1.1                          A bill for an act 
  1.2             relating to retirement; increasing certain formula 
  1.3             annuity percentages for the teachers retirement 
  1.4             association; amending Minnesota Statutes 1998, section 
  1.5             354.44, subdivision 6. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 1998, section 354.44, 
  1.8   subdivision 6, is amended to read: 
  1.9      Subd. 6.  [COMPUTATION OF FORMULA PROGRAM RETIREMENT 
  1.10  ANNUITY.] (1) The formula retirement annuity must be computed in 
  1.11  accordance with the applicable provisions of the formulas stated 
  1.12  in clause (2) or (4) on the basis of each member's average 
  1.13  salary for the period of the member's formula service credit.  
  1.14     For all years of formula service credit, "average salary," 
  1.15  for the purpose of determining the member's retirement annuity, 
  1.16  means the average salary upon which contributions were made and 
  1.17  upon which payments were made to increase the salary limitation 
  1.18  provided in Minnesota Statutes 1971, section 354.511, for the 
  1.19  highest five successive years of formula service credit 
  1.20  provided, however, that such "average salary" shall not include 
  1.21  any more than the equivalent of 60 monthly salary payments.  
  1.22  Average salary must be based upon all years of formula service 
  1.23  credit if this service credit is less than five years. 
  1.24     (2) This clause, in conjunction with clause (3), applies to 
  1.25  a person who first became a member of the association or a 
  2.1   member of a pension fund listed in section 356.30, subdivision 
  2.2   3, before July 1, 1989, unless clause (4), in conjunction with 
  2.3   clause (5), produces a higher annuity amount, in which case 
  2.4   clause (4) applies.  The average salary as defined in clause 
  2.5   (1), multiplied by the following percentages per year of formula 
  2.6   service credit shall determine the amount of the annuity to 
  2.7   which the member qualifying therefor is entitled: 
  2.8                          Coordinated Member   Basic Member
  2.9    Each year of service    ~~the percent~~        the percent
  2.10    during first ten       ~~specified in~~       specified in
  2.11                           ~~section 356.19,~~    section 356.19,
  2.12                           ~~subdivision 1,~~     subdivision 3,
  2.13                           ~~per year~~           per year
  2.14                           1.3 percent per
  2.15                           year for service
  2.16                           before July 1, 2000,
  2.17                           and 1.5 percent
  2.18                           per year for service
  2.19                           on or after July 1,
  2.20                           2000 
  2.21     
  2.22   Each year of service    ~~the percent~~        the percent
  2.23    thereafter             ~~specified in~~       specified in
  2.24                           ~~section 356.19,~~    section 356.19,
  2.25                           ~~subdivision 2,~~     subdivision 4,
  2.26                           ~~per year~~           per year
  2.27                           1.8 percent per
  2.28                           year for service
  2.29                           before July 1, 2000,
  2.30                           and 2.0 percent per
  2.31                           year for service on or
  2.32                           after July 1, 2000
  2.33     (3)(i) This clause applies only to a person who first 
  2.34  became a member of the association or a member of a pension fund 
  2.35  listed in section 356.30, subdivision 3, before July 1, 1989, 
  2.36  and whose annuity is higher when calculated under clause (2), in 
  3.1   conjunction with this clause than when calculated under clause 
  3.2   (4), in conjunction with clause (5). 
  3.3      (ii) Where any member retires prior to normal retirement 
  3.4   age under a formula annuity, the member shall be paid a 
  3.5   retirement annuity in an amount equal to the normal annuity 
  3.6   provided in clause (2) reduced by one-quarter of one percent for 
  3.7   each month that the member is under normal retirement age at the 
  3.8   time of retirement except that for any member who has 30 or more 
  3.9   years of allowable service credit, the reduction shall be 
  3.10  applied only for each month that the member is under age 62. 
  3.11     (iii) Any member whose attained age plus credited allowable 
  3.12  service totals 90 years is entitled, upon application, to a 
  3.13  retirement annuity in an amount equal to the normal annuity 
  3.14  provided in clause (2), without any reduction by reason of early 
  3.15  retirement. 
  3.16     (4) This clause applies to a member who has become at least 
  3.17  55 years old and first became a member of the association after 
  3.18  June 30, 1989, and to any other member who has become at least 
  3.19  55 years old and whose annuity amount when calculated under this 
  3.20  clause and in conjunction with clause (5), is higher than it is 
  3.21  when calculated under clause (2), in conjunction with clause (3).
  3.22  The average salary, as defined in clause (1) multiplied by the 
  3.23  percent specified by section 356.19, subdivision 4, for each 
  3.24  year of service for a basic member and by ~~the percent specified~~ 
  3.25  ~~in section 356.19, subdivision 2,~~ 1.8 percent for each year of 
  3.26  service before July 1, 2000, and by 2.0 percent for service on 
  3.27  or after July 1, 2000, for a coordinated member shall determine 
  3.28  the amount of the retirement annuity to which the member is 
  3.29  entitled. 
  3.30     (5) This clause applies to a person who has become at least 
  3.31  55 years old and first becomes a member of the association after 
  3.32  June 30, 1989, and to any other member who has become at least 
  3.33  55 years old and whose annuity is higher when calculated under 
  3.34  clause (4) in conjunction with this clause than when calculated 
  3.35  under clause (2), in conjunction with clause (3).  An employee 
  3.36  who retires under the formula annuity before the normal 
  4.1   retirement age shall be paid the normal annuity provided in 
  4.2   clause (4) reduced so that the reduced annuity is the actuarial 
  4.3   equivalent of the annuity that would be payable to the employee 
  4.4   if the employee deferred receipt of the annuity and the annuity 
  4.5   amount were augmented at an annual rate of three percent 
  4.6   compounded annually from the day the annuity begins to accrue 
  4.7   until the normal retirement age. 
  4.8      Sec. 2.  [EFFECTIVE DATE.] 
  4.9      Section 1 is effective July 1, 2000.