund in excess of required amounts must, upon 
14.14 	discovery and verification by the department making the deduction, be refunded to the 
14.15 	employee.
14.16 	(b) If a deduction for the retirement fund is taken from a salary warrant or check, and 
14.17 	the check is canceled or the amount of the warrant or check returned to the funds of the 
14.18 	department making the payment, the sum deducted, or the part of it required to adjust the 
14.19 	deductions, must be refunded to the department or institution if the department applies for 
14.20 	the refund on a form furnished by the director. The department's payments must likewise 
14.21 	be refunded to the department.
14.22 	(c) If erroneous employee deductions and employer contributions are caused by an error 
14.23 	in plan coverage involving the plan and any other plans specified in section 356.99, that 
14.24 	section applies. If the employee should have been covered by the plan governed by chapter 
14.25 	352D, 353D, 354B, or 354D, the employee deductions and employer contributions taken 
14.26 	in error must be directly transferred to the applicable employee's account in the correct 
14.27 	retirement plan, with interest at the rate of 0.71 percent per month until June 30, 2015, and 
14.28 	0.667 percent per month thereafter applicable monthly rate or rates specified in section 
14.29 	356.59, subdivision 2, per month, compounded annually, from the first day of the month 
14.30 	following the month in which coverage should have commenced in the correct defined 
14.31 	contribution plan until the end of the month in which the transfer occurs.

14.32 	EFFECTIVE DATE. This section is effective July 1, 2017.

15.1 	Sec. 8. Minnesota Statutes 2016, section 352.23, is amended to read:
15.2 	352.23 TERMINATION OF RIGHTS; REPAYMENT OF REFUND.
15.3 	(a) When any employee accepts a refund as provided in section 352.22, all existing 
15.4 	allowable service credits and all rights and benefits to which the employee was entitled 
15.5 	before accepting the refund terminate.
15.6 	(b) Terminated service credits and rights must not again be restored until the former 
15.7 	employee acquires at least six months of allowable service credit after taking the last refund. 
15.8 	In that event, the employee may repay all refunds previously taken from the retirement fund.
15.9 	(c) Repayment of refunds entitles the employee only to credit for service covered by (1) 
15.10 	salary deductions; (2) payments previously made in lieu of salary deductions as permitted 
15.11 	under law in effect when the payment in lieu of deductions was made; (3) payments made 
15.12 	to obtain credit for service as permitted by laws in effect when payment was made; and (4) 
15.13 	allowable service previously credited while receiving temporary workers' compensation as 
15.14 	provided in section 352.01, subdivision 11, paragraph (a), clause (3).
15.15 	(d) Payments under this section for repayment of refunds are to be paid with interest at 
15.16 	the rate of 8.5 percent until June 30, 2015, and eight percent thereafter applicable annual 
15.17 	rate or rates specified in section 356.59, subdivision 2, compounded annually, from the date 
15.18 	the refund was taken until the date the refund is repaid. They may be paid in a lump sum 
15.19 	or by payroll deduction in the manner provided in section 352.04. Payment may be made 
15.20 	in a lump sum up to six months after termination from service.

15.21 	EFFECTIVE DATE. This section is effective July 1, 2017.

15.22 	Sec. 9. Minnesota Statutes 2016, section 352.27, is amended to read:
15.23 	352.27 CREDIT FOR BREAK IN SERVICE TO PROVIDE UNIFORMED 
15.24 	SERVICE.
15.25 	(a) An employee who is absent from employment by reason of service in the uniformed 
15.26 	services, as defined in United States Code, title 38, section 4303(13), and who returns to 
15.27 	state service upon discharge from service in the uniformed service within the time frames 
15.28 	required in United States Code, title 38, section 4312(e), may obtain service credit for the 
15.29 	period of the uniformed service as further specified in this section, provided that the employee 
15.30 	did not separate from uniformed service with a dishonorable or bad conduct discharge or 
15.31 	under other than honorable conditions.
16.1 	(b) The employee may obtain credit by paying into the fund an equivalent employee 
16.2 	contribution based upon the contribution rate or rates in effect at the time that the uniformed 
16.3 	service was performed multiplied by the full and fractional years being purchased and 
16.4 	applied to the annual salary rate. The annual salary rate is the average annual salary during 
16.5 	the purchase period that the employee would have received if the employee had continued 
16.6 	to be employed in covered employment rather than to provide uniformed service, or, if the 
16.7 	determination of that rate is not reasonably certain, the annual salary rate is the employee's 
16.8 	average salary rate during the 12-month period of covered employment rendered immediately 
16.9 	preceding the period of the uniformed service.
16.10 	(c) The equivalent employer contribution and, if applicable, the equivalent additional 
16.11 	employer contribution provided in this chapter must be paid by the department employing 
16.12 	the employee from funds available to the department at the time and in the manner provided 
16.13 	in this chapter, using the employer and additional employer contribution rate or rates in 
16.14 	effect at the time that the uniformed service was performed, applied to the same annual 
16.15 	salary rate or rates used to compute the equivalent employee contribution.
16.16 	(d) If the employee equivalent contributions provided in this section are not paid in full, 
16.17 	the employee's allowable service credit must be prorated by multiplying the full and fractional 
16.18 	number of years of uniformed service eligible for purchase by the ratio obtained by dividing 
16.19 	the total employee contribution received by the total employee contribution otherwise 
16.20 	required under this section.
16.21 	(e) To receive service credit under this section, the contributions specified in this section 
16.22 	must be transmitted to the Minnesota State Retirement System during the period which 
16.23 	begins with the date on which the individual returns to state service and which has a duration 
16.24 	of three times the length of the uniformed service period, but not to exceed five years. If 
16.25 	the determined payment period is less than one year, the contributions required under this 
16.26 	section to receive service credit may be made within one year of the discharge date.
16.27 	(f) The amount of service credit obtainable under this section may not exceed five years 
16.28 	unless a longer purchase period is required under United States Code, title 38, section 4312.
16.29 	(g) The employing unit shall pay interest on all equivalent employee and employer 
16.30 	contribution amounts payable under this section. Interest must be computed at the rate of 
16.31 	8.5 percent until June 30, 2015, and eight percent thereafter at the applicable annual rate or 
16.32 	rates specified in section 356.59, subdivision 2, compounded annually, from the end of each 
16.33 	fiscal year of the leave or the break in service to the end of the month in which the payment 
16.34 	is received.

17.1 	EFFECTIVE DATE. This section is effective July 1, 2017.

17.2 	Sec. 10. Minnesota Statutes 2016, section 352.92, subdivision 1, is amended to read:
17.3 		Subdivision 1.Employee contributions. (a) Employee contributions of covered 
17.4 	correctional employees must be in an amount equal to the following percent of salary:

17.5		from July 1, 2010, to June 30, 2014
	8.6
	
17.6		from July 1, 2014, and thereafterto June 30, 2017
	9.1
	
17.7		after June 30, 2017
	9.6
	
17.8 	(b) These contributions must be made by deduction from salary as provided in section 
17.9 	352.04, subdivision 4.
17.10 	(c) Contribution increases under paragraph (a) must be paid starting the first day of the 
17.11 	first full pay period after the effective date of the increase.

17.12 	EFFECTIVE DATE. This section is effective July 1, 2017.

17.13 	Sec. 11. Minnesota Statutes 2016, section 352.92, subdivision 2, is amended to read:
17.14 		Subd. 2.Employer contributions. (a) The employer shall contribute for covered 
17.15 	correctional employees an amount equal to the following percent of salary:

17.16		from July 1, 2010, to June 30, 2014
	12.1
	
17.17		from July 1, 2014, and thereafterto June 30, 2017
	12.85
	
17.18		after June 30, 2017
	14.4
	
17.19 	(b) Contribution increases under paragraph (a) must be paid starting the first day of the 
17.20 	first full pay period after the effective date of the increase.

17.21 	EFFECTIVE DATE. This section is effective July 1, 2017.

17.22 	Sec. 12. Minnesota Statutes 2016, section 352.92, is amended by adding a subdivision to 
17.23 	read:
17.24 		Subd. 2a.Supplemental employer contribution. Effective July 1, 2018, the employer 
17.25 	shall pay a supplemental contribution. The supplemental contribution shall be 1.45 percent 
17.26 	of salary for covered correctional employees from July 1, 2018, through June 30, 2019; 
17.27 	2.95 percent of salary for covered correctional employees from July 1, 2019, through June 
17.28 	30, 2020; and 4.45 percent of salary for covered correctional employees thereafter. The 
17.29 	supplemental contribution rate of 4.45 percent shall remain in effect until the market value 
17.30 	of the assets of the correctional state employees retirement plan of the Minnesota State 
17.31 	Retirement System equals or exceeds the actuarial accrued liability of the plan as determined 
18.1 	by the actuary retained under section 356.214. The expiration of the supplemental employer 
18.2 	contribution is effective the first day of the first full pay period of the fiscal year immediately 
18.3 	following the issuance of the actuarial valuation upon which the expiration is based.

