1.1                          A bill for an act 
  1.2             relating to retirement; clarifying ambiguities 
  1.3             associated with the merger of local police and fire 
  1.4             consolidation accounts into the public employees 
  1.5             police and fire plan; amending Minnesota Statutes 1999 
  1.6             Supplement, section 423A.02, subdivisions 1b, 4, and 5.
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 1999 Supplement, section 
  1.9   423A.02, subdivision 1b, is amended to read: 
  1.10     Subd. 1b.  [ADDITIONAL AMORTIZATION STATE AID.] (a) 
  1.11  Annually, on October 1, the commissioner of revenue shall 
  1.12  allocate the additional amortization state aid transferred under 
  1.13  section 69.021, subdivision 11, to: 
  1.14     (1) all police or salaried firefighter relief associations 
  1.15  governed by and in full compliance with the requirements of 
  1.16  section 69.77, that had an unfunded actuarial accrued liability 
  1.17  in the actuarial valuation prepared under sections 356.215 and 
  1.18  356.216 as of the preceding December 31; 
  1.19     (2) all local police or salaried firefighter consolidation 
  1.20  accounts governed by chapter 353A that are certified by the 
  1.21  executive director of the public employees retirement 
  1.22  association as having for the current fiscal year an additional 
  1.23  municipal contribution amount under section 353A.09, subdivision 
  1.24  5, paragraph (b), and that have implemented section 353A.083, 
  1.25  subdivision 1, if the effective date of the consolidation 
  1.26  preceded May 24, 1993, and that have implemented section 
  2.1   353A.083, subdivision 2, if the effective date of the 
  2.2   consolidation preceded June 1, 1995; and 
  2.3      (3) the public employees police and fire fund on behalf of 
  2.4   municipalities that received amortization aid in 1999 and are 
  2.5   required to make an additional municipal contribution under 
  2.6   section 353.665, subdivision 8, for the duration of the required 
  2.7   additional contribution. 
  2.8      (b) The commissioner shall allocate the state aid on the 
  2.9   basis of the proportional share of the relief association or 
  2.10  consolidation account of the total unfunded actuarial accrued 
  2.11  liability of all recipient relief associations and consolidation 
  2.12  accounts as of December 31, 1993, for relief associations, and 
  2.13  as of June 30, 1994, for consolidation accounts. 
  2.14     (c) Beginning October 1, 2000, and annually thereafter, the 
  2.15  commissioner shall allocate the state aid, including any aid in 
  2.16  excess of the limitation in subdivision 4, on the following 
  2.17  basis of: 
  2.18     (1) 64.5 percent to the public employees police and fire 
  2.19  fund or local consolidation account, whichever applies, on 
  2.20  behalf of municipalities to which section 353.665, subdivision 
  2.21  8, paragraph (b), or 353A.09, subdivision 5, paragraph (b), 
  2.22  apply for distribution in accordance with paragraph (b) and 
  2.23  subject to the limitation in subdivision 4,; 
  2.24     (2) 34.2 percent to the city of Minneapolis to fund any 
  2.25  unfunded actuarial accrued liability in the actuarial valuation 
  2.26  prepared under sections 356.215 and 356.216 as of the preceding 
  2.27  December 31 for the Minneapolis police relief association or the 
  2.28  Minneapolis fire department relief association,; and 
  2.29     (3) 1.3 percent to the city of Virginia to fund any 
  2.30  unfunded actuarial accrued liability in the actuarial valuation 
  2.31  prepared under sections 356.215 and 356.216 as of the preceding 
  2.32  December 31 for the Virginia fire department relief association. 
  2.33     In the event that If there is no unfunded actuarial accrued 
  2.34  liability in both the Minneapolis police relief association and 
  2.35  the Minneapolis fire department relief association, the 
  2.36  commissioner shall allocate that 34.2 percent of the aid as 
  3.1   follows:  49 percent to the Minneapolis teachers retirement fund 
  3.2   association, provided that, 21 percent to the St. Paul teachers 
  3.3   retirement fund association, and 30 percent as additional 
  3.4   funding to support minimum fire state aid for volunteer 
  3.5   firefighter relief associations.  If there is no unfunded 
  3.6   actuarial accrued liability in the Virginia fire department 
  3.7   relief association, the commissioner shall allocate that 1.3 
  3.8   percent of the aid as follows:  49 percent to the Minneapolis 
  3.9   teachers retirement fund association, 21 percent to the St. Paul 
  3.10  teachers retirement fund association, and 30 percent as 
  3.11  additional funding to support minimum fire state aid for 
  3.12  volunteer firefighter relief associations.  The allocation must 
  3.13  be made by the commissioner at the same time and under the same 
  3.14  procedures as specified in subdivision 3.  With respect to the 
  3.15  Minneapolis teachers retirement fund association or the St. Paul 
  3.16  teachers retirement fund association, annually, beginning on 
  3.17  July 1, 2005, if a the teacher's association five-year average 
  3.18  time-weighted rate of investment return does not equal or exceed 
  3.19  the performance of a composite portfolio assumed passively 
  3.20  managed (indexed) invested ten percent in cash equivalents, 60 
  3.21  percent in bonds and similar debt securities, and 30 percent in 
  3.22  domestic stock calculated using the formula under section 
  3.23  11A.04, clause (11), the aid allocation to that retirement fund 
  3.24  under this section ceases until the five-year annual rate 