18.4 	EFFECTIVE DATE. This section is effective the first day of the first full pay period 
18.5 	after July 1, 2018.

18.6 	Sec. 13. Minnesota Statutes 2016, section 352.955, subdivision 3, is amended to read:
18.7 		Subd. 3.Payment of additional equivalent contributions. (a) An eligible employee 
18.8 	who is transferred to plan coverage and who elects to transfer past service credit under this 
18.9 	section must pay an additional member contribution for that prior service period. The 
18.10 	additional member contribution is the amount computed under paragraph (b), plus the greater 
18.11 	of the amount computed under paragraph (c), or 40 percent of the unfunded actuarial accrued 
18.12 	liability attributable to the past service credit transfer.
18.13 	(b) The executive director shall compute, for the most recent 12 months of service credit 
18.14 	eligible for transfer, or for the entire period eligible for transfer if less than 12 months, the 
18.15 	difference between the employee contribution rate or rates for the general state employees 
18.16 	retirement plan and the employee contribution rate or rates for the correctional state 
18.17 	employees retirement plan applied to the eligible employee's salary during that transfer 
18.18 	period, plus compound interest at the monthly rate of 0.71 percent until June 30, 2015, and 
18.19 	0.667 percent per month thereafter applicable monthly rate or rates specified in section 
18.20 	356.59, subdivision 2.
18.21 	(c) The executive director shall compute, for any service credit being transferred on 
18.22 	behalf of the eligible employee and not included under paragraph (b), the difference between 
18.23 	the employee contribution rate or rates for the general state employees retirement plan and 
18.24 	the employee contribution rate or rates for the correctional state employees retirement plan 
18.25 	applied to the eligible employee's salary during that transfer period, plus compound interest 
18.26 	at the monthly rate of 0.71 percent until June 30, 2015, and 0.667 percent per month thereafter
18.27 	applicable monthly rate or rates specified in section 356.59, subdivision 2.
18.28 	(d) The executive director shall compute an amount using the process specified in 
18.29 	paragraph (b), but based on differences in employer contribution rates between the general 
18.30 	state employees retirement plan and the correctional state employees retirement plan rather 
18.31 	than employee contribution rates.
18.32 	(e) The executive director shall compute an amount using the process specified in 
18.33 	paragraph (c), but based on differences in employer contribution rates between the general 
19.1 	state employees retirement plan and the correctional state employees retirement plan rather 
19.2 	than employee contribution rates.
19.3 	(f) The additional equivalent member contribution under this subdivision must be paid 
19.4 	in a lump sum. Payment must accompany the election to transfer the prior service credit. 
19.5 	No transfer election or additional equivalent member contribution payment may be made 
19.6 	by a person or accepted by the executive director after the one year anniversary date of the 
19.7 	effective date of the retirement coverage transfer, or the date on which the eligible employee 
19.8 	terminates state employment, whichever is earlier.
19.9 	(g) If an eligible employee elects to transfer past service credit under this section and 
19.10 	pays the additional equivalent member contribution amount under paragraph (a), the 
19.11 	applicable department shall pay an additional equivalent employer contribution amount. 
19.12 	The additional employer contribution is the amount computed under paragraph (d), plus the 
19.13 	greater of the amount computed under paragraph (e), or 60 percent of the unfunded actuarial 
19.14 	accrued liability attributable to the past service credit transfer.
19.15 	(h) The unfunded actuarial accrued liability attributable to the past service credit transfer 
19.16 	is the present value of the benefit obtained by the transfer of the service credit to the 
19.17 	correctional state employees retirement plan reduced by the amount of the asset transfer 
19.18 	under subdivision 4, by the amount of the member contribution equivalent payment computed 
19.19 	under paragraph (b), and by the amount of the employer contribution equivalent payment 
19.20 	computed under paragraph (d).
19.21 	(i) The additional equivalent employer contribution under this subdivision must be paid 
19.22 	in a lump sum and must be paid within 30 days of the date on which the executive director 
19.23 	of the Minnesota State Retirement System certifies to the applicable department that the 
19.24 	employee paid the additional equivalent member contribution.

19.25 	EFFECTIVE DATE. This section is effective July 1, 2017.

19.26 	Sec. 14. Minnesota Statutes 2016, section 352B.013, subdivision 2, is amended to read:
19.27 		Subd. 2.Purchase procedure. (a) An employee covered by the plan specified in this 
19.28 	chapter may purchase credit for allowable service in the plan for a period specified in 
19.29 	subdivision 1 if the employee makes a payment as specified in paragraph (b) or (c), whichever 
19.30 	applies. The employing unit, at its option, may pay the employer portion of the amount 
19.31 	specified in paragraph (b) on behalf of its employees.
19.32 	(b) If payment is received by the executive director within one year from the date the 
19.33 	employee returned to work following the authorized leave, the payment amount is equal to 
20.1 	the employee and employer contribution rates specified in section 352B.02 at the end of 
20.2 	the leave period multiplied by the employee's hourly rate of salary on the date of return 
20.3 	from the leave of absence and by the days and months of the leave of absence for which 
20.4 	the employee is eligible for allowable service credit. The payment must include compound 
20.5 	interest at the monthly rate of 0.71 percent until June 30, 2015, and 0.667 percent per month 
20.6 	thereafter applicable monthly rate or rates specified in section 356.59, subdivision 2, from 
20.7 	the last day of the leave period until the last day of the month in which payment is received. 
20.8 	If payment is received by the executive director after one year from the date the employee 
20.9 	returned to work following the authorized leave, the payment amount is the amount 
20.10 	determined under section 356.551. Payment under this paragraph must be made before the 
20.11 	date of termination from public employment covered under this chapter.
20.12 	(c) If the employee terminates employment covered by this chapter during the leave or 
20.13 	following the leave rather than returning to covered employment, payment must be received 
20.14 	by the executive director within 30 days after the termination date. The payment amount is 
20.15 	equal to the employee and employer contribution rates specified in section 352B.02 on the 
20.16 	day prior to the termination date, multiplied by the employee's hourly rate of salary on that 
20.17 	date and by the days and months of the leave of absence prior to termination.

20.18 	EFFECTIVE DATE. This section is effective July 1, 2017.

20.19 	Sec. 15. Minnesota Statutes 2016, section 352B.02, subdivision 1a, is amended to read:
20.20 		Subd. 1a.Member contributions. (a) The member contribution is the following 
20.21 	percentage of the member's salary:

20.22
20.23		(1) before the first day of the first pay period beginning 
after July 1,  2014
	12.4 percent
	
20.24
20.25		(2) on or after the first day of the first pay period 
beginning afterfrom July 1, 2014, to June 30, 2016
	13.4 percent
	
20.26
20.27		(3) after June 30, 2016 from July 1, 2016, to June 30, 
2017
	14.4 percent
	
20.28		from July 1, 2017, to June 30, 2019
	14.9
	
20.29		after June 30, 2019
	15.4
	
20.30 	(b) These contributions must be made by deduction from salary as provided in section 
20.31 	352.04, subdivision 4.
20.32 	(c) Contribution increases under paragraph (a) must be paid starting the first day of the 
20.33 	first full pay period after the effective date of the increase.

20.34 	EFFECTIVE DATE. This section is effective July 1, 2017.

21.1 	Sec. 16. Minnesota Statutes 2016, section 352B.02, subdivision 1c, is amended to read:
21.2 		Subd. 1c.Employer contributions and supplemental employer contribution. (a) In 
21.3 	addition to member contributions, department heads shall pay a sum equal to the specified 
21.4 	percentage of the salary upon which deductions were made, which constitutes the employer 
21.5 	contribution to the fund as follows:

21.6
21.7		(1) before the first day of the first pay period beginning 
after July 1,  2014
	18.6 percent
	
21.8
21.9		(2) on or after the first day of the first pay period 
beginning afterfrom July 1, 2014, to June 30, 2016
	20.1 percent
	
21.10
21.11		(3) after June 30, 2016 from July 1, 2016, to June 30, 
2017
	21.6 percent
	
21.12		from July 1, 2017, to June 30, 2018
	22.35
	
21.13		after June 30, 2018
	23.1
	
21.14 	(b) Department contributions must be paid out of money appropriated to departments 
21.15 	for this purpose.
21.16 	(c) Contribution increases under paragraph (a) must be paid starting the first day of the 
21.17 	first full pay period after the effective date of the increase.
21.18 	(d) Effective July 1, 2017, department heads shall pay a supplemental employer 
21.19 	contribution. The supplemental contribution shall be 1.75 percent of the salary upon which 
21.20 	deductions are made from July 1, 2017, through June 30, 2018; three percent of the salary 
21.21 	upon which deductions are made from July 1, 2018, through June 30, 2019; five percent of 
21.22 	the salary which deductions are made from July 1, 2019, through June 30, 2020; and seven 
21.23 	percent of the salary upon which deductions are made thereafter. The supplemental 
21.24 	contribution rate of seven percent shall remain in effect until the market value of the assets 
21.25 	of the State Patrol retirement plan of the Minnesota State Retirement System equals or 
21.26 	exceeds the actuarial accrued liability of the plan as determined by the actuary retained 
21.27 	under section 356.214. The expiration of the supplemental employer contribution is effective 
21.28 	the first day of the first full pay period of the fiscal year immediately following the issuance 
21.29 	of the actuarial valuation upon which the expiration is based.

21.30 	EFFECTIVE DATE. The amendments to paragraphs (a) and (c) are effective July 1, 
21.31 	2017. The amendments to paragraph (d) are effective the first day of the first full pay period 
21.32 	after July 1, 2017.

22.1 	Sec. 17. Minnesota Statutes 2016, section 352B.085, is amended to read:
22.2 	352B.085 SERVICE CREDIT FOR CERTAIN DISABILITY LEAVES OF 
22.3 	ABSENCE.
22.4 	A member on leave of absence receiving temporary workers' compensation payments 
22.5 	and a reduced salary or no salary from the employer who is entitled to allowable service 
22.6 	credit for the period of absence under section 352B.011, subdivision 3, paragraph (b), may 
22.7 	make payment to the fund for the difference between salary received, if any, and the salary 
22.8 	that the member would normally receive if the member was not on leave of absence during 
22.9 	the period. The member shall pay an amount equal to the member and employer contribution 
22.10 	rate under section 352B.02, subdivisions 1b and 1c, on the differential salary amount for 
22.11 	the period of the leave of absence. The employing department, at its option, may pay the 
22.12 	employer amount on behalf of the member. Payment made under this subdivision must 
22.13 	include interest at the rate of 8.5 percent until June 30, 2015, and eight percent thereafter
22.14 	applicable annual rate or rates specified in section 356.59, subdivision 2, per year, and must 
22.15 	be completed within one year of the member's return from the leave of absence.

22.16 	EFFECTIVE DATE. This section is effective July 1, 2017.

22.17 	Sec. 18. Minnesota Statutes 2016, section 352B.086, is amended to read:
22.18 	352B.086 SERVICE CREDIT FOR UNIFORMED SERVICE.
22.19 	(a) A member who is absent from employment by reason of service in the uniformed 
22.20 	services, as defined in United States Code, title 38, section 4303(13), and who returns to 
22.21 	state employment in a position covered by the plan upon discharge from service in the 
22.22 	uniformed services within the time frame required in United States Code, title 38, section 
22.23 	4312(e), may obtain service credit for the period of the uniformed service, provided that 
22.24 	the member did not separate from uniformed service with a dishonorable or bad conduct 
22.25 	discharge or under other than honorable conditions.
22.26 	(b) The member may obtain credit by paying into the fund an equivalent member 
22.27 	contribution based on the member contribution rate or rates in effect at the time that the 
22.28 	uniformed service was performed multiplied by the full and fractional years being purchased 
22.29 	and applied to the annual salary rate. The annual salary rate is the average annual salary 
22.30 	during the purchase period that the member would have received if the member had continued 
22.31 	to provide employment services to the state rather than to provide uniformed service, or if 
22.32 	the determination of that rate is not reasonably certain, the annual salary rate is the member's 
23.1 	average salary rate during the 12-month period of covered employment rendered immediately 
23.2 	preceding the purchase period.
23.3 	(c) The equivalent employer contribution and, if applicable, the equivalent employer 
23.4 	additional contribution, must be paid by the employing unit, using the employer and employer 
23.5 	additional contribution rate or rates in effect at the time that the uniformed service was 
23.6 	performed, applied to the same annual salary rate or rates used to compute the equivalent 
23.7 	member contribution.
23.8 	(d) If the member equivalent contributions provided for in this section are not paid in 
23.9 	full, the member's allowable service credit must be prorated by multiplying the full and 
23.10 	fractional number of years of uniformed service eligible for purchase by the ratio obtained 
23.11 	by dividing the total member contributions received by the total member contributions 
23.12 	otherwise required under this section.
23.13 	(e) To receive allowable service credit under this section, the contributions specified in 
23.14 	this section must be transmitted to the fund during the period which begins with the date 
23.15 	on which the individual returns to state employment covered by the plan and which has a 
23.16 	duration of three times the length of the uniformed service period, but not to exceed five 
23.17 	years. If the determined payment period is calculated to be less than one year, the 
23.18 	contributions required under this section to receive service credit must be transmitted to the 
23.19 	fund within one year from the discharge date.
23.20 	(f) The amount of allowable service credit obtainable under this section may not exceed 
23.21 	five years, unless a longer purchase period is required under United States Code, title 38, 
23.22 	section 4312.
23.23 	(g) The employing unit shall pay interest on all equivalent member and employer 
23.24 	contribution amounts payable under this section. Interest must be computed at the rate of 
23.25 	8.5 percent until June 30, 2015, and eight percent thereafter applicable annual rate or rates 
23.26 	specified in section 356.59, subdivision 2, compounded annually, from the end of each 
23.27 	fiscal year of the leave or break in service to the end of the month in which payment is 
23.28 	received.

23.29 	EFFECTIVE DATE. This section is effective July 1, 2017.

23.30 	Sec. 19. Minnesota Statutes 2016, section 352B.11, subdivision 4, is amended to read:
23.31 		Subd. 4.Reentry into state service. When a former member, who has become separated 
23.32 	from state service that entitled the member to membership and has received a refund of 
23.33 	retirement payments, reenters the state service in a position that entitles the member to 
24.1 	membership, that member shall receive credit for the period of prior allowable state service 
24.2 	if the member repays into the fund the amount of the refund, plus interest on it at the rate 
24.3 	of 8.5 percent until June 30, 2015, and eight percent thereafter at the applicable annual rate 
24.4 	or rates specified in section 356.59, subdivision 2, compounded annually, at any time before 
24.5 	subsequent retirement. Repayment may be made in installments or in a lump sum.

24.6 	EFFECTIVE DATE. This section is effective July 1, 2017.

24.7 	Sec. 20. Minnesota Statutes 2016, section 352D.05, subdivision 4, is amended to read:
24.8 		Subd. 4.Repayment of refund. (a) A participant in the unclassified program may repay 
24.9 	regular refunds taken under section 352.22, as provided in section 352.23.
24.10 	(b) A participant in the unclassified program or an employee covered by the general 
24.11 	employees retirement plan who has withdrawn the value of the total shares may repay the 
24.12 	refund taken and thereupon restore the service credit, rights and benefits forfeited by paying 
24.13 	into the fund the amount refunded plus interest at the rate of 8.5 percent until June 30, 2015, 
24.14 	and eight percent thereafter applicable annual rate or rates specified in section 356.59, 
24.15 	subdivision 2, compounded annually, from the date that the refund was taken until the date 
24.16 	that the refund is repaid. If the participant had withdrawn only the employee shares as 
24.17 	permitted under prior laws, repayment must be pro rata.
24.18 	(c) Except as provided in section 356.441, the repayment of a refund under this section 
24.19 	must be made in a lump sum.

24.20 	EFFECTIVE DATE. This section is effective July 1, 2017.

24.21 	Sec. 21. Minnesota Statutes 2016, section 352D.11, subdivision 2, is amended to read:
24.22 		Subd. 2.Payments by employee. An employee entitled to purchase service credit may 
24.23 	make the purchase by paying to the state retirement system an amount equal to the current 
24.24 	employee contribution rate in effect for the state retirement system applied to the current 
24.25 	or final salary rate multiplied by the months and days of prior temporary, intermittent, or 
24.26 	contract legislative service. Payment shall be made in one lump sum unless the executive 
24.27 	director of the state retirement system agrees to accept payment in installments over a period 
24.28 	of not more than three years from the date of the agreement. Installment payments shall be 
24.29 	charged interest at the rate of 8.5 percent until June 30, 2015, and eight percent thereafter
24.30 	applicable annual rate or rates specified in section 356.59, subdivision 2, compounded 
24.31 	annually.

24.32 	EFFECTIVE DATE. This section is effective July 1, 2017.

25.1 	Sec. 22. Minnesota Statutes 2016, section 352D.12, is amended to read:
25.2 	352D.12 TRANSFER OF PRIOR SERVICE CONTRIBUTIONS.
25.3 	(a) An employee who is a participant in the unclassified program and who has prior 
25.4 	service credit in a covered plan under chapter 352, 353, 354, 354A, or 422A may, within 
25.5 	the time limits specified in this section, elect to transfer to the unclassified program prior 
25.6 	service contributions to one or more of those plans.
25.7 	(b) For participants with prior service credit in a plan governed by chapter 352, 353, 
25.8 	354, 354A, or 422A, "prior service contributions" means the accumulated employee and 
25.9 	equal employer contributions with interest at the rate of 8.5 percent until June 30, 2015, 
25.10 	and eight percent thereafter applicable annual rate or rates specified in section 356.59, 
25.11 	subdivision 2, compounded annually, based on fiscal year balances.
25.12 	(c) If a participant has taken a refund from a retirement plan listed in this section, the 
25.13 	participant may repay the refund to that plan, notwithstanding any restrictions on repayment 
25.14 	to that plan, plus 8.5 percent interest until June 30, 2015, and eight percent interest thereafter
25.15 	with interest at the applicable annual rate or rates specified in section 356.59, subdivision 
25.16 	2, compounded annually, and have the accumulated employee and equal employer 
25.17 	contributions transferred to the unclassified program with interest at the rate of 8.5 percent 
25.18 	until June 30, 2015, and eight percent thereafter compounded annually based on fiscal year 
25.19 	balances. If a person repays a refund and subsequently elects to have the money transferred 
25.20 	to the unclassified program, the repayment amount, including interest, is added to the fiscal 
25.21 	year balance in the year which the repayment was made.
25.22 	(d) A participant electing to transfer prior service contributions credited to a retirement 
25.23 	plan governed by chapter 352, 353, 354, 354A, or 422A as provided under this section must 
25.24 	complete a written application for the transfer and repay any refund within one year of the 
25.25 	commencement of the employee's participation in the unclassified program.