  3.25  of investment return equals or exceeds the performance of a that 
  3.26  composite portfolio, 21 percent to the St. Paul teachers 
  3.27  retirement fund association, provided that, annually, beginning 
  3.28  on July 1, 2005, if a teacher's association five-year average 
  3.29  time-weighted rate of investment return does not equal or exceed 
  3.30  the performance of a composite portfolio assumed passively 
  3.31  managed (indexed) invested ten percent in cash equivalents, 60 
  3.32  percent bonds and similar debt securities, and 30 percent in 
  3.33  domestic stock calculated using the formula under section 
  3.34  11A.04, clause (11), the aid under this section ceases until the 
  3.35  five-year annual rate of return equals or exceeds the 
  3.36  performance of a composite portfolio, and 30 percent as 
  4.1   additional funding to support minimum fire state aid for 
  4.2   volunteer firefighter relief associations, with the allocation 
  4.3   made at the same time and under the same procedures in 
  4.4   subdivision 3.  In the event there is no actuarial accrued 
  4.5   unfunded liability in the Virginia fire department relief 
  4.6   association, the commissioner shall allocate that 1.3 percent of 
  4.7   the aid as follows:  49 percent to the Minneapolis teachers 
  4.8   retirement fund association, provided that, annually, beginning 
  4.9   on July 1, 2005, if a teacher's association five-year average 
  4.10  time-weighted rate of investment return does not equal or exceed 
  4.11  the performance of a composite portfolio assumed passively 
  4.12  managed (indexed) invested ten percent in cash equivalents, 60 
  4.13  percent bonds and similar debt securities, and 30 percent in 
  4.14  domestic stock calculated using the formula under section 
  4.15  11A.04, clause (11), the aid under this section ceases until the 
  4.16  five-year annual rate of return equals or exceeds the 
  4.17  performance of a composite portfolio, 21 percent to the St. Paul 
  4.18  teachers retirement fund association, provided that, annually, 
  4.19  beginning on July 1, 2005, if a teacher's association five-year 
  4.20  average time-weighted rate of investment return does not equal 
  4.21  or exceed the performance of a composite portfolio assumed 
  4.22  passively managed (indexed) invested ten percent in cash 
  4.23  equivalents, 60 percent bonds and similar debt securities, and 
  4.24  30 percent in domestic stock calculated using the formula under 
  4.25  section 11A.04, clause (11), the aid under this section ceases 
  4.26  until the five-year annual rate of return equals or exceeds the 
  4.27  performance of a composite portfolio, and 30 percent as 
  4.28  additional funding to support minimum fire state aid for 
  4.29  volunteer firefighter relief associations, with the allocation 
  4.30  made at the same time and under the same procedures in 
  4.31  subdivision 3.  
  4.32     (d) Additional amortization state aid payable to the public 
  4.33  employees retirement association on behalf of a municipality 
  4.34  must be credited by the executive director of the public 
  4.35  employees retirement association against any additional 
  4.36  municipal contribution to which the applicable municipality is 
  5.1   obligated to make under section 353A.09, subdivision 5, or under 
  5.2   section 353.665, subdivision 8. 
  5.3      (e) The amounts required under this subdivision are 
  5.4   annually appropriated to the commissioner of revenue. 
  5.5      Sec. 2.  Minnesota Statutes 1999 Supplement, section 
  5.6   423A.02, subdivision 4, is amended to read: 
  5.7      Subd. 4.  [LIMIT ON CERTAIN TOTAL AID AMOUNTS.] (a) The 
  5.8   total of amortization aid, supplemental amortization aid, and 
  5.9   additional amortization aid under this section payable to the 
  5.10  executive director of the public employees retirement 
  5.11  association on behalf of a municipality to which section 
  5.12  353.665, subdivision 8, paragraph (b), applies, may not exceed 
  5.13  the amount of the additional municipal contribution payable by 
  5.14  an individual municipality under section 353.665, subdivision 8, 
  5.15  paragraph (b). 
  5.16     (b) Any aid amount in excess of the limit under this 
  5.17  subdivision for an individual municipality must be redistributed 
  5.18  to the other municipalities to which section 353.665, 
  5.19  subdivision 8, paragraph (b), applies.  The excess aid must be 
  5.20  distributed in proportion to each municipality's additional 
  5.21  municipal contribution under section 353.665, subdivision 8, 
  5.22  paragraph (b). 
  5.23     (c) When the total aid for each municipality under this 
  5.24  section equals the limit under paragraph (a), any aid in excess 
  5.25  of the limit must be redistributed under subdivisions 1, 1a, and 
  5.26  subdivision 1b. 
  5.27     Sec. 3.  Minnesota Statutes 1999 Supplement, section 
  5.28  423A.02, subdivision 5, is amended to read: 
  5.29     Subd. 5.  [TERMINATION OF STATE AID PROGRAMS.] The 
  5.30  amortization state aid, supplemental amortization state aid, and 
  5.31  additional amortization state aid programs terminate as of the 
  5.32  December 31, next following the date of the actuarial valuation 
  5.33  when the assets of the Minneapolis teachers retirement fund 
  5.34  association equal the actuarial accrued liability of that plan 
  5.35  and when the assets of the St. Paul teachers retirement fund 
  5.36  association equal the actuarial accrued liability of that 
  6.1   plan or December 31, 2009, whichever is later. 
  6.2      Sec. 4.  [EFFECTIVE DATE.] 
  6.3      Sections 1 to 3 are effective on the day following final 
  6.4   enactment.