25.26 	EFFECTIVE DATE. This section is effective July 1, 2017.

25.27 	Sec. 23. Minnesota Statutes 2016, section 356.415, subdivision 1a, is amended to read:
25.28 		Subd. 1a.Annual postretirement adjustments; Minnesota State Retirement System 
25.29 	plans other than the State Patrol and judges retirement plan plans. (a) Retirement 
25.30 	annuity, disability benefit, or survivor benefit recipients of the legislators retirement plan, 
25.31 	including constitutional officers as specified in chapter 3A, the general state employees 
25.32 	retirement plan, the correctional state employees retirement plan, and the unclassified state 
26.1 	employees retirement program are entitled to a postretirement adjustment annually on, 
26.2 	effective as of each January 1, as follows:
26.3 	(1) for each successive January 1, if the definition of funding stability under paragraph 
26.4 	(b) has not been met as of the prior July 1 for or with respect to the applicable retirement 
26.5 	plan, a postretirement increase of two1.5 percent must be applied each year, effective on 
26.6 	January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who has 
26.7 	been receiving an annuity or a benefit for at least 12 full months as of the June 30 of the 
26.8 	calendar year immediately before the adjustment; and
26.9 	(2) for each successive January 1, if the definition of funding stability under paragraph 
26.10 	(b) has not been met as of the prior July 1 for or with respect to the applicable retirement 
26.11 	plan, for each annuitant or benefit recipient who has been receiving an annuity or a benefit 
26.12 	for at least one full month, but less than 12 full months as of the June 30 of the calendar 
26.13 	year immediately before the adjustment, an annual postretirement increase of 1/12 of two
26.14 	1.5 percent for each month that the person has been receiving an annuity or benefit must 
26.15 	be applied to the monthly annuity or benefit amount of the annuitant or benefit recipient.
26.16 	(b) Increases under this subdivision for the general state employees retirement plan or 
26.17 	the correctional state employees retirement plan terminate on December 31 of the calendar 
26.18 	year in which two prior consecutive actuarial valuations prepared by the approved actuary 
26.19 	under sections 356.214 and 356.215 and the standards for actuarial work promulgated by 
26.20 	the Legislative Commission on Pensions and Retirement indicate that the market value of 
26.21 	assets of the retirement plan equals or exceeds 90 percent of the actuarial accrued liability 
26.22 	of the retirement plan and increases under subdivision 1 recommence after that date. Increases 
26.23 	under this subdivision for the legislators retirement plan established under chapter 3A, 
26.24 	including the constitutional officers specified in that chapter, and for the unclassified state 
26.25 	employees retirement program, terminate on December 31 of the calendar year in which 
26.26 	two prior consecutive actuarial valuations prepared by the approved actuary under sections 
26.27 	356.214 and 356.215 and the standards for actuarial work promulgated by the Legislative 
26.28 	Commission on Pensions and Retirement indicate that the market value of assets of the 
26.29 	general state employees retirement plan equals or exceeds 90 percent of the actuarial accrued 
26.30 	liability of the retirement plan and increases under subdivision 1 recommence after that 
26.31 	date.
26.32 	(c) After having met the definition of funding stability under paragraph (b), the increase 
26.33 	provided in paragraph (a), clauses (1) and (2), rather than an increase under subdivision 1, 
26.34 	for the general state employees retirement plan or the correctional state employees retirement 
27.1 	plan, is again to be applied in a subsequent year or years if the market value of assets of the 
27.2 	applicable plan equals or is less than:
27.3 	(1) 85 percent of the actuarial accrued liabilities of the applicable plan for two consecutive 
27.4 	actuarial valuations; or
27.5 	(2) 80 percent of the actuarial accrued liabilities of the applicable plan for the most recent 
27.6 	actuarial valuation.
27.7 	(d) After having met the definition of funding stability under paragraph (b), the increase 
27.8 	provided in paragraph (a), clauses (1) and (2), rather than an increase under subdivision 1, 
27.9 	for the legislators retirement plan, including the constitutional officers, and for the 
27.10 	unclassified state employees retirement program, is again to be applied in a subsequent year 
27.11 	or years if the market value of assets of the general state employees retirement plan equals 
27.12 	or is less than:
27.13 	(1) 85 percent of the actuarial accrued liabilities of the applicable plan for two consecutive 
27.14 	actuarial valuations; or
27.15 	(2) 80 percent of the actuarial accrued liabilities of the applicable plan for the most recent 
27.16 	actuarial valuation.
27.17 	(e)(b) An increase in annuity or benefit payments under this subdivision must be made 
27.18 	automatically unless written notice is filed by the annuitant or benefit recipient with the 
27.19 	executive director of the applicable covered retirement plan requesting that the increase not 
27.20 	be made.

27.21 	EFFECTIVE DATE. This section is effective January 1, 2018.

27.22 	Sec. 24. Minnesota Statutes 2016, section 356.415, subdivision 1e, is amended to read:
27.23 		Subd. 1e.Annual postretirement adjustments; State Patrol retirement plan. (a) 
27.24 	Retirement annuity, disability benefit, or survivor benefit recipients of the State Patrol 
27.25 	retirement plan are entitled to a postretirement adjustment annually on, effective as of each
27.26 	January 1 if the definition of funding stability under paragraph (b) has not been met, as 
27.27 	follows:
27.28 	(1) a postretirement increase of one percent must be applied each year, effective on 
27.29 	January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who has 
27.30 	been receiving an annuity or a benefit for at least 12 full months as of the June 30 of the 
27.31 	calendar year immediately before the adjustment; and
28.1 	(2) for each annuitant or benefit recipient who has been receiving an annuity or a benefit 
28.2 	for at least one full month, but less than 12 full months as of the June 30 of the calendar 
28.3 	year immediately before the adjustment, an annual postretirement increase of 1/12 of one 
28.4 	percent for each month that the person has been receiving an annuity or benefit must be 
28.5 	applied to the monthly annuity or benefit amount of the annuitant or benefit recipient.
28.6 	(b) Increases under paragraph (a) for the State Patrol retirement plan terminate on 
28.7 	December 31 of the calendar year in which two prior consecutive actuarial valuations for 
28.8 	the plan prepared by the approved actuary under sections 356.214 and 356.215 and the 
28.9 	standards for actuarial work promulgated by the Legislative Commission on Pensions and 
28.10 	Retirement indicates that the market value of assets of the retirement plan equals or exceeds 
28.11 	85 percent of the actuarial accrued liability of the retirement plan. Thereafter, increases 
28.12 	under paragraph (a) become effective again on the December 31 of the calendar year in 
28.13 	which the actuarial valuation, or prior consecutive actuarial valuations for the plan prepared 
28.14 	by the approved actuary under sections 356.214 and 356.215 and the standards for actuarial 
28.15 	work promulgated by the Legislative Commission on Pensions and Retirement indicates 
28.16 	that the market value of the assets of the retirement plan equals or is less than 80 percent 
28.17 	of the actuarial accrued liability of the retirement plan for two years, or equals or is less 
28.18 	than 75 percent of the actuarial accrued liability of the retirement plan for one year and 
28.19 	increases under paragraph (c) commence after that date.
28.20 	(c) Retirement annuity, disability benefit, or survivor benefit recipients of the State Patrol 
28.21 	retirement plan are entitled to a postretirement adjustment annually on January 1, as follows:
28.22 	(1) a postretirement increase of 1.5 percent must be applied each year, effective on 
28.23 	January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who has 
28.24 	been receiving an annuity or a benefit for at least 12 full months as of the June 30 of the 
28.25 	calendar year immediately before the adjustment; and
28.26 	(2) for each annuitant or benefit recipient who has been receiving an annuity or a benefit 
28.27 	for at least one full month, but less than 12 full months as of the June 30 of the calendar 
28.28 	year immediately before the adjustment, an annual postretirement increase of 1/12 of 1.5 
28.29 	percent for each month that the person has been receiving an annuity or benefit must be 
28.30 	applied.
28.31 	(d) Increases under paragraph (c) for the State Patrol retirement plan terminate on 
28.32 	December 31 of the calendar year in which two prior consecutive actuarial valuations 
28.33 	prepared by the approved actuary under sections 356.214 and 356.215 and the standards 
28.34 	for actuarial work adopted by the Legislative Commission on Pensions and Retirement 
29.1 	indicates that the market value of assets of the retirement plan equals or exceeds 90 percent 
29.2 	of the actuarial accrued liability of the retirement plan and increases under subdivision 1 
29.3 	recommence after that date.
29.4 	(e)(b) An increase in annuity or benefit payments under this subdivision must be made 
29.5 	automatically unless written notice is filed by the annuitant or benefit recipient with the 
29.6 	executive director of the applicable covered retirement plan requesting that the increase not 
29.7 	be made.

29.8 	EFFECTIVE DATE. This section is effective January 1, 2018.

29.9 	Sec. 25. Minnesota Statutes 2016, section 356.415, subdivision 1f, is amended to read:
29.10 		Subd. 1f.Annual postretirement adjustments; Minnesota State Retirement System 
29.11 	judges retirement plan. (a) The increases provided under this subdivision are in lieu of 
29.12 	increases under subdivision 1 or 1a for retirement annuity, disability benefit, or survivor 
29.13 	benefit recipients of the judges retirement plan.
29.14 	(b)(a) Retirement annuity, disability benefit, or survivor benefit recipients of the judges 
29.15 	retirement plan are entitled to a postretirement adjustment annually on, effective as of each 
29.16 	January 1 if the definition of funding stability under paragraph (b) has not been met, as 
29.17 	follows:
29.18 	(1) a postretirement increase of 1.75 percent must be applied each year, effective on 
29.19 	January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who has 
29.20 	been receiving an annuity or a benefit for at least 12 full months as of the June 30 of the 
29.21 	calendar year immediately before the adjustment; and
29.22 	(2) for each annuitant or benefit recipient who has been receiving an annuity or a benefit 
29.23 	for at least one full month, but less than 12 full months as of the June 30 of the calendar 
29.24 	year immediately before the adjustment, an annual postretirement increase of 1/12 of 1.75 
29.25 	percent for each month that the person has been receiving an annuity or benefit must be 
29.26 	applied to the monthly annuity or benefit amount of the annuitant or benefit recipient.
29.27 	(c)(b) Increases under this subdivisionparagraph (a) terminate on December 31 of the 
29.28 	calendar year in which two prior consecutive actuarial valuations prepared by the approved 
29.29 	actuary under sections 356.214 and 356.215 and the standards for actuarial work promulgated 
29.30 	by the Legislative Commission on Pensions and Retirement indicates that the market value 
29.31 	of assets of the judges retirement plan equals or exceeds 70 percent of the actuarial accrued 
29.32 	liability of the retirement plan. and increases under subdivision 1 or 1a, whichever is 
29.33 	applicable,paragraph (c) begin on the January 1 next followingafter that date.
30.1 	(c) Retirement annuity, disability benefit, or survivor benefit recipients of the judges 
30.2 	retirement plan are entitled to a postretirement adjustment annually, effective as of each 
30.3 	January 1 if the definition of funding stability under paragraph (d) has not been met, as 
30.4 	follows:
30.5 	(1) a postretirement increase of two percent must be applied each year to the monthly 
30.6 	annuity or benefit of each annuitant or benefit recipient who has been receiving an annuity 
30.7 	or a benefit for at least 12 full months as of the June 30 of the calendar year immediately 
30.8 	before the adjustment; and
30.9 	(2) for each annuitant or benefit recipient who has been receiving an annuity or a benefit 
30.10 	for at least one full month, but less than 12 full months as of the June 30 of the calendar 
30.11 	year immediately before the adjustment, an annual postretirement increase of 1/12 of two 
30.12 	percent for each month that the person has been receiving an annuity or benefit must be 
30.13 	applied to the monthly annuity or benefit amount of the annuitant or benefit recipient.
30.14 	(d) Increases under paragraph (c) terminate on December 31 of the calendar year in 
30.15 	which two prior consecutive actuarial valuations prepared by the approved actuary under 
30.16 	section 356.214 and the standards for actuarial work promulgated by the Legislative 
30.17 	Commission on Pensions and Retirement indicate that the market value of assets of the 
30.18 	judges retirement plan equals or exceeds 90 percent of the actuarial accrued liability of the 
30.19 	retirement plan and increases under paragraph (e) begin after that date.
30.20 	(e) Retirement annuity, disability benefit, or survivor benefit recipients of the judges 
30.21 	retirement plan are entitled to a postretirement adjustment annually, effective as of each 
30.22 	January 1, as follows:
30.23 	(1) a postretirement increase of 2.5 percent must be applied each year to the monthly 
30.24 	annuity or benefit of each annuitant or benefit recipient who has been receiving an annuity 
30.25 	or a benefit for at least 12 full months as of the June 30 of the calendar year immediately 
30.26 	before the adjustment; and
30.27 	(2) for each annuitant or benefit recipient who has been receiving an annuity or a benefit 
30.28 	for at least one full month, but less than 12 full months as of the June 30 of the calendar 
30.29 	year immediately before the adjustment, an annual postretirement increase of 1/12 of 2.5 
30.30 	percent for each month that the person has been receiving an annuity or benefit must be 
30.31 	applied to the monthly annuity or benefit amount of the annuitant or benefit recipient.
30.32 	(d)(f) An increase in annuity or benefit payments under this subdivision must be made 
30.33 	automatically unless written notice is filed by the annuitant or benefit recipient with the 
31.1 	executive director of the applicable covered retirement plan requesting that the increase not 
31.2 	be made.

31.3 	EFFECTIVE DATE. This section is effective January 1, 2018.

31.4 	Sec. 26. Minnesota Statutes 2016, section 490.121, subdivision 4, is amended to read:
31.5 		Subd. 4.Allowable service. (a) "Allowable service" means any calendar month, subject 
31.6 	to the service credit limit in subdivision 22, served as a judge at any time, during which the 
31.7 	judge received compensation for that service from the state, municipality, or county, 
31.8 	whichever applies, and for which the judge made any required member contribution. It also 
31.9 	includes any month served as a referee in probate for all referees in probate who were in 
31.10 	office before January 1, 1974.
31.11 	(b) "Allowable service" also means a period of authorized leave of absence for which 
31.12 	the judge has made a payment in lieu of contributions, not in an amount in excess of the 
31.13 	service credit limit under subdivision 22. To obtain the service credit, the judge shall pay 
31.14 	an amount equal to the normal cost of the judges retirement plan on the date of return from 
31.15 	the leave of absence, as determined in the most recent actuarial report for the plan filed with 
31.16 	the Legislative Commission on Pensions and Retirement, multiplied by the judge's average 
31.17 	monthly salary rate during the authorized leave of absence and multiplied by the number 
31.18 	of months of the authorized leave of absence, plus annual compound interest at the rate of 
31.19 	8.5 percent until June 30, 2015, and eight percent thereafter interest at the applicable annual 
31.20 	rate or rates specified in section 356.59, subdivision 2, compounded annually, from the date 
31.21 	of the termination of the leave to the date on which payment is made. The payment must 
31.22 	be made within one year of the date on which the authorized leave of absence terminated. 
31.23 	Service credit for an authorized leave of absence is in addition to a uniformed service leave 
31.24 	under section 490.1211.
31.25 	(c) "Allowable service" does not mean service as a retired judge.

31.26 	EFFECTIVE DATE. This section is effective July 1, 2017.

31.27 	Sec. 27. Minnesota Statutes 2016, section 490.121, subdivision 25, is amended to read:
31.28 		Subd. 25.Tier I. "Tier I" is the benefit program of the retirement plan with a membership 
31.29 	specified by section 490.1221, paragraph (b), and governed by sections 356.415, subdivisions 
31.30 	1 and subdivision 1f; and 490.121 to 490.133, except as modified in sections 490.121, 
31.31 	subdivision 21f, paragraph (b); 490.1222; 490.123, subdivision 1a, paragraph (b); and 
31.32 	490.124, subdivision 1, paragraphs (c) and (d).

32.1 	Sec. 28. Minnesota Statutes 2016, section 490.121, subdivision 26, is amended to read:
32.2 		Subd. 26.Tier II. "Tier II" is the benefit program of the retirement plan with a 
32.3 	membership specified by section 490.1221, paragraph (c), and governed by sections 356.415, 
32.4 	subdivisions 1 and subdivision 1f; 490.121 to 490.133, as modified in section 490.121, 
32.5 	subdivision 21f, paragraph (b); 490.1222; 490.123, subdivision 1a, paragraph (b); and 
32.6 	490.124, subdivision 1, paragraphs (c) and (d).

32.7 	Sec. 29. Minnesota Statutes 2016, section 490.1211, is amended to read:
32.8 	490.1211 UNIFORMED SERVICE.
32.9 	(a) A judge who is absent from employment by reason of service in the uniformed 
32.10 	services, as defined in United States Code, title 38, section 4303(13), and who returns to 
32.11 	state employment as a judge upon discharge from service in the uniformed service within 
32.12 	the time frame required in United States Code, title 38, section 4312(e), may obtain service 
32.13 	credit for the period of the uniformed service, provided that the judge did not separate from 
32.14 	uniformed service with a dishonorable or bad conduct discharge or under other than honorable 
32.15 	conditions.
32.16 	(b) The judge may obtain credit by paying into the fund equivalent member contribution 
32.17 	based on the contribution rate or rates in effect at the time that the uniformed service was 
32.18 	performed multiplied by the full and fractional years being purchased and applied to the 
32.19 	annual salary rate. The annual salary rate is the average annual salary during the purchase 
32.20 	period that the judge would have received if the judge had continued to provide employment 
32.21 	services to the state rather than to provide uniformed service, or if the determination of that 
32.22 	rate is not reasonably certain, the annual salary rate is the judge's average salary rate during 
32.23 	the 12-month period of judicial employment rendered immediately preceding the purchase 
32.24 	period.
32.25 	(c) The equivalent employer contribution and, if applicable, the equivalent employer 
32.26 	additional contribution, must be paid by the employing unit, using the employer and employer 
32.27 	additional contribution rate or rates in effect at the time that the uniformed service was 
32.28 	performed, applied to the same annual salary rate or rates used to compute the equivalent 
32.29 	member contribution.
32.30 	(d) If the member equivalent contributions provided for in this section are not paid in 
32.31 	full, the judge's allowable service credit must be prorated by multiplying the full and 
32.32 	fractional number of years of uniformed service eligible for purchase by the ratio obtained 
33.1 	by dividing the total member contributions received by the total member contributions 
33.2 	otherwise required under this section.
33.3 	(e) To receive allowable service credit under this section, the contributions specified in 
33.4 	this section and section 490.121 must be transmitted to the fund during the period which 
33.5 	begins with the date on which the individual returns to judicial employment and which has 
33.6 	a duration of three times the length of the uniformed service period, but not to exceed five 
33.7 	years. If the determined payment period is calculated to be less than one year, the 
33.8 	contributions required under this section to receive service credit may be within one year 
33.9 	from the discharge date.
33.10 	(f) The amount of allowable service credit obtainable under this section and section 
33.11 	490.121 may not exceed five years, unless a longer purchase period is required under United 
33.12 	States Code, title 38, section 4312.
33.13 	(g) The state court administrator shall pay interest on all equivalent member and employer 
33.14 	contribution amounts payable under this section. Interest must be computed at the rate of 
33.15 	8.5 percent until June 30, 2015, and eight percent thereafter at the applicable annual rate or 
33.16 	rates specified in section 356.59, subdivision 2, compounded annually, from the end of each 
33.17 	fiscal year of the leave or break in service to the end of the month in which payment is 
33.18 	received.

33.19 	EFFECTIVE DATE. This section is effective July 1, 2017.

33.20 	Sec. 30. Minnesota Statutes 2016, section 490.124, subdivision 12, is amended to read:
33.21 		Subd. 12.Refund.  (a) A person who ceases to be a judge is entitled to a refund in an 
33.22 	amount that is equal to all of the member's employee contributions to the judges' retirement 
33.23 	fund plus interest computed under section 352.22, subdivision 2.
33.24 	(b) A refund of contributions under paragraph (a) terminates all service credits and all 
33.25 	rights and benefits of the judge and the judge's survivors under this chapter.
33.26 	(c) A person who becomes a judge again after taking a refund under paragraph (a) may 
33.27 	reinstate the previously terminated allowable service credit, rights, and benefits by repaying 
33.28 	the total amount of the previously received refund. The refund repayment must include 
33.29 	interest on the total amount previously received at the annual rate of 8.5 percent until June 
33.30 	30, 2015, and eight percent thereafter at the applicable annual rate or rates specified in 
33.31 	section 356.59, subdivision 2, compounded annually, from the date on which the refund 
33.32 	was received until the date on which the refund is repaid.

33.33 	EFFECTIVE DATE. This section is effective July 1, 2017.

34.1 	ARTICLE 3
34.2 	TEACHER RETIREMENT ASSOCIATION

34.3 	Section 1. Minnesota Statutes 2016, section 354.42, subdivision 3, is amended to read:
34.4 		Subd. 3.Employer. (a) The regular employer contribution to the fund by Special School 
34.5 	District No. 1, Minneapolis, is an amount equal to the applicable following percentage of 
34.6 	salary of each coordinated member and the applicable percentage of salary of each basic 
34.7 	member specified in paragraph (c).
34.8 	The additional employer contribution to the fund by Special School District No. 1, 
34.9 	Minneapolis, is an amount equal to 3.64 percent of the salary of each teacher who is a 
34.10 	coordinated member or who is a basic member.
34.11 	(b) The regular employer contribution to the fund by Independent School District No. 
34.12 	709, Duluth, is an amount equal to the applicable percentage of salary of each old law or 
34.13 	new law coordinated member specified for the coordinated program in paragraph (c).
34.14 	(c) The employer contribution to the fund for every other employer is an amount equal 
34.15 	to the applicable following percentage of the salary of each coordinated member and the 
34.16 	applicable following percentage of the salary of each basic member:

34.17		Period
	Coordinated Member
		Basic Member
	
34.18		from July 1, 2013, until June 30, 2014
		7 percent
		11 percent
	
34.19
34.20		after June 30, 2014 from July 1, 2014, 
through June 30, 2017
		7.5 percent
		11.5 percent
	
34.21		from July 1, 2017, through June 30, 2018
		8.0 percent
		12 percent
	
34.22		from July 1, 2018, through June 30, 2019
		8.5 percent
		12.5 percent
	
34.23		from July 1, 2019, through June 30, 2020
		9.0 percent
		13 percent
	
34.24		after June 30, 2020
		9.5 percent
		13.5 percent
	
34.25 	(d) When an employer contribution rate changes for a fiscal year, the new contribution 
34.26 	rate is effective for the entire salary paid for each employer unit with the first payroll cycle 
34.27 	reported.
34.28 	(e) After June 30, 2015, if a contribution rate revision is made under subdivisions 4a, 
34.29 	4b, and 4c, the employer contributions under paragraphs (a), (b), and (c) must be adjusted 
34.30 	accordingly.

34.31 	EFFECTIVE DATE. This section is effective the day following final enactment.

35.1 	Sec. 2. Minnesota Statutes 2016, section 354.50, subdivision 2, is amended to read:
35.2 		Subd. 2.Interest charge. If a member desires to repay the refunds, payment shall include 
35.3 	interest at an annual rate of 8.5 percentthe applicable annual rate or rates specified in section 
35.4 	356.59, subdivision 3, compounded annually, from date of withdrawal to the date payment 
35.5 	is made and shall be credited to the fund.

35.6 	EFFECTIVE DATE. This section is effective July 1, 2017.

35.7 	Sec. 3. Minnesota Statutes 2016, section 354.51, subdivision 5, is amended to read:
35.8 		Subd. 5.Payment of shortages. (a) Except as provided in paragraph (b), in the event 
35.9 	that full required member contributions are not deducted from the salary of a teacher, 
35.10 	payment of shortages in member deductions on salary earned are the sole obligation of the 
35.11 	employing unit and are payable by the employing unit upon notification by the executive 
35.12 	director of the shortage. The amount of the shortage shall be paid  with interest at an annual 
35.13 	rate of 8.5 percentthe applicable annual rate or rates specified in section 356.59, subdivision 
35.14 	3, compounded annually, from the end of the fiscal year in which the shortage occurred to 
35.15 	the end of the month in which payment is made and the interest must be credited to the 
35.16 	fund. The employing unit shall also pay the employer contributions as specified in section 
35.17 	354.42, subdivisions 3 and 5 for the shortages. If the shortage payment is not paid by the 
35.18 	employing unit within 60 days of notification, and if the executive director does not use the 
35.19 	recovery procedure in section 354.512, the executive director shall certify the amount of 
35.20 	the shortage to the applicable county auditor, who shall spread a levy in the amount of the 
35.21 	shortage payment over the taxable property of the taxing district of the employing unit if 
35.22 	the employing unit is supported by property taxes. Payment may not be made for shortages 
35.23 	in member deductions on salary paid or payable under paragraph (b) or for shortages in 
35.24 	member deductions for persons employed by the Minnesota State Colleges and Universities 
35.25 	system in a faculty position or in an eligible unclassified administrative position and whose 
35.26 	employment was less than 25 percent of a full academic year, exclusive of the summer 
35.27 	session, for the applicable institution that exceeds the most recent 36 months.
35.28 	(b) For a person who is employed by the Minnesota State Colleges and Universities 
35.29 	system in a faculty position or in an eligible unclassified administrative position and whose 
35.30 	employment was less than 25 percent of a full academic year, exclusive of the summer 
35.31 	session, for the applicable institution, upon the person's election under section 354B.21 of 
35.32 	retirement coverage under this chapter, the shortage in member deductions on the salary 
35.33 	for employment by the Minnesota State Colleges and Universities system institution of less 
35.34 	than 25 percent of a full academic year, exclusive of the summer session, for the applicable 
36.1 	institution for the most recent 36 months and the associated employer contributions must 
36.2 	be paid by the Minnesota State Colleges and Universities system institution, plus annual 
36.3 	compound interest at the rate of 8.5 percentapplicable annual rate or rates specified in 
36.4 	section 356.59, subdivision 3, compounded annually, from the end of the fiscal year in 
36.5 	which the shortage occurred to the end of the month in which the Teachers Retirement 
36.6 	Association coverage election is made. An individual electing coverage under this paragraph 
36.7 	shall repay the amount of the shortage in member deductions, plus interest, through deduction 
36.8 	from salary or compensation payments within the first year of employment after the election 
36.9 	under section 354B.21, subject to the limitations in section 16D.16. The Minnesota State 
36.10 	Colleges and Universities system may use any means available to recover amounts which 
36.11 	were not recovered through deductions from salary or compensation payments. No payment 
36.12 	of the shortage in member deductions under this paragraph may be made for a period longer 
36.13 	than the most recent 36 months.

36.14 	EFFECTIVE DATE. This section is effective July 1, 2017.

36.15 	Sec. 4. Minnesota Statutes 2016, section 354.52, subdivision 4, is amended to read:
36.16 		Subd. 4.Reporting and remittance requirements. An employer shall remit all amounts 
36.17 	due to the association and furnish a statement indicating the amount due and transmitted 
36.18 	with any other information required by the executive director. If an amount due is not 
36.19 	received by the association within 14 calendar days of the payroll warrant, the amount 
36.20 	accrues interest at an annual rate of 8.5 percentemployer shall pay interest on the amount 
36.21 	due at the applicable annual rate or rates specified in section 356.59, subdivision 3, 
36.22 	compounded annually, from the due date until the amount is received by the association. 
36.23 	All amounts due and other employer obligations not remitted within 60 days of notification 
36.24 	by the association must be certified to the commissioner of management and budget who 
36.25 	shall deduct the amount from any state aid or appropriation amount applicable to the 
36.26 	employing unit.

36.27 	EFFECTIVE DATE. This section is effective July 1, 2017.

36.28 	Sec. 5. Minnesota Statutes 2016, section 354.53, subdivision 5, is amended to read:
36.29 		Subd. 5.Interest requirements. The employer shall pay interest on all equivalent 
36.30 	employee and employer contribution amounts payable under this section. Interest must be 
36.31 	computed at a rate of 8.5 percent at the applicable annual rate or rates specified in section 
36.32 	356.59, subdivision 3, compounded annually, from the end of each fiscal year of the leave 
36.33 	or the break in service to the end of the month in which the payment is received.

37.1 	EFFECTIVE DATE. This section is effective July 1, 2017.

37.2 	Sec. 6. Minnesota Statutes 2016, section 356.415, subdivision 1d, is amended to read:
37.3 		Subd. 1d.Teachers Retirement Association annual postretirement adjustments. (a) 
37.4 	Retirement annuity, disability benefit, or survivor benefit recipients of the Teachers 
37.5 	Retirement Association are entitled to a postretirement adjustment annually on, effective 
37.6 	as of each January 1, as follows:
37.7 	(1) for each January 1 until funding stability is restored,effective January 1, 2018, 
37.8 	through December 31, 2022, a postretirement increase of twoone percent must be applied 
37.9 	each year, effective on January 1, to the monthly annuity or benefit amount of each annuitant 
37.10 	or benefit recipient who has been receiving an annuity or a benefit for at least 12 full months 
37.11 	as of the June 30 of the calendar year immediately before the adjustment;
37.12 	(2) for each January 1 until funding stability is restored,effective January 1, 2018, 
37.13 	through December 31, 2022, for each annuitant or benefit recipient who has been receiving 
37.14 	an annuity or a benefit for at least one full month, but less than 12 full months as of the June 
37.15 	30 of the calendar year immediately before the adjustment, an annual postretirement increase 
37.16 	of 1/12 of twoone percent for each month the person has been receiving an annuity or 
37.17 	benefit must be applied to the monthly annuity or benefit amount of the annuitant or benefit 
37.18 	recipient;
37.19 	(3) for each January 1 following the restoration of funding stability,effective January 
37.20 	1, 2023, and thereafter, a postretirement increase of 2.5 1.5 percent must be applied each 
37.21 	year, effective January 1, to the monthly annuity or benefit amount of each annuitant or 
37.22 	benefit recipient who has been receiving an annuity or a benefit for at least 12 full months 
37.23 	as of the June 30 of the calendar year immediately before the adjustment; and
37.24 	(4) for each January 1 following the restoration of funding stability,effective January 
37.25 	1, 2023, and thereafter, for each annuitant or benefit recipient who has been receiving an 
37.26 	annuity or a benefit for at least one full month, but less than 12 full months as of the June 
37.27 	30 of the calendar year immediately before the adjustment, an annual postretirement increase 
37.28 	of 1/12 of 2.51.5 percent for each month the person has been receiving an annuity or benefit 
37.29 	must be applied to the monthly annuity or benefit amount of the annuitant or benefit recipient.
37.30 	(b) Funding stability is restored when the market value of assets of the Teachers 
37.31 	Retirement Association equals or exceeds 90 percent of the actuarial accrued liabilities of 
37.32 	the Teachers Retirement Association in the two most recent prior actuarial valuations 
38.1 	prepared under section 356.215 and the standards for actuarial work by the approved actuary 
38.2 	retained by the Teachers Retirement Association under section 356.214.
38.3 	(c) After having met the definition of funding stability under paragraph (b), the increase 
38.4 	provided in paragraph (a), clauses (1) and (2), rather than an increase under subdivision 1, 
38.5 	or the increase under paragraph (a), clauses (3) and (4), is again to be applied in a subsequent 
38.6 	year or years if the market value of assets of the plan equals or is less than:
38.7 	(1) 85 percent of the actuarial accrued liabilities of the plan for two consecutive actuarial 
38.8 	valuations; or
38.9 	(2) 80 percent of the actuarial accrued liabilities of the plan for the most recent actuarial 
38.10 	valuation.
38.11 	(d)(b) An increase in annuity or benefit payments under this section must be made 
38.12 	automatically unless written notice is filed by the annuitant or benefit recipient with the 
38.13 	executive director of the Teachers Retirement Association requesting that the increase not 
38.14 	be made.
38.15 	(e)(c) The retirement annuity payable to a person who retires before becoming eligible 
38.16 	for Social Security benefits and who has elected the optional payment as provided in section 
38.17 	354.35 must be treated as the sum of a period-certain retirement annuity and a life retirement 
38.18 	annuity for the purposes of any postretirement adjustment. The period-certain retirement 
38.19 	annuity plus the life retirement annuity must be the annuity amount payable until age 62, 
38.20 	65, or normal retirement age, as selected by the member at retirement, for an annuity amount 
38.21 	payable under section 354.35. A postretirement adjustment granted on the period-certain 
38.22 	retirement annuity must terminate when the period-certain retirement annuity terminates.

38.23 	EFFECTIVE DATE. This section is effective the day following final enactment.

38.24 	ARTICLE 4
38.25 	ST. PAUL TEACHERS RETIREMENT FUND ASSOCIATION

38.26 	Section 1. Minnesota Statutes 2016, section 354A.011, subdivision 3a, is amended to read:
38.27 		Subd. 3a.Actuarial equivalent. "Actuarial equivalent" means the condition of one 
38.28 	annuity or benefit having an equal actuarial present value as another annuity or benefit, 
38.29 	determined as of a given date with each actuarial present value based on the appropriate 
38.30 	mortality table adopted by the appropriate board of trustees based on the experience of that 
38.31 	retirement fund association as recommended by the actuary retained under section 356.214, 
38.32 	and approved under section 356.215, subdivision 18, and using the applicable preretirement 
39.1 	or postretirement interest rateinvestment return assumption specified in section 356.215, 
39.2 	subdivision 8.

39.3 	EFFECTIVE DATE. This section is effective July 1, 2017.

39.4 	Sec. 2. Minnesota Statutes 2016, section 354A.093, subdivision 6, is amended to read:
39.5 		Subd. 6.Interest requirements. The employer shall pay interest on all equivalent 
39.6 	employee and employer contribution amounts payable under this section. Interest must be 
39.7 	computed at the rate of 8.5 percent until June 30, 2015, and eight percent thereafterapplicable 
39.8 	rate or rates specified in section 356.59, subdivision 4, compounded annually, from the end 
39.9 	of each fiscal year of the leave or break in service to the end of the month in which payment 
39.10 	is received.

39.11 	EFFECTIVE DATE. This section is effective July 1, 2017.

39.12 	Sec. 3. Minnesota Statutes 2016, section 354A.096, is amended to read:
39.13 	354A.096 MEDICAL LEAVE.
39.14 	Any teacher in the coordinated program of the St. Paul Teachers Retirement Fund 
39.15 	Association who is on an authorized medical leave of absence and subsequently returns to 
39.16 	teaching service is entitled to receive allowable service credit, not to exceed one year, for 
39.17 	the period of leave, upon making the prescribed payment to the fund. This payment must 
39.18 	include the required employee and employer contributions at the rates specified in section 
39.19 	354A.12, subdivisions 1 and 2a, as applied to the member's average full-time monthly salary 
39.20 	rate on the date the leave of absence commenced plus annual interest at the rate of 8.5 
39.21 	percent until June 30, 2015, and eight percent thereafter per yearapplicable rate or rates 
39.22 	specified in section 356.59, subdivision 4, compounded annually, from the end of the fiscal 
39.23 	year during which the leave terminates to the end of the month during which payment is 
39.24 	made. The member must pay the total amount required unless the employing unit, at its 
39.25 	option, pays the employer contributions. The total amount required must be paid by the end 
39.26 	of the fiscal year following the fiscal year in which the leave of absence terminated or before 
39.27 	the member retires, whichever is earlier. Payment must be accompanied by a copy of the 
39.28 	resolution or action of the employing authority granting the leave and the employing 
39.29 	authority, upon granting the leave, must certify the leave to the association in a manner 
39.30 	specified by the executive director. A member may not receive more than one year of 
39.31 	allowable service credit during any fiscal year by making payment under this section. A 
39.32 	member may not receive disability benefits under section 354A.36 and receive allowable 
39.33 	service credit under this section for the same period of time.

40.1 	EFFECTIVE DATE. This section is effective July 1, 2017.

40.2 	Sec. 4. Minnesota Statutes 2016, section 354A.12, subdivision 1a, is amended to read:
40.3 		Subd. 1a.Obligation for omitted salary deductions. If the full required contributions 
40.4 	are not deducted from the salary of a teacher, payment of the shortage in such deductions 
40.5 	is the sole obligation of the employing unit during the three-year period following the end 
40.6 	of the fiscal year in which the shortage occurred. The shortage is payable by the employing 
40.7 	unit upon notification of the shortage by the executive director of the applicable retirement 
40.8 	fund association. The employing unit shall also pay any employer contributions related to 
40.9 	the shortage. The amount of the shortage in employee contributions and associated employer 
40.10 	contributions is payable with interest at the preretirement interest assumption for the 
40.11 	retirement fund as specified in section 356.215, subdivision 8, stated as a monthly rate
40.12 	applicable rate or rates specified in section 356.59, subdivision 4, from the date due until 
40.13 	the date payment is received in the office of the association, compounded annually, with a 
40.14 	minimum interest charge of $10. If the shortage payment and interest is not paid by the 
40.15 	employing unit within 60 days of notification, the executive director shall certify the amount 
40.16 	of the shortage payment and interest to the commissioner of management and budget, who 
40.17 	shall deduct the amount from any state aid or appropriation amount applicable to the 
40.18 	employing unit.

40.19 	EFFECTIVE DATE. This section is effective July 1, 2017.

40.20 	Sec. 5. Minnesota Statutes 2016, section 354A.12, subdivision 2a, is amended to read:
40.21 		Subd. 2a.Employer regular and additional contributions. (a) The employing units 
40.22 	shall make the following employer contributions to the teachers retirement fund association:
40.23 	(1) for anyeach coordinated member of the St. Paul Teachers Retirement Fund 
40.24 	Association, the employing unit shall make a regular employer contribution to the retirement 
40.25 	fund association in an amount equal to the designated percentage of the salary of the 
40.26 	coordinated member as provided below:

40.27		after June 30, 2014
	5.5 percent
	
40.28		after June 30, 2015
	6 percent
	
40.29		after June 30, 2016
	6.25 percent
	
40.30		after June 30, 2017
	6.57 percent
	
40.31		after June 30, 2018
	7.5 percent
	
40.32		after June 30, 2019
	8 percent
	
40.33		after June 30, 2020
	8.5 percent
	
41.1 	(2) for anyeach basic member of the St. Paul Teachers Retirement Fund Association, 
41.2 	the employing unit shall make a regular employer contribution to the respective retirement 
41.3 	fund in an amount according to the schedule below:

41.4		after June 30, 2014
	9 percent of salary
	
41.5		after June 30, 2015
	9.5 percent of salary
	
41.6		after June 30, 2016
	9.75 percent of salary
	
41.7		after June 30, 2017
	1010.5 percent of salary
	
41.8		after June 30, 2018
	11 percent of salary
	
41.9		after June 30, 2019
	11.5 percent of salary
	
41.10		after June 30, 2020
	12 percent of salary
	
41.11 	(3) for aeach basic member of the St. Paul Teachers Retirement Fund Association, the 
41.12 	employing unit shall make an additional employer contribution to the respective fund in an 
41.13 	amount equal to 3.64 percent of the salary of the basic member;
41.14 	(4) for aeach coordinated member of the St. Paul Teachers Retirement Fund Association, 
41.15 	the employing unit shall make an additional employer contribution to the respective fund 
41.16 	in an amount equal to 3.84 percent of the coordinated member's salary.
41.17 	(b) The regular and additional employer contributions must be remitted directly to the 
41.18 	St. Paul Teachers Retirement Fund Association at least once each month. Delinquent amounts 
41.19 	are payable with interest under the procedure in subdivision 1a.
41.20 	(c) Payments of regular and additional employer contributions for school district or 
41.21 	technical college employees who are paid from normal operating funds must be made from 
41.22 	the appropriate fund of the district or technical college.
41.23 	(d) When an employer contribution rate changes for a fiscal year, the new contribution 
41.24 	rate is effective for the entire salary paid by the employer with the first payroll cycle reported.

41.25 	EFFECTIVE DATE. This section is effective July 1, 2017.

41.26 	Sec. 6. Minnesota Statutes 2016, section 354A.12, subdivision 7, is amended to read:
41.27 		Subd. 7.Recovery of benefit overpayments. (a) If the executive director discovers, 
41.28 	within the time period specified in subdivision 8 following the payment of a refund or the 
41.29 	accrual date of any retirement annuity, survivor benefit, or disability benefit, that benefit 
41.30 	overpayment has occurred due to using invalid service or salary, or due to any erroneous 
41.31 	calculation procedure, the executive director must recalculate the annuity or benefit payable 
41.32 	and recover any overpayment. The executive director shall recover the overpayment by 
41.33 	requiring direct repayment or by suspending or reducing the payment of a retirement annuity 
42.1 	or other benefit payable under this chapter to the applicable person or the person's estate, 
42.2 	whichever applies, until all outstanding amounts have been recovered. If a benefit 
42.3 	overpayment or improper payment of benefits occurred caused by a failure of the person 
42.4 	to satisfy length of separation requirements for retirement under section 354A.011, 
42.5 	subdivision 21, the executive director shall recover the improper payments by requiring 
42.6 	direct repayment. The repayment must include interest at the rate of 0.71 percent per month
42.7 	applicable rate or rates specified in section 356.59, subdivision 4, from the first of the month 
42.8 	in which a monthly benefit amount was paid to the first of the month in which the amount 
42.9 	is repaid, with annual compounding.
42.10 	(b) In the event the executive director determines that an overpaid annuity or benefit 
42.11 	that is the result of invalid salary included in the average salary used to calculate the payment 
42.12 	amount must be recovered, the executive director must determine the amount of the employee 
42.13 	deductions taken in error on the invalid salary, with interest as determined under 354A.37, 
42.14 	subdivision 3, and must subtract that amount from the total annuity or benefit overpayment, 
42.15 	and the remaining balance of the overpaid annuity or benefit, if any, must be recovered.
42.16 	(c) If the invalid employee deductions plus interest exceed the amount of the overpaid 
42.17 	benefits, the balance must be refunded to the person to whom the benefit or annuity is being 
42.18 	paid.
42.19 	(d) Any invalid employer contributions reported on the invalid salary must be credited 
42.20 	against future contributions payable by the employer.
42.21 	(e) If a member or former member, who is receiving a retirement annuity or disability 
42.22 	benefit for which an overpayment is being recovered, dies before recovery of the overpayment 
42.23 	is completed and an optional annuity or refund is payable, the remaining balance of the 
42.24 	overpaid annuity or benefit must continue to be recovered from the payment to the optional 
42.25 	annuity beneficiary or refund recipient.
42.26 	(f) The board of trustees shall adopt policies directing the period of time and manner 
42.27 	for the collection of any overpaid retirement or optional annuity, and survivor or disability 
42.28 	benefit, or a refund that the executive director determines must be recovered as provided 
42.29 	under this section.

42.30 	EFFECTIVE DATE. This section is effective July 1, 2017.

42.31 	Sec. 7. Minnesota Statutes 2016, section 354A.29, subdivision 7, is amended to read:
42.32 		Subd. 7.Eligibility for payment of Postretirement adjustments. (a) Annually, after 
42.33 	June 30, the board of trustees of the St. Paul Teachers Retirement Fund Association must 
43.1 	determine the amount of any postretirement adjustment using the procedures in this 
43.2 	subdivision and subdivision 8 or 9, whichever is applicable.(b) OnEach January 1, each 
43.3 	person who has been receiving an annuity or benefit under the articles of incorporation, the 
43.4 	bylaws, or this chapter, whose effective date of benefit commencement occurredthat 
43.5 	commenced on or before July 1 of the immediately preceding calendar year immediately 
43.6 	before the adjustment, is eligible towill receive aan annual postretirement increase as 
43.7 	specified in subdivision 8 or 9. adjustment as follows:
43.8 	(1) the monthly annuity or benefit amount of each person whose annuity or benefit 
43.9 	commenced on or before January 1 of the immediately preceding calendar year shall be 
43.10 	increased by one percent of the monthly amount; and
43.11 	(2) the monthly annuity or benefit amount of each person whose annuity or benefit 
43.12 	commenced after January 1 of the immediately preceding calendar year shall be increased 
43.13 	by one-half of one percent of the monthly amount.

43.14 	EFFECTIVE DATE. This section is effective the day following final enactment.

43.15 	Sec. 8. Minnesota Statutes 2016, section 354A.34, is amended to read:
43.16 	354A.34 DISPOSITION OF UNPAID PERIOD CERTAIN FOR LIFE OR 
43.17 	GUARANTEED REFUND OPTIONAL ANNUITIES.
43.18 	If a retiree from a coordinated program who has elected a period certain and for life 
43.19 	thereafter or a guaranteed refund optional annuity form dies without having a designated 
43.20 	beneficiary who has survived the retiree, any remaining unpaid guaranteed annuity payments 
43.21 	shall be computed at the rate of interest specified in section 356.215, subdivision 8, and 
43.22 	paid in one lump sum to the estate of the retiree. If a retiree from a coordinated program 
43.23 	who has elected a period certain and for life or a guaranteed refund optional annuity form 
43.24 	dies with a designated beneficiary who has survived the retiree but the designated beneficiary 
43.25 	dies without there existing another designated beneficiary, any remaining unpaid guaranteed 
43.26 	annuity payments shall be computed with interest at the applicable rate of interestor rates 
43.27 	specified in section 356.215 356.59, subdivision 8 4, and paid in one lump sum to the estate 
43.28 	of the designated beneficiary.

43.29 	EFFECTIVE DATE. This section is effective July 1, 2017.

43.30 	Sec. 9. Minnesota Statutes 2016, section 354A.38, subdivision 3, is amended to read:
43.31 		Subd. 3.Computation of refund repayment amount. If the coordinated member elects 
43.32 	to repay a refund under subdivision 2, the repayment to the fund must be in an amount equal 
44.1 	to refunds the member has accepted plus interest at the rate of 8.5 percent until June 30, 
44.2 	2015, and eight percent thereafterapplicable rate or rates specified in section 356.59, 
44.3 	subdivision 4, compounded annually, from the date that the refund was accepted to the date 
44.4 	that the refund is repaid.

44.5 	EFFECTIVE DATE. This section is effective July 1, 2017.

44.6 	Sec. 10.  REPEALER.
 44.7 	Minnesota Statutes 2016, section 354A.29, subdivisions 8 and 9, are repealed.

44.8 	EFFECTIVE DATE. This section is effective July 1, 2017.

APPENDIX 

Repealed Minnesota Statutes: 17-2368 

354A.29 ST. PAUL TEACHERS RETIREMENT FUND ASSOCIATION POSTRETIREMENT ADJUSTMENT.Subd. 8.Calculation of postretirement adjustments; percentage based. 
(a) For purposes of computing postretirement adjustments for eligible benefit recipients of the St. Paul Teachers Retirement Fund Association, the accrued liability funding ratio based on the actuarial value of assets of the plan as determined by the two most recent actuarial valuations prepared under sections 356.214 and 356.215 determines the postretirement increase, as follows: 

		Funding ratio	Postretirement increase	
		Less than 80 percent	1 percent	
		At least 80 percent but less than 90 percent	2 percent	

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

(c) If the accrued liability funding ratio based on the actuarial value of assets is at least 90 percent in two consecutive actuarial valuations, subsequent postretirement increases must be paid as specified in subdivision 9. 

(d) If, following a postretirement increase under paragraph (a), the accrued liability funding ratio, based on the actuarial value of assets, falls below 80 percent for two consecutive actuarial valuations, the applicable postretirement increase must be reduced to one percent until January 1 of the calendar year next following the date on which the requirements for an increase under paragraph (a) are again satisfied. 

Subd. 9.Calculation of postretirement adjustments. 
(a) This subdivision applies if the requirements of subdivision 8, paragraph (c), have been satisfied. 

(b) A percentage adjustment must be paid under this subdivision to eligible persons under subdivision 7. 

(c) The amount of 2.5 percent is the full postretirement adjustment to be applied as a permanent increase to the regular payment of each eligible member on January 1 of the next calendar year. For any eligible member whose effective date of benefit commencement occurred after January 1 of the calendar year immediately before the postretirement adjustment is applied, the postretirement adjustment amount must be reduced by 50 percent. 

(d) In the event the accrued liability funding ratio based on the actuarial value of assets falls below 90 percent for two consecutive actuarial valuations, the applicable postretirement increase must be determined under subdivision 8 until January 1 of the calendar year next following the date on which the requirements of subdivision 8, paragraph (c), are again satisfied. 

356.415 POSTRETIREMENT ADJUSTMENTS; STATEWIDE RETIREMENT PLANS.Subdivision 1.Annual postretirement adjustments; generally. 
(a) Except as otherwise provided in subdivision 1a, 1b, 1c, 1d, 1e, or 1f, retirement annuity, disability benefit, or survivor benefit recipients of a covered retirement plan are entitled to a postretirement adjustment annually on January 1, as follows: 

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

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

